Goods and Services Tax (GST)

  • Goods and Services Tax (GST)

Frequently Asked Questions

General Overview

1. What is GST? When will GST be rolled out?

GST is a dual tax levied by both central and state governments on the supply of goods and services. GST will replace the multiple central and state taxes and standardize the tax structure. GST has been implemented across 28 states and 7 union territories from July 1, 2017. In Jammu and Kashmir, GST has been implemented from July 8, 2017.

2. Which taxes presently levied at the Centre and State level will be replaced by GST?

GST will replace the following taxes which are currently levied:

Taxes to be included in GST

Taxes not to be included in GST

Central taxes

Central Excise Duty

Basic Customs Duty

Additional Duties of Excise (Goods of Special Importance)

 

Additional Duties of Excise (Textiles and Textile Products)

 

Duties of Excise (Medicinal and Toilet Preparations)

 

Additional Customs Duty (CVD)

 

Special Additional Duty (SAD)

 

Service Tax

 

Central Sales Tax

 

Surcharge and cess

 

State taxes

Value Added Tax

Stamp Duty

Purchase tax

State Excise Duty

Entry Tax, Octroi, Local Body Tax

Professional Tax

Entertainment and Amusement Tax (except when levied by the local bodies)

Motor Vehicle Tax

Luxury Tax

Electricity Duty

Taxes on lotteries, betting and gambling

State levies on petroleum products

State Surcharge and cess related to the supply of goods and services

 

 

3. What are the various types of taxes under GST?

The government of India has identified three models of GST, depending on whether the centre or the states/union territories are allowed to collect revenue from taxation.

  1. Central GST (CGST) – Tax to be levied by the Centre on intra-state supply of goods and services
  2. State GST (SGST)/Union Territory GST (UTGST) – Tax to be levied by the States/Union Territories on intra-state supply of goods and services
  3. Integrated GST (IGST) – Tax to be levied by Centre on inter-state supply of goods and services, and on imports

4. What will be the various rates of GST?

For goods, a tax structure of four types of rates has been finalized by the government:

 

Particulars

Rate

Nil rated goods

0%

Lower rate (items of mass consumption)

5%

Standard rate

12% or 18%

Higher rate (demerit goods)

28% plus cess

5. Is State GST/Union Territory GST applicable in all the states/union territories across India?

SGST is applicable in all states across India. UTGST is applicable in:

  1. Andaman and Nicobar Islands
  2. Chandigarh
  3. Dadra and Nagar Haveli
  4. Daman and Diu
  5. Lakshadweep

Delhi and Pondicherry have State Legislatures and will be treated as states under GST law. The applicable GST on local transactions within Delhi and Pondicherry will be CGST and SGST.

6. Will services be taxed under GST at state level? How is GST different from Service Tax?

Under GST, services will be assessed and taxed by both Central and State Governments. Separate registrations will have to be obtained in every state where there is a place of business. Therefore, if services are provided from that state/place of business, then GST has to be deposited in that state. This is different from the current service tax law, as presently, service tax is paid centrally in the state where central registration has been obtained, irrespective of the services provided in different states.

7. How can I determine the nature of GST that will be applicable on goods/service?

The nature of tax i.e. whether CGST + SGST / UTGST or IGST depends on whether the transaction is inter-state supply or an intra-state supply.

If the service provider and the place of supply are in the same state, it will be intra-state supply and local CGST and SGST / UTGST will be applicable.

However, if the service provider and the place of supply are in different states, IGST will be applicable as the transaction is in the nature of an inter-state supply.

Description

Nature of transaction

Taxes applicable

Service provider and place of supply are in same state

Intra-state supply

CGST + SGST

Service provider and place of supply are in same union territory

Intra-state supply

CGST + UTGST

Service provider and place of supply are in different states/ union territories

Inter-state supply

IGST

8. How will imports be taxed under GST? What are the duties payable on imports? Who is liable to pay such taxes?

Integrated GST (IGST) and Basic Customs Duty (BCD) will be applicable on the import of goods. The duties payable on import of goods under GST include:

  1. education cess on the Basic Customs Duty paid
  2. safeguard duties and anti-dumping duties

IGST on the import of goods will be payable by the importer of goods or by a person authorized to pay the duty on behalf of the importer.

