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Introduction

 GST is a single tax on the supply of goods and services with a

continuous chain of setoff benefits right from the

manufacturer to the consumer. GST is a destination
based tax.

 It extends to whole of India except in state of Jammu &

Kashmir.

 There will be no distinction between goods and services.

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 Objectives

• Single rate of tax

• Uniform tax across the country

• Reduce cascading effect of taxes

• No more double taxation of indirect taxes

• Principle of ‘consumption-based taxation’

• Higher Revenue Efficiency for State and Central Government

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Features Of GST

• Tax on supply of goods or services rather than manufacture

/ production of goods, provision of services or sale of goods.

• On Intra-State supplies of goods or services - CGST & SGST

shall be levied by the Central and State Government
respectively, at the rate to be prescribed.

• On Inter -State supplies of goods or services - IGST shall be

levied by the Central Government, at the rate to be
prescribed.

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 • Cross Utilization of Input Tax Credit across Different sector
available(i.e.manufacturer, traders & service providers).
GST Benefits Goods & Services no longer
required
To Consumer:-
To Trader:Reduction in
 Simpler Tax sys+
multiplicity of taxes

 Mitigation of cascading/
 tem Reduction in prices
double taxation
of goods & services due to
 More efficient elimination of cascading
neutralization of taxes effect
especially for exports
 Uniform prices throughout
 Simpler tax regime the country
Distinction between

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 Transparency in taxation  Increase in employment
system opportunities

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J D Shah Associates
Merging of Existing Taxes

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 GST STRUCTURE
Sale of Goods between
two States

•IGST

CGST SGST IGST

State Central State

Central
Government Government Government
Government
•Exclude:
Sale of Goods within Electricity Duty, Stamp Duty, Professional
State Tax etc
Sale of Goods within Union Territory
•CGST
•SGST •CGST
•UTGST
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 Proposed rate structure

•Petroleum products will be taxed from such date as may be

notified by Government
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 •Gold jewellery, silver and processed diamonds will be taxed
at
3%
CGST & SGST

‘A’ sold to ‘B’ of Mumbai ‘B’ sold to Consumer in Mumbai

Particulars Rs Particulars Rs

Selling Price 1000 Selling Price 2000

CGST @9% 90 CGST @9% 180

SGST @9% 90 SGST @9% 180

Total Sale Price 1180 Total Sale Price 2360

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Total Tax Paid by 180 Total Tax Paid by 180
A B(360-180)

IGST

IGST = CGST+SGST

X IGST Y TAX Z
Rs.150 Mumbai Rs.200 Mumbai
Gujarat

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 CGST Rs.100
SGST Rs.100

Y’s Output Tax Liability is Rs 200 and its Input Tax Liability is Rs 150
. So its final tax liability is Rs 50 (200-150).
GST Registration

Every person is required to take a registration in every state

of supply if

Total turnover > 20 Lakhs*

* 10 lakhs for north eastern states
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 Total Export of
Taxable Interstate Exempt
Turnover goods/
Supplies Supplies Supplies
services
Compulsory Registration

• Interstate taxable supply

• Casual taxable Person

• Paying tax under Reverse charge Mechanism

• Electronic Commerce Operator

• Non Resident Taxable persons

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 • Persons required to deduct TDS/ TCS

• Agent

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 Contd..

• Person Supplying online information and database access or

retrieval services from place outside India to a person in India,
other than a registered taxable person.

• Input Service Distributor

• Others-Notified by Government
Multiple
Registration

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 • Separate registration for each state
• Option for obtaining separate
Transition/ registrations for different business
Migration • Two or more branches in single state –
Single registration
• Example : M/s ABC Ltd. has business
of
• Manufacture of AC (Mumbai)
• Construction of residential apartments
( Pune )
• M/s ABC Ltd. has the option to obtain
one single registration for both units or
has the option to take separate
registration for each line of business
• VAT / CST / Service tax dealers have to
migrate under the GST law
• GST Registration number (GSTIN) to be obtained in the specified
period

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
Composition Scheme

 Conditions for availing composition levy:

Turnover
less than 75 PAN No Tax No Input Only intra
lakhs in last Linked Collection Tax Credit state Sales
F.Y

 Composition scheme is Optional

Minimum prescribed rate of tax under Composition scheme:(% of

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
turnover in a state during the year)

Manufacturer Trader
1% 0.5 % Restaurants
2.5 %

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
Particulars Document to be issued
Exempted goods/services Bill of Supply
On receipt of Advance Payment Receipt Voucher

Refund of Advance in case of no Refund Voucher

Supply
On receipt of Goods/Services- Tax Invoice
RCM
Goods Returned, Goods Credit & Debit Note
Deficient
Documents/Tax Invoice

