Q. 172 Company A is trader/manufacture of consumer products like Furniture, electronics, house hold items, mobiles etc. All the product is properly grouped into various product line. Company A requested Company B to invest in one of the product line with 50:50 investment and sharing of Profit or loss of that particular product line equally. All products are sold under the brand name of Company A using GSTIN of company A and paid GST accordingly. Sharing of profit or loss will be done on quarterly basis and company A will pay 50% profit to Company B. in case of loss same amount will be compensated accordingly. Now the Question whether sharing of profit subject to GST in the hands of Company B(GST registered). If yes what is the HSN or SAC code to be used by company “B” to company “A” ?

Ans. Under the GST regime, if the agreement consists of profit sharing only then it is not covered under GST. However, if any services are given to the branch and get profit in return, then it would be covered under GST. Further, if any joint venture is formed or composed of a club or association then it would be covered under GST. HSN or SAC to be determined post identification of goods or services provided in the agreement between company A and company B. 

Q. 171 A exporter has exported goods with payment of IGST (partly utilising ITC and partly cash). He got refund of IGST paid. He has realised only 50% of the export proceeds till date. 1. What is the time limit within which he shall realised the export proceeds so that he don’t have to repay the refund amt? OR there is no such time limit for IGST refund. 2. If refund is to be repaid for above reason than he shall pay back refund only in proportion to ITC utilised and not the cash portion. Example: Suppose IGST refund amount is RS. 100, (RS. 60 IGST and Rs. 40 cash) . The exporter could realise 80% of Export proceeds. Therefore proportionately Rs. 20 refund need to reversed. So can we say Rs.20 is paid in cash and not through ITC therefore not to be repaid back ?

Ans. In terms of rule 96B, where any refund of integrated tax paid on export of goods has been paid to an applicant but the sale proceeds in respect of such export goods have not been realised , in full or in part, in India within the period allowed under the Foreign Exchange Management Act, 1999 (42 of 1999), including any extension of such period, the person to whom the refund has been made shall deposit the amount so refunded, to the extent of non- realisation of sale proceeds, along with applicable interest within thirty days of the expiry of the said period. 

Q. 170 A Gst registered regular scheme two invoices value rs:2 lacs not reflected in gstr2a/ gstr2b for July -22 month.but supplier gstr1 invoice upload cut off date:13-08-22 after invoice upload. Question: Dealer itc claim taken July -22 as per rule 36(4 ) provision applicable or August -22 month itc claim taken is correct procedure ?

Ans. In terms of rule 36(4), since the invoices are reflected in GSTR-2B of august 22, therefore, ITC is to be claimed in the same month.