GST Registration

9. Can I operate in multiple states with a centralized GST registration?

No. Since the services will be taxed at a state level, all relevant compliance i.e. registrations, returns, refunds etc. must be undertaken at the state level for supply of services. You will have to obtain separate registration for each state where you have a place of business.

10. Do I need to declare all the places of business in a state at the time of registration?

Yes. You are required to declare all places of business in a state while registering under GST. You must also declare one premise in each state as your principal place of business. FedEx has sent a separate communication to all customers dated May 31, 2017 requesting details of their state-wise registrations.

Levy of Tax, Place of Supply and Invoicing Changes

11. What are the applicable GST rates for services provided by FedEx Express?

For services provided by FedEx Express, the applicable GST rates are:

Services provided by FedEx

GST Rate

Courier services

18%

Goods Transport Agency Services

(payable by the recipient under reverse charge)

5%

Warehousing services

18%

Customs clearance

18%

12. Are the services provided by FedEx subject to any exemption under GST?

Some services provided by FedEx which are exempted under GST include:

  • Transportation of goods by road other than by way of goods transport agency services or courier agency services.
  • To United Nations or a specified international organization.
    (Note: The provision under the CGST Act under which this exemption is sought to be granted only empowers the Government to notify persons who are entitled to claim a refund of taxes paid on the notified supplies of goods or services. Hence, the Government needs to revisit the provisions under which the exemption notification will be issued.)
  • For official use of a foreign diplomatic mission or consular post in India or personal use or use of family members of diplomatic agents or career consular officers posted therein.
    This exemption is available on reciprocal basis based on a certificate issued by MEA (Protocol Division).
  • As a goods transport agency, by way of transport in a goods carriage of:
    • agricultural produce
    • goods where gross amount charged for the transportation of goods on a consignment transported in a single carriage does not exceed INR 1,500
    • goods where gross amount charged for transportation of all such goods for a single consignee does not exceed INR 750
    • milk, salt and food grain including flour, pulses and rice
    • organic manure
    • newspaper or magazines registered with the Registrar of Newspapers
    • relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap
    • defence or military equipment
    • Loading, unloading, packing, storage or warehousing of rice.

In addition to the above, FedEx will not charge GST on invoices issued for services provided to entities located in Special Economic Zones (SEZ).

13. Currently the service tax on Goods Transport Agency services provided by FedEx is paid by the recipient. Will this continue under GST?

Yes. GST on Goods Transport Agency services will be paid by the recipient of the service. The applicable GST on such services will be five per cent.

14. What is the ‘place of supply’ in case of services provided by FedEx?

Customers who have registered under GST

Service

Place of supply

Courier services

Location of service recipient

Goods Transport Agency services

Location of service recipient

Warehousing services

Location of immovable property

Customs clearance services

Location of service recipient

Customers who have not registered under GST

Service

Place of supply

Courier services

Location of handing over of shipments for transportation

Goods Transport Agency services

Location of handing over of shipments for transportation

Warehousing services

Location of immovable property

Customs clearance services

Address on record of customer or the location of supplier (if address on record does not exist)

 


15. How will the ‘place of supply’ impact FedEx invoicing process?

FedEx airway bills used for transportation / courier services require customers to specify the billing type of the shipment - Bill Shipper, Bill Consignee or Bill Third Party. Under GST, you must choose the correct billing type, as the same will reflect in the final invoice generated.

Please refer to ‘place of supply’ for each of the services provided below and the corresponding change in invoicing process.

 

If you are registered under GST

GST registration

Type of transaction

Invoicing

Type of tax

FedEx office (issuing the invoice)

Place of supply (mentioned in invoice)

Express service – Domestic shipment (including Goods Transport Agency services)

Bill Shipper

Office at origin

Pick-up address

CGST + SGST/UTGST of pick-up state

Bill Consignee

Office at destination

Delivery address

CGST + SGST/UTGST of delivery state

Bill Third Party

Office at origin

Contracting address as per account

CGST + SGST/UTGST – if in the same state

 

IGST if in different states

Express service – Import shipment

Bill Consignee

Office at destination

Delivery address

CGST + SGST/UTGST of delivery state

Bill Third Party

Office at destination

Contracting address as per account

CGST + SGST/UTGST – if in the same state

 

