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GST: INTRODUCTION, REGISTRATION,
TRANSITIONAL PROVISION & INVOICE/RETURNS
DATED 27/05/2017
A Presentation by CMA. (Dr.) Shailendra Saxena B.COM,SAP(FICO),ACS,FCMA,FCA,DISA(ICAI).Ph.D.JLNUS & CO, Chartered Accountants, Baroda 1
GST
Present Tax Structure[5 Important Constituents]Excise Duty
Entry No. 84, List I, Schedule VIITaxable Event is Manufacture
Service TaxResiduary Entry No. 97, List I, Schedule VIITaxable Event is Provision of Service
Sales Tax / VAT/ CSTEntry No. 54 of List II (VAT) and 92A of List I (CST)
Taxable Event is Sale
Customs DutyEntry No. 83, List I, Schedule VIITaxable Event is Import & Export
Entry Tax/ Entertainment TaxEntry No. 52 &62 List II, Schedule VII
Taxable Event is Entertainment & Entry of Goods
Present Indirect Tax Structure of India
Intra State Taxable Supply
Excise and Service Tax
will be known as CGST
Local VAT & Other taxes
will be known as SGST
Inter State Taxable Supply
CST will be replaced by Integrated GST (IGST)
Approx. Sum Total of CGST
and SGST
Import From
Outside India
Custom DutyIn Place of
CVD and SAD, IGST will be
charged
4
Proposed Indirect Tax Structure Under GST
GST: COMPONENTS OF GST Central GST (CGST) –
Levy on supply of ALL goods and/ or services within a particular State, by the Central Government
State GST (SGST) – Levy on supply of ALL goods and/ or services within a particular State, by the respective State Government
Integrated GST (IGST) – Levy on ALL inter-State supplies of goods and/ or services, by the Central Government 5
GST: BASIC OBJECTIVE OF GST One Nation, One Tax & One Market
Taxability shift from sale/manufacture/service to supply of Goods & Services
Seamless credit across the chain
Eliminate cascading effect of taxes
Single rate of tax
Uniform tax across the country
Principle of ‘consumption-based Destination taxation’ 6
GST: BASIC OBJECTIVE OF GST GST will be levied and collected at a value addition
at each stage of supply of Goods and services. It will overcome the present constraint of credit
mechanism and the input credit mechanism will be made much simpler by allowing credit at each stage.
It is a dual GST structure comprising of Central and state GST.
A unique concept in the name of IGST is introduced for inter state supply of goods and Services including Stock transfer for transparent mechanism.
7
GST: BASIC OBJECTIVE OF GST OF GOVT.
Simpler Tax system. Broadening of Tax base. Improved compliance & revenue collections (tax booster). Efficient use of resources. Compliance Rating under GST for Tax payers.
8
Low compliance cost Simple business processes Less requirement of automation initially Minimal ITC refund cases Exemptions instead of exclusions from GST Seamless flow of input credit Seamless flow of information between, supplier, buyer and tax administration Need for IT portal or agency like TINXSYS, NSDL
9
Industry’ Expectations from GST
Automation of process by way of e-registrations, e-returns, e-payment No requirement of verifications during inter state movement of Goods Zero rating of supplies to exporters Administrative efficiency in case of assessment and adjudication Ease of compliance Self-policing 10
Industry’ Expectations from GST
GST: CONCEPT OF CGST, SGST AND IGST Leviable on Supply of Goods and Services
Levy on transaction value with set-off of input tax
Backed by Goods and Services Tax Network (GSTN)
11
Valuation - CURRENT
Customs
Section 14 – Transaction
Value
Customs Valuation
(Determination of Price of Imported / Exported
Goods) Rules, 2007
Excise
Section 4 and 4A –
Transaction Value / MRP
Central Excise (Determination
of Value of Excisable
Goods) Rules, 2000
Service Tax
Section 67 - GAC
Service Tax (Determination of Value Rules),
2006
THREE PRIME MODELS OF GST
Central GST
GST to be levied by
theCenter
State GST
GST to be levied by
theState
Dual GST
GST to be levied by
the Centre and the States
Concurrently
Value of Supply – Section 15 (1)
• The value of a supply of goods and/or services
• Shall be the transaction value,
• That is the price actually paid or payable
• For the said supply of goods and/or services where:• The supplier and the recipient of the supply are
not related and • The price is the sole consideration for the
supply
Consideration – Section 2(31)
Consideration” in relation to the supply of goods or services includes: • any payment made or to be made, whether in money or otherwise, in
respect of, in response to, or for the inducement of, the supply of goods or services, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government;
• The monetary value of any act or forbearance, whether or not voluntary, in respect of, in response to, or for the inducement of, the supply of goods or services, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government
PROVIDED that a deposit, whether refundable or not, given in respect of the supply of goods or services shall not be considered as payment made for the supply unless the supplier applies the deposit as consideration for the supply;
Meaning and Scope of Supply – Section 7(1
) Sup
ply
inclu
des
All forms of supply of goods and/or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business,
Importation of services, for a consideration whether or not in the course or furtherance of business, and
A supply specified in Schedule I, made or agreed to be made without a consideration
Supplies without consideration – Schedule IFollowing transactions are liable to GST even without consideration: Permanent transfer/disposal of business assets
where input tax credit has been availed on such assets.
