CS EXECUTIVE & PROFESSIONAL

AMENDMENTS & REVISIONfor JUNE 18 , LECTURE -2

By

CS UDIT DUA

TIME OF SUPPLYThe time of supply fixes the point the liability to charge GST arises.

Liability to pay GST arises at time of supply.

Section 12 of CGST Act, 2017 deals with the provisions of Time of Supply of goods and Section 13 deals with provisions relating to Time of supply of services.

Liability to pay tax on goods [Section 12(1)]

The liability to pay tax on goods shall arise at the time of supply, as determined in accordance with the provisions of this section.

Time of supply of goods under Normal Charge{Section 12(2)}

Time of Supply (TOS) = DOI or DOP, whichever is earlier

Where

DOI = date of issue of Invoice by the supplier or the last date on which he is required , to issue the invoice with respect to the supply

DOP is the date on which supplier receives the payment with respect to supply, being earlier of :-

DOPE = Date on which Payment is Entered in his books of accounts, or

DOPB = Date on which Payment is credited to his Bank account

Small advances upto Rs 1000, then , TOS = DOI (option to supplier)

Non- Composition dealers having turnover upto 1.5 crores – Tax on “goods” on “INVOICE BASIS”- Receipt basis inapplicable (Notification No. 40/2017 dated 13-10-2017)

The registered person whose aggregate turnover in preceding financial year did not exceed 1.5 crore & who did not opt for composition levy under section 10,

Shall pay GST on Outward supply of goods

At the time of supply as specified in section 12(2)(a) {DOI basis}

Illustration:-

Case Invoice

date

Invoice due

date

Payments entry in

suppliers book

Credit in bank

account

DOI DOP Time of

supply

Invoice raised

before removal

10-10-17 20-10-17 26-10-17 30-10-17 10-10-17 26-10-17 10-10-17

Advance received 30-10-17 20-10-17 10-10-17 30-10-17 30-10-17 10-10-17 30-10-17

Time of supply Reverse Charge {Section 12(3)}

In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earliest of the following dates, namely:—

(a) DOR (date of receipt of goods); or

(b) DOP (earlier of DOPE or DOPB); or

(c) DOI + 31 days (date immediately following 30 days from DOI)

However, where it is not possible to determine the time of supply under clause (a) or clause (b) or clause (c), the time of supply shall be DOPE (date of entry in the books of account of the recipient of supply)

Illustration:-

Determine the time of supply in the following cases assuming that GST on goods is payable under reverse charge:-

No. DOR

(1)

DOP

(2)

DOI by supplier

of goods (3)

DOI + 31 days

(4)

TOS

{Earliest of (1), (2) &

(4)}

(1) July 1 August 10 June 29 July 30

(2) July 1 June 25 June 29 July 30

(4) July 5 DOPE= June 28

DOPB = June 30

June 1 July 2

(5) July 1 DOPE = June 30

DOPB= June 26

June 29 July 30

TIME OF SUPPLY OF SERVICES [Section 13]

Time of supply of services under normal charge [Section 13(2)]

The time of supply of services shall be:- DOI or DOS or DOR {whichever is Earlier}

Where

DOI = date of issue of invoice by supplier

DOS = date of provision of service

DOR = date on which recipient shows the receipt of services in his books of accounts.

As per Rule 47 of CGST Rules 2017, time limit for issue of invoice for taxable supply of service should be issued within 30 days from the date of supply of service.

However, in case of banking or insurance services time limit is 45 days from the date of supply of service.

