Frequently Asked Questions on Goods and Services Tax (GST)

Q. What is GST?

A. GST stands for Goods and Services Tax. GST will be a single destination based consumption tax that will replace existing taxes, including CENVAT, Octroi, Sales Tax, and Excise Duty, etc. Unlike the old tax structure, where the state of origin received tax revenue, in the new GST model the state in which goods and services are consumed is the state that will receive the revenue.

Q. What will trigger GST?

A. The ‘supply’ of goods and/or services to any person or entity in India. Q. What does ‘supply’ mean? A. The sale, transfer, barter, exchange, license, rental, lease or disposal of goods and services. Q. What are the types of GST? A. CGST: Central Goods and Services Tax, paid on all transactions, collected by the Center SGST: State Goods and Services Tax, paid on all transactions within a State, collected by the States IGST: Integrated Goods and Services Tax, paid on all inter-state transactions, or import of goods into India, collected by the Center Q. When will GST come into effect? A. The expected GST introduction date is July 1, 2017. Q. How will I pay GST? A. GST will be managed through the GST Network, GSTN – http://gstn.org/. All taxes will be paid online and there will be no manual filing of returns. Post generation of challan online, you can pay GST by one of the following modes – Axis Debit/credit card, Axis Internet Banking or cash/cheque at any Axis Bank branch. Q. What are the taxes proposed to be subsumed under GST? A. The central taxes proposed to be subsumed under CGST include:
 Central Excise duty  Additional Excise duties  Excise Duty levied under the Medicinal and Toiletries Preparation Act  Service Tax levied under Chapter V of the Finance Act, 1994  Additional Customs Duty, commonly known as Countervailing Duty (CVD)  Special Additional Duty of Customs (SAD)  Central Sales Tax  Surcharges  Central cesses. The state taxes proposed to be subsumed under GST are:  VAT/Sales tax  Entertainment tax (unless it is levied by the local bodies)  Luxury tax  Taxes on lotteries, betting and gambling  State cess and surcharges in so far as they relate to supply of goods and services  Entry tax  Octroi. Q. Is GST charged on exported goods and services? A. No, GST is a consumption based tax. Because the place of consumption is outside India there is no GST on exported goods and services. Q. Will there be a Central and State GST levied on all transactions in India? A. Yes, every transaction of supply in India will either be subject to: CGST and SGST OR CGST and IGST Unless the good or service is exempt. Q. What goods and services are exempt? A. The list of exempt goods and services includes (but is not limited to) petroleum products,
entertainment and amusement, alcohol/liquor for human consumption, stamp duty, customs duty, and electricity. Q. When does ‘supply’ occur? A. For goods it’s the earliest of the following  Date of removal of goods  Date goods are made available to the recipient  Date the invoice is issued  Date payment is received  Date recipient reflects the goods on his/her books of accounts For services it’s the earliest of the following:  Date the invoice is issued  Date payment is received  Date services are completed (where invoice is not issued within a prescribed time)  Date recipient reflects the goods on his/her books of accounts
Q. How can payment be done? A. Payment can be done by the following methods: (i) Through debit of Credit Ledger of the taxpayer maintained on the Common Portal- ONLY Tax can be paid. Interest, Penalty and Fees cannot be paid by debit in the credit ledger. Tax payers shall be allowed to take credit of taxes paid on inputs (input tax credit) and utilize the same for payment of output tax. However, no input tax credit on account of CGST shall be utilized towards payment of SGST and vice versa. The credit of IGST would be permitted to be utilized for payment of IGST, CGST and SGST in that order. (ii) In cash by debit in the Cash Ledger of the taxpayer maintained on the Common Portal. Money can be deposited in the Cash Ledger by different modes, namely, E-Payment (Internet Banking, Credit Card, Debit Card); Real Time Gross Settlement (RTGS)/ National Electronic Fund Transfer (NEFT); Over the Counter Payment in branches of Banks Authorized to accept deposit of GST
Q. Which are the mode of payments through which dealer can pay their tax?
A Three modes of payment through which dealers can pay their tax are as follows—-
a) Payment by taxpayers through Internet Banking (Retail Internet Banking and Corporate internet Banking) through authorized banks.