Supply of goods or services between related persons, or between distinct persons as specified in section 25, when made in the course or furtherance of business.- STOCK TRANSFER
Supply of goods between principal and agent. Importation of services by a taxable person
from a related person or from any of his other establishments outside India, in the course or furtherance of business.
STOCK TRANSFER/ INTER UNIT TRANSACTIONS
GST not applicable!
Gujarat Plant 1 Gujarat
Plant 2
Levy of GST on movement of goods from -• Plant 1 to Plant 2 located in the Same
State• One plant to another plant located in
another State• One Plant to warehouse/depot located
in another State• One Plant to warehouse/depot located
in the same State• One warehouse to another warehouse
within the Same State• One warehouse to another warehouse
located in another State
X
X
X
GST:Possible rate structure
Exempt Supplies: Nil-rate, zero percent supplies
Zero-Rated Supplies: Exports and supplies to SEZ
Taxable Supplies:Supplies taxable at 5% Supplies taxable at 12% Supplies taxable at 18% Supplies taxable at 28%
19
TAXES TO BE SUBSUMED UNDER GST
Central Levies Central excise duty Additional excise duties ED under the Medicinal & Toiletries Preparation Act Service tax Additional Customs Duty (CVD) Special additional duty (SAD) Surcharges and cesses relating to supply of goods and services.
State Levies VAT/Sales tax Central Sales Tax (CST) Entertainment tax (other than levied by local bodies) Octroi and Entry tax Purchase tax Luxury tax Taxes on lottery, betting, gambling State surcharges, cesses relating to supply of goods and services
GSTCGSTSGSTIGST
TAXES NOT TO BE SUBSUMED UNDER GST
Basic Customs Duty Excise Duty / VAT on Petroleum Products for five years
(Petrol,Diesel,Crude Oil,Aviation fuel and Natural Gas) Excise Duty on Tobacco Products Electricity Duty by state Entertainment tax levied by local bodies State excise on Alcoholic Beverages Property tax, Stamp Duty and taxes on immovable
properties Royalty on minerals, Environmental / regulatory taxes- e.g.
vehicles tax
GST X
TAXES TO BE LEVIED UNDER GST
Inter state Supply
under GSTIntra State
Supply of GST Imports Exports
IGST CGST SGST
BASIC CUSTOM DUTY
IGST
Zero Rated
TRANSACTION UNDER GST (INTRA STATE)
PARTICULARSAmount
(InRs)
Basic Price of Goods to the Manufacturer 1,00,000
Add: CGST @ 9% 9,000
Add: SGST @ 9% 9,000Total Sales Value for Distributor(with in State
supply) 1,18,000Less: Input tax Credit of CGST/SGST (Rs9000+Rs9000) 18,000
Landed Cost to the Dealer/Distributor 1,00,000
Add: Value Addition 10,000
Basic Sales Value for Retailor 1,10,000Add: SGST @9% & CGST @ 9% (Supply with in State) 19,800
COST TO END CUSTOMER 1,29,800
TRANSACTION UNDER GST (INTER STATE)
PARTICULARSAmount
(InRs)
Basic Price of Goods to the Manufacturer 1,00,000
Add: IGST @18% (Supply Inter State) 18,000
Total Sales Value 1,18,000
Less: Input tax Credit of IGST Rs18,000 18,000
Landed Cost to the Dealer/Distributor 1,00,000
Add: Value Addition 10,000
Basic Sales Value 1,10,000Add: SGST @9% & CGST @ 9% (Supply with in State) 19,800
COST TO END CUSTOMER 1,29,800
ANTI- PROFITEERING MEASURESAs per Section 171 Anti Profiteering provision in CGST/SGST Act, a taxpayer may be required to pass on the following benefits:a. benefit on account of increase in input tax creditb. Benefit on account of reduction in Tax Rates
-Computed that additional amount which will be available as ITC under the GST regime.-To formulate statergy to comply with the above provision -Pricing policy to be Revisited. [email protected]
m
25
GOODS AND SERVICES TAX
RATE SCHEDULE OF GOODS & SERVICES
26
GST/VAT RATE GLOBALLY VS. INDIA
S. No. Country Rate
(%)
1. Australia 10
2. Austria 20
3. Canada 7
4. China 17
5. Denmark 25
6. Finland 22
7. France 19.6
8. Germany 16
9. Indonesia 10
10. Italy 2011
. Japan 5
S. No. Country Rate
(%)12
. Malaysia 5
13. Mexico 15
14. New Zealand 12.5
15. Philippines 10
16. Russia 18
17. Singapore 7
18. South Africa 1419
. Sweden 2520
. Taiwan 5
21. U.K. 17.522
. Zambia [email protected]
KEY HIGHLIGHTS GST Compensation Cess rates and Chapter
wise rate wise GST schedule decided; Fitment of more than 1200 items in various
tax slabs; 19% of items taxed over 18% GST tax slab; 7 final rules and the draft formats released.
28
FINAL RULES
29
ITEM FITMENT IN TAX SLABS (%)
30
RATE FITMENT – AN OVERVIEW
31
KEY HIGHLIGHTS
Rate structure for following 7 commodities yet to be decided
Biri wrapper leaves Biscuits Biris Textiles Footwear Gems & Jewellery Power driven agricultural, horticultural, etc. machinery used in
military industry and part thereof.
