Overview of GST

On 18-08-2017 at JP Celestial, Bangalore

-BY CA B D Chandrashekar

M/s. Shekar & Yathish

Bangalore

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Brain Teasers

• Some months have 30 days, some of them have 31 days, how many of them have 28 days?

• I went to bed at 8 o’clock in the evening and wound up the clock and set the alarm to sound at 9 o’clock in the morning. How many hours sleep would I get before being woken by the alarm.

• Take 2 apples from 3 apples. How may do you have?

• Intro about GST • Taxes Subsumed & Not subsumed • Levy & Supply

– Time of Supply – Place of supply – Value of Supply

• Input Tax Credit • Registration • Records and Accounts • Returns & Transitional Provisions

Over View of GST

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EVOLUTION OF TAXES ON

SUPPLY SERVICE GOODS

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• GST is a comprehensive tax levied on manufacture, sale and consumption of goods and services across India.

• GST is a Destination based Consumption tax, and the taxable event is Supply as against the existing taxable events of sale, manufacture or provision of service.

• GST is a Compliance based law.

GST - Intro

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Central Taxes to be subsumed into GST

CGST

Central Excise Duty

Additional Excise Duty

Service Tax

CVD SAD

Cess

Surcharge

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State Taxes to be subsumed into GST

SGST

VAT

Ent. tax

CST

Entry Tax

Luxury Tax Betting

Tax

Purchase Tax

Cess

Surcharge

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Taxes not subsumed in GST

1. Basic Customs duty 2. Alcohol for human consumption 3. Stamp duty and Property tax 4. Toll tax 5. Mandi Cess etc levied by Local authority 6. Profession tax 7. Motor Vehicles tax 8. Entertainment Tax (levied by local bodies) 9. Petrol / Diesel / Aviation fuel / Natural Gas* *Shall not be subject to levy of GST till a date notified on the

recommendation of the Goods and Services Tax Council.

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SUPPLY & LEVY

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Supply definition

7. (1) For the purposes of this Act, the expression “supply” includes––

- all forms of supply of goods or services or both

- such as sale, transfer, barter, exchange, licence, rental, lease or disposal

-made or agreed to be made

-for a consideration

-by a person

-in the course or furtherance of business;

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Supply – Sample Examples

• Sale of goods { Local , Interstate, Export Etc. } • Service Income

– Repair Services – Commission received

• Other Income – Renting of property – Earning of interest income

• Barter & Exchange of goods – Two supplies • Sale of car ( used for business ) • Transfer to branch located in another state Tip : Check your credit side of P & L Account & credits in your capital

account ( Keep a check on every receipt – whether GST is applicable? ) Shekar & Yathish 13

Individual/Composite /Mixed Supply

• Single Supply of good / Service – Individual supply

• Composite Supply – Two or more taxable supplies naturally bundled & one is a principal supply (Predominant element) – Rate applicable of principal supply.

• Mixed Supply – Two or more individual supplies for a single price which is not composite supply – Rate applicable is highest rate.

• Example : Haldiram’s Gift Box

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• Forward Charge

- is on the Credits / Receipts

• Reverse Charge

- is on the Debits / Payments

Levy

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Reverse Charge – Notified goods/Services 9(3)

Services Notification 13/2017

• GTA – Goods Transport Agency

• Advocate Services

• Sponsorship Services

Goods : Notification 4/2017

• Cashew nuts, not shelled or peeled

• Bidi wrapper leaves (tendu)

• Silk yarn

• Lottery.

Rs.5,000/- limit not applicable to such services

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Reverse charge – Unregistered Person 9(4)

9(4) : Taxable goods or services or both received by registered person from an unregistered person

– Spares purchased from URD – Rent paid – Stationery – Professional Charges – Repairs & Maintenance

Relaxation : Rs.5,000/- for all such supplies in a day, Notification 8/2107 Egg: Stationery -1000, computer Repairs -1000, Spares – 2000 on 5th July 2017 let us

say these are the payment entries in your books (Then RCM NOT required at respective rates)

Tip : Check the debit side of your Trading & P/L A/c and analyze whether any goods or

services procured from URD Challenge – Identification of the rate of tax by identifying the proper HSN code

