We are small service providers mostly rendering services within the state, but occasionally receive small amounts from our clients in other states. Our aggregate value of services on an all-India basis does not exceed the threshold limit. Is there any way to avoid registration and compliance rigours of GST?
The GST Council has now decided that service providers will be allowed to make inter-state supplies of up to Rs 20 lakh without GST registration. A notification is expected within a week.
Is it possible for us to purchase goods from an authorised distributor of a manufacturer and export the same? If so, how?
You can purchase the goods on payment of GST and export the goods either without payment of IGST under letter of undertaking or on payment of IGST under claim of refund.
Is custom notification 01/2017 custom (CVD) dated September 9, 2017 (regarding levy of countervailing duty on import of stainless steel coils from China) applicable in case of imports of such coils under advance authorisation?
The countervailing duty levied under notification 1/2007 is to counter the effect of export subsidies in the exporting country that depress prices. That notification is levied under Section 9 of the Customs Tariff Act, 1975). The Custom exemption notification no. 18/2015-Cus dated April 1, 2015 exempts duties levied under Section 12 of the Customs Act, 1962 and Sections 3(1), (3), (5), 8C and 9A of Customs Tariff Act, 1975. Under this notification there is no exemption to duty levied under Section 9 of the Customs Tariff Act, 1975. Therefore, countervailing duty under the said notification 1/2017 is leviable even if the goods are imported under advance authorisation.
Is GST applicable on merchanting trade transactions, i.e. where the goods we purchase from, say, China and sell to a party in Germany, go directly from China to Germany without entering India?
In my opinion, GST should not be levied on such third country exports because the goods do not enter India at all. However, the way the law is worded, tax liability can arise. Section 11 of the IGST Act, 2017 deals with place of supply of goods imported into, or exported from India whereas Section 10 of the Act deals with the place of supply of goods, other than supply of goods imported into, or exported from India. So, in a situation where the goods are not exported from India or imported into India it is Section 10 that comes into play. Now, as per Section 10(a), the place of delivery is Germany (non-taxable territory), whereas as per Section 10(b), the place of supply is India. In my opinion Section 10 (b) is more appropriate in case of merchanting trade, because the goods move on the directions of the party in India. That gives rise to tax liability but taxing goods that do not enter India at all flies in the face of logic. CBEC should look into the matter and clarify and if necessary, get the law amended.