32
SERVICES Travelling in metro, local trains, Non-AC train and religious
travel will be exempt. Education and healthcare services continue to be exempt
under GST regime.
Restaurant services to be taxed at
5% where turnover is less than INR 50 Lakhs in a year 12% for non-air conditioned (AC) restaurants; and 18% in case of restaurants having the facility of AC or/and serve liquor – the
erstwhile rule of AC and liquor license (as was introduced vide the negative list regime) reinstated.
Accommodation service by Hotel service to be taxed at
Nil, in case of hotel day tariff of below INR 1000 12%, in case of hotel having day tariff of INR 1000 to 2500; 18%, in case of hotel having day tariff of INR 2500 to 5000; and 28%, in case of hotel having day tariff of above INR 5000.
33
SERVICES
Passenger travel by air in Economy class to attract 5%; and Business class to attract 12%.
Services by cab aggregators to attract 5%. Transportation service to fall under 5% slab..
Works contract service to attract 12%. Telecom and financial services to attract 18%. Gambling and Cinema services to fall under 28% slab, as
entertainment tax is subsumed under GST
34
MAJOR DECISIONS. No.an
Change Decision Ideally Before
Reason
1. Decision for Place of Removal for Manufacturing Units/Depots/Branches
Now Relocation may be time consuming.
2. Stock Taking(Multi-locational Goods/Service Provider) and Reconciled with books.
3 month Process and readiness.
3. Reviewing the compliances under old law
Now Pending C/H/I Forms under Sales Tax Act.
4. Review of Export benefits-New FTP
3 month Decide to option to maximize benefit.
MAJOR DECISIONS. No.
Change Decision Ideally Before
Reason
5. Purchase Policy 3 Month Buying from particular source to enable credit on stocks.(Not from Unregistered Dealer)
6. Upgrading the IT hardware/Software
3-4 Month Extent of integration and customization needed.
7. Changes in formats of records and billing
2 month Printers will be extremely busy in last 3 months before GST implementation.
8. Declaration of stocks in a system +Certification
1 Month Limited numbers of Subject professionals.
MAJOR DECISIONS. No.
Change Decision Ideally Before
Reason
9. Manpower optimization/Assess requirement of Manpower.
3 month Multiple laws disappearing and converging in to one.
10. Confirmation of no missed Credit+ No excess/ineligible Credit
Now onwards
To avoid disputes under old law.
11. Procurement goods under documents where all taxes clearly indicated as tax suffered such as CE, CVD, SAD, etc.
3 Month Enhance the credit at time of declaration of stocks during transition to GST.
MAJOR DECISIONS. No.
Change Decision Ideally Before
Reason
12. Planning for Completion of Assessment under old laws
3-4 Month Liability must be finalize before GST implementation.
13. Revisiting the Overlapping contracts
4 Month Ensure amendment to avoid disputes with customers on applicability of taxes.
14. Representation of Undue or unintended hardship of new law.
Now This may have to be thought Industry Association, Trade Bodies and Professional Institutes and other Public forms.
GST
REGISTRATION
40
Section 139: Migration under GST
41
Issuance of Provisional RC with validity of 3 months or as extended
Final RC to be issued
Information not furnished
Provisional RC cancelled
Provisional RC may be cancelled, if application is filed by existing taxable person that he is not liable to be registered u/s 22 or 24.
GST: Who Is liable for Registration
Assessee whose Aggregate turnover exceeding Rs.20 Lakhs in a financial year
Aggregate turnover = All-India turnover Threshold shall be 10 Lakhs in case of supplies made from
NE States Turnover includes supplies made on behalf of principal(s)
i.e. supply made by Consignment Agent In case of job-work, direct dispatch from the place of job-
worker shall be considered as a supply by the principal (and not by the job-worker)
Separate Registration required for every State from where any taxable supply is made
Liability to register shall not arise where: Person engaged exclusively in the business of supplying
non-taxable supplies, or wholly exempt supplies Person is an agriculturalist, for the purpose of agriculture.
42
GST: Compulsory Registration(Sec.24)
Compulsory registration irrespective of threshold in the below cases: Casual taxable persons; Non-resident taxable person; Person making an inter-State supply (outward supply); Person required to pay tax under reverse charge
mechanism; Persons who supply goods and/ or services on behalf of
another registered taxable person (whether as agent or otherwise);
Notified persons required to deduct tax u/s 46;(Govt. Department)
Persons required to collect tax u/s 56 i.e., (e-commerce operators)
Input service distributors Persons supplying online information & database access or
retrieval services from a place outside India to an unregistered person;
43
Registration Structure under GST – Sec 24
Registrations required by every person:• Simultaneous registration under CGST, SGST & IGST
Separate registration required for each State
Total possible registrations for one PAN(29 States+2UT) & Business verticals.
