Reports of Joint Committee on draft

business processes for GST released

The Ministry of Finance has made available draft business processes of GST relating to:

Registration under GST regime (dated July 2015)

Payment of tax (dated April 2015)

Refund of tax (dated August 2015)

In order to invite comments from the public and the comments/ feedback can be submitted
through the MyGov.in portal. The business processes are issued in form of reports of a joint
committee, constituted to make recommendations to Empowered Committee of State
Finance Ministers, for incorporating under the proposed GST law. The broad highlights of
the reports are mentioned below:
GST Registration

Recommendation to provide for obtaining registration within 30 days from the date of
liability to obtain registration.

Without obtaining registration, GST cannot be collected and neither can input tax
credit (ITC) be claimed by the dealer.

ITC prior to the date of registration would not be available if registration application is
not filed within prescribed time limit of 30 days.

To provide for penalty for failure to obtain registration within stipulated time period.

Details of the person currently registered under the indirect tax law, being subsumed
under the GST regime, would be migrated to the GST network. Additional details may
be required to be furnished.

Procedure for registration of new applicants also suggested along with the draft list of
documents required.

Separate state wise registration would be required to be obtained by a taxable person

Option for voluntary registration, casual dealer registration, non-resident dealer

registration and compounding scheme may be available under the GST regime.

Registration is to be obtained mandatorily, in case of any inter-State supply

irrespective of the turnover.

Also, appears that the reverse charge mechanism on import of service from outside
India would continue under the GST regime. The person liable to pay tax under reverse
charge will be also liable to obtain registration mandatorily, irrespective of turnover.

Concept of Input Service Distributor (ISD) may continue, subject to such provisions
being incorporated under the GST law. However, this facility would only be available
for services and not for goods.

1|Page

GST identification number (GSTIN) would be a 15 digit State-wise PAN based

number.

For claiming GST refund, UN bodies/ embassies may be assigned a unique

identification number.

Facilities like Tax Return Preparer (TRP) and Facilitation Center (FC) to be made
available for taxpayers who are not IT savvy.

Formats of application form for registration, opting for/ out of composition scheme etc.
also suggested.

GST Payment process

GST payment challan should be generated electronically from GSTN common portal
and no manually prepared challan to be used.

Facilitation for tax payers by providing anytime, anywhere payment option, paperless
transactions as well as electronic reconciliation of transactions

Three different payment mechanisms being proposed:

- Payment through internet banking (through authorized banks) and through credit
cards/ debit cards
- Over the counter (OTC) payment through authorized banks (up to Rs. 10,000/per challan only)
- Payment through NEFT/RTGS from any bank (including other than authorized
banks)

Other payment mechanisms like book adjustment presently allowed to some

departments/ State governments or payment by debit to export scrip to be
discontinued.

Suggestion to not allow payment across departmental counters, except in the case of
deposit of taxes during enforcement and anti-evasion investigations.

Format of challan along with challan correction mechanism also suggested in the
report. The format of challan to be common for all modes of payment.

Only one challan would be used for all types of payment such as CGST, IGST,
SGST, interest, penalty etc. and sample accounting codes for each type of payment
also suggested

Setting up of Electronic Focal Point Branches (e-FPBs) for each authorized bank for
the entire country. e-FPBs to perform the following broad roles:

Opening and maintenance of accounts for receipt of tax remittances

Sending real time data for successful completion of payment transaction

Preparing daily report regarding receipt of payment government wise and submitting

2|Page

it to Reserve Bank of India.

Refund Processes

Situations under which refund may arise are provided in the report. For example
excess payment of tax inadvertently, export (including deemed exports) of goods/
services, etc.

System based verification of refunds ensuring minimal human intervention.

Exports are proposed to be zero rated and refund of unutilized GST paid on inputs to
be refunded to the exporter, subject to prescribed conditions.

Suggested that option to procure duty free inputs for goods exported should not be
available.

Verification of Bank realization certificate (BRC) may be done post sanctioning of

refund claims in case of export of goods, as export in such case can be substantiated
basis customs documents.

BRC verification would be required prior to sanctioning of refund claims in case of

export of services.

For online verification of export documents, uploading scanned copies along with
refund application would be required.

Benefits of actual exports may be extended to deemed exports (goods supplied to

EOUs/ SEZs etc.) with some exceptions and conditions

Suppliers of exempted/ nil rated/ non-GST goods or services would not be entitled to
ITC of GST paid on inputs and consequently refund.

Proportionate ITC may be allowed in case of mixed supplies (exempted and taxable).

Tax refund for international tourist (TRT) scheme proposed, for allowing refund at the
time of exit form the country of GST paid on purchase of goods by international
tourists.

Forms for refund claims, refund order and reduction/ adjustment summary provided.

Time limit for filing refund application proposed to be one year from the relevant date.
Relevant date to be defined separately in the GST law for each kind of refund claim.

Refund may be required to be carried forward to next tax period(s) in some cases,
otherwise refund would be provided by way of bank transfers such as NEFT/RTGS.

Source: Reports of the Joint Committee on Business Processes f

3|Page