ARTICLE/BLOGS – GSTSEVA https://www.gstseva.com A goods and service tax news updates and blog website GST India Sun, 14 Oct 2018 13:59:13 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.8 https://www.gstseva.com/wp-content/uploads/2017/07/gst-150x150.png ARTICLE/BLOGS – GSTSEVA https://www.gstseva.com 32 32 Last Chance : Rectify your GST return errors Know How https://www.gstseva.com/last-chance-rectify-your-gst-errors-know-how Sun, 30 Sep 2018 17:12:31 +0000 https://www.gstseva.com/?p=9315

Expert Says: Knowingly and Unknowingly Many taxpayers had made mistakes while filing gst returns and this because of understanding of new law. Also pressure of filling gst return on time to save penalty is the reason of errors.

GST: Don’t miss the last chance to rectify errors of FY 2017-18

CA SANJAY JAIN
CA SANJAY JAIN

GST Law has given us a chance to rectify any errors crept in GST returns filed for the financial year 2017-18 till date of filing of September 2018 return. This article focuses on most probable errors in the returns and way to correct them.

Month of September, being tax audit season, is always an important month for many of the businessmen and also professionals from Direct taxes point of view. Now, from indirect taxes point of view too, this month is now made critical, not for annual return or audit but return for month/quarter of September is last chance to add/correct/delete/ modify any details of either outward supplies or inward supplies pertaining to previous financial year i.e. any rectifications in the details already furnished in returns of July 2017 to March 2018 may be corrected/added in the return to be filed for the month of September 2018. Details of outward supplies can be modified on or before 31.10.2018 (being due date for filing GSTR 1) and details of inward supplies on or before 20.10.2018 (being due date for filing GSTR 3B). This article focuses on most probable errors in the returns and way to correct them.

Outward Supplies:-

  1. Invoice pertaining to FY 2017-18 missed in GSTR 1 – The invoice may be added in GSTR 1 along with invoices of September 2018 in Table 4 with original date. If the tax pertaining to invoice is also not paid, the same may be added to taxable value and tax of the month of September, 2018 and pay the tax along with interest from due date of payment of tax till date of actual payment. However, the Annual return format i.e. GSTR 9 does not have a facility to add these type of missing invoices but the most suitable disclosure may be in Part V, Point 10 of Form GSTR 9.
  2. B2B Invoice details wrongly entered in GSTR 1 –Here is a case where the invoice details are entered in GSTR 1 but some fields are wrongly mentioned. Some of the situations are:-

Error in GSTIN i.e. Invoice is in name of Mr. X but GSTR 1 is filed mentioning GSTIN of Mr. Y,Error in taxable value,Error in tax rate, etc.,

These details may be modified in Table 9A, 9B, 9C of GSTR 1. The same may be disclosed in Part V, Point 10 or 11 in GSTR 9.

  1. B2C details wrongly entered in GSTR 1–There will be again 2 types of errors in B2C details.

3A. B2B invoice entered as B2C – If an B2B invoice pertaining to month of January 2018 entered as B2C in GSTR 1 of January 2018, this error can be rectified by adding the invoice details in GSTR 1 of September 2018 along with September B2B invoices and amending the B2C supplies of January 2018 using Table 10 of GSTR 1. To correct B2C details of a month,

Step 1 – Select the financial year and month (2017-18 & January, in this case)

Step 2 – Amount of B2C supplies already disclosed in January 2018 return appears

Step 3 – Reduce the B2C amount with the taxable value as per B2B invoice.

Then, B2C details of January 2018 stand corrected.

If the invoice is already declared in GSTR 3B correctly, the liability is not affected and the same needs not be disclosed anywhere in GSTR 9.

3B. B2C Intra-state supplies entered as Inter-state – If B2C supplies of an assessee from the state of Karnataka entered as B2C supplies of Andhra Pradesh i.e. Intra state entered as inter-state, the same may be rectified using Table 10 of GSTR 1. However, if the same error is also continued in GSTR 3B too, the liability may be affected since IGST is paid instead of CGST+SGST. This can be rectified by paying CGST+SGST and claiming refund of IGST. The same needs to be disclosed in Part V, Point 10 of GSTR 9.

3C. B2C Inter-State supplies wrongly entered as different state– If B2C supplies made to Andhra Pradesh was entered as B2C supplies to Telangana by a supplier registered in Odisha; the tax liability doesn’t change but the state mentioned is wrong. This also doesn’t affect the liability but the wrong details needs to be rectified for correct disclosure.

Inward Supplies:-

  1. Failed to avail ITC– Did you miss claiming ITC on any invoice pertaining to FY 2017-18. No Worries, the same can be claimed upto the month of September 2018. Include the same in GSTR 3B of September 2018 and the ITC can be availed and utilised. These details are to be declared in Point 13 of Part V of GSTR 9.
  2. GSTR 2A Vs GSTR 3B – Monthly data of GSTR 2A can be downloaded in Excel format now. Many have been ignoring the reconciliation of ITC as per GSTR 3B with details available in GSTR 2A. This reconciliation exercise should be a continuous process since it is a time consuming one but major outcomes are as under:-

Unearthing any missed credits i.e. supplies on which ITC is available but not availed will come into light when the reconciliation is done. It is important to note that the ITC pertaining to FY 2017-18 cannot be availed after the return for the month of September 2018 is filed.There may be situations where ITC has been claimed as per Invoice issued by the supplier but the supplier failed to file GSTR 1. If supplier doesn’t file GSTR 1, the invoice details doesn’t appear in GSTR 2A. This exercise helps us to follow up with the supplier and intimating/educating them to file their GSTR 1.

It is appropriate to mention here that minimum requirements for eligibility of invoice to avail ITC have been relaxed recently. The following details are minimum requirements to avail ITC.

Tax charged,Description of goods or services,Total value of supply of goods or services or both,GSTIN of the supplier andGSTIN of recipient andPlace of supply in case of inter-State supply

  1. Excess ITC claimed – There may be situations where excess ITC would have been claimed due to error. For example, instead of entering only tax amount in ITC IGST column in GSTR 3B, amount of purchases may be entered which inflates IGST ITC. The same may be rectified now by reversing the excess ITC availed by entering the amount to be reversed in Table 4(B)
    (2) of GSTR 3B for the month of September 2018 and the same may be disclosed in Part V Point 12 of GSTR 9.

The situations discussed in the article are the most common issues which are required to be addressed in this September return. Now, one may agree that September month is made crucial even from indirect taxes point of view and hence please be cautious and re visit all the returns filed, reconcile with books of accounts and GSTR 2A and claim the missed ITC and also rectify any errors that were made while filing the returns for FY 2017-18. Happy September return in the month of October.

Disclaimer: Views/ opinion of the author are personal and  for  consultancy only,  In no circumstances it replace the law. 

Author is the member of ICAI

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EWay Bills on Inter State Movement of Goods A changing dynamic of GST https://www.gstseva.com/eway-bill Mon, 22 Jan 2018 15:06:05 +0000 https://www.gstseva.com/?p=8872 E-Way Bills on Inter State Movement of Goods – A changing dynamic of GST
CA SANJAY JAIN

CA SANJAY JAIN

Recently, the Central Government has issued notification no 74/2017,dated 29.12.2017 whereby it has fixed 1st February 2018 as the applicable date for use of E-way bills in relation to Inter State movement of goods (i.e. between two states). However, Central Board of Excise & Customs vide its press release dated 16th December, 2017 has intended that for movement of goods within a state, the respective State Government shall decide the date from when E-way bills would be required for such movement and which should be latest 31.05.2018.

In this regard, it is pertinent to note that the Central Government had issued Central Goods and Service Tax (Sixth Amendment) Rules, 2017 vide notification no 27/2017 dated 30th August, 2017 through which it substituted exiting rule 138 with new rules and also inserted four more new rules 138A, 138B, 138C & 138D. This CGST Rule 138, before its substitution, was stood as follow:-

138. E-way rule

Till such time as an E-way bill system is developed and approved by the Council, the Government may, by notification, specify the documents that the person in charge of a conveyance carrying any consignment of goods shall carry while the goods are in movement or in transit storage.

As it is evident from above that the existing rule was only declaratory in nature which declared itself that the government was on task to develop an E-way Bill system. While issuing this new amendment rules, the government uses its general power as provided in section 164 of the CGST Act which inter-alia provides that:-

(1) The Government may, on the recommendations of the Council, by notification, make rules for carrying out the provisions of this Act.

(2) Without prejudice to the generality of the provisions of sub-section (1), the Government may make rules for all or any of the matters which by this Act are required to be, or may be, prescribed or in respect of which provisions are to be or may be made by rules.

With this background, the author attempts to explain the provisions in relation to e-way bill whose enforcement has recently been may be notified by government.

A. Rule 138 of Central Goods & Service Tax Rules: –

A.1. On whom it applies

These rules applies to every registered person under GST if he causes movement of goods of consignment value exceeding fifty thousand rupees in the following situation:-

(i) in relation to a supply; or

(ii) for reasons other than supply; or

(iii) due to inward supply from an unregistered person,

He is required to furnish information in PART A of Form GST EWB-01 electronically on the common portal This information need to be furnished before commencement of such movement of goods. However when goods are transported thorough:-

own / hire conveyance of supplier or recipient of consignment; or
Railway, Air or Vessel
supplier or as the case may be, recipient of consignment may furnish information in PART B of Form GST EWB-01 electronically on the common portal and generate the e-way bill. The contents of Part A & Part B of Form GST-EWB-01 are as under:-

PART-A

A.1 GSTIN of Recipient

A.2 Place of Delivery

A.3 Invoice or Challan Number

A.4 Invoice or Challan Date

A.5 Value of Goods

A.6 HSN Code

A.7 Reason for Transportation

A.8 Transport Document Number

PART-B

B. Vehicle Number

A.1.1 Movement by registered person

In cases where the registered person (i.e. supplier or recipient) furnishes information in PART A of Form GST EWB-01 electronically on the common portal and hands over the goods to a transporter for transportation by road without generating this e-way bill, then he shall also furnish the information relating to the transporter in Part B of FORM GST EWB-01 on the common portal and thereafter transporter shall generate the e-way bill from the said portal.

A.1.2 Movement by unregistered person

In cases where an unregistered person transports the goods either in his own / hire conveyance or through transporter, then either the unregistered person or the transporter may generate the e-way bill in FORM GST EWB-01 on the common portal.

The following chart may help understand these provisions in a simple way:

eway bill

A. 2. Circumstances when E-way bill is optional / not required

A supplier or a recipient may not issue / generate e way bills in the following situations:-

Sl No

Circumstances

Part A of Form GST EWB-01

Part B of Form GST EWB-01

a)

If the value of consignment is less than Rs.50,000/-

Optional / Not required

Optional / Not required

b)

If the distance between consigner’s business place and transporter’s business place is less than 10 km.

Compulsory

Optional / Not required

c)

If the distance between transporter’s business place and consignee’s business place and is less than 10 km.