Possible separate registrations for each business vertical(optional) within a State/UT as defined u/s 2(18) Factor should be considered: The nature of product or services The nature of production processes The type or class of customers for the products or services The methods used to distribute the products or provide the services. If applicable ,the nature of the regulatory environment, for
example, banking , insurance, or public utilities.44
Registration Structure under GST – Sec 24
PAN based Registration: PAN will be mandatory (except for Non-Resident)
Place of Registration - “from where” Supplier makes a taxable supply of goods
and/ or services
Provision for Voluntary Registration
Central/State Government specify persons exempted from obtaining registration
Auto generation of provisional registration for existing assessee based on
enrolment (Migration)
Proper officer has powers for suomoto registrations in case of unregistered
persons 45
State Code
PAN Business Vertical
X X X X XX X X X X XXX X X
Blank Check-sum
Amendment in Registration – Sec 28
Any change in registration has to be informed
Proper officer may approve/reject amendment
No rejection without giving an opportunity of being heard
Rejection of amendment under CGST will be a deemed rejection under SGST and vice-a-versa
46
WHETHER THE JOB WORKER WILL HAVE TO BE COMPLSORILY REGISTERED
No
Section 25 of GST Act
Does not provide any such condition
If Aggregate turnover of such job-worker exceeds the threshold, then he has to obtain registration.
47
AT THE TIME OF REGISTRATION WILL THE ASSESSEE HAVE TO DECLARE ALL HIS PLACE OF BUSINESS
Yes
Section 2(85) & 2(89) of GST Act defined place of business(Additional) & Principal Place of business
Taxpayer will have to declare the Principal place of business as well as the details of additional place of business.
In the registration form.
48
WHETHER A PERSON WHO IS REGISTERED (VOLUNTARILY) IS LIABLE TO COLLECT AND REMIT THE TAX EVEN THOUGH HIS AGGREGATE TURNOVER DOESNOT EXCEED THRESHOLD LIMIT OF RS.20 LAKH/10 LAKH AS CASE MAY BE?
YES
There is no provision in GST Act to provide for exemption to such cases.
49
IS IT MANDATORY FOR A GST OFFICER TO PHYSICALLY VERIFY BUSINESS PREMISES OF TAXABLE PERSON ?
No According to Rule 17 of GST Registration Rules, Where
the proper officer is satisfied that the physical verification of the place of business of a taxable person is required after grant of registration
He may get such verification done Up-load verification report along with other documents,
including photographs in Form GST REG-29 on Common portal with in 15 working days following the date of such verification.
50
WHETHER REGISTERED TAXABLE PERSON REQUIRED TO BE DISPLAY HIS CERTIFICATE OF REGISTRATION?
YES, As per Registration Rules.
Every registered taxable person shall display his registration certificate in a prominent location at his principal place of business and at every additional place of business.
Further , he has to display his GSTIN in the name board exhibited at the entry of his principal place of business and at every additional place of business. 51
GST:
TRANSITIONAL PROVISION
52
53
Section 139 Migration of existing Tax Payer to GST(Valid PAN is Mandatory)
On date of applicability of GST, Provisional Certificate to be issued to everyone registered under any earlier law
Certificate valid for period of six months, period may be extended by CG/SG on the recommendation of GST Council
Everyone issued the provisional certificate under Sub-section(1) shall furnish the prescribed information within the period specified
above i.e. six months or extended period
Final RC will be issued by
Central / State
Government on furnishing
of the prescribed information
The PRC issued to a person not liable for
registration under GST
shall be deemed to have been
cancelled upon filing
application
Person who is eligible to pay tax under
composition scheme and who has been
issued a PRC, may opt to pay composition tax in the time and manner
prescribed.
54
Sections 140(1) Amount of CENVAT credit carried forward in a return to be allowed as
input tax creditA registered taxable person who has carried forward balance of
CENVAT / VAT in return filed by him under earlier law.
CENVAT / VAT is allowed to be carry forwarded in person’s electronic credit ledger (As a opening balance)
Provided that the amount taken as CENVAT / Input Tax credit must be eligible under earlier law and GST law
.
Unit operating under area-based exemption shall be allowed to transfer the credit proportionate to the stock in hand as on
appointed date.
55
Section 140(2) Unavailed CENVAT Credit on capital goods, not carried forward in a
return, to be allowed in certain circumstances.
A registered taxable person, other than composition dealer, shall be eligible to take the credit, In the
electronic credit ledger
Unavailed Credit on Capital Goods (as per Rule 2(a) CENVAT Credit Rule,2004) not carried forward in a return
Unavailed Credit = (Total eligible credit – credit availed)
under the earlier law
Such credits must be eligible under the earlier law AND under GST law
56
Section 140(3) Credit of eligible duties and taxes in respect of inputs held in
stock to be allowed in certain situations
Person eligible for input tax credit• Person not liable to be registered under the earlier law • Person engaged in manufacture/ sale of exempted goods, provision of
exempted services• Person providing works contract service and availing abatement under
notification no. 26/2012• First/ Second stage dealer, importer
Credit available on• Inputs held in stock and inputs contained in semi-finished goods or finished
goods held in stock as on appointed day Above benefit not available for input services
• Such credit can be taken in the electronic credit ledger
57
Section 140(3) : Conditions of credit availability
Such inputs and / or goods are used or intended to be used for making taxable supplies under GST law;
The said taxable person is eligible for input tax credit on such inputs under this Act;
The said taxable person is in possession of invoice and/or other prescribed documents evidencing payment of duty under the earlier law in respect of such inputs; NOTIONAL Credit allowed if documents not available.
