GST masterclass answers traders' queries: Can L&T or D'Souza register?

The lessons are in Hindi this week, to be followed by English classes next week

Prime Minister Narendra Modi described the goods and services tax (GST) as “the good and simple tax” but traders found it difficult to register for the new tax system if their names had special characters in them — D’Souza, for example. The same problem could arise if Larsen & Toubro wants to register, because these words use special characters such as apostrophe or ampersand.

These and other questions were put to Revenue Secretary Hasmukh Adhia on the first day of the masterclass on the GST.  

Prakash Kumar, chief executive officer of GST Network, which is responsible for the technology infrastructure, pointed out the problem with special characters had arisen initially but had been fixed.

The first GST class conducted by officials was on returns and migration. On Friday, it will deal with transition and invoicing, and Saturday’s lesson will be on composition and record-keeping.

The lessons — GST ki masterclass — are in Hindi this week, to be followed by English classes next week.

Traders tweeted their queries for Thursday’s class, which were posed to officials by a moderator. Adhia explained the Rs 20 lakh and Rs 75 lakh composition scheme thresholds were available only if an entity was engaged in supply within a state. For interstate supply, registration was mandatory, he added.

However, if entities supply in more than one state, they need not register in each state unless they have branches there.

GST registration is based on the permanent account number, and entities with different verticals will need separate registration numbers. Also, entities with one unit in the domestic tariff area and another in a special economic zone will need separate GST registration numbers.

The responsibility for deducting taxes on goods or services bought from unregistered dealers lay with purchasers, explained Adhia. 

However, registered entities might not prefer to deal with unregistered dealers, he added. 

Dealers have to exhibit their GST registration number in their shops stating they are under the composition scheme and are not claiming input tax credit. 

On whether financial services would become costlier, Adhia said in insurance, the increased GST rate of 18 per cent was only on the risk cover and not on the portion that went into savings. Also, insurers will receive input tax credit on goods purchased, which was not the case earlier. 

A liquor trader wanted to know if he had to register. 

Officials explained that alcohol and fuel were kept out of the GST. Also, stamp duty, electricity duty, motor vehicle tax and entertainment tax by local bodies have not been subsumed in the GST.