‘No service tax exemption for importer on basis of constitution or turnover’

CHATROOM

According to recent notifications, importers have to pay service tax on ocean freight under reverse charge mechanism with effect from April 23, 2017. Are we, as a small importer proprietary concern with turnover of less than ~2 crore, required to pay service tax by registering for service tax for goods imported between April 23 and June 30, especially when the Goods and Services Tax is applicable from July 1? Yes. The notifications 14/2017-ST, 15/2017-ST and 16/2017-ST, all dated April 13, 2017, do not give any exemptions to importers on the basis of their constitution or turnover. So, as the importer, you have to pay service tax on ocean freight on reverse charge basis, when imports are made on payment of freight abroad by the consignor. We have balance of education cess (EC) and secondary and higher education cess (SHEC) lying unutilised since March 1, 2015. These were not allowed to be utilised for payment of excise duty or service tax. Can we carry over these balances in the GST regime? No. The Transitional Provisions under the CGST Act, 2017 allow carryover of only the Cenvat Credit and Credit of eligible duties mentioned in the explanations given at the end of Section 140. EC and SHEC are not mentioned there. So, these provisions do not allow you to carry over the Credit of EC and SHEC. Will the CT-1 and ARE-1 procedure continue in the GST regime? The ARE-1 procedure is not prescribed in the GST laws. You can clear goods for exports under bond or UT-1 undertaking and submit the details in your return and upload the documents. You can export goods on GST payment and claim a refund of that by uploading your refund application along with prescribed documents. For exports through a merchant exporter, you have to pay the GST and clear the goods. The merchant exporter can take Input Tax Credit and export the goods under bond or on duty payment. The refund of unutilised Credit on account of export under bond or UT-1 can be claimed. The CT-1 procedure is not prescribed in the GST laws. I am in Mahipalpur, which is near the border of Delhi and Gurgaon. I provide accounting services to small businesses in Delhi as well as Gurgaon. My turnover is less than ~10 lakh. So, I am not registered with the service tax authorities. I am told that all those with turnover of less than ~20 lakh need not register in the GST regime. Is that correct? No. Exemption from registration for persons whose turnover is less than ~20 lakh is available only if they give their services within the same State. Since you give services from Delhi to Haryana, it is considered inter-state supply. Under the GST laws, even if you make inter-state supply of one rupee, you have to take registration, issue invoices, furnish returns, and so on. There is no exemption based on turnover for inter-state supplies in the GST regime.