Compulsory

Optional / Not required

d)

In cases of specified goods as per Annexure

Not Required

Not Required

e)

If the goods are transported through non-motorised vehicles

Not Required

Not Required

f)

If the goods are transported / moved into specified areas

Not Required

Not Required

g)

Transportation of goods from the port, airport, air cargo complex and land customs station to an inland container depot or a container freight station for clearance by Customs

Not Required

Not Required

A.3. Other procedural aspects for E-way bills

A unique e way bill number (EBN) shall be allotted to supplier, recipient and transporter upon generation of each e way bill.
A transporter may change the conveyance during transit of goods upon updation of details at common portal.
In case of multiple consignments in one conveyance by transporter, he will indicate the serial number of each e way bill in a consolidated e way bill in Form GST EWB-02 on common portal.
The supplier may use the information furnished in Part A of GST EWB-01 in filing his monthly GSTR-1 return.
In cases where goods are either not despatched / transported or not transported in accordance with the furnished details, supplier or recipient may cancel the same within 24 hours of generation of e way bill.
The information of e way bill shall be made available to registered recipient who shall accept or reject the same with 72 hours of receipt of information failing which, his acceptance shall be deemed to granted.
The e way bill generated from the portal, shall be valid in every State and Union territory.
A.4. Validity Period of E way bill

Any E way bill generated by the consigner, consignee or transporter shall be valid for the below mentioned period during which the goods have to be transported and complete its journey:-

Upto 100 Km : One Day

For every 100 km or part thereof thereafter : One additional day

However, in cases where goods cannot be transported within validity period due to circumstances of exceptional nature, transporter may generate another e way bill after updating conveyance details in Part B of Form GST EWB-01. Further, in case of certain goods, Commissioner has power to extend this validity period through notification.

A.5. Broad categories of goods exempted from E way bill requirements

Under the rule, certain goods are made exempt from the requirement of E way bill during transit due to their perishable shelf life or essential daily goods nature. Some of them are mentioned below for illustrative purpose:-

Vegetables
Fruits,
Cereals, wheat, rice, maize, salts etc.
Milk and milk products,
News Papers
Dry fruits & Nuts
Tea, Coffees
Seeds
Papad, Bread, Water,
However, the annexure to the Rule138 may be referred to for a complete list of goods which are made exempted.

B. Documents and Devises during movement of goods – Rule 138A

a) The person in charge of a conveyance shall carry:-

(i) the invoice or bill of supply or delivery challan; and

(ii) a copy of the e-way bill or the e-way bill number, either physically or mapped to a Radio Frequency Identification Device embedded on to the conveyance in prescribed manner.

b) A facility will be provided on the portal where a registered person may upload tax invoice in Form GST INV-1 and obtain an Invoice Reference Number from the common portal valid for 30 days. The information so uploaded on the portal shall be auto populated in Part A of Form GST EWB-01.

c) The Commissioner may require a class of transporters to obtain a unique Radio Frequency Identification Device and get the said device embedded on to the conveyance and map the e-way bill to the Radio Frequency Identification Device prior to the movement of goods.

d) The Commissioner has been given power to prescribe following documents instead of e way bill in exceptional circumstances as notified by him:-

(i) tax invoice or bill of supply or bill of entry; or

(ii) a delivery challan, where the goods are transported for reasons other than by way of supply.

C. 138B. Verification of documents and conveyances

The Department has been given power to intercept any conveyance to verify the e-way bill or the e-way bill number in physical form for all inter-State and intra-State movement of goods.

The Commissioner shall have power to get Radio Frequency Identification Device readers installed at places where the verification of movement of goods is required to be carried out and verification of movement of vehicles shall be done through such device readers where the e way bill has been mapped with the said device.

The Authorised officer of the department shall conduct the physical verification of conveyances either on its own or on the basis of specific information on evasion of tax,

D. 138C. Inspection and verification of goods

Wherever an inspection or verification of goods is done by the department, a summary report of every inspection of goods in transit shall be recorded online by the proper officer in Part A of FORM GST EWB-03 within twenty four hours of inspection and the final report in Part B of FORM GST EWB-03 shall be recorded within three days of such inspection. This helps reduce the undue harassment & loss of time during transit.
Except in case of specific information, repetitive inspection, physical verification of conveyance or goods is not permitted during transit in the State.

E. 138D. Facility for uploading information regarding detention of vehicle.

This is a welcome provision whereby it is made mandatory that where a vehicle has been intercepted and detained for a period exceeding thirty minutes, the transporter may upload the said information in FORM GST EWB-04 on the common portal. FORM GST EWB-01.

Conclusion

With the commencement of these rules pertaining to E way bill w.e.f. 1st February, 2018 on inter-state movement of goods, the government has brought much needed uniform procedures across the States and Union territories in true sense of One Nation. This will help check the movement of goods for bonafide purposes during transit as well as increase the compliances by tax payers under GST.

Note: This article is authored to create awareness among all stakeholder and does not represent any opinion, advise by the author.

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Exemption from E-Way bill, when e waybill not require https://www.gstseva.com/exemption-e-way-bill-e-waybill-not-require Thu, 04 Jan 2018 08:33:23 +0000 https://www.gstseva.com/?p=8638 Updated On January 11th, 2018

Exemptions from non-generation of E-way bill

Exemption from E-Way bill, when e waybill not require

Eway is mandatory under GST and it is require to be furnish prior to the commencement of movement of goods. 

E-way bills mandate by Rule 138 of E-Way Bill rules under GST.

There are broadly two types of Exemptions available for non generation of E-way bill:-

  1. FULL EXEMPTION
  2. PART EXEMPTION

 

READ BELOW IN DETAIL

*FULL EXEMPTION MEANS NO NEED TO GENERATE EWAY BILL AND PART EXEMPTION MEANS EXEMPTION FROM FILLING PART B (ie. part B of Form E-way Bill GST EWB 01) ONLY.

 

KNOW MORE ABOUT EWAY BILL

 

A video interview by GSTSEVA on eway BILL

GENERATE E WAYBILL ONLINE

generate eway bill online

click here to generate eway bill. e waybill login

PART EXEMPTION i.e Exemption from filling Part B of GST EWB 01

PART EXEMPTION i.e Exemption from filling Part B of GST EWB 01

  • Where the goods are transported by consignor for further transportation:- 

Provided also that where the goods are transported for a distance of less than ten kilometres within the State or Union territory from the place of business of the consignor to the place of business of the transporter for further transportation, the supplier or the transporter may not furnish the details of conveyance in Part B of FORM GST EWB-01

CONDITIONS:

  1. Total distance for transport upto 10 Kms and
  2.  Transport Within a State or Union Territory
  3.  Transport by consignor to transporter

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FULL EXEMPTION FROM GENERATION OF E WAY BILL

In the following cases There is no need  to generate E-way bill:-

  • BASED ON INVOICE VALUE:- If the invoice value is not more than Rs. 50,000/- or say Upto Rs. 50,000/- there is no need to generate E-way Bill

 

  • SPECIFIC EXEMPTION BY RULE 138(14) OF GST E-WAY BILL RULES:-
  1. Specified nature of goods transported – The goods mentioned in Annexure of Rule 138(14) can broadly classify the products of following types:      DOWNLOAD THE COMPLETE LIST OF GOODS EXEMPTED FROM E WAY BILL HERE
    • Live Stock
    • Meat
    • Household
    • Daily needs
    • Milk/Vegetables/fruits etc
    • Currency

                                                              DOWNLOAD THE COMPLETE LIST OF GOODS EXEMPTED FROM E WAY BILL HERE

        2.  When the goods are transported by NON-MOTORISED conveyance there is no need to generate eway bill

 

3. where the goods are being transported from the port, airport, aircargo complex and land customs station to                an inland container depot or a container freight station for clearance by Customs; 




4. State Specific Area -in respect of movement of goods within such areas as are notified under clause (d) of sub-rule (14) of rule 138 of the Goods and Services Tax Rules of the concerned State

 

DOWNLOAD THE COMPLETE LIST OF GOODS EXEMPTED FROM E WAY BILL HERE 

 

Exemption from E-Way bill, when e waybill not require

 

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GST Registration online https://www.gstseva.com/gst-registration-online Mon, 25 Sep 2017 05:02:18 +0000 https://www.gstseva.com/?p=8052 Updated On October 22nd, 2017

GST Registration online

GST i.e Goods and Service tax is an indirect tax and its applicable to whole India. And supplier of goods and services are liable to register under GST.  Know more about GST

Some Questions Related to gst registration comes in every businessmen’s mind, here we will try to answer:-

Why my business need registration? 

When my Business need registration? 

Type of registration

Single vs Multiple registration

Fees for registration

Online or Offline?

Documents require

Consequences for not registering 

Here the answer of All common queries: gst registration

Why my business need registration?

Any person who makes a taxable supply with an aggregate turnover of over Rs.20 lacs in a financial year, is required to obtain GST registration. In special category states i.e Northern Eastern States and , the aggregate turnover criteria is set at Rs.10 lacs.

 

Aggregate turnover requirement for GST registration is as below:

Region Aggregate Turnover
Liability to Register under gst
North East India Rs 9 Lakhs
Rest of India Rs 19 Lakhs

Supply Means : Definition of ‘supply’ Under section 2(92) read with section 3 ‘supply’ includes all forms of supply of goods and/or services such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. Schedule I specified the supply.

THE TURNOVER LIMIT MENTIONED ABOVE NOT APPLICABLE TO FOLLOWING TRANSACTIONS?

  • Every person who is registered under the Pre-GST law (i.e., Excise, VAT, Service Tax etc.)  needs to register under GST.
  • When a business which is registered has been transferred to someone, the transferee shall take registration with effect from the date of transfer.
  • Anyone who drives inter-state supply of goods
  • Casual taxable person
  • Non-Resident taxable person
  • Agents of a supplier
  • Those paying tax under the reverse charge mechanism
  • Input service distributor
  • E-commerce operator or aggregator
  • Person who supplies via e-commerce aggregator
  • Person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person

When my Business need registration?

I.e Time frame or time limit to obtain GST registration online-

Person liable to take registration under this act shall be liable to take registration within thirty days from the date on which he becomes liable to registration.

Type of registration i.e types of gst registration  a business may require 

  • NORMAL REGISTRATION OR SAY REGULAR GST REGISTRATION

    • Every registration which are not availing benefit of  any composition scheme and are not a casual/temporary registration
    • It is a Normal or say regular registration.

 

  • COMPOSITION 

Small businesses having annual turnover less than Rs. 75 lakhs can opt for Composition scheme.

Composition dealers will pay nominal tax rates based on the type of business:

Type of Business  RATE OF TAX
CGST AND SGST IGST
Manufacturer 1% CGST

1% SGST

2% IGST
Trader 0.5% CGST

0.5% SGST

1% IGST
Supplier of food or drink for human consumption, other than alcohol 2.5% CGST

2.5% SGST

5 % IGST
  • Composition dealers are required to file only one quarterly return
  • They cannot issue taxable invoices
  • Cannot collect tax from customers
  • Businesses that have opted for Composition Scheme cannot claim any input tax credit.

Composition scheme is not applicable to :

  1. Service providers
  2. Inter-state sellers
  3. E-commerce sellers
  4. Supplyier of non-taxable goods
  5. Manufacturer of Notified Goods

 

  • CASUAL GST REGISTRATION

As per the law, a ‘Casual Taxable Person’ is a person who occasionally undertakes transactions involving supply of goods or services, or both, in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business.

TURNOVER EXEMPTION LIMIT NOT AVAILABLE TO CASUAL TAXABLE PERSON

Single vs Multiple registration

Should I require multiple gst registration for each place of business?- YES

Can I Apply of Centralized gst registration- NO, centralized registration is not possible

IMPORTANT POINTS

SINGLE -If the business have the same nature i.e same line of  business IN A SAME STATE they need single registration

MULTIPLE–  If business is in more than one state also if business have separate vertical they cannot opt single registration.

