Welcome to Seminar - KG Somani · Welcome to Seminar GST : ALL YOU WANTED TO KNOW On Revised Model...

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Welcome to Seminar

GST : ALL YOU WANTED TO KNOW

On

Revised Model Of Goods And Service Tax Law

Presented ByKGS ADVISORS LLP

22nd December, 2016SCOPE Complex, New Delhi

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Revised Model Of Goods And Service Tax Law


Technical Session –I

Presented ByCA S.K. Loonker

SCOPE Complex, New Delhi22nd December, 2016

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TOPICS COVERED

1. Indirect Tax Levies2. Taxable Event for IDT levy3. Challenges with Existing Framework4. What is GST ?5. Levy & Collection of SGST / IGST6. Definition of Goods & Supply7. Supply Concept8. Taxable Person9. Place of Supply10.Time of Supply11. Taxable Value12.Tax Rates13.Composition Scheme14.Input Tax Credit15.Transitionary Provisions16.Special Provisions17.Sector Impact18.Overall Impact on trade and Industry

Disclaimer : This presentation is based on the updations made by the Finance Ministry up to 30th November,2016

Present IDT Levy by Central Govt.

1. Central Excise Duty

2. Addl Excise Duties

3. Excise Duty levied under Medicinal & Toiletries Preparation Act

4. Addl Customs Duty (CVD) & Special Addl Customs Duty (SAD)

5. Service Tax

6. Surcharges & Cess on Above

In GST Levied as

Note: Centre continues levying Exciseon Petroleum Products.

Present IDT Levy by State Govt

1. VAT/Sales Tax/ CST retained by States.

2. Purchase Tax/ Luxury Tax/ Entertainment Tax

3. Entry Tax/ LBT/ Octroi

4. Tax on Lotteries/Betting/Gambling

5. Tax on Tobacco & Tobacco Products

6. Surcharge & Cess on Above

In GST Levied as

Note: State continues levying Sales Tax onPetroleum Products & Alcoholic liquor forhuman consumption.

CGST

Indirect Tax Levies (IDT)

SGST

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ExciseLevied

on

Mfg./ Removal of goods

Service tax levied on

In GST, Tax levied on Supply of Goods / Services based on Place & Point of

Supply

Taxable event for IDT levy

ET or LT levied on

Providing Entertainment or Luxuries

Sales tax & Purchase tax levied

on

Sale or Purchase of goods

Rendering of services or receipt

of considerati

on

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Multilayered Levies

Tax barriers fragmentedeconomy

Multiple taxable eventsmade structure complex

Tax Cascading due to non-availability of cross credits

Tax leakage

Challenges with existing framework

Complex Laws/Procedure

Besides Federal taxes, all 35States have independentVAT laws

Check posts hassles on stateborders

Multiple authorities,

payments and returns

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1. Harmonious structure of GST maintaining States’ autonomy consistent with FederalStructure of India

2. GST levied & collected by State Govt. = SGST

3. GST levied & collected by Central Govt. = CGST

4. SGST & CGST both to be levied on

Local Supply of Goods & Services i.e. Intra-state transactions

5. Integrated GST levied & collected by Central Govt. = IGST

i. IGST applicable on Interstate Supply of Goods & Services

ii. IGST applicable on Import of Goods & Services

iii. IGST rate = CGST rate + SGST rate

6. Export of goods & services = Zero rated (Tax-free/Exempted)

Dual GST Model

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Basis Destination based Consumption tax

Trigger Each stage of supply along value chain

Collection By supplier on each supply against tax Invoice

Payment To the Treasury by cash or credit

Credit Tax credit of GST paid on inputs

GST – Emerging Paradigm

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Levies in addition to GST

Levy by Central Govt Levy by State Govt

Taxes/ Levies/ Fees

Not- Subsumed(Not- Merged)

1. Customs Duty2. Direct Taxes

(IT/Corp. Tax/etc)3. Securities

Transaction Tax4. Excise on Petroleum

products, Tobacco & Tobacco products

1. Profession Tax2. Stamp Duty3. Property Tax4. Tax on Petroleum

products, Alcoholic liquor

Levies continued by Centre & States

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CGST & SGST shall be levied on all

intra-state supplies (i.e. Supply within State) of goods and / or services… at the rate specified in the Schedule… and collected in such manner as prescribed…

Q ) On what turnover/value…?

Q ) ‘goods’ means ? Refer Defn u/s 2(49)

Q ) ‘services’ means ? Refer Defn u/s 2(92)

Q ) ‘Supply’ means ? (Refer Sec. 3)

Levy & Collection of SGST u/s Sec 8 & IGST u/s 5

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‘• ‘Goods’ means every kind of movable property

other than money and securities

but includes actionable claims, specified intangible property, growingcrops, grass and things attached to or forming part of the land which areagreed to be severed before supply or under the contract of supply;

Example: Tangible property/ Water/ Electricity etc

Q. Petroleum Products/ Alcoholic Liquor?(Amended Entry 54 of State List II specifies said goods)

Q. Newspaper?(Old Entry 92 of Union List I “which referred as Taxes on sale/purchase of

newspapers and on advertisements published therein” is omitted vide 122nd

Constitution Amendment)( Amended Entry 54 of State List II does not specify ‘Newspaper’)

‘Goods’ Definition u/s 2(49)

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• ‘Services’ means anything other than goods;

Services includes Specified Intangible PropertyEg. Patents, Trademarks, Copyrights, Designs, Import Licenses,…etc

Q. Software?.....when supplied on CD/PD?[Canned Software is goods – TCS Ltd (2005) 1 SCC 308]

Q. Electromagnetic waves / Radio frequencies are not goods as held inBSNL (2006) 3 SCC 1…..so are services!!

‘Services’ Definition u/s 2(92)

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1. ‘Supply’ includes… (‘Supply’ = provide or flourish)all forms (i.e. all types of ) of supply of goods &/or servicessuch as sale, transfer, barter, exchange, license, rental, lease ordisposal made or agreed to be made, for a consideration by aperson in the course or furtherance of business

Meaning & Scope of ‘Supply’ u/s 3 of GST Act

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1A. ‘Supply’ includes… (‘Supply’ = provide or flourish)all forms (i.e. all types of ) of supply of goods &/or servicessuch as sale, transfer, barter, exchange, license, rental, lease or disposal madeor agreed to be made, for a consideration by a person in the course orfurtherance of business

Q. ‘Business’ definition u/s. 2(17): inclusive definition/ any trade, commerce,manufacture/profession, vocation/……whether or not for a pecuniary benefit? (i.e. Object may be formonetary benefit or Charitable purpose);incidental or ancillary transaction; Irrespective of volume, frequency,continuity or regularity;during commencement or closure; capital assets or other goods.


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2. Supply includes Importation of service, whether or not for aconsideration & whether or not in the course/ furtherance of business

Q. Architect/Dr- Relative from foreign country, rendered free service?

Q. Downloading of Software, free of cost? Just for personal use?

Q. Foreign Branch/Principal rendering free service to Indian Branch?


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3. Supply includes;Supply specified in Schedule I,made or agreed to be made without consideration:

3.1. Permanent transfer/disposal of business assets:e.g. Assets gifted/ donated/ discarded free/transferred free by operation of law/ Assets shared by Partners duringretirement/dissolution of Firm

3.2. Supply of Goods and / or Services between related person orbetween distinct persons made in the course or furtheranceof business.

Example: free supplies, samples, sales promotion exps., gifts, goodsdonated, Staff Welfare expenses…etc.


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4. Where an agent, for agreed commission/ brokerage,

either supplies or receives

any goods and/or services

on behalf of any principal,

the transaction between such principal and agent shall be

deemed to be a supply.


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Following are supply of Goods:

1. Transfer of title in goods; transfer of title in goods under an agreement whichstipulates that property in goods will pass at a future date upon payment offull consideration as agreed.

i.e. outright sale/ sale on hire-purchase or on installment basis

2. Business goods/assets of a taxable person when sold by another personhaving power to do so to recover any debt owed by said taxable person , isdeemed as goods supplied by the taxable person in the course or furtheranceof business.

E.g. Auction by Bank/ financial institutions

3. Supply of goods by any unincorporated AOP/BOI,to a member thereof forcash, deferred payment or other valuable consideration.

Schedule II specifies matters to be treated as Supply of Goods Or Supply of Services (Sec. 3(2)):

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Following are supply of Goods (Contd…)

4. Where any person ceases to be a taxable person, any goods forming part of business assets, shall be deemed to be supplied by him in the course/ furtherance of his business immediately before he ceases to be a taxable person, unless-

a) Business is transferred as a Going Concern or

b) Business is carried on by a personal representative who is deemed to be a taxable person.

5. Goods/Assets of a business are transferred or disposed off, whether or not for a consideration.


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Following are supply of Services:

1. Transfer of right to use any goods for any purposes (whether or not for a specifiedperiod) for cash, deferred payment or other valuable consideration.

2. Transfer of goods or of right in goods or of undivided share in goods, without transferof title thereof. i.e. lease/hire of goods.

3. Temporary transfer or permitting the use or enjoyment of any intellectual propertyright (IPR)

4. Development, Design, programming, customization, adaptation, upgradation,enhancement, implementation of Information Technology Software.

5. Lease/ Tenancy/ Easement/ License to occupy land;renting of immovable property i.e. commercial or residential or factory along with plant &machinery

6. Lease or letting out the building including commercial, industrial or residential complexfor business or commerce, either wholly or partly.


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7. Any treatment or process applied to another persons goods i.e. pure services.

8. Works Contract (WC) (Defn u/s 2(110)) including transfer of property of goods (whetheras goods or in some other form) involved in the execution of a WC.

9. Construction of a complex, building, civil structure or a part thereof, includingbuilding intended for sale to buyer, wholly or partly, except where entireconsideration has been received after issuance of completion certificate, where required, bythe competent authority or before its first occupation, whichever is earlier.

The term ‘Construction’ includes additions, alterations, replacements or remodeling ofany existing civil structure.


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10. Service of food & non-alcoholic drinks: Supply, by way of or as part of any service or inany other manner whatsoever, of goods, being food or any other article for humanconsumption or any drink (other than alcoholic liquor for human consumption), wheresuch supply or service is for cash, deferred payment or other valuable consideration.

