time/value/place of supply returns under gsttime/value/place of supply & returns under gst at...
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Time/Value/Place of Supply
&
Returns under GST
At Fortune Park JP Celestial
on 23-06-2017, By
CA B D Chandrashekar Shekar & Yathish,
Chartered Accountants
Bengaluru
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Categorization of Changes in
GST
• Major Change
• Medium Change
• Procedural Changes
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Flow of the session
• What was the need to define Time of Supply?
• Time of Supply of Goods
• Time of Supply of Service
• What is the need to define ―Place of Supply‖?
• Place of Supply of Goods
• Place of Supply of Service
• How to value a ―Supply‖?
• Returns under GST
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Business scenario to understand
the need for “Time of Supply”
• Goods sold by a trader.
• Date of Invoice – 01.09.2017
• Date of removal from the factory –
30.08.2017
• Date of receipt of payment – 30.07.2017
In which tax period should the trader pay
tax? July? August? or September?
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Business scenario to understand
the need for time of Supply
• Audit is conducted for - FY 2016-17
• Date of Completion of Audit - 30-09-
2017
• Date of Invoice - 10-10-2017
• Date of receipt of payment - 01-08-2017.
In which tax period should the CA pay
tax? August? September? Or October?
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Business scenario to understand
the need for time of Supply
• Building Construction from a Civil Contractor
• Date of RA bill – 01.07.2017
• Date of Completion of Project – 30.09.2020
• Date of receipt of payment – 15.08.2017
In which tax period should the Civil Contractor pay tax? July 2017? August
2017? or September 2020?
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Time of Supply of Goods
• Time of supply shall be earlier of the following dates – – Date of issue of invoice
• Invoice however has to be raised before or on removal of goods
– Receipt of payment
• For advances up to one thousand rupees in excess of the amount indicated in the tax invoice, the time of supply be the date of issue of invoice at the option of supplier.
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Reverse Charge for Goods
• Time of supply is earliest of the
following dates, namely—
– Date of the receipt of goods,
– Date on recording payment in books, or
– Date of debit in the bank statement for
payment made by purchaser of goods, or
– Date immediately following thirty days
from the date of issue of invoice by the
supplier
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Time of Supply of Service
• Time of supply shall be earlier of the following dates – – Date of issue of invoice or
• Invoice however has to be raised within 30 days from completion of Service. If not issued within 30 days then Date of completion of Service
– Receipt of payment
• For advances up to one thousand rupees in excess of the amount indicated in the tax invoice, the time of supply be the date of issue of invoice at the option of supplier.
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Reverse Charge for
Services
• Time of supply shall be the earlier of
the following dates,
– Date on recording payment in books, or
– Date of debit in the bank statement for
payment made to supplier, or
– Date immediately following sixty days
from the date of issue of invoice by the
supplier
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Supply of Vouchers
– Goods/Services
• For supply of vouchers by a supplier,
the time of supply shall be—
– The date of issue of voucher, if the supply
is identifiable at that point; or
– The date of redemption of voucher, in all
other cases.
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Date of Supply for Interest,
Late Fee or Penalty – Goods/Services
• Time of supply - Date on which the
supplier receives such addition in
value by way of –
– Interest
– Late Fee or
– Penalty
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Change in rate of tax in respect
of supply of goods or services
Goods/Service
s Supplied
Invoice Receipt Time of Supply Rate
applicable
Before Change
in rate
After Change in
rate
After Change
in rate
Earlier of invoice
or receipt date
New Rate
Before Change
in rate
After Change in
rate
Before Change
in rate
Date of receipt Old rate
Before Change
in rate
Before Change in
rate
After Change
in rate
Date of Invoice Old rate
After change in
rate
Before Change in
rate
Before Change
in rate
Earlier of invoice
or receipt date
Old rate
After change in
rate
After Change in
rate
Before Change
in rate
Date of Invoice New rate
After change in
rate
Before Change in
rate
After Change
in rate
Date of receipt New Rate
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Value of Taxable Supply
• Price actually paid would be the value
of supply only when –
– Supplier and the recipient of the supply
are not related and
– Price is the sole consideration for the
supply.
