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GOODS AND SERVICE TAX
Summary1. Existing Tax structure2. Proposed Tax structure3. GST Position as on date4. What is GST, CGST, IGST & SGST5. How GST Will Work6. Benefit of GST7. Registration Under GST8. Transitional Provision for Registration9. Process & requirement for Registration10. Composition Scheme under GST11. Conditions for Composition Scheme12. Invoice Under GST13. Input Tax Credit14. Transaction how to utilize ITC15. Transitional Provision under GST16. Credit C/f17. Credit on stock18. Credit on capital Goods19. Goods Under Transit20. Return Under GST21. Requirements for return
Existing Tax Structure
Tax Structure in IndiaDirect Taxes
Indirect Taxes
Income Tax Gift TaxesState Tax
Central TaxCustom Tax
Excise Duty
Service Tax
CST
Surcharge & Cess
VAT
Entertainment Tax
Luxury Tax
Entry Tax
Surcharge & Cess Taxes on Lottery
Security Transaction Tax
Property Tax
Stamp Duty
Electricity Duty
Environment Tax
Export Duty
Taxes on Betting & Gambling
Credit Issue under current structureCredit of
Service Tax
VAT Excise Service Tax
Credit of VAT
Credit of Excise
VAT Excise Service Tax
VAT Excise Service Tax
(in some situation)
(in some situation)
Proposed Tax Structure under GST
State TaxCentral Tax
Excise Duty
Service Tax
CST
Surcharge & Cess
VAT
Entertainment Tax
Luxury Tax
Entry Tax
Surcharge & Cess
Taxes on Lottery
Security Transaction Tax
Taxes to be subsumed under GST
Taxes not subsumed under GST
Basic Custom Duty
Export Duty
Property Tax
Stamp Duty
Electricity Duty
Environment Tax
Way forward
• Constitution (101st) Amendment Act already notified on 08.09.2016
• GST Council already notified wef 12.09.2016
• Recommendation of Model GST laws by GST Council
• Passage of CGST and IGST laws by Parliament and passage of SGST laws by all State legislatures
• Notification of GST Rules
• Establishment of IT framework
Now What is GST?
One Tax For
Manufacturing
Trading
Services
Few Terms…
SGST ?CGST?IGST ?
Integrated GST
GST to be levied on Inter State Supplies
Three important Term
Tax Invoice Cost of Goods =
100IGST @20% =
20 Total =
120
Tax Invoice Cost of Goods =
100IGST @20% =
20 Total =
120
How GST Levied?
Tax Invoice (A)Cost of Goods =
100SGST (G) @10%
= 10CGST @10%
= 10 Total =
120
Tax Invoice (A)Cost of Goods =
100SGST (G) @10%
= 10CGST @10%
= 10 Total =
120
Location of
Supplier in
different state
Place of
Supply in
different
state
IGST
Location of
Supplier in
same state
Place of
Supply in
same state
SGST
LIMITATIONS OF CURRENT STRUCTURE VIS-A-VIS BENEFIT OF GST
Credit of Excise not allowed Credit of CST Not Available
MAHARASHTRA MADHYA PRADESH1. Cascading Effect of Tax
In GST Credit Will be Available in All the stages
2. Registration Under Different Act
In GST Single Registration In a State
3. Different Point of Taxation
Excise(On Manufacturing)
Service Tax(On provision of Service)
VAT( On sale of Goods)
In GST Same Rule for point of taxation for every type of transaction
No Entry Tax
Entry Tax
Value Added Taxe.g. on Sugar
@ 4%@ NIL %
4. Lack of Uniformity
One India One Market in GST
5. Goods Vs. Services dilemma & Manufacturing Vs. Service dilemma:
Sale
Manufacturing
License Software in CD
Services
Sale of Food In Restaurant
In GST Schedule III Specify Matters To Be Treated As Supply Of Goods Or Services
Duties & Taxes
Cost of Goods
Burden of Tax make Local goods Costlier
in International Market
6. Limited Export
Due to GST our Product become Competitive in International Market
Different Reg. no.