IGST if in different states

Express service – Export shipment

Bill Shipper

Office at origin

Pick-up address

CGST + SGST/UTGST of origin state

Bill Third Party

Office at origin

Contracting address as per account

CGST + SGST/UTGST – if in the same state

 

IGST if in different states

Duty handling service – Import shipment (Customs clearance in India)

Bill Consignee

Customs clearance office

Delivery address

CGST + SGST/UTGST – if in the same state

 

IGST if in different sates

Bill Third Party

Customs clearance office

Contracting address as per account

Duty handling service – Export shipment (Customs clearance outside India)

Bill Shipper

Office at origin

Pick-up address

CGST + SGST/UTGST of origin state

 

Bill Third Party

Office at origin

Contracting address as per account

CGST + SGST/UTGST – if in the same state

 

IGST if in different states

Warehousing service

 

Location of warehouse

Location of warehouse

CGST + SGST / UTGST of the state in which warehouse is located

 

If you are not registered under GST

GST registration

Type of transaction

Invoicing

Type of tax

FedEx office (issuing the invoice)

Place of supply

Express service – Domestic shipment (including Goods Transport Agency services)

Bill Shipper

Office at origin

Origin of shipment

CGST + SGST/UTGST of pick-up state

Bill Consignee

Office at destination

Origin of shipment

CGST + SGST/UTGST – if in the same state

 

IGST if in different states

Bill Third Party

Office at origin

Origin of shipment

CGST + SGST/UTGST of pick-up state

Express service – Import shipment

Bill Consignee

Office at destination

Origin of shipment outside India

IGST

Bill Third Party

Office at destination

Origin of shipment outside India

IGST

Express service – Export shipment

 

Bill Shipper

Office at origin

Origin of shipment

CGST + SGST/UTGST – if in the same state

 

IGST if in different states

Bill Third Party

Office at origin

Origin of shipment

Duty handling service – Import shipment (Customs clearance in India)

Bill Consignee

Customs clearance office

Billing address if account holder

 

Delivery address if non-account holder

CGST + SGST/UTGST – if in the same state

 

IGST if in different states

Bill Third Party

Customs clearance office

Billing address on record

Duty handling service – Export shipment (Customs clearance outside India)

Bill Shipper

Office at origin

Billing address on record

CGST + SGST/UTGST – if in the same state

 

IGST if in different states

Bill Third Party

Office at origin

Billing address on record

Warehousing service

 

 

Location of warehouse

Location of warehouse

CGST + SGST / UTGST of the state in which warehouse is located

 

If you are registered under GST, FedEx will raise invoices at your address in the state of place of supply, based on the nature of the transaction. However, if you are not registered under GST in the state of place of supply, you will be considered as unregistered customer and credit of the taxes charged on the invoice will not be available to you. It is advised to register in the state of place of supply i.e. pick-up, delivery or contracting location, if you want to avail tax credit on the invoices raised by FedEx.

However, if you are not a GST registered customer, FedEx will raise invoices at the billing address provided by you.

16. I have only one FedEx shipping account with one billing address. Is this likely to change?

Yes. To facilitate the invoicing process, FedEx has sent a communication to all customers to provide a list of their FedEx shipping accounts and the corresponding provisional GST ID for each account. In case you have a place of business in any other state and you wish to avail FedEx services, please share details of the principal place of business in that state along with the corresponding provisional GST ID. FedEx will create a separate account for each state that you operate in. Please contact your FedEx Territory Manager for more details.

If you have multiple GST registration numbers (GSTINs) in one state, separate customer accounts will be created for each registration number in that state. FedEx will update the principal place of business as specified in your registration certificate as the invoicing address.

Example: If you have two divisions or places of business in one state and an office in an SEZ unit in the same state, then you will have three GST registrations in that state. In order to facilitate billing, FedEx will issue an account number for each such registration.

If you are not registered under GST, FedEx will invoice you at the billing address provided by you.

17. I do not have a FedEx shipping account but I am registered under GST. Will I receive a valid tax invoice for availing credit?

Yes. You will receive a tax invoice which will allow you to take credit of the taxes paid on the invoice. FedEx will collect your GST ID, billing address and email address at the time of booking the shipment and send you an electronic copy of the invoice within 15 days of the delivery of the shipment. This process is applicable for online bookings on our website, customer service centers and retail outlets.

