Presentation GST Nagpur - Vidarbha Industries · PDF file&rpsoldqfh xqghu *67 5hjlvwudwlrq...

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Compliance under GSTRegistration, Payment, Returns, Tax returns, Invoices,

Valuation, RCM, Anti Profiteering measures, Works contract, job work, Transitional provisions excluding ITC

Presented By:

Dhaval Talati

Talati & Co.

At

Vidarbh Industry Association, Nagpur

on 28/06/2017

[email protected]

Dhaval Talati, Mumbai

REGISTRATION STRUCTURE UNDER GST

Three Acts applicable on every Person under GST – Central GST Act, (State) GST Act, Integrated GST Act.

Registrations required by every person:

Simultaneous registration under CGST, SGST & IGST

Separate registration required for each State treated as distinct person

Total possible registrations for one PAN

Possible separate registrations for each business verticalwithin a State as defined u/s 2(18)

Single GSTIN

Registration under SGST

Registration under CGST

Registration under IGST

DHAVAL TALATI, MUMBAI

WHO IS REQUIRED TO TAKE REGISTRATION

As per Sec.22 :-

If the aggregate turnover (pan India basis) in a financial year exceeds twenty lakh rupees (Rs20,00,000)

Every supplier who makes a taxable supply of goods or services or both shall be liable to be registered under this Act in the State or Union territory

All the textile traders/distributors earlier not liable for registration will required to take the registration.

Special Category State:

If the aggregate turnover (pan India basis) in a financial year exceeds Ten lakh rupees (Rs 10,00,000)

Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh, Uttarakhand.

Every registered person under old Act shall be liable to be registered under GST w.e.f on the appointed day.


(CONTD)COMPULSORY REGN. (NO TURNOVER LIMIT)- SEC 24

persons making any inter-State taxable supply

Non-Resident taxable persons making taxable

supply

persons who are required to deduct tax under section

51.(TDS)

supplying online information and data base access

Input Service Distributor(ISD)

Casual taxable persons making taxable supply

persons who are required to pay tax

under reverse charge

Electronic Commerce Operator

Taxable supply made on behalf of

principal as an agentDHAVAL TALATI, MUMBAI

NO REGISTRATION REQUIRED (SEC 23)

Person engaged exclusively in the

supply of goods or services or both that are not liable to tax or wholly exempt from

tax.

an agriculturist,to the extent of

supply of produce out of cultivation of

land.

Every regd person-registration

Existing law to GST

within 30 days from the date on which he becomes liable for registration.

Application for registration shall be

made in all such states from which he makes taxable

supply.



Payment of Tax

Who is liable to pay GST:

Supplier of goods /servicesImport and other notified

supplies, liability may arise on recipient under RCM

E-Commerce Operator are liable to TCS

Government department liable for TDS

Liable to pay GST

Dhaval Talati, Mumbai7

Main Features & procedure under GST:

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

2. Single point interface for challan generation.

3. Common challan form with auto population features.

4. Use of single challan and single payment instrument.

5. Common set of Authorised bank.

6. Common Accounting codes.

7. No ITC on account of CGST shall be utilized towards payment of SGST and vice versa. The credit of IGST would be permitted to be utilized for payment of IGST, CGST and SGST in that order.

8. A Unique Identification Number shall be generated at the common portal for each debit or credit to the electronic cash or credit ledger. The UID relating to discharge of any liability shall be indicated in the corresponding entry in the electronic tax liability register. A UID shall be generated at the common portal for each credit in the electronic tax liability register for reasons other than the above.


What are the payment to be made in GST regime?

Intra state supply – CGST (account CG)

SGST (account SG)

Interstate supply- IGST component both CGST & IGST

Certain categories of taxable person will be required to pay TDS (Tax

deducted at source) and TCS (Tax collected at source).

Wherever applicable Interest, Penalty, Fees or other payment will also

require to be made.


Mode of payment

Credit or

Debit card

Payment of tax,

interest, penalty

Internet Banking

NEFT, RTGS

OTC(Rs10000/-

per challan

Any Other mode as prescribed


Returns:

There will be common state wise e-return for CGST, SGST,IGST.

Monthly return- All Taxable dealers

Quarterly return-Composition dealers

Nil Return- Compulsory to be filed.

Annual return- To be filed by all registered dealers except ISD, Casual taxable person, Non-resident taxable person, Deductor of tax.

