From 1st July GST came in effect and everyone is shifted to the new taxation system. but still, there are number of confusion. Here we made the list of some frequently asked questions (faq) with their solutions. Check out do you have same questions or query like many others.
GST Frequently Asked Questions (FAQ)
Q1. In GST jute is exempted from GST so that it comes under 0% slab of GST. due to this, it is considered that the treaders of raw wool don’t need to register under GST but the jute Mills are denying to accept the jute from the traders who don’t have GST registration no. So is it really necessary to jute traders to register under GST?
As it is known that jute is under 0 % GST rate so that it is exempted from the GST. So that there is no any tax on the jute fibres. According to the CGST act 2017 section 23 (1)(A), there is no any need of registration of traders of raw jute fibre. For jute Mills under the act of CGST 2017 section 9(4), there is no any need to pay RCM (reverse charge mechanism) because on jute there is no any GST tax. In the same way, raw silk is also kept in 0% slab so it can be said that silk is also exempted from and for raw silk traders also there is no any need of registration for GST no.
Q2. according to 5201 and 5203 cotton comes under the 5% slab. So that is it necessary to cotton farming farmers to register under GST?
Absolutely not. Under the GST act 2017, section 23 (1)(B) an agriculturist, no need to register under GST to the extent of supply of produce out of cultivation of land.
Q3. Is it necessary to Cotton traders to pay GST by the RCM (Reserve Charge Mechanism)? (Who is registered, trader).
Yes, under the heading of 5201 and 5203 there is 5% GST imposed on cotton and farmers farming cotton are not required to register under GST. And the registered traders of cotton are compulsory to pay tax under CGST act 2017 section 9(4) by the RCM(Reserve charge mechanism).
Q4. In respect of goods classified under Chapters 61, 62 and 63, the rate of tax for goods of sale value not exceeding Rs.1000/- is 5% and for those exceeding Rs.1000/- is 12%. Is this value transaction value or MRP?
According to the rate schedule declared by the government, all the goods having sale value below 1000 attract 5% GST and sale value above 1000 attract 12% GST. So that GST is on sale value on which tax has to be paid. It is not MRP.
Q5. There is no any declaration about the jute bags and jute blended goods.so there is confusion among the traders that the jute may be placed under chapter 42 of leather where there is 28% tax is imposed on leather accessories. But at the same time, it is said that to reduce the pollution and to protect the environment as well as to promote jute fibres; jute accessories may be exempted from GST.
Jute fibre is exempted from the GST but in chapter 4202,22, 30 according to the rate schedule, it is clearly mentioned that jute handbags and accessories attract 18% GST.
Q6. Man-made filaments and staple fibre attract 18% GST whereas fabric made out of it is attract only 5% GST. If I purchase man-made yarn of rupees 100 by 18% tax means by paying 18 rupees tax then by increasing the price by 50% means for 150 rupees if I sold grey fabric by 5% tax.it means by paying 7.50 rupees tax. Then what will happen to my remaining input credit 11.50 rupees? Will my remaining credit is refunded? And how much credit I will get?
You are eligible for ITC of 18 rupees that you paid on yarn.but whatever is the remaining credit will remain in your electronic laser credit and that will not be refunded.
Q7. I have a Cotton trousers garment manufacturing unit where the fabric is provided by fabric manufacturers and I give back the trousers to fabric manufacturers. So what is the rate of GST imposed on me either 5% or 18?
As your business is coming from job work according to the definition given in CGST act 2017 section 2 (68). Trousers come under appears so that the rate of GST will be 18%.
Q8. We are manufacturers of floor coverings which come under chapter 57. According to the GST conference taken on 11/ 06/2017, the GST rates are reduced from 12% to 5% on the coir mats, matting and floor covering which also come under chapter 57. Please clear the confusion that where all the mats coming under chapter 57 have 5% or only coir mats comes under 5% GST?
5% GST is only for coir goods.
Q9. We are in the business of curtains and furnishing fabrics. We are doing the trading mainly of woven, knitting, polyester and manmade fabrics. We want to know that above fabrics come under which chapter and under which slab they come?
Depending on composition woven fabrics are categorised under different headings. Knitted fabrics come under chapter 60 and 5% GST and polyester fabric come under chapter 54 and 55 and coated fabrics come under chapter 59.
Q10. what will be the rate on embroidery stripes and bags?1 it will be 5% or 12%?
Embroidery stripes and badges fabrics are put under chapter 5810 and there is 12% tax on it.
Q11. What is the difference between fabric and made-ups? Where is the shawl fabric or apparel or made-ups? And what is the rate of GST on the shawl?
Shawl comes under apparels and accessories. If the shawl is crochet or knitted then it comes under chapter 6117 and if not then it comes under 3214. If the price of a shawl is below 1000/ pic then the rate of GST will be 5% and if the price is more than 1000 then GST will be 12%.
Q12. dress materials are sold on the basis of length.there may be plane embroidery work on these dress materials too. So where these dress materials categorised.
Dress materials are categorised under chapter 6307 .and the rate of GST on dress materials is same as for the ready to wear garments.that is for the dress materials having sale price less than 1000 will attract the 5% GST and above 1000 attract 12% GST rate.