Time of Supply in case of change in rate of tax {Sec 14}

For supply of goods or services

Has over ridding effect to section 12 & 13

Terms used:-

DOI :- date of issue of invoice by supplier

DOS:- date of supply of goods or services or both

DOC:- date of change in rate of tax

DOP:- Date on which supplier receives payment with respect to supply , i.e

{earlier of DoPE or DoPB}

DOP = DOPB, if DOPB > DOC + 4 working days

TIME OF SUPPLY WHEN RATE IS CHANGED

Sec 14 DOS is:- DOI is:- DOP is:- TOS is:-

(a) (i) Before DOC After DOC After DOC DOP or DOI

whichever is earlier

(a) (ii) Before DOC Before DOC After DOC DOI

(a) (iii) Before DOC After DOC Before DOC DOP

(b) (i) After DOC Before DOC After DOC DOP

(b) (ii) After DOC Before DOC Before DOC DOP or DOI

whichever is earlier

(b) (iii) After DOC After DOC Before DOC DOI

Illustration:-

An assesse provides you with following data:-

Service was exempted up to 30/09/2017 and exemption withdrawn from 1/10/2017

Date of provision of services = 1/10/2017

Date of issue of invoice = 30/09/2017

Payment thereof is received by the way of account payee draft on = 30/9/2017

Draft is banked on 06/10/2017 and credited to bank account on 07/10/2017

Determine GST, if any payable @ 18%, if the value of services is Rs 5 lakh.

Banking holidays were 2/10/2017 and 5/10/2017

PLACE OF SUPPLY (IGST ACT)Place of supply determines the NATURE of tax to be applied

When the location of supplier and place of supply are in 2 different states , then it will be Inter State supply and IGST applies.

And when they are in same state, then it will be an Intra State supply & CGST –SGST applies.

PLACE OF SUPPLY OF GOOD IMPORTED IN INDIA (Sec 11(a))

Place of supply = Location of importer

(eg, in case of imports by X ltd of Mumbai from US, the place of supply of goods shall be Mumbai)

PLACE OF SUPPLY OF SERVICES (sec 12 & 13 of IGST ACT )

INPUT TAX CREDIT

As per section 2(82) of CGST Act 2017, Input tax credit means the credit of input tax.

Input tax credit is allowed only to registered persons

How is credit allowed?

Payment on purchases 100 +10 tax

Receipt on sale 150 + 12 tax

Net tax payable in cash on sale 12 – 10 = 2

Total tax payment 10 on inputs + 2 incremental on output = 12

Net cash in hand (Net profit) 162 received – 110 purchases – 2 tax = 50

GENERAL POWER TO TAKE CREDIT {Section 16(1)}

Every registered person shall,

Subject to such conditions & restrictions as may be prescribed and

In the manner specified in section 49 be entitled to take credit of

Input tax charged on any supply of good or services or both

To him

Which are

Used or indented to be used in the course or furtherance of his business and

Said amount shall be credited to electronic credit ledger of such person.

Conditions for taking credit ( Section 16(2))

1. Tax Paying Document:- credit is allowed only if registered person is in possession of tax invoice or debit note. No credit is allowed without any documentary evidence.

2. Goods / service actually received by such person:- credit is allowed only if registered person has received the goods or services or both.

3. Tax charged is actually paid to the government

4. Return furnished

OTHER CONDITIONS:- (Sec 16(2))

REVERSAL OF INPUT TAX CREDIT IN CASE OF NON PAYEMENT OF CONSIDERATION TO SUPPLIER (RULE 37)

1. Furnishing of details:-

A registered person who has availed ITC on any inward supply of goods or services , but fails to pay the supplier thereof, the value of such supply along with the tax payable , within 180 days shall furnish-

the details of such supply,

the amount of value not paid &

the amount of ITC availed of proportionate to such amount not paid to the supplier in FORM GSTR-2

for the month immediately following the period of 180 days from DOI of invoice.

The amount of input tax credit shall be added to output tax liability of registered person for the month in which details are furnished.

The registered person shall be liable to pay interest @ 18% starting from the date of availing credit till date when amount added to output tax liability is paid.

For example:-

A bill dated 1st August ,2017 for Rs 10,000 plus tax Rs 1,200 remains unpaid even after 180 days.

Now, the period of 180 days expired on 28th Jan, 2018

The recipient has to show this Rs 1200 as output tax for Feb 2018

If this amount is paid to government on 10/02/2018, the recipient has to pay interest @ 18% on 1,200 from 1st August 2017 to 10/2/2018

If the payment is made to supplier on 1st June 2018, the credit may be taken on 1st

June 2018 irrespective of time limit to take credit.