Unless payment of tax for previous period is made, subsequent month’s return would not be a valid return.o Purchaser would not be able to claim Input

Tax Credit.


Upload sales details in GSTR-1 on 10th

Auto populated purchases details in GSTR-2A (after 10th)

Action by RecipientAction By Supplier

upload purchase details In GSTR-2 on 15th

Details mismatched

GSTR 1 (sales) stands amended

Mismatch(2 & 2A) Auto populated in GSTR-1A

Accept modification

Reject modification

Added to the output tax liability of recipient of next monthFile GSTR-3 (Final

Return) on 20th

No mismatch

File GSTR-3 (Final Return) on 20th

Cross check with purchase register

Matching in Returns


Returns: Late Filing Fee

Defaulted Return Late feeReturn on Outward Details Rs. 100 per day of delay

Maximum Rs. 5,000Return on Inward Details same as aboveReturn on Input credit same as aboveFinal Return for prescribed three months

same as above

Annual Return Rs. 100 per day of delayMaximum = 0.25% on AggregateTurnoverDhaval Talati, Mumbai

1. No revised returns;2. Any modification – through Supplementary Inv/DN/CN;

• Separate boxes are provided in the returns for such supplementary Inv/DN/CN;

3. Time limit for modification - earlier of :a. Till the return of September of next year(DD-20th October) b. Annual return(DD-31st December)

4. Quality & accuracy of data;5. Reconciliation with GST receivable A/c & GST Credit ledger.

Important Points for Returns


TAX INVOICE

The invoice shall be issued in case of supply of taxable goods or services or both.


Manner of Issuing Tax Invoice

In Case of Supply of Goods In case of Supply of Service

Original for Recipient Original for Recipient

Duplicate for Transporter Duplicate for Supplier

Triplicate for Supplier


Contents of Tax Invoice

1. Name, address and GSTIN of the supplier2. A consecutive serial number, containing alphabets or numerals or special characters3. Date of its issue4. Name, address and GSTIN or UIN, of the recipient; if registered5. Address of delivery6. HSN Code of goods or service Accounting Code for services7. Description of goods or services or both8. Quantity of goods9. Value of supply of goods or services or both taking into account discount or abatement,

if any10. Rate of GST11. Amount of GST on taxable goods and services12. Place of supply in case of interstate transaction13. Whether reverse charge applicable14. Signature or digital signature of the supplier or his authorized representative.


Invoice for Exports of Goods or services

The invoice shall carry an endorsement “Supply meant for export on payment of Integrated Tax”, or “Supply meant for export under Bond or Letter of Undertaking without

payment of Integrated Tax”

It should also mention Name and address of the recipient Address of delivery Name of the country of destination


• Self invoice is to be issued to the persons belonging to specified category/URD supplieron the date of receipt of goods, i.e., in case of reverse charge mechanism. [sec 31(3)(f)]

• Payment voucher is to be issued by a registered person who is liable to pay tax underReverse Charge Mechanism, at the time of making payment to the supplier. [sec31(3)(g)]

• Bill of Supply is to be issued, instead of a tax invoice, by a registered person supplyingexempted goods or services OR by a person paying tax under Composition Scheme,provided that the value of goods and/or services is not less than Rs.200.

• A Receipt Voucher is to be issued at the time of receipt of advance payment with respectto any supply of goods or services, evidencing such advance. [sec 31(3)(e)]

• A Refund Voucher is to be issued when, on receipt of advance payment for any supply ofgoods or services, the registered person issues a receipt voucher, but subsequently nosupply is made and no tax invoice is issued. [sec 31(3)(e)]

• Delivery Challan is to be issued when the goods are delivered to the recipient.Dhaval Talati, Mumbai

Valuation


Valuation – sec.15(1)

• Value of supply of goods or services – transaction value – price actually paid or payable for the said supply

• Where, • price is the sole consideration and;• Supplier & recipient are not related


Sec. 15(2)Transaction Value

includes

Price actually paid or payable

Any other taxes and duties etc.