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Who are Related Person
• Such persons are officers or directors of one another’s businesses;
• Such persons are legally recognised partners in business;
• Such persons are employer and employee;
• Any person directly or indirectly owns, controls or holds twenty-five per cent. or more of the outstanding voting stock or shares of both of them
• One of them directly or indirectly controls the other;
• Both of them are directly or indirectly controlled by a third person;
• Together they directly or indirectly control a third person;
• They are members of the same family;
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Inclusions in Value of
supply • All taxes other than those paid under
GST
• Amount incurred by recipient of supply but not included in the price actually paid.
• Incidental expenses commission and packing.
• Interest, or late fee or penalty for delayed payment of any consideration
• Subsidies linked with the price except those provided by CG/SG
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Exclusion from the value
of Supply • Value of supply shall not include any
discount – – Before or at the time of supply, If such
discount has been recorded in the invoice.
– After the supply has been effected, provided that: • Such discount is in terms of an agreement
entered into at or before the time of such supply and specifically linked to relevant invoices; and
• Input tax credit has been reversed by the recipient of the supply as is attributable to the discount on the basis of document issued by the supplier.
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Place of Supply
• What is the need to define ―Place of
Supply‖
– To Determine whether it is Intrastate or
Interstate transaction
– If location of the supplier and place of supply
are in same - Transaction will be intra-State
and liable for CGST and SGST.
– If they are in different States – It is Inter-
State transaction and be liable to pay IGST
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Place of Supply of Goods Sl No Nature of Transaction Place of Supply of Goods
1 Supply involves movement of goods Location of delivery of goods to recipient
Example - A in Bangalore purchases chair from supplier B in Chennai and the chair is to be delivered by the supplier to Bangalore. The place of supply is Bangalore as chair has moved from Chennai to Bangalore.
2 Supply without movement of goods Location of goods at the time of delivery to the recipient
Example – A of Bangalore goes to Mumbai and purchases washing machine from the outlet of supplier B in Mumbai. A, himself takes the delivery in Mumbai and transports the machine in his car. The place of supply is Mumbai as supply does not involve movement of goods.
3 Assembly or installation at site Place of assembly or installation
Example - Company A in Delhi want to get a printing machine installed at its office in Delhi from supplier B located in Haryana. Since the printing machine will be assembled or installed at Delhi, the place of supply is Delhi.
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Place of Supply of Goods Sl No Nature of Transaction Place of Supply of Goods
4 Supply on board a conveyance such as vessel, aircraft, train, motor vehicle
Location at which such goods are taken on board.
Example – A train starts from Delhi for Bangalore. On the way water bottle cartons are taken on board at Agra that are purchased by passengers during the journey from Agra to Bangalore. The place of supply of water bottles is Agra
5 Supplier delivering to a recipient on direction of a third person
Third person’s principle place of business for the first leg of the supply and location of delivery to recipient for the second leg
Example - A Limited Mumbai has engaged L&T, Bangalore for development of a railway station in Chennai. L&T has a factory for fabrication of lifts in Tamilnadu. L&T Bangalore places order on L&T Tamilnadu for supply of lifts at the site of CIDCO railway station. Here L&T Tamilnadu has delivered the goods to A Ltd, Chennai on the directions of L&T Bangalore. It will be deemed that L&T Bangalore has received the goods from L&T Tamilnadu (place of supply – Bangalore) and then supplied those goods to A Ltd at Chennai (place of supply – Chennai) despite the fact goods did not move out of Tamilnadu.
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Place of Supply of Goods Sl No Nature of Transaction Place of Supply of Goods
6 Place of supply of goods imported into India
Location of importer
7 Place of supply of goods exported from India
Location outside India
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Place of Supply of Service Sl no Nature of Transaction Place of Supply
1 Directly relating to immovable property
If property is located in India Place where immovable property is located
If property is located outside India Location of recipient
Example: If Mr. A of Delhi has property in Hyderabad and avails architect services from B of Bengaluru, then place of supply would be Hyderabad as the supplier, recipient and property are located in India. However, if such property is located in Japan, then place of supply will be Delhi that is to say location of service recipient.