18. I have a FedEx account. How do I identify which billing option to select at the time of booking a shipment? How can I use the new account numbers which FedEx provides me?

If you are the payor for the below services, you can choose the following billing type.

Pick up/Delivery Options

Billing Option to choose from

Account Number to be used

If pick-up is from any of your offices across the country

Select ‘Bill Shipper’ option

Account number of pick-up state to be used

If delivery to any of your offices across the country

Select ‘Bill Consignee’ option

Account number of delivery state to be used

If pick-up and delivery is to other legal entities

Select ‘Bill Third Party’ option

Account number of contracting state to be used

If both pick-up and delivery is from / to your offices

Select either ‘Bill Shipper’ or ‘Bill Consignee’

Account number of pick-up state or delivery state to be used, as the case may be

FedEx will raise an invoice with the account number that you have provided, on the address specified for the account. The computation of taxes will be dependent on the selection of billing type and customer account number provided.

For pickup/ delivery/ billing at your office located in a state where you are not registered, FedEx will consider you as unregistered entity in that state and tax will be computed accordingly. However, since you do not have a GST registration ID specified on the invoice, you will not be eligible to claim tax credit specified on the invoice.

19. I have a FedEx account. What tax will be applicable to me if I approach a FedEx retail outlet to hand-over a shipment?

The applicable tax is determined as per GST law for registered or unregistered customer, as the case may be. You must provide the relevant FedEx account number at the retail outlet, on which the invoice will be issued.

20. My employees drop off shipments at a FedEx retail location, for shipping from a state where I do not have an office. How will FedEx send me an invoice?

Please ensure that the employee provides your FedEx account number at the retail counter. If the account is GST registered and updated in the FedEx database, then FedEx will charge you IGST on the shipment. You can avail input tax credit on such invoice. However, if you are not registered under GST, FedEx will charge CGST + SGST / UTGST as applicable in the location of handover of the shipment.

It is advisable that you issue some verification document to your employees/representatives who will hand over the shipment at the FedEx retail outlet, authorizing them to provide your customer account number to FedEx for billing purposes.

21. I have scheduled a pickup/delivery from an office which is not registered under GST. However, I have registered other offices across the country under GST. What tax is applicable on my shipment?

If you are yet to obtain GST registration in any state, the premises in such state where FedEx picks up/delivers shipments shall be treated as unregistered premises as per the GST law. FedEx will consider you as an unregistered customer, and you will not be able to avail input tax credit of such invoices.

22. How can I provide my GST registration details to FedEx?

FedEx has developed a template in which you can share your GST details. Please download the template from fedex.com/in/gst, complete, attach the template and send it to gstcustomerdata@fedex.com along with the supporting documents.

23. I have a FedEx shipping account for my import shipments. FedEx pays the customs duty on my behalf and then bills it back to me. Will GST be applicable on the customs duty?

No, the customs duty that FedEx pays on your behalf is not subject to GST. However, the advancement fees shall be subject to GST.

24. Under the service tax regime, the services provided by FedEx to units in a Special Economic Zone (SEZ) are not subject to tax. Will this continue under GST?

FedEx will not charge GST on the invoices issued for the below mentioned services provided to entities located in Special Economic Zone (SEZ) units.

Billing Type

Services Provided

Account Number

Bill Shipper

If the pick-up is from an office in an SEZ unit

Customer SEZ account

Bill Consignee

If the delivery is to an office in an SEZ unit

Customer SEZ account

Bill Third Party

If the contracting office is located in an SEZ unit

Customer SEZ account

25. Will FedEx create separate accounts for customers in SEZ?

Yes, FedEx will create separate accounts for customers with units in SEZs and inform them of the same.

26. I want to avail the Composition scheme under GST. Will there be any impact on the invoices raised by FedEx for my shipments?

As per the GST law, an individual opting to pay tax under the Composition scheme will not be eligible to avail input tax credit on the tax charged by FedEx on the services provided.

27. How will FedEx issue me a credit note?

FedEx will issue a credit note in the following circumstances:

  • taxable value or tax charged on a tax invoice is found to exceed the actual taxable value or tax payable in respect of the supply
  • ervices are found to be deficient

Please note that FedEx will issue the credit note by September 30th of the following financial year or the date of filing of the annual return, whichever is earlier.

