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Virtual Certificate Course on GST – 18.06.2017

Common Errors expected in GST and measures to avoid them

- CA Mandar Telang

Snapshot

• Compliances under existing Laws.

• Transitional Provisions.

• Getting GST Ready.

• Compliance under GST.

• Other Aspects

6/18/2017 Presented by CA Mandar Telang - Virtual Certification Course 2

Compliance under Existing Law

• Filing of Tax Returns under the Existing Laws within time.

• Tallying Tax Liability and Input Tax Credit in Accounts with the closing balance disclosed in returns –preparing reconciliation.

• Analysis of Pending CENVAT credit or VAT Credit under the existing laws.

• Avoiding instances of excess payment of tax under existing law.

• Account of Statutory Forms ( C Form, F Form, H Form etc) pending as on Transition date.


Transitional Provisions – Registration.

• Migration to New GST Registration.

• Deciding places of business in respect of which registration to be obtained.

• Deciding decision as regards registration as separate business verticals.

• Availment of benefit as Input Service Distributor.

• Ascertaining correct HSN/SAC classification for supplies to be made.


Transitional Provisions – Input Tax Credit.

Section Transition Benefit Action to be Taken Documents

140(1) –Rule 1

Closing Balance of CENVAT Credit / VAT Credit in Existing Returns to be carried forward.

1. Furnish all pendingreturns required underthe existing law.

2. Submit declaration within90 days of appointeddate.

3. Secure Pending C/H/IForms from Purchasers.

4. Compile details ofStatutory Forms receivedin respect of c/f ITC forthe period 2015-16 and2016-17.

1. Declaration in Form TRAN-1 [ Table – 5]

2. Statutory Forms

140(2) –Rule 1

Taking un-availed CENVAT / VAT Credit in respect of Capital Goods as ITC

1. Compile Details of all suchCapital goods in respect ofwhich CENVAT Creditavailment is pending.

1. Declaration in Form TRAN-1 [ Table – 6 ]

2. Copies of Invoices pertaining to Capital Goods.




140(3)/(4)/(6) –Rule 1(b)

Carried forward ofCENVAT Credit/ VATCredit in respect ofInputs/ WIP/FinishedGoods in stock as onappointed date in case ofunregistered dealers inexisting law.

[ In the absence of validduty evidencingdocument, deemed creditshall be allowed only totraders etc. and not tomanufacturers/ serviceproviders.]

1. Liquidate/ Return Old Stockwhich is older than 1 year fromappointed date

2. Compile Invoices/ duty payingdocuments in respect of Inputsin stock/ WIP or FinishedGoods which are/werepurchased within 1 year.

3. Maintain Details of Stock as on30.06.2017.

4. In case of Traders claimingdeemed credit maintainrecords identifying supply ofgoods 6 months after theappointed date and keep stockof such goods separatelyidentified.

1. Declaration in Form TRAN-1 [ Table – 7 ]

2. Copies of Invoices pertaining to such inputs.

3. Stock Register as on 30.06.2017.

4. In case of Traders not having valid documents, submit statement in Form TRAN-2 for 6 tax periods.




140(5), Rule 1 (c)

Supplies received afterappointed date, butsupplier has paid taxbefore appointed date.

1. Account for the invoices pertainingto such supplies within 30 days fromthe appointed date.

2. Details as per Rule 1(c) to becompiled.

1. Copy of suchinvoices.

140 (7) Supplies completedbefore appointed date,but credit not takenpending accounting /receipt of duty payingdocument.

1. If such documents/ invoices are tobe issued in the name of respectivefactory/plant etc. secure thedocument and account for the samebefore appointed date.

2. If document could not be obtainedbefore appointed date, Obtain thedocument in the name of ISD , andthen distribute the same to therespective units.

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140(8) Transfer of Credit in caseof CentralisedRegistration underService Tax

1. Ensure the last returnunder the existing law isfiled within 3 monthsfrom the appointed dateclaiming correct credit.

2. Decide to which Unit suchcredit is to be transferred.

1. Submit declaration inForm TRAN-1 [ Table 8]

140(9) Reversal of Service TaxCredit of Input Servicesdue to non-payment toservice providers within 3months under existinglaw

1. Make the outstandingpayment in respect ofsuch vendors within 3months from theappointed date.

2. Prepare Invoice wisedetails of Vendorsbalance o/s as on30.06.2017.

6/18/2017Presented by CA Mandar Telang - Virtual

Certification Course8



141 Inputs/ capital goods sent tojob-worker before appointeddate, but not returned as onappointed date. – No creditreversal if such goods arereturned within specifiedperiod after appointed date.

1. Maintain stock of Inputs/ capitalgoods lying in Job-worker’spremises as on 30.06.2017.

2. Ensure that such inputs/ capitalgoods are returned to place ofbusiness within 6 months of theappointed date.

1. Submission ofdeclaration in FormTRAN-1 [ Table – 9]

2. Documents issued toJob-worker at thetime of transfer ofgoods in the existinglaw.

142( 1) Goods supplied to unregisteredconsumer before appointeddate returned by such personafter appointed date -Registered Dealer to whomgoods are returned shall beentitled to take refund of taxespaid under existing law

1. Goods near expiry/ possiblereturns with registered dealersto be identified and to bereturned before appointeddate.

2. Other goods lying with un-registered dealers to beidentified and be returnedwithin 6 months from theappointed date

1. Invoice issued to returning customer before appointed date.

2. POD in respect of goods returned within 6 months.



Section Transition Benefit Action to be Taken

142 (3) / (4)/ (5)

Refund of Taxes under Old Law 1. Follow up with Authorities2. Possibility of carrying forward the

amount in electronic credit ledger afterappointed date instead of filing refundclaim under existing law be explored.

142(11) (a) / (b)

Goods supplied afterappointed date – but tax onsuch goods or services isleviable under the existing law

1. Purchase department to take care thatin respect of goods dispatched prior toappointed date but received afterappointed date NO GST is charged, ifVAT is already charged by thecustomer.

2. No GST on old service bills receivedafter appointed date.




142(11) ©

Supply is made afterappointed date – but bothVAT and Service Tax is paidon such supply – Suchpayment can be adjusted tothe extent they relate tosupply made after theappointed date

1. Where the VAT laws providefor advance payment of VATon entire supply, better totake steps so that POT underthe existing law arises beforeappointed date.

2. Declaration in TRAN -1 to befiled within 90 days.

1. Any documentindicating extent offuture supply inrespect of whichtax is paid underexisting law.

2. Submit details inTRAN -1 [ Table 11]

142(14) of SGST

Credit of Goods belonging toPrincipal lying with Agentnot older than 12 months

1. Maintain stock of goods lyingat Agent’s Premises as onappointed date.

2. Declaration in TRAN -1 to befiled within 90 days.

3. Reverse the ITC in the booksof Principal.

1. Proof of the fact that VAT credit in respect of such goods is either not availed or is reversed by the Principal.

2. Submit details in TRAN -1 [ Table 10]

6/18/2017Presented by CA Mandar Telang - Virtual

Certification Course11

Getting ready for GST.

• Making Changes in the IT System to cover the fields required to be disclosed on Invoice and required for Reporting Purpose.

• Chart of Accounts/ Creating - Updating Masters.

• GSTN-Wise Tax Modules

• Study of APIs, Syntax, Restrictions etc.

• Accounting Entries not affecting financials but required for reporting purposes.

• Preparation of GST compliant Reports.

• Purchase Return v/s Sales & Expense v/s Reverse Charge Liabilities.


Getting ready for GST - Invoices

• Documentation Required for Accounting Purpose v/s Documents required for GST purpose.


