Can supplier adjust deposited CGST and SGST with IGST?

No requirement under GST law to pay interest at 18% per annum because of delay in filing of the returns

I had undertaken an interstate transaction on which I understand integrated goods and services tax (IGST) should be applied. However, at the time of the transaction, I inadvertently considered it as an intrastate transaction and deposited central GST and state GST instead. Can I adjust the deposited CGST and SGST with the IGST?

There is no provision allowing a person to adjust CGST and SGST deposited inadvertently against a transaction actually liable to IGST. However, there is a provision under GST law that allows a supplier to claim a refund of central tax and state tax paid on a transaction inadvertently considered an intrastate transaction, though it actually qualifies as an interstate one. For this purpose, an application in the prescribed form is required to be filed specifically stating the details of such transaction.

The aforesaid provision also specifically provides that no interest should be payable due to delay in payment of IGST, if CGST and SGST had already been deposited earlier, considering the transaction as an intrastate supply. 

One of the conditions in the recent notification no. 40/2017-Central tax (rate) is that a registered recipient should be registered with an export promotion council or a commodity board recognised by the department of commerce. Does it mean if he is not registered, the supplier has to charge full GST?

Through the notification, the government has provided an option to a registered supplier supplying goods to a registered recipient (a merchant exporter), to pay central tax at 0.05 per cent. However, this benefit has been provided subject to fulfilment of all the prescribed conditions. Even if one of the prescribed conditions is not fulfilled, the supplier should be required to charge GST rate applicable based on the harmonised system of nomenclature (HSN) of the goods supplied. 

Amit Bhagat, tax partner, PwC India.

One of the specific conditions prescribed in the notification is that the recipient should be registered with an export promotion council or a commodity board recognised by the department of commerce. If this condition is not fulfilled, GST should be applicable based on the HSN of such goods.

Is the interest rate of 18 per cent a year payable over and above late fee for delay in filing of GST return? If yes, under which provisions? 

GST law prescribes that any registered person who fails to furnish the returns by the due date shall pay a late fee of Rs 100 for every day during which such failure continues subject to a maximum of Rs 5,000. However, there is no requirement under the GST law to pay interest at 18 per cent per annum because of delay in filing of the return.  

In a recent notification, the applicability of GST on reverse charge basis has been suspended. In this scenario, we want to know if the notification is applicable on import services for which we pay GST on reverse charge basis?

In case of import of services, the integrated tax is payable under Section 5(3) of the Integrated Goods and Service Tax Act, 2017. The liability to pay GST under reverse charge has only been deferred in respect of transactions falling under Section 5(4) of the IGST Act, which only covers procurements made from suppliers not registered under GST law. Accordingly, import of services should continue to be liable to integrated tax under the reverse charge mechanism.

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