JOB WORK {Section 2(68)}

Job work means any treatment or process undertaken by a person on goods belonging to another registered person (principal)

Job work is service

No exemption to job- work service – It is liable to GST @ 18%

Job- worker need not be registered

Principal must be registered person

Inputs & capital goods can be sent to job worker & principal can avail ITC

The goods can be sent directly from job worker place even without bringing them to the premises of principal

Inputs should be brought back with 1 year & capital goods within 3 years.

If not received back within above time, it shall be treated as supply & liable to GST

ITC of Inputs & Capital Goods sent for Job Work( Section 19)

Principal eligible for credit on inputs / capital goods

Credit is allowed even if the inputs or capital goods are directly sent to job worker for job work without being first brought to his place of business.

As per section 2(58) , Input means any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business.

As per section 2(19), Capital Goods means goods, the value of which is capitalised in the books of account of the person claiming ITC and which are used or intended to be used in the course or furtherance of business.

CONDITIONS & RESTRICTIONS IN RESPECT OF INPUTS & CAPITAL GOODS SENT TO JOB WORKER (RULE 45)

1. CHALLAN:-

The input, semi finished goods or capital goods shall be sent to the job worker under the cover of a challan issued by the principal with details, including where such goods are sent directly to job worker.

2. INCLUSION OF DETAILS IN RETURN:-

The details of challans during a Quarter shall be included in FORM GST ITC- 04 furnished for that period on or before the 25th day of the month succeeding the said quarter or within such period as may be extended by Commissioner by notification.

Any extension of time limit by Commissioner of state tax or commissioner of Union territory shall be deemed to be notified by Commissioner. (w.e.f. 28-10-2017)

JOB WORK IN RELATION TO AGRICULTURE OR AGRICULTURAL PRODUCE IS EXEMPT

Notification dated 28-06-2017- Carrying out an intermediate production process as job work in relation to (a) agriculture or (b) agricultural produce is EXEMPT

As per circular No. 19/19/2017 dated 20-11-2017, contrary view is taken that “milling of paddy into rice” is not eligible for job work exemption because “rice” is not agricultural produce and hence, milling of paddy to rice is NOT an intermediate production process in relation to agriculture and therefore, such activity is NOT eligible for Exemption. It is liable to GST @ 5%

REGISTRATION

PERSONS LIABLE FOR REGISTRATION (Sec 22 of CGST Act)

Every supplier shall be liable to registered if his aggregate turnover in a financial year exceeds Rs 20 lakhs

Reduced limit of Rs 10 lakhs for North eastern states & Himachal (except J & K)

PERSON NOT LIABLE FOR REGISTRATION (Sec 23 of CGST Act)

(a) Exclusively in non- taxable or exempted supply

(b) agriculturist

EXEMPTION FROM REGSTRATION TO “CASUAL TAXABLE PERSON” Of HANDICRAFT GOODS HAVING TURNOVER UPTO 20 LAKHS (10 lakhs for special category states) (Notification dated 15/09/2017 & Notification No. 8/2017 daed14/09/2017)

The casual taxable person making Intra State or Inter taxable supplies of handicraft goods are exempted from registration , subject to following conditions:-

1. Aggregate value computed on ALL INDIA basis Does NOT exceed 20 Lakhs in financial year (10 lakhs in case of special category states , other than J & K)

2. Casual taxable persons shall obtain PAN and generate e- way bill as per Rule 138 of CGST Rules 2017

3. CGST exemption will apply only if such person has availed IGST exemption also.

Handicraft goods means:-

Leather articles, wood products, etc, listed in the notification,

When made by the craftsman predominately by hand , even though some machinery may also be used in process.

IGST – Job worker – Services – Exemption from Registration to INTER-STATE services by job – worker for turnover up to Rs 20 Lakhs (Notification No. 7/2017, dated 14/09/2017)

The job workers engaged in making inter state supply of services to a registered person are EXEMPTED from obtaining registration under this Act.

The exemption from registration will NOT apply to :-

1. Job – worker liable to be registered under section 22(1)

{ i.e turnover exceed Rs 20 lakhs or 10 lakhs)

2. Job worker who opts to take registration voluntarily under Section 25(3) of Act; or Job- worker supplying services in relation to “Jewellery, Goldsmiths, and Silvermiths wares are other articles.

