FAQ's and Guide on GST Basics

GSTIN means GST identification number assigned to every person registered under GST.

GSTIN is a 15-digit number assigned to every taxpayer registered under GST.

1. First 2 digits- state code.
2. Next 10 digits-PAN number of the taxpayer.
3. The 13th digit will be assigned based on the number of registrations of taxpayer in the state.
4. The 14th digit will be Z by default. The last digit is for check code.

• CGST: Central goods & Service Tax which is collected by the centre.
• SGST: State Goods & Service tax which is collected by the state.
• IGST: Integrated goods & service tax which is collected by the centre.

Where the location of the supplier and place of supply of goods or services are in the same state/union territory, it is treated as intra state supply of goods or services.

Where the location of the supplier and place of supply of goods or services are in two different states or two different union territories or a state and union territory, it is treated as inter-state supply of goods or services.

Exempt supply means supply of any goods or services or both which attracts nil rate of tax or which may be exempt from tax and includes non-taxable supply.

Zero rated supply means any of the following supplies of goods or services or both:

• Export of goods or services or both.
• Supply of goods or services or both to a SEZ developer or SEZ unit.

Taxable event under GST is supply of goods or services or both. CGST and SGST/UTGST will be levied on intra state supplies. IGST will be levied on inter- state supplies.

Reverse charge means liability to pay taxes is on the recipient of goods or services instead of supplier of goods or services in notified transactions.

If the receipt of supply is from an unregistered person, then the registered person who is receiving goods or services is liable to pay tax under reverse charge.

No, a person without GST registration can neither claim ITC nor collect GST from his customers.

Any registered person who fails to furnish the returns within the due dates shall be liable to pay a penalty of Rs 100 per day subject to a maximum of Rs 5000.

All taxpayers filing return in GSTR 1 to GSTR 3 are required to file an annual return. However, the following persons are not required to file annual return

1. Casual taxable persons.
2. Non-resident Taxable persons.
3. ISD.
4. Persons authorized to deduct or collect tax at source.

Payment should be made on or before 20th of every month.

Electronic cash ledger means a summary of all the deposits or payments made by a taxpayer. It is maintained on GST portal.

Manual or physical challans are not allowed under GST regime. It is mandatory to pay the challan online.

There is a single challan prescribed for CGST, SGST, IGST, interest, penalty etc under GST regime.

No, the taxpayer cannot utilize the amount available in one major head for discharging the liability of other major head or minor head. For example, amount available in CGST cannot be utilized for paying the liability under SGST or IGST or interest.

Electronic credit leger means summary of the input credit available to registered taxable person. It is maintained on GST portal.

Electronic liability register means details of total tax liability of a taxpayer for the month. It is maintained on GST portal.

Input Tax means CGST, SGST, IGST or UTGST paid on inward supplies of goods or services of a registered person. It also includes tax paid on reverse charge basis and import of goods or services.

A registered person can take the credit of all input tax paid by him on the goods or services which are used or intended to be used in the course of business subject to conditions.

Yes, it includes taxes paid on input goods, input services and capital goods.

The registered person shall be entitled to the credit only upon receipt of last instalment.

ITC of IGST can be used to pay the liability of

• IGST
• CGST
• SGST

ITC of CGST can be used to pay the liability of

• CGST
• IGST

ITC of SGST can be used to pay the liability of

• SGST
• IGST

An invoice is a commercial instrument issued by a supplier of goods/services to recipient. It consists of supplier and buyer details, description and quantity of items sold, date of shipment, prices, discounts, delivery and payment terms.

No, the unregistered person cannot issue tax invoice.

Bill of supply should be issued instead of tax invoice in case of the following supplies:

• Supply of exempted goods/services.
• Supplies made by composition supplier.

For issuing a credit note, an invoice should have been issued earlier. A credit note may be issued in the following cases:

• Taxable invoice in invoice > Taxable value in respect of such supply.
• Tax charged in invoice > Tax payable in respect of such supply.
• When the goods supplied by the supplier are returned by the recipient.
• Where the goods or services or both found to be deficient.

For issuing a debit note, an invoice should have been issued earlier. A debit note may be issued in the following circumstances:

• Taxable invoice in invoice < Taxable value in respect of such supply.
• Tax charged in invoice < Tax payable in respect of such supply.

The tax invoice should contain the following details:

• Name, address, GSTIN of the supplier.
• Consecutive Serial Number unique for a financial year.
• Date of Issue.
• Name and address of the recipient.
• GSTIN / UID of the recipient, if registered.
• HSN code of Goods or Accounting Code of Services.
• Description of Goods / Services.
• Quantity and Unit (or Unique Quantity Code) in case of Goods.
• Total Value of Goods and Services.
• Post discount/abatement taxable value of Goods and Services.
• Rate of Tax and Amount of Tax Charged.
• Place of Supply along with the name of the State if the supply is an inter-State supply.
• Place of delivery if different from place of supply.
• Whether tax is payable on reverse charge.
• Signature/Digital Signature of the Supplier or his authorised representative.

The time limit for availing ITC is due date of filing of return for the month of September of succeeding financial year or date of filing of the relevant annual return whichever is earlier.

Supply of goods:

1. When the supply of goods involves movement of goods, invoice should be issued before or at the time or removal of goods.
2. When the supply of goods involves delivery or making available, then invoice should be issued before or at the time of delivery.

Supply of services:

Invoice should be issued within 30 days of supply of service.

It means supply which consists of two or more supplies in conjunction with each other. One of the supply is principal supply and tax liability shall be at the rate of principal supply. For example, charges supplied along with mobile phones.

It consists of two or more supply which can be supplied independently still supplied together. Tax liability is applicable to the supply that attracts highest rate of tax. For example, gift consisting of sweets and chocolates.

HSN means harmonized System nomenclature for goods. SAC means Service Accounting codes for services.

The board or commissioner by notification may specify the number of digits of HSN /SAC code that a taxpayer is required to mention.

• Dealers with annual turnover up to Rs 1.5 crore – not required to mention HSN code.
• Dealers with annual turnover between 1.5 crore to 5 crores- mention first two digits of HSN code.
• Dealers with annual turnover more than 5 crores – mention four digits of HSN code.

Small taxpayers whose aggregate turnover in the preceding financial year does not cross 75 lakhs can register under Composition scheme.

The person registered under composition scheme has to pay the tax on quarterly basis on or before 18th of the succeeding quarter.

No, the registered person under composition scheme is not eligible to claim input tax credit.

No, the registered person under composition scheme is not permitted to collect tax. It means they cannot issue tax invoices.