CA RITUL PATWA www.ritulpatwa.com

GST TRAINING SESSION

RAJASTHAN STATE WAREHOUSING CORPORATION

INDEX

S. No. TOPICS COVERED

1) What is GST?

2) Exempted Services

3) Rate of GST on RSWC Activities

4) Reverse GST Liability

5) TDS Liability on Government Departments & Agencies

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S. No. TOPICS COVERED

6) Invoicing & Other Procedures

7) Filling of Returns

8) Interest & Late Fees

9) Prosecution under GST

10) Critical Triggers – Caution List

11) Key for successful GST Adoption

What is GST?

“One Nation – One Tax”

GST is a Single Uniform Tax that has subsumed all other Indirect Taxes applicable on a Taxpayer

Taxes subsumed under GST:-

> Central Excise

> VAT

> Service Tax

> CVD & SAD

> Entry Tax

> All surcharge & Cess on supply of Goods & Services etc.

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EXEMPTED SERVICES

4 Services relating to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products or agricultural produce by way of-

(v) loading, unloading, packing, storage or warehousing of agricultural produce

76 Services provided by a goods transport agency, by way of transport in a goods carriage of,-

(a) agricultural produce;

79 Services by way of loading, unloading, packing, storage or warehousing of rice;

NOTE - Agriculture Produce means any produce of agriculture on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market [Section 65B(5) of the Finance Act, 1994]

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Rate of GST on Services Provided by RSWC

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S. No

Description of Output Services

SAC Code

GST Rate

Remarks

1. Storage and warehousing Services

00440193

(Storage &

Warehousing

Service)

a) Agricultural Produce Exempt Sl. No. 4 (v) of List of Exempted Services

b) Seeds – Unprocessed that are covered under Agriculture Produce

Exempt

c) Seeds – Processed that are not covered under Agriculture Produce

18% -

d) Fertilisers 18% -

e) Other Commodities 18% -

Rate of GST on Services Provided by RSWC

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S. No

Description of Output Services

SAC Code

GST Rate

Remarks

2. Supervision Charges:-

00440366

(Business Support Service)

18%

Exempt

Refer : The

Determination of Value of Supply Rules under GST

a) On Handling & Transportation (H&T) Charges of Goods

b) On Storage Charges under PEG-2008 Scheme

3. Forfeiture of Security Deposit/ Bank Guarantee:-

00441480 (Other Taxable Services)

18% Exempt

Section 5 (e) - agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act;

a) Of H&T Agent for leaving work before Contracted Period

b) Of Investors under PEG-2008 Scheme for Non

Rate of GST on Services Provided by RSWC

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S. No

Description of Output Services

SAC Code

GST Rate

Remarks

4. Fumigation Charges of Agricultural Produce stored in the Warehouse

00440318 (Cleaning Service)

18% Fumigation is exempted only when it is done on an Agriculture Farm

5. Rent paid on Godowns taken on

Lease/ Rent

00440406 (Renting of Immovable Property)

18% -

Rate of GST on Services Provided by RSWC

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S. No

Description of Output Services

SAC Code

GST Rate

Remarks

6. Composite supply of Works contract as defined in clause 119 of section 2 of CGST Act

00440410 (Works Contract Service)

18% ITC not Allowed Till now not covered under Reverse Charge

7. GST on various services under MOU with Shri Shubham Logistics Ltd (SSL) for 38 Warehouses and ALPs:-

a) Storage & Warehousing Income directly received by RSWC under the MOU

00440193 (S&W

Service)

Same as

at S No 1 -

b) Share in Income received by RSWC from SSL from NCDEX, Commodity Funding, Weight Bridge, LAB Charges & Liability for payment of GST on share of income paid to SSL

No Joint Venture; MOU creates activites & deliverable for both parties that can be categorised as a relationship of Service between RSWC & SSL; No Specific Exemption under GST To avoid Retrospective Tax liability in future, suggested to pay GST .

REVERSE GST LIABILITY [Sec 9 (3)]

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The GST Council has prescribed a list of Services that are Liable to be taxed under Reverse Charge Mechanism u/s 9 (3) of the GST Act.

Taxable Services under Reverse Charge include:- a) Provided to person located in Non-Taxable Territory b) Goods Transport Agency – Transport by Road; c) Individual Advocate or Firm of Advocates; d) By an Arbitral Tribunal; e) Sposorship Service; f) Provided by Govt or Local Authority; g) Provided by Diretors of the Company; h) Insurance Agent & Recovery Agent i) Tranfer of Goods by a vessel from outside India by Non Resi; j) Transfer or Permit the use of Copyright; k) Radio Taxi or Transport provided through E-Commerce

Operator

REVERSE GST LIABILITY [Sec 9 (4)]

-: On All Goods or Services procured from Un-Registered Dealer:-

Section 9 (4) : The ‘state/ central’ tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

---

This implies that if RSWC will buy any taxable Goods or Services from any person who is an unregistered dealer, then the recipient is liable to pay GST on such Goods/ Services on reverse charge basis.

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TDS Liability - Govt Establishments & Agencies

As per Section 51 of the CGST Act & RGST Act, a department or establishment of the State Government or a Government Agency is required to deduct Tax at Source at the rate of 1% under the CGST Act and 1% under the SGST Act from the payment made or credited to supplier of the Taxable goods or services or both where the total value of such supply, under a contract, exceeds two lakhs and fifty thousand rupees within the same state. As per section 20 of the IGST Act, where the supplier & place of supply is in a state which is different from the state of registration of the recipient, the deductor shall deduct tax at the rate of 2% from the payment made or credited to the supplier.