28. Am I required to pay tax under reverse charge with respect to any of the supply made by FedEx?

Goods Transport Agency services provided by FedEx will be subject to payment of tax under reverse charge at the rate of five per cent. The invoice raised by FedEx will have a notation stating that the supply is subject to payment of tax under reverse charge.

29. I have received a credit note from FedEx. When should I declare the details of the credit note in my returns?

You will have to disclose the details of the credit note in the period in which the credit note was issued. You must reverse the input tax credit for the difference in amount. In cases where credit notes are issued by FedEx on account of any of the aforementioned reasons, resulting in a reduction of tax liability, you are required to reduce your claim of input tax credit to that extent so that FedEx can make appropriate tax adjustments.

30. When does the liability to pay tax on supply of services arise under reverse charge mechanism?

The liability to pay tax on supply of services under reverse charge mechanism will arise at the time of supply of services, which is earlier of:

  1. date of payment as per the books of account of the recipient or date on which payment is debited in the bank account, whichever is earlier
  2. date after 60 days from the date of invoice
  3. date of entry in the books of account of the recipient, if the same could not be determined as per the above points i and ii

Input Tax Credit

31. Will I be allowed to take credit on GST paid for services provided by FedEx?

Yes, you will be eligible for credit on GST paid for services provided by FedEx, provided it is used or intended to be used by you in the course or expansion of your business.

32. What are the implications of rebills issued by FedEx?

Under GST, you will be required to report both credit note and fresh invoice separately in your input return. In case of any upward revision of price of services or in case of any change in the invoice, FedEx will issue a credit note for the entire value charged and issue a fresh invoice for the revised value.

33. On verification of GSTR-2A, I find that certain procurements that I made are not reflecting, can I add the details of such inward supplies in the return?

If you find that certain inward supplies made to you during the tax period are not reflect in Form GSTR-2A (generated automatically on GSTN), you can manually add the details of such supplies in Form GSTR-2.Such additions will be communicated to FedEx in Form GSTR-1A. FedEx will either accept or reject such modifications before the 17th of the succeeding period, upon which, Form GSTR-1 filed by FedEx would stand amended.

34. What happens where the details of inward supplies furnished by the recipient do not match with the outward supply details furnished by the supplier in his valid return?

In case of any mismatch, the details will be shared with FedEx and you. If the mismatch is not rectified by FedEx, then the amount will be added to the output liability of recipient in the returns for the month succeeding the month in which discrepancy is communicated. You are required to pay the applicable interest in the interim.

However, the output liability will be reduced once FedEx rectifies such discrepancy and the interest amount will be refunded.

35. How will I avail credit for IGST paid on import of goods?

Credit will be available to you on the basis of the Bill of Entry filed on the import of goods.

36. When can a registered taxable individual/entity avail credit on the taxes paid for inward supplies of services?

A registered taxable person/entity shall be entitled to avail credit of any input tax in respect of a supply of services provided, if the:

  1. individual/entity is in possession of a tax invoice or debit note issued by a supplier registered under GST or such other tax paying documents as may be prescribed.
  2. individual/entity has received the services
  3. tax charged in respect of such supply has been actually paid to the Government
  4. individual/entity has furnished the return as prescribed under the law

Transition to GST

37. How will FedEx raise invoices after the implementation of GST?

GST will be charged on the invoices raised on or after July 1, 2017. However, due to certain system constraints, FedEx will not be able to issue invoices from June 30, 2017 to July 17, 2017. If your billing cycle falls within this period, you will receive the invoices on or after July 18, 2017. On June 30, 2017, FedEx will issue invoices for all Air Waybills which reflect in our billing system till June 29, 2017.

38. What tax would be applicable for services, of a contract entered into before the transition date, are supplied on or after the transition date?

In such cases, the goods/services will be liable to GST only in a case where tax is not leviable under the Service Tax laws. Service tax is leviable in the following cases during the cutover period:

Supply of service

Invoicing

Payment

Tax Applicable

Before GST

Before GST

Before GST

Service Tax

Before GST

After GST

Before GST

Service Tax

Before GST

Before GST

After GST

Service Tax

After GST

Before GST

Before GST

Service Tax

After GST

After GST

Before GST

Service Tax

After GST

Before GST

After GST

Service Tax

39. How will FedEx consider invoices which are raised in service tax regime, but credit notes pertaining to these invoices are raised in GST regime?