 

Fees for registration

There is no fees of registration under GST

GST Registration Online or Offline?

There is only online process for registration.  CLICK HERE FOR GST ONLINE REGISTRATION

You can register as :-

TAXPAYER

GST PRACTITIONER

Documents require 

  1. PAN CARD
  2. MOBILE NUMBER
  3. EMAIL ID
  4. PRESCRIBED DOCUMENTS FOR REGISTRATION CLICK HERE TO KNOW
  5. PROOF OF BUSINESS
  6. PLACE OF BUSINESS
  7. VALID BANK ACCOUNT NUMBER
  8. IFSC CODE OF BANK
  9. AUTHORIZED PERSON SIGNATORY DETAILS

Consequences for not registering 

An offender not paying tax or making short payments (genuine errors) has to pay a penalty of 10% of the tax amount due subject to a minimum of Rs.10,000.

The penalty will at 100% of the tax amount due when the offender has deliberately evaded paying taxes

 

READ MORE GST AND ENROLLMENT QUESTIONS

 

Gst registration online

Image is only for imaginary purpose

This article to assist gst registration online

 

 

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GTA Goods Transport Agency https://www.gstseva.com/gta-goods-transport-agency https://www.gstseva.com/gta-goods-transport-agency#comments Wed, 13 Sep 2017 16:31:29 +0000 https://www.gstseva.com/?p=7837 Updated On September 26th, 2017

GTA Goods Transport Agency

GTA Goods Transport Agency

Image Source www.marketresearchreports.com

GTA – AT A GLANCE

INTRODUCTION :-   Goods Transport Agency has not been defined in GST Act . However , notifications related to provisions regarding GTA services have been issued by Central Tax 2017 on various dates. An attempt has been made to compile these notifications in one place & simplify the provisions   of GTA services in GST regime.

1. GTA ( GOODS TRANSPORT AGENCY ) GTA ( Goods Transport Agency ) means any person who provides services in relation to transportation of goods by ROAD and issues CONSIGNMENT NOTE. ( Notification No. 11/2017 of Central Tax ( Rate ) dt 28 June 2017. ).

2.  CONSIGNMENT NOTE :-  The consignment note is a serially numbered document ,issued by a good transport agency ( GTA) against receipt of goods for transportation . It contains following details

(a)  Name of consignor & consignee

(b)  Registration No. of the goods carriage (vehicle) in which the goods are transported

(c)  Details of goods

(d)  Place of origin & destination

(e)  Person liable for paying GST ( Consignor , consignee or the GTA)

3.    LIABILITY TO PAY GST

,The Recipient of services is required to pay GST under Reverse Charge Mechanism (Notification No. 13/2017 dt 28 June 2017 is relevant ) for  services provided by GTA to following category of  person :-

(a) Factory  registered under the Factories Act 1948.

(b) A Society  registered under the Societies Registration Act 1860 or under any other law.

(c) A Co operative society established under any other law.

(d) A Body Corporate  by or established under any law

(e) A partnership firm (Registered or Unregistered )

(f) Casual taxable person payer

(g) A person registered under GST

Note :-  GTA is liable to pay GST for services provided to an individual or unregistered person only .For all 7 categories stated in Para 3 above , liability to pay GST is lies with the recipient of transportation of goods & services  .

4.    RECEPIENT OF SERVICES

(a)    The person who pays or is liable to pay freight for transportation of goods by road will be treated as the recipient of service        .( Central Tax Notification 13/2017 is relevant ).

(b)     Supplier ( consignor ) of the goods will be treated as recipient of services if he is liable to pay freight..If Supplier belongs to the category of persons stated in Para 3 above , then he will pay GST on Reverse Charge Basis.

(c )    Receiver r ( consignee ) of the goods  will be treated as recipient of services if he is liable to pay freight . If Receiver  belongs to the category of persons stated in Para 3 above , then he will pay GST on Reverse Charge Basis.

5. LIABILITY TO PAY FREIGHT

(a)     Consigner ( sender of the goods ) is liable to pay freight  for goods transported on CIF basis ( CIF is a trade term that mean the seller must pay the cost needed  ( cost of Insurance+ Freight) to transport goods to a destination ).

(b)      Consignee ( Receiver of the goods ) is liable to pay freight transported on FOB basis .It means buyer pays the cost of Freight , Insurance , Uploading and Transportation from the sender place to the final destination .

6.   GTA’S LIABILITY TO REGISTRED UNDER GST

(a)   A GTA does not  have to register under GST if he is exclusively transporting goods to the person as indicated at Para 3 above. (Notification no. 13/2017 is relevant ) even if the aggregate turnover exceeds 20 lakh threshold limit .

(b) As per Notification 05/2017 –Central Tax dated 19/06/2017 , a person is exempted from registration in GST if he is exclusively engaged in making supplies of taxable goods/services where the total tax  is liable to be paid  by the recipient on RCM basis. .

(c)   However , if GTA is also providing services to unregistered dealer in addition to the person  specified vide notification 13/2017 , he is liable to register if his aggregate turnover exceeds Rs. 20 lakh ( even if aggregate turnover consists of only Rs 2 Lakh from unregistered and balance ie Rs. 19 Lakhs from Notified person )

7.  DETERMINATION OF TAX FOT GTA SERVICES

(a)     Intra State :- If location of supplier & place of supply  are in same States , the services provided will be considered as Intra sales and CGST + SGST will  be levied.

(b)     Inter State   – If location of supplier and place of supply are  in different States , services will be considered as Inter State and IGST will be levied.

8.  PLACE OF SUPPLY (POS)

(a)      GTA provides services to  a registered Person –POS will be the location of such registered person .

(b).     GTA provides services to unregistered person – POS will be the location at which  goods are handed over for  transportation

(c )   Indicative Examples:-

POS AND GST LIABILTY ASSUMING  GTA IS MUMBAI BASED

Sl Situation Status of consigner RCM Applicable ( Yes/No) Delivery Terms ( CIF/FOB) Freight payment by Movement of goods . From …To Consignee’s Location Consignor’s location Place of Supply is  Service recipient location , who will pay the freight Nature of Supply Tax Liability GST to be paid by Remarks / Reference
1 2 3 4 5 6 7 8 9 10 11 12 13 14
(a) Mr. Arun , an unregistered dealer  in Mumbai ,hires GTA to deliver goods to Bangalore Unregistered No CIF Mr. Arun    (consignor) Mumbai to Bangalore Bangalore Mumbai Mumbai Intra State CGST & IGST GTA
(b) Ms. Anita is a registered professional in Mumbai   , hires a GTA to deliver goods to Bangalore Registered Yes CIF Ms. Anita          (consignor) Mumbai to Bangalore Bangalore Mumbai Mumbai Intra state CGST & IGST Ms. Anita Recepient under RCM
© M/S MDL hires a GTA in Mumbai to deliver goods to  BEL Bangalore Registered Yes FOB BEL Bangalore ( Consignee) Mumbai to Bangalore Bangalore Mumbai Bangalore Inter state IGST BEL Bangalore (Recepient under RCM )

 

 

10.    GST RATES & ITC AVALIABLE :-

(a)   Tax rate 5 %   –      GTA services to notified person under specified category indicated at Para 3 above . Tax will be paid by service receivable  . ITC available. for recipient

(b)   GTA can  opt 5 % GST without availing or 12% GST ITC available . However , he has to exercise the option  at the beginning of the financial year .

(c )  Notification No. 11/2017 Central Tax ( Rate ) dt 8 .06. 2017  & council 20th meeting on 20th Aug 2017 mentions that non availability of ITC by opting 5 % GST is only on Goods & services used in supplying the GTA services .

This restriction is not applied to the person paying tax under Reverse Charge Mechanism . So GST paid on GTA under RCM can ve availed as ITC by the person paying tax.

11.  EXEMPTIONS

GST will not applied on  transport of following  goods by GTA :-

(a)  Agriculture produce

(b)  Milk,Salt, food grain , pulses & Rice

(c)  Organic manure

(d)  Newspaper or magazines reistered with Registrar of newspaper

(e)  Relief material meant for victims of natural or man made disasters

(f) Defence or Millitary equipment

(g) Goods where consideration charges for single carriage is less than Rs.1500/-

(h) Goods where consideration for all the goods for single consignee is less than Rs 750/-

12. GST RETURNS  BY GTA

Registered GTA is required to file 3 monthly Returns – GSTR1, GSTR2 and GSTR 3 .

CONCLUSION :- An attempt has been made to bring out all applicable facets of GST in respect of GTA in easy to understand manner and at a glance . The governing notifications and liabilities of payment of GST by GTA or by the recipient of Services under various condition of Supply.

 

THIS article is for

GTA Goods Transport Agency

       

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STEP BY STEP GUIDELINES FOR FILING GST RETURN TRAN-1 https://www.gstseva.com/gst-trans-1 Fri, 01 Sep 2017 08:21:15 +0000 https://www.gstseva.com/?p=7743 gst tran 1

STEP BY STEP GUIDELINES FOR FILING GST RETURN TRAN-1

 

INTRODUCTION :-

A major concern for businessmen registered under GST is to avail Tax Benefit & Input Credit of Old Regime . In order to avail such benefit , a registered person is required to file TRAN – 1 Within 90 days ( 28th Sep 2017 )of the appointed day ,that is 01 July 2017.

Those who desirous of availing  such credits for tax payment for the month of f July 2017, need to furnish TRAN -1 before filing Form 3B . For such person , date of furnishing TRAN 1 is 28th Aug 2017.

 

Step by step guidelines for filing of TRAN 1 according to dashboard of GSTN Portal will be certainly  useful for businessmen and other registered person filing this return.

An attempt has been made to present it in easy to understand and self explanatory fashion.