2 Performance based services Where services are actually performed
Example – Mr. P of Kolkata visits a hotel located in Jaipur for a vacation and stays in the hotel for 5 days and avails services of gym and parlour and makes individual payment for these services to hotel, gym and parlour. The place of supply would be Jaipur as the actual services are supplied there.
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Place of Supply of Service Sl no Nature of Transaction Place of Supply
3 Admission to an event Where event is held
Example – Mr. M of Bangalore goes to Delhi and purchases ticket for watching a movie at a Delhi Cinema Hall. The place of supply would be Delhi.
4 Service on board a conveyance First scheduled point of departure
Example - A caterer is providing catering services on-board in train during Bangalore-Hyderabad-Pune which is not included in fare charges. The place of supply of service shall be the location of the first scheduled point of departure of that conveyance for the journey i.e. Bangalore.
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Place of Supply of Service Sl no Nature of Transaction Place of Supply
5 Banking & Financial service( including Stock broking )
if location of recipient is available on record of the supplier
Location of service recipient
if location of the recipient of service is not available on record of the supplier
Location of service provider
Example – A Ltd of Kolkata who has a saving bank account with Axis Bank of Kolkata gets a DD issued from Axis Bank at Chennai, the place of supply will be Kolkata as A Ltd’s address is in the records with Axis Bank. However, if A Ltd gets a DD issued from SBI Bank of Chennai, without having a bank account there, the place of supply will be Chennai.
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Place of Supply of Service Sl no Nature of Transaction Place of Supply
1 Telecommunication Services
Post-paid mobile and internet service Location of Service recipient
2 Prepaid mobile, internet service and direct to home television service through voucher or any other means
Through selling agent or a reseller or a distributor
Address of such agent, reseller or distributor
By any person to the final subscriber Where such pre-payment is received or voucher sold
In other cases, through internet banking or e payment mode
The location of recipient of services on the records of the supplier
3 Fixed telecommunication line, leased circuit, cable or dish antenna
Where telecommunication line, antenna is located
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Place of Supply of Service Sl no Nature of Transaction Place of Supply
1 Services by way of organisation of a cultural, artistic, sporting, etc
Registered person Location of recipient
Other than registered person Where the event is held, if outside India, the location of recipient
2 Transportation of goods, including by mail or courier
Registered person Location of recipient
Other than registered person Location where the goods are handed over for transportation
3 Passenger transport service
Registered person Location of recipient
Other than registered person
Where passenger embarks on the conveyance for a continuous journey
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List of Forms - Returns SL No
Form No Title of the Form
1 Form GSTR-1 Details of Outward Supplies
2 Form GSTR-1A Details of O/s as added, corrected or deleted by recipient
3 Form GSTR-2 Details of inward supplies of -Taxable goods -Services for claiming input credit
4 Form GSTR-2A Details as furnished in GSTR 1 by supplier
5 Form GSTR-3 Monthly return – Based on details of Outward supplies, Inward supplies along with payment of amount of tax
6 Form GSTR-3A Notice for non filing – under Sec 27 /Sec 31
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List of Forms - Returns
SL No Form No Title of the Form
7 Form GSTR-4 Quarterly return for compounding taxable persons
8 Form GSTR-4A Details of inward supplies to the recipient under Composition scheme on the basis of Form GSTR-1 by Supplier
9 Form GSTR-5 Return of Non – resident
10 Form GSTR-6 ISD Return
11 Form GSTR-6A Details of Inward supplies to an ISD recipient on the basis of Form GSTR-1 by the supplier
12 Form GSTR-7 Return for authorities deducting TDS
13 Form GSTR-7A TDS certificate
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List of Forms - Returns
SL No Form No Title of the Form
14 Form GSTR-ITC-1
Communication of acceptance, discrepancy or duplication of ITC
15 Form GSTR-8 Details of supplies effected through e-commerce operator and amount tax collected under Sec 43C(1)
16 Form GSTR-9 Annual return
17 Form GSTR-9A Simplified Annual return by Compounding taxable persons registered under Sec 10
18 Form GSTR-9B Reconciliation Statement
19 Form GSTR-10 Final Return (Surrender/Cancellation)
20 Form GSTR-11 Details of inward supplies to be furnished by a person having UIN
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Who needs to file returns
under GST?
