GST Questions Related to Food Processing business with Solutions. FAQ on Food Processing under GST Regime. Get answer of your all important queries related to Food Processing business under GST Regime. GST is a consumption or destination based tax levied on the basis of the “Destination principle.” It is a comprehensive tax regime covering both goods and services, and be collected on value-added at each stage of the supply chain. Now check Queries related to Food Processing business with there solutions as per GST Acts 2017.

Question 1: If I have multiple manufacturing units in a State/UT, do I have to register all my companies separately or as a group?
Answer: You shall be granted a single registration in the State/UT. However, you have the option to take separate registration for each of your business verticals (as defined in section 2(18) of the CGST Act, 2017) in the State/UT.
Question 2: A registered person is sending semi-cooked food from his manufacturing unit at Gurgaon to his branch in Delhi. Is he required to pay any tax?
Answer: In accordance with the provisions of section 25(4) of the CGST Act, 2017, branches in different States are considered as distinct persons. Further, as per Schedule I, this constitutes supply made in the course or furtherance of business between distinct persons even if made without consideration. As it is an inter-State supply, the registered person is required to pay IGST.
Question 3: A registered person is supplying manufactured food products to another person. Transportation charges are required to be paid by the supplier but are actually paid by the recipient. Whether this transportation charges would be added in the supply value?
Answer: If the supplier is liable to pay any amount in relation to a supply, such amount would be a part of transaction value, even if the same has been paid by the recipient. In this case, the transportation charges shall be added to the value of supply.
Question 4: A registered person is a manufacturer of taxable food items. His factory is in rental premises. Whether this person is eligible to claim ITC on tax charged onthe rental amount?
Answer: Yes, the person is eligible to claim ITC of tax charged on the rental amount.
Question 5: Whether the supplier can reduce the tax elements against goods returned to him?
Answer: Yes, the person is eligible to reduce the tax liability by issuing credit notes to his recipient for such returned goods subject to the condition that the recipient reduces the claim of ITC to that extent if ITC was availed by him. (Credit Note must bear reference of original invoice No.)
Question 6: What will be the rate of tax on cold drinks ( nonalcoholic beverages ) and ice cream when served in non-AC Restaurant along with food ?
Answer: The rate of tax shall be 12 %. In the event of the supply being made in an AC restaurant, the rate of tax shall be 18%. If the restaurant was availing compoistion scheme (can do so only if ice cream is not manufactured by the restaurant), the rate of tax shall be 5% of the aggregate turnover.
Question 7: The supplier has sold machinery for hotel industry on 28-06-2017. The purchaser has received the invoice and machinery on 05-07-2017. Whether ITC of Duty / VAT paid ( under the existing law ) on machinery can be allowed to be claimed ?
Answer: No. Such credit is not admissible in case of machinery, being capital goods. As per Section 140 ( 5 ) of the CGST Act, 2017, credit of eligible duties and taxes in respect of only inputs / input services in transit during transition from Pre-GST to Post-GST is allowable. This is subject to the condition that the tax on such supply is paid under the existing law and the recipient records this receipt in his books of accounts within thirty days of the appointed day.
Question 8: Is Atta / Maida/ Besan supplied in bulk liable to tax under GST?
Answer: Outward supply of these goods if effected without registered brand name is exempt under GST. However , if the outward supply is made under a registered brand name and put up in unit container then it would be liable to tax @ 5%.
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. |
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? | A person who takes voluntary registration is entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi– finished or finished goods held in stock on the day immediately preceding the date of grant of registration. Two important points being that the goods in stock must qualify as “input” and that the tax paid at the time of its purchase must qualify as “input tax” under GST. Any goods which have been capitalised in the books of account will not be treated as an input. Hence credit on computers will not be available if the value of the same has been capitalized in the books of accounts. Further, in terms of section 18(1)(b) of the CGST Act, 2017, taxes paid on accounting software which were acquired before registration will not be available as credit since credit is not available in respect of services in such cases. Other than that, credit shall be available on CGST/SGST paid on packing materials, etc. subject to conditions and restrictions spelt out in sections 16 to 18 of CGST Act, 2017 |
When shall I start charging tax i.e. from the date I apply for registration or only after I have got my registration number? | Only from date the registration has been granted. The tax invoice also can be issued from that date only. Prior to it neither you can issue tax invoice nor charge any tax on the invoice. |
Will I have to issue tax invoice for all sales that I make i.e. branded or un-branded after getting | 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 [ Section31(3) (c) of the CGST Act, 2017 read with Rule 49 of the CGST Rules, 2017]. |
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 |
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. |
Is place of supply required to be mentioned in the tax invoice for local sales also? | No. Under Rule 46(b) of the CGST Rules, 2017, the place of supply along with the name of the State is required to be mentioned in case of an inter–State supply only. |
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