TRAN 1 – TRANSITIONAL ITC / STOCK STATEMENT
TABLE 1..GSTN TABLE 2.  LEGAL NAME TABLE 3. TRADE NAME
(Coloum 1 , 2 & 3 of TRAN 1 will be auto populated on login in GST Portal)
TABLE 4 – .   Whether all the returns required under existing law for the period  of six months immediately preceding the appointed day have been furnished Yes/NO
( A registered person is not eligible for claiming  transitional credit unless the answer for Table 4 above is YES – Sec 140(1)(ii)  of GST Act 2017)
First page of GST Portal indicates the summary content of Table  5 to Table 12 of this Return .Click on each table , which will open the page where all  required details need to be entered.:-
TABLE 5 TABLE 6 TABLE 7
  5(a) ,5(b),5 (c )                                                Amount of tax credit carried forward 6(a) , 6 (b)                   Details of capital goods for which unavailed credit has not been carried forward 7(a), 7(b),7(c ) , 7(d)              Details of the inputs held in stock
TABLE 8 TABLE 9 TABLE 10
(8)                                 Details of transfer of CENVAT Credit for registered person having centralised registration 9(a) , 9(b)                    Details of goods sent to job worker and held in his stock on behalf of principal under Sec 141 10 (a) 10(b)                          Details of goods held in stock as agent on behalf of the principal under           Sec 142
TABLE 11 TABLE 12
(11)                                      Details of credit availed in terms of                            Sec 142 (11) (c ) (12)                                       Details of goods sent on approval basis six months prior to the appointed day . Sec 142(12)
The explanatory notes and actions to be taken for each table are enumerated in suceeding paragraphs. The explanatory notes are given as footnote under each table
TABLE 5 –   TAX CREDIT FORWARD IN RETURN FILED UNDER EXISTING  LAW . (Existing law means law which were prevailing in pre GST regime  implementation and subsumed in  GST ie. Service Tax , VAT etc)      .               
TABLE 5 (a) – The details  need to be entered  in following coloums :-
Coloum  1           Registration No. under existing law    ( Central Exice & Service Tax) Coloum 2                              Tax period to which the last return filed under the existing law pertains Coloum 3                            Date of filing of the return specified in coloum 2
Select from drop down window –
Jan-17 Feb-17 Mar-17 DD/MM/YY
Apr-17 May-17 Jun-17
Coloum 4                             Balance CENVAT credit carried forward in the said last return Coloum 5                           CENVAT Credit admissible as ITC of central tax in accordance with transitional provisions
Admissibility as per Sec 140(1) & 140(4)(a) of GST Act 2017 ( See footnote (i) & (ii)
Note (i)  Section 140(1) of GST Act states that  Registered taxable person shall  be  eligible to take credit of CENVAT CREDIT /VT -ITC carried forward in the return , furnished for the period , immediately preceding the appointed day ( 01 Jul 2017) subject to following conditions :-
                 (i)    The said amount is admissible as ITC under this Act
(ii)    The registered person has furnished the returns required under existing law ( pre GST law ie service Tax , VAT etc) for the period of six months immediately preceding the appointed date (01 July 2017)
(iii)     The said amount of credit does not relate to goods sold as exempted goods under relevant Government Notification in prevailing law at that point of time
  Note (ii)  Section 140(4)(a) states that any registered person who was engaged in supply of goods and services which were exempted  ,in previous tax regime and such exempted goods & services have become taxable under GST Act  , is eligible to take CENVAT creditt . The said  credit can be claimed to the extent of amount carried forward in returns furnished under pre GST Law (ie Service Tax , VAT etc.)
TABLE  5 (b)  DETAILS OF STATUTORY FORMS (‘C’ FORM ,’F’ FORM , ‘H/I’ FORM  RECEIVED FOR WHICH CREDIT IS BEING CARRIED FORWARD:-.
Details in Table 5(b) need to be  entered in following coloums :-
 Coloum 1 – Form Type  Coloum 2 – TIN of Issuer Coloum 3 – Name of Issuer
Select  from drop down window  – Form C          Form  D or Form H/I
Coloum 4 – Sr. No. of Form Coloum 5 –   Amount    Applicable VAT Rate
TABLE  5(c ) AMOUNT OF TAX CREDIT CARRIED FORWARD AS STATE/UT TAX
Details in Table 5(c) need to be  entered in following coloums :-
   Coloum 1                       Reg. No. in existing law        VAT NO..etc Coloum 2                            Balance of ITC of VAT and (Entry Tax) in last return Coloum  3                            Turnover for which C Forms are  pending
Coloum 4                            Difference tax payable on C Forms pending Coloum 5                             Turnover for which F Forms are pending Coloum 6                            Difference tax payable on  F Forms pending
See  foot note (i) below
Coloum 7                               ITC reversal relatable to Form C & Form F Coloum 8                  Turnover for which Form H/I Forms are pending Coloum 9                Difference tax payable on H/I Forms pending
Coloum 10                           Transition ITC                        Net Eligible ITC)
Coloum  2 -((4+6) – (7+9)) See  footnote (ii)
 Footnote (i) – In pre GST regime , Form C,, F & H/I  were to be issued for concessional tax rate on interstate supply , stock transfer &  Import-export respectively . In case of non avaliability of these concessional forms in respect of business transaction , difference between normal tax rate and concessional tax rate is required to be paid by registered person. This  amount need to be entered in Coloum 4 ,6 & 9 respectively of table 5 c.
Footnote (ii)  –  Coloum 2 indicates CENVAT credit carried forward from pre GST returns , during that period tax person should have availied credit against  Form C, F,& H/I as the case may be ,and still these Forms are not received from buyer  . Credit allowed for these form need to be reversed by indicating ITC reversible amount in coloum 7 . Further , difference between normal tax rate and concessional tax is required to be paid and entered in coloum 4,6,&9.above .Net eligible ITC amount is arrived by  coloum 2- (4+6+9-7) and will be entered in Coloum 10.
TABLE  6 – DETAILS OF CAPITAL GOODS FOR WHICH UNAVAILED CREDIT HAS NOT BEEN CARRIED FORWARD UNDER EXISTING LAW UNDER SECTION  140(2) ,
Sec 140 (2) states that a registered person shall be entitled to take credit on capital goods which was not carried forward in return filed under ealier law or Act..The only condition is that transfered ITC is  eligible as credit both under earlier law as well as under GST.
Unavailed Central tax CENVAT credit in respect of Capital goods .Details required to be entered  in Table 6 (a) under following coloums :-
Coloum 1                               Invoice /Document No. Coloum 2                               Invoice /Document date. Coloum 3                               Supplier’s Registration No. .
Coloum 4                           Recepient’s Registration No. . Coloum  5                               value of capital goods on which credit has been partially availed Coloum  6                               Duties and Taxes paid on Invoice value at coloum 5
ED/CVD
Coloum 7                               Duties and Taxes paid on Invoice value at coloum 5 Coloum  8                              Total eligible credit under existing law. Coloum 9                              Total CENVAT Credit availed under existing law
SAD
Special Additional Duty)
Coloum 10                               Total CENVAT Credit unavailed under existing law ( admissible as ITC of Central Tax ( coloum 8-9)
TABLE 6(b) UNAVAILED STATE TAX  CENVAT IN RESPECT OF CAPITAL GOODS  .Details required to be entered in Table 6 (b) under  following coloums :-
Coloum 1                               Invoice /Document No. Coloum 2                               Invoice /Document date. Coloum 3                               Supplier’s Registration No.under existing law .
Coloum 4                           Recepient’s Registration No. .under existing law Coloum  5                              Invoice Value of capital goods on which credit is not availed. Coloum  6                               Duties and Taxes paid on Invoice value at coloum 5
VAT & (Entry Tax)
Coloum  7                              Total eligible credit under existing law. Coloum 8                              Total VAT & Entry Tax  Credit availed under existing law Coloum 9                               Total VAT & Entry Tax  Credit unavailed under existing law ( admissible as ITC of State Tax ( coloum 7-8)
       VAT  & Entry Tax
TABLE 7 – DETAILS OF INPUT HELD IN STOCK IN TERMS OF SEC  140(3) , 140(4)(b) and 140(6).
TABLE 7(a) AMOUNT OF DUTIES AND TAXES ON INPUT CLAIMED AS CREDIT . Details requied to be entered under fillowings coloums:-
Coloum 1                               HSN ( at 6 digit level) of input held in stock Coloum 2                               Unit of measurement Coloum 3                               Qty
Coloum 4                           Value. Of input held in stock Coloum  5                              Eligible duties paid on such inputs Coloum  6                               Duty paid invoices are avaliable
Yes / NO
Coloum  7                              Types of goods Coloum 8                              Details of inputs  where duty paid invoices are avaliable Coloum 9                              Details of inputs  where duty paid invoices are not avaliable
Input
Semi finished
finished goods
Note : If duty paid invoices are not avaliable with the registered person ( other than manufacturer or service provider ) , he can claim credit in terms of Rule 117(4).
TABLE 7 (b) – AMOUNT OF ELIGIBLE DUTIES AND TAXES /VAT/ET IN RESPECT OF INPUTS OR INPUT SERVICES UNDER SEC 140(5)
Sec 140(5) applies where inputs/input services received on or after the appointed day whereas the applicable duty/tax paid by the supplier under the earlier law . CENVET credit in respect of such inputs shall be eligible subject to condition that invoice or duty paying documents has been recorded in the books of account within thirty days from the appointed day.
Details in TABLe 7b are required to be filled in following coloums :-
Coloum 1                               Name of Suppier Coloum 2                               Regd No. of supplier Coloum 3                               Invoice No.& Date
Coloum 4                           Description Coloum  5                              Quantity Coloum  6                               UQC
Coloum 7                               Value Coloum  8                              Eligible duties & taxes Coloum 9                              VAT(ET)
Coloum 10                               Date on which entered in recepients books of account
TABLE 7 (c ) – AMOUNT OF VAT AND ENTRY TAX PAID ON INPUTS SUPPORTED BY INVOICES /DOCUMENTS EVIDENCING PAYMENT OF TAX UNDER SEC 140(3) , 140(4)(B) AND 140(6) .
Section 140(3) states that any registered person who was engaged in manufacturing of exempted goods or provision of services &  work contracts and said goods and services which have become taxable under GST  Act ,is  eligible to claim ITC in respect of  tax paid amount included in value of raw material stock ,work In Progress or final products as on the date immediately preceding the appointed date( As on 30th June 2017).

Section 140(4)(b) states that any registered person who was engaged in manufacturing of exempted goods or provision of services &  work contracts and said goods and services which have become taxable under GST  Act ,is  eligible to claim ITC in respect of tax paid amount included in value of stock in  semi finished or finished goods  as on the date immediately preceding the appointed date. (30 June 2017)

Section 140(6) states that any registered person who was paying tax in the capacity of composite tax payer at a fix rates and become  regular registered person  ,is  eligible to claim ITC in respect of tax paid  amount included in  in stock , WIP or in final products   as on the  appointed date. (30 June 2017)
Details of such payments required to be filled in following coloums :-
Coloum 1                               Description of inputs in stock Coloum 2                               Unit Coloum 3                               Quantity
Coloum 4                           Value Coloum  5                              VAT ( ET) Paid Coloum  6                               Types of goods
Inputs
Semi finished
Finished
Coloum 7                               Totla input tax claimed under earlier year Coloum  8                              Total input tax credit related to exempted sales not claimed under earlier law Coloum 9                              Total Input Tax credit admissible as SGST/UTGST
TABLE 7(d)  – STOCK OF GOODS NOT SUPPORTED BY INVOICES /DOCUMENTS EVIDENCING PAYMENT OF TAX  .
Details of input in stock are required to be provided in following coloums:
Coloum 1                         Number

Coloum  2                              Description of inputs in stock

Coloum  3                               Unit of measurement

Coloum 4                          Qty of input Coloum  5                              Value of input in stock Coloum 6                            Tax Paid
CONCLUSION :-   In conclusion , the approach adopted above is to put in place the procedure to be followed , the governing sections and the methology to be adopted to avail Transitional credit  while magrating prevailing Tax regime to GST regime . Care has been taken to avoid complicated terminologies and legalis , so that the reader of this article understand the concept easily.

gst trans 1

ANITA BHADRA

ANITA BHADRA (AUTHOR)

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What is high-seas sale, Is High-seas Sale taxable under IGST? https://www.gstseva.com/what-is-high-seas-sale-is-high-seas-sale-taxable-under-igst https://www.gstseva.com/what-is-high-seas-sale-is-high-seas-sale-taxable-under-igst#comments Mon, 14 Aug 2017 14:55:08 +0000 http://www.gstseva.com/?p=7596 Updated On September 23rd, 2018

What is high Seas Sale?

High Seas Sale is supply under GST, now the question

What is high-seas sale, Is High-seas Sale taxable under IGST?

“Sales in the course of Import”

In simple world sale taking place(i.e supply of goods, through change in title) before the goods physically reached to custom port of the Importing country/ or say before custom clearance.

Example:  MR. A from India buy Goods from a dealer outside India, and after purchasing Mr. A transferred the Goods the Buyer Mr. X, by changing tittle in documents and before the goods physically reaching the custom port of India or say Indian Territory. What is high-seas sale, Is High-seas Sale taxable under IGST

IS high Sea Sale Exempt from tax or taxable i.e IGST ?

Now before concluding this we need to discuss the two scenario here:-

Take the above  said  example for Buyer X , reproducing here

(Example:  MR. A from India buy Goods from a dealer outside India, and after purchasing Mr. A transferred the Goods the Buyer Mr. X, by changing tittle in documents and before the goods physically reaching the custom port of India or say Indian Territory. )

  1. Mr X, buyer is Located in India.
  2. Mr X, buyer located outside India.

Now as per basic understanding we can presume following

Case 1 (Buyer and high sales supplier both in India)

i.e Mr. X and Mr. A both located In India- Here we can easily say YES IT should liable to  IGST tax, 

               but question here is Who is liable to pay IGST I.E  Mr. A  or Mr. X or both

This is clear case of import and as per IGST ACT,  The IGST on imported goods shall be levied.

Either X is liable to Pay

Or Is A is liable to Pay

Or Both are liable to Pay.

We will conclude it later.

Case 2 (When buyer outside India and high seas supplier in India)

i.e  Mr. X located Outside India and Mr. A in India- Here some of us will say NO, it should not liable to IGST  because goods not Physically not reached to India.

Also some of us may say YES, it should be taxable in India, because seller of goods i.e Mr. A in our example, trader of India.

Clause (2) of section 7 of IGST ACT-  Supply of goods imported into the territory of India, till they cross the customs frontiers of India, shall be treated to be a supply of goods in the course of inter-State trade or commerce.

Assuming the above it is clearly define  that it should be taxable. But again it is debatable -i.e has India has right to collect tax on this high-seas transaction (case 2)

 

 

Before to conclude any thing form above two cases  here are the relevant provisions under GST Act-  FIND IGST ACT HERE

Relevant  GST provisions under the Act related to Import

Section 2 (10) of IGST ACT – Meaning of Import of Goods under under GST Act

‘‘import of goods” with its grammatical variations and cognate expressions, means bringing goods into India from a place outside India.

Will IGST levy on Imported goods and if yes on which Value?

As per the proviso of section 5 of IGST Act, 2017-   The IGST on Imported goods shall be levied  and  collected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975 on-

the value as determined under the said Act at the point when duties of customs are levied on the said goods under section 12 of the Customs Act, 1962.

 

Are supply of goods imported into-India before they cross the custom frontiers of India is liable for Inter-state transaction?

Yes, Refer- 

Clause (2) of section 7 of IGST ACT-  Supply of goods imported into the territory of India, till they cross the customs frontiers of India, shall be treated to be a supply of goods in the course of inter-State trade or commerce

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How to amend or modify GST registration https://www.gstseva.com/how-to-amend-or-modify-gst-registration Wed, 02 Aug 2017 15:17:48 +0000 http://www.gstseva.com/?p=7590 Updated On August 6th, 2017

How to amend or modify GST registration, here is the article submitted by one of our user:-

 

GST registration is mandatory for the existing tax payers. There may be chances that one has entered wrong or incomplete information on the GST portal. There is no need for visiting any government office for changing the particulars in the GST as it can be easily done on the internet. If one wants changes in the GST registration certificate then one can do it online subject to approval in some cases.

Changes in the particulars are provided by Rule 12 and Form GST REG 14. There can be three types of changes in the GST registration certificate which are as follows :

  • Core field change

When it the change is related to the following:

  • legal name of the business or
  • address of the principle place of business or
  • any additional place of business,

Then the applicant has to require approval from proper officer. He shall approve the change within 15 days.

  • No core field

These are the field which are not that important then the applicant does not require any approval and can be amended online.

  • Email or Mobile no. Change

For changing the mobile and email no approval is required but it has to be verified by OTP (One Time Password).  It can be amended only after online verification on the GST portal.

When there is requirement of change in the details given in the GST Registration then the registered tax payer shall submit the application for change within 15 days along with the required documents on GST portal. When the changes stated in from GST REG 14 have been approved, then the registration certificate in form GST REG 06 will be amended.  Although when there is change in the PAN due to conversion of Proprietorship into private limited company, then it will not be regarded as amendment but requires a fresh GST registration.

Procedure For Amendment in GST- How to amend or modify gst registration

  1. Within 15 days of change registered tax payer will submit an application for change duly signed in the form GST REG 14 electronically.
  2. When the change relates to following:
  • legal name of business;
  • address of the principal place of business or any additional place of business; or
  • addition, deletion or retirement of partners or directors, Karta, Managing Committee, Board of Trustees, Chief Executive Officer or equivalent, responsible for day to day affairs of the business, which does not warrant cancellation of registration,

The proper officer should within 15 working days approve the amendment as per the From GST REG 14 after due verification and issue an order in the Form GST REG 14. The amendment will take effect from the date of event occurrence wanting amendment.

  1. If the change is related to any other field than specified above then the registration certificate will be deemed to be amended when application is submitted. Although if there is change is in the mobile no or email address then it can be done by online verification on the GST portal. When there is change in the business’s constitution then it results in change of PAN then the taxpayer has to apply for fresh registration in the Form GST REG 01.
  2. When Proper officer thinks that change applied for is not needed or the documents are incomplete or incorrect then The Proper officer if finds that the documents submitted in the Form GST REG 14 are not proper then he will serve notice in the Form GST REG 03 to show cause why application should not be rejected within 7 days. Then applicant should furnish reply to the show cause notice in the form GST REG 04 within 7 days from receiving the notice. The proper office can reject the application if the reply is not satisfactory and can pass an order in the form GST REG 05.

Although when the proper office fails to take any action within 15 days from the application or 7 days from receipt of reply then the changes will be deemed to be approved. (Also the approval of Proper Officer is required only in the core field only and he cannot reject application without opportunity of being heard to the applicant).

How to amend or modify gst registration- Amendment In gst registration are the views of the author.

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Get Ready for Transport E-way Bill https://www.gstseva.com/get-ready-for-transport-e-way-bill https://www.gstseva.com/get-ready-for-transport-e-way-bill#comments Thu, 13 Jul 2017 14:32:55 +0000 https://www.gstseva.com/?p=7234 The Goods and Service Tax (GST) is rolled out on 1 July, 2017 (in few countries it is also known and Value Added Tax) and definitely this will create a positive as well as negative impact on various sectors. Sectors like Textiles, Auto, Engineering, Capital goods, Power Equipment, Pharmaceutical, Real Estate, Logistics and Transportation are going to have positive impact whereas service sectors like Airlines, Insurance, Telecom are going to have negative impact from the higher service tax rate of 18% v/s 15% currently.

The need for GST has been arise because of the current indirect tax system. Various indirect taxes are levied by State and Central Government in India such as Custom Duties, Central Excise, Service Tax, VAT, Entertainment Tax, Purchase tax and many more. Thus, the GST Council has finalized a four-tier GST tax structure of 5%, 12%, 18% and 28% with lower rates for essential items and the highest rates for luxury items.

Under GST every person has to generate E-way Bill.

What is E-way Bill?

E-way bill is an electronic way bill for movement of goods which can be generated on the GSTN (common portal). A ‘movement’ of goods of more than Rs. 50,000 in value cannot be made by a registered person without an e-way bill.

The Central Board of Excise and Customs (CBEC) proposes E-way bill. Under this, moving goods of more than Rs. 50,000 under GST will require the person to first register and then generate E-way will which can be inspected by tax officials anytime during the transit to check tax evasion. E-way bill can be generated or cancelled through an SMS. When it is generated a unique E-way bill number is allocated and it is available to Supplier, Recipient and Transporter.

E-way bill should be generated in three cases:

  1. When there is movement of goods in relation to supply.
  2. For reasons other than supply.
  3. Due to inward supply from an unregistered person.

The key issue of E-way bill is that the validity of the bill will depend on the goods that were to travel.

E-way bill is to be generated by Registered Person and Transporter. Every Registered person under GST, before movement of goods needs to fill the information in Part A of Form GST INS-1 or Registered person who is consignor or consignee or recipient of goods needs to fill Part B of Form GST INS-1 and Registered person where the goods are to be handed over to Transporter needs to fill Part A and Part B of Form GST INS-1 whereas in case of Transporter before the movement of goods needs to fill Form GST INS-1 if consignor does not

The following table shows the validity of a bill, according to kilometers travelled.

Valid For Distance
1 Day Less than 100 kms
3 Days 100 kms to 300 kms
5 Days 300 kms to 500 kms
10 Days 500 kms to 1000 kms
20 Days 1000 kms or more

 

The goods and services tax (GST) provision, required to be pre-registered before it can be moved, is likely to kick in from October after a centralized software platform is ready, a top official said.

According to one report in Livemint, “E-way bill would be implemented after infrastructure for smooth generation of registration and its verification through hand-held devices with tax officials is ready. The information technology platform for the e-way bill system is being developed by the National Informatics Centre (NIC) along with GST-Network (GSTN)—the company which has developed the IT backbone for the new indirect tax regime.”

“The e-way bill rules may be taken up in the next meeting of the GST Council on 5 August. After the rules are in place, the NIC and GSTN would develop an all India platform for a consolidated system,” another official said.

Currently, there are few states such as Maharashtra, Telangana, Bihar, Andhra Pradesh, Madhya Pradesh, and many more which are using E-way Bill but the GST Council has allowed these states to continue with the existing form till a central format is built.

It is expected that E-way bill will facilitate faster movement of goods since check-posts would disappear in the GST. No doubt that digitization of the documentation process will reduce the time and ensure accountability and easy verification. If it is implemented properly, it will definitely help the logistic industry to grow while making transportation of goods faster and easier.

 

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Political Reformist Modi’s GST; Mother Father Grandpa of all reforms will lead India’s growth towards double digits https://www.gstseva.com/political-reformist-modis-gst-mother-father-grandpa-of-all-reforms-will-lead-indias-growth-towards-double-digits https://www.gstseva.com/political-reformist-modis-gst-mother-father-grandpa-of-all-reforms-will-lead-indias-growth-towards-double-digits#comments Fri, 07 Jul 2017 16:37:16 +0000 https://www.gstseva.com/?p=7132 Political Reformist Modi’s GST; Mother Father Grandpa of all reforms will lead India’s growth towards double digits:
After GST launch we will see lots of mergers & acquisitions as well more & more Industrialist going for backward & forward integration sighting huge capacities to bring in economies of scale which in turn will make products more cheap then now. Imported goods will also come under GST. It means that apart from paying import duty it will also attract GST which will make all these imported products more costly which in turn will protect our local industries.
Thus apart from bringing all business under tax ambit (Ensuring robust tax collections going fwd) GST also will encourage private investments in big way which is currently lacking.
Its actually mother father grandpaa of all reforms done so far.
Let one year pass under current form & structure of GST, I am sure from next year onwards we will see GST tax slabs on various goods & services will come down drastically.
So far initial teething problems that we are seeing due to GST will settle down fast then we expect because we Indians are very fast in adapting any changes or challenges that comes our way. Indians means business & business means Indians.?
                                                                -by DHARMESH PANCHOLI
                                                                      EQUITY MARKET EXPERT

Disclaimer
This is to informs readers to know that the views, thoughts, and opinions expressed in the text article/ opinion belong solely to the author, and not necessarily to the author’s employer, organization, committee or other group or individual.

