What is the impact of GST on trust registered under Section 12AA?

Is the central state tax (CST) paid on closing stock held on June 30, 2017, available as deemed credit and can I set it off against goods and services tax (GST) liability? 

The GST law permits a supplier holding closing stock as on June 30, 2017, to claim deemed input tax credit of eligible duties and taxes. Such input tax credit can thereafter be used for payment against output GST liability. However, the list of eligible input tax credit doesn’t include CST. Therefore, you will not be eligible to claim input tax credit of CST paid in respect of closing stock held as on June 30, 2017.   

I intend to give my fully furnished residential flat as a guest house to a multinational company. The flat will be used for residential purposes by the company for its employees only. No charges will be taken from the employees by the company. Is GST applicable on the licence fees?

The tax implications would depend upon the precise nature of the transaction, that is, whether the residential flat is provided by you to the MNC under a residential lease arrangement or as a guest house. If the flat is provided under a residential lease, the transaction should be exempt from GST 

However, if you are providing an accommodation in a guest house, the transaction should attract GST, if the declared tariff per day is more than Rs 1,000. The applicable rate of GST would depend upon the declared tariff. If it is more than Rs 1,000 per day but less than Rs 2,500, GST should be applicable at the rate of 12 per cent. And, if it is more than Rs 2,500 per day but less than Rs 7,500, then the rate of GST should be 18 per cent. If it is higher than Rs 7,500, then the GST rate should be 28 per cent.

Amit Bhagat, tax partner, PwC India.
I am a seller on Amazon US and Amazon India. Both these businesses are run under different proprietorships under my PAN card and are essentially business-to-consumer (B2C). The turnover of selling via Amazon US is around Rs 40 lakh and via Amazon India is Rs 10 lakh. Can you please help me understand the GST applicability for both these businesses? Also, do I need to take two GST numbers because exports have zero GST?

Under GST law, every supplier of goods/services having an annual aggregate turnover of Rs 20 lakh on a pan-India basis during a financial year are required to obtain GST registration. The annual aggregate turnover includes all taxable, exempt and zero-rated supplies, including exports. 

We understand that your aggregate turnover during a financial year is more than Rs 20 lakh. Therefore, you are required to obtain GST registration in all states from where you are supplying goods. Export of goods by you should be treated as ‘zero-rated’ supplies under GST law. For such supplies, you should have an option to export the goods after payment of integrated tax, and thereafter, claim refund of such tax paid. Else, you may supply the goods without payment of integrated tax under a letter of undertaking/bond. Domestic supplies of goods by you should attract GST at applicable rates, depending on the nature of the goods. The GST law has an enabling provision under which an e-commerce company may collect tax at source. 

What is the impact of GST on trust registered under Section 12AA of the Income Tax Act, 1961?

Exemption provided under the service tax law for charitable services rendered by trust registered under Section 12AA of the Income Tax Act, 1961, has been carried forward under the GST law as well.  Therefore, such service provided by such trust should continue to be exempt under GST law also.
The writer is tax partner, PwC India. Aditya Khanna, associate director, PwC contributed to this column. 
The views expressed are experts’ own. Send your queries to yourmoney@bsmail.in

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel