Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
AWARENESS SESSION
By
CA CR Koundinya
M.com., PGDTFM,PGDEXIM,ACS.,ACA
&
CA CAK Chaitanya
B.Sc., PGDCA, ACA
Contact details:
RAGHAVENDRA KOUNDINYA.
Chartered Accountants
Address: plot no.295&296, Flat No.403,
Nishita plaza, KPHB 6TH Phase,Hyderabad-85
Email: cackoundinya@gmail.com
Phone no.040-23059333
Mobile: 9959860333 , 8888833357
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Introduction of GST would be a significant step in the field of indirect tax reforms in India. GST
Act is likely to be effective from 1st July,2017. - We have tried to explain few important
provisions under GST.
The concept of sales and purchases has gone, now it is outward supply and inward Supply.
Supply of petroleum Crude, high Speed diesel, motor Spirit (petrol), natural gas and aviation
turbine fuel and alcohol for human consumption are kept outside the purview of GST.
For these commodities, indirect taxation system of VAT and Central Excise will continue.
The place of supply determines whether a transaction is an interstate Supply or intra –state
supply. The place of supply of goods is required to be determined whether a supply is subject to
SGST + CGST in a State or else would attract IGST if it is an interstate supply.
Intra-state Supply means location of Supplier (seller) and place of supply (purchaser) are in the
same State.
Inter-State supply means location of Supplier (seller) and place of supply (purchaser) are in two
different States.
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For intra-state supply - State Goods and Service Tax (SGST) and Central Goods Service Tax
(CGST) are to be levied.
For example Mr. A of Guntur supply goods to Mr. B of Vijayawada. The movement of goods
terminates at Vijayawada. The place of supply is in the State of Andhra Pradesh hence CGST
SGST is to be levied. If the rate of tax on goods is 18% then 9% CGST and 9% SGST are
For example Mr. A of Vijayawada supplies goods to Mr. S of Warangal. The movement of
goods terminates at Warangal. The place of supply is inter-state hence GST is to be levied. If rate
on goods is 18%, then 18%. IGST is to be collected from the customer.
3) SUPPLY
Supplies include all forms of supply of goods and / or services such as sale, transfer, barter (one
product is exchanged with another product), exchange, license (arty grant of license to use forms
part of supply e.g. online Subscriptions), rental (renting of property is Supply under GST), lease
(letting out the building or property on lease is Supply under GST) or disposal (disposal of
business assets forms part of Supply).
Supplies involving two or more goods or services or any combination thereof wherein one
of the components having essential character is known as principal supply. This composite
Supply shall be taxable at the rate applicable to principle supply. Example: Goods + insurance
service on transportation. Supply of goods is the essential Supply. Rate applicable to Such goods
would be applicable to this composition Supply.
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TIME OF SUPPLY OF GOODS
-
"Forward charge - Supplier collects from the receiver
"Reverse charge - Receiver has to pay GST directly to Government.
The value of supply of goods or services shall be the transaction value, which is the price
actually paid or payable for the said Supply of goods or services where the supplier and the
recipient of the supply are not related and the price is the sole consideration for the supply.
5) (a) any taxes, duties, cesses, fees and other charges levied under any law for the time being in
force other than , SGST Act, the CGST Act if charged separately by the
supplier.
5)(b)any amount that the Supplier is liable to pay in relation to Such supply but which has been
incurred by recipient of the Supply and not included in the price actually paid or payable for the
goods or services or both.
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5)(c) incidental expenses including commission and packing charged by the Supplier to the
recipient and any amount charged for anything done by the Supplier in respect of the supply of
goods or services or both at the time of, or before delivery of goods or supply of services.
Interest or late fee or penalty for delayed payment of any consideration for any supply.
Subsidies directly linked to the price excluding subsidies provided by the Central
Government and State Government.
Any discount which is given at the time of supply if such discount is duly recorded in the invoice
issued and after the supply has been effected if such discount is established in terms of any
agreement entered into at or before the time of such supply and specifically linked to the relevant
invoices and input tax credit attributable to the discount on the basis of document issued by the
Supplier has been reversed by the recipient of the supply.