This is not consultancy or information of any law, it’s only the views of the author on which GSTSEVA.COM has no control.
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IMPACT OF GST ON SMALL TRADERS https://www.gstseva.com/impact-of-gst-on-small-traders Wed, 05 Jul 2017 20:10:37 +0000 https://www.gstseva.com/?p=6957 As we know, despite of numerous benefits of GST it will be very difficult for traders, turnover not less than 20 lakhs, to adopt it in its present form because of the complications that would arise after its implementation.

PROBLEMS THAT ARE GOING TO ARISE

  • ISSUE OF INVOICES FOR VERY LOW AMOUNT:                                                                                                                                        In GST regime issue of invoice is the most important so as to get input tax credit on the purchases made.Without the generation of invoices no input credit is allowed the chain will break and the system will collapse.But this will become the nightmare for the small traders like chemists, confectionary shop owners, stationary shop owners etc.

Let us explain it with the help of an example:

Suppose a customer visits a chemist shop to buy 2 tablets of medicine worth Re. 4. issue of invoice for such a small amount is neither logical and not at all possible, and if the person don’t issue the invoice then he will not get the ITC and his tax already paid on purchase will become the part of its cost thereby increasing its price.

  • CUMBERSOME PROCEDURE

A very small trader will not be able to install a computer with an accounting software to meet these requirements because of lack of knowledge .

  • GST RETURNS

A lot of returns is required to be filed by small traders atleast 3 returns is required to be filed by traders, other than compounding tax payers and Input service distributor, each month that is GSTR 1, GSTR 2 and GSTR 3 etc. along with the annual return. This becomes very difficult for a small trader to comply with.

CONSEQUENCIES

This will lead to frustration among the small traders for complying with the procedures and this ultimately lead to issuance of fake invoices which deviate the GST from its path. And also the frustration among traders will lead to adopting Unethical means to comply with the provisions of GST.

HOW TO RESOLVE THESE ISSUES

The Govt. should conduct seminars for these small traders so as to make them aware about the procedures about how to comply them. And to aware them about the GST committee for them which assist them in complying the procedures and help them in case any problem arise.

CONCLUSION

As the benefits of GST are more as compared to its drawbacks one need to learn about the procedures for the same. GST is need of the hour for our present economy which is totally complicated under present indirect Taxation system. The traders on their part should learn about GST from various external sources like internet, newspapers and journals etc. because implementation of GST is for the benefit of the whole nation and to unite the nation under a single umbrella of all the indirect taxes. So let us join our hands to learn, understand and implement it for the sake of ourselves and for the economy as a whole.
Disclaimer 
This is to informs readers to know that the views, thoughts, and opinions expressed in the text article/ opinion belong solely to the author, and not necessarily to the author’s employer, organization, committee or other group or individual.
This is not consultancy or information of any law, it’s only the views of the author on which GSTSEVA.COM has no control.

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Good or bad – only time will tell https://www.gstseva.com/good-or-bad-only-time-will-tell Wed, 05 Jul 2017 20:09:07 +0000 https://www.gstseva.com/?p=7126 It is a little too early to say what will be the impact of GST. 

Battle lines are drawn & we hear from both sides – pro & anti. 

Any decision in a democracy cannot be a knee jerk decision but a well evaluated one. What went into the decision to have multiple slabs, the decision to include some categories & exclude some – will perhaps never be known but will leave us with questions none the less.

 The decision to impose higher GST on services that an honest tax payer shoudl be expecting from his government – getting higher GST or even tax in the first place is a shame. 

Health insurance premium, life insurance premiums – can an individual not also protect against bad times. Does the government really have to make money on this ? there will be many such questions from the working class who by virtue of their hard work & not luck or inheritance have made it to where they have. Guess this segment will never find favors from the government. 

It will always be clubbed & penalised with extra taxes but nothing extra to show in terms of services. GST was a chance to address some of these anomalies. an opportunity lost at the altar of contorted thinking…

Disclaimer 
This is to informs readers to know that the views, thoughts, and opinions expressed in the text article/ opinion belong solely to the author, and not necessarily to the author’s employer, organization, committee or other group or individual.
This is not consultancy or information of any law, it’s only the views of the author on which GSTSEVA.COM has no control.

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How to do work under GST- Step by Step Guide  https://www.gstseva.com/how-to-do-work-under-gst-step-by-step-guide Mon, 19 Jun 2017 05:52:06 +0000 https://www.gstseva.com/how-to-do-work-under-gst-step-by-step-guide/ Step By Step guide to work under GST under transition phase.

List to activities you need to know for GST. 

 Return, records, process  and planning for GST.
1. Get Complete your working for Closing Stock for the period 31.3.2017 / 30.6.2017 before GST Implementation date. 

2. Allocate your such stock into quantative mode. 
3. Get the A/c Statement from your Suppliers / Creditors for the year ended 31/3/2017 & compiled them from your books.
4. Rectify *Mismatch Reports of Purchases *, if persists .
5. Revise your Vat Returns if point no.4 applies to you.
6. Make strict follow-up to Collect all the C forms/H Form/ I forms. 
7. Get your Books Finalise for FY 2016-17 
8. Make a separate file of those items which are shown in your Unsold stock as on 30.6.2017 e.g. Purchase Bills/ Bill of Entry/ Excise Paying Documents etc. 
9. Stock ageing be made to ascertain if any stock is more than 1yr old. If yes then dispose it off immediately or sell it to your sister concern against Tax Invoice locally. 
10. Classify stock tax rate wise, purchased locally to get ITC into SGST. 
11. Classify stock purchased on invoices bearing Duty Payment & non duty payments to get ITC transferred to CGST. 
12. Inform your GSTIN / ARN to all suppliers of Goods & Services.
13. Obtain GSTIN of all Suppliers & Buyers. 
14. Apply for migration in all states if you have centralised registration under Service Tax. 
15. Train your accountants for GST accounting and returns formats. 
16. Make Chart of HSN CODES & GST Rates on your goods & services to be purchased & Sold.
17. Check whether any stock of one year old is lying with you .
18. Analyse P and L and see which expenses are liable to RCM.
19. Be in regular touch with your GST Consultant .
20. Kindly Place the order to your printer for * Draft Format *of Tax Invoice/ Bill of Supply/ Debit – Credit Note etc ( as applicable to your business )
21. If you are planning to generate , invoices through any Software , do align with Software Consulting firm. 
22. And Get approved the Draft ( pt no. 20-21) from your GST Expert.
23. Use only original Softwares for Accounting & Invoicing purposes. 
24. Pl pay special attentions for any Calls, mails , messages or communication of your GST Consultant/ Department.
25. Make a practise to Upload your Sales / purchases on regular basis at GST Portal 
26. GST / Interest/ penalty or any levy may be paid through RTGS/ NEFT/ Debit Card/ Credit Card Etc. 
27. Due Dates for uploading of Returns : 
GSTR 1 : 10th of Next Month 

GSTR 2 : 15th of Next Month

GSTR 3. : 20th of Next Month 

* ( For Regular Dealer ) *

GSTR 4. : 18th of Next Quarter * ( Composite Dealers ) *

GSTR 5 : 20th of Next Month * ( For Non Resident )*

GSTR 6 : 13th of Next Month *(Input Service Distributors)*

GSTR 7. : 10th of Next Month * ( For TDS Returns )*

GSTR 8. : 10th of Next Month *( E-Commerce Operators )*

GSTR 9. : 31st December of Next F.Y.

*(Registered Taxable Person)*
28. Penalty Provisions for non submission of GST returns : Rs 100/- per day but subject to max. Rs.5000/- in each acts.
29. Penalty Provisions for non submission of Annual Return is 0.25% of Annual Turnover . 
30. Please Final the terms & remuneration of your GST Service provider before GST Implementation Date .
31. Option of revising the return is not available in GST Regime but you can modify your uploaded data by Debit & Credit Notes. 
32. Every Normal Dealer filing GSTR 1 -3 required to submit Annual Return in GSTR 9 by the due date .
33. Late filing would be permitted on payment of late fees only. Hence late filing of return will not be possible without payment of fees.
34. A return furnished without payment of full tax due as per such return shall not be treated as a valid return for allowing input tax credit in respect of supplies made by such person.
35. Input tax credit is eligible only after filing a valid GST return.

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Input Service Distributor i.e ISD under GST https://www.gstseva.com/input-service-distributor-i-e-isd-under-gst Mon, 15 May 2017 06:12:58 +0000 http://www.gstseva.com/?p=6697 Updated On May 17th, 2017

Relevance/Importance of ISD in GST

INPUT SERVICE DISTRIBUTOR UNDER GST

Input Service Distributor has been defined Section 2(61) of CGST ACT. The main objective of Input Service Distributor (ISD) is to receive and distribute the Input Credit to the eligible offices / departments / branches / units

Key Highlights for Input Service Distributor:-

  • Registration is mandatory for ISD
  • Any Office of the supplier can be ISD i.e any head office, registered office, corporate office, administrative office, branch office, regional/divisional/zonal office, depot, plant etc.
  • Also, a service provider can have more than one ISD registrations.
  • Distribution of credit shall be pro rata on the basis of the turnover, if more than one

Recipient

Distribution of Tax Credit By ISD

1.

Credit of IGST can be distributed as         >>>>>>>>>>>>          IGST to every Recipient having same in PAN

2.

IF ISD AND RECIPIENT ARE IN SAME STATE

  • Credit of CGST/SGST Can be distributed as tax credit of CGST/SGST respectively to every recipient having same PAN

IF ISD AND RECIPIENT ARE NOT IN SAME STATE

Credit of CGST/SGST Can be distributed as tax credit of IGST to every recipient having same PAN

Definition- Section 2(61) of CGST ACT-

                        “Input Service Distributor” means an office of the supplier of goods or services or both which receives tax invoices issued under section 31 towards the receipt of input services and issues a prescribed document for the purposes of distributing the credit of central tax, State tax, integrated tax or Union territory tax paid on the said services to a supplier of taxable goods or services or both having the same Permanent Account Number as that of the said office;

Compulsory Registration

Section 24(viii) CGST ACT

Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered under this Act,––

(viii) Input Service Distributor, whether or not separately registered under this Act;

Section 20 of CGST ACT:-

(1) The Input Service Distributor shall distribute the credit of central tax as central tax or integrated tax and integrated tax as integrated tax or central tax, by way of issue of a document containing the amount of input tax credit being distributed in such manner as may be prescribed.

(2) The Input Service Distributor may distribute the credit subject to the following conditions, namely:––

(a) the credit can be distributed to the recipients of credit against a document containing such details as may be prescribed;

(b) the amount of the credit distributed shall not exceed the amount of credit available for distribution;

(c) the credit of tax paid on input services attributable to a recipient of credit shall be distributed only to that recipient;

(d) the credit of tax paid on input services attributable to more than one recipient of credit shall be distributed amongst such recipients to whom the input service is attributable and such distribution shall be pro rata on the basis of the turnover in a State or turnover in a Union territory of such recipient, during the relevant period, to the aggregate of the turnover of all such recipients to whom such input service is attributable and which are operational in the current year, during the said relevant period;

(e) the credit of tax paid on input services attributable to all recipients of credit shall be distributed amongst such recipients and such distribution shall be pro rata on the basis of the turnover in a State or turnover in a Union territory of such recipient, during the relevant period, to the aggregate of the turnover of all recipients and which are operational in the current year, during the said relevant period.

