goods & service tax (gst) - india - sampat &...
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Goods & Service Tax(GST) - India
Biggest Tax Reform Since Independence….
Sampat & Mehta, GST Conference at Sofitel, Mumbai
Basic Concepts
What is GST ?▪ Goods and Service Tax (GST) is a comprehensive tax levy on manufacture,
sale and consumption of goods and service at a national level.
▪ No differentiation between goods and services as GST is levied at each stage inthe supply chain.
▪ Seamless input tax credit throughout the supply chain.
▪ The definition of GST as per Article 366(12A) of the Constitution of Indiais as follows:
“any tax on supply of goods or services or both except taxes on supplyof the alcoholic liquor for human consumption”
Currently, Petroleum Products are also not covered under GST Act. But, infuture it will be covered under GST.
Introduction - GST
▪ One tax, one nation
▪ Biggest tax reforms
▪ Mixtures of all existing indirect tax Acts
▪ Dual GST
▪ Remove cascading effects
Levy of GST will be operationalize by enacting followings Acts
▪ IGST Act by Central Government = 1 Act
▪ CGST Act by Central Government = 1 Act
▪ SGST Act by each State Government (Delhi and Pondicherry will also pass SGST Act) = 28 + 2 Act
▪ UT-GST Act by Central Government = 1 Act
▪ Compensation Act by Central Government = 1 Act
▪ Total = 34 Acts
Global scenario
▪ Currently around 160 countries have already introduced GST/National VAT.
▪ France was the first country to introduce GST system in 1954.
▪ Canada and Brazil alone have a dual VAT.
▪ Standard GST rate in most countries ranges between 15-20%.
▪ Centre has enacted CGST Act, IGST Act, UTGST Act on April 12, 2017
▪ GST to be effective from date to be notified by the Central Government
▪ Likely to roll out by July 1, 2017
Tax Structure in India after GST Implementation
Tax Structure
Direct Tax
Income Tax
Indirect
GST
Intra- state
CGST (Central) SGST (State)
Inter State
IGST (Central)
Basic Custom Duty
Framework of GST
Authority • Article 246 A of the Constitution – given to Centre, State and UT
Taxable Territory • Whole of India except the State of Jammu and Kashmir
Taxable Person• Registered Person – 2(94) of CGST• Taxable Person – 2(107) of CGST
Taxable Event • Supply of Goods / Services
Time of Payment • Time of Supply of Goods / Services
Whom to Pay • Place of Supply of Goods / Services
How much to Pay• Valuation (Sec 15 of CGST + Valuation Rule)• Rate of GST• Input Tax Credit
Compliances
• Registration• Payment• Returns• Refund / Assessments
Taxable Territory
GST Act extents to the whole of India except the State of Jammu and Kashmir
What is India ?
Land part and includes Air SpaceTerritorial Water [up to 12 nautical
miles] and includes Air space, Seabed and subsoil
Exclusive Economic Zone, Other Maritime Zone and includes
installation, structures and vessels
Continental Shelf and includes installation, structures and vessels
28 States
7 UT
Subsuming of Existing Indirect Taxes under CGST
CGST
Central Excise Duty
under Central Act
Additional Excise Duty
Service Tax under
Finance Act, 1994
CVD(Counter vailing -Customs
Duty)
SpecialAdditional Duty (SAD) of Customs
Central Surcharges,
Cesses
Subsuming of Existing Indirect Taxes under SGST
SGST
Value Added Tax
Entertainment tax
Central SalesTax
Entry TaxLuxury Tax
Lottery, Betting and
Gambling Tax
State surcharges,
Cesses
When to charge IGST or CGST and SGST
Supply
Intra State Supply
CGST & SGST
Inter State Supply
IGST
Import
BCD & IGST
Export & Deemed Export
Zero rate
S. S. Rajamouli (Supplier)
Bahubali Pvt. Ltd.
(Mumbai)
Import of Finished Goods
Outside India
Sale toDelhi
Sale to PuneSale to SEZ
IGST
CGST, SGST
No Tax
Example on When to charge IGST or CGST and SGST
Example on Cascading Effect of Taxes and Input Tax Credit Flow
Manufacturer Pvt Ltd Present Scenario GST
Manufacturing Price 5,000 5,000
( + ) Excise (Tax) @ 12.5% 625 0
Total 5,625 5,000
( + ) CST (Tax) 2%(+) GST @ 12% (assumed)
113600
Sale Price of a Product 5,738 5,600
Tax to be paid to Government Output Liability = 738 Output Liability = 600
Rate Structure
Description Rate
Exports, Deemed Exports, Essential Items (vegetables, food grains, milk etc )
0%
Common use items / necessary items (bulk drugs etc) 5%
Standard rate 12% / 18%
Demerit rate (tobacco products, luxury items, aerated beverages) 28%
GST Rates for Services as approved by GST CouncilServices of GTA in relation to transport of goods and Renting of Motor cab
5% - No ITC
GST Rates for Services as approved by GST Council
Selling of space for Advertisement in print media – 5% Full ITC
Temporary/ Permanent Transfer ofIntellectual Property Rights – 12% FullITC
GST Rates for Services as approved by GST CouncilRenting of Hotels, inns, Guest houses, Clubs, Campsites etc for residential or
lodging purpose
Room Tariff per night GST Rate
Rs. 1,000 to Rs. 2,500 12% Full ITC
Rs. 2,500 to Rs. 5,000 18% Full ITC
Above Rs. 5,000 including 5 star 28% Full ITC
GST Rates for Services as approved by GST CouncilSupply of Food / Drinks – Restaurant/ Outdoor Catering
License to serve Liquor – 18% Full ITC
AC Restaurant – 18% Full ITC
Outdoor Catering – 18% Full ITC AC Restaurant in 5* or
above hotel – 28% Full ITC
Restaurant with No AC and no Liquor License – 12% Full ITC
GST Rates for Services as approved by GST CouncilConstruction intended for a sale to buyer
▪ Construction of a Complex, Building, Civil Structure or a part thereof.
▪ The value of land is included
▪ 12% Full ITC, No refund of overflow of ITC
GST Rates for Services as approved by GST CouncilAll Other Services not specified – 18% Full ITC
Few examples of all other services which are not specified
▪ Renting of immovable properties for commercial use;
▪ Services of CA, CS, Consultants;
▪ Commission/Brokerage;
▪ Job work Charges;
▪ Inspection Services;
▪ Maintenance Contract and many more
Services Exempted in GST as decided by GST Council
▪ Total 85 exempt services notified.
▪ Toll charges for access to road or bridge.
▪ Transmission or distribution of electricity.
▪ Renting of residential dwelling for Residential use.
▪ Service by entity registered u/s 12AA of Income Tax Act (Charitable trusts)
▪ Services by Hotel, inn, guest house etc for residential or lodging purpose having declared tariff per day less than Rs. 1,000.
▪ Health care services and services of ambulance.
Scope of Supply(Section 7 of CGST Act)
Certain Definition – CGST/IGST Act
Section 2(52) of CGST ActGoods
• Every kind of movable property other than money and securities but includes actionable claim, growingcrops, grass and things attached to or forming part of the land which are agreed to be severed beforesupply or under a contract of supply
Section 2(72) of CGST ActManufacture
• Processing of raw material or inputs in any manner that results in emergence of a new product having adistinct name, character and use and the term “manufacturer” shall be construed accordingly
Section 2(102) of CGST ActServices
• Anything other than goods, money and securities but includes activities relating to the use of money or itsconversion by cash or by any other mode, from one form, currency or denomination, to another form,currency or denomination for which a separate consideration is charged
Section 2(94) of CGST ActRegistered Person
• A Person who is registered under section 25 but does not include a person having a Unique IdentityNumber
Section 2(105) of CGST ActSupplier
• The person supplying the said goods or services or both and shall include an agent acting as such onbehalf of such supplier in relation to the goods or services or both supplied
Section 2(107) of CGST ActTaxable Person
• A Person who is registered or liable to be registered under section 22 or section 24 of CGST Act
Certain Definition – CGST/IGST Act
Section 2(50) of CGST ActFixed Establishment
• Place (other than the business establishment) which has the permanent presence of human and technicalresources to provide/ receive a service. Temporary presence of staff by way of a short visit at a placecannot be called a fixed establishment
Section 2(89) of CGST Act
Principal Place of Business
• The place of business specified as the principal place of business in the certificate of registration
Section 2(113) of CGST ActUsual Place of Residence
• In case of a body corporate - the place where it is incorporated or otherwise legally constituted• In case of individual – the place (country, state etc) where the individual spends most of his time for the
period in question, such as, the place where the individual has set up his home, or where he lives with hisfamily and is in full time employment
Certain Definition – CGST/IGST Act
Section 2(31) of CGST ActConsideration
• Any Payment made / to be made in money or otherwise, the monetary value of any act or forbearance• In respect of / in response to or for the inducement of the supply of goods and or services whether by
recipient or by any other person• Deposit to be treated as consideration only when adjusted against Supply.• Consideration excludes Subsidy given by Central or State Government
Section 25(4) of CGST ActDistinct Person
• An establishment in such state and establishments in other state shall be treated as distinct persons.• Example : Suppose ABC Private Limited has one branch in Pune, Maharashtra and other branch in
Chennai, Tamilnadu then it will be considered a Distinct persons under GST Act.