We would suggest RSWC to confirm, if it is covered within the meaning of a department or establishment of a State Government or a government agency as provided in Section 51 of the GST Act.

(NOTE : The applicability of this section has been postponed for few days by a press release of Govt dated 26th June, 2017.)

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INVOICING PROCEDURE

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S. No

Type of Document

When to be Issued Remarks

i) Tax Invoice a) On Supply of Taxable Goods or Services or Both; & b) On receipt of taxable supplies from Unregistered person under reverse charge [Section 31 (3) (f)]

To be issued:- For Goods - At the time of Removal/ Delivery of Goods; For Services - Within 30 Days from the date of supply of Services; Under Reverse Charge – At the time of receipt of supplies.

ii) Bill of Supply On Supply of Exempted Goods or Services or Both

-

iii) Receipt Voucher On receipt of advance payment of any Goods or Services or Both

Where at the time of receipt of advance:- a) Tax Rate is not determinable – Tax shall be paid @ 18% b) Nature of Supply is not determinable – It shall be treated as Inter-State Supply

INVOICING PROCEDURE

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S. No

Type of Document

When to be Issued Remarks

iv) Refund Voucher To be issued if, subsequent to the receipt of Advance, no supply is made and no tax invoice is issued and the amount is refunded to the payee

-

v) Payment Voucher To be issued in case of Reverse Charge Liability u/s 9 (3) or 9 (4) at the time of making payment to the Supplier.

-

vi) Debit Note To be issued for the differential amount, in case if the Taxable Value or Tax payable in respect of any supplies, in a Tax Invoice issued earlier is found to be less

Debit Note includes Supplementary Invoice

INVOICING PROEDURE

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S. No

Type of Document

When to be Issued Remarks

vi) Credit Voucher To be issued in case of Return of Goods/ Services or reduction in the value of supplies after issue of Tax Invoice

No reduction in Output Tax Liability of the Supplier shall be permitted, if the incidence of Tax and Interest on such supply has been passed on to any other person. [Proviso to Section 34 (2)].

NOTE : Each document should have a consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or numerals or special characters -hyphen or dash and slash symbolised as “-” and “/”respectively, and any combination thereof, unique for a financial year.

FILLING OF RETURNS

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GSTR 1 : Outward Supplies made by the taxpayer

: 10th of Next Mth

GSTR 2 : Inward Supplies/ purchases received

GSTR 3 : Monthly Return

GSTR 9 : Annual Return

Note – Extension of time has been provided in Filling of Returns for July and Aug, 2017. GSTR-3B has to be filled by 20th of next month.

: 15th of Next Mth

: 20th of Next Mth

: 31st Dec Next Yr

GSTR 7 : Tax Deducted at Source : 10th of Next Mth

INTEREST & LATE FEES

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Note: Penalties have been prescribed under 122 to Section 125 of the Act for various offences under the Act.

S. No.

Nature of Default Section Interest/ Late Fees/ Penalty

i) Delay in Payment of Tax 50 (1) Interest @ 18%

ii) Undue or Excess claim of Input Credit or undue or excess reduction in Output Tax Liability

50 (3) Interest @ 24%

iii) Delay in Filling of Monthly Return

47 (1) Late Fees of Rs. 100/- for every day of delay [Maximum – Rs. 5000/-]

iv) Delay in Filling of Annual Returns

47 (2) Late Fees of Rs. 100/- every day of delay [Max. upto 0.25% of the TO]

v) Delay in furnishing the TDS Certificate to the Deductee

51 (4) Late Fees of Rs. 100/- for every day of delay [Maximum – Rs. 5000/-]

PROSECUTION UNDER GST

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Note: Nature of Offences that are liable for prosecution have been defined under Section 132 (a) to (l)

S. No.

Amount Quantum of Punishment Clause in Section 132

(1)

i) Exceed Rs. 500 Lakhs Upto 5 Years with Fine (i)

ii) Exceeds Rs. 200 Lakhs upto Rs. 500 Lakhs

Upto 3 Years with Fine (ii)

iii) Exceeds Rs. 100 Lakhs upto Rs. 200 Lakhs

Upto 1 Years with Fine (iii)

iv) Offences specified in clauses (f), (g) or (j) of section 92 (1)

Upto 6 months and/ or with fine

(iv)

CAUTION - CRITICAL TRIGGERS

EVENTS OF BLACKLISTING i) Continuous Default for 3 Months in paying ITC that has been reversed; ii) Continuous Default for 3 months or any 3 months-period over a duration

of 12 months in uploading the sales details leading to reversal of ITC for others;

iii) Continuous short reporting of sales beyond 5% (of total sales) for a period of 6 months.

RESULT OF BLACKLISTING i) Name published in public domain; ii) SMS sent to all dealers who have pre-registered this dealer as their

supplier; iii) Blacklisted GSTIN cannot be uploaded in purchase details resulting in

denial of ITC;

[RESULT : If you are blacklisted, your buyers may not buy from you]

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DISCLAIMER: The Views expressed in this presentation are strictly personal and for knowledge of our clients only. The contents of this article are solely for informational purpose and it does not constitute any professional advice or recommendation. The laws related to GST are under evolution and subject to constant changes and amendments over time. It is suggested to take specific legal advice and necessary due diligence before relying on the contents and information of this article.

Key for successful GST Adoption:- 1. Use Technology; 2. Train your Team &

Stake holders; 3. Finalise your Tax

Position; 4. Revisit your Business

Process; 5. Review major

contracts affected by GST

- CA Ritul Patwa