All about GOODS AND SERVICE TAX (GST) · All about GOODS AND SERVICE TAX (GST) ... Intra-State Supply. Both CGST & SGST charged concurrently on every point of Supply . IGST would

All about GOODS AND SERVICE TAX (GST)A new regime of indirect taxation in India

CA Sahib Singh Choudhary12-Jun-17

TOPICS

STRUCTURALFRAMEWORK OF GST

TAX INVOICE

KEY DEFINITIONS INPUT TAX CREDIT

MEANING OF SUPPLY TAXABLE PERSON

PLACE OF SUPPLY REGISTRATION

INTER STATE & INTRA STATE SUPPLY

RETURN WITH PAYMENT RULES

TIME & VALUE OF SUPPLY TRANSITIONAL PROVISIONS

CA Sahib Singh Choudhary12-Jun-17

LEGISLATIVE FRAMEWORK

• Constitution is amended to give concurrent power to Center and State for taxation of goods and services.

• GST council is being set up.

• Central Goods and Service Tax Act and Integrated Goods and Service Tax Act are enacted.

• State Goods and Service Tax Act is enacted in some states and under process in other states.

12-Jun-17 CA Sahib Singh Choudhary

GOODS AND SERVICE TAX COUNCIL


ROLE & DECISION OF GST COUNCIL

Recommend to Central and State Govt. on following:

Goods and services which will be exempted.

Drafting of Model GST Laws.

Rates of GST

Special rate of for specified period.

DECISION OF GST COUNCIL Every Decision of GST Council shall be taken by a majority not less than ¾th

weighted vote of member present.

The vote of Central Govt. shall have a weight of 1/3rd and weight of all state together shall be 2/3rd.


EXPECTED GST


ACTUAL GST


STRUCTURE OF GST

GOODS & SERVICE TAX

Intra-State Inter-State

CGST SGSTIGST

(CGST+SGST)


TAX WHICH SUBSUMED IN GST


CENTRAL TAXES STATE TAXES

a) Central Excise Duty b) Duties of Excise (Medicinal & toilet

Preparation)c) Additional duties of Excise (Textile &

Textile Products)d) Additional duties of Customs e) Special additional duty of Customs

(SAD) f) Service Tax g) Additional duties of Excise (Goods of

Special Importance)h) Cesses and surcharge insofar as far as

they relate to supply of goods and services

a) State VAT b) Central Sales Tax c) Purchase Taxd) Luxury Tax e) Entry Tax (All forms) f) Entertainment Tax (not levied by local

bodies) g) Taxes on advertisementsh) Taxes on lotteries, betting and

gamblingi) State cesses and surcharges insofar as

far as they relate to supply of goods and services.

STRUCTURAL FRAMEWORK OF GST

CONCURRENT DUAL GST MODEL

CGST levied by Central

SGST levied by State

IGST to be levied by Centre

Intra-State SupplyInter-State Supply

Both CGST & SGST charged concurrently on every

point of Supply

IGST would be equivalent to (CGST+SGST)


SET OFF OF INPUT TAX CREDIT

INPUT TAX CREDIT SET OFF RULES

CGST

CGST

IGST

IGST

IGST

CGST

SGST

SGST 2nd Pref.

SGST

IGST


PROPOSED RATE STRUCTURE

GST RATE STRUCTURE

Exempted

5% 12/18% 28% 28% + CESS

Items of basic needs illustratively, food grains

Items of mass

consumption

Pegged as Standard rates – Products for Lower middle

Class

Other products Luxury cars, aerated drinks, pan masala &

tobacco products

0%

To be notified by the Govt.


ADMINISTRATIVE CONTROL OF CENTRE & STATE

Dual control over taxation base.

Taxpayers will be selected automatically by GSTN common portal.

The administration and assessment of entire taxpayer base will be share betweenCentral and state in following manner:

Turnover <₹1.5 crore

Turnover >= ₹ 1.5 crore

Central Government

State Government

Central Government

State Government

90%10% 50% 50%


MEANING AND SCOPE OF “SUPPLY” (SEC 7)Supplies – where consideration is necessary Supplies – where consideration is not necessary

(Schedule I)In the course or furtherance of business

Not in the course or furtherance of business

1. Sale2. Transfer3. Barter4. Exchange5. License6. Rental7. Lease or8. Disposal9. Import of

services

1. Import ofServices

1. Permanent transfer/disposal of business assets where ITC has been availed on such assets.

2. Supply between related persons or distinct persons made in the course or furtherance of business.

3. Supply of goods by principal to agent or vice versa where agent undertakes to supply/receive such goods on behalf of the principal.

4. Import of services by a taxable person from:-

related person

Any of his other establishment outside India.