Certain Definition – CGST/IGST Act
Certain Definition – CGST/IGST Act
Section 2(39) of CGST ActDeemed Exports
• Supplies of goods as may be notified under Section 147• Under Section 147 : Government may, on the recommendations of the council, notify certain supplies of
goods as deemed exports, where goods supplied do not leave India, and payment for such supplies isreceived either in Indian rupees or in convertible foreign exchange, if such goods are manufactured inIndia
Section 2(47) of CGST ActExempt Supply
• Supply of any goods or services or both which attracts Nil rate of tax or which may be wholly exempt from tax under section 11, or under section 6 of the IGST Act, and includes non – taxable supply
Section 2(68) of CGST ActJob Work
• Any treatment or process undertaken by a person on goods belonging to another registered person and the expression ‘job worker’ shall be construed accordingly
Certain Definition – IGST/IGST Act
Section 2(23) of IGST ActZero rated - Supply
• As per Section 16 of IGST Act : Any of the following supplies of Goods or Services or both namely :-• Export of goods or services or both• Supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone
unit
Section 25(9) of the CGST ActUnique Identity Number
• Specifies certain person who shall be required to obtain Unique Identity Number (UID) as againstregistration number
• The Specified persons are:• Any specialized agency of United Nations Organization or any Multilateral Financial Institution and
organization notified under the United Nations Act, 1947; Consulate or Embassy of Foreign countries• Any other person or class of person notified by the Commissioner
Certain Definition – CGST/IGST Act
As per Explanation u/s 15(3) of CGST ActRelated Person
• Officers / Directors of one another’s business• Partners in business• Employer – Employee• A person directly/ indirectly owns/ controls/ holds 25% of shares of both the persons• One directly/ indirectly controls the other• Both are directly/ indirectly controlled by a third person• Together, they directly/ indirectly control a third person• Members of the same family• Sole agent / distributor of the other,
Scope of Supply
Section 7(1)(a) of CGST Act
Sale, Transfer, barter, exchange, license, rental, lease, disposal made or
agreed to be made
For Consideration
In the course or furtherance of Business
Section 7(1)(b) of CGST Act
Importation of Services
For Consideration
Whether or Not in the course or furtherance of
business
Section 7(1)(c) of CGST Act
Activities specified in Schedule I
Without Consideration
Section 7(1)(d) of CGST Act
Activities to be treated as supply of goods or services as referred in
Schedule II
All Forms of supply of Goods or Services or Both
Neither as a supply of Goods nor a supply of Services.
• Activities specified in Schedule III
• Notified supplies made by CG/ SG/ Local Authority as public Authority
Schedule I : Activities to be treated as supply even if made without consideration
▪ Permanent transfer / disposal of business assets where input tax credit has been availed on such assets:
o Proprietor/Partner transferring goods for personal use (example)
▪ Supply of goods or services between related persons, or between distinct persons :
o Branch / Depot Transfer
o Services provided by Head Office / Corporate Office to its Branch Offices or Regional offices
Provided that gifts not exceeding fifty thousand rupees in value in a financial year by an employer to anemployee shall not be treated as supply of goods or services or both
▪ Supply of Goods:
o By a principal to his agent where the agent undertakes to supply such goods on behalf of the principal; or
o By an agent to his principal where the agent undertakes to receive such goods on behalf of the principal
▪ Import of services by a taxable person from a related person or from any of his other establishments outside India,in the course or furtherance of business
Example : Scope of Supply
Permanent Transfer / Disposal of
Business Asset where Input Tax Credit has been availed on such
assets
Example : LLP has transferred
assets to Partner without
Consideration. Value of Assets :
Rs.100 and Rs.10 Input Credit is availed by LLP
Since, LLP has taken Input tax
credit of Asset so when it is
transferred to Partner it will be Supply and it is subject to GST.
Example : Scope of Supply
Supply of Goods or Services
between related person or
distinct person
Example :
A Ltd of Mumbai has made the
transfer of FG to its Branch B Ltd
of Surat
As per the definition of
Supply transfer to distinct person
without consideration is a
Supply so this kind of
transaction will be subject to the
levy of GST
Schedule II : Activities to be treated as Supply of Goods or Supply of Services
Clause Transaction Nature of Supply
1(a) Transfer of title in goods Goods
1(b) Transfer of: (Without transfer of title) ▪ rights in goods; or ▪ undivided share in goods
Service
1(c) Transfer of title in goods at future date upon payment of full consideration
Goods
2(a) Lease, tenancy, easement, license to occupy land Service
2(b) Lease or letting out of building including commercial, industrial or residential complex (wholly or partly) for business or commerce
Service
Schedule II : Activities to be treated as Supply of Goods or Supply of Services
Clause Transaction Nature of Supply
3 Treatment or processing of other’s goods (job work) Service
4(a)
4(c)
Transfer of business assets:▪ Transfer / disposal of goods forming part of business asset (with or
without consideration)▪ When a person ceases to be a taxable person except when:
o Business transferred as going concern o Business carried on by a personal representative (deemed to be a
taxable person)
Goods
4(b) Business assets put to private use or for any purpose other than business (With or without consideration)
Service
5(a) Renting of immovable property Service
Schedule II : Activities to be treated as Supply of Goods or Supply of Services
Clause Transaction Nature of Supply
5(b) Sale of under construction flats / units (money received before CC or First occupation certificate)
Service
5(c) Temporary transfer or permitting use or enjoyment of IPR Service
5(d) Development, design, programming, customization etc. of IT Software Service
5(e) Agreeing to the obligation to: ▪ Refrain from an act; or ▪ Tolerate an act or situation; or▪ Do an act
Service
5(f) Transfer of right to use any goods for any purpose whether or not for specified period for consideration
Service
Schedule II : Activities to be treated as Supply of Goods or Supply of Services
Clause Transaction Nature of Supply
6(a) Works Contract including transfer of property in goods Service
6(b) Supply of food as a part of service (Outdoor catering and restaurant sale)
Service
7 Supply of goods by an unincorporated association to its members Goods
Schedule III: Activities or Transactions which shall be treated neither as a supply of Goods nor a Supply of Services
▪ Services by an employee to the employer in the course of or in relation to his employment.
▪ Services by any court or Tribunal established under any law for the time being in force.
▪ Other
o the functions performed by the Members of Parliament, Members of State Legislature,Members of Panchayats, Members of Municipalities and Members of other local authorities;
o the duties performed by any person who holds any post in pursuance of the provisions of theConstitution in that capacity; or
o the duties performed by any person as a Chairperson or a Member or a Director in a bodyestablished by the Central Government or a State Government or local authority and who isnot deemed as an employee before the commencement of this clause.
▪ Services of funeral, burial, crematorium or mortuary including transportation of the deceased.
▪ Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building.
▪ Actionable claims, other than lottery, betting and gambling.
Sale v/s Supply
Particulars Sale Supply
Transfer of Title of Goods is required ?
Presence of more than 1 person to trigger tax (except excise) ?
Consideration is required ?
Place of Supply
Place of Supply of Goods (other than Supply of Goods imported into or exported from India) [Section 10 of IGST Act]
Supply involves movement of Goods
Location of goods at the
time at which movement
terminates for delivery to recipient
Goods supplied on direction of third
person
Principal Place of Business of
the third person (i.e. address in
Registration Certificate)
Supply does not involves movement
of Goods
Location of Goods at the
time of delivery to the recipient
Goods are assembled or
installed at site
Place of installation or
assembly
Goods supplied on board a conveyance Eg. Vessel, aircraft, train, vehicle, etc.
Location at which such
goods are taken on board
Examples : Place of Supply
Supply involves movement of Goods
A of Surat makes supply to B of Pune
and goods are transferred to the
premise of B
Pune (So, IGST to be charged by A in his
Invoice)
Goods Supplied at the direction of third
person
C of Jaipur gave direction to A of
Vadodara to make supply to B of Surat
Jaipur (So, IGST to be charged by A in his
Invoice)
`
Examples : Place of Supply
Supply does not involve movement of
Goods
A of Surat makes Supply to B of Surat
and there is no movement of Goods as B wants his Goods to be delivered at Pune where the Goods are located at the time of
the supply
Pune (So, IGST to be charged by A in his
Invoice)
Place of Supply of Goods during Import and Export
[Section 11 of IGST Act]
Goods imported into India
Location of Importer
Goods exported
from India
Location outside India
Examples : Place of Supply
Goods imported in India
A of Mumbai imported goods from Singapore
Mumbai (Pay IGST under RCM along with
BCD)
Goods exported from India
A of Pune exported goods to Germany
Germany (No GST to be paid as Place of Supply is
outside India)`
Place of Supply in relation to Immovable Properties[Section 12(3) of IGST Act]
Lodging Accommodation by hotel, inn, guest house by way of Accommodation in any Immovable Properties
Ancillary Services to above services
Location of Property
Examples : Place of Supply
Supply in relation to Immovable Properties,
Lodging Accommodation by
Hotel, Inn, etc
Sofitel Hotel of Mumbai gave accommodation to B of Surat who visited Mumbai for Business
meeting
Mumbai (CGST & SGST to be charged by Sofitel
in their Invoice)
Place of Supply of Services [Section 12(4) of IGST Act]
Restaurant and catering services, personal grooming, fitness, beauty treatment, health service including cosmetic and plastic surgery
Location where the services are actually
performed
Examples : Place of Supply
Supply by Restaurant, catering services, etc
A of Mumbai provides Service in restaurant at Bangalore to B of Delhi
Bangalore (IGST to be charged by A in his
Invoice) `
Place of Supply of Service [Section 12(5) of IGST Act]
If recipient is Registered person,
Location of such person
If recipient is not Registered person
Location where the services are actually
performed
In relation to training and performance appraisal
Examples : Place of Supply
Supply in relation to training and
performance appraisal
A of Surat provided training to a registered
person B of Mumbai and to the unregistered person C of Mumbai at
Surat Office
In case of B – Mumbai (IGST to be charged by A
in his Invoice)
In case of C – Surat (CGST & SGST to be charged by A in his
Invoice)
Place of Supply of Services [Section 12(6) of IGST Act]
Service provided by way of Admission to a cultural, artistic, sporting, scientific, educational, entertainment event, or amusement park or any other
place and services ancillary thereto
Location will be the place where the event is actually held or where the park or such other place is located
Place of Supply of Services [Section 12(7) of IGST Act]
Registered recipient
Location of Recipient
Unregistered Recipient
Event is actually held
If outside India, then location of the recipient
Organizing cultural, arts, sports, educational, scientific, entertainment event including
supply of services in relation to a conference, fair, exhibition, celebration or similar event
Services ancillary to above
Place of Supply of Services [Section 12(8), 12(9) & 12(10) of IGST Act]
of Services
Transportation of goods, including by
mail or courier
Registered Recipient : Location of Recipient
Unregistered Recipient : Location where goods are handed over for their transportation
Passenger Transportation Service
(Return journey treated as separate
journey)
Registered Recipient : Place of Registered Recipient
Unregistered Recipient : Place where passenger embarks on the conveyance for a continuous
journey
Services on board conveyance like vessel, aircraft,
train, motor vehicle
First scheduled point of departure of that conveyance for that journey
Examples : Place of Supply
Transportation of goods, including by
mail or courier
A of Mumbai transported goods to B
of Surat and handed over the goods to Spot
Courier Private Limited in Mumbai
In case B is registered : Surat (IGST to be charged in the Invoice)
In case B is Unregistered : Mumbai (CGST & SGST to be charged in the Invoice)
Place of Supply
Any other services
Registered recipient :
Location of recipient
Unregistered recipient :
Address in supplier’s records
Unregistered recipient :
Location of supplier if address
not available
Definition
Section 2(6) of IGST Act
Export of Services
• the supplier of service is located in India;• the recipient of service is located outside India;• the place of supply of service is outside India;• the payment for such service has been received by the supplier of service in convertible foreign exchange;• the supplier of service and the recipient of service are not merely establishments of a distinct person in
accordance with Explanation 1 in section 8;
Place of supply of Services – where supplier or recipient is outside India [Section 13 & 14 of IGST Act]
Services on which Goods are required to
be made physically available by recipient &
Services requiring physical presence of
receiver / person acting on his behalf
Location where services actually
performed
Services supplied directly in relation to immovable property
Location of such immovable
property (or where it is
intended to be located)
Services by way of admission to /
organizing an event, etc. and ancillary
services
Place where services are
actually performed
Banking services to account holders,
intermediary services, hiring of means of
transport (other than aircraft & vessels) upto
1 month
Location of supplier
Transportation of goods (other than by way of mail / courier)
Destination of Goods.