IGST – Service Provider – Exemption from Registration to Inter State Supplies of Services if Turnover upto 20 Lakhs

(Notification No. 10/2017, dated 13-10-2017)

The persons making inter State supplies of taxable services and

Having an aggregate turnover , to be computed on all India basis, upto Rs 20 lakhs (10 lakh in case of special category states except J & K) in a financial year

Are EXEMPTED obtaining registration under IGST

Exemption from Registration , If all Supplies are under Reverse Charge

(Notification No. 5/2017- Central Tax, dated 19/06/2017)

RULES FOR REGISTRATION [CHAPTER III](REFER ICSI READING MATERIAL FOR JUNE 18)

TAX INVOICE { Section 31}A registered person supplying taxable goods shall, before or at the time of,—

(a) removal of goods for supply to the recipient, where the supply involves movement of goods; or

(b) delivery of goods or making available thereof to the recipient, in any other case, issue a tax invoice showing the description, quantity and value of goods, the tax charged thereon and such other particulars as may be prescribed.

A registered person supplying taxable services shall, before or after the provision of service but within a prescribed period, issue a tax invoice, showing the description, value, tax charged thereon and such other particulars as may be prescribed

A registered person supplying exempted goods or services or both or paying tax under the provisions of section 10 shall issue, instead of a tax invoice, a Bill of Supply containing such particulars and in such manner as may be prescribed

Provided that the registered person may not issue a bill of supply if the value of the goods or services or both supplied is less than two hundred rupees subject to such conditions and in such manner as may be prescribed;

RULES FOR TAX INVOICES, DEBIT & CREDIT NOTES

BILL OF SUPPLY (Rule 49)

A bill of supply referred to in section 31 shall be issued by supplier containing the following details:-

(a) name, address & GSTN of supplier,

(b) A consecutive serial number not exceeding sixteen characters

(c) Date of issue (DOI)

(d) Name , address & GSTN or Unique Identity Number , if registered of reciepant

(e) HSN for goods & services

(f) Description of goods or services

(g) Value of supply of goods or services or both

(h) Signature or DSC of supplier or authorised representative

BILL OF SUPPLY TO BE ISSUED FROM DATE OF LIABILITY TO ACTUAL DATE OF REGISTRATION –INVOICES TO BE REVISED LATER(Press release 08/07/2017)The applicant for grant of new registration can issue Bill of Supply for supplying goods or services during the period from the date of liability to obtain registration till date of issuance of registration certificate, if he has applied for registration within 30 days from the date he has become liable for registration.

On grant of certificate of registration, he can issue revised tax invoices for supplies made during this period.

INVOICE CUM BILL OF SUPPLY (Rule 46A w.e.f 13-10-2017)

Where a registered person is supplying taxable as well as exempted goods or services or both to an unregistered person,

A single “invoice- cum bill of supply” may be issued for all such supplies

TAX INVOICE IN SPECIAL CASES (RULE 54)

Banks , Insurers, etc – Consolidated Monthly Invoice- Title of Invoice , Sl No., Address of recipient NOT relevant

Where the supplier of taxable service is an insurer or a Banking company or a financial institution , including NBFC, the said supplier shall issue CONSOLIDATED TAX INVOICE for supply of services made during a month at the end of the month,

Whether issued or made available, physically or electronically whether or not serially numbered , and whether or not containing the address of the recipient of taxable service ( Amended w.e.f 13-10-2017)

RETURNSGSTR-1 may be filled on Quarterly basis if turnover is upto Rs 1.5 crores (Circular No. 26/26/2017-GST, dated 29/12/2017)

It is clarified that the registered person will self-assess his aggregate turnover in terms of Section 2(6) of the CGST Act, 2017 for the previous financial year or the current financial year (in case of new registrants).

Based on this self-assessed turnover, the registered person with turnover up to Rs. 1.5 Crore will be required to file FORM GSTR-1 on quarterly basis instead of on monthly basis.

It is also clarified that the registered person may opt to file FORM GSTR-1 on monthly basis if he so wishes even though his aggregate turnover is up to Rs. 1.5 Crore.

