Do Big Webinar: Introduction to GST - Impact on your telecom business services
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Transcript of Do Big Webinar: Introduction to GST - Impact on your telecom business services
Content herein is proprietary and confidential information of Tata Teleservices Limited. Unauthorized distribution is strictly prohibited.
Introduction to GSTImpact on telecom business services
Tata Docomo Business Services
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Tata Docomo Business Services
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Overview
2
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Tata Docomo Business Services
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Overview – Basic understanding
► GST is a comprehensive value added tax on supply of goods and services
► It is a consumption based tax, which is a departure from the erstwhile regime of origin based
taxation
► A dual GST structure would be followed i.e. State and Centre to levy GST on common base
(CGST+SGST/ UTGST), in respect of all intra-state supplies of goods and services
► Integrated GST on all inter state supplies of goods and services (IGST)
► All sectors are covered with very few exceptions / exemptions
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Overview – Taxes subsumed into GST
Taxes to be subsumed Taxes not to be subsumed
Central Taxes
State Taxes
► Central Excise Duty
► Additional Excise Duty
► Service Tax
► Additional Customs Duty
► Special Additional Duty of Customs
► Central Sales Tax
► Value Added Tax, Octroi, Entry Tax and Purchase Tax
► Entertainment Tax (other than tax levied by local
bodies)
► Luxury Tax
► Taxes on lottery, betting & gambling
Central Taxes
State taxes
► Basic Customs Duty and Export Duties
► Terminal taxes on goods or passengers, carried by
railway, sea or air/ taxes on railway fares and freights
► R&D Cess
► Stamp Duty, Electricity Duty
► Taxes on professions, trades, callings and
employments
► Taxes on vehicles/ goods and passengers carried by
road or on inland waterways
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Overview – Need for GST
Given below is a snapshot of major indirect tax levied under the current Indirect tax regime
CompanyExcise Duty
Levied on manufacture of goods at an approximate rate of 12.5%
Customs Duty
Levied on import of goods at an approximate rate of 29.44%
Service Tax
Levied on provision of services at an approximate rate of 15%
Value Added Tax (VAT)
Levied on sale of goods within the state at 5% / 12.5% / 15%
Central Sales Tax (CST)
Levied on inter-state sale of goods at 2% (with C Form)
Entry tax/ Octroi/ Local Body Tax
Levied on entry of goods within state/ local limits (tax rate depends
on the nature of goods)
All above taxes and many other state and local levy gave rise to multiple compliances. Thus need for a
single levy arose.
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Overview – Basic understanding
Ref. Procurement Current regime Under GST regime
A Imports/Clearance from FTWZ BCD + CVD + SAD; Customs cess** BCD + IGST
B Inter-State Purchases Excise + CST + Entry Tax + LBT/Octroi IGST
C Intra-State Purchases Excise + VAT CGST + SGST*
D Export Nil (Zero rated) Nil (Zero rated)
E Sale (interstate) Excise + CST IGST
F Sale (intrastate) Excise + VAT CGST + SGST*
G Import of Service Service tax IGST
H Inter-State receipt / supply of service Service tax IGST
I Intra-State receipt / supply of service Service tax CGST + SGST*
J Stock transfer interstate (under Form F) Excise duty (in case of manufactured goods)
+ VAT retention
IGST
K Stock transfer intrastate Excise duty (in case of manufactured goods) No tax in case of stock transfer within same
registration within same state
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Where are we today
7
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GST – Where are we today
Passage of Constitutional Amendment Bill (‘CAB’) in Rajya Sabha and Lok Sabha
Ratification of the CAB by >50% State Assemblies
Formation of GST Council
Introduction from July 2017
Finalisation of GST slab rates
(0%, 5%, 12%, 18% & 28%, cess in certain cases)
Passage of CGST, IGST, UTGST & Compensation law by Lok Sabha & Rajya Sabha
Current State
Categorisation of products into slabs and finalisation of rules
CGST, IGST, UTGST and Compensation cess Acts enacted
GST Bill gets presidents assent
State assemblies to consider and pass respective SGST Bills.