Passenger transportation service
Place where passenger
embarks on the conveyance for
continuous Journey
Services provided on Board a conveyance
First scheduled point of
departure of that conveyance for
that journey
Online information and database access or retrieval services
Location of recipient
Residuary
Location of the recipient(If not available in the ordinary course of business, then
Location of supplier
To Prevent double taxation / non taxation
or for the uniform application of rules, Central Government has power to notify
services / circumstances
Place of effective use and
enjoyment of services
Place of supply of Services – where supplier or recipient is outside India [Section 13 & 14 of IGST Act]
Place of Supply
[Section 12(12), 12(13) & 12(14) of IGST Act]
Banking and other Financial Services
including Stock Broking
Location of recipient in suppliers records
(If not available, location of supplier)
Insurance Services
Registered recipient
Location of recipient
Unregistered recipient
Location of recipient in suppliers records
Advertisement Services to
Government, etc
Place is state of dissemination in
proportion
Note : In cases not covered in (2) and (3), address of recipient on records shall be the place of supply
Where no address of the recipient available in records, location of the supplier shall be the place of supply
Service of fixed telecommunication line, leased circuits, internet leased circuit, cable or
dish antenna
Location where above devices are installed
Post paid mobile connection for
telecommunication and internet services
Location of billing address of the recipient
of services
Prepaid mobile connection for telecommunication and
internet services
Through Internet : Location of recipient on
record
Through selling agent : Location of selling agent on
record of supplier
Though others : Location where pre payment
received
Place of supply of telecommunication services including data transfer, broadcasting, cable and direct to home television services to any person shall
[Section 12(11) of IGST Act]
Value of Taxable Supply(Section 15 of CGST Act)
Value of Supply of Goods / Services
WherePrice is the
sole consideration
Supplier and recipient are not related
Transaction Value
Value of Taxable Supply [Section 15(1) of CGST Act]
Transaction Value
Price actually paid or payable
Any Duties, Taxes, etc
OTHER THAN GST
Subsidies directly linked
to Price EXCLUDING
subsidies provided by
CG/SG
Amount paid by recipient on behalf of supplier Eg. Freight paid
by Buyer
INTEREST or LATE FEES or PENALTY for
delayed payment of
any consideration
Incidental Expenses
such as commission, Packing, etc charged by
Supplier
Transaction Value [Section 15(2) of CGST Act]
Discount
Before Supply
Discount has been duly recorded in Invoice i.e Trade
Invoice
At the time of Supply
Discount has been duly recorded in Invoice i.e Trade
Invoice
After Supply
Established in Agreement &
specifically linked to relevant invoice
Corresponding Input Credit
reversed by the Recipient
Transaction Value shall not include [Section 15(3) of CGST Act]
If Value of Supply cannot be determined by
Transaction Value then
Follow
Valuation Rules
Value of Supply
Open Market Value of such Supply
If Open Market Value not available
Consideration in Money (+) Amount equivalent to consideration not in money if such amount is known at the time of supply
Supply of goods/services of like
kind and quality
As per Rule 4 & 5 with Money
Consideration
When the consideration is not wholly in money [Rule 1 of Valuation Rules]
Case 1: When Open Market Value of such Supply is available
Particulars Amount
New Phone Supplied Rs.20,000/- + Exchange of Old Phone
Price of New Phone without Exchange Rs.24,000/-
Open Market Value Rs.24,000/-
Example of When the consideration is not wholly in money [Rule 1 of Valuation Rules]
Case 2: When Open Market Value of such Supply is not available.
Particulars Amount
Laptop Supplied along withbarter of printer
Rs.40,000/- + barter of printer manufacture by recipient
Value of printer at time of Supply Rs.4,000/-
Open market value of laptop Not known (Assumed)
Value of laptop Rs.44,000/-
Example of When the consideration is not wholly in money [Rule 1 of Valuation Rules]
Value of Goods/Services
Open Market Value
If Open Market
Value not available,
then value of Supply
of Goods/Service of
like kind & quality
110% of Cost of
Production
(Rule 4)
Reasonable basis consistent with principle and
general provision
Valuation – Related or Distinct Person (Other than through an Agent) [Rule 2 of Valuation Rules]
Note :
Where recipient is eligible for full ITC, the value declared in invoice shall be open market value of Goods/service
“Supply of goods or services or both of like kind and quality” means any othersupply of goods or services or both made under similar circumstances that, inrespect of the characteristics, quality, quantity, functional components,materials, and reputation of the goods or services or both first mentioned, isthe same as, or closely or substantially resembles, that supply of goods orservices or both.
Value of like Kind and Quality ?
Between Principal & Agent
Value of Goods
Open Market Value of goods being supplied OR 90% of price charged for
supply of like kind & quality by recipient to his customer (not related), where goods are intended for further
supply by recipient
110% of Cost of Production
Reasonable basis consistent with
Principle and General Provision
Valuation of Goods – Through an Agent [Rule 3 of Valuation Rules]
Principal 1
Agent
Sells Groundnut @ 5,000 per
quintal
Customer
Principal 2Sells Groundnut
@ 4,550 per quintal
Example
Value = Rs. 4,550 or Rs. 4,500 (90% of Rs. 5,000) at the option of Supplier
(Principal)
Value
Token Voucher CouponsStamp (other
than Postage)
Redeemable against a supply
Money value of goods or services or both redeemable against such token, voucher, coupons or stamp
Value of token, voucher, etc[Rule 6(6) of Valuation Rules]
E-Way Bill
Draft e-way Bill
Important Points
▪ To be issued by every registered person
▪ For every movement of goods
▪ To be generated from GSTN site before commencement of the movement of Goods
▪ Value > INR 50,000
▪ Can be generated / cancelled through SMS
▪ To be kept by the Supplier, Recipient and Transporter
▪ New Bill to be generated when transporter is transferring goods from one conveyance to another
Draft e-way Bill
When to Issue e-way Bill ?
▪ In relation to Supply
▪ For reason other then Supply (Example : Goods Return)
▪ Inward supply from an Unregistered person
Validity of e-way Bill
Distance Validity Period
< 100 km 1 Day
> 100 km < 300 km 3 Days
> 300 km < 500 km 5 Days
> 500 km < 1000 km 10 Days
> 1000 km 15 Days
Job Work(Section 143 of CGST Act)
Job Work u/s 143 of CGST Act
▪ No GST on RM supplied provided ;o Principal to supply goods under intimation
o Goods are received back within 1 year
▪ Principal is responsible for accountability of Input
▪ Goods are permitted to be supplied from place of business of job worker provided:
Principal declares the place of business of job worker as his additional place of business except
➢Job worker is registered u/s. 25
➢Principal is engaged in supply of such goods as may be notified by Council
▪ Transitional provision [ Section 141(1)/(2)];o If RM/SFG were transferred before appointed date but FG received after appointed date – No
GST provided goods are received back within 6 months
Taxation of Job Work – Section 143 of CGST Act
Job work
Satisfy Section 143
No GST payable on :
• Supply of raw material from principal to job worker
• Supply of semi/finished goods from job worker to manufacturer
GST on Job work charges payable
Does not satisfy other than Section 143
GST payable on :
• Supply of raw material from principal tojob worker
• Supply of semi/finished goods from jobworker to manufacturer
No GST on Job Work charges since paidon goods
Job Work u/s 143 – Special Procedure for Removal of Goods
Any Waste/Scrap generate during Job Work
Job Worker Registered
Yes
May be supplied by Job worker directly from his premises on payment of Tax
No
To be supplied by Principal on payment of tax
Time of Supply[Section 12, 13 & 14 of CGST Act]
Time of Supply of Goods/Services
Date on which the supplier receives the payment with respect
to supply
“the date on which the supplier receives the payment” shall be
earlier of
Date on which the payment is entered in his books of accounts
Or
Date on which the payment is credited to his bank account.