Such invoices and /or other prescribed documents were issued not earlier than twelve months immediately preceding the appointed day; and
The supplier of services is not eligible for any abatement under this Act.
The said inputs were not [specified in Schedule--- of the earlier law or in the rules made thereunder or in any notification issued under the earlier law] as inputs on which credit was not admissible under the earlier law (SGST law)
58
Rule 3(B) :Procedure for availing transitional credit
For availing the deemed credit following conditions are to be satisfied: Such goods were not exempt from excise duty specified under First
Schedule to CETA or not Nil Rated or tax under the State Value Added Tax Act.
Documents for procurement of such goods are available. In addition to details of stock in rule 2, person shall submit
statement in FORM GST TRAN... at the end of each six tax periods indicating details of supplies of such goods effected during the tax period.
Eligible credit shall be allowed to be credited in electronic credit ledger.
Storage of stock of goods is such that it can be easily identifiable. Credit shall be allowed @ 40% of CGST /SGST applicable on supply of such
goods after the appointed day.
Such amount shall be credited after payment of CGST payable on such supplies.
CREDIT OF ELIGIBLE DUTIES AND TAXES IN RESPECT OF INPUTS HELD IN STOCK TO BE ALLOWED IN CERTAIN SITUATIONS (SEC. 140(10)
Duties and taxes eligible for claiming the credit are:S.
No.Duty Description
1. Excise Duty2. Additional Duty under Sec.3(1) of CTA (CVD)3. National Calamity Contingent Duty4. Additional Duty under Sec.3(5) of CTA (SAD)5. Service Tax6. State VAT and Entry Tax7. Education Cess & Secondary Higher Education Cess8. Krishi Kalyan Cess (Service Provider)
59
TRANSITIONAL PROVISION
Case StudyXYZ Ltd Registered under VAT &CST having a Vat balance carried forward as per the return as on 30/06/2017 are:
60
Particular Amount(Rs) Amount(Rs)
Opening balance of Vat as on 1 April,2017
5,00,000.00
Vat Availed (From 1 April to 30 June,2017)
60,00,000.00 65,00,000.0
0LESS CST paid @ 2% (against C Form) on Interstate sale for Rs 20,00,00,000/-(From 1 April to 30 June,2017)
40,00,000.0
0
Balance as on 30/06/2017 25,00,000.00
XYZ Ltd not in position to collect C form for Rs.10 Crore.
25 Lacs to be Reversed from ITC
25,00,000.00
ZEROC/F
TRANSITIONAL PROVISIONCase Study
‘Z’ is a registered Dealer in the present G-VAT provisions. He has allotted provisional GST registration number. He is not able to furnish the required information under Rule 16 (2)(b) within the time prescribed (i.e. with in 3 months) what will be the consequences ?
Case StudyA Existing registered GVAT dealer/Service Provider having a turnover of Rupees 18 lakhs will come under GST migration or not? If yes, then what will be the registration requirements and if not then how he will proceed ?[Sec.25(8)]
61
Persons Eligible for ITC
• Person Not Eligible to take ITC:• Non-registered taxable person
• Person having aggregate turnover below threshold limit
• Supplier under Composition Scheme
• Supplier exclusively engaged in making exempt or non-taxable
supplies
• Agriculturist
• Person Eligible to take ITC:• Registered Taxable person [Section 16 of CGST/ SGST Act]
• Person making zero rated supplies [Section 16(3) of IGST Act]
CROSS CREDIT SET OFF HEADS
IGST Input
IGST Output
CGST/SGST Output
CGST Input
IGST Output
CGST Output
SGST Input
IGST Output
SGST Output
TAX INVOICE•A registered taxable person while supplying taxable goods/services shall issue a tax invoice containing following details.
(a). name, address and GSTIN of the supplier,
(b). a consecutive serial number containing only alphabets and/or numerals, unique for a financial year,
(c). Date of its issue
(d). name, address and GSTIN/ Unique ID Number, if registered, of the recipient,
(e). name and address of the recipient and the address of delivery, along with the name of State and its code, if such recipient is unregistered and where the taxable value of supply is fifty thousand rupees or more
(f). HSN code of goods or Accounting Code of services (g). description of goods or services
(h). quantity in case of goods and unit or Unique Quantity Code thereof
(i). total value of goods or services 65
TAX INVOICE(j). taxable value of goods or services taking into account discount or abatement, if any,
(k). rate of tax (CGST, SGST or IGST),
(l). amount of tax charged in respect of taxable goods or services (CGST, SGST or IGST),
(m). place of supply along with the name of State, in case of a supply in the course of inter-State trade or commerce
(n). place of delivery where the same is different from the place of supply
(o). whether the tax is payable on reverse charge,
(p). the word “Revised Invoice” or “Supplementary Invoice”, as the case may be, indicated prominently, where applicable along with the date and invoice number of the original invoice; and
(q). signature or digital signature of the supplier or his authorized representative.
• In case of export, the invoice shall carry an endorsement “SUPPLY MEANT FOR EXPORT ON PAYMENT OF IGST” or “SUPPLY MEANT FOR EXPORT UNDER BOND WITHOUT PAYMENT OF IGST”.