Amount paid by

recipient

e.g FreightIncidental exp e.g. packing

Int, late fees & penalty

for delay in paymt

Subsidies directly

linked to price

Transaction Value includes


Before Supply

DiscountValue of supply excludes

Discount

At the time Supply After Supply

Discount duly recorded in Invoice i.e Trade discount

Established in agreement & specifically linked tot

relevant invoice

Corresponding input credit reversed by recipient


Rule 1 When consideration not wholly in money

Value of supply

(a)Open market value of such

supply

(b)If open market

value not available

If (a) or (b) not applicable

( C )Supply of

goods/service of like kind & quality

If (a) or (b) or ( c ) not applicable

(d)As per Rule 4 & 5 along with Money

consideration

Consideration in money

Amount equivalent to the consideration not in money if such amount known at the time of supply


‘Open mkt value’ & ‘ of like kind quality’

• Open market value means- full value of money excluding IGST/C& SGST/UTGST - and the cess payable by a person - are not related and price is sole consideration

• Like kind and quality means- supply made in a similar circumstances , characteristics, quality, quantity, functional components, materials, and reputation of the goods/services or both –is the same or closely or substantially resembles


Rule 2Related person or distinct person

Value of goods/service

(a)Open Market

Value

(b)If Open Market Value not

available then value of supply Goods/Service of like kind &

quality

110% of Cost of production

Reasonable basis consistent with

principle & general provision

Rule 4 Rule 5

If clause (a) or (b) not applicable

OR

Note- Where recipient is eligible for full ITC, the value declared in invoice shall be open market value of Goods/Service


Rule 3Between Principal and Agent

Value of Goods

(a)Open

Market Value

OR

(a)90% of Price charged for

supply of like kind & quality by recipient to his

customer(not related), where goods are intended

for further supply by recipient

110% of Cost of

production

Reasonable basis consistent with

principle & general

Rule 4 Rule 5

OR


Rule 7 – Value of supply of service in case of Pure Agent

Expenditure Incurred by supplier as Pure Agent of recipient of supply of service shall be excluded from value of Supply subject to following conditions

Contract for

supply shall be

between third

party & recipient of supply

Recipient of supply uses the service so procured

by the supplier in

his capacity as pure agent of recipient

Recipient of supply is liable to make payment to third party

Recipient authorizes supplier for

payment on his behalf

Recipient knows

that services

are procured from 3rd

party

On behalf payment has ben

separately indicated

on the invoice

Supplier recovers only such amount as has

been paid by him to the third

party

Services procured from pure

agent are in addition to the supply

he provides on his own

account


Reverse Charge Mechanism(RCM)


Overview RCMCurrently, Reverse charge is common applicable on imports

of services and intangible properties.

Normally, the supplier pays the tax on supply. In certain cases, the receiver becomes liable to pay the tax & it is called reverse charge.


Applicability of RCM

Reverse charge is applicable on notified supplies

• Eg. Goods transport, Advocates etc.(full list of services covered under RCM can be downloaded from http://www.cbec.gov.in/resources//htdocs-cbec/gst/list-of-services-under-reverse-charge-2.pdf)

and

Purchases of goods or services or both from URD

• URD purchases of say stationery, auto/taxi,

However, Exempt supplies received from the unregistered person is not subject to RCM (including conditional exempt supplies).


Normally, liable to register - if turnover exceeds Rs.20lakhs

persons required to pay tax under reverse charge have to compulsory register irrespective of the threshold limit.

Registration for RCM:


When tax under RCM need to be paid for GOODS:

In case of reverse charge, the time of supply shall be the earliest of the following dates—

a) the date of receipt of goods OR

b) the date of payment OR

c) the date immediately after 30 days from the date of issue of invoice by the supplier

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


Example:

Date of receipt of goods 15th July 2017

Date of payment 30th July 2017

Date of invoice 21st July 2017

Date of entry in books of receiver 25h July 2017

Time of supply of goods 15th July 2017

If for some reason time of supply could not be determined supply under (a), (b) or (c) then it would be 25th July 2017 i.e., date of entry

Cont…

When tax under RCM need to be paid for GOODS:


In case of reverse charge, the time of supply shall be the earliest of the following dates:

a) the date of payment OR

b) the date immediately after 60 days from the date of issue of invoice by the supplier.

If it is not possible to determine the time of supply under (a) or (b), the time of supply shall be the date of entry in the books of account of the recipient.

When tax under RCM need to be paid for SERVICES:


In case of ‘associated enterprises’, where the supplier of service is located outside India, the time of supply shall be earlier of –

1. The date of entry in the books of account of the receiver

OR

2. The date payment

5. Time of supply for SERVICES under RCMCont…


CLAUSE & MEANING

1. Benefit of Reduction in tax on supplyof goods or services or input tax creditshall be passed on to the recipient byway of commensurate reduction inprices.