BUSINESS [SEC 2(17)]

BUSINESSin

clud

esa) Any trade, commerce, manufacture, profession, vocation, adventure,

wager whether or not it is for a pecuniary benefit.b) Any activity or transaction in connection with or incidental or ancillary to

sub-clause (a) above.c) Any activity or transaction in the nature of sub-clause (a), whether or not

there is volume, frequency, continuity or regularity of such transaction.d) Supply or acquisition of goods including capital goods and services in

connection with commencement or closure of business.e) Provision by a club, association, society or any such body (for a

subscription or any other consideration) of the facilities or benefits to its members.

f) admission, for a consideration, of persons to any premises.g) Services supplied by a person as the holder of an office which has been

accepted by him in the course or furtherance of his trade, profession or vocation.

h) Services provided by a race club by way of totalisator or a license to book maker in such club.

i) Any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities.


GOODS [Sec 2(52)]

“goods’’ means every kind of movable propertyother than money and securities but includesactionable claim, growing crops, grass and thingsattached to or forming part of the land which areagreed to be severed before supply or under acontract of supply;


RELATED PERSON [SEC 15(5)]

they are officers or directors of one another's businesses;

they are legally recognized partners in business;

they are employer and employee;

any person directly or indirectly owns, controls or holds 25% or more of the outstanding voting stock or shares of both of them;

one of them directly or indirectly controls the other;

both of them are directly or indirectly controlled by a third person;

together they directly or indirectly control a third person; or

they are members of the same family;

Explanation I. - The term "person" also includes legal persons.


SCHEDULE IIMATTERS TO BE TREATED AS SUPPLY OF GOODS


any transfer of the title in goods;

any transfer of title in goods under an agreement whichstipulates that property in goods shall pass at a future dateupon payment of full consideration as agreed;

where goods forming part of the assets of a business aretransferred or disposed of, whether or not for a consideration;

Supply of goods by any unincorporated association or bodyof persons to a member thereof for cash, deferred payment orother valuable consideration.

MATTERS TO BE TREATED AS SUPPLY OF SERVICES

Renting of immovable property; Construction of a complex, building, civil structure or a part thereof; Temporary transfer or permitting the use or enjoyment of any intellectual

property right; Development, design, programming etc of IT software; Agreeing to the obligation to refrain from an act,; Transfer of the right to use any goods; Any lease, tenancy, easement, licence to occupy land; Any lease or letting out of the building; Any treatment or process which is applied to another person's goods; goods held or used for the purposes of the business are put to any private use

or are used, or made available to any person for use, for any purpose otherthan a purpose of the business,

works contract services; Supply of food or other goods for human consumption as part of any services.


ACTIVITIES/TRANSACTION NOT TREATED AS SUPPLY OF GOODS OR SERVICES

1. Services by an employee to the employer2. Services by any court or Tribunal3. Services performed by the MP, MLA, Members of

Panchayats, Municipalities, local authorities.4. Services of funeral, burial, crematorium or mortuary

including transportation of the deceased.5. Sale of land and sale of building6. Actionable claims, other than lottery, betting and

gambling.7. Duties performed who holds constitutional post.8. Duties performed as chairperson or member of body

and who is not deemed as employee.


INTER-STATE/INTRA-STATE SUPPLY

Particulars Inter-State supply

Intra-StateSupply

Location of supplier and place of supply in the:Same stateSame UT × √

Location of supplier and place of supply:-Two different statesTwo different UTOne state and other UT

√ ×

Import of Goods/Services √ ×

Supply of goods imported into India till cross the custom frontier √ ×

Supply to/by SEZ or SEZ unit √ ×

Supplies to Tourist √ ×

Location of supplier in India and place of supply outside India

√ ×

Any other supplies not covered above √ ×


LOCATION OF SUPPLIER OF SERVICES { Sec 2(15)

Supply from a placeof business for whichthe registrationobtained

The location of such place of business

Supply from a placeother than the placefor which theregistrationobtained

The location of such fixed establishment

Supply made from more than one establishment

Location directly concerned with provision of supply.

In other casesLocation of the usual place of residence of the supplier


LOCATION OF RECIPIENT OF SERVICES {Sec 2(14)Supply received ata place for whichthe registrationobtained

The location of such place of business

Supply received at aplace other than theplace for which theregistration obtained

The location of such fixed establishment

Supply received frommore than oneestablishment

Location directly concerned with thereceipt of supply

In other casesLocation of the usual place of residenceof the recipient


PLACE OF BUSINESS [SEC 2(85)

“Place of Business” includesa) a place from where the business is ordinarily carried

on, and includes a warehouse, a godown or any otherplace where a taxable person stores his goods,provides or receives goods and/or services; or

b) a place where a taxable person maintains hisbooks of account; or

c) a place where a taxable person is engaged inbusiness through an agent, by whatever namecalled;


PLACE OF SUPPLY OF GOODS [Sec 10(IGST)]

Supply involves movement of goods – saleof goods

Location where movement terminates for delivery to recipient

Where goods are delivered before orduring movement of goods

Principal place of business of person to whom goods are transferred

Supply does not involve movement ofgoods

Location of goods at the time of delivery to recipient

Where goods installed or assembled at site Place of installation or assembly


Place of supply of services where the location supplierand recipient is in India [Sec 12 (IGST)](1/2)

The place of supply of services shall be: Except the services specified in subsections (3), to (14) of section 12:

a) location of service recipient in case of supply to registered person.b) In case of other than registered recipient, location of recipient if addresson record exist otherwise location of supplier.