66
TAX INVOICEManner of Issuing Invoice
• The invoice shall be prepared in triplicate, in case of supply of goods, in the following manner(a) the original copy being marked as ORIGINAL FOR RECIPIENT,
(b) the duplicate copy being marked as DUPLICATE FOR TRANSPORTER; and
(c) the triplicate copy being marked as TRIPLICATE FOR SUPPLIER.• The invoice shall be prepared in duplicate, in case of supply of services in the following manner(a) the original copy being marked as ORIGINAL FOR RECEIPIENT; and
(b) the duplicate copy being marked as DUPLICATE FOR SUPPLIER.
67
BILL OF SUPPLY• Following persons are required to issue bill of supply.
1. Supplying non-taxable goods/services
2. Paying tax under Section-9, i.e. composition levy
• Bill of Supply shall contain following details.
1. name, address and GSTIN of the supplier, serial number, date of issue
2. name, address and GSTIN/ Unique ID Number, if registered, of the recipient
3. HSN Code of goods or Accounting Code for services
4. description of goods or services
5. value of goods or services taking into account discount or abatement, if any
6. signature or digital signature of the supplier or his authorized representative
69
CREDIT NOTE
Particulars Provision
Credit Note[Section 34(1)]
After issuance, invoice is found to exceed taxable value/ tax payable on such supply
Credit note to issue up to earlier of following • 30th day of the September following the end of the financial
year in which supply made.• date of filing of relevant annual return
No credit note shall be issued by the said person if the incidence of tax and interest on such supply has been passed by him to any other person.
Details of Credit note to be given in monthly return. No credit note shall be issued on account of
renegotiation of prices after supply. In such cases C/N or D/N should be issued without showing GST. Such D/N or C/N is not required to be uploaded in monthly Return.
71
DEBIT NOTE
Particulars Provision
DebitNote[Section 34(3)]
After issuance, invoice is found to less the than taxable value/ tax payable on such supply
Debit note to issue up to earlier of following • 30th day of the September following the end of the financial
year in which supply made.• date of filing of relevant annual return
No debit note shall be issued by the said person if the incidence of tax and interest on such supply has been passed by him to any other person.
Details of Debit note to be given in monthly return. Debit note shall include a supplementary invoice.
72
RULES:E WAY BILL Goods worth over 50,000 will require obtaining a prior registration and generation of an e-way bill under the ₹
GST regime. E-way bill will also be allowed to be generated or cancelled through SMS.
When an e-way bill is generated a unique e-way bill number (EBN) is allocated and is available to supplier, recipient, and the transporter. which will subsequently accepted/rejected by recipient of goods within 3 days.
E-way bill will be generated when there is movement of goods –• In relation to a ‘supply’• Other than a ‘supply’ ( say a return of goods)• Inward ‘supply’ from an unregistered person
A supply may be –• Supplied for a consideration in the normal course of business.
• Supplies made for a consideration, which may not be in the course of business.
• Supplies without consideration.
Registered person or the transporter may choose to generate and carry e-way bill even if value of goods is less than Rs 50,000. RFID readers shall be installed in places for verification of movement of goods
Unregistered persons or his transporter may also choose to generate e-way bill. Which means e-way bill can be generated by both registered and unregistered persons. However, where a supply is made by an unregistered person to a registered person, the receiver will have to do all the compliances as if he’s the supplier.
ISSUE:When invoice is already issued, issuance of e-way bill increases the compliance at the time of removal of goods. This is not in line with ease of doing business.
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RULES: 7.AN E-WAY BILL CAN BE GENERATED BY
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Who When Part Form
Every Registered person under GST
Before movement of goods
Fill Part A Form GST INS-1
Registered person is consignor or consignee (mode of transport may be owned or hired) OR is recipient of goods
Before movement of goods
Fill Part B Form GST INS-1
Registered person is consignor or consignee and goods are handed over to transporter of goods
Before movement of goods
Fill Part A & Part B
Form GST INS-1
Transporter of goods Before movement of goods
Fill form GST INS-1 if consignor does not.
Unregistered person under GST and recipient is registered.
Compliance to be done by Recipient as if he is the Supplier.
E-WAY BILL: CASE STUDY
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ISSUE SOLUTIONScenario 1:If any manufacturing Plant transfers/ supply to direct customer and value of goods is less than Rs.50,000/-.
• The value of goods would be less than Rs.50,000/- the e-way bill need not be generated.
Scenario 2:If one manufacturing plant transfers to other manufacturing plant(Same entity and under same state) and the value of goods is less than Rs.50,000/-
Draft Rule 8 of Tax Invoice, Credit and Debit Notes which states that in cases other than supply i.e. like transfer of goods within the same registration number or from one plant to another covered under the same registration number the consignor of the goods shall issue a delivery challan, serially numbered at the time of removal of goods for transportation with the details prescribed.
The value of goods would be less than Rs.50,000/- the e-way bill need not be generated.
E-WAY BILL: CASE STUDY
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ISSUE SOLUTIONScenario 3:If manufacturing Plant transfers/ supply to direct customer and value of goods is more than Rs.50,000/-
• The supplier in the present case has to fill up the details on common portal (GST Network) in Part A of Form GST INS-01.
