CBEC clarifies taxpayers' questions

The CBEC connected with taxpayers on twitter to clarify some of the doubts. Below, we have listed the discussed points.

1. Firstly, the CBEC has clarified that other than the profit-share, Partners’ remuneration under GST is considered taxable.

The CBEC said that remuneration to Partners over and above share of profits is not in nature of employer-employee relationship. For this reason it appears to be liable to GST.Input tax credit of IGST cannot be cross utilized among distinct persons. Vouchers would either be “goods” or “services” depending on which item they can be redeemed for.

2. On a query whether export through merchant exporter by 100% EOU would be zero rated, the CBEC clarified that only direct export of goods / services and SEZ (Special Economic Zone) supplies are zero rated u/s 16(1) for which refund is allowed u/s 16(3) of IGST Act to the exporter.

Simplified export procedure under GST and Transition Rules approved by GST Council would soon be placed in public domain according to the CBEC Tweets.

3. In case of “bill-to-ship-to” transactions, place of supply is the “bill-to” location given that goods are shipped to a different location based on instructions given by the “bill-to” party, but this transaction also involves second supply wherein the place of supply will be “ship-to” location, in terms of Section 10(1)(b) of IGST Act.

4. Also, it has been clarified that neither Swachh Bharat Cess nor closing balance of education cess and secondary higher education cess prior to March 1, 2015 can be carried forward in GST.

5. In case of advertisement by media owner / publisher to client / ad agency, the place of supply for services to Govt. / Statutory authority / local authority shall be governed by Section 12(14) and by Section 12(2) of IGST Act in case of services to any other entity, billing and discharge of GST to be done accordingly.

6. In case where advocate avails taxable services from unregistered person, he shall pay tax on reverse charge basis in terms of Section 9(4) of CGST Act.

7. VAT registered dealer can take full ITC on stock held on July 1, in respect of excise invoices in possession if the same are in his name.

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