Different Tax Rate
Different Details
Different Valuation
Different Forms
Different Format
Manual/ Online
7. Complicated Invoice
Different Rules are require to be followed under Different Acts
In GST Same Invoice for all type of transactions
Other Benefit of GST
Logistic BenefitPurchasing Option
TransparencyAbolishment of Purchase & Entry Tax
How GST will work?
Are you covered under GST?
Threshold Limit
Existing Taxes
Excise
Rs. 150.00 Lakh
Service Tax
Rs. 10.00 Lakh
VAT
Rs. 10 Lakh/ Voluntary
Proposed Tax
GST
Rs.20.00 Lakh in other
Rs. 10.00 Lakh In Northeast
COMPULSORY REGISTRATION UNDER GST
Aggregate Turnover includesi. All taxable & non-taxable suppliesii. Exempted supplies andiii. Export of goods and/or service
Further registration is mandatory in case ofa) Inter-state saleb) Casual taxable personsc) Reverse Charged) Non-residente) TDSf) Agentg) Input service distributorh) Electronic Commerce operatori) An aggregator with brand name
Registration
Compulsory Registration for Each State where business
situated
Option to take multiple registration for each business within same state
TRANSITIONAL PROVISION
Pre-GST
Registration under existing law i.e. VAT, S.Tax, Excise, etc
Not registered under existing law But liable to get Registration under GST
LAW:Issue of Registration Certificate on Provisional Basis
which will be valid for 6 MonthsApply for Registration within 30 days of becoming liable to Registration as per
Section 19.Liable to Reg under GST Not Liable to Reg under GST
Liable to furnish Info within prescribed time
Info furnished Info not furnished
Final Registration Granted
Registration will be cancelled
Follow the procedure as let down under Section 19 Apply for cancellation of
Registration
Enrolment Under GST
Sr. Question Answer1. What is Enrolment? Updating Database available about existing
tax payer by existing department.2. Who is Require to Enroll? Every existing taxpayer register under
existing law is liable to enroll on GST common Portal
3. What is the due date of Enrollment?
Due date of enrollment for VAT dealer in Maharashtra is 30th November 2016. However Enrollment portal will remain open till 31st January 2017.
4. Whether enrolment under both CGST & SGST Act is different?
No, On common Portal there is single enrollment for both CGST & SGST
Requirement for Enrollment
I. Provision ID Received from State/ Central AuthorityII. Password Received from State/ Central AuthorityIII. Email IDIV. Mobil No.V. Bank Account numberVI. Bank IFSCVII.Proof of Constitution of BusinessVIII.Photograph of Promoter/ Director/ PartnerIX. Proof of Authorized SignatoryX. Photograph of Authorized SignatoryXI. 1st Page of Bank Pass Book/ Statement
Composition Scheme
Taxable Supplies
Exempted Supplies Export
All supplies should be below Rs. 50.00 Lakh
In case of ManufacturePay Tax @2.5%
In case of TraderPay Tax @2.5%
Not Applicable to Service Provider
CONDITION FOR COMPOSITION SCHEME
Transaction all over the India should be consider for eligibility
i.e. PAN based turnover
Input Tax Credit Not allowed.
Inter State Supplies not allowed
Other Point related to scheme
E.g.: If Mr. X has to opt for composition scheme from 1st April, 2018, he has to fill the application on or before 31st March, 2018.If during the year, Mr. X’s turnover exceeds 50 lakhs at any point of time, his opted composition scheme will lapse and he will be shifted to the Normal scheme automatically.