In case of services relating to immovable property location at whichimmovable is located.

In case restaurant and catering services, personal grooming, fitness othersuch personal services location where the services are actually performed.

In case of services provided by way of admission to a cultural, artistic,sporting, scientific, educational, or entertainment event or amusement parkbe the place where the event is actually held or where the park or suchother place is located.


Place of supply of services where the location supplierand recipient is in India [Sec 12 (IGST)](2/2)

The place of supply of services shall be: In case of services provided by way of admission to a cultural, artistic, sporting,

scientific, educational, or entertainment event or amusement park be the placewhere the event is actually held or where the park or such other place is located.

In case of transportation of goods, including by mail or courier to, a registeredperson, shall be the location of such person in other case location at which suchgoods are handed over for their transportation.

In case passenger transportation service to a registered person, shall be thelocation of such person, in other case place where the passenger embarks on theconveyance.

The place of supply of services on board a conveyance such as vessel, aircraft, trainor motor vehicle, shall be the location of the first scheduled point of departure ofthat conveyance.

The place of supply of banking and other financial services including stock brokingservices to any person shall be the location of the recipient of services on therecords of the supplier of services.


Place of supply of services where the location ofsupplier or recipient is outside India [Sec 10(IGST)] The place of supply of services shall be: Location of service recipient in case of supply o registered person., except the

services specified in subsections (3), (4), (5), (6), (7), (8), (9), (10), (11), (12) and(13) of section 10

Location where the services are actually performed in respect of goods that arerequired to made physically available to supplier of services.

Location of immovable property where services supplied in relation of immovableproperty.

Place where event held in case of services supplied by way of admission to anysport, cultural and artistic etc event.

Location of supplier of services in case of services supplied by bank, financial, non-banking financial institution, intermediary services, hiring of means of transportother than aircraft and vessels.

Place of destination of goods in case transport of goods other than mail or courier. Location of recipient in case of online information and database access.


TIME OF SUPPLY OF GOODS (SEC 12)

Time of Supply of - goods

Forward Charge

Earlier of

Date of issue of Invoice

Receipt of payment

Reverse Charge

Earlier of

Date of payment entered inbooks

Date following 30 days fromthe date of issue of invoice

Debit in bank

Last date on which he isrequired to issue invoice

Date of receipt of goods


TIME OF SUPPLY OF SERVICES (SEC 13)

Time of Supply of - Services

Forward Charge

Reverse Charge

Earlier of

Date of issue of invoice

Receipt of payment

Date of provision of service ifinvoice not issued withinprescribed time

Credit in books

Earlier of

Debit in bank account

Debit in books

Date following 60 days from thedate of issue of invoice


TAX INVOICE, CREDIT AND DEBIT NOTES (Sec 28)

A registered taxable person supplying taxable goods/servicesshall, before or at the time of removal of good/provision of serviceor within such time as may be prescribed (30 days in case ofservice) shall issue a tax invoice.

Where the goods (being sent or taken on approval or sale or returnor similar terms) are removed before supply takes place, the invoiceshall be issued before or at the time of supply or six months from thedate of removal, whichever is earlier.

The tax invoice should contain description of quantity, value and taxcharged.

Person who is liable to pay tax on reverse charge basis under subsection (3) or (4) of section 9 shall issue a payment voucher at thetime of making the payment.


TAX INVOICE, CREDIT AND DEBIT NOTES

Continuous supply of goods

In case of continuous supply of goods, wheresuccessive statements of accounts or successivepayments are involved: the invoice shall be issued before; or at the time each such statement is issued; or, each such payment is received


TAX INVOICE, CREDIT AND DEBIT NOTES

In case of continuous supply of services time of issue of invoice is asunder Where the due date of payment is ascertainable from the contract, the

invoice shall be issued before or after the payment is liable to be madeby the recipient but within a period prescribed (30 days)

Where the due date of payment is not ascertainable from the contract,the invoice shall be issued before or receipt of payment .

Where the payment is linked to the completion of an event, the invoiceshall be issued on or before the date of completion of such event.

In a case where the supply of services ceases under a contract beforethe completion of the supply, the invoice shall be issued at the time whenthe supply ceases.