2. Central government may constitute anauthority to examine above .

3. Anti profiteering rules are notified

1. Revisit pricing decisions based on projected/estimated costs considering

• impact of all recoverable/Non-recoverable ITC -Pre-and post GST.

• Reduction in tax rate of goods /services procured /acquired.

• Reduction in tax rate of goods /services suppled.

• Change in profit margins for external/uncertain factors

2. Determination of Non-profiteering/profiteering atproduct/project level.

3. Adjustment in price to give effect of profiteering

ACTION REQUIRED

ANTI PROFITEERING (SEC 173 CGST ACT 2017)


Works Contract

• “works contract” means a contract for building, construction, fabrication,completion, erection, installation, fitting out, improvement, modification,repair, maintenance, renovation, alteration or commissioning of anyimmovable property wherein transfer of property in goods (whether asgoods or in some other form) is involved in the execution of such contract.”

• ‘Works contract’ definition only covers the transaction which are related tothe immovable property and excluded the transfer of property in goodsinto a ‘movable property’

• Works contract i.e any contracts related to the immovable property isspecifically considered as ‘composite supply’ as per the Schedule II of theGST Act and it is to be treated as ‘Supply of Services’ and not ‘ Supply ofGoods’.


Job work

Job-work - Definition

Definition -Section 2(68) -Job work meansundertaking any treatment or process

on goods

belonging to another registered taxable person

Job-work procedure (Sec 143 )

Supply from Principal

Job-workerNot taxable

Inputs – Returned within 1 year after completion of job work or otherwise /

CG – Returned within 3 years

Supply from Place of Business of RD Job worker [sec. 143(b)]

Principal/RD tax Payer –sent any inputs/CG

Job Worker - inputs/CG without payment of tax

Supplied inputs/CG from POB of Job worker

within 1 yr/3yrs

Supply within India –with payment of tax

Export – Without payment of tax

job worker should be RD u/s 25 Or principal declares as add. POB Accountability & Responsibility of inputs/CG – with the principal CG doesn’t include moulds and dies, jigs and fixtures, or tools

Inputs/CG not returned - Job-worksupply by Job-worker

If inputs notReturned/supplied

within 1 year from sending

Deemed Supplyby principal

If CG not returned/supplied

within 3 years from sending

Deemed Supply by principal

treated as

supply by

Principal

ITC Rule 10

Inputs or CG to be sent to JW to be issued under challan (as per Rule- Invoice 8) by Principal

Including cases where inputs/CG directly sent directly to JW

Challans of goods dispatched and /or received to/from JW to be reported in Form GSTR -1

If inputs/CG not returned in time – Challan will be deemed to be invoice

Capital good shall include P & M

Some issues – job work On appointed date- both Principal & Job-worker to declare

stock Should ‘job work’ to result in ‘Manufacture’?- No, broad

definition What if goods are belonging to ‘URD’? Would it be still a job-

work? – No. taxable supply Can the job-worker supply/transfer goods to another job-work? Yes Should the Principal and JW be located in same state/UT? No – refer

FAQ 16 CG doesn’t include moulds and dies, jigs and fixtures, or tools

Is it, supply of moulds and dies, jigs and fixtures, or tools to Job-worker – TAXABLE? – No

What about Capital goods sent/ removed to JW under existing law?

