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TMI BlogFAQ for GST on IT/ITES dated 18-08-2017X X X X Extracts X X X X X X X X Extracts X X X X ..... involving a temporary transfer or permitting the use or enjoyment of any intellectual property right. The other implication is that the supplier of software services would not be eligible for the composition scheme. Question 3 : A is a dealer in Computers and Computer parts having turnover of ₹ 8 lakh in a year; does A have to register under GST? Answer : Every supplier located in a State or Union territory, whose aggregate turnover in a financial year exceeds twenty lakh rupees, is liable to be registered under GST. This limit of turnover for a special category State is ten lakh rupees. A , whose aggregate turnover is only ₹ 8 lakh in a year, is therefore not liable to registration. Question 4 : The registered person B receives small portions of software code from individuals which he then integrates and supply as a package to clients. These individuals are having small turnover of ₹ 5 to 10 lakh, and therefore are not registered in GST. Whether there is any liability on B in respect of services provided by such individuals? Answer : If the supplies are made by unregistered suppliers, GST is liable to be paid by the recipient, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here he receives services is outside India or, if he does not have a place of business, his usual place of residence is outside India. Question 10 : Would I be liable to pay GST on reverse charge even if the foreign supplier of software from whom I buy for use in my firm registered under GST was to accept the payment in Indian Rupees? Answer : Yes, you would be liable to pay GST. A supply is treated as an import of service if the following conditions are satisfied : (1) the supplier of service is located outside India; (2) the recipient of service is located in India; and (3) the place of supply of service is in India. The place of such supply would be taken to be the location where the firm is registered (in GST) and the supplies would attract integrated tax (IGST). The factum of which currency was used to pay the consideration is immaterial. Question 11 : I am an Indian Company who makes software and sells it outside the country. I have hired a firm (not a related party) C located abroad to facilitate the supply of software in Europe and the USA; would I be liable to pay GST on the payments that I make to this entity abroad? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a State shall make a separate application for registration for SEZ unit(s) as a business vertical distinct from his other units located outside the Special Economic Zone in that State (Refer Rule 8(1) of CGST Rules, 2017). Question 15 : I have a unit in the DTA and another in the SEZ; can I take a common registration? Answer : No. A person having unit(s) in a Special Economic Zone as well as outside the SEZ in a State, shall make a separate application for registration for SEZ unit(s) as a business vertical distinct from his other units located outside the Special Economic Zone in that State (Refer Rule 8(1) of CGST Rules, 2017). Question 16 : If I supply a laptop bag along with the laptop to my customer, what would be the rate of tax leviable? Answer : If the laptop bag is supplied along with the laptop in the ordinary course of business, the principal supply is that of the laptop and the bag is an ancillary. Therefore, it is a composite supply and the rate of tax would that as applicable to the laptop. Question 17 : I am obtaining online database access services from a company abroad over the net, would I have to pay tax on reverse charge? Answ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equired to reverse the input tax credit on the parts/components replaced. Question 21 : An Original Equipment Manufacturer (OEM) has an obligation to provide repair services to their customers in the warranty period. This activity is outsourced by OEM to D , who bills the OEM for the services he provides to the customer. What is the tax liability of D ? Answer : D is providing service to the OEM. GST is payable on the value of any supplies made by D to OEM i.e. in respect of bills raised by D on the OEM. Question 22 : How will the defective parts be sent to the mother warehouse/repairing centre for repair by the downstream repairing centres? What is the tax liability? Answer : The defective parts shall be sent for repair on a delivery challan accompanied by such e-way bill as may be prescribed. GST shall be chargeable on the repair amount, including the cost of parts, charged by the repairing centre. Question 23 : What is the tax liability in a scenario where supplies are made from multiple locations (in different States) of the supplier to the recipient under a single contract? Answer : Delivering services from various locations and inte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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