Issue of Invoice by the supplier
Earlier of
Last date on which he is required to issue invoice
with respect to the supply
Date of Issue of Invoice
Note for Time of Supply :The time of supply to the extent it relates to an addition in the value of supply by wayof interest, late fee or penalty for delayed payment of any consideration shall be thedate on which the supplier receives such addition in value.
Yes No
Examples : Time of Supply
Example 1:A of Mumbai makes supply to B of Surat and has issued Invoice on 29.05.2017 and payment is received on 23.05.2017
Time of Supply of Goods/Services
Answer 1:23.05.2017
Example 2:A of Mumbai makes supply to B of Surat and has issued Invoice on 01.05.2017 and payment is received on 23.05.2017
Answer 2 :01.05.2017
Note :If it is not possible to determine the time of supply under any of the above way then timeof supply shall be the date of entry in the books of accounts of the recipient of supply.
Earlier Of
Date of Receipt of goodsDate on which the payment is made
Date immediately following 30 days from the date of Issue of Invoice by
the supplier.
Time of Supply of Goods when tax payable under Reverse charge
Note :If it is not possible to determine the time of supply under any of the above way then time of supply shall be the date of entry in the books of accounts of the recipient of supply.
Earlier Of
Date on which the payment is made (entered in the books of
accounts of the recipient or debited in Bank Account
whichever is earlier)
Date immediately following 60 days from the date of Issue of
Invoice by the supplier.
Time of Supply of Services when tax payable under Reverse charge
Examples : Time of Supply
Time of Supply of Goods when Tax paid under Reverse Charge
A of Mumbai supplied Goods to B of Delhi
Date of Issue of Invoice : 28.04.2017
Date of Receipt of Goods : 01.05.2017
Payment Received : 10.05.2017
01.05.2017`
Time of Supply of Services when tax paid under Reverse Charge
A of Mumbai supplied Goods to B of Delhi
Date of Issue of Invoice : 28.04.2017
Payment received : 02.05.2017
02.05.2017`
Or
Time of Supply of vouchers along with Goods or Services or both
Date of Issue of vouchers, if supply
is identifiable at that point
Date of redemption of vouchers, in all
other cases
Where it is not possible to determine time of supply of Goods or Services as specified above then time of supply shall be
In case, periodical return has to be filed,
then the date on which such return is to be filed
In any other case, date on which the tax is paid.
Change in rate of tax in respect of supply of Goods or Services
Date of Supply of goods or services
Date of Invoice Date of receipt of payment
Time of Supply Rate of Tax
(1) (2) (3) (4) (5)
Before After After Earlier of (2) and (3)
New
Before Before After (2) Old
Before After Before (3) Old
After Before After (3) New
After Before Before Earlier of (2) and (3)
Old
After After Before (2) New
Composition Levy, Composite Supply and Mixed Supply
(Section 8/10 of CGST Act)
Composite Supply [Section 8 of CGST Act]
What is Composite supply ?
It means a supply consist of two or more taxable supply of goods or services orboth and are naturally bundled and are supplied with each other in theordinary course of business.
Example:
Passengers travel in Rajdhani Express from Mumbai to Delhi. The price paidconsist of three services like Transport of Passengers, Food Service & Bed rollsservice. Passenger have no option but to avail all the services. So it is acomposite supply and transportation of passenger is the principal supply.
Mixed Supply [Section 8 of CGST Act]
What is Mixed Supply ?
It means a supply consist of two or more individual supplies of goods orservices or both and are made in conjunction with each other for a single price.
Example:
A supply of a package consisting of canned foods, sweets, chocolates, cakes, dryfruits supplied together for a single price. However, each of such items can besupplied separately and is not dependent on each other. So, it is mixed supply.
How to determine tax liability on a Composite and Mixed Supplies ? [Section 8 of CGST Act]
Composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply
Mixed Supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax
Composition Levy
▪ Applicable when Supply of Goods or Services along with Goods
▪ Optional Scheme
▪ Pay an Amount in lieu of tax, minimum rate to be:
▪ No Tax to be collected and No Input Tax Credit available
▪ If aggregate turnover (all India basis) during the FY exceeds INR 50 Lakhs, no composition from the day when limit is crossed
Sr. No. Particulars Rate
1 Turnover in State in case of Manufacturer 1%
2 Turnover in State in case of person engaged in making supplies (i.e Supply of Services along with Goods)
2.5%
3 Turnover in State in case of other supplies 0.5%
Conditions to Opt Composition Levy
▪ Registered Persons
▪ Not engaged in the supply of services other than supplies referred to in clause (b) of paragraph 6 of schedule II
▪ Not engaged in the supply of goods which are not leviable to tax under the Act
▪ Not engaged in making any inter-state outward supplies of goods
▪ Not engaged in making any supply of goods through an electronic commerce operator who is required to collect tax at source under section 52
▪ Not a manufacturer of such goods as may be notified by the Government on the recommendations of the council
▪ Aggregate Turnover < INR 50 Lakhs (All India basis for taxable persons having same PAN – who shall also opt for composition) but excludes Schedule III
▪ Aggregate turnover = Value of all supplies (taxable + non taxable + exempt + exports) – Value of (RCM supplies + inwards supplies) – taxes under GST
EXAMPLES
S. S. Rajamoulii (Supplier)
Bahubali Pvt. Ltd.
(Mumbai)
Import of Raw Material
Maharashtra
Outside India
S. S. Rajamoulii (Supplier)
Bahubali Pvt Ltd
(Mumbai)
Own Factory(Pune)
Import of Raw Material
Sent for Manufacturing
Maharashtra
Outside India
Own Factory (Surat)
Bahubali Pvt Ltd
(Mumbai)
Own Factory (Surat)
Supply of Part Processed Material
Sent for Final Process
Maharashtra
Gujarat
Gujarat
Labourcharges invoice
S. S. Rajamoulii (Supplier)
Bahubali Pvt Ltd
(Mumbai)
Own Factory (Surat)
Import of Raw Material
Sent for part Process
Maharashtra
Gujarat
Outside India
Labour charges invoice
S. S. Rajamoulii
(Job Worker)
Bahubali Pvt Ltd
(Mumbai)
Raw Material or SFG received from Bahubali on May 29, 2017
Maharashtra
Gujarat
Labour charges invoice
FG return on July 10, 2017
S. S. Rajamoulii (Supplier)
Bahubali Pvt Ltd
(Mumbai)
Own Factory (Surat)
Import of Raw Material
Sent for part Process
M/s Kattappa Sent for Job work
Maharashtra
Gujarat
S. S. Rajamoulii (Supplier)
Bahubali Pvt Ltd
(Mumbai)
Own Factory (Surat)
Import of Raw Material
Sent for processing
Quality Control (External Co)
Sent for QC
Maharashtra
Gujarat
Invoice raised
Finished Goods returnedWith labour charge invoice
S. S. Rajamoulii (Supplier)
Bahubali Pvt Ltd
(Mumbai)
Own Factory (Surat)
Import of Raw Material
Sent for preparation and marking
Maharashtra
Gujarat
Labour charges invoice
S. S. Rajamouli (Supplier)
Bahubali Pvt Ltd
(Mumbai)
Branch(Surat)
Supply of Finished Goods
Finished Goods sent for sale or inspection
Maharashtra
Gujarat
Bahubali Pvt Ltd
(Mumbai)
FG sent for Assortment
(to Bahubali Pvt Ltd) (Bhopal)
FG sent for Assortment
(to Katapa Pvt Ltd)
• A Series of action or step taken in order toachieve a particular end (noun)
• Perform a series of mechanical or chemicaloperations on something in order to changeor preserve it (verb)
Process
Principal
Agent for sale Agent for sale
Goods under Consignment
Outside Maharashtra
Maharashtra
Company AExhibition in
Hotel
DelhiMumbai
Goods sent for
Company A(Mumbai)
Chennai
Employee carry goods for sale
▪ What if goods are not sold?
▪ If sold , Place of supply rule?
Big Four Ent.. LLP
(Mumbai)
To Customer in Mumbai
Deliver Goods on Approval for sale
▪ Is delivery subject to tax ?▪ When to raise Invoice ?
• Invoice to be raised within 6 Month from the date of delivery or
• Date of confirmation
As per Section 31(7) :-
(Earlier of)
Walmart Inc., USA
Blue Sky Trading LLP
(Mumbai)
Good Products Pvt. Ltd.
Bill to
Ship to
▪ What if, Good Products Pvt. Ltd. is in- Mumbai- SEZ- Delhi
▪ What if bill is raised on a company in Gujarat?
▪ Reason, why not considered export ?
Customer ACompany X
add part of RM and Mfg FG
DelhiMumbai
Trf part of RM for Mfg
On what value GST would be Charged by Company X?
Big Four Consulting LLP
(Mumbai)
Company X inMauritius
IFRS Advisory Services to
Whether Big Four would be required to Charge GST?
Big Four Consulting LLP
(Mumbai)
Company X inUSA
Management Consulting Services to
Whether Big Four would be required to pay GST?
