Question 1. How would a particular transaction of goods and services be taxed simultaneously under Central GST (CGST) and State GST (SGST)?

 

Answer :     The Central GST and the State GST would be levied

simultaneously on every transaction of supply of goods and services except on exempted goods and services, goods which are outside the purview of GST and the transactions which are below the prescribed threshold limits. Further, both would be levied on the same price or value unlike State VAT which is levied on the value of the goods inclusive of Central Excise.


A diagrammatic representation of the working of the Dual GST model within a State is shown in Figure 1 below.

Question 2.   Will cross utilization of credits between goods and services be allowed under GST regime?

 

Answer: Cross utilization of credit of CGST between goods and services would be allowed. Similarly, the facility of cross utilization of credit will be available in case of SGST. However, the cross utilization of CGST and SGST would not be allowed except in the case of inter-State supply of goods and services under the IGST model which is explained in answer to the next question.

Question 3. How will be Inter-State Transactions of Goods and Services be taxed under GST in terms of IGST method?

Answer: In case of inter-State transactions, the Centre would levy and collect the Integrated Goods and Services Tax (IGST) on all inter-State supplies of goods and services under Article 269A (1) of the Constitution. The IGST would roughly be equal to CGST plus SGST. The IGST mechanism has been designed to ensure seamless flow of input tax credit from one State to another. The inter-State seller would pay IGST on the sale of his goods to the Central Government after adjusting credit of IGST, CGST and SGST on his purchases (in that order). The exporting State will transfer to the Centre the credit of SGST used in payment of IGST. The importing dealer will claim credit of IGST while discharging his output tax liability (both CGST and SGST) in his own State. The Centre will transfer to the importing State the credit of IGST used in payment of SGST. Since GST is a destination-based tax, all SGST on the final product will ordinarily accrue to the consuming State.

A diagrammatic representation of the working of the IGST model for inter-State transactions is shown in Figure 2 below.

 

Question 4. What is the format of Provisional ID?

 

 

 

 

Format of Provisional ID

 

 

22

AAAAA0000A 1

M

5

 

'-------- '------- ' y

y

Y

State Code

Permanent Account Number (PAN) Entity

number of

Alphabet

'Z'by default

Check sum digit

 

the same

DAM hnUor

 

kan noiaer in a state

 

 

 

Question 5. What is ARN? What is the format of ARN?

 

ARN refers to Application Reference Number. It is a unique number assigned to each transaction completed at the GST Common Portal. It will also be generated on submission of the Enrolment Application that is electronically signed using DSC. ARN can be used for future correspondence with GSTN.

 

Format of ARN

AA 07 07 16 000000 1

•nr1 V V V 1---------------------- 1------ 1 Y

Alphabets   State Code     Month                    Year        Six digit-System generated code Check sum digit

 

Miscellaneous

1.  I have multiple businesses in one state registered using the same PAN. Do I need to enrol each business separately with GST?

 

As one PAN allows one GST Registration in a State, you may register one business entity first. For the remaining business within the State please get in touch with your Jurisdictional Authority.

2.  What is ISD Registration?

 

ISD stands for Input Service Distributor. An Input Service Distributor refers to a person who distributes credit, in respect of the tax invoices of the services received at the Head Office, to its branches where the services have been supplied actually. Tax invoice refers to the invoice issued under Section 23 of the Model Goods and Services Act.

 

If you are an existing ISD Taxpayer, you need to apply afresh in the GST Common Portal for the State in which you desire to seek registration. For that you need to inform your Central Jurisdictional Authority.