Explanation.––For the purposes of this section,––

(a) the “relevant period” shall be––

(i) if the recipients of credit have turnover in their States or Union territories in the financial year preceding the year during which credit is to be distributed, the said financial year; or

(ii) if some or all recipients of the credit do not have any turnover in their States or Union territories in the financial year preceding the year during which the credit is to be distributed, the last quarter for which details of such turnover of all the recipients are available, previous to the month during which credit is to be distributed;

(b) the expression “recipient of credit” means the supplier of goods or services or both having the same Permanent Account Number as that of the Input Service Distributor;

(c) the term ‘‘turnover’’, in relation to any registered person engaged in the supply of taxable goods as well as goods not taxable under this Act, means the value of turnover, reduced by the amount of any duty or tax levied underentry 84 of List I of the Seventh Schedule to the Constitution and entries 51 and 54 of List II of the said Schedule.

RETURN

 

FORM GSTR-6

INPUT TAX CREDIT RULES

 

RULE 1 – DOCUMENTRY REQUIREMENT FOR CLAIMING INPUT TAX CREDIT

 

 

Clause (f) of sub-rule (1) of rule 1  

(1) The input tax credit shall be availed by a registered person, including the Input Service Distributor, on the basis of any of the following documents, namely:-

           

(f) A document issued by an Input Service Distributor, as prescribed in clause (g) of sub-rule (1) of rule 4.

RULE 4 OF INPUT TAX CREDIT RULES- “Procedure for transfer of Input Tax Credit by Input Service Distributor”

Clause (g) of sub-rule (1) of rule 4

The Input Service Distributor shall issue an ISD invoice, as prescribed in sub-rule (1) of rule invoice-7, clearly indicating in such invoice that it is issued only for distribution of input tax credit.

RULE 7 OF TAX INVOICE, DEBIT AND CERDIT NOTES RULES- “TAX INVOICES IN CASE OF SPECIAL CASES”

Sub-Rule 1 of rule 7

 

An ISD invoice or, as the case may be, an ISD credit note issued by an Input Service Distributor shall contain the following details:-

(a) name, address and GSTIN of the Input Service Distributor;

(b) a consecutive serial number containing alphabets or numerals or special characters hyphen or dash and slash symbolised as , “-”, “/”, respectively, and any combination thereof, unique for a financial year;

(c) date of its issue;

(d) name, address and GSTIN of the recipient to whom the credit is distributed;

(e) amount of the credit distributed; and

(f) signature or digital signature of the Input Service Distributor or his authorized representative:

Exemption for Banking Company, FI, NBFC

Provided that where the Input Service Distributor is an office of a banking company or a financial institution, including a non-banking financial company, a tax invoice shall include any document in lieu thereof, by whatever name called, whether or not serially numbered but containing the information as prescribed above.

RULE 4 OF INPUT TAX CREDIT RULES- “Procedure for transfer of Input Tax Credit by Input Service Distributor”

Distribute in the Same Month:-

            Clause (a) of sub-rule 1 of rule 4

The input tax credit available for distribution in a month shall be distributed in the same month and the details thereof shall be furnished in FORM GSTR-6 in accordance with the provisions of Chapter —- (Return Rules);

Clause (b) of sub-rule 1 of rule 4

The Input Service Distributor shall, in accordance with the provisions of clause (d), separately distribute the amount in-eligible as input tax credit under the provisions of sub-section (5) of section 17 and the amount eligible as input tax credit;

Clause (c ) of sub-rule 1 of rule 4

the input tax credit on account of central tax, State tax, Union territory tax and integrated tax shall be distributed separately in accordance with the provisions of clause (d)

(d) the input tax credit that is required to be distributed in accordance with the provisions of clause (d) and (e) of sub-section (2) of section 20 to one of the recipients ‘R1, whether registered or not, from amongst the total of all the recipients to whom input tax credit is attributable, including the recipient(s) who are engaged in making exempt supply, or are otherwise not registered for any reason, shall be the amount, “C1”, to be calculated by applying the following formula:-

C1 = (t1÷T) × C

where,

“C” is the amount of credit to be distributed,

“t1” is the turnover, as referred to in section 20, of person R1 during the relevant period, and

“T” is the aggregate of the turnover of all recipients during the relevant period;

(e) the input tax credit on account of integrated tax shall be distributed as input tax credit of integrated tax to every recipient;

(f) the input tax credit on account of central tax and State tax shall, 3

(i) in respect of a recipient located in the same State in which the Input Service Distributor is located, be distributed as input tax credit of central tax and State tax respectively;

(ii) in respect of a recipient located in a State other than that of the Input Service Distributor, be distributed as integrated tax and the amount to be so distributed shall be equal to the aggregate of the amount of input tax credit of central tax and State tax that qualifies for distribution to such recipient in accordance with clause (d);

(g) The Input Service Distributor shall issue an ISD invoice, as prescribed in sub-rule (1) of rule invoice-7, clearly indicating in such invoice that it is issued only for distribution of input tax credit.

(h) The Input Service Distributor shall issue an ISD credit note, as prescribed in sub-rule (1) of rule Invoice-7, for reduction of credit in case the input tax credit already distributed gets reduced for any reason.

(i) Any additional amount of input tax credit on account of issuance of a debit note to an Input Service Distributor by the supplier shall be distributed in the manner and subject to the conditions specified in clauses (a) to (g) and the amount attributable to any recipient shall be calculated in the manner provided in clause (d) above and such credit shall be distributed in the month in which the debit note has been included in the return in FORM GSTR-6.

(j) Any input tax credit required to be reduced on account of issuance of a credit note to the Input Service Distributor by the supplier shall be apportioned to each recipient in the same ratio in which input tax credit contained in the original invoice was distributed in terms of clause (d) above, and the amount so apportioned shall be,-

(i) reduced from the amount to be distributed in the month in which the credit note is included in the return in FORM GSTR-6; and

(ii) added to the output tax liability of the recipient and where the amount so apportioned is in the negative by virtue of the amount of credit to be distributed is less than the amount to be adjusted.

(2) If the amount of input tax credit distributed by an Input Service Distributor is reduced later on for any other reason for any of the recipients, including that it was distributed to a wrong recipient by the Input Service Distributor, the process prescribed in clause (j) of sub-rule (1) shall, mutatis mutandis apply for reduction of credit.

(3) Subject to sub-rule (2), the Input Service Distributor shall, on the basis of the ISD credit note specified in clause (h) of sub-rule (1), issue an ISD Invoice to the recipient entitled to such credit and include the ISD credit note and the ISD Invoice in the return in FORM GSTR-6 for the month in which such credit note and invoice was issued.

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NEGATIVE IMPACT ON MANUFACTURER https://www.gstseva.com/negative-impact-on-manufacturer Fri, 05 May 2017 07:56:47 +0000 https://www.gstseva.com/?p=6682 Companies have set up units with significant investment outlays based on incentives offered by States under their respective investment promotion policies. These incentives are usually in the form of tariff incentives (lower tax rates, refund /deferment of taxes etc.) and non-tariff incentives (economical land lease terms, lower electricity duty etc.).
Further, the Model GST Law does not clarify the fate of current incentives. Companies which have based their financial projections around these fiscal incentives may have to reassess their projections.

Also impact on working capital may be significant for the manufacturing sector. Under the current regime, stock transfers are not subject to tax. However, under the GST regime, stock transfers are deemed to be supplies and are subject to GST. Though GST paid at this stage would be available as credit, realization of this GST would only occur when the final supply is concluded. This would likely result in cash flow blockages and therefore companies would have to rethink their supply chain management strategies to minimize this impact on their cash flows.

Also impact on VAT, under the present indirect tax regime free supply of goods are not subject to VAT. The Model GST Law stipulates that specific transactions without consideration would also be treated as supplies. Accordingly, free samples may be subject to GST, leading to increase in overall costs.

Disclaimer: All data and information provided on this site is for informational purposes only. The above article is submitted by an user of this site. www.gstseva.com makes no representations as to accuracy, completeness, currentness, suitability, or validity of any information on this site and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis
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Dual Structure Challenge in GST Determination https://www.gstseva.com/dual-structure-challenge-in-gst-determination https://www.gstseva.com/dual-structure-challenge-in-gst-determination#comments Wed, 08 Mar 2017 12:58:48 +0000 http://www.gstseva.com/?p=6407

At present, State Value Added Tax (VAT) applies to the intrastate sale of goods, whereas Central Sales Tax (CST) is levied on the interstate sale of goods. Since revenue from these taxes is retained by the originating state, they are known as Origin-Based Taxes (OBT).

A Goods and Service Tax (GST) regime, however, is a dual structure of taxation. Both Central GST (CGST) and State GST (SGST) are levied on the intrastate supply of goods, while Integrated GST (IGST) applies to interstate supply of goods and services. With intrastate transactions, CGST revenue will accrue to the Centre whereas SGST revenue will accrue to the State. For interstate supplies, the destination state will be entitled to their share of IGST revenue.  Thus, in a GST regime, it is crucial to distinguish between ‘intrastate’ and ‘interstate’ transactions.

This blog discusses the importance of classifying each supply transaction as either interstate or intrastate. It also describes possible challenges arising from the dual GST structure in India.

Consuming states versus manufacturing states

At present, a major source of revenue for manufacturing states is CST, which is levied on interstate sales. CST is an origin-based tax (OBT), meaning it accrues to the state from which supplies are made. Since GST is a destination-based consumption tax (DBT), states that consume the taxed goods and services receive the tax revenue (e.g., IGST). In other words, the GST regime effectively replaces the OBT with the DBT.

Generally, GST benefits states that consume more goods and/or services than they produce. States currently dole out incentives, subsidies, etc. (such as packaged scheme of incentives) with an assumption that the tax benefits will accrue to the state in the subsequent period. As this won’t necessarily be the case under a GST regime, states will need to revisit their assumptions and re-evaluate their practices.

Potential loss of revenue

The GST has the potential to integrate the economy and unify the national market. Under a GST regime, states where the goods or services are consumed are entitled to GST, while states that produce more than they consume may earn less.

Manufacturing states are concerned about the potential loss of revenue. However, although states may lose revenue from CST and other taxes, they also stand to gain the power to tax services that, at present, are taxed only by the Centre. A tax on services will certainly increase state indirect tax revenue.  Additionally, under the GST regime, the entire supply chain will be required to register, as all assessees with a turnover above INR 20 lacs (INR 10 lacs in case they have presence in specified states) will be required to register and pay GST. Furthermore, most of the existing exemptions for products and services are expected to disappear under the GST regime. This will lead to additional tax revenue for the assessee base.

To address states’ concerns over a loss of revenue due to the introduction of the GST, the Central Government has proposed to compensate states for their lost tax revenue for a period of five years. The compensation will be funded by revenue generated from GST Compensation Cess, to be levied on specified products/ services.