Return
GSTR 1 Outward supplies
GSTR 2 Inward
supplies
GSTR 3 Monthly return
GSTR 4 Quarterly
return
GSTR 5 Periodic return
GSTR 6 ISD
GSTR 7 TDS
GSTR 9 Annual return
Normal/regular tax payers a a a a
Compounding taxpayer a a
Casual taxpayer a a a
Non- Resident taxpayer other than foreigner
a a a
Non- Resident foreign taxpayer
a
Input Service Distributor a
Govt. Dept., agency, local authority
a a a a
Due Date 10th of next month
15th of next month
20th of next month
18th of next month to quarter
Last day of registration/Monthly
13th of next month
10th of next month
By 31st December of next FY
Assessee
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Accounting Codes
Turnover of preceding FY
Above 5 crores 1.5 crores- 5crores Below 1.5 crores
4 digit HSN and SAC Description of goods/services 2 digit HSN and SAC
8-Digit HSN code is mandatory for exports and imports
Prescribed accounting code will be mandatory for services which are dependent on place of supply rules
In order to differentiate between the HSN code and the Service Accounting Code (SAC), the latter will be prefixed with “s”
To begin with composition dealers may not be required to specify HSN at 2-digit level
Any taxpayer, irrespective of his turnover, may use HSN code at 6- digit or 8-digit level if he so desires
Unique identification number (UIN) in case of UN agencies etc.,
Applicability of coding is depicted below:
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Outward Supplies
Section 25
• Registered taxable person other than ISD, compounding taxpayer and TDS assesses
• Includes zero-rated supplies, inter-state supplies, returns, exports, debit notes, credit notes and supplementary invoices issued during the said tax period
• Only the Board/Commissioner has power to extend the due date of filing outward supply –
At the Centre Board (CBEC) has powers however, at the State level, Commissioner has powers
Whether only one state can extend the due date through Commissioner. What will happen to matching of credits in case of supplies to other states?
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GSTR-2 Inward Supply • Basic details
• Period
• Invoice-level inward supply information pertaining to the tax period for
goods and services separately
• Auto-population of information submitted in GSTR-1 by the
counterparty Supplier in the concerned tables of GSTR-2
• Separate tables for submitting details relating to import of
Goods/Capital Goods from outside India and for the services received
from outside India
• Table for submitting details in relation to NIL rated, Exempted and Non
GST inward Supplies including compounding taxpayers and
unregistered dealers.
• Table for ITC on capital goods
• Table for invoices on which partial credit was availed earlier
• Table for the ISD credit received by the taxpayer
• Table for the TDS credit received by the taxpayer
• Details of debit note and credit note
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GSTR-3 Monthly Return • Basic details
• Period
• Turnover Details including Gross Turnover, Export Turnover, Exempted Domestic Turnover, Nil Rated Domestic Turnover, Non GST Turnover and Net Taxable Turnover
• Auto-population of information from GSTR-1 and GSTR-2
• Details regarding revision of invoices relating to outward and inward supplies
• Details of ITC utilized against tax liability of CGST, SGST and IGST on supplies of goods and services.
• Net tax payable under CGST, SGST, IGST.
• Interest on reversal of credit?
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GSTR-4 Compounding
Taxpayers
• Basic details
• Taxes at fixed rate not less than 1% of turnover
• Quarterly return
• Only total value of supply is to be disclosed
• Invoice-level purchase information for the purchases from normal taxpayers.
• Details of the goods and services imported from outside India
• Export of goods and services
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GSTR-5 Non-resident Foreign
Taxpayers
• Basic details
• Non-Resident foreign taxpayers
• Period license
• File within 7 days of expiry of license
• In case registration period is for more than one month, monthly return(s) would be filed and thereafter return for remaining period would be filed within a period of seven days as stated above
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GSTR-6 ISD Return
• Basic details
• Period
• Auto population of invoice-level inward supply information pertaining to the tax period separately for goods and services on which the ITC is being claimed on the basis of GSTR-1 filed by the Counterparty Supplier.
