GST: FAQs on invoicing and registration under new tax regime

Law mandates person to obtain registration from place where he makes a supply of goods/services

I have a registered office and business in Pune (Maharashtra), and I have purchased steel goods from one registered trader or manufacturer from Kolkata (West Bengal) and sold the same on IGST to my customer in Hyderabad (Telangana). To save time and freight charges from Kolkata to Pune, I want to dispatch the goods directly to my customer in Hyderabad. Guide me on how to issue the invoice, keeping in mind that my supplier in Kolkata shouldn’t know to whom I am selling the goods in Hyderabad, as I am dispatching goods directly from Kolkata. Could I issue an integrated goods and service tax (IGST) invoice from Pune to Hyderabad and send the same to the transporter?

Under GST law, if a supplier of goods instructs his vendor to supply directly to a third person, it is deemed that the supplier had received the goods from his vendor at its principal place of business and the tax is to be so determined. 

We understand that your principal place of business is in Maharashtra, for which you would have obtained the GST registration number. Though the vendor would supply the goods directly from his location in West Bengal to your customer in Hyderabad, it would be deemed that you had first received the goods at your location in Maharashtra. Subsequent supply of goods by you should be treated as supply from Maharashtra to Hyderabad, which should attract integrated tax. 

I have my head office in Bengaluru (only input) but my site office is in Tamil Nadu. Do I need two registrations?

The GST law mandates every taxable person to obtain the registration from the place where he makes a taxable supply of goods/services. In your case, it would need to be determined from which location you are supplying goods/services. We understand you are doing so from your location in Tamil Nadu. Therefore, you are required to obtain the GST registration of Tamil Nadu, if your annual aggregate turnover is more than Rs 20 lakh. As you are not supplying any goods/services from Bengaluru, you should not be mandatorily required to obtain the GST registration if Karnataka.  

However, if you do not obtain GST registration of Karnataka, you might not be entitled to claim any input credit of taxes charged by suppliers of goods/services received of Karnataka.

I started a proprietary firm on June 30 for repairing motor vehicles and buying spare parts for replacement of vehicles. All activities are within the state of West Bengal. I do not sell any spares directly to customers. My annual turnover would be below Rs 20 lakh. Let me know whether registration under GST is required. Also, what would be the rates for GST on the services I render?

According to GST law, a supplier of goods/services having an annual aggregate turnover of less than Rs 20 lakh (on a pan-India basis) during a financial year is not required to obtain GST registration. However, this threshold limit is not applicable if the supplier is undertaking inter-state supply. We understand you are engaged in intra-state supplies and accordingly are not required to obtain registration under GST law if your annual aggregate turnover doesn’t exceed Rs 20 lakh.  

Whether the activity undertaken by you should qualify as supply of service or supply of goods (as you might supply spares to customers), would need to be determined on the precise terms of the transaction.
 

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