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Time of supply - Goods

Regular Goods Sold – Date of invoice issued or – last date on which it had to be issued ( Before or at

the time of delivery of goods)

• RCM Purchases The date of receipt of goods The date of payment entered in books or credited in

bank account 30 days from the date of issue of invoice Date of entry in books

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Earliest of the following – Date of issue of invoice ( if issued within 30 days or date of

payment – Date of provision of service (if invoice not issued within 30

days ) or date of payment – Date of Sale entry in books

RCM Service Purchase

The date of payment entered in books or credited in bank account

60 days from the date of issue of invoice Date of entry in books

Time of Supply - Services

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POS

Vendor Customer

Exports CGST + SGST IGST

Customer IGST

CGST + SGST

NO TAXES

Imports Customs Duty Vendor

IGST IGST

Factory

Godown

WareHouse

NO TAX

Out of India Your StateRest of India

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Local / Intra State – CGST & SGST ( C + S ) Inter State – IGST ( I ) • Location of Supplier (LOS) & Place of Supply (POS)

If LOS = POS, then C & S If LOS is not = POS, then I

Place of Supply for goods where delivery terminates to recipient

Bill to Ship to Model : Bill to Party

Note: Goods sold to foreign Tourist must be charged IGST

Place of Supply - Goods

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Thumb Rule

- Made to registered person then - location of such person

- Made to unregistered person - The location of the recipient where the address on

record exist

- The location of the supplier of services in other cases

Place of Supply - Services

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12 Notified services : Separate POS

1. Immovable property related services

2. Restaurant, Catering, fitness,etc

3. Training & performance appraisal

4. Admission & Entry to Amusement park etc

5. Services by certain organizations like organizing fair, exhibition, events etc.

6. Transportation of goods (RP or location where goods are handed over)

7. Passenger Transportation Service

8. Services on board conveyance Vessel, air craft, train, motor vehicle

9. Telecommunication services

10. Banking & Financial services

11. Insurance Services

12. Advertisement services

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Valuation

Transaction Value - Price actually paid between unrelated parties & Price is the

sole consideration

Inclusions

- Taxes & duties paid (other than under GST Act) - Amount supplier is liable to pay but incurred by recipient - Incidental expenses like commission, packing etc - Interest, Late fee, Penalty for delayed payment

Exclusions Discount – given before or at the time of supply & duly recorded in invoice.

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REGISTRATION

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Aggregate Turnover { Across India } – > 20 Lakhs in other than notified states and > 10 Lakhs in notified states – Turnover includes = { Taxable Supplies + Exempt Supplies + Exports + Inter

state supplies – GST }

Mandatory registration - Inter state supply - Casual Taxable Person + Non resident Taxable persons - Persons required to pay under reverse charge - Sale Thru E commerce operators - TCS - Persons required to do TDS - Govt - Persons making taxable supplies on behalf of other taxable persons

whether as agents or otherwise - Input Service Distributors

Registration – Mandatory Sec 22 & 24

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• Exclusively dealing with exempt supply or non taxable supply

• An agriculturist – means Individual or HUF who undertakes cultivation of land (subject to certain conditions

Persons not required to register : Sec 23

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Registered voluntarily :YES – all provisions shall apply. – Collect & Pay Tax from Rupee 1 – File Returns – Cannot cancel for one year

• Earlier Registered under– VAT, Service Tax, Luxury Tax, etc. – Mandatorily migrate. – Can apply for cancellation / Composition

• Amendment to details possible – Core fields like Place of business, PAN change etc. requires

approval of officer. – Non-core fields do not require approval of officer – Egg: Bank

details, HSN codes

Voluntary Registration/Cancellation/Amendment

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• Turnover less than 75lakhs in preceding financial year

• Stock on 1st July must not include stock purchased from inter state

• Should not render services (exception – food related)