11. Business goods/assets put to any private use or making available for private use,whether or not for a consideration.

12. Agreeing to the obligation to refrain from an act, or to tolerate an act or asituation, or to do an act.

Note: Subject to Schedule II, the Central Govt. or State Govt. may, upon

recommendation of the GST Council, specify by notification, the transactions that are

to be treated as supply of goods or services or neither.


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Composite Supply,

To cover bundled supply of goods and services one of which

will be principal (predominate) supply. The tax liability will be

determined based on the rate and provisions applicable to the

principal supply.

Mixed Supply :-

To cover the cases of bundled goods and services; supply of which arenot depended on each other. The tax liability will be deferred on thesupply which attracts the highest rate of tax.

Composite & Mixed Goods / Supply Concept

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• GOODS

Supply of goods which is provided, or agreed to be provided,continuous or on recurrent basis, under a contract, whether or notby means of wire, cable, pipeline or other conduct and whichsupplier and which supplier invoices, the recipient on a regular orperiodic basis.

Water & Gas bills are issuing successive statement for raising billand receiving payment. Supplies will deemed to be completed on thesuccessive statement, then time will be date of Invoice.

Continuous Supply Of Goods And Services Definition in S. 2(30) & (31)

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• SERVICES

Supply of services which is provided or agreed to be provided,continuously or on recurrent basis, under a contract. For a periodexceeding 3 months with periodic payment obligation and includesof such services.

Continuous Supply Of Goods And Services Definition in S. 2(30) & (31)

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Section 8/ 5: CGST & SGST shall be paid by every “taxable person” in

accordance with the provisions of this Act

“Taxable Person” :

Person who is registered/ required to be registered under Schedule V of this Act.

• Compulsory Registrations :

a. Inter-state supplier

b. Non-resident taxable person

c. Casual taxable persons

d. E-commerce supplier

e. Notified services by e-commerce operator

f. E-commerce operator

g. Payment on reverse charge basis

h. Agent

i. Input Service Distributor

j. Online Database Services.

Taxable Person

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• Following Persons shall not be considered as Taxable Person under thisAct:

a. An Employee in the course of Employment.

b. Any person engaged in business of exclusively supplying goods/ services thatare not liable to tax under this Act.

c. Central Government/ State Government/ Local Authority for specifiedactivities in Schedule IV of this Act.

d. An ‘Agriculturist’ shall not be considered as a taxable person.

Agriculture includes floriculture, horticulture, sericulture (silk wormbreeding), raising of crops, grass or garden produce, grazing (grasslandsuitable for pasturage)

but does not include dairy farming, poultry farming, stock breeding, merecutting of wood or grass, gathering of fruit, raising of man-made forest,rearing of seedling/plants.

Taxable Person

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e. Any Person liable to pay tax on Reverse Charge Basis (RCB) u/s 8(3),receiving services of value not exceeding threshold turnover forpersonal use (other than for use in business).

For e.g. Student importing software/ services.

f. A person whose aggregate turnover in a FY does not exceedprescribed limit shall not be considered as a taxable person. (Sch.Vcontains provision regarding who and when a person is liable to beregistered.)

Q. If agriculturist is supplying any taxable goods/services then?

Q. Educational Institutions and Transporters are not excluded fromthe term ‘Taxable Person’.

Taxable Person

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Determining POS for GOODS

• Place of Supply to determine levy: - IGST interstate / import/ export); or- CGST +SGST (intra state )

Specific provisions

• General Rule : Location where goods movement terminates for delivery.

• No movement involved : Location of goods at time of delivery

• Goods assembled / installed at site : Location of assembly / installation.

• Supply on board a conveyance. Place where goods taken on board.

• For import – Location of Importer

Place of Supply (POS)

Determining POS for SERVICES

• Location of recipient person address on record or supplier location

Specific provisions (Domestic Parties )Illustrative : • Immovable Property• Performance based • Admission to events • Training , events• Transport, mail, courier• Telecommunication• Financial Services and Insurance Services

Specific Provisions• When either supplier or recipient is outside India• online database services supplied by non residents

Place of Supply

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• General Rules

A. Goods

The time of supply of goods shall be earlier of the following :-

-- Date of Issue of Invoice or

-- Receipt of payment

whichever is earlier

In case of supplies attracting tax under Reverse charge mechanism (RCM) shall be the following :-

-- Receipts of Goods

-- Receipt of payment

-- 30 days from the date of Invoice

whichever is earliest

Time of Supply (Section 12 of CGST Act)

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Time of Supply (Section 12 of CGST Act)

• General Rules

A. Goods

The time of supply in case of vouchers :-

-- Date of Issue of Voucher, if identifiable

-- Date of Redemption of voucher in all other cases

If time it is not possible to determine :

-- In a case, where periodical return has to be filed.

-- In any other case, Date of CGST / SGST is paid.

B. Services

The time of supply of services shall be the earlier of the following :-

-- Date of issue of Invoice

-- Last date on which Tax Invoice (u/s 28)

-- Receipt on payment

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Coverage of the term ‘Taxable Value’

• Any amount in relation to supply :

i) Actually paid or

ii) Payable

• Included in ‘transaction value’

a) Taxes and duties charged under any statute, other than GST & Compensation cess.

b) Reimbursable Expenditure

c) Any tax other than GST & Compensation cess.

d) Interest / late fee for delayed

e) Subsidies (other than Govt.)

