GST: Is CST paid on closing stock eligible for input tax credit?

You should not be eligible to claim input credit in respect of goods held in closing stock on 30June

I purchase goods from outside the state but sell these within the state. My annual turnover is less than Rs 20 lakh. As I understand, I am not required to get registered under the goods and services tax (GST). But, my suppliers refuse to supply me until I provide them with my GST Network number. Please advise.  

According to the GST law, the following categories of persons are mandatorily required to obtain registration: Persons making any inter-state taxable supply; persons required to pay tax under reverse charge; persons required to distribute input tax credit as an input service distributor; and persons having an annual aggregate turnover of more than Rs 20 lakh (on a pan-India basis) during a financial year. 

The list doesn’t include a person making inter-state procurement of goods.  Therefore, unless you come under any of these categories, you should not be mandatorily required to obtain GST registration. However, the tax charged by the supplier would be a cost to you, as you would not be entitled to claim input tax credit for it.  

The fact that you are not registered under the GST law should not have any adverse impact on your supplier.   

Is central sales tax (CST) paid on closing stock eligible for input tax credit or can it be set off by GST?

A person holding closing stock of goods immediately prior to the date of GST implementation is eligible to claim input tax credit of eligible duties and taxes, subject to prescribed conditions. The list of such eligible duties and taxes doesn't include CST paid under the earlier indirect tax regime. Therefore, you should not be eligible to claim input credit of CST paid in respect of goods held in closing stock on June 30. 

We purchase stationery for office use but retailers are unwilling to add my GSTN. How do I get input credit? Also, I want to know if the GST paid on stationery can be used as input? 

To avail input tax credit, a buyer must possess a valid tax invoice containing all prescribed particulars, including the GST registration number of the buyer. Therefore, for you to be able to claim the input tax credit, the retailer must mention your GST registration number on the invoice. 

As regards input tax credit on stationery, as long as the stationery is for use in the course of or in furtherance of business, you should be eligible to claim input tax credit on it. 

What is the difference between ‘exempted goods and services’ and ‘zero-rated goods and services’? 

Exempted goods and services are supplies taxable under the GST Act. However, such supplies have been made exempted by the government by way of notification.

Export of goods and services outside India and supplies to a  special economic zone (SEZ) by a supplier located in India are regarded as zero-rated supplies under the GST Act. Such suppliers are eligible to claim refund of taxes paid at the time of export/supplies to SEZ. Such supplier has two options. First, to supply goods/services with payment of taxes. Second, to supply goods/services without payment of taxes. 

Under the first, the supplier can claim refund of taxes paid at the time of export/supplies to SEZ, whereas under the second, the supplier can claim refund of unutilised input tax credit 
 

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