Invoice should contain the prescribed details and to be issued inprescribed manner.


TAX INVOICE

The invoice shall be prepared in triplicate, in case ofsupply of goods, in the following manner: (a) the original copy being marked as ORIGINAL FOR RECIPIENT; (b) the duplicate copy being marked as DUPLICATE FOR TRANSPORTER; and (c) the triplicate copy being marked as TRIPLICATE FOR SUPPLIER.

In case of Services Invoice should be issued in following manner: (a) the original copy being marked as ORIGINAL FOR RECIPIENT; and (b) the duplicate copy being marked as DUPLICATE FOR SUPPLIERS;

In case of Export Invoice should be issued in following manner: In case of export Invoice shall carry an endorsement “SUPPLY MEANT FOR EXPORT ON

PAYMENT OF IGST” or “SUPPLY MEANT FOR EXPORT UNDER BOND WITHOUT PAYMENTOF IGST”

Recipient shall required to issue a receipt voucher at the time of advance received withrespect to supply.


CONTENT OF TAX INVOICE

There are 16 mandatory items which are requiredto mentioned in the invoice, few important are: Name, Address, GSTIN of supplier and recipient. HSN code or Accounting code of Services. Rate of Tax. Place of supply with place of delivery. Consecutive serial number only alphabets/ numerals or

special character hyphen or dash and slash, unique forfinancial year.


VALUE OF TAXABLE SUPPLY (SEC 15)The value of a supply of goods and/or services shall be thetransaction value, where the supplier and the recipient of thesupply are not related and the price is the sole consideration forthe supply.


TRANSACTION VALUE

Any taxes,duties, cesses,fees andchargeslevied, ifchargedseparatelyby thesupplier

Any amountthat thesupplier isliable to paybut which hasbeenincurred bythe recipientof the supply

Incidentalexpenses, suchas, commissionand packing,charged bythe supplier tothe recipientof a supply

Interest or latefee or penaltyfro delayedpayment ofanyconsiderationfro anysupply.

Subsidiesdirectly linkedto the priceexcludingsubsidiesprovided bythe CG & SG.

VALUE OF TAXABLE SUPPLY (SEC 15)

The value of the supply of goods and/or servicescannot be determined under sub-section (1), thesame shall be determined in such manner as may beprescribed.

In case of notified supplies value of the supply shallbe determined in such manner as may beprescribed.


DETERMINATION OF VALUE OF SUPPLY

Where consideration not wholly in money:a) open market value of supply;b) if no open market value, sum of consideration in money and money value of consideration other than money;c) if could not determined as per (a) and (b) above value of like kind a quality;d) if could not be determined in accordance to (a) to (c) above as per Rule 4 and 5.



Value of supply between distinct or related person:a) open market value of supply;b) if open market value is not available, then value of like kind a quality;d) if could not determined (a) to (b) above as per Rule 4 and 5.Provided that where recipient is eligible for fullITC, value declared in the invoice shall be treatedas open market value



Value of supply based on cost (Rule 4) If value of supply could not determined under Rule

(1) to (3), then value 110% of the cost If value of supply could not determined under Rule

(1) to (4), then value shall be determined using reasonable means consistent with general provision of section 15


DETERMINATION OF VALUE IN RESPECT OF CERTAIN SUPPLIES

In case of booking of tickets for air travel by an agentvalue of supply shall be 5% of basic fare in case ofdomestic booking and 10% in case of internationalbooking. [Rule 6(3)]

In case of person deals in second hand goods value ofthe supply shall be difference between selling andpurchase price if no input tax credit is availed onpurchase. [Rule 6(5)]

In respect of supplies as notified by the governmentand referred to in Entry 2 of Schedule I, other thanthose where ITC is not available, value shall be deemedto be NIL. [Rule 6(7)]


LEVY AND COLLECTION OF CENTRAL/STATE GOODS AND SERVICES TAX(SEC 9)

Central/State goods and service tax (CGST/SGST) shall be leviedon all intra-state supply by a taxable person at the time of supplyat such rates notify by the Central/State govt subject to maximum of20%.

Integrated Goods and Service Tax (IGST) shall be levied on allinter-state supply by a taxable person at the time of supply at suchrates notify by the Central govt subject to maximum of 40%.

GST shall be payable on reverse charge basis on such categories asnotify by the govt.

GST shall be payable on reverse charge basis on supplied madeby an unregistered supplier to a registered supplier.

GST to be paid by electronic commerce operator or itsrepresentative on notified category of services


COMPOSITION LEVY(SEC 10)

COMPOSITION SCHEME UDER GST (SEC. 10)

TURNOVER DID NOT EXCEED ₹ 75 LAKH

RATE CGST SGST/UTGST TOTAL

MANUFACTURER 1.00 1.00 2.00

ARTICLE FOR HUMAN CONSUMPTION 2.50 2.50 5.00

OTHERS 0.50 0.50 1.00

WHO CAN NOT OPT THIS SCHEME

Who engaged in the supply of services other than articles for human consumption

Who makes supply of goods exempted under the CGST Act.