• Shall not include any discount

a) Before or at time of supply ---- Discount recorded in Invoice issued

b) After supply has been effected ----

i) Discount is established in terms of an agreement into or before supply

ii) ITC reversed by supplier on attributable to discount on supplier document.

Special Valuation mechanism :

Related party transactions

Branch / stock transfers

Notified transaction based

on recommendations

of GST council

Taxable Value

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Likely tax rates• Four tax slabs proposed : 5%, 12%, 18%, 28%

• Luxury and sin goods to be taxed at 28% + additional

• Aligned to HSN

Threshold• States : INR 2 Million;

• Special Category states INR 1 Million

Tax Rates

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Composition Scheme

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• Registered Taxable person (trader or manufacturer) has option todischarge tax liability under composition option, in lieu of normal taxrate of tax payable by him;

Conditions

1. Aggregate Turnover should not be > 50 lacs.

2. Rate of composition scheme tax should not be less than 1% of theturnover during the year.

3. Taxable person who had inadvertently opted for composition levy, heis liable to pay tax along with equivalent penalty.

Composition Scheme

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Restrictions

1. Taxable person can not effects any interstate supplies of goods &services.

2. All registered taxable person having same PAN have to opt forcomposition levy scheme.

3. Not to collect tax separately from recipient of supplies.

4. Not eligible for ITC.

Availability of Tax credit

• Credit of input tax paid on :

i. Capital goods (including telecom towers pipelines etc.)

ii. Inputs

iii. Input Services

Priority of credit offset

IGST

- First IGST then CGST finally SGST

CGST

- First CGST then IGST

SGST

- First SGST then IGST

Input Tax Credit (ITC)

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Definition

IGST/CGST/SGST charged on any supply of goods &/ services to taxpayer used/ intended to be used in the course / furtherance of business.

Inputs / Input / Services

- Goods / Services

- used or intended to be used

- by a supplier

- for making an outward supply

- in the course or furtherance of business

Capital Goods

- Specified goods similar to CENVAT Credit Rules used –

• at the place of business for supply of goods

• outside the place of business for generation of electricity for captive use

• for supply of services

Input Tax Credit (ITC)

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• Every registered taxable person shall entitle to take credit of Input Tax on anysupply / goods to him which are intended to be used in the course /furtherance of his business and the said amount shall be credited to electroniccredit ledger.

• CONDITIONS FOR AVAILING ITC

-- Valid document ( i.e. Tax Invoice / Debit tax Note)

-- Tax Payer has received the goods / services (Exception Bill to ship to cases)

-- ITC only on last lot / installment.

-- Supplier has actually paid the tax

-- Buyer has filed GSTR 3/6

-- Time limit for availing ITC

Restrictions and Conditions for Availing ITC

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• Taxable person claims depreciation on the tax component of the costof capital goods, the ITC shall not be eligible to the extent of said taxamount.

• Taxable person is not eligible to take ITC in respect of any invoice forsupply, after the filing of return for the month of September following

Restrictions and Conditions for Availing ITC

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Relevant provision

1. Capital goods defined as goods the value of which is capitalised in the books of accounts. Regarding 50% credit inI year and balance in next year the provision not yet clear.

2. ITC on Pipelines and Telecommunication towers including foundation and structural support as fixed to the Earth tobe availed in 3 instalments spread over 3 financial years.

3. Banking Companies including NBFCs have option either to reverse ITC as attributable to exempt supplies or availITC only @ 50% of the eligible ITC every month.

4. ITC availed on Input services is liable to be paid as Output Tax liability if the invoices of the service supplier is notpaid within 3 months from date of issue of invoice.

5. Present exclusions for Input services as pertaining to rent a cab , employee benefits to continue except for statutorilymandated services to be provided by employer to employees.

6. ITC on Works Contract services involved in construction of Immovable Property not eligible – except for constructionof Plant & Machinery.

7. However ITC on Input Works Contract services for main works contract w. r. t. the Output GST will be paid will beavailable to the main works contractor.

Provisions for Availment of Input Tax Credit under CGST Act

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Relevant provision

8. ITC on goods and services involved in construction of immovable Property [Other than Plant &Machinery] on one’s own account by a taxable person not eligible even if Immovable Property is usedin course of or furtherance of business.

9. ITC not available w. r. t. Output GST paid / payable under Composition Scheme and also when Input services areused for personal consumption and also when the goods are lost ,stolen, destroyed , written off ordisposed of as Gifts, Free Samples and also the GST paid under cases of detention, confiscation orFraud.

10. ITC credit will be available on vehicles or other conveyances used for transportation of own goods i. e. even ifvehicles or other conveyances are not used for providing for taxable supplies of services of transportation of goods.

11. The period for return of the job worked items (inputs) by the Job Worker to the Principal registered taxable person[Manufacturer or Service Provider ] is enhanced from the present 180 days to one year.