Once he falls in this bracket or if he chooses to file return on monthly basis, the registered person will not have the option to change the return filing periodicity for the entire financial year. In cases, where the registered person wrongly reports his aggregate turnover and opts to file FORM GSTR-1 on quarterly basis, he may be liable for punitive action under the CGST Act, 2017.

ELECTRONIC WAY BILLS ( E-Way Bills)• The Government may require the person in charge of a conveyance carrying any consignment of goods

of value exceeding the prescribed amounts, to carry with himself such documents and devices as may be prescribed.

• Where any such conveyance is intercepted by the proper officer, he may require the person in charge of the conveyance to produce the documents & devices for verification and that person then has the duty to cooperate and allow the inspection.

• It is for the same reason that Electronic Way Bills (E-way bills) have been prescribed.

• CGST Rules, 2017 stipulates as under, with regard to E- Way Bills:

• Every registered person who causes movement of goods of consignment value greater than Rs. 50,000 whether for supply or otherwise or due to the inward supply from an unregistered person, shall before commencement of such movement, furnish the necessary information in the prescribed form, electronically on the portal.

• Where the E-way bill hasn’t been generated and the consignment is handed over to a transporter, the transporter will generate the E-way bill on the basis of information furnished on the portal by the registered person. Upon the generation of the E-way bill, a unique E-way bill number (EBN), is generated and made available to the supplier, the recipient and the transporter. Where multiple consignments are being carried, a transporter may also generate a consolidated E-way bill.

• The E-way bill so generated is valid for one day if the distance involved is less than or equal to 100 kms, and one additional day for every 100 kms over and above.`

E- WAY RULES (RULE 138)

Information to be furnished prior to commencement of movement of goods and generation of e-way bill.-

(1)Every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees—

(i) in relation to a supply; or

(ii) for reasons other than supply; or

(iii) due to inward supply from an unregistered person, shall, before commencement of such movement, furnish information relating to the said goods in Part A of FORM GST EWB-01, electronically, on the common portal.

[Provided that where goods are sent by a principal located in one State to a job worker located in any other State, the e-way bill shall be generated by the principal irrespective of the value of the consignment: Provided further that where handicraft goods are transported from one State to another by a person who has been exempted from the requirement of obtaining registration under clauses (i) and (ii) of section 24, the e-way bill shall be generated by the said person irrespective of the value of the consignment.

Provided further that where handicraft goods are transported from one State to another by a person who has been exempted from the requirement of obtaining registration under clauses (i) and (ii) of section 24,

the e-way bill shall be generated by the said person irrespective of the value of the consignment.

Explanation – For the purposes of this rule, the expression “handicraft goods” has the meaning as assigned to it in the Government of India, Ministry of Finance, notification No.32/2017-Central Tax dated 15.09.2017 published in the Gazette vide number G.S.R 1158 (E)] 39 (2) Where the goods are transported by the registered person as a consignor or the recipient of supply as the consignee, whether in his own conveyance or a hired one or by railways or by air or by vessel, the said person or the recipient may generate the e-way bill in FORM GST EWB-01 electronically on the common portal after furnishing information in Part B of FORM GST EWB-01.

(3) Where the e-way bill is not generated under sub-rule (2) and the goods are handed over to a transporter for transportation by road, the registered person shall furnish the information relating to the transporter in Part B of FORM GST EWB-01 on the common portal and the e-way bill shall be generated by the transporter on the said portal on the basis of the information furnished by the registered person in Part A of FORM GST EWB-01:

Provided that the registered person or, as the case may be, the transporter may, at his option, generate and carry the e-way bill even if the value of the consignment is less than fifty thousand rupees:

Provided further that where the movement is caused by an unregistered person either in his own conveyance or a hired one or through a transporter, he or the transporter may, at their option, generate the e-way bill in FORM GST EWB-01 on the common portal in the manner specified in this rule:

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

Explanation 1.– For the purposes of this sub-rule, where the goods are supplied by an unregistered supplier to a recipient who is registered, the movement shall be said to be caused by such recipient if the recipient is known at the time of commencement of the movement of goods.