• Details of the invoices along with the GSTIN of the receiver of the credit i.e. to whom the ISD is distributing credit
• Opening balance of ITC, credit for ITC services received, debit for ITC reversal and ITC distributed and closing Balance
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GSTR-7 TDS Return
• Basic details
• Period
• Invoice wise details
• TDS certificate no. with date and value
• Details of GSTIN of the supplier along with the invoices against which the Tax has been deducted. This will also contain the details of tax deducted against each major head i.e. CGST, SGST and IGST
• Details of other payments - Interest/Penalties/Fee/Others, etc.
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Annual Return
• Registered taxable person other than ISD, compounding
taxpayer and TDS assesses
• To be filed electronically on or before 31st December following the end of such FY.
• Every taxable person who is required to get his accounts audited shall furnish, electronically, the annual return along with the audited copy of the annual accounts and a reconciliation statement, reconciling the value of supplies declared in the return furnished for the year with the audited annual financial statement, and such other particulars as may be prescribed
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GSTR-8 Annual return
• Basic details
• Statutory audit details
• Name and details of auditors
• Total value of outward and inward supplies with details of ITC availed
• Details of income earned from sources other than supply and also expenses other than purchases
• Reconciliation between CGST, SGST and IGST
Value as per PL may not be same as value for GST. How to reconcile??
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Where to file the return?
A registered Tax Payer shall file GST Return at GST Common Portal either:
i. by himself logging on to the GST Common Portal using his own user ID and password;
ii.Through his authorized representative.
The filing may be done either directly or by using Applications developed by accounting companies / IT companies which will interact with GST System using APIs or through Facilitation Centre (FC).
The concept of tax return preparer(TRP) is prevalent under GST.
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Steps For Return Filing 1
•Upload the final GSTR-1 return from either directly through data entry mode in GST common portal or by uploading the file containing the said GSTR-1
2 • Auto-draft of provisional GSTR-2 based on the supply details as reported by the suppliers
3 • Tax payer to accept/reject/modify such auto drafted provisional GSTR-2
4 • Additional purchase invoice details can be added by the purchaser in his GSTR-2 which have not been
uploaded by counter party
5 • Reconciliation of inward supplies with counter party tax payers
6 • Finalize their GSTR-1 and GSTR-2 by using online facility at common portal or using GSTN offline facility in
their accounting applications
7 •Pay the amount as shown in the draft GSTR-3 return generated automatically at the Portal post finalization of activities mentioned in Step 6 above
8 • Debit the ITC ledger and cash ledger and mention the debit entry no. in the GSTR-3 return and submit
the same
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Revision of returns
• No revision of returns
• All unreported invoices of previous tax period would be reflected in the return for the month in which they are proposed to be included. The interest, if applicable will be auto populated.
• All under-reported invoice and ITC revision will have to be corrected using credit/debit note and such credit / debit note would be reflected in the return for the month in which such adjustment is carried out
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Non filing
• Generation of defaulter list by the department and
necessary action will be taken up
• GST Common Portal can auto generate and send the notice
to all non-filers in the form of email and SMS.
• Jurisdictional tax authorities can get the same printed
and dispatch such notices
• The details of non-filers shall be made available on the
dash board of jurisdictional officers
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Short filing of return
• E-Return is allowed to be uploaded even in case of short
payment. But the return would be considered as invalid
• Invoice matching and inter-governmental fund settlement
would take place only after the full tax has been paid.
Return without full payment of tax will be allowed to be
uploaded but it will be treated as an invalid return and
this return will not be used for matching of invoices and
settlement of funds.
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Late filing of return
Registered taxable person who fails to furnish the details
of outward or inward supplies by the due date
Liable for penalty of Rs 100/- per day of default
Penalty of Rs. 100 per day of default subject to a maximum of
0.25% of Aggregate Turnover
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Think outside the box
If not now then when lets make a new beginning…….
48 Shekar & Yathish