12. The period for return of the capital goods by the Job Worker to the Principal registered taxable person[Manufacturer or Service Provider ] is enhanced from the present 2 years to 3 years

Provisions for Availment of Input Tax Credit under CGST Act

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Registrations :

• Automatic provisional registration

• Assesse to submit documents for permanent registration

• Registration required for each state from where supply is made

Tax Credits :

• Carry forward of earlier credit subject to model law and disclosure in the return.

• Unavailed credit on capital goods subject to model law.

• Credit of eligible inputs held in stock / semi finished goods

• Credit reversal switch to composition scheme

Transitionary Provisions

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Special Circumstances :

• No tax on return of following category of goods within 6 months from appointed day.

• Dutiable.

Transitionary Provisions

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Exports :• Exports are zero rated.• Credit of input tax available even though no tax or output.• Concept of deemed export retained

Job Work : • Any treatment or process by a person on goods belonging to another registered

taxable person• Conditional, tax free movement of goods between principal and job worker• Principal has to be registered taxable person in India Credits available to the

principal for supplies to job work

E- Commerce:• Person who owns, operates or manages digital platform is an ecommerce

operator.• Obligation to collect tax at source at 1%.

Special Provisions

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WholesaleManufacture Retail

Cost 100

Profit 20

Base price 120

Cen. Exc. 12% 14.4

VAT 14% 18.8

Sale price 153.2

Cash pay out 33.2

Purchase 153.2

ITC (18.8)

Profit - 50

Base Price 184.4

VAT 14% 25.8

Sale price 210.2

Cash pay out 7

Purchase 210.2

ITC - (25.8)

Profit 50

Base price 234.4

VAT 14% 32.8

Sale price 267.2

Cash pay out 7

Cost 100

Profit 20

Base price 120

CGST 8% 9.6

SGST 12% 14.4

Sale price 144

Cash pay out 24

Purchase 144

ITC (24)

Profit - 50

Base Price 170

CGST 8% 13.6

SGST 12% 20.4

Sale price 204

Cash pay out 10

Purchase 204

ITC - (34)

Profit 50

Base price 220

CGST 8% 17.6

SGST 12% 26.4

Sale price 264

Cash pay out 10

Pre GST Total Tax 47.2

Post GST Total Tax 44

GST IMPACT ON PRICE

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Financial

services

Shift from central tax to now both central & state tax

Difficulty in determining place of supply

Exemption to Interest?

Real Estate

Reduction in multiple taxes currently imposed

No specific valuation provision (deduction of land orabatement or composition) prescribed for constructioncontract or sale of under-construction property

Logistics Redundancy of multiple warehousing and hence change inservice model

Adapting to evolved centralised warehousing pattern

Drawback since petroleum outside GST during initial period

Sector Impact

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Transformation in to single ‘Indian Common Market’ leading to supply chain efficiency & economies of scale,

Reduction in compliance cost on simplification of tax structure and uniform returns/ procedure. Reduction in cash economy

Reduction in cost of indigenous production due to seamless credit

Same IGST on imports inter state sale will bring parity in sourcing of supply thereby promoting indigenous goods

Export will become more competitive on zero rating of CGST & SGST

Higher tax incidence on Services due to rate increase on dual GST

Trading will have dual GST necessitating review of trade margins

Overall Impact of GST on Trade & Industry

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Checklist for Way Forward | GST readiness

1. State wise accounting of transactions

2. Recording transactions separately under CGST, IGST and SGST

3. Change in tax processes including tax payment, returns and input tax credit availment

4. Identifying applicable tax rate

5. Separate accounting impact for products outside GST

6. Valuation of stock transfers/ Inter branch services and its impact on working capital

7. Change in the GST credit process, timing, reversal

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THANK YOU

Contact Name Email Id Mobile

Tripti [email protected] 9818887628

Puneet Mehra [email protected] 9811017410

mailto:[email protected]


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Technical Session –II

PROCEDURAL ASPECTS OF GSTBy: Advocate Garima Sharma &

CA Puneet Mehra

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TOPICS COVERED

1. REGISTRATION UNDER GST (S. 23)

2. INVOICE UNDER GST (S. 28)

3. RETURNS UNDER GST (S.34)

4. REFUND UNDER GST (S.48)

5. GOODS AND SERVICE TAX NETWORK(GSTN)

6. ASSESSMENTS UNDER GST (S.57)

7. AUDITS UNDER GST (S.63)

8. PAYMENTS UNDER GST (S.44)

Disclaimer : This presentation is based on the updations made by the Finance Ministry up to 30th November,2016

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REGISTRATION UNDER GST (S. 23)

A) Transitional Provisions:On the appointed day, existing taxable person having valid PAN will getprovisional registration certificate under GST which is valid for 6 months from thedate of its issue. They will have to submit required details/information to get finalregistration certificate.

B) Existing Dealers:Existing VAT/Central excise/Service Tax payers will not have to apply afresh forregistration under GST.

C) New Registration under GST:• Threshold limit for registration prescribed at INR 20 lakhs . Reduced threshold

limit of INR 10 lakhs prescribed for other than Special Category States [specifiedunder Article 279A(4) (g)] of the Constitution and Special Category States asprescribed under GST.