• Should not make inter state supply

• RCM applies to composition dealer as well

• Rates – Traders – 1%; Manufacturer – 2%; Service Provider – 5%

• Need to file GST CMP-01 within 16th August

Composition - Conditions

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INPUT TAX CREDIT

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SET OFF’S

CGST

• CGST

• IGST

SGST/UTGST

• SGST/UTGST

• IGST

IGST

• IGST

• CGST

• SGST/UTGST

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INPUT TAX CREDIT

33

Input Credit

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ITC

Generally All Credits

Used in Business

Not Available

Not used in Business

Used for Exempted

Sales

Restricted Credits

motor vehicles &

other conveyance

s-

Food & beverages,

outdoor catering,

beauty

treatment, health

services, cosmetic & plastic surgery

Other

Club members

hip

Rent a cab, life &

health insurance

Constructio

n servic

es

Goods lost, stolen,destr

oyed,

written off or disposed of by way of gift or free samples.

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Taxable supplies & exempt supply : Identification at invoice level

- Wholly Non business supplies credit – T1 - Example: Buy a mobile phone to gift to your wife.

- Wholly Exempt Supplies Credit – T2 - Example : Manual sprayer – Transportation charges

- Blocked Credits – T3 - Example : Purchase Benz Car

- Wholly Taxable supplies credit – T4 - Example : Transportation towards Chainsaw

- Common credit C2 apportionment – Ratio of exempt supply & taxable supply

- Ex: Rent paid ( used for both taxable supply & exempt supply ).

Apportionment of credits

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ACCOUNTS & RECORDS

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Records

• Taxable Supplies – Tax Invoice • Exempt Supplies & Composition RP – Bill of Supply • Advance received – Receipt Voucher ( Tax to be paid ) – If rate & nature of

transaction known accordingly – Otherwise IGST /18% • RCM – Self Tax Invoice & Payment Voucher – Consolidated Self Tax Invoice for

whole month in case of 9(4) RCM • Other than supply – Delivery Challan –Job work / Sale on

Approval/Demo/Exhibition – E way bill (Rs.50,000/- or more) • Revised Tax Invoice – New registration between effective date of registration &

date of certificate of registration • Credit notes – Reduction in value – Egg: Sales returns • Debit notes – Increase in Value NOTE : PURCHASE RETURNS CANNOT BE INITIATED IN GST FOR CONTROL PURPOSES. FORMATS

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Accounts

• Production or manufacture

• Inward & Outward Supply

• Stock of goods

• Input Tax Credit availed

• Output tax payable & paid

• Also declare godowns & branches as additional place of business & keep details pertaining to that branch there.

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• If there is excess of input credit in VAT monthly return of June – then SGST opening credit

• If there is excess of input credit in service tax return or excise return – then CGST opening credit

• To be filed through GST TRAN 1 and then only it will available

• In case of Traders • ITC on goods manufactured in India & Excise duty paid

document available. (subject to conditions) • Deemed Credit (60% / 40% of CGST portion & 30% / 20% of

IGST portion) – only goods manufactured in India and excise duty paid document not available (subject to conditions)

Transitional Provisions

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RETURN FILING

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List of Forms - Returns SL No

Form No Title of the Form

1 Form GSTR-1 Details of Outward Supplies

2 Form GSTR-1A Details of O/s as added, corrected or deleted by recipient

3 Form GSTR-2 Details of inward supplies of -Taxable goods -Services for claiming input credit

4 Form GSTR-2A Details as furnished in GSTR 1 by supplier

5 Form GSTR-3 Monthly return – Based on details of Outward supplies, Inward supplies along with payment of amount of tax

6 Form GSTR-3A Notice for non filing – under Sec 27 /Sec 31

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List of Forms - Returns

SL No Form No Title of the Form

7 Form GSTR-4 Quarterly return for compounding taxable persons

8 Form GSTR-4A Details of inward supplies to the recipient under Composition scheme on the basis of Form GSTR-1 by Supplier

9 Form GSTR-5 Return of Non – resident

10 Form GSTR-6 ISD Return

11 Form GSTR-6A Details of Inward supplies to an ISD recipient on the basis of Form GSTR-1 by the supplier

12 Form GSTR-7 Return for authorities deducting TDS

13 Form GSTR-7A TDS certificate

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List of Forms - Returns

SL No Form No Title of the Form

14 Form GSTR-ITC-1

Communication of acceptance, discrepancy or duplication of ITC

15 Form GSTR-8 Details of supplies effected through e-commerce operator and amount tax collected under Sec 43C(1)

16 Form GSTR-9 Annual return

17 Form GSTR-9A Simplified Annual return by Compounding taxable persons registered under Sec 10

18 Form GSTR-9B Reconciliation Statement

19 Form GSTR-10 Final Return (Surrender/Cancellation)

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

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Who needs to file returns

under GST?