Finalisation of GST rules and initiation of industry outreach
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GST – Key government milestones before Go-Live
Activities completed Critical/ Not critical
Finalise rate schedules under GST regime ( for goods and services ) Critical
Finalise the GST rules placed in public domain Critical
Activities in process of completion Critical/ Not critical
Testing of GST network prior to GST implementation Critical
Ensuring applicability of GST in the state of Jammu and Kashmir Critical
Passing of respective SGST Bills by all the State Assembly Critical
Activities to be startedCritical/ Not
critical
Finalise area based exemption of excise / VAT/ CST currently granted Not Critical
Identify jurisdictional officers / office for GST Not Critical
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GST – Key concepts
10
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GST – Proposed framework
100% Compensation
IGST on interstate supplies and
imports
Minimum
exemptions
Dual-GST
Salient features
► Centre and states to levy GST on
common base (CGST & SGST)
► Potentially aligned to current VAT
exemptions
► Integrated-GST (IGST) on inter-state
supplies/import of goods and services
► 100% compensation to the states for
five years towards loss of revenue due
to GST
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GST – Key concepts
Notes :
► Currently no GST will be
levied on Liquor for
human consumption.
► In case of Natural Gas,
Petroleum Crude, High
Speed Diesel, Petrol,
Aviation Turbine Fuel,
GST Council would
decide the effective date
for GST levy.
*CGST, IGST and SGST/UTGST will apply to the state of Jammu & Kashmir (not as of now but after necessary ratification by the Jammu & Kashmir State Assembly)
GSTcharged
on
Scope of GST
Type & timing of tax
► Person supplying goods or services (supplier)
► Person receiving goods or services in case of certain specified supplies (recipient)
► Extends to whole of India except Jammu & Kashmir *
► India has been defined to include territorial waters, continental shelf, exclusive economic zone or any other maritime zone
► Time of supply and Place of supply ancillary aspects of GST.
► Place of supply is basis for levy of CGST + SGST / UTGST or IGST
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GST – Key concepts - Registration
► Registration to be obtained in each state from where a person supplies goods and/ or services
► TTL is registered in all States and UT except Andaman & Nicobar, Daman & Diu, Dadra & Nagar Haveli and J&K
► PAN based 15-digit GSTIN for each state
Provisional ID for the state of Maharashtra
State code – numeric code as per Indian Census 2011
Entity – number of registration of an entity in one state (1-9 and then A-Z)
► Multiple registrations within a state allowed subject to:
► The separate unit can be considered as a business vertical
► ITC allowed only when goods / services supplied across the verticals
► For recovery of dues all business verticals to be considered as a single legal entity
State Code PAN Entity Code Check
digit
2 7 A A A C T 2 4 3 8 A 1 Z T
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GST – Key concepts
SUPPLY OF
Goods/Services
Deemed Supply
of Goods/
Services
In the course or
furtherance of
business
PLACE OF SUPPLY
By taxable person
India Outside India
Intra-State Inter-State
Export under bond or without bond
If export then
zero rated
supply, else
IGST
If import / procurement
from SEZ - IGST
► Requirement of registration in relevant
State
► Liable to CGST + respective State’s SGST*
► Requirement of registration in the origin
State
► Liable to IGST
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GST – Key concepts: Place of supply
Sr No Service Type Product Offerings Place of supply (TTL Enterprise Solution)
1 Wireless Mobile voice/ data, LBS etc Billing address
2a Wireline Leased circuit like MPLS, NPLC,
DLC, ILL, L2MC etc
Each state where point have been installed
(viz. for NPLC PoS would be State of point
A and state of point B)
2b Wireline Fixed line (split between a and b) State in which fixed line has been installed
3 Supply of goods Dongles, GPS equipments etc Place where the goods are delivered
Place of supply is crucial to identify type of GST (viz IGST/ CGST & SGST) applicable to a particular service
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GST – Key concepts: Time of supply
Time of supply
Within time limit
Earlier of
Issue of invoice*
Receipt of payment**
Not within time limit Earlier of
Provision of service
Receipt of payment**
Other caseReceipt of services in books of
accounts of recipient (if time of supply not determinable from above)
*Invoice needs to be issued before within 30 days of supply of service
** It shall be earlier of payment entered in books of account or the date on which the payment is credited (debited in case of reverse charge) in bank account
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GST – Key concepts: Credit mechanism
Vendor activity
Customer activity
Month 1 Month 2
Vendor raises GST
invoice on
customer
Customer records
invoice and credit in
books
Vendor reports the
invoice in GSTR –
1 by 10th of next
month
Basis vendors
return credit moves
online to customers
online credit register
in GSTR-2A
Customer matches
GSTR-2A with
credit register and
makes necessary
changes
Changes made by
customer
communicated to
vendor
Changes are
provisionally
accepted and
allowed as credit in
GSTR-2
If the vendor
rejects the
changes and
also doe not
upload the
invoice in
next month,
then credit
amount is
added to
liability of