Who makes any inter-state outward supplies of goods.

Who makes any supply of goods through an E- Commerce Operator.

Who is manufacturer of goods notified by GST Council.


POWER TO GRANT EXEMPTION/REMISSION FROM TAX(SEC 11)

On the recommendation of the GST councilCentral/State government by notification/specialorder exempt any goods/services from whole orany part of tax leviable thereon.


TAXABILITY OF COMPOSITE SUPPLY

In case of composite supply tax shall be charged on the basisof principal supply

“Composite supply” means a supply made by a taxableperson to a recipient comprising two or more supplies ofgoods or services, or any combination thereof, which arenaturally bundled and supplied in conjunction with eachother in the ordinary course of business, one of which is aprincipal supply;

“Principal supply” means the supply of goods or serviceswhich constitutes the predominant element of a compositesupply and to which any other supply forming part of thatcomposite supply is ancillary and does not constitute, for therecipient an aim in itself, but a means for better enjoymentof the principal supply;


TAXABILITY OF MIXED SUPPLY

In case of mixed supply tax shall be charged on thebasis of supply having highest rate in the mixedsupply. “Mixed Supply” means two or more individual supplies

of goods or services, or any combination thereof, madein conjunction with each other by a taxable person fora single price where such supply does not constitute acomposite supply;


TAXABLE PERSON (SEC 22 OF CGST ACT)

Taxable Person means who is registered or liable tobe registered under section 22 or 24.

A person who obtained more than one registrationwill be treated as distinct person.


PERSONS LIABLE TO BE REGISTERED (Sec 22)

Person makes a taxable supply of goods and/orservices if his aggregate turnover in a financialyear exceeds ₹ 20,00,000 (₹ 10,00,000 in specialcategory states)

Every person who is registered under earlier lawon immediately preceding day to appointed day.

In case of transfer of business itssuccessor/transferee.

Person liable to register in the every state where hemake a taxable supply.


PERSONS NOT CONSIDERED AS TAXABLE PERSON/NOT REQUIRED TO REGISTERED

(SEC 23 of CGST ACT)

Person who exclusively supply goods or services whichare not liable to tax or wholly exempt.

Agriculturist to the extend of produce out of cultivationof land.

Subject to certain exceptions where aggregate turnoverdoes no exceeds ₹ 20,00,000 (₹ 10,00,000 in case ofNE state and Sikkim).

Categories of person as notified by the govt.


AGRICULTURIST {SEC 2(7) OF CGST}

“Agriculturist” means an individuals or HUF whoundertake cultivation of land –

by own labour, or by the labour of family, or by servants on wages payable in cash or kind or by

hired labour under personal supervision or thepersonal supervision of any member of the family


COMPULSORY REGISTRATION (Sec 24)

Inter state taxable supply Supplies on behalf of other taxable person

Casual taxable person’s supply Input Service Distributor

Reverse charge Supplies other intra state supply byelectronic commerce operator whois required to deduct TDS.

Intra state supply by ElectronicCommerce Operator

Every electronic commerce operator.

Supply by Non resident taxable person

Supply of online information from a place outside India to a person in India, other than a registered person

Persons required to deduct TDS Persons notified by the Govt. on therecommendation of the Council.


PROCEDURE FOR REGISTRATION (SEC 25) Person liable to be registered under this Act shall apply for registration in

every such State in which he is so liable within 30 days from the date on which he becomes liable to registration.

In case of casual taxable person or a non-resident taxable person shall apply for registration at least 5 days prior to the commencement of business.

Person having multiple business verticals in a State may obtain a separate registration for each business vertical.

Person not liable to be registered, may get himself registered voluntarily.

GSIN shall be displayed in the name board exhibited at the entry of the place of business.

Every person who registered under earlier law and granted provisional registration may file an application in FORM GST REG-28 for cancellation of provisional registration.


PLACE OF BUSINESS [SEC 2(85)]

A place where a taxableperson is engaged in businessthrough an agent.

A place from where the business isordinarily carried on, and includesa warehouse, a godown where ataxable person stores his goods,supplies or receives goods orservices or both.

A place where a taxableperson maintains his booksof account


BUSINESS VERTICAL (Sec 18)

“Business Vertical” means a distinguishablecomponent of an enterprise that is engaged insupplying an individual product or service or agroup of related products or services and that issubject to risks and returns that are different fromthose of other business verticals.