7) APPORTONMENT OF CREDIT
Goods and Services used partly for the purpose of business and partly for other purpose, ITC
shall be restricted to so much of the ITC as is attributable to the purpose of business.
Goods or Services used partly for effecting taxable Supplies including zero rated supply and
partly for effecting exempt supplies the amount of credit shall be restricted to so much of the
input tax as is attributable to the said taxable Supplies including zero rated supplies.
ITC shall not be available in respect of Motor vehicles and other conveyances except
when they are used for making further supply of such vehicles, transportation of passengers or
imparting training on driving, flying, navigating such vehicles or for transportation of goods.
A)
i. Food and beverages
ii. Outdoor catering
iii. Beauty treatment
İV. Health Services
v. Cosmetics & plastic surgery
Except where an inward supply of goods and services is used by a person for making outward
taxable supply of the same category of goods or services
B)
i. Membership of a club, health and fitness center
ii.Rent- a- cab, life insurance and health insurance except where the Government notifies the
services which are obligatory for an employer to provide to its employees.
iii.Travel benefits extended to employees
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iv. Works contract services when supplied for Construction of an immovable property (other
than plant and machinery) except where it is an input service for further supply of Works
Contract service.
v. The goods or service received by a person for construction of immovable property (other than
plant and machinery) on his own account including when such goods or Services are used in the
Course of or furtherance of business.
vi. Composition dealer
vii. Goods or services received by non-resident taxable person except on goods imported by him.
viii)Goods or services used for personal consumption.
ix) Goods lost, stolen, destroyed, written off or disposed off by way of gift or free samples.
TAX INVOCE
A registered person Supplying taxable goods is required to issue tax invoice at the time of
removal of goods for supply to the recipient.
Tax invoice shall be issued by the registered person containing the following particulars
a)Name, address and GSTIN of the supplier.
b)A consecutive serial number.
c)Date of issue,
d)Name, address and GSTN of the recipient.
e) If the recipient is un-registered and where the value of taxable supplier is
Rupees Fifty thousand or more, then name and address of the recipient
and address of delivery along with the name of State and its Code.
f) HSN Code of goods or Accounting Code of Services
g) Description of Goods or Services
h) Quantity in case of goods
i) Total value of supply of goods or services
j) Rate of tax (CGST, SGST, GST)
k) Amount of tax charged
1) Place of supply along with name of State, in case of Supply in the course of inter-state.
m) Address of deliver where the same is different from the place of supplier.
n) Whether the tax is payable on reverse charge basis.
o) Signature or digital signature of the supplier or his authorized representative.
lf the value of goods or services is less than Rs.200/- then a registered person may not
issue a tax invoice unless recipient demands for a bill.
A registered person supplying exempted goods or services or paying tax under composition
Scheme has to issue a bill instead of tax invoice.
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6) CONDITIONS FOR TAKING ITC (INPUT TAX CREDIT)
The dealer shall be entitled to take credit of input tax charged on any supply of goods or services
or both which are used or intended to be used in the Course of or furtherance of his business. The
ITC shall be credited to the electronic credit ledger of a dealer. A person shall be entitled if
i) The receiver is in possession of tax invoice or debit note issued by the supplier
iii) The tax charged in respect of such supply has been actually paid to the Government by the
supplier.
v) Where the goods against an invoice are received in lots or installments the person shall be
entitled to take credit upon receipt of last lot or installment.
vi) Where the recipient fails to pay to the supplier of goods / services the amount towards value
of supply along with tax within a period of 180 days from the date of issue of invoice, an amount
equal to the ITC avail by the recipient shall be added to his output tax liability along with
interest. Such recipient shall be entitle to avail the credit of ITC on payment made by him
towards value of Supply of goods / Services with tax payable thereon.
vii) lf depreciation is claimed on tax component of the cost of capital goods and plant and
machinery, the ITC on the said tax component shall not be allowed.
viii) No TC in respect of any invoice after the due date of furnishing annual return in the month
of September following the end of Financial Year.