Explanation 2.-The information in Part A of FORM GST EWB-01 shall be furnished by the consignor or the recipient of the supply as consignee where the goods are transported by railways or by air or by vessel. (4) Upon generation of the e-way bill on the common portal, a unique e-way bill number (EBN) shall be made available to the supplier, the recipient and the transporter on the common portal.

(5) Any transporter transferring goods from one conveyance to another in the course of transit shall, before such transfer and further movement of goods, update the details of conveyance in the e-way bill on the common portal in FORM GST EWB-01: Provided that where the goods are transported for a distance of less than ten kilometers within the State or Union territory from the place of business of the transporter finally to the place of business of the consignee, the details of conveyance may not be updated in the e-way bill.

(6) After e-way bill has been generated in accordance with the provisions of sub-rule (1), where multiple consignments are intended to be transported in one conveyance, the transporter may indicate the serial number of e-way bills generated in respect of each such consignment electronically on the common portal and a consolidated e-way bill in FORM GST EWB-02maybe generated by him on the said common portal prior to the movement of goods.

(7) Where the consignor or the consignee has not generated FORM GST EWB-01 in accordance with the provisions of sub-rule (1) and the value of goods carried in the conveyance is more than fifty thousand rupees, the transporter shall generate FORM GSTEWB-01 on the basis of invoice or bill of supply or delivery challan, as the case may be, and may also generate a consolidated e-way bill in FORM GST EWB-02 on the common portal prior to the movement of goods.

(8) The information furnished in Part A of FORM GST EWB-01 shall be made available to the registered supplier on the common portal who may utilize the same for furnishing details in FORM GSTR-1: Provided that when the information has been furnished by an unregistered supplier in FORM GST EWB-01, he shall be informed electronically, if the mobile number or the email is available.

(9) Where an e-way bill has been generated under this rule, but goods are either not transported or are not transported as per the details furnished in the e-way bill, the e-way bill may be cancelled electronically on the common portal, either directly or through a Facilitation Centre notified by the Commissioner, within 24 hours of generation of the eway bill: Provided that an e-way bill cannot be cancelled if it has been verified in transit in accordance with the provisions of rule 138B.

(10) An e-way bill or a consolidated e-way bill generated under this rule shall be valid for the period as mentioned in column (3) of the Table below from the relevant date, for the distance the goods have to be transported, as mentioned in column (2) of the said Table

TABLE

Provided that the Commissioner may, by notification, extend the validity period of e way bill for certain categories of goods as may be specified therein:

Provided further that where, under circumstances of an exceptional nature, the goods cannot be transported within the validity period of the e-way bill, the transporter may generate another e-way bill after updating the details in Part B of FORM GSTEWB-01.

Explanation.—For the purposes of this rule, the “relevant date” shall mean the date on which the e-way bill has been generated and the period of validity shall be counted from the time at which the e-way bill has been generated and each day shall be counted as twenty four hours. (11)The details of e-way bill generated under sub-rule (1) shall be made available to the recipient, if registered, on the common portal, who shall communicate his acceptance or rejection of the consignment covered by the e-way bill.

S.NO DISTANCE VALIDITY PERIOD

1. UPTO 100 kms One day

2. For every 100 km or part thereof thereafter One additional day

(12)Where the recipient referred to in sub-rule (11) does not communicate his acceptance or rejection within seventy two hours of the details being made available to him on the common portal, it shall be deemed that he has accepted the said details.

(13) The e-way bill generated under this rule or under rule 138 of the Goods and Services Tax Rules of any State shall be valid in every State and Union territory.

(14) Notwithstanding anything contained in this rule, no e-way bill is required to be generated— (a) where the goods being transported are specified in Annexure; (b) where the goods are being transported by a non-motorised conveyance; (c) where the goods are being transported from the port, airport, air cargo complex and land customs station to an inland container depot or a container freight station for clearance by Customs; and (d) in respect of movement of goods within such areas as are notified under clause (d) of sub-rule (14) of rule 138 of the Goods and Services Tax Rules of the concerned State.

THANKS for Watching

By

CS UDIT DUA

9811373370