FM Releases CBEC's FAQ on GST
1. A person from Gurgaon travels by Air India flight from Mumbai to Delhi and gets his travel insurance done in Mumbai. What will be the place of supply for GST?
Ans. The location of the recipient of services on the records of the supplier of insurance services shall be the place of supply. So Gurgaon shall be the place of supply.
2. Give two examples of registered taxable persons who were not liable to be registered under the earlier law but are required to be registered under GST?
Ans. A manufacturer having a turnover of say Rs 60 lakhs was enjoying SSI exemption earlier, will have to be registered in GST as the said turnover exceeds the basic threshold of Rs 10 lakhs.
A trader having turnover below the threshold under VAT making sales through e-commerce operator will be required to be registered in GST. There will no threshold for such persons.
3. In respect of exchange of goods, namely gold watch for restaurant services will the transaction be taxable as two different supplies or will it be taxable only in the hands of the main supplier?
Ans. No. In the above case the transaction of supply of watch from consumer to the restaurant will not be an independent supply as the same is not in the course of business. It is a consideration for a supply made by the restaurant to him. The same will be a taxable supply by the restaurant.
These and 506 other questions on GST are answered in a book "FAQ on GST" published by CBEC and released by the Finance Minister yesterday.
But it beats me why anyone should go to a restaurant and give a gold watch for maybe having a cup of coffee. Maybe under the GST regime, that would be the norm. In this case, who is the main supplier? Why is the wise man who gives a gold watch in a restaurant not a supplier?
Have they decided on the threshold limits? In several places the FAQ mentions the threshold limit as Rs. 10 lakhs.
Have you heard of MGL? If you read the FAQ through you get this word 140 times and after the 80th time or so you will get a doubt whether it is an abbreviation for Model GST Law.
What is the difference between detention and seizure?
The FAQ answers: Denial of access to the owner of the property or the person who possesses the property at a particular point of time by a legal order/notice is called detention. Seizure is taking over of actual possession of the goods by the department. Detention order is issued when it is suspected that the goods are liable to confiscation. Seizure can be made only on the reasonable belief which is arrived at after inquiry/investigation that the goods are liable to confiscation.
And what happens if the search is illegal?
'No problem', says the FAQ: Search without a valid search warrant (i.e. issued by other than a competent authority or without a search warrant) results in an illegal search without authority of law. However, due to this reason, the accused cannot get benefit. Accordingly, evidence collected even during an illegal search and seizure is considered admissible in trial and adjudication proceedings.
Many such interesting questions are answered for helping the officers as well as public, to get acquainted with the Model GST Law and its nuances, as Chairman, CBEC Najib Shah says in his foreword.