CANCELLATION OF REGISTRATION (Sec 29) The proper officer may, either on his own motion or on an

application filed, in the prescribed manner, by the registeredtaxable person or by his legal heirs, cancel the registration infollowing circumstances:

a) The business has been discontinued/transferredb) Change in constitution of business.c) Registered person contravened such provisions rules as may

be prescribed.d) Not furnished return of three consecutive tax periods.e) Where registration obtained by means of fraud/willful

misstatement/suppression of facts.


REVOCATION OF CANCELLATION OF REGISTRATION (SEC 30)

Any registered taxable person, whose registration iscancelled by the proper officer on his own motion,may apply to such officer for revocation ofcancellation of the registration within 30 days fromthe date of service of the cancellation order.


INPUT TAX CREDIT (ITC) {Sec 16}

Meaning of ITC

Time limit to take credit {Sec 16(4)}

Earlier of date of filing or due date of: return for the month of September following the end of financial year to which invoice relates orrelevant annual return.


Credit of IGST/CGST/SGST paid on the supply of goods/services for used or intended to be used in course or furtherance of business

INPUT TAX CREDIT (ITC) {Sec 16}

CA Sahib Singh Choudhary

Conditions foravailingITC{Sec16(2)}

1. Invoice/ Supplementary invoice/ debit note from aregistered supplier.

2. Goods/ Services are received and taxes are paid tothe appropriate Govt.

3. Furnishing of return u/s 39.4. Where goods are received in installments, then credit

can be availed after receipt of last lot.

Reversal of ITC(Rule 2)

1. If a registered person fails to pay to the supplier, thevalue of supply along with tax liability within the timelimit, then he has to furnish the details in GSTR – 2 forthe month immediately following the period of 180 daysfrom the date of issue of invoice.

2. The amount of ITC shall be added to the output taxliability.

12-Jun-17

SET OFF OF INPUT TAX CREDIT


CGST

CGST

IGST

IGST

CGST

SGST

SGST

IGST

IGST

SGST

INPUT TAX CREDIT SET OFF RULES

APPORTIONMENT OF CREDIT & BLOCKED CREDIT (Sec 17)

Credit shall be restricted to Input tax

Supplies are partly used or the purpose ofany business and partly for other purposes

Supplies are partly used for effectingtaxable supplies including zero-rated suppliesand partly for effecting exempt supplies.

In case of banking company or financialinstitution they have option to avail the crediton the basis of input credit attributable totaxable supply or 50% of total input credit.



1. Motor vehicle or other conveyance except it is used in taxable supply of such vehicle or conveyance, or for transportation of goods or passengers or used in training etc.

2. food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery except where such inward supply of goods or services of a particular category is used by a registered taxable person for making an outward taxable supply of the same category of goods or services.

3. Membership of a club, health and fitness centre.

4. Rent-a-cab, life insurance, health insurance except where the Government notifies the services which are obligatory for an employer to provide to its employees under any law for the time being in force.

5. Travel benefits extended to employees on vacation such as leave or home travel concession.

6. Works contract services when supplied for construction of immovable property, other than plant and machinery, except where it is an input service for further supply of works contract service.

BLOCKED CREDIT { Sec 17(5)}

BLOCKED CREDIT { Sec 17(5)}7. Goods or services received by a

taxable person for construction of an immovable property on his own account, other than plant and machinery, even when used in course or furtherance of business.

8. Goods and/or services on which tax has been paid under section 10 (Composition levy).

9. Goods and/or services used for personal consumption.

10. Goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples.

11. Tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for any reason other than fraud or any wilful misstatement or suppression of facts.

12. Tax paid u/s 129 for detention, seizure of goods and conveyances in transit for contravention of provision of this act.


AVAILABILITY OF CREDIT IN SPECIAL CIRCUMSTANCES (SEC 18)

A person who has applied for registration under this Act within 30 days from the dateon which he becomes liable to registration and has been granted such registration,shall be entitled to take credit of input tax in respect of inputs held in stock and inputscontained in semi-finished or finished goods held in stock on the day immediatelypreceding the date from which he becomes liable to pay tax under the provisions ofthis Act

A person who takes registration under sub-section (3) of section 25 shall be entitled totake 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 ofgrant of registration

where any registered person ceases to pay tax under section 10, he shall be entitled totake credit of input tax in respect of inputs held in stock, inputs contained in semi-finished or finished goods held in stock and on capital goods on the day immediatelypreceding the date from which he becomes liable to pay tax under section 9


where an exempt supply of goods or services or both by a registered person becomesa taxable supply, such person shall be entitled to take credit of input tax in respect ofinputs held in stock and inputs contained in semi-finished or finished goods held in stockrelatable to such exempt supply and on capital goods exclusively used for such exemptsupply on the day immediately preceding the date from which such supply becomestaxable

AVAILABILITY OF CREDIT IN SPECIAL CIRCUMSTANCES (SEC 18)

TAKING INPUT TAX CREDIT IN RESPECT OF INPUTS SENT FOR JOB WORK

The “principal” shall, subject to such conditions and restrictions as may beprescribed, be allowed input tax credit on inputs sent to a job-worker for job-work.Where the inputs sent for job-work are not received back by the “principal” or arenot supplied from the place of business of the job worker within a period of oneyear (three years in case of capital goods) of their being sent out, it shall bedeemed that such inputs had been supplied by the principal to the job-worker on theday when the said inputs were sent out.