Opt for scheme from 1st day of financial year only
Application should be filed before 31st march of previous year
Can shift from composition scheme to normal scheme at any time during year
Automatically shift to normal scheme if turnover exceed Rs.50.00
Shift over from Normal scheme under Existing Law to Composition Scheme under GST
Normal Scheme in existing Law
Want to Opt Composition Scheme under GST
There is unutilized credit under existing law
Pay an amount equal to Credit of stock held utilized
for pay tax
Un-utilized Credit will Laps i.e. reverse it
Invoice Under GSTTax Invoice
Name of SupplierAddress of Supplier
GST Registration No. of Supplier
Customer Name : Date : DD/MM/YYYYCustomer Address : Invoice No:Customer GST No. :
Sr. Description of Goods/Service *HSN Code of Goods
Qty Rate Total Abetment Taxable Supplies
1 XYZ 10 100 1000 1000
Total 1000 1000
Add: CGST @10% 100
Add: SGST @10% 100
Total 1200 1200
Authorized Signature*HSN -Harmonized System of Nomenclature (HSN)
Input Tax Credit
Do You know Input Tax Credit?State Tax= 14( 10 + 2 + 2)
SGST = 10
SGST = 12ITC = ( 10)Pay = 2
SGST=14ITC = ( 12)Pay = 2
CGST =10
CGST = 12ITC = (10) 2
Tax Invoice (A)Value = 100CGST = 10SGST = 10Total = 120
Tax Invoice (B)Cost = 100Value = 120CGST = 12SGST = 12Total = 144
Tax Invoice (C)Cost = 120Value = 140CGST = 14SGST = 14 Total = 168
Central Tax= 14( 10 + 2 + 2)
CGST= 14ITC = (12) 2
Input Manufacturer
Output Manufacturer Dealer Consumer
CGST Rate : 10%
SGST Rate : 10%
Credit on purchase of Input i.e. Raw Material, finished goods, Input service
Accounting Treatments
On Intra state purchase (Within the state purchase)
Material A/c………DrCGST A/c……………DrSGST A/c……………Dr To Supplier A/c………..Cr
On Inter State Purchase Material A/c………DrIGST A/c…………….Dr To Supplier A/c………..Cr
On Intra state Supplies Debtor A/c…………Dr To Sale A/c………………Cr To CGST………………….Cr To SGST………………….Cr
On Inter State Supplies Debtor A/c…………Dr To Sale A/c………………Cr To IGST……….………….Cr
On Payment of CGST or SGST if any Payable
CGST A/c……………Dr.SGST A/c……………Dr To Bank/Cash A/c…Cr
PRIORITY OF UTILIZATION OF CREDIT
CGST SGST IGST
CGST SGST IGST
IGST IGST CGST
SGST
CGST IGST SGST
Input 10000
30000 10000
Output 25000
10000 25000
Net (Refund)/Payable
15000
(20000)
15000
Payable - - 10000
TaxesParticular
what about credit on existing stock?
Eligible persons Credit entitled As onPerson applied for registration within 30 days of liable to register
Inputs held in stock & inputs contained in Semi finished or finished goods held
in stock
The day immediately preceding the date from which he becomes liable to pay tax
Person who is not required to register, but obtains Voluntary registration
The day immediately preceding the date of registration
Person ceases to pay composition tax
The day immediatelypreceding the date from which he becomesliable to pay tax under regular scheme
Person applied for registration After 30 days of liable to register Not entitle to take Input Tax Credit
When should I take credit?
Is in possession of a tax invoice ( not earlier than 1 year)
Goods/services are received
Tax on such goods are deposited with the Government by supplier
He has furnished return
INELIGIBLE CREDIT
Motor vehicles except used for usual course of business or for providing taxable services of –Transportation of passengers, goods or Imparting training or motor driving skills.
Specified goods and / or services as are used primarily for personal use or consumption of employee
Goods and/or services acquired by principal in the execution of works contract which resulted in construction of immovable property other than plant and machinery.
Goods acquired by a principal, the property in which is not transferred (whether as goods or in some other form) to any other person, which are used in the construction of immovable property, other than plant and machinery.
Goods and/or services on which tax has been paid under composition scheme.
Goods and/or services used for private or personal consumption to the extent they are so consumed.
NOTE: Where the tax component has been capitalised to the asset and depreciation is claimed on it under Income-Tax Act, then no input tax credit shall be allowed on such tax component.
What about Credit under existing Law carried forward ?
What about Stock as on 31st March
Are You Planning to purchase Capital Goods?
Here is solution for You
Credit Under Existing Law carried Forward`
Input Tax
Credit
CENVAT credit
VAT credit
It includes Central excise Service Tax Education cess NCCD krishikalyan cess (only to
service provider) Additional duty u/s 3(1) of Custom Tariff Act
It includesITC under VAT law of state CVD 3(5) under CTA
CGST
SGST
Qualify for credit under existing law
Qualify for credit under GST law
Reflected in Return filled for period immediately before application date of
GST
Transitional Provision of Credit Of Input Held In Stock
I) If assessee is not liable to Register under existing law i.e. VAT & Service Tax because of following reasons: Turnover not exceeding exemption Limit or Deals in exempted goods or Paying tax in composition scheme.II) And he is liable to register under GST: So assessee is eligible to take credit of input held in stock on applicable date of GST in following
manner.
