Q.39 Is GST applicable on grants received by a Company from the Central/State Govt under a scheme ? 

Ans. This is one of the most subjective matters whether grants are taxable or not. It primarily depends on the nature of grant received and needs to be checked carefully.

Apparently, any activity covered under the definition of Supply would be subject to levy of GST. Grants received from the government are also subject to levy of GST unless otherwise specifically exempted from the levy by way of exemption notification.

It is advisable to take a legal opinion on this matter as it requires proper examination of facts and figures.

Q.38 Whether manpower supplies services provided by any proprietorship firm to an Old Age home (unregistered) covers under RCM?

Old age home is not a business entity how it will pay tax under RCM?

And if RCM is not applicable then services provider needs to tax under forward charge by charging the said GST tax in the invoice to Old age home assessee ? 

Ans. Manpower services are not covered under RCM instead service providers will charge GST on their invoice and collect from the Old Age Home.

Q.37 The assessee is manufacturer of synthetic yarn with input/output gst rate of 18/12 %. Additionally it trades in cloth having gst rate of 5%.

Query: While calculating Net ITC whether input gst on purchase of trading of cloth is to be included? 

Ans. As per para 54 of Circular No.125/44/2019-GST, refund of ITC of GST paid on those inputs which are procured at equal or lower rate of GST than the rate of GST on outward supply, shall also be included while calculating the maximum refund amount as specified in Rule 89(5) of the CGST Rules.

Rule 89(5) of CGST Rules defines ‘Net ITC’ as input tax credit availed on inputs during the relevant period other than the input tax credit availed for which refund is claimed under sub-rule (4A) or (4B) or both.

Basis, the above, it can be concluded that as per Rule 89(5) Input Tax Credit availed on inputs of a particular registration for which refund of inverted duty structure is being applied has to be considered irrespective of the fact that such input relates to manufacturing or trading.