The Input Service Distributor shall distribute, in such manner asmay be prescribed, the credit of CGST by way of issue of aprescribed document of input tax credit.

The credit of tax paid on input services attributable to morethan one recipient of credit shall be distributed only amongstsuch recipient(s) to whom the input service is attributable andsuch distribution shall be pro rata on the basis of the turnover ina State of such recipient.

DISTRIBUTION OF CREDIT BY INPUT SERVICE DISTRIBUTOR


RETURNS

Particulars Return Form Frequency Due date

Outward Supply GSTR-1 Monthly 10th of succeeding month

Inward Supply GSTR-2 Monthly 15th of succeeding month

Monthly Return GSTR-3 Monthly 20th of succeeding month

Quarterly Return by Composition Suppliers

GSTR-4 Quarterly 18th of the month succeeding the quarter

Outward & Inward supply of non-resident

GSTR-5 Monthly 20th of succeeding month or within 7days after last date of validity of registration

Return by ISD GSTR-6 Monthly 13th of succeeding month

Return of TDS GSTR-7 Monthly 10th of succeeding month

TCS Return by E-Commerce operator

GSTR-8 Monthly 10th of succeeding month

Annual Return GSTR-9 Annual 31st December of succeeding financial year


GSTR-110th

GSTR-520th

GSTR-613th

GSTR-710th

GSTR-810th

GSTR-2A(Auto)GSTR-2

(amendment)15th

GSTR-1A(Auto)

Accept/Reject GSTR-1A Details (17th)

PART A GSTR-3 Auto populated

Liab. Debit in GST PMT-1

Payments

RETURN PROCESS


Challan (GSTR-PMT-4) generated from common Portal and submit to bank

Auto credit of cash in GST PMT-3

Auto credit of TDS/TCS in GST PMT-3Auto credit ITC in GST PMT-

2

Debit to GST PMT-2 & GST PMT-3

Credit of Tax/ITC in GST PMT-1 (Liability Register)

Credit Ledger (PMT 2) Cash Ledger (PMT-3)

Debit Entry Ref # to be filled in GSTR-3 GST R3 filed

PAYMENT PROCESS

Payment


JOB WORK PROCEDURE (Sec143) A registered taxable person may, subject to such conditions as may

be prescribed, send any inputs and/or capital goods, withoutpayment of tax, to a job worker for job-work.

Bring back such inputs and/or capital goods within 1 year and 3years, respectively, of their being sent out.

Principal shall not supply the goods from the place of job workerunless such place is declared as additional place of business or jobworker is registered or engaged in supply of notified goods.

In case input/capital goods not received back within one year/threeyear it shall be deemed that such goods had been supplied to thejob worker.

Any waste and scrap generated during job work may be supplieddirectly by job worker if registered otherwise by the principal.


ASSESSMENT

SELF-ASSESSMENT: Every registered taxable personshall himself assess the taxes payable and furnish areturn for each tax period.

PROVISIONAL ASSESSMENT: Where the taxableperson is unable to determine the value or rate of tax,he may request for payment of tax on a provisionalbasis and the proper officer may pass an orderallowing payment of tax on provisional basis.

SCRUTINY OF RETURNS: The proper officer mayscrutinize the return and related particulars furnishedby the taxable person.


AUDIT

Audit by tax authorities: The tax authorities byway of a general or a specific order, mayundertake audit of any taxable person.

Such audit shall be completed within three monthsfrom commencement of audit.

Special audit: If at any stage of scrutiny, enquiry,investigation or any other proceedings beforeDeputy/Assistant Commissioner may direct to getexamined and audited by chartered accountant


TRANSITIONAL PROVISIONS (Sec 139 to 142)

MIGRATION OF EXISTING TAXPAYERS TO GST

On the appointed day, every person registered under any ofthe earlier laws shall be issued a certificate of registration ona provisional basis in such form and manner as may beprescribed.

Such provision certificate of registration shall be valid for aperiod of six months from the date of its issue

Every person to whom a provisional certificate of registrationhas been issued, shall furnish such information as may beprescribed.