Dies, Moulds, Jigs, fixture or tools – not capital goods – Hence supply

Transitional provisionsGoods sent under

MVAT Act & Returned Under GST

Act

Within

6m Not Taxable

if in closing stock

Received By principal

Supplied from Job work POB - Exclude Aggregate T/O

on payment of tax in India

without payment of tax for Export

Beyond 6 months Taxable – Job

Worker

ITC recovered -

Principal

Goods/Service In Transit on appointed date

Credits can be claimed as GST if

Inputs/Inputsservices receivedafter Appointeddate

Taxes paid under earlier law

Invoice received andrecorded within30days of appointeddate


GOODS RETURNS AFTER APPOINTED DATE

Duty/VAT paid GoodsExempt Goods under existing law

Returned within 6 months of AD

Returned after 6 months from AD

Returned within 6 months

Returned after 6 months from AD

Not a supply Independent Supply

Returned from

Unregistered customer

Returned from

Registered customer

Independent Supply

Can claim refund

under earlier law

Independent Supply

AD: Appointed dateDhaval Talati, Mumbai

Goods sent on Job- Work

Removed not > 6 months before AD

Returned within 6 months of AD

Yes No

No tax payableRecovery of

corresponding credit

Sold from Job work Premises

Before AD

Tax payable under

Existing law

After AD

Tax payable under GST AD: Appointed date


Goods sent on Approval Basis

Removed not > 6 months before AD

Approved within 6 months of AD

Rejected within 6 months of AD

Not approved within 6 months of AD

GST Payable No GST PayableGST still Payable on expiry of six months

from AD


Revision in price of contract entered prior to GST

Revision in Price after AD

Upward Revision

Downward Revision

Issue supplementary invoice or debit

note with in 30 days of price revision

Issue credit note with in 30 days of

price revision

Deemed supply under GST

Deemed to be issued under GST*

* Recipient of CN should reduce ITC.AD: Appointed dateDhaval Talati, Mumbai

Revision of Return after AD

Return revised under existing law

Any amount recoverable Any amount refundable

The amount to be recovered under existing law, unless

already recoveredTo be refunded under existing law, in cash*

Amount so recovered not admissible as ITC under GST

*Revised return should be furnished with in prescribed limit


Refund claim

For taxes paid under the earlier law

To be disposed of under the earlier law

If allowed If allowed & subsequently found to be recoverable If rejected

To be paid in cash To be recovered under GST Law To Lapse


Assessment/Adjudication Proceedings

Instituted before, on or after AD under the existing law

Any amount recoverable Any amount refundable

To be recovered under GSTunless recovered under

existing lawRefunded under existing

law, in cash

Amount so recovered not admissible as ITC under GST


Pending Claims

Appeal / Revision /Review / Reference

Admissible Rejected

Refund in Cash Recovered as CGST/SGST


No tax at source to be deducted under GST

sale of goods made under the earlier law.

invoice issued before appointed date

payment is made after appointed date



Transition Rules Salient features are as under:

1. Persons entitled to take transition credit will have to submit a declaration within 90 days (up to 30th Sept) specifying the credit he wants to take on stocks lying with him on 30th June.

2. Declaration will have to be submitted in from GST Tran-1

3. Commissioner can extend this timeline by another 90 days

4. In case of capital goods whose part credit was availed in current period and part credit is to be availed under GST, he will have to submit the declaration specifying:a) Amount of credit already availed in the current lawb) Amount of credit yet to be availed under the existing law and which he intends to avail

under GST period

5. Persons having excise invoices for stocks lying as on 30th June will be entitled to take full credit of excise mentioned in the invoices


Transition Rules # Salient features are as under: (Contd..)

6. Deemed Credit:Persons who do not have excise invoice, will be eligible to take credit in the following manner:a) For goods taxable @ 18% or above - Credit shall be allowed at the rate of 60% of CGST

payable on that goods – so if the rate is 18% then credit will be available @ 8.4% (60% of 9% CGST)

b) For goods other than above - Credit shall be allowed at the rate of 40% of CGST payable on that goods – so if the rate is 12% then credit will be available @ 2.4% (40% of 6% CGST)

7. Credit in the above Deemed Credit scheme will be available only once the said goods are sold and GST is paid. It’s like a cash back scheme.

8. To take the credit in this scheme following conditions will have to be fulfilled:a) such goods were not unconditionally exempt from exciseb) the document for procurement of such goods is availablec) the stock of goods on which the credit is availed is so stored that it can be easily

identified by the registered person.


Transition Rules # Salient features are as under: (Contd..)9. Deemed credit scheme will go on for 6 months from GST date, so stocks lying as on 30th

June have to be sold maximum up to 31st December, 2017. No credit will be available if these goods are sold after December 2017.

10. Separate return under for GST TRAN-2 will have to be filed.

11. Every person to whom the provision of section 142 (11) (c) applies, shall submit a declaration within 90 days of GST date in form GST TRAN-1 furnishing the proportion of supply on which VAT or service tax has been paid before the GST day but the supply is made after the GST day, and the ITC admissible thereon.

12. Every person to whom the provisions of section 141 (Job worker) apply shall, within 90 days of the GST day, submit a declaration electronically in form GST TRAN-1, specifying therein, the stock held by him on the appointed day.

13. Every person having sent goods on approval under the existing law and to whom section 142 (12) applies shall, within 90 days of the appointed day, submit details of such goods sent on approval in form GST TRAN-1.

Thank You


Presentation GST Nagpur - Vidarbha Industries · PDF file&rpsoldqfh xqghu *67 5hjlvwudwlrq...

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