CBEC releases FAQs on Mining & Handicraft Sector under GST [Read FAQs]

The Central Board of Excise and Customs (CBEC) has released Frequently Asked Questions (FAQs) on mining and handicrafts under the Goods and Services Tax (GST).

The document clarified the GST rates applicable to minerals and ores in Composition Scheme where the process amounts to manufacture, the rate of tax will be 1% (CGST) and 1% (SGST/UTGST). In any other case, the rate will be ½% (CGST) and ½% (SGST/UTGST).

It also clarified that in such cases GST has to be paid separately under CGST and SGST/UTGST by generating a single challan through the common portal under a single return.

The Government also specified that the basic exemption limit of Rs. 20 lakhs (Rs.10 lakhs in the case of special category States) is applicable to the tiny and micro segment even in mining. However, a person engaged in making taxable supply and having aggregate annual turnover (more than Rs.20 lakhs in any State other than the special category States) would be liable to obtain registration under GST. The return has to be filed on monthly basis by regular taxable persons and on quarterly basis by the taxable persons registered under the composition scheme.

To a question Whether the buyer of goods from unregistered person pay reverse tax, it replied that “A registered person receiving taxable goods or services from a supplier who is not registered, would be liable to pay GST under reverse charge mechanism. However, in terms of notification no. 8/2017-Central Tax (rate) dated 28th June, 2017, aggregate value of supplies of goods and/or service received by a registered person from any or all the suppliers, who is or are not registered, upto five thousand rupees in a day is exempt from tax un­der reverse charge mechanism. This exemption will not apply if the value exceeds Rs.5000/-.”

Read the full text of the FAQs below.