ABC Private Limited(HO)Location A
XYZ Private Limited(Subsidiary Co.)
Location B
Sharing of Common Services such as:- Payroll Cost- IT Infra Cost- Insurance Expenses
OR Unit Located in SEZ
Nature of services provided by person registered in Mumbai
Registered location of
Service receiver
Servicesrender at
Place ofsupply
Tax
Statutory Audit of Co. in Kochi Mumbai Kochi Mumbai CGST/IGST
Tax Audit of Co. in Kochi Kochi Kochi Kochi IGST
Secretarial Audit of Co. in Mumbai Delhi Mumbai Delhi IGST
BPO Services Delhi Mumbai Delhi IGST
Brokerage/ Commission for Goods Mumbai Bangalore Mumbai IGST
Management Consulting Hyderabad Mumbai Hyderabad IGST
Input Tax Credit(Section 16 – 21 of CGST Act)
Certain Definition – CGST/IGST Act
Section 2(62) of CGST ActInput Tax
• It means CGST, SGST, IGST, UTT charged on supply of goods or services or both made to him and include:• IGST charged on Import of Goods• Tax Payable under RCM but
• does not include tax paid under Composition Levy
Section 2(59) of CGST ActInput
• It means any goods other than capital goods used or intended to be used by a supplier in the course orfurtherance of business;
Section 2(60) of CGST ActInput Services
• It means any service used or intended to be used by a supplier in the course or furtherance of business.
Section 2(19) of CGST ActCapital Goods
• It means goods , the value of which is capitalized in the books of account of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business.
Manner of Utilization of Input Tax Credit (ITC)[Section 49(5) of CGST Act]
Claiming Credit of Input against Input Liability should be in above order only. UTT Input can be used for UTT and IGST
IGST Output
IGST Input
CGST Input
SGST Input
CGST Output
CGST Input
IGST Input
SGST Input
SGST Output
SGST Input
IGST Input
CGST Input
Eg:- Manner of Utilization of Input Tax Credit (ITC)[Section 49(5) of CGST Act]
Particulars Amount CGST SGST Particulars Amount CGST SGST
Raw Material 10,000/- 250/- 250/- Sales 15,000/- 375/- 375/-
Job work charges 1,000/- 90/- 90/-
Total 11,000/- 340/- 340/- Total 15,000/- 375/- 375/-
Input credit (340) (340)
Payable 35/- 35/-
Eg:- Manner of Utilization of Input Tax Credit (ITC) [Section 49(5) of CGST Act]
Particulars Amount IGST CGST SGST Particulars Amount IGST CGST SGST
Purchase of Raw Material
10,000 500 - - Sales 5,000 250 - -
ExpensesMonthly basis
10,000 - 250 250 Sales 20,000 - 500 500
Job work charges 1,000 180 - - - - -
Total 21,000 680 250 250 Total 25,000 250 500 500
Input Credit - (250) (250) (250)
Balance - - 250 250
Input Credit (Bal. IGST)
- - (250) (180)
Payable - - - 70
Eligibility and Condition for taking ITC
[Section 16(1) of CGST Act]
Every registered person
Credit for input tax paid on any supply used / intended to be
used in the course / furtherance of
business
ITC Amount shall be credited to the Electronic Credit
Ledger
Notes:
1. Goods deemed to be received by a taxable person when the supplier delivers the goods to the recipient /any other person, on the direction provided by the taxable person to the supplier
2. Credit already availed to be reversed (with interest) if payment is not made to the supplier within 180days
3. If ITC on Capital Goods is claimed as Depreciation under IT Act then ITC can not be availed [Section 16(3)]
4. Credit only upon receipt of the last lot / installment in case of goods received in lots / installment
Possession of tax invoice / debit note
issued by a registered supplier
Goods and / or services have been received by
him (Refer note 1)
Tax actually paid by the supplier to the credit of
the appropriate Government, either in
cash or by utilization of ITC
Has furnished the monthly return in Form
GSTR – 3
Conditions for availment of ITC
[Section 16(2)]
• Due date of September return following the end of FY – i.e 20th October of the following FY.
• Filing of Annual Return – i.e 31st December of the Following FY
Example
Invoice Date – 10th August, 2017 (FY 2017-18)
A)Sept 18 return filing due date – 20th Oct, 2018
B)FY 2017-18 Annual Return filing due date – 31st Dec, 2018
Hence last date to avail credit – 20th Oct, 2018
But if Annual return of FY 2017-18 is filed on 31st Aug, 2018, last date to avail Credit – 31st Aug 2018
Last date by which Credit can be availed – Section 16(4) of CGST Act
Utilisation of ITC [Section 17(1) of CGST Act]
Use of Input tax credit
For Business Purpose
For Other Purpose
ITC Available
ITC NOT Available
Note:
Exempt supply includes sale value of land & building and 1% of sale value of securities
Option to Banking Companies & NBFC : A Standard rate of 50% of eligible ITC on Capital Goods, Inputs and Input Services on a Monthly basis – Once Option applied - No change for that year possible
If composition scheme is followed then ITC is not available.
Use of Input Credit : Partly for
Taxable Supplies
Zero – rated Supplies
Non –Taxable Supplies
Exempt Supplies
Nil – rated Supplies
Utilisation of ITC [Section 17(2), 17(3) & 17(4) of CGST Act]
ITC Available ITC NOT Available
Motor Vehicles / Other Conveyances
Restrictions on ITC (Blocked Credits) [Section 17(5)(a) of CGST Act]
ITC for Motor Vehicles/Other
Conveyances will NOT be available
Except:
When they are used for
Transportation of Goods, or Making the following taxable services:
• Further supply of such vehicles / conveyances, or
• Transportation of passengers, or
• Training for driving / flying / navigating such vehicles / conveyances
Supply of goods and services being
Restrictions on ITC (Blocked Credits) [Section 17(5)(b) of CGST Act]
• Allowed ONLY if goods / services of a particular category are used towards making taxable outward supplies of the same category
- Food and Beverages
- Outdoor Catering
- Beauty Treatment
- Health Services
- Cosmetic and Plastic Surgery
• Allowed ONLY if goods / services of a particular category are used towards making taxable outward supplies of the same category
OR• Allowed ONLY if where the services are notified as obligatory
for an employer to provide an employee
- Life / Health Insurance
- Rent – a - Cab
Supply of goods and services being:
Restrictions on ITC (Blocked Credits) [Section 17(5)(b) of CGST Act]
Never Allowed
Membership of Club
Health and Fitness Centre
Travel Benefits to Employee
Construction of Immovable Property (Other than Plant & Machinery)
ITC NOT Available
Restrictions on ITC (Blocked Credits) [Section 17(5)(c) & 17(5)(d) of CGST Act]
Work Contract Services, except where it is an input services for further supply of works
contact service
Goods or Services received by a taxable person for
construction of an immovable property on his own account even when used in course or
furtherance of business
Restrictions on ITC (Blocked Credits) [Section 17(5)(e), (f), (g), (h) & (i) of CGST Act)
ITC Not Available
Tax paid under Section 10 i.e Composition
Scheme
Supply received by Non-resident taxable person
except on goods Imported
Used for Personal
consumption
Goods lost, stolen, destroyed, written off or disposed of by way of gift or
free samples
Tax paid with the provisions of Sections 74,129
and 130 i.e Demand notice
Availability of credit in Special circumstances [Section 18 (1) & 18(2) of CGST Act] (Below Input Credit to be availed within 1 year from the date of issue of tax Invoice)
Person applied for registration within 30 days
of becoming liable to register and registration
granted
ITC Available in respect of
• Stock
• Semi – finished Goods
•Finished Goods
On the day immediately preceding the date from
which he becomes liable to pay tax
Person applied for Voluntary Registration
ITC Available in respect of
• Stock
• Semi – finished Goods
•Finished Goods
On the day immediately preceding the date of
Registration
Registered Person shifting from
Composition Scheme to Regular Tax Payment
ITC Available in respect of
• Stock• Semi – finished Goods• Finished Goods• Capital Goods(after reducing by
5% per quarter or part thereof from the date of invoice)
On the day immediately preceding the date from
which - becomes liable to pay tax
When Exempt supply becomes taxable
ITC Available in respect of
• Stock• Semi – finished Goods• Finished Goods• Capital Goods (exclusively
used for exempt supply)
On the day immediately preceding the date from which he becomes liable
to pay tax
Availability of credit in Special circumstances [Section 18 (3) of CGST Act]
Change in Constitution of Taxable Person
Change in Constitution of Registered Taxable Person
On Account of:
• Sale
• Merger
• Demerger
• Amalgamation
• Lease, or
• Transfer of Business
Transfer of Unutilized ITC in the Books allowed
Supply become wholly exempt or covered under Composition scheme
[Section 18(4) of CGST Act]
Any balance of ITC in electronic credit ledger shall lapse
ITC in respect of Stock , Semi finished goods, Finished goods, & Capital goods reduced by 5 % per quarter or part there of from date of invoice
Shall pay by debiting the electronic credit ledger or cash ledger equivalent to
In case of Register person, supply become wholly exempted or converted into Composition scheme
Supply of Capital Goods on which ITC already taken
[Section 18(6) of CGST Act]
Supply of CapitalGoods on which ITChas been takenearlier
Pay Tax on higher of
• Tax on Transaction Value or
• ITC availed earlier reduced by Percentage of Deduction as may be specified
Example on Supply of capital goods on which ITC already taken
▪ Purchase of Plant & Machinery on January 1, 2018 worth of INR 1,00,000: Taxpaid INR 28,000.
▪ Disposed off on April 15, 2018 for INR 50,000.