CENVAT credit VAT credit
It includesITC under VAT law of state CVD 3(5) under CTA
Can be availed against payment of CGST i.e.as a CGST Credit
Can be availed against payment of SGST i.e.as a SGST Credit
It includes Central excise Service Tax Education cess NCCD krishikalyan cess (only to service
provider) Additional duty u/s 3(1) of CTA
i. This Stock is used for making taxable goods
ii. Entity is not opted for composition scheme
iii. Eligible to take credit under earlier law but not taken due to limit or due to exempted goods or Composition scheme.
iv. Person is eligible to take credit under GST law.
v. Having invoice/document of this stock as on applicable date of GST.
vi. Above invoices/documents issued not earlier than 12 months of applicable date
vii. Amount should be calculated as per GAAP .
CONDITIONS FOR TAKING CREDIT OF INPUT HELD IN STOCK U/S 145
Transitional Provision for CAPITAL GOODS U/S 144
In case of capital goods, credit under excise is allowed in two equal installments :- 50% in the year of purchase and 50% in the subsequent year or thereafter.
Credit booked in year of purchase & c/f in return
Credit not booked in year of purchase i.e. not c/f as per return.
Carried forward in GST as CGST/SGST as the
case may be
Carried forward as per sec.144 in following manner
Cenvat Credit VAT Credit
GST
It includes Central excise NCCD Special Duty/ Countervailing Duty Additional duty u/s 3(1) of CTA
It includesITC under VAT law of state CVD 3(5) under CTA
CGST SGST
Accounting EntryCredit Under Excise, Service Tax, etc Carried forward in return
CGST A/c……………Dr. To CENVAT Credit A/c….Cr.
Credit Under VAT Law carried forward in return
VAT A/c………………..Dr To SGST A/c ………………….Cr.
Book Credit on Stock not carried forward in Return(By reducing cost of Stock)
CGST A/c…………..Dr.SGST A/c…………..Dr. To Goods A/c…………….Cr.
Credit of Capital Goods(assuming 50% of credit has been availed in last year)
CGST A/c………….Dr. To CENVAT (Deffered) Credit…Cr
100% Credit of VAT Paid on Capital goods is available in the year of purchase itself
MATCHING OF RETURN
1
• Upload the detail of outward supplies-including taxable supplies, exempt, export, deemed supplies, etc BY 10TH OF NEXT MONTH under GSTR-1
2• Accepted/ rejected/ modify by 15th of next month
auto drafted GSTR-2 Also upload detail of purchases not filed by supplier by
3• Accepted/ rejected/ modify by 17th of next month
detail filed by recipient in step 2
4 • GSTR-3 automatically generated on finalization as in Step:5
5• Pay the amount as shown in payable under
GSTR-3 & file the return by the 20th of next month.
GSTN Invoice IGST CGST SGST Place of SupplyNo. Date Value Goods
/Service
HSN Taxable Value
Rate Amt Rate Amt Rate Amt
Following Detail are required:1.Taxable Supplies to Registered Taxable Person2.Interstate Supply of Amount Exceeding Rs.2.5 Lakh to Consumer3.Taxable Supply to Consumer Other Than Above4.Detail of Credit/ Debit note5.Detail of Export6.Detail of Nil Rated, Exempted or non Taxable Supplies
Format of GSTR-1
Opportunity for Accountant?
• Monthly Updating of Accounting Require• Bill Wise Detail is to Maintain • Reconciliation with supplier vis-à-vis consumer to
take the credit and pass on the credit• For Transitional Credit Accounts need to be close
before 31st of March 2017• Detail of Stock as on 31st March2017 & Tax paid on
it is require to obtain to take credit of it.
ASK YOUR QUARY
CA Mayur ZanwarFCA, DISA, DIRM, B.com
Cell: 9422855595