• After furnishing the details in Part A, Manufacturing Plant has to furnish the details in Part B of Form GST INS-01. In any case,
• if manufacturing Plant is not in a position to fill up Part B of Form GST INS-01 then the buyer has to fill up the details in Part B of Form GST INS-01.
• Further, as per Draft Rule 2 of E-Way Bill rules, the transporter needs to carry the copy of the invoice, copy of the e-way bill or e-way bill number, either physically or mapped to a Radio Frequency Identification Device (RFID) embedded on to the conveyance in prescribed manner.
Scenario 4:If one plant transfers to other plant and the value of goods is more than Rs.50,000/-
• It is internal transfer within the same registration number, therefore, invoice will not be generated. However, the movement of goods will be under the challan for internal transfer.
• e-way bill is to be generated since the value of goods is more than Rs.50,000/-. The Draft E-Way Bill rules states that even though it may not be a taxable supply but if the value of goods is more than Rs.50,000/- then e-way bill has to be generated before movement of goods.
• If the value of goods is exceeding Rs.50,000/- then the e-way bill is to be generated before the movement of goods.
RULES: VALIDITY OF E WAY BILL
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Distance Valid from Valid for
Less than 100km Date & time at which e-way bill is generated
1 day
100km to 300km Date & time at which e-way bill is generated
3 days
300km to 500km Date & time at which e-way bill is generated
5 days
500km to 1000km Date & time at which e-way bill is generated
10 days
1000km or more Date & time at which e-way bill is generated
15 days
E-WAY BILL IN LINE OF EASE OF DOING BUSINESS I.E. EASY COMPLIANCE FOR TRANSPORTER
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While addressing a session at the India Integrated Transport and Logistics Summit 2017 on 5th May, Revenue Secretary Hasmukh Adhia elaborated following features of Draft Rule of e-waybill.
1. Electronic (e-way) Bill under the Goods and Services Tax will simplify their operations and not cause any compliance burden.
2. tax authorities will provide time to transporters to adjust to the new system, and not begin imposing penalties from “Day 1”.
3. The system of e-way Bill is a major reform and will remove many complications.
4. Flexible approach: Initially, we will only observe the behaviour (of transporters). We will be flexible and won’t put penalties.
5. Doing away with hard copies of verification documents, e-way bills can also be generated through a smart phone and sent to the driver of the cargo vehicle as an SMS. Under GST, freight worth over 50,000 will require obtaining a prior registration and ₹generation of an e-way bill and will be used to track all inter-State and intra-State movement of goods.
GST: PROVISIONS FOR PAYMENT OF TAX, INTEREST, PENALTY AND OTHER AMOUNTS (SEC.49)
Generally, Supplier is liable to pay the tax,Interest and Penalty/other amount.
In Other cases like:
• Imports and other notified supplies, liabilities(BCD,CVD &SAD) may be imposed on the recipient under the reverse charge mechanism (RCM)
By third person for example in case of :
E-Commerce = Operator is responsible for TCS Contractual Payments = Government / Other notified entities are
responsible for TDS
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GST: ELECTRONIC TAX LIABILITY REGISTER
DEBITS CREDITS(i) amount payable towards tax, interest, late fee or any other amount payable as per the return filed by the said person;
(i) Electronic credit ledger
(ii) amount of tax, interest, penalty or any other amount payable as determined by a proper officer in pursuance of any proceeding under the Act or as ascertained by the said person;
(ii) Electronic cash ledger
(iii) amount of tax and interest payable as a result of mismatch under section 42 or section 43 or section 50; or
(iii) Relief given by the appellateauthority
(iv) any amount of interest that may accrue from time to time.
(iv) Reduction in penalty (if any)
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GST: ELECTRONIC CASH LEDGER
DEBITS CREDITS
(i) Amount payable towards tax, interest, late fee or any other amount payable
(i) Payment made through challan on receipt of CIN
(ii) Towards claim for refund of any amount (ii) Amount deducted under Section 46(TDS) and claimed in Form GSTR-2
(iii) Amount collected under Section 56(TCS) and claimed in Form GSTR-2
(iv) Reversal of amount debitedearlier on account of final rejection of refund (Form GSTPMT-03)
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RETURN-BASIC FEATURES
Self-assessment of tax liability by the taxpayer Common e-Return for CGST, SGST, IGST.
Separate returns for different categories of taxpayers Returns by a normal / casual taxpayer to be filed in sequential
manner with different cut-off dates to allow auto-population of return & automated matching of invoices.
Payment of due tax is must for filing valid return Returns can be submitted with short payment but shall be
treated as invalid – not taken into account for invoice matching & inter-Government fund settlement.
Provision for filing revised information Differential Tax liability to be captured through Debit Note/
Credit Note/ Supplementary invoices / correction mechanism.
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GST: RETUN FILING
Pre - GST Regime Post - GST RegimeNeed not file all Sales Transactions online (Except some States)
All your Invoices details to be filed with GST Every month(Not Scan copy)
Credit availed based on Purchase Invoice
Credit received ONLY when Vendor pays taxes and files Monthly Returns
One Return per month/ period Min. Three Returns every month
Follow-up with vendor mostly for ‘C’ Forms
Follow-up with vendor every month for uploading of supplies after payment of tax.