Credit Note:
Where the taxable value or tax charged in tax invoice in excess of goods supplied are returned or
goods or services are found to be deficient the Supplier shall issue credit notes to the recipient.
Such credit notes is to be declared in the return for the month during which such credit notes has
been issued but not later than September following the end of the financial year or date of
furnishing annual return whichever is earlier.
Debit Note :
Where tax invoice has been issued for any goods or services and the taxable value or tax charged
in the tax invoice is found to be less than the taxable value or tax payable, the supplier shall issue
to the recipient a debit note. Debit note shall include a supplementary invoice.
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Accounts AND OTHER RECORDS
Every Registered person has to keep and maintain true and correct accounts of:
Production or manufacture of goods,
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B2B (business to business) supplies invoice level details to be uploaded.
B2C (business to consumer) transaction, if in the course of interstate with invoice Value more
than Rs.2,50,000/-.
For invoice value less than Rs.2,50,000/- State wise consolidated Summary -HSN Codes and
accounting codes for services
-Details of advance received against future Supplies.
-Details of taxes already paid on advance for which invoices are issued in the respective month.
-Details of Export
-Separate table for Submitting revision in invoices of previous tax periods
-Separate table for submitting correcting errors in earlier returns
-Separate table for details of NIL rated, exempted, non taxable Supplies
-Credit notes and debits notes issued.
GSTR-2A.
Part A: Details of inward supplies
Part B: ISD
Part C: TOS
Fort D: TCS
Dealer to verify, validate, modify or delete, if required, the details relating to outward
supplies, Credit notes/debit notes
Dealer can add details of inward Supplies, Credit/debit notes not declared by the
Suppliers
Form GSTR-2 is to be furnished electronically for a tax period from 11" to 15" of succeeding
month
Invoice level inward supplies of goods and Services for the month.
-Details of import of goods, services, capital goods to be furnished
-Separate table for submitting details of revision or correction of errors in earlier returns
-Separate table to furnish information where partial Credit is availed earlier.
-Separate table for details of NIL rated, exempted, non taxable supplies (Both intra
State & Inter State)
-Separate table for ISD credit and TDS/TCS credit.
lf inward Supplies are added, modified or deleted in return of inward supply, the
same shall be communicated to the supplier after 15" day in form GSTR-1A.
The supplier may accept or reject the details so communicated on 16" to 17."
days of the month.
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In case the difference is accepted, the original return of outward supply shall stand amended
accordingly.
In Case the difference is rejected, the un-match credit shall be added to outward tax liability of
the Supplier in the return of next tax period.
The un-match details can be rectified by the supplier on discovery of error / omission by
payment of tax along with interest.
11(c) GSTR-3
Information of inward and outward Supplies of goods and services are auto populated on the
basis of GSTR-1 and GSTR-2 in form GSTR-3.
Credits are available on provisional basis in electronic credit ledger.
Liabilities are discharged by debiting electronic credit/cash ledger.
On the basis of above information if the dealer is eligible for refund, he can claim in GSTR-3
only. No separate application for refund is required.
GSTR-3 is then submitted to common portal electronically. The above mentioned procedure is
explained hereunder:
Example:
Ram sold goods to Laxman. Ram shall submit GSTR-1 by 10" of next month.
Laxman may accept, amend add the details in GSTR-2A during 11" to 15".
Laxman shall file GSTR-2 before 15" of next month.
lf Laxman amends or make addition in GSTR-2A the same shall be displayed to Ram
in GSTR-1A.
if Ram accepts changes in GSTR-1A before 17", the original GSTR-1 shall stand amended.
If Ram does not accept the changes made by Laxman, ITC shall be denied to Laxman and will be
added to his output tax liability in next month GSTR-3.
Return is to be filed even for Nil supplies. Return shall be treated as valid only when self-
assessed tax is paid in full
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All the omission / modification shall be allowed before due date of filing return for the month of
September of next financial year or before filing annual return, whichever is earlier.
Every registered person has to furnish an annual return electronically for every financial year on
before 31 December following the end of such financial year.