Need for automation and robust IT systems

Model GST law casts the onus of determining whether a transaction is ‘intrastate’ or ‘interstate’ on the assesse, for payment Central GST (CGST) plus State GST (SGST) or Integrated GST (IGST), respectively. In this regard, section 70 of Revised Model GST law provides that if an assessee wrongly determines an intrastate transaction as an interstate transaction and in-turn pays IGST, then the taxpayer must pay the correct applicable tax (i.e., CGST plus SGST, perhaps along with a penalty) again and then claim a refund of the wrongly paid CGST plus SGST.

To determine whether a transaction is ‘intrastate’ or ‘interstate,’ the taxpayer must scroll through multiple scenarios. It’s easy to make the wrong choice.

Given the complexities involved — returns to be filed, documents and records to be maintained, etc. — it is unrealistic to expect a ‘flawless’ GST. Tax automation software can dramatically simplify GST implementation. Thus, it is prudent for companies to have a robust IT backbone for the determination and payment of the proper GST. In the long run, a robust GST automation system will give companies an edge over other competitors.

This blog is contributed by CA Pritam Mahure.

 

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Advantages of GST – Goods and Services Tax https://www.gstseva.com/advantages-of-gst-goods-and-services-tax Tue, 15 Nov 2016 10:09:08 +0000 http://www.gstseva.com/?p=6074 Top 10 Advantage of Goods And Services Tax ( GST ) are as follows:-

  1. One Nation One Tax:-

The one of the major advantage about GST in India that it is going to replace many indirect taxes like

    • Central Excise Duty
    • Additional Excise Duties
    • The Excise Duty levied under the Medicinal and Toiletries Preparation Act
    • Service Tax
    • Additional Customs Duty, commonly known as Countervailing Duty (CVD)
    • Special Additional Duty of Customs – 4% (SAD)
    • Surcharges, and
    • Cesses.

    The following State taxes and levies would be, to begin with, subsumed under GST:

    • VAT / Sales tax
    • Entertainment tax (unless it is levied by the local bodies).
    • Luxury tax
    • Taxes on lottery, betting and gambling.
    • State Cesses and Surcharges in so far as they relate to supply of goods and services.
    • Entry tax not in lieu of Octroi.

2. Reduce double tax effect:-

Because of Input Tax Credit  seller in one state will be able to take input tax credit benefit of the supplies received from other states.

However in VAT system credit was allowed for intra-state transactions only.

3.  Increase Tax Payers Volume:-

GST will work on value addition concept and it is expected that new registration will come in existence to take to benefit of  Input Tax in Transaction chain.

4.   Investment Booster:

It  will help to bring new investments in market.

5.  Bring Transparency in system

Same billing in country will help to bring more transparency in system.

6.  Boost for Make in India

One tax in place of many manufacturing duties will promote dealers/suppliers to manufacture goods in India.

7.  Will Create Jobs

More Investment, More Industries will create jobs opportunities.

8. Help in GDP

9. E-Commerce Boost

It will shift the burden of payment and compliance of taxes from online seller to E-commerce portal will help to bring more traders to sell their products online.

10.  Fair Billing

 

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A Comparison in price present tax system vs GST https://www.gstseva.com/a-comparison-in-price-present-tax-system-vs-gst Tue, 09 Aug 2016 12:20:29 +0000 http://www.gstseva.com/?p=5490 A comparison between pricing GST VS EXISTING system DOWNLOAD PDF  FILE GST COMPARISON
Rate PRESENT SYSTEM UNDER GST
FACTORY (RS.) (RS.)
COST OF PRODUCTION 500.00 500.00
MARGIN OF MANUFACTURER 200.00 200.00
EXCISE(Computed on Transaction Value) 12.50% 87.50 0.00
GST 18% 0.00 126.00
TOTAL PRICE TO TAKE OUT PRODUCT FROM FACTORY 787.50 826.00
WHOLESELLER PURCHASE PRICE 787.50 826.00
MARGIN/VALUE ADDITION 100.00 100.00
TOTAL SALE PRICE 887.50 926.00
INPUT UNDER GST- IGST 0.00 126.00
OUTPUT VAT UNDER CURRENT SYSTEM 12.50% 110.94 0
(NO INPUT OF EXCISE DUTY)
GST- ON SALE PRICE REDUCE BY INPUT GST I.E ON 800 ONLY 18% 0 144
(Net Payble to Government by dealer Rs. 18 i.e 144-126 OUTPUT-INPUT)
TOTAL PRICE TO TAKE OUT PRODUCT FROM WHOLESELLER 998.44 944.00
RETAILER TOTAL INPUT PRICE FOR  RETAILER PRODUCT (A) 998.44 944.00
VAT INPUT FOR PAYMENT OF OUTPUT SALES TAX (B) 110.94 0
GST INPUT C) 0.00 144
PRICE OF PRODUCT FOR CHARGING SALES TAX (A-B)/(A-C) 887.50 800.00
MARGIN/VALUE ADDITION BY RETAILER 100.00 100.00
SALE PRICE CHARGEABLE FROM CONSUMER 987.50 900.00
OUTPUT VAT UNDER CURRENT SYSTEM 12.50% 123.44 0
(Net Payble to Government by dealer Rs. 12.50 i.e 123.44-110.94 OUTPUT-INPUT)
GST- ON SALE PRICE CHARGEABLE FROM CONSUMER 18% 0.00 162
(Net Payble to Government by dealer Rs. 18 i.e 144-126 OUTPUT-INPUT)
TOTAL PRICE TO BUY PRODUCT FOR END USER 1110.94 1062.00
TOTAL TAX REACHED TO GOVERNMENT 210.94 162.00
(CENTRAL AND STATE BOTH)
MANUFACTURER 87.50 126.00
WHOLESELLER 110.94 18.00
RETAILER 12.50 18.00
SAVING UNDER GST 48.94
TO CONSUMER

GST COMPARISON CLICK TO DOWNLOAD 
gst invoicing

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Solar power companies fret over GST cost; find out why https://www.gstseva.com/solar-power-companies-fret-over-gst-cost-find-out-why Mon, 11 Jul 2016 11:53:28 +0000 http://www.gstseva.com/?p=5349 Lack of clarity on how the likely additional costs as input taxes in the upcoming Goods and Services Tax  (GST) regime would be allowed as a pass-through by the regulators has put the potential bidders for solar power projects in a bind. At stake are solar projects with combined capacity of at least 8 gigawatt (GW) for which the Centre and several state governments are slated to issue tenders in the remaining part of this fiscal year.

Currently, the solar power equipment are largely exempt from indirect taxes across states but implementation of GST would mean a possible 18% tax on them. With electricity likely to remain outside the ambit of GST, the companies won’t be able to offset the input taxes. The threat of cost increase in the GST regime exists for all power developers, including thermal power units, but the issue is more serious for solar and wind power firms.

In the case of solar firms, capital costs make up almost the entire chunk of the generation cost and variable costs are minimal. Also, unlike thermal power companies — mostly owned by diversified corporate groups, most solar firms won’t be able to offset the input tax costs against tax liabilities on outputs other than power.

“Although the government has said that the regulators would decide the impact of GST on solar projects as this would be considered under “change in law” clause in power purchase agreements, it is not clear how they would calculate the pass-through; unlike thermal projects, solar project tariffs do not have variable and fixed cost components,” Manoj Gupta, vice-president of solar division at Fortum India said.

Solar tariffs represent composite price encompassing all related costs including the internal rate of return for the project and hence solar projects are less amenable to accurate calculation for cost pass-through, some analysts feel.“We need a clear view from the government regarding the ambit of GST and its impact on solar power projects. At this point, I am not sure whether to factor GST in upcoming bids,”  Sanjay Aggarwal, managing director, Fortum India told FE. Factoring in GST could put a bidder at the risk of being out-priced by competitors who haven’t done so. If you don’t budget for GST, then you could end up with an unsustainable project.

“The increase in cost of electricity (in the GST regime) could be maximum for the renewable sources such as the solar and wind. Solar panels, wind turbines, towers, and all other inputs would attract GST at the rate of 18%, with no benefit of input tax credit. This would directly translate into a cost increase of 18%. In the case of gas and coal-based generation too, a similar scenario would prevail,” Satya Poddar, senior tax advisor at EY had told FE earlier.

While GST would adversely impact all the renewable energy segments, the issue is particularly vexing for solar developers due to the nature of such projects that require not more than 18 month for commissioning. This means such projects, especially those being bid out in the next few months, could be straddling two different taxation regimes, if GST comes into effect from  next April. In case of wind power, the government has announced bidding route for procuring power but the process is still some time away while thermal projects require 3-5 years for commissioning, making it easier for them to absorb the change.

“The developers’ concern regarding the ambiguity on one of the bid parameters is legitimate. Ideally, the ministry of new and renewable energy and the central electricity regulatory authority (CERC) should disclose the mechanism or formula that would be used for passing through the resultant increase in input cost when GST is implemented,” Jasmeet Khurana, associate director-consulting at Bridge to India told FE.

-Source:- http://www.financialexpress.  com/article/economy/solar-power-companies-fret-over-gst-cost-find-out-why/312504/

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Invoicing Under Goods and Services Tax https://www.gstseva.com/invoicing-under-goods-and-service-tax https://www.gstseva.com/invoicing-under-goods-and-service-tax#comments Thu, 23 Jun 2016 10:32:20 +0000 http://www.gstseva.com/?p=5227 To issue invoice for supply of Goods/Service by taxable persons is another interested and important task. Here you understand how:-

 Name of the invoices:-

TAX INVOICE:    FOR TAXABLE SUPPLY OF GOODS/ SERVICE

BILL OF SUPPLY:  FOR NON-TAXABLE SUPPLY OF GOODS/SERVICES

When to issue?

 

Issue of Invoices, possibilities Supply Of Goods Supply Of Services
After receiving of payment Yes, Possible Yes, Possible
Before receiving of  Payment Yes, Possible Yes, Possible
Before Supply of Goods/Services Not  Possible Yes, Possible
After Supply of Goods/Services Not  Possible Yes, Possible

 

Reasons:-

  1. In case of supply of Goods -“A taxable person need to issue invoice mandatorily at the time of supply of Goods

 

  1. In Case of supply of services – “A taxable person need to issue invoice mandatorily within the prescribed time”.  

 

What to include in invoice?

Apart from other things like GST registration no/Date/address etc, following are mandatory

PARTICULARS Supply Of Goods Supply Of Services
Description Yes Yes
Quantity Yes NA
VALUE Yes Yes
Tax thereon Yes Yes

 

AMOUNT OF TAX TO SHOW

 

Amount of tax to be indicated in tax invoice and other documents

SECTION 23 A.

 

AMOUNT OF TAX SHALL prominently indicate in all documents relating to:-

  • assessment,
  • tax invoice and
  • other like documents,

 

the amount of tax which will form part of the price at which such supply is made.

 

COMMENT:-  AS PER THIS PROVISIONS,  IT IS NOT POSSIBLE FOR SUPPLIERS TO MARK-

“Inclusive Of Taxes” IN TAX INVOICES

NOTE:- IN PROVISION IT IS CLEARLY STATED THAT IT IS TO MENTION ON TAX INVOICE AND OTHER DOCUMENTS.  However nothing mentioned about the- BILL OF SUPPLY.

A clarification may require-  Meaning of Other Like documents

 Or

 Is Bill of supply other like documents?

Although as per our understanding Bill of Supply should not be part for section 23A.

 

 

 

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