Return

GSTR 1 Outward supplies

GSTR 2 Inward

supplies

GSTR 3 Monthly return

GSTR 4 Quarterly

return

GSTR 5 Periodic return

GSTR 6 ISD

GSTR 7 TDS

GSTR 9 Annual return

Normal/regular tax payers a a a a

Compounding taxpayer a a

Casual taxpayer a a a

Non- Resident taxpayer other than foreigner

a a a

Non- Resident foreign taxpayer

a

Input Service Distributor a

Govt. Dept., agency, local authority

a a a a

Due Date 10th of next month

15th of next month

20th of next month

18th of next month to quarter

Last day of registration/Monthly

13th of next month

10th of next month

By 31st December of next FY

Assessee

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Due date for next 2 months

• Note 1 – If credit carried forward from earlier regime, then return filing date extended till 28-08-2017

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Month GSTR – 3B GSTR – 1 GSTR – 2 (auto

populated from

GSTR-1)

GSTR - 3

July, 2017 20th August

-Note 1

1st – 5th

September 2017

6th – 10th

September 2017

11th to 15th

September 2017

August,

2017

20thSeptem

ber

16th – 20th

September 2017

21st – 25th

September 2017

26th to 30th

September 2017

Penalty

Frequency Returns Penalty (CGST

+SGST)

Monthly GSTR -1 ,2,3,6,7 Rs 100 per day subject To Maximum of Rs.5,000

Quarterly GSTR 4 – 18th of Next Quarter

Rs 100 per day subject To Maximum of Rs.5,000

Annual Return GSTR 9 – 31st Dec end of Financial year

Rs 100 per day subject To Maximum of 0.25% of Aggregate Turnover

Final Return – Surrender

GSTR 10 – 3 months form the date of Cancellation

Rs 100 per day subject To Maximum of Rs.5,000

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Normal/Regular Tax Payers – Monthly Return

• Upload details of outward supply on 10th of subsequent month

GSTR-1

• Data will be auto populated in 2A of Recipient tax payer

GSTR-2A • Additions, modifications and deletion by recipient will be made available to supplier and submitted on 15th GSTR-2

•Corrections in Form GSTR-2 will be made available to supplier

•Supplier has to accept or reject adjustments by 17th

GSTR-1A •Auto-populated return will be available for submission along with the payment on 20th

GSTR-3

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Ratna Steels Portal Super Cars Ltd Portal

Ratna Steels GSTR-1

Ratna Steels Outward Supplies

Register

Super Cars Ltd

Ratna steels Rev Automobiles

Books of Super Cars Ltd for July Inward Supplies Register Outward Supplies Register No Qty Amt GST

Tot.

225 2,25,000 40,500

No Qty Amt GST

Tot.

215 2,36,500 42,570

No Qty Amt GST

Tot.

225 2,25,000 40,500

6 100 1,00,000 18,000

6 100 1,00,000 18,000

7 50 50,000 9,000

7 50 50,000 9,000

8 25 25,000 4,500

8 25 25,000 4,500

10 50 50,000 9,000

10 50 50,000 9,000

1 80 88,000 15,840

4 45 49,500 8,910

2 60 66,000 11,880

3 30 33,000 5,940

Aug

10 Super Cars Ltd GSTR-1

1 80 88,000 15,840

4 45 49,500 8,910

2 60 66,000 11,880

3 30 33,000 5,940

Aug

11

6 100 1,00,000 18,000

6 1,00,000 18,000

Aug

15

Ratna Steels GSTR-1A

6 1,00,000 18,000

In.No Amt GST

6 1,00,000 18,000

Aug

16

Aug

21

6 100 1,00,000 18,000

Payment Payment

Aug

20

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FLOW OF GST INPUT

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For any clarification shekar@ca-sny.com

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