Every registered person who is required to get his accounts audited as per the provisions of GST
Act, has to furnish, electronically, the annual return along with a copy of the audited annual
accounts and a reconciliation statement, re-conciling the value of suppliers declared in the return
furnished for the financial year with the audited financial statement and other details as
prescribed.
A registered person who fails to furnish the details of Outward or inward supplies or fails to file
returns by the due date shall be liable to pay late fee of Rs.100/- for every day during which such
failure continues subject to a maximum amount of Rs.5,000/-.
Any registered dealer who fails to furnish annual return within the prescribed time shall be liable
to pay a late fee of Rs.100/- for every day during which such failure continues subject to a
maximum amount calculated at a quarter percent (1/4" %) of his turnover
in the State.
ELECTRONICLEDGERS
Electronic ledger shall be maintained on Dash board of taxpayer by GSTN. Such ledgers
shall be updated in real time.
Details in these ledgers shall be Auto populated from previous tax period return.
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Debited to discharge only tax liability. Credited with ITC as self assessed in return
a) The following persons are required to deduct tax at the rate of 1% CGST / SGST each from
the payment made to the Supplier of taxable goods / services where the tota
value of such supply exceeds Rs.2,50,000/-.
b)No deduction shall be made if the location of the supplier and the recipient are in
different State.
c. For deducting TDS, the value of supply shall be taken as the amount excluding tax.
d. The Tax Deducted shall be paid to the Government by the deductor within 10 days
after the end of the month.
e. The tax deduct or shall furnish the certificate within 5 days of payment to the
Government. Failure to furnish the certificate the deduct or shall be liable to pay late fee
of Rs.100 per day after expiry of 5 days period until the failure is rectified, subject to a
maximum amount of Rs.5,000/-.
Reverse charge means the liability to pay tax by the recipient of supply of goods or
services or both instead of the Supplier of such goods / services. In short the purchaser
is liable to pay tax and not the seller.
In Case of Supplies from un-registered person, the recipient has to pay tax. (purchases from
URD, the purchaser has to pay tax).
Such tax has to be paid in cash and the same cannot be adjusted by utilizing ITC.
Person liable to pay under RCM, required to be registered under GST Laws.
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Information of RCM is required to be furnished in GST Returns.
Every person liable to pay tax as per the provisions of Act but fails to pay the same within the
prescribed time has to pay interest for the period for which the remained unpaid at the rate not
exceeding 18%.
Every electronic commerce operator shall collect an amount at 1 % of the and value of taxable
supplies made through it by other Suppliers where the consideration with respect to such supplies
is to be collected by the operator.
The amount Collected by the operator shall be paid to the Government within 1days after the end
of the month. Such operator who collects the amount shall furnish annual statement containing
the details of outward Supplies of goods / services before 31 December following the end of
financial year.
The Supplier who has supplied the goods / services through the operator shall claim credit of the
amount Collected and reflected in the statement of operator.
b) Where the credit has accumulated on account of rate of tax on inputs being higher than the
rate of tax on output supplies.
No refund of un-utilized ITC shall be allowed in Cases where the goods are exported out of India
subject to Export Duty.
1) Every person registered under any of the existing law and having a valid PAN shall be issued
a certificate of registration on provisional basis which unless replaced by a final certificate of
registration shall be liable to be cancelled if the prescribed conditions are not complied with.
2) A registered person other than a person opting for Composition scheme, shall be entitled to
take, in his electronic credit ledger, the amount of CENVAT credit carried forward in the return
preceding to the appointed day.
Such credits shall not be allowed in the following circumstances:
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a) Where the said amount of credit is not admissible as ITC under GST Act or
b) Where the dealer has not furnished all the returns under the existing law for the period of 6
months immediately preceding the appointed day
Οr
c) Where the said amount of credit relates to goods manufactured and cleared under such
exemption notifications as are notified by the Government.
3) A registered person shall be entitled to take credit of un availed CENVAT credit in respect of
capital goods, not carried forward in a return, furnished under the existing law by him.