• Concept of Centralised Registration shall be no longer available.• Registration is required in all the states of the supplies of goods and services made

by the assessee within 30 days from the date he becomes liable to registration.

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D) New dealers: Single application to be filed online for registration under GST.• The registration number will be PAN based and will serve the purpose for Centre

and State.• He has to submit scanned copies of prescribed documents for review by

authorities.• Each dealer to be given unique Login ID GSTIN.• Deemed approval within three days.• Registration certificate can be downloaded from GST portal.

E) Others:• GST law provides for an option to obtain separate registration for each of the

‘business vertical’ in the same State subject to such conditions as may beprescribed.

• Any person can take voluntary registration if he has valid income tax PAN.• Services provided by a Government or local authority to individuals in discharge

of its statutory powers or functions such as assignment of right to use naturalresources to an individual farmer for the purpose of agriculture shall be neithersupply of goods nor a supply of services (Schedule IV).

• A casual taxable person or a non-resident taxable person shall apply forregistration at least five days prior to the commencement of business(Sec.24).

• The registration certificate may be cancelled by the Authorities on their ownmotion or basis the application filed by the assessee/ his heirs.

F) Mandatory - Registration: • Following persons shall be required to be mandatorily registered irrespective of Basic

Threshold Limit under GST:• Persons making any inter-State taxable supply• Casual taxable persons• Transferee or successor of business liable to be registered w.e.f. date of transfer or

successor if transferor was a taxable person.• Persons who are required to pay tax under reverse charge• Non-resident taxable persons• Persons who supply goods and/or services on behalf of other registered taxable persons

whether as an agent or otherwise• Input service distributor• Persons who supply goods and/or services, other than branded services, through

electronic commerce operator• Every electronic commerce operator• An aggregator who supplies services under his brand name or his trade name• Such other person or class of persons as may be notified by the Central Government or

a State Government on the recommendations of the Council.• Persons who are required to deduct tax under section 37.

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A. ‘Tax Invoice’ shall be deemed to include-a. document issued by an input service distributor (Section 23) andb. any supplementary or a revised invoice issued by the supplier in respect of a

supply made earlier (Section 17).

B. A registered taxable person supplying taxable goods shall issue a tax invoice-a. at the time of supply,b. tax invoice should show,

i. the description, quantity and value of goods,ii. tax charged thereon, andiii. other details.

C. A registered taxable person can only issue a tax invoice at the time of supply ofgoods. Thus, determining the time of supply of goods is important.

D. A registered taxable person supplying taxable services shall issue a tax invoice-a. within the prescribed time,b. Tax invoice should show-

i. description of services,ii. tax charged , andiii. other details.

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INVOICE UNDER GST (S. 28)

E. Particulars to be shown in a Tax Invoice:A tax invoice issued by the supplier shall contain the following details:

a. name, address and GSTIN of the supplier,

b. a consecutive serial number containing only alphabets and/or numerals, uniquefor a financial year,

c. date of its issue,

d. name, address and GSTIN/ Unique ID Number, if registered, of the recipient,

e. contain the following details:a. name and address of the recipient and the address of delivery,b. the name of State and its code,c. if such recipient is unregistered, andd. 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,

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j. taxable value of goods or services taking into account discount or abatement, ifany,

k. rate of tax (CGST, SGST or IGST),

l. amount of tax charged in respect of taxable goods or services (CGST, SGST orIGST),

m. place of supply along with the name of State, in case of a supply in the course ofinter- 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 numberof the original invoice, and

q. signature or digital signature of the supplier or his authorized representative.


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F. Details required in a tax invoice of supply meant for export :-In case of exports, an invoice shall carry an endorsement ‘supply meant forexport on payment of IGST’ or ‘supply meant for export under bond withoutpayment of IGST’, as the case may be, contain the following details:

a. name and address of the recipient,b. address of delivery,c. name of the country of destination, andd. number and date of application for removal of goods for export in form ARE-1.

G. Time limits for issuance of a tax invoice:-Any tax invoice is required to be issued as per following time frame:

a. In case of goods, at the time of supply,b. In case of services, as per time limits indicated below:

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Types of supply Time frame

Supply in ordinary course Within 30 days from the date of supply of

services

Continuous supply Within 30 days from the date when each event

specified in the contract for payment

Banking company/Financial

Institution including NBFC

Within 45 days from the date of supply of

services

I. Three copies of invoice should be prepared in case of goods and only two copies ofinvoice are needed in case of services

J. In GST regime the adjustment (excess or short) in value and tax payable thereonwill be possible through debit or credit notes only.

H. Time limits of issue of a tax invoice for services can be summarized as follows :


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ILLUSTRATIVE INVOICE UNDER GST

A. Common/Single E- return under CGST, SGST & IGST.

B. There are eight forms provided for in the GST business processes for filing forreturns. Most of the average tax payers would be using only four forms for filingtheir returns.

C. These are return for outward supplies, inward supplies, monthly returns andannual return.An Annual Return is also required to be filed. Reconciliationstatement to be furnished along with the statutory audited report and AnnualReturn.

D. Filing of returns shall be completely online.

E. Error or Omission may be rectified till September 30 or date of filing of AnnualReturn. No specific provision for revision prescribed.