On furnishing of such information, to whom provision certificateof registration is granted shall be granted on a final basis bythe Central/State Government



Amount of CENVAT credit carried forward in a return tobe allowed as input tax credit

Unavailed Cenvat credit on capital goods, not carriedforward in a return, to be allowed in certain situations

Credit of eligible duties and taxes in respect of inputsheld in stock to be allowed in certain situations (withspecific conditions)

Credit of eligible duties and taxes on inputs held in stockto be allowed to a taxable person switching over fromcomposition scheme (with certain condition)



No GST will be change on Inputs/Semi Finished/Finishedgoods removed for job work and returned on or after theappointed day within six months.

Supplementary invoices, debit or credit notes issued inrespect of supply made before appointed day, suchInvoice/Debit/Credit not shall be deemed to issued underGST



Following shall be dealt as per existing law: Pending refund claims to be disposed of under earlier

law Refund claims filed on or after appointed day under

the existing law Every appeal/Revision initiated on or after appointed

date under existing law



No GST charged on goods/service to the extend tax was leviable underexisting law

Where tax was paid under existing law and supply made after theappointed date, GST is chargeable and such tax paid will be allowed asinput tax credit.

Credit distribution of service tax by ISD. Provision for transfer of unutilized Cenvat Credit by taxable person having

centralized registration under the earlier law Tax paid on goods lying with agents to be allowed as credit (Certain

condition) Tax paid on capital goods lying with agents to be allowed as credit Treatment of branch transfers Goods sent on approval basis returned on or after the appointed Transitional provisions for availing Cenvat credit in certain cases (Credit not

allowed for non payment)


ACTION PLAN BEFORE GST ROLL-OUT

Stock should be minimum level Book stock and physical stock should be duly reconciled. Manpower should be properly allocated to group entities. Proper allocation of common infrastructure. Closing of defunct branch/units/godowns etc. Transfer of machinery and equipment from the branch or

division which are not in operation. Transfer of stock from agent or branch. Pay the disputed tax in respect of liability under reverse

charge mechanism and take the input credit. Recruitment of adequate and competent staff in accounts

division.


PROCESS OF E-WAY BILL

Value of movement of goods is > ₹

50,000

NoIs there multiple consignment in

vehicle and value is > ₹ 50,000

No No way bill required.

Supplier is a registered person.

No Is recipient a registered person

No

E way bill to be generated by the

transporter in GST INS - 01


Supplier.


Recipient in GST INS -1


PROCESS OF E-WAY BILL (Contd…)

Details available to registered recipient

Accept/Reject within 72 hrs

Transporter will generate consolidated

e-way bill

Transfer goods in other Vehicle

New way bill to be prepared

Carry physical way bill or map with RFID

Commissioner may require a class of

transporter to install unique RFID.


VALIDITY OF AN E-WAY BILL

An e-way bill is valid for periods which is based on thedistance travelled by the goods. Validity is calculated from thedate and time of generation of e-way bill:-

Distance Valid from Valid for

Less than 100km

Date & time at which e-way bill is generated

1 day

100km to 300km 3 days



1000km or more 15 days


VERIFICATION OF GOODS

Commissioner may require a class of

Transporter to embed RFID

Install RFID reader where verification of movement of goods is required

Physical verification is required

Upload summary reportwithin 24 hours ofinspection in PART A ofform GST INS - 03

Final report within 3days of inspection inPART B of form GST INS- 03

Transporter may reportdetention of goods inform GST INS - 04


RETURNS

GSTR - 1.docx

GSTR - 2.docx

GSTR - 3.docx


RETURNSForm What to file? By whom? By when?

GSTR-1Details of outward supplies of taxable goodsand/or services effected

Reg. TaxableSupplier

10th of the next month

GSTR-2Details of inward supplies of taxable goodsand/or services effected

Reg. TaxableRecipient


GSTR-3Monthly return on the basis of finalization ofdetails of outward supplies and inwardsupplies along with the payment of amountof tax.

Reg. Taxable Person


GSTR-4 Quarterly return for compounding taxable person.

Composition Supplier

18th of the month succeeding quarter

GSTR-5 Return for Non-Resident foreign taxable person

Non-Resident Taxable Person


GSTR-6 Return for Input Service Distributor Input Service Distributor



RETURNS

Form What to file? By whom? By when?

GSTR-7 Return for authorities deducting tax at source. Tax Deductor 10th of the next month

GSTR-8 Statement for Tax Collection at Source E-commerce Operator/Tax Collector


GSTR-11 Details of inward supplies to be furnished by a person having UIN

Person having UIN and claiming refund

28th of the month following the month for which statement is filed


CA Sahib Singh Choudhary

Thank you

QUESTIONS

You may send you query to:[email protected]

THANKSCA. SAHIB SINGH CHOUDHARY

GST PROFESSIONALS LLP

+91 [email protected]

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Documents

All about GOODS AND SERVICE TAX (GST) · All about GOODS AND SERVICE TAX (GST) ... Intra-State Supply. Both CGST & SGST charged concurrently on every point of Supply . IGST would