Question 1

Who is legally required to register for GST in India?

Accepted Answer

GST registration is mandatory if your aggregate annual turnover exceeds ₹40 Lakhs (for exclusive supply of goods in normal states) or ₹20 Lakhs (for services). However, registration is mandatory from Day 1 with ₹0 turnover if you: (1) engage in inter-state supplies, (2) sell via e-commerce portals like Amazon/Flipkart, (3) receive services under Reverse Charge (RCM), or (4) export services/software.

Question 2

Can I export SaaS or software consulting services without paying 18% GST?

Accepted Answer

Yes! Export of services to clients outside India where payment is received in convertible foreign exchange (USD, EUR, GBP, etc.) is classified as a 'Zero-Rated Supply' under Section 16 of the IGST Act. By filing a free Letter of Undertaking (Form GST RFD-11 LUT) once per financial year, you can bill foreign clients at 0% GST.

Question 3

What is the new Invoice Management System (IMS) introduced by GSTN?

Accepted Answer

IMS is an interactive portal utility launched by GSTN allowing recipient taxpayers to actively Accept, Reject, or mark as Pending any supplier invoice before filing GSTR-3B. It ensures that only genuine, verified invoices flow into your GSTR-2B, minimizing automated tax discrepancy notices.

Question 4

Can I claim Input Tax Credit on personal expenses or motor cars?

Accepted Answer

No. Section 17(5) of the CGST Act explicitly blocks ITC on motor vehicles (unless used for passenger transport or driving school), food & beverages, outdoor catering, health insurance, club memberships, and personal consumption goods.

Question 5

What is the strict GSTR-2B matching rule under Rule 36(4) & Section 16(2)(aa)?

Accepted Answer

Under Section 16(2)(aa), you can ONLY claim Input Tax Credit if your supplier has actually filed their GSTR-1 and the invoice appears in your auto-populated GSTR-2B statement. The previous 5% or 10% provisional credit buffer has been completely eliminated. Any ITC claimed outside GSTR-2B triggers an automated Form DRC-01C mismatch notice.

Question 6

What is Rule 86B and who must pay a minimum of 1% GST in cash?

Accepted Answer

Rule 86B restricts the use of electronic credit ledger (ITC) to a maximum of 99% of output tax liability if your taxable supplies (excluding exempt supplies) in a month exceed ₹50 Lakhs. Applicable businesses must pay at least 1% of their output tax liability in cash via Challan PMT-06.

Question 7

What are the statutory late fees and interest rates for delayed GSTR-3B filing?

Accepted Answer

Filing GSTR-3B after the 20th of the month incurs a mandatory late fee under Section 47 of ₹50 per day (₹25 CGST + ₹25 SGST) for regular returns, or ₹20 per day for NIL returns, capped at ₹10,000 per return. In addition, Section 50 mandates 18% per annum interest calculated on net cash tax liability from the due date until actual payment.

Question 8

Can I obtain a GST registration on my residential home or a virtual/co-working office?

Accepted Answer

Yes! A residential home (owned or rented) is 100% legally permissible as a principal place of business with an electricity bill and owner NOC. Virtual offices at registered co-working spaces are also accepted across most states, provided you have a valid rent agreement and NOC showing specific desk allotment.

Question 9

What happens if my supplier does not file their GSTR-1 or pay their tax to the government?

Accepted Answer

Under Section 16(2)(c) read with Rule 37A, if your supplier fails to furnish GSTR-3B by the 30th September following the end of the financial year, you must reverse the Input Tax Credit previously availed on that invoice along with interest. Once the supplier files and pays the tax, you can re-claim the reversed ITC.

Question 10

How do I surrender or cancel my GST registration if turnover drops below the threshold?

Accepted Answer

If your business closes down or turnover falls permanently below statutory thresholds, you can file Form GST REG-16 online. Once cancellation is approved, you must file a final return in Form GSTR-10 within 3 months to discharge any tax liability on closing stock and capital assets.

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