F. A return needs to be filed even if there is no business activity (i.e. Nil Return)during the said tax period of return.

G. A notice in Form GSTR-3A will be sent electronically to a registered taxableperson who fails to file returns under section 27 and section 31

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RETURNS UNDER GST (S.34)

H. Late Fee for outward or inward Supplies –INR 100 per day subject to a maximumof INR 5000.

I. Late Fee for Annual Return – INR 100 per day subject to a maximum of 0.25% ofthe aggregate turnover of the defaulter.

J. There will be a separate table to modify or correct the details reported in thereturns submitted earlier.

K. At the time of registration, every taxpayer shall be enrolled with GST commonportal (GSTN) and he is required to file GST return at GST common portal.

L. There would be no revision of returns. All invoice and revision in and input taxcredit will have to be corrected using credit/debit note and such credit note/debitnote would be reflected in the return for the month in which such adjustment iscarried out.

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RETURNS UNDER GST (S.34)

Type of Return Details Due Date

GSTR-1

(Monthly)

Details of outward supplies of goods and

services (not required for compounding

taxpayer and ISD)

By 10th of next

month

GSTR-2

(Monthly)

Details of inward supplies of goods and

services (not required for compounding

taxpayer and ISD)

By 15th of next

month

GSTR-3

(Monthly)

All details to be reported in GSTR-3 shall be

auto populated from GSTR-1 (of counterparty

suppliers), GSTR-2, ISD Return (GSTR-6) (of

input service distributor), TDS return (GSTR-

7) (of counterparty deductor). However the

taxpayer shall have the option to fill the

missing details

By 20th of next

month

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TYPES OF RETURNS


GSTR-4

(Quarterly)

(For

compounding

Tax payers)

To indicate the total value of supply made

during the period of return and tax paid at the

compounding rate along with details of

payment of tax.

By 18th of the

next month for

the quarter

ending

GSTR-5

(Monthly) (For

Non Resident

foreign

taxpayers)

To furnish details of outward supplies of goods

and services. But if registration is for less than

a month, return to be filed within 7 days of last

day of registration.

Last day of

registration

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TYPES OF RETURNS


GSTR-6

(Monthly)

(For ISD)

To furnish inward supply details separately for

goods and services on which the ITC is being

claimed

By 15th of next

month

GSTR-7

(Monthly) (For

Tax Deductor)

To furnish details of all suppliers along with

the invoices against which the TDS has been

deducted.

By 10th of next

month

GSTR-8 To furnish details of tax collected at source by

an e-commerce operator under section 43-C

GSTR-9

(Annually)

To furnish annual return on basis of financial

records to provide 360 degree view about the

activities of the taxpayer.

By 31st

December of

next F.Y.

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TYPES OF RETURNS

Key Points about GST Refund :-

A. Section 48 of refund provides that the refund is permissible in following cases:a. Exports (Including Zero rate supply), orb. Credit has accumulated on account of rate of tax on inputs being higher thanthe rate of tax on outputs.

B. The refund claimed in Part B of GSTR-3 shall be deemed to bean application filed for refund.

C. The time limit prescribed for claiming refund is two (2) years from relevantdate.

D. The provisional refund, i.e., 90% of refund claimed shall be granted onsatisfaction of following conditions:-➢ Person claiming refund has not been prosecuted for any offence under GSTduring any 5 preceding years. If he has been prosecuted under an earlier law,the amount of tax evaded should not exceed Rs.2,50,000.➢ GST compliance rating of the applicant is not less than 5 on a scale of 10.➢ No proceeding for any appeal, review or revision is pending on issueswhich form the basis of the refund and if pending, the same has not beenstayed by the appropriate authority or court.

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REFUND UNDER GST (S.48)

E. Refund shall be granted after adjusting any outstanding demand payable bythe applicant.

F. Proper officer shall issue the order within 60 days from the receipt of theapplication.

G. Any amount rejected as refund shall be re-credited to the electronic credit ledger.

H. Person claiming refund of tax paid on inward supplies shall applyfor refund in FORM GST RFD-10 once in every quarter.

I. In case of delay in processing of refund claim of an assessee more than 60 daysfrom date of receipt of application then the assessee will be entitled to interest onsuch delay.

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Goods and Services Tax Network, (GSTN) is a Section 8 (under new companies Act,not for profit companies are governed under section 8), non-Government, privatelimited company. It was incorporated on March 28, 2013. The Company has been setup primarily to provide IT infrastructure and services to the Central and StateGovernments, tax payers and other stakeholders for implementation of the Goodsand Services Tax (GST).

Services rendered by GSTN:

1. Tax payer registration2. Return filing and processing3. Tax payer management, including account management, notifications,

information and status tracking4. Invoices upload, auto drafting of purchase register of buyer periodic GST return

filing5. Tax authority account and ledger management6. Computation of settlement (including IGST settlement) between centre and states

; clearing house for IGST7. Tax payments including integration with agency banks8. ITC and cash ledger and liability register

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ABOUT GOODS AND SERVICE TAX NETWORK(GSTN)

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9. Providing training to stakeholders10. Provide analytics and business intelligence to tax authorities11. Carry out research , study best practises12. MIS reporting for tax payers, tax officials, and other stake holders13. BI/Analytics for tax officials.