The registered person shall not be allowed to Credit unless the said credit was admissible as
CENVAT credit under the existing law and is also admissible as ITC under GST Act.
4)A registered person who has engaged in the manufacture of textile as well as exempted goods
under the Central Excise Act or provision of taxable as well as exempted services but which are
liable to tax under the GST Act shall be entitled to take credit in electronic credit ledger
a. the amount of CENVAT credit carried forward in a return furnished under the existing law by
him and
b. the amount of CENVAT credit of eligibilities in respect of inputs held in stock and inputs
contained in semi-finished or finished goods held in stock on the appointed day, relating to such
exempted goods or services.
5) A registered person shall be entitled to take Credit of eligible duties and taxes it respect of
inputs or input services received on or after the appointed day but the duty or tax in respect of
which has been paid by the supplier under the existing law, subject to the condition that the
invoice or any other duty or taxpaying document of the same is recorded in the books of
accounts of such person within a period of 30 days from the appointed day.
6) A registered person who was paying tax at a fixed rate or paying a fixed amount in lieu of tax
payable shall be entitled to take Credit of eligible duties in respect of inputs held in stock and
inputs contained in semi-finished or finished goods held in stock on th appointed day subject to
following conditions. a) Such inputs or goods are used or intended to be used for making taxable
supplier.
b) The said registered person is not paying tax under composition scheme
c) The said person is eligible for ITC on such inputs under GST Act.
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e) Such invoices were issued not earlier than 12 months immediately preceding the appointed
day.
7) Where a registered person having centralized registration under the existing law has obtained
a registration under GST Act, such person shall be allowed to take Credit of the amount of
CENVAT credit carried forward in a return under the existing law in respect of the period ending
with the day immediately preceding the appointed day.
IGST shall be levied on inter-state supply of goods and services. Import of Goods and Services
will be treated as inter-state supplies and IGST will be levied on import of goods and services
into the Country. IGST paid can be claimed as set off.
20(A) EXPORTS
Export will be treated as zero rated Supplies. No tax will be payable on export of Goods &
Services, however Credit of input tax credit will be available and same will be available as
refund to the exporters. The exporter will have an option to either pay tax on the output (not to
collect from the buyer) and claim refund of IGST or export under bond without payment of GST
and claim refund of input tax credit.
20(B)
COMPOSITION SCHEME
Small taxpayers with an aggregate turnover in preceding financial year up to Rupees fifty
Lakhs shall be eligible for the scheme. Under the scheme a taxpayer shall pay tax as a percentage
of his turnover in a State during the year without benefit of input tax credit on purchases. The
floor rate of tax for CGST & SGST shall be 1% for manufacturer (manufacturer of goods which
would be notified) and 0.5% in other cases, 2.5% for specific services namely serving of food or
any other article for human Consumption. Such dealer shall not collect any tax from the
customers.
A person availing composition Scheme during the financial year, crosses the turnover of
Rupees fifty Lakhs during the course of the year then the option availed shall lapse from the day
on which his aggregate turnover during the financial year
Exceeds Rupees Fifty Lakhs.
ANTI-PROFITEERING MEASURE
Any reduction in rate of tax on any supply of goods or services or the benefit of input tax
credit shall be passed on to the recipient by way of commensurate reduction in prices. An
authority may be constituted by the Government to examine whether input tax credits avail by
any registered person or the reduction in the tax rate have actually resulted in commensurate
reduction in the price of the goods or services or both
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Supplied by the dealer.
