Question : I am a whole seller of rice dealing in both branded and un-branded rice. I purchase them locally (i.e. from within the State) and also from outside the State (inter-State purchase). In the last financial year my turnover was Rs 5.5 Crore. Today, I am not registered under VAT.My questions are:
(i) Will I have to get myself registered now?
Answer: Rice put in a unit container and bearing a registered brand name is taxable @ 5%. In accordance with the provisions of section 22 of the CGST Act, 2017 (applicable in your case), a person becomes liable to be registered in the State/UT from where he makes taxable supply of goods or services or both if his aggregate turnover (which includes value of exempt supplies as well) in a financial year exceeds Rs.20 Lakh. Hence, liability to get registration accrues in your case from the date the aggregate turnover in the current financial year exceeds Rs.20 lakh.
(ii) The suppliers of basmati rice (branded) are saying that they will charge 5% IGST and I must get myself registered to avail the ITC. What do I do?
Answer: As rice put up in a unit container and bearing a registered brand name is taxable @ 5%, the suppliers of branded basmati rice located in other States would be charging IGST @ 5%, whose credit can be availed only when the recipient is registered under the CGST Act, 2017.Therefore, if you want to avail of input tax credit, you must get yourself registered. That said, for making inter-State purchases one is not mandatorily required to be registered.
(iii) 90% of my turnover will of un-branded rice, while 10% only will of branded one. Can I sell both of them in one invoice?
Answer: As per Invoice Rules, a registered person supplying taxable goods is required to issue a tax invoice and in case of exempted goods, he is required to issue a bill of supply. As all the contents of bill of supply are included in the tax invoice, a separate bill of supply need not be issued in case of the exempt component. Thus, both branded and unbranded rice can be included in one invoice.
(iv) As an un-registered taxable person now, am I required to furnish information like HSN, place of supply, taxable value, etc in my invoice? (I know that it is mandatory for a tax invoice only).
Answer: HSN codes, taxable value, place of supply are required to be recorded in a tax invoice to be issued by a registered person under rule 46 of the CGST Rules, 2017. An unregistered person cannot issue a tax invoice.
(v) Assuming, I apply for voluntary registration and obtain GST registration:
| (a) | Will I get ITC on the IGST paid on branded rice lying in stock on the date prior to the date of my liability? | Yes, a person who takes voluntary registration is entitled to take credit of input tax in respect of inputs held in stock on the day immediately preceding the date of grant of registration. In this connection, section 18(1)(b) read with section 25(3) of the CGST Act, 2017 refers. | |||||||||
| (b) | Will I get ITC on CGST & SGST paid on packing materials, office stationery, computer and accounting software purchased and lying with me as stock as business assets on the date preceding the date from which I have become liable to pay tax under GST? |
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| (c) | When shall I start charging tax i.e. from the date I apply for registration or only after I have got my registration number? |
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| (d) | Will I have to issue tax invoice for all sales that I make i.e. branded or un-branded after getting registered? | Rice put up in a unit container and bearing a registered brand name is taxable @ 5% and tax invoice has to be issued for supply of taxable goods [ Section 31(1) of the CGST Act, 2017 read with Rule 46 of the CGST Rules, 2017]. For sale of goods exempt from tax i.e. unbranded rice, a bill of supply has to be issued [ Section 31(3) (c) of the CGST Act, 2017 read with Rule 49 of the CGST Rules, 2017]. | |||||||||
| (e) | Is it compulsory to show the tax amount separately on the face of the tax invoice? | Yes, it is mandatory under section 33 of the CGST Act, 2017. | |||||||||
| (f) | I have three shops in the city, can I issue tax invoices using prefix for these different locations? | Yes. It may, however, be ensured that the invoice conforms to the requirements under Rule 46(b) of the CGST Rules, 2017. |
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