▪ Tax payable at 28%
Particulars Amount Amount
Tax on transaction value (1) 14,000
ITC availed(5% per quarter or part thereof from the date of invoice)
(10% of 28,000)
28,000
(2,800)
(2) 25,200
Tax liability will be [Higher of (1) or (2)]
25,200
Principal Job Worker
Inputs / Capital Goods sent for Job Work
Received back or directly supplied from Job – worker’spremises within 1 year (inputs) or 3 years (Capital Goods)of being Sent Out
Note : ITC available if the conditions and restrictions under job work are satisfied
ITC in respect of goods sent for Job Work
[Section 19 of CGST Act]
ITC is distributed to supplier of goods/services of same entity having the samePAN
ISD & Recipient in Different
States
CGST Act
Credit of CGST or IGST as CGST
or IGST
SGST Act
Credit of SGST or IGST as SGST
or IGST
ISD & Recipient in Same State
CGST Act
Credit of CGST or IGST
as CGST
SGST Act
Credit of SGST or IGST
as SGST
Input Service Distributor [Section 20 of CGST Act]
Conditions to distribute credit : Input Service Distributor
▪ Credit distributed to recipient through prescribed documents containingprescribed details. Such document should be issued to each of the recipient ofcredit.
▪ Credit distributed should not exceed the credit available for distribution
▪ Tax paid on input services used by a particular location (registered assupplier) has to be distributed only to that location.
▪ Credit of tax paid on input service used by more than one location who areoperational is to be distributed to all of them based on the prorate basis ofturnover of each location in a State to aggregate turnover of all such locationswho have used such services.
Important – Transitional Provisions
Carry Forward of CENVAT Credit [Section 140(1) of CGST Act]
Registered taxable person other than
composition scheme
Allowed carry forward of Input tax / CENVAT credit
– through a return
(Condition : Last Six Return should be filed under existing Law &
Credit should not relate to any exemption
notification)
Such Credit must be eligible under earlier law and
GST Law
Credit can be taken in the electronic
credit ledger
Unavailed CENVAT Credit on Capital Goods [Section 140(2) of CGST Act]
A registered taxable person, other than
composition dealer, shall be eligible to take the
credit
In the electronic credit ledger
Unavailed Credit on Capital Goods (as per Rule 2(a) of CENVAT
Credit Rule, 2004) not carried forward in a
return
Unavailed Credit = (Total Eligible Credit – Credit
availed) under the earlier law
Such credits must be eligible under the earlier
law and under GST law
Excess Claim shall be recovered as arrears of
tax under GST Law
Credit of eligible duties and taxes on input held in stock [Section 140(3) of CGST Act]
Person eligible for input tax credit
• Person not liable to be registered under the earlier law
• Person engaged in manufacture/sale of exempted goods, provision of exempted service
• Person providing works contract service and availing abatement under notification no. 26/2012
• First / Second stage dealer, importer
Credit available on
• Stock, semi-finished goods or finished goods held as on appointed date
• Above benefit not available for input services
• Such credit can be taken in the electronic credit ledger
Conditions
• Goods must be used or intended to be used for taxable supply
• Eligible to take credit under GST• Possession of invoice or other prescribed
documents• Invoice or other document should not be
earlier than 12 months immediately preceding the appointment day
• Supplier of service is not eligible for any abatement under GST Act.
• Credit shall be allowed @ 40 % of CGST/SGST.
• Scheme is availed for six tax period
A registered taxable person who was engaged in the manufacture of taxableand exempted goods under Central Excise or taxable as well as exemptedservice under Finance Act, 1994 but liable under GST will be entitled to takethe following amounts of CENVAT credit in his electronic credit ledger:-
▪ Amount c/f in return furnished under earlier law,
▪ Amount of CENVAT credit of eligible duties in respect of;o Stock
o Semi finished goods
o Finished goods
o Relating to exempt goods or services
Credit of eligible duties and taxes on input held in stock [Section 140(4) of CGST Act]
CGST / SGST
▪ A registered taxable person is entitled to take credit in electronic credit ledger ofeligible duties and taxes on inputs/ input services received on/ after theappointed day but the duty/ tax has been paid before the appointed day.
▪ Condition: Invoice/ any other duty/tax paying document recorded in the books ofaccounts within 30 days from the appointed day.
Credit of eligible duties and taxes paid in advance on inputs/input services [Section 140(5) of CGST Act]
Person eligible for input tax credit
• A registered taxable person who was paying tax under composition scheme
Credit available on
• Stock Semi-finished goods or finished goods held in stock as on appointed date
• Above benefit not available for input services
• Such credit can be taken in the electronic credit ledger
Conditions
• Person not paying taxes under composition scheme under GST Law
• Goods must be used for taxable supply• Otherwise eligible to take the credit
under earlier law and under GST Law• Such person should be in possession of
invoice / other prescribed document• Invoices / other prescribed document
was not issued earlier than 12 months immediately preceding appointment day
Credit of duties and taxes on inputs held in stock on switching over from composition scheme [Section 140(6) of CGST Act]
Other Points
▪ CENVAT Credit of Input Services has been reversed under earlier law due tonon-payment of consideration within a period of 3 months, then such creditcan be reclaimed subject to condition that the registered person has made thepayment of the consideration for that supply of service within a period of 3months from the appointed date.
▪ Excess Tax paid under earlier law, can only be claimed as Refund. It cannot becarried forward under GST Regime.
Procedure for Claiming Input Tax Credit of Earlier Law
Registered person entitled to take credit of Input Tax
File Form GST Tran – 1 within 60 days from the appointed date
Reverse Charge
Reverse Charge Mechanism (RCM)
Under normal scenario tax is paid by supplier of Goods or Service or both. However RCM , theliability to pay tax would be not on the supplier of Goods or Services or both, but on therecipient of such Good or Service or both.
The Act empowers the Government to notify categories and situations wherein GST shall becharges under reverse charge mechanism.
Why RCM required
Supplier of the goods & services is unregistered and makes supply to a registeredperson.
When an unregistered person makes supply of goods or services or both, he breaks the trailof supply chain as he would not be filing any return declaring the details if his supply.
His supply becomes relatively cheaper than the goods or service supplied by the registereddealer
Why RCM required
Supplier is located in non-taxable territory
GST being destination based taxation, the supplier located in non-taxable territory cannot collect and deposit tax from the recipient.
Therefor the recipient is made to pay tax under RCM to create similarlevel of taxes on goods and services , thereby eliminating the benefit onimported goods and services on account of lower taxes.
E.g. Import of services
Why RCM required
Levy of Tax in an unorganised sector
When in a particular sector many persons fall under unorganized sector, the cost of administering and collecting the taxes from them would be too high
Sometime majority of persons fall under threshold exemption limit due to low individual aggregate turnover
E.g.. Goods Transport Agency. Ola/ Uber operators
Why RCM required
Indirect levy of tax in a sector which is exempt
Legislature may exempt specific goods or service from levy of tax but indirectly levy taxon that sector under RCM
Eg : Advocates and Lawyers.
Notified Reverse Charge Services
SI No Services Recipient of service
1 Import of Services Any person located in the taxable territory other thannon-assesse online recipient(Business Recipient)
2 Services providedor agreed to beprovided by a goodstransport agency(GTA) in respect oftransportation ofgoods by road
a) any factory registered under or governed by the Factories Act, 1948;(b)any society registered under the Societies Registration Act, 1860 or under any other law for the time being in force in any part of India;(c) any co-operative society established by or under any law;(d)any person registered under CGST/SGST/UTGST Act;(e) any body corporate established, by or under any law; or(f) any partnership firm whether registered or not under any law including association of persons.(g) Casual taxable person
SI No Services Recipient of service
3 Services provided or agreed to be provided by an individualadvocate or firm of advocates by way of legal services, directly orindirectly
Any business entity.
4 Sponsorship services Anybody corporate or partnership firm.
5 Services provided or agreed tobe provided by a director of a company or a body corporate to the said company or the bodycorporate;
A company or a bodycorporate.
Notified Reverse Charge Services
SI No Services Recipient of service
6 Services provided or agreed to be provided by arecovery agent to a banking company or a financialinstitution or a non-banking financial company
A banking company or a financialinstitution or a nonbankingfinancial company.
7 Transfer or permitting the use or enjoyment of acopyright covered under clause (a) of sub-section (1) ofsection 13 of the Copyright Act, 1957 relating to originalliterary, dramatic, musical or artistic Works
Publisher, Music company,Producer
Notified Reverse Charge Services
▪ Only Full Reverse charge is allowed under GST Act
▪ Also Applicable on Goods under GST Act along with Services (earlier only Services were listed under Reverse Charge).
Reverse Charge
Can Recipient of Service or Goods paying tax under Reverse charge is allowed to take Input Credit against his output liability under GST Act ?
▪ Input Credit was not allowed to be utilized against output liability underReverse charge.
▪ Once the payment is made, then the receipt of service or goods who is payingtax under Reverse charge is allowed to take credit of the same tax whilefiling return.
Reverse Charge
Example :-
Person A is registered under GST. Person A purchases the goods from Person Bwho is not registered under GST.
Answer :-
Under such a case, GST will be payable by the recipient of supply i.e. Person A.So, Person A is required to declare the receipt of goods or services in form GSTR– 2.
Credit of such tax will be available to the recipient provided it is used in thecourse or furtherance of Business.
Reverse Charge
Works Contract
Works contract [Section 2(119) of CGST Act]
Works Contract
A contract for
Specified activities
In respect of
Immovable property
Wherein transfer of property in
goods
Whether as goods or in some other
form
is involved
In the execution
of such contract
Works Contract-Specified activities
Construction
fabrication
completion
erection
modification
installation
repair
alteration
Fitting out
maintenance
commissioning
Building
Improvement
renovation
Activities under Works
Contract
Section 142(10) of CGST Act :-
The goods or services or both supplied on or after the appointed day inpursuance of a contract entered into prior to the appointed day shall be liableto tax under the provisions of this Act.