In case of credit notes raised in GST regime against the invoices raised in service tax regime with the applicable service tax at 15 per cent, the credit notes will include the differential amount of tax displayed as CGST at 15 per cent.

40. Can credit be availed on invoices for services received after the transition date but the tax in respect of which has been paid under the existing law?

Yes credit can be availed under the GST law if you record the invoice in your books of accounts within 30 days of the transition date.

E-Way Bill

41. What is an Electronic Way bill (E-Way bill)?

E-Way bill (EWB) is a mandatory regulatory document generated for any taxable consignment of domestic or international goods with a value exceeding INR 50,000 (inclusive of GST). Any registered person/entity, who intends to initiate a movement of goods of value exceeding INR 50,000 should mandatorily generate EWB for:

  1. inter-state movement of goods (from one state to another) effective April 1, 2018
  2. intra-state movement of goods (within the same state) no later than June 1, 2018. Some states across India are expected to start the implementation of national EWB for Intra-State movement of goods effective April 15, 2018.

Some states across India are expected to start the implementation of national EWB for Intra-State movement of goods effective April 15, 2018.

42. Who will generate the E-Way bill in cases where goods are supplied by an unregistered individual/entity under GST?

In cases where the goods are supplied by an unregistered individual/entity, the E-Way bill shall be generated by the registered recipient or the transporter.

43. I am a FedEx customer. Am I required to generate the E-Way bill?

Yes, the E-Way bill is required to be generated by the registered supplier/consignee or the transporter where the value of the consignment is in excess of INR 50,000. The E-Way bill is required to be generated for both inter-state as well as intra-state supplies.

44. How can I generate an E-Way bill?

To generate the EWB, the registered supplier/consignee and transporter will have to complete the following forms with details of the movement of goods on the Goods and Service Tax Network (GSTN) portal:

  1. EWB 01 part A needs to be filled by the registered person/entity (shipper/consignee) as per the GST compliant invoice.
  2. EWB 01 part B needs to be filled by the Transporter (FedEx Express) with the vehicle number.

45. What will happen where the goods are transferred from one conveyance to another during transit?

FedEx will update EWB 01 part B of the E-Way bill before the transfer of such goods from one conveyance to another for further movement.

46. What are the compliances to be undertaken when multiple shipments are to be transported in one conveyance?

FedEx will be required to generate a consolidated E-Way bill on the basis of the serial numbers of E-Way bills of shipments in the vehicle.

47. Can the E-Way bill generated electronically be cancelled?

The E-Way bill may be cancelled electronically within 24 hours of generation, where the goods are either not transported or are not being transported as per the details furnished in the E-Way bill.

48. What is the time period for which such E-Way bill be valid?

Distance

Validity period

Up to 100 km

One day in cases other than Over Dimensional Cargo

For every 100 km or part thereof thereafter

One additional day in cases other than Over Dimensional Cargo

Up to 20 km

One day in case of Over Dimensional Cargo

For every 20 km. or part thereof thereafter

One additional day in case of Over Dimensional Cargo:

 

49. What is the role of registered person receiving the said goods?

The recipient must communicate the acceptance or rejection of the shipment mentioned in the E-Way bill within 72 hours from the date and time of generation of the E-Way bill, otherwise it shall be deemed that the recipient has accepted the details.

50. Which are the documents required to be carried by a person in charge of the conveyance?

  • Invoice or bill of supply or delivery challan (as applicable)
  • Copy of E-Way bill (E-Way bill number)

51. Will the E-Way bill rules be different in different States?

The E-Waybill rules are uniform across all states in India.

52. If we receive an intimation through common portal of receipt of shipment which does not belong to us/we wish to return back. What will be the E-Way bill compliances in this regard?

If the goods are still in transit and are under our custody for delivering the same to you, you need to intimate rejection of such shipment delivery within 72 hours from the generation of the E-Way bill with the details made available to you regarding such shipment. For our convenience, you may also intimate us that you do not want a delivery for such shipment.

If the goods are delivered to you and you have rejected such goods at the time of delivery/after delivery, then such transaction shall be treated as return to origin. We will issue you a separate airway bill for such transaction. Your delivery location will be required to undertake E-Waybill compliances as explained above.