Multiple Law Compliance Single window filing
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NORMAL/REGULAR TAX PAYERS - MONTHLY RETURN
Action Return
• Upload details of outward supply on or before 10 th of following month
GSTR-1
• Data will be auto populated in 2A of Recipient tax payer GSTR-2A
• Actions of Accept, Reject or Modify has to be taken
• Additions can be made
• Return needs to be filed after 10th and on or before 15 of following month
GSTR-2
• Rejections, modifications and additions in GSTR-2 will be made available to supplier in 1A
• Supplier has to take action by 17th
GSTR-1A
• Auto-populated return will be available for submission along with the payment on 20th
GSTR-3
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GST RETURNS, PERIODICITY AND DUE DATES
Section Return Type
For Periodicity Due Date
37 GSTR-1 Outward Supplies Made by Tax payer. The "Detail of Outward supplies" shall include invoice, debit notes, credit notes and revised invoices
Monthly 10th of Next Month. recipient of supplies, can either accept or reject the detail so communicated on or before 17th of the next month
38 GSTR-2 Inward Supplies Made by Tax payer. The details of inward supplies added, corrected or deleted by the recipient in his FORM GSTR-2 shall be made available to the supplier electronically in FORM GSTR-1A
Monthly 15th of Next Month. supplier may either accept or reject the modifications made by the recipient and FORM GSTR-1 furnished by the supplier shall stand amended to the extent of modifications accepted by him.
39(1) GSTR-3 Tax Return (other than Composition & ISD Dealer)
Monthly 20th of Next Month
39(2) GSTR-4 Composition Dealer Quarterly 18th of Next Month
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GST RETURNS, PERIODICITY AND DUE DATES
Section Return Type For Periodicity Due Date39(4) GSTR -6 ISD Monthly 13th of Next Month39(3) GSTR –7 Return of TDS Monthly 10th of Next Month
44 GSTR-9 Annual Return Annually 31st December of Next FY.
39(5) GSTR-5 Periodic Return by Non-Resident Foreign Taxpayer
Within 20 Days after the end of Tax period or within 7 days after the last date whichever is earlier?
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ISSUE:Cross-references rule number incorrectRule 2(5) of draft GST return rules refers to ISD invoice ‘…. issued under rule 7….”However, there appears to be an error as ISD invoice is referred in rule 6 and not 7
HSN CODES & SERVICE ACCOUNTING CODE
HSN Code for goods - in invoice level details
4-digit HSN Code mandatory for taxpayers having turnover above Rs. 5 Crore in
preceding FY
2-digit HSN Code for taxpayers with turnover between Rs. 1.5 Crore & Rs. 5
Crore in preceding FY - optional in 1st Year and mandatory from 2nd Year
8-digit HSN Code mandatory for exports & imports
Accounting Codes for services – in invoice level details
Mandatory for those services for which Place of Supply Rules are dependent on
nature of services
Mandatory for exports & imports
Service Accounting Code to be prefixed with ‘s’ for differentiating from HSN
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MATCHING OF ITC – SEC 42
• After the due date of furnishing the form GSTR 3
• Following details to be matched
(a) GSTIN of the supplier
(b) GSTIN of the recipient
(c) Invoice/Debit Note date
(d) Invoice/Debit Note number
(e) Taxable value
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MATCHING OF ITC – SEC 42
B2B supply information given by the supplying taxpayer in GSTR-1 will be auto-
populated into GSTR-2 of the counter-party purchaser
Purchasing taxpayers will be allowed to add invoice details in GSTR-2 & avail credit if
he is in possession of valid invoice & have received supply of goods or services
Counterparty registered taxpayers shall have a 2-day window to reconcile invoice
information among themselves prior to filing of GSTR-3
Credit availed on unmatched invoices shall be auto-reversed in the next to next return
period (e.g. mismatched ITC for April to be auto-reversed in return for June)
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FILING OF RETURN
To be filed by taxpayer at GST Common Portal either:
by himself logging on to the GST System using his own user ID & password; or
through his authorized representative using the user Id & password (allotted to
the authorized representative by the tax authorities), as chosen at the time of
registration, logging on to the GST System
Filing may be done through TRPs / FCs/GSP also
Filing may be done either directly or by using Applications developed by accounting
companies / IT companies which will interact with GST System using GSP.
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ASP/GSP: FOR COMPLIANCES UNDER GST
For successful filing of returns , all records will have to be maintained in the ERP/Tally/Other Software's.
GSP and ASP will provide related services.
ASP will be responsible for developing the necessary software bridge.
GSP will be responsible for the proper uploading of invoices and filing of returns from technical perspective as vanilla SAP output will be incompatible with GSTN accepted formats.
ACTION: Assesse to evaluate and initiate the process of identification and appointment of GSP and ASP
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REVISION
Revision of information permitted
Changes in Tax liability / ITC amount to be handled through Ø Debit- Credit Notes
Revision of supply invoices
Post sales discount
Volume discount
Amendments / Corrections
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THANKS!! ANY QUESTIONS ?CONTACT FOR POST SESSION QUERY:CMA. (Dr.) Shailendra Saxena E-mail: [email protected] Cell: +91-93774-10260 | Website: www.jlnus.com
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