b) Payment by taxpayers through credit card/debit card;
c) Over the Counter payment (OTC) through authorized banks; (available for payments up to Rs. 10,000/- per challan only.)
d) Payment through NEFT/RTGS .
Q. What is E challan?
A. E Challan is the challan generated through GSTN portal. The dealer has to enter his challan details in the portal and take the print out of the challan for payment of GST.
Q. What are the methods of online generation Draft challan for the payment of taxes?
A. The methods of online generation of draft challans are as follows—
a) By Registered tax payer or his authorized person by logging on to GSTN Common Portal where basic details (such as name, address, email, mobile no. and GSTIN) of the tax payer will be auto populated in the challan;
b) By authorized representatives of tax payers by logging on to the GSTN Common Portal where after the list of registered taxpayers represented by him will be displayed. He can select any tax payer on whose behalf he proposes to pay GST and challan details for such tax payer will be auto populated;
c) By grant of temporary Registration number by any one Tax authority on GSTN Common Portal which can be used by both the tax authorities for facilitating tax payments on behalf of an unregistered person. Such a situation can arise during enforcement action by a tax authority and this temporary registration can be later converted into a regular registration number (GSTIN) if the tax payer has a regular GST liability to discharge after the enforcement action
d) By creation of a challan without requirement of USER ID and Password, for enabling payment of GST by a registered or an unregistered person on behalf of a taxpayer as per the directions of the tax authority using the GSTIN (like the present provision under Service tax).
Q. Can the dealer generate challan in multiple sittings?
A. Yes , The tax payers can partially fill in the challan form and temporarily “save” the challan for completion at a later stage. A saved challan can be “edited” before finalization. After the tax payer has finalized the challan, he will generate the challan, for use of payment of taxes. The remitter will have option of printing the challan for his record.
Q. Will there be any Unique no given to the challan?
A. The challan so generated will have a 14-digit (yymm followed by 10-digit) Unique Common Portal Identification Number (CPIN), assigned only when the challan is finally generated, this will help the portal and other authorities in identifying the challan. The CPIN would be a running serial number to be initialized every calendar month. After the challan is generated, it will be frozen and will not be allowed to be modified.
Q. Is there any validity for Common Portal Identification Number (CPIN) number?
A. The CPIN/challan so generated would be valid for a period of seven days. In case of payment through NEFT/RTGS, CPINs would remain live with RBI for a period of 30 days. GSTN would purge all unused CPINs on the day immediately after the date on which the validity period is over (i.e. 7 days if CC/DC and OTC payment is selected and 30 days if NEFT/RTGS is selected for payment)
Q. Will there be any service charges for Credit Card/Debit Card payment?
A Yes there will be service charges for Credit Card/Debit Card payment .The exact charge is calculated separately by the gateway service provider. The gateway provider should collect this amount separately over and above the challan amount. The challan amount is fully credited to respective Government accounts maintained with the authorised bank (acquiring bank for CC/DC payments), while the gateway charges is retained back by the gateway provider.
Q. Is the pre registration of credit card necessary in the GSTN portal for the GST payment?
A. The taxpayer would be required to pre-register his credit card, from which the tax payment is intended, with the GSTN system. GSTN may also attempt to put in a system with banks in getting the credit card verified by taking a confirmation from the credit card service provider. The payments using credit cards can therefore be allowed without any monetary limit to facilitate ease of doing business.
Q. After the successful completion of payment will there be any new number given to the dealer?
A. After the successful completion of a transaction, the concerned bank will create a unique Challan Identification Number (CIN) against the CPIN. This will be a unique 17-digit number containing 14-digit CPIN generated by GSTN for a particular challan and unique 3-digit Bank code (MICR based which will be communicated by RBI to GSTN).