Sr. No. Document Name SeriesDescription

Purpose

1 Sales Invoice – 1 LINV B 2 B & B 2 C (IL) Taxable Supply ( incl. Free supply)

2 Sales Invoice – 2 SINV B 2 C (Others).

3 Consolidated Invoice ( B 2 C)

CINV B 2 C Taxable Supply – Value Less than Rs.200 [ to be issued at the end of every day ]

4 Purchase Return Invoice -1

PRLINV Return of Goods to Vendors [ B 2 B & B 2C (IL) ]

5 Purchase Return Invoice– 2

PRSINV Return of Goods to Vendors [ B 2 C Others ]

Getting ready for GST – Bill of Supply

Sr. No.

Document Name SeriesDescription

Purpose

6 Bill of Supply - 1 BOS B2B & B2C Exempted SupplySupply by Composition Dealers.

7 Purchase Return of Exempted Supply

PRBOS Purchase Returns - B2B & B2C ExemptedSupply

8 Debit Note DN Increase in the Value of Goods / Tax Amount

9 Credit Note CN Decrease in the Value of Goods / Tax Amount/ Rejection of Goods by Vendor

10 Bill of Supply – 2 BOS Goods Lost in Transit / Shortage ( Wherethere is no recipient) – Schedule I , Sr. No.1.


Getting Ready under GST – Other Documents

Sr. No.

Document Name SeriesDescription

Purpose

11 Receipt Voucher REC Advance Received

12 Refund Voucher REF Refund of Advance

13 RCM Invoice RCMI Supplies received attracting RCM.

14 Payment Voucher RCMP Payment in respect of supplies attracting RCM

15 Delivery Challan DC 1. Transportation of Goods not constitutingsupply.

2. Transportation of Goods for Job Work3. Cases involving supply of goods where Issue

of Invoice after delivery is permitted.

16 ISD Invoices ISD Distribution of ITC.


Getting Ready under GST – Other Documents• Reference of Original Document No. Required.

• Proof of Delivery and Proof of Dispatch.

• Invoicing in respect of Bill to Ship to Transactions.

• Issue of Invoice in One month and Cancellation thereof in subsequent month.

• Revised Invoices.

• Value Adjustments not impacting stock - Tax Invoice vs. Bill of Supply (Loss in Transit) vs. Credit Note ( Not affecting Tax Liability)


Compliances under GST

• Filing of Returns.

• Mismatch of Entries & Periodic Reconciliation.

• GSTR-1 (Vendor) vs GSTR 2 (Tax Payer)

• GSTR-2 (Purchasers) vs GSTR-1 (Tax Payer)

• GSTR-6 vs GSTR-2

• Issues

• GSTR - 1 (100) vs. GSTR – 2 [Single Entry of (110) or (100 + 10) ?]

• Error due to wrong GSTIN – Freezing of Entry (?) – Whether Modification Possible

• Timing Difference – Raising of Invoice by Vendor vs. Receipt of Goods by Tax Payer

• POS in Tax Payers State , Receiver having to Registration in Tax Payers States, CGST+SGST supply ( Whether B2 B or B 2 C?)

• Disputed Transactions ( Credit Notes ??)


Other Aspects.

• Vendor Management - Reversal of ITC with interest if payment not made within 180 Days.

• ITC in respect of Debit Note in respect of Invoices pertaining to earlier financial year after September

• Management of Digital Signature.

• Fixing of Roles & Responsibilities.

• Filing of GSTR-1 ( Sales Data)

• Filing of GSTR – 2 ( Purchase Data)

• Filing of Returns

• ISD Distribution

• Reconciliation of Mismatched Entries

• Reconciliation with Financials on periodic basis.

• Review of Blocked ITC and follow up with vendors.

• Vendors Compliance Rating


• Visit www.idtc.icai.org for technical material on GST

• Visit www.cbec.gov.in for latest updates on GST.


http://www.idtc.icai.org/

http://www.cbec.gov.in/