TRANSITIONAL PROVISIONS
A registered person (other than composition dealer) shall be entitled to take in his electronic
credit ledger, credit of the amount of VAT and Entry Tax carried forward in the returns relating
to the period ending with the day immediately preceding the appointed day (probably 1 July,
2017). Such person shall not be allowed to take credit in the following circumstances:
i) Where the said amount of credit is not admissible as input tax credit under GST act
Or
ii) Where he has not furnished all the returns required under MVAT Act for the period of 6
months immediately preceding the appointed date or
iii) Where the said amount of Credit relates to PSI units not entitled to claim Set off under rule
79 of MVAT Rules
It is further provided that while calculating credit, the differential liability of Central Sales Tax
on account of non-receipt of Form-C. Form-F, form-H, E-1, E-Il,
A registered person (other than composition dealer) shall be entitled to take, in his electronic
Credit ledger, credit of un-availed input tax credit, (ITC) in respect of capital -goods, not carried
forward in a return, furnished under the existing law. Such credit shall not be allowed unless the
said credit was admissible as ITC under the existing law and also admissible as TC under GST
Act.
c) A registered person who was engaged in the sale of taxable goods as well as exempted / tax
free goods under the existing law but which are liable to tax under GST Act, shall be entitled to
take, in his electronic credit ledger. The amount of credit of VAT. & entry tax carried forward in
a return furnished under the existing law and
i)the amount of credit of VAT & Entry Tax in respect of input contained in semi-finished or
finished goods held in stock on the appointed day relating to such tax free / exempted goods.
d) A registered person shall be entitled to take in his electronic credit ledger, Credit of VA and
entry Tax in respect of inputs received on or after the appointed date but the tax respect of which
has been paid by the Supplier under the MVAT Act subject to condition that the invoice of the
same was recorded in the books of accounts of SU person within a period of 30 days from the
appointed day.
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On sufficient cause such period can be extend by commissioner for further days. The
person has to furnish a statement as prepared.
e) A registered person who was paying tax at a fixed rate or paying a fixed amount in of
tax under the existing law shall be entitled to take, in his electronic credit led اینCredit of VAT
in respect inputs, held in stock and inputs contained in Semi-finished, finished goods held in
stock on the appointed day subject to the following condition (i)
Such inputs are used in for making taxable supplies under GST Act.
(iii) The registered person is eligible for ITC under GST Act.
(v) Such invoices were not issued earlier then 12 months preceding the appointed date.
f) Goods Return -
Any goods on which tax has been paid under the existing law (MVAT Act) at the time of sale
(not earlier than 6 months prior to the appointed date) are returned on or after the appointed day,
the registered dealer shall be eligible for refund of tax paid under the existing law where such
goods are returned by un-registered person within 6 months from the appointed day provided that
if the Said goods are returned by a registered person, the return of such goods shall be deemed to
be a supply.
g) Debit Note
Where, in pursuance of a contract entered into prior to the appointed day, the price of any
goods is revised upwards on or after the appointed day, the dealer shall issue debit note or
supplementary invoice within 30 days of Such price revision, such debit note shall be deemed to
have been issued in respect of outward Supply made under GST Act.
h) Credit Note
Where, in pursuance of any contract entered into prior to the appointed day, the price of
any goods is revised downwards on or after the appointed day, the registered person (seller) shall
issue credit note within 30 days of such price revision, such credit note shall be deemed to have
been issued in respect of outward supply made under GST Act.
Provided that the registered person shall be allowed to reduce his tax liability on account
of issue of credit note only if the recipient of credit note (purchaser) has reduced his ITC
corresponding to such reduction of tax liability.
i) Every claim for refund under MVAT Act shall be disposed of in accordance with the
provisions of existing law and such amount of refund shall be refunded to the dealer in cash.
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Provided that no refund shall be allowed of any amount of ITC where the balance of the said
amount as on the appointed day has been carried forward under GST Act.
j) Appeal, revision, review or reference relating to any output liability initiated whether before,
on or after the appointed day under the existing law (MVAT) / CST) shall be disposed of in
accordance with the provision of the existing law.
k) The goods / services supplied on or after the appointed day in pursuance of a contract entered
into prior to the appointed day shall be liable to tax under the provisions of GST Act.
1) Where any goods sent on approval basis, not earlier than 6 months before the appointed day,
are rejected or not approved by the buyer and returned to the seller on or after the appointed day,
no tax shall be payable thereon if such goods are returned within 6 months from the appointed
day.
Provided further that the tax shall be payable by the person returning the goods if such goods are
liable to tax under GST Act and are returned after the above period.
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