Basis of the information available in the public domain, the GSTN has planned tomeet about 100-150BPMsoftware firms by September end or early October 2016 andhand over the application programming interface (API) to develop the ERP softwarewhich will act as an interface between their clients and GSTN.Common software shall be rolled out by SAP, Oracle or Tally by January – February2017.

ABOUT GOODS AND SERVICE TAX NETWORK(GSTN)

GST System Portal (“GSTN Portal”) has been launched by the Government ofIndia. Mr. Navin Kumar, Chairman of GST Network (“GSTN”) said“The enrolment of other States will be done subsequently and the entireprocess completed by January 15, 2017”. Thus, the schedule of the GSTenrolment plan State-wise is as follows:

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ENROLMENTS ON GSTN PORTAL

TYPES OF ASSESSMENT

Self Assessment

(Section 57)

Provisional Assessment

(Section 58)

Scrutiny Assessment

(Section 59)

Best Judgment Assessment

Assessment of non filers of returns (Section 60)

Assessment of unregistered persons (Section 61)

Summary Assessment in certain special

cases (Section 62)

ASSESSMENTS UNDER GST (S.57)

A. Self assessment - registered taxable person shall himself assess the taxespayable.

B. Provisional assessment - where the taxable person is unable to determinethe value of goods/ services; or determine the rate of tax applicable on supply.

C. Scrutiny assessment - officer may conduct scrutiny of returns & if anydiscrepancies found then-

– A) if satisfactory replies received – NO FURTHER ACTION

– B) if satisfactory replies not received – may initiate action u/s 63 / 64 / 79OR may determine tax u/s 66(7) / 67(7)

D. Best judgment assessment – to assess tax liability of person who:

– A) section 60 – has not filed the returns

– B) section 61 – failed to obtain registration

ASSESSMENTS UNDER GST (S.57)

TYPES OF AUDIT

Audit by Tax Authorities

(Section 63)

Special Audit i.e. Audit by CA/ Cost Accountant

(Section 64)

Power of CAG to call for information for audit

(Section 65)

AUDITS UNDER GST (S.63)

A. Audit by Tax Authorities - May conduct audit of any taxable person, at thebusiness place. Further, a notice shall be given at least 15 days prior to thecommencement of audit.

B. Special Audit - Where proper officer found that the value is not declaredcorrectly or credit is not availed within normal limit, may direct taxable person toget accounts audited by a CA or a cost accountant.

C. Power of CAG to call for information of audit - The proper officer shallmake available to the CAG of India, information, records and returns, required forconduct of audit as required under the comptroller and auditor general's (duties,powers and conditions of service) act (56 of 1971)

AUDITS UNDER GST (S.63)

Every registered taxable person will have two types of electronic ledgers showing theamounts standing to the credit of such taxable person for discharge of tax liability, interest,penalties or any other sum payable under the Act and rules made thereunder.(i) Electronic cash ledger (ii) Electronic credit ledger

1. The amount available in the electronic cash ledger may be used for making anypayment towards tax, interest, penalty, fees or any other amount payable under theprovisions of the Act.

2. The amount available in the electronic credit ledger may be used for making anypayment towards tax payable under the provisions of the Act.

Utilization of Input Tax Credit

Input Tax

Credit

Manner of Utilization

1 Integrated

GST [ IGST ]

first be utilized towards payment of IGST and the amount remaining, if any, may be

utilized towards the payment of CGST and SGST, in that order.

2 Central GST

[ CGST ]

first be utilized towards payment of CGST and the amount remaining, if any, may be

utilized towards the payment of IGST, shall not be utilized towards payment of

SGST.

3 State GST

[SGST ]

first be utilized towards payment of SGST and the amount remaining, if any, may be

utilized towards the payment of IGST shall not be utilized towards payment of

CGST.

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PAYMENTS UNDER GST

• Electronic payment process- no generation of paper at any stage.

• Single point interface for challan generation- GSTN.

• Ease of payment – payment can be made through online banking, CreditCard/Debit Card, NEFT/RTGS and through cheque.

• Common challan form with auto-population features.

• Use of single challan and single payment instrument.

• Common set of authorized banks.

• Common Accounting Codes.

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Other Key Points:

PAYMENTS UNDER GST (S.44)

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LIST OF PAYMENT FORMS UNDER GST

S. No. Form No. Title of the Form

1 Form GST PMT-1 Electronic Tax Liability Register of Taxpayer(Part-I: Return related liabilities)

Electronic Tax Liability Register of Taxpayer(Part-II: Other than return related liability)

2 Form GST PMT-2 Electronic Credit Ledger

3 Form GST PMT-2A Order for re-credit of the amount to cash or creditledger

4 Form GST PMT-3 Electronic cash ledger

5 Form GST PMT-4 Challan for Deposit of Goods and Service Tax

6 Form GST PMT-5 Payment Register of Temporary IDs/Un-registeredTaxpayers

7 Form GST PMT-6 Application for Credit of Missing Payment (CIN notgenerated)

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THANK YOU

Contact Name Email Id Mobile

Tripti [email protected] 9818887628

Puneet Mehra [email protected] 9811017410



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