customer
along with
interest
Month 3
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GST – Key Concepts – Returns
Report Name Purpose Due Date
GSTR-1 (Monthly) Outward supplies 10th of next month
GSTR-1A (Monthly) Details supplied by recipient Auto Populated
GSTR-2 (Monthly) Inward supplies 15th of next month
GSTR-2A (Monthly) Details supplied by the supplier Auto populated
GSTR-3 (Monthly) Monthly return 20th of next month
GSTR-6 (Monthly) ISD return 13th of next month
GSTR-6A (Monthly) Details furnished by the supplier to ISD recipient Auto Populated
GSTR-9 (Annually) Annual return 31st December of subsequent FY
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Impact on TTL Enterprise services
19
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GST – Impact on TTL services: Customer invoice
Customer (AP)
(Tel)
Customer
(Karnataka)
Customer
(Rajasthan)
Current Scenario
TTSL
GST Scenario
Customer (AP)
(Tel)
Customer
(Karnataka)
Customer
(Rajasthan)
TTSL
Circle wise invoice to single billing address
Separate invoice for each installation state
Impact Areas Current scenario GST Scenario
Value of serviceSingle consideration can be considered for all the links installed
in multiple statesMandatory to bifurcated the consideration between each
state where links have been installed
BillingSingle Invoice can be generated for all the links provided to the
customer
Separate billing for each state(However, a consolidated statement of account can be sent to
customer at central location)
Tax Service tax is charged SGST and CGST of respective state to apply
Customer masterInvoice to contain customer GST registration number and
address of each stateInvoice to contain customer GST registration number and
address of each state
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GST – Impact on TTL services: Customer invoice – Fixedline
Current Scenario
Account name Account No. Service type Installation address Billing address Taxes charged
Kotak Securities
Limited202102123 Standard Wireline Vijayawada Hyderabad Service tax
GST Scenario
Account name Account No. Service type Installation address Billing address Taxes charged
Kotak Securities
Limited202102123 Standard Wireline Vijayawada Vijayawada
CGST (AP) and
SGST (AP)
Impact Areas GST impact Customer Impact
Billing address Place of supply = AP Change in billing address from Hyderabad to Vijayawada
Customer masterUpdate customer GST registration number and
addressCustomer to provide GST details in relevant state
Tax AP SGST and CGSTCurrent service tax would be replaced with GST applicable
in respective state
Consolidated statement No impact -
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GST – Impact on TTL services – Customer Invoice – NPLC
Current Scenario
Account name Point A state Point B state Revenue booking circle Billing address Taxes charged
Intas Pharmaceuticals Gujarat Assam Gujarat Ahmedabad Service tax
GST Scenario
Account name Point A state Point B state Revenue booking state Billing address Taxes charged
Intas
PharmaceuticalsGujarat Assam Gujarat Assam Ahmd Assam
CGST (Guj)
&SGST (Guj)
CGST (Assam)
&SGST (Assam)
Impact Areas GST impact Customer impact
Invoicing Separate invoice for each stateCurrent single invoice to be replaced with separate invoice
for each state where links have been installed
Customer masterUpdate customer GST registration number and
addressCustomer to provide GST details for each state
TaxCGST and SGST of each state where links are
provided
Current service tax would be replaced with GST applicable
in respective state
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GST – Impact on TTL services – Customer Payments
Current Scenario
► Currently, for certain services TTL receives advance from the customers at the time of service activation
► TTL discharges service tax on advance received. A receipt is given to the customer for such advance payment.
► Advance collected are adjusted against customer invoices issued subsequently.
GST Scenario
► Any amount received in advance will trigger GST liability on TTL.
► TTL is required to issue Advance Receipt Document (ARD) to the customer for amount received in advance
► Advances received from customer account in one state can be adjusted only against subsequent invoicing only on same customer
account in the same state
► It is imperative for customer to specifically communicate payment of advance to TTL along with details of correct Account
number and GST registration number in the state relevant for such Account.
► Customer will not be able to avail credit on the basis of ARD. Credit can be availed only on the basis of subsequent invoice to be issued
by TTL.
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The customer has taken DLC services between Telangana and Andhra Pradesh.
How many invoices would the customer be getting for such services in GST
regime?
24
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Can TTL issue single invoice for MPLS services received in multiple states?
25
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Tata Docomo Business Services
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FeedbackFor more information on
GST applicable on our
services contact us on
Email: [email protected]
Call: 1800 266 1515
Request your valuable inputs at the end
of the webinar. The form will open
automatically.
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Q&A session
27
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Thank you
Call : 1800 266 1800
Email : [email protected]
Visit : www.tatadocomo.com/business
Tata Docomo Business Services