Section 142(11) of CGST Act :-
No tax shall be payable on Goods/Services under this Act to the extent the taxwas leviable on the said goods/services under the value added tax act of thestate or under chapter V of the Finance Act, 1994.
Works contract – Transitional Provisions
Section 142(11) of CGST Act :-
Where tax was paid on any supply both under the Value Added tax Act andunder chapter V of the Finance Act. 1994 then tax shall be leviable under thisAct and the taxable person shall be entitled to take credit of value added tax orservice tax paid under the existing law to the extent of supplies made after theappointed day and such credit shall be calculated in such manner as may beprescribed.
Section 140(3) of CGST Act :-
Credit of eligible duties on inputs held in stock/contained in semi-finished/finished goods to a registered person providing works contractservice availing notification no.26/2012 – ST and such inputs or goods are usedor intended to be used for making taxable supplies under this Act eligible forInput tax credit on such inputs under this Act is in possession of prescribeddocuments issued not earlier than twelve months not eligible for anyabatement under this Act.
Works contract – Transitional Provisions
Returns
Return Type For Periodicity Due Date
GSTR - 1 Outward Supplies made by Taxpayer(other than Composition dealer, ISD, and TDS u/s 37)
Monthly 10th of Next Month
GSTR - 2 Inward Supplies made by Tax payer(other than Composition dealer, ISD, and TDS u/s 37)
Monthly 15th of Next Month
GSTR - 3 Tax Return (other than Compositiondealer, ISD, and TDS u/s 37
Monthly 20th of Next Month
Returns, Periodicity and Due dates [Section 37,38 & 39 of CGST Act]
Return Type For Periodicity Due Date
GSTR - 4 Composition Dealer Quarterly 18th of Next Month to the quarter
GSTR - 5 Periodic Return of Non Resident Foreign Tax Payer
Monthly 20th of Next Month or within 7 Daysafter the last day of the period of registration which ever is earlier.
GSTR - 6 ISD Monthly 13th of Next Month
GSTR - 7 Return of TDS Monthly 10th of Next Month
GSTR - 9 Annual Return Annually 31st December of next Financial Year
Returns, Periodicity and Due dates
Upload GSTR –1
Auto –Drafted GSTR – 2A based on
details from GSTR – 1 filed
by other supplier
Generate GSTR – 2 by accepting
/ rejecting / modifying
details from GSTR – 2A
Add missing Purchase Invoices
Supplier to accept
modifications
General Net Tax : Pay / Carried
forward in GSTR – 3
Return Process
▪ Every registered taxable person to furnish returns.
▪ Submission of return - through online mode.
▪ Return to be filed even if there is no business activity during the return period.
▪ Error or omission may be rectified – No specific provision for revisionprescribed.
▪ B2B transactions proposed on invoice level – GSTIN, Invoice No., Date, Value,Description, Rate of tax and value of tax.
▪ B2C invoice wise only for transaction above specified limit (INR 2,50,000).
▪ HSN Codes.
▪ Separate Tables for Debit / Credit / Input service distributor credit / TDS / etc.
▪ Common E – return for CGST, SGST and IGST.
GST Return – Important Points
Matching
• Details of inward supplyfurnished by a receiver tobe matched with details ofoutput supplies furnishedby corresponding supplier
• Credit details of matchingsupplies only to beaccepted – manner to beprescribed
Reversal
• Details not matchingresulting in excess to becommunicated to bothsupplier and receiver
• Details communicated butnot rectified by supplier tobe added to the output taxliability of recipient
• Duplication resulting inexcess also to be added tooutput tax liability ofrecipient
Reclaim
• Recipient entitled toreduce output tax liabilityif supplier rectifies thereturn within prescribedtime
Matching, Reversal and Re – Credit [Section 42 & 43 of CGST Act]
First Return
• Every registered taxable person who has made outward supplies between date of liability to register to date of grant of registration
• Filed after grant of Registration
Annual Return
• Every registered dealer to furnish annual return by 31st
December except :• ISD • Casual taxable person• Person deducting tax• Non resident taxable person
• Reconciliation statement to be furnished along with the statutory audited report and annual return
Final Return
• Every registered dealer opting for cancellation to furnish a final return to be furnished within 3 months from the date of cancellation or date of cancellation order, whichever is later
First, Annual and Final Return [Section 40, 44 & 45 of CGST Act]
GST Return – Important Points
Rectification
Rectification allowed till September 30 or date of filing of annual return
Penalty – Non Filing of Return
Late Fees : Rs.100 per day subject to a maximum of Rs.5000
Late Fees : Annual Return Rs.100 per day subject to maximum of 0.25% of the aggregate turnover of the defaulter
▪ Every person registered under GST Act has to pay tax online only.
▪ There will be one Single Challan Form for making payment of all taxes covered in GST Basket.
▪ Contents of Challan;o GSTIN, Name, Address, Email ID, Mobile No.
o Date
o CGST Code
o SGST Code
o IGST Code
o Details of Instruments.
Payment of Tax Liability under GST Act [Section 49 of CGST Act]
Tax reconciliation between Central and State Government
• The Exporting State will transfer to the Centre the credit of SGST used inpayment of IGST.
• The Importing dealer will claim credit of IGST while discharging his output taxliability in his own State,
• The Centre will transfer to the importing State the credit of IGST used inpayment of SGST,
• The relevant information will also be sub mechanism submitted to the CentralAgency which will act as a clearing house
Registration
Definitions
Taxable Supply
• Supply of goods or services or both which is leviable to tax under the Act.
Exempt Supply
• It means supply of any goods or services or both which is wholly exempt from tax as notified byGovernment.
Nil rated Supply
• It means supply of any goods or services or both which attracts NIL rate of tax.
Definitions
Non-taxable Supply
• It means supply of goods or services or both which is not leviable to tax under the Act.
Export Supply
• It means supply of goods or services or both which is exported out of India.
Direct dispatch from the place of job worker
• It means goods or services or both are dispatched directly from the place of Job Worker so it will beconsidered as the supply of Principal and that amount of supply will be included in the aggregateturnover of Principal.
Example :
Suppose Mr. X is trading on his own account and also acting as an agent ofBaahubali Private Limited Company for receiving and selling the goods. FurtherMr. X made a turnover on his own account that is Rs.12 lacs and on behalf ofPrincipal is Rs.10 Lacs.
Answer :
So, Aggregate turnover of Mr. X would be Rs.22 Lacs
Supplies made on behalf of Principal(s) or on own account ?
Under CGST Act, State wise registration is to be done.
Examples :-
Case 1 : ABC Private Limited has Place of Business in more than 1 state
State 1 : Mumbai, Maharashtra
State 2 : Bangalore, Karnataka.
Ans 1 : ABC Private Limited to apply for Registration under both the states compulsorily.
Registration
Case 2 : ABC Private Limited has more than one Place of Business in same state
Place 1 : Mumbai, Maharashtra
Place 2 : Pune, Maharashtra.
Ans 2 : ABC Private Limited has choice to either take combined registration or separate registration for both the places.
Registration
Person liable for registration - (Section 22)
▪ Every supplier whose
Aggregate turnover in a financial year exceeds Rs.20 lakhs (Rs.10 lakhs for special category states)(To apply in 30 days).
▪ Existing person registered under current law that are subsumed into GST.
▪ Transferee and successor of business.
▪ Transferee of business in case of amalgamation and demerger.
Registration
Person not liable for registration - (Section 23)
▪ Person engaged exclusively in the business of supplying non-taxable supplies , or wholly exempt supplies
▪ Person is an agriculturalist , to the extent of supply of produce outof cultivation of land.
Registration
Aggregate Turnover [Section 2(6)]
Means Excludes
Aggregate value of :
• Taxable supplies• Exempt supplies u/s 11• Nil rated supplies• Non-taxable supplies• Export supplies• Inter-state supplies• Supplies made on behalf of Principal(s) or on own account• In case of Job Work, direct dispatch from the place of job-worker shall
be considered as a supply by the Principal (and not by the job-worker)
• Value of inward supply onwhich tax is payableunder RCM
• CGST, SGST, UTGST, IGSTand cess
Computed on all India Basis of person having same PAN
Registration
Compulsory registration in certain cases - (Section 24)
▪ Person making an inter-State supply (outward supply).
▪ Casual taxable persons.
▪ Person required to pay tax under reverse charge mechanism.
▪ Electronic commerce operator.
▪ Non-resident taxable person.
▪ Notified persons required to deduct tax u/s 51.
▪ Persons who supply goods and / or services on behalf of another registeredtaxable person (whether as agent or other wise).
▪ Input service distributors.
▪ Persons supplying online information & database access or retrieval servicesfrom a place outside India to an unregistered person in India.
Registration
Example 1:-
XYZ Company has two offices one in Surat, Gujarat and other in Mumbai, Maharashtra and is involved in supply of taxable as well as non taxable supply of goods and services.
List of supplies of goods and services made by XYZ Company is as follows :
Supply made from Surat, Gujarat Supply made from Mumbai, Maharashtra
Taxable supply = Rs.5 Lacs Taxable supply = Rs.2 Lacs
Nil rated supply = Rs.3 Lacs Supply made by Job Worker = Rs.2 Lacs
Non taxable supply = Rs.5 Lacs Export supply = Rs.3 Lacs
Supplies made on behalf of Principal = Rs.2 Lacs
Registration
Whether XYZ Company is liable to take Registration ?
Answer 1:-
Aggregate turnover of XYZ Company is Rs.22 Lacs.
As, aggregate turnover > 20 Lacs
So, XYZ Company is liable for Registration under the GST Act.
Note :-
To calculate Aggregate turnover, Supply is to be considered for PAN India.
Registration
Example 2 :-
XYZ Company has two offices one in Surat, Gujarat and other in Mumbai, Maharashtra and is involved in supply of taxable as well as non taxable supply of goods and services.
List of supplies of goods and services made by XYZ Company is as follows :
Supply made from Surat, Gujarat Supply made from Mumbai, Maharashtra
Taxable supply = Rs.5 Lacs Non taxable supply = Rs.5 Lacs
Nil rated supply = Rs.3 Lacs Inter-state supply = Rs.1 Lac
Supplies made on behalf of Principal = Rs.2 Lacs
Registration
Whether XYZ Company is liable to take Registration ?
Answer 2 :-
Aggregate turnover of XYZ Company is Rs.16 Lacs.
As, aggregate turnover < 20 Lacs
But, as there is Inter-state supply
So, XYZ Company is compulsorily liable for Registration under the GST Act.
Registration
Deemed Registration - (Section 26)
▪ The grant of registration or Unique Identity Number under SGST Act or UT – GST Act then it shall be deemed to be a grant of registration or Unique Identity Number under CGST Act also.
▪ Rejection of registration under SGST Act or UT-GST Act then it shall be deemed to be rejection of registration under CGST Act.
Period From
Within 3 working days The date of submission of application
Within 7 working days The date of receipt of clarification, information or documents furnished by the applicant
Registration
Note :-
▪ If proper officer does not take any action.
▪ then the registration shall be deemed to be granted.
Special Provisions relating to casual taxable person or Non resident taxableperson – (Section 27)
Registration
Registration
A person who occasionally, undertakes transactions
involving supply of goods and services, and who has no fixed place of business
in India.
Time Period
Certificate of Registration issued to such persons shall be valid only for a
period of 90 Days. (Can be extended maximum by
further 90 days)
Advance Deposit
Required to make advance deposit of estimated tax
liability net tax at the time of registration.
Amendment of Registration – (Section 28)▪ Informed within 15 days of such change to the respective officer along with supporting documents.
▪ Amendment can be like change in the Legal Name of business, Address of the principal place of business orany additional place of business, or addition, deletion or retirement of partner or directors, Karta,Managing committee and so on.
▪ Proper officer may approve/reject amendment.
▪ No rejection without giving an opportunity of being heard.
▪ Rejection of amendment under CGST will be a deemed rejection under SGST and vice-a-versa.
Period From
Within 15 working days The date of submission of application
Within 7 working days The date of reply to the notice to show cause
Registration
Note :-
▪ If proper officer does not take any action.
▪ then the certificate shall be deemed to be amended.
Cancellation of Registration - (Section 29)
▪ Change in the constitution of business. (Partnership Firm may be changed to SoleProprietorship due to death of one of the two partners , leading to change in PAN).
▪ Person no longer liable to be registered (aggregate turnover < 20 Lacs or 10 Lacs, asapplicable).
▪ Where registered taxable person has contravened provisions of the Act (like taxshort paid, not paid, returns not filed).
▪ A composition supplier has not furnished returns for 3 consecutive tax periods/anyother person has not furnished returns for a continuous period of 6 months.
▪ Non-commencement of business within 6 months from date of registration by aperson who has registered voluntarily.
▪ Transfer of business or discontinuation of business (Death of proprietor, De-merger,Amalgamation and so on).
Registration
Cancellation of Registration - (Section 29)
▪ Where registration has been obtained by means of fraud , willful misstatement orsuppression of facts , the registration may be cancelled with retrospective effect.
▪ Cancellation can be done by Proper Officer suo motu or on application made by theregistered taxable person.
▪ Liability to pay tax before the date of cancellation will not be affected.
▪ Cancellation under CGST Act will be deemed cancellation under SGST Act and vice-versa.
▪ Substantial penalty in case registration obtained with fraudulent intentions.
▪ Notice of hearing and opportunity of being heard is a MUST before cancellation.
▪ Application for revocation or cancellation of registration shall be made within 30days from the date of service of cancellation of order.
Registration
Consequences of default in taking registration
Liable to a penalty
Registration
• Rs.10,000 or• 100% of tax evaded or not
deducted or short deductedHigher of
Note :-
▪ Input tax credit cannot be claimed for the period prior to registration.
▪ Pay liability with Interest.
Decoding GST Number [15 Digit GST No.]
7 6CA A F 3 M1 Z5 1S2 W
State Code
PAN Business Vertical
Blank
Check Sum
GST Refund
Point of Refund
▪ Refund arising from earlier law, will be adjudicated as per earlier law.
▪ No refund will be granted if the amount is less than Rs.1000/-.
▪ Refund allowed only in case of▪ Exports (including zero rated supplies).▪ Credit accumulation as a result of inverted duty structure on output supplies
other than Nil rated and fully exempt.
▪ Refund Application has to be made within 2 years from the relevant date;
▪ Time limit of 2 years not applicable on refund of balance in electronic cash ledger.
▪ Such refund can be claimed only in returns furnished.
Situation of Refund 2 years from below mentioned date
On account of excess payment Date of Payment of GST
On account of Export of Goods Date on which proper officer gives an order for export known as “Let Export Order
On account of Export of Services Date of BRC
On account of Finalization of Provisional Assessment
Date of the Finalization Order
Situations and Relevant Time Period for Refund
Situation of Refund 2 Years from below Relevant Date
In pursuance of an appellate authority’s order in favour of the taxpayer
Date of Communication of the appellate authority’s order
On account of no/less liability arising at the time of finalization of investigation proceedings
Date of communication of adjudication order or order relating to completion of Investigation
On account of refund of accumulated ITC due to inverted duty structure
Last day of the Financial year
Situations and Relevant Time Period for Refund
Accounts and Records
Accounts and Records [Section 35 & 36 of CGST Act]
▪ To be kept at the Principal Place of Business
▪ Owner or operator of warehouse or go down to keep records
▪ To maintain records until the expiry of 72 months – From the due date of furnishingof Annual Return – For the year pertaining to such accounts and records (i.e 80months from the end of the financial year)
▪ Records pertaining to revision and appeal to be kept for 1 year from the date ofdisposal of such proceedings or for the period specified above, whichever is later
Invoicing Under GST
Few Contents of Invoice
▪ Name, address and GSTIN No. of Supplier
▪ Date of Issue
▪ Invoice No.
▪ Name, address and GSTIN No. of Recipient
▪ Address of Delivery along with name of state and its code
▪ HSN Code
▪ Description of Goods or Services or Both
▪ Quantitative details
▪ Rate of Tax (CT, ST, IT and UTT)
▪ Place of Supply
▪ Signature or Digital Signature
Invoicing Under GST
Points for invoicing
▪ Supply meant for Export on Payment of IGST or Supply meant for Export under Bond or Letter of Undertaking without Payment of IGST (This is to be mentioned in the Export Invoices)
▪ If Advance is received then Receipt voucher to be issued
▪ Credit Note or Debit Notes to be issued (Same as Earlier)
▪ Manner of Issuing Invoice : o In case of Goods
o Original Copy being marked as Original for Recipient
o Duplicate Copy marked as Duplicate for Transporter
o Triplicate Copy marked as Triplicate for Supplier
o In case of Serviceso Original Copy being marked as Original for Recipient
o Duplicate Copy marked as Duplicate for Supplier
Tax Invoice, Credit Note and Debit Note
Other Points
▪ Not to Issue Tax Invoice < Less than INR 200
▪ If goods or services or both or paying tax under composition levy then Issue a Bill of Supply
▪ For Advance Received then Issue a Receipt voucher
▪ If Advance is received but supply is not done then Issue a Refund voucher
▪ If Tax is paid under Reverse Charge then recipient has to Issue an Invoice and at the time of making payment to supplier Issue a payment voucher
Credit Note and Debit Note [Section 34 of CGST Act]
Where taxable value and / or tax
Charged in Tax Invoice > Amount Payable or goods returned by
recipient or services found deficient
Charged in Tax Invoice < Amount Payable
Taxable Person to issue CREDIT Note
Taxable Person to issue DEBIT Note
No reduction in Output tax liability if incidence of tax
and interest on supply has been
passed to any other person
On or before 30th
September following the end of FY of supply or
date of annual return whichever
is earlier
Accounting Perspectives
Few Points :
▪ Invoicing as per the Draft Format
▪ E Way Bill to be used for movement of Goods
▪ For Accounting of Taxes :oPreferable is to create separate Ledger’s:
Outward Ledgers of IGST, CGST and SGST Inward Ledgers of IGST, CGST and SGST Tax paid under Reverse Charge (Ledgers of IGST, CGST and SGST)
▪ Pass Transfer Entry every month in Electronic Credit Ledger Account
▪ Maintain GSTN of every supplier and customer
Tax Deduction at Source
[Section 51 of CGST Act]
Tax Deduction at Source
▪ Government to notify persons who shall deduct TDS on supply of Taxable goods or services
▪ TDS @ 1% to be deducted
▪ On Taxable supply > 2,50,000 per contract
No deduction shall be made if the location of the supplier and the place ofsupply is in a state or union territory which is different from the State or as thecase may be, Union territory of registration of the recipient.
TDS – When to be paid and file return
▪ Payment – 10th of the next month
▪ Return – 10th of the next month
▪ Issue TDS Certificate – 5 days from the payment to the Government
Tax Deduction at Source - Exception
Tax Deduction at Source - Transitional provisions
Where a supplier has made any sale
of goods
In respect of which tax was required to
be deducted
Under any law of a state or union
territory relating to Value Added Tax
No TDS u/s 51Before the
appointed day
Has also issued an invoice for the
same
Where payment to the said supplier is
made on or after the appointed day
Thank You