Tax invoice not required to be issued -Value of Supply is less than

Rs.200

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
Category of
Invoice & Supplier Customer/
Referencing Details Recipient details

Information Required on Invoices

• Original Tax • Signature or • To Registered • Description of

• Invoice or digital Person –Name , goods & HSN Revised Tax signature of address
and code
Invoice the supplier or GSTIN/Unique ID • Qty & Unit of
Supplementary authorized • To Unregistered Measure
Tax Invoice or representative Person –Name, • Rate per unit,
Export Invoice • Name, address address of the Total value of
• Date of and GSTIN of recipient goods,
issuance of the supplier • Place of Supply Discounts,
invoice • Place of delivery Taxable Value

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 Particulars of
Goods supplied,
 value& taxes
• Tax Rates and tax amount involved
• Freight, insurance, packing and forwarding charges

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J D Shah Associates
HSN Code
 Harmonized Commodity Description and Coding System generally
referred to as “Harmonized System of Nomenclature” or simply
“HSN”.

 For taxpayers with turnover between Rs1.5 Crores-Rs.5Crores in

the preceding financial year, HSN codes may be specified only of 2
digit which is optional.

 From second year of GST operations, mentioning 2 digit HSN Code

will be mandatory.

 Taxpayer having a turnover exceeding Rs.5crore is required to

mention the HSN code of 4 digits.

 In case of export and imports an eight digit HSN code is

mandatory.

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INVOICE FORMAT

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 HSN code for each item of goods/services is to be mentioned in

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 invoice
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GST INVOICE

Relevance of Tax Invoice

• Disallowance of credit to the recipient

• Fraudulently non issuance/false/ incorrect invoice or issuance

of invoice without supply- Penalty up to 10000 or amount of
tax whichever is higher

• Bona fide non issuance/false/ incorrect invoice or issuance of

invoice without supply- Penalty up to 10000 or 10% amount
of tax whichever is higher

• Improper invoice - upto Rs.25000

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 • Confiscation of goods and/ or conveyance

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Procedural Aspects

To continue in the GST regime

Forms
Form Form Form
C H F
No longer relevant under
GST regime.
Transit Check Road
Pass Posts Permit

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 E-commerce

• “Electronic Commerce” means supply of goods and/ or services

including digital products over digital or electronic network.

• “Electronic commerce operator” means any person who owns, operates

or manages digital or electronic facility or platform for electronic
commerce.

• Every e-commerce operator, not being an agent, has to collect 1% of

net value of taxable supplies where consideration is to be collected by
the operator.

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 • Net value = aggregate value of goods/ services [other than those
notified] made during the month less returns during the month
Compliances for e-commerce operators

• TCS to be paid to government.

• Furnish a statement of such outward supplies of goods and / or services,

electronically.

• Both payment and statement to be made/ filed within 10 days from the
end of the month in which the collection is made.

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 Verification of the statement filed by the e-commerce
operator

• Details of the supplies furnished to be compared with corresponding

outward supplies.

• Discrepancies, if any, to be communicated to both.

• Discrepancy, if not rectified by supplier, to be added to output liability of

supplier for the month succeeding the one in which the same was
communicated.

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Advances

Under
Under
Current
GST
Law Now taxpayer will
In Excise and VAT, have to pay GST on
it is not required to the advance paid
pay tax on before supply of
advances. Only in goods and services
Service tax in GST.
provisions the
taxpayer has to pay Eg: If a person has
service tax on given order of Rs.
advances. 10 Lakhs and gave
advance of Rs. 5
Lakhs, then
supplier has to pay
GST on that
advance at that
time only.

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 At the time of receiving advance, supplier will have to give the Receipt voucher.

 Also at the time of filing of GST return the details of such receipts are to be mentioned
in the return.

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 The supplier should charge GST on remaining amount while preparing tax invoice
after supply of goods & services. The information about advance received should be
mentioned on the tax invoice.

 If the rate is not ascertainable at the time of advance, then GST should be charged
at 18%.

 The buyer will receive the credit at the time of supply of goods or services. The money
will be blocked for this until the supply is completed.

 Similarly, the supplier will have to charge GST on the remaining amount by
deducting advance from the total amount.

 Eg: If “A” gives Rs. 10 Lakhs as advance on 5th July to “B” for buying machinery of
Rs. 15 Lakhs. “B” will pay Rs. 1 Lakh on it as GST. On 10th October, “B” supply the
Machinery and in tax invoice mentions Rs. 15 Lakhs as cost and will charge GST of
Rs. 50,000/- on the remaining payment of Rs. 5 Lakhs. Then “A” will get credit of
Rs. 1.5 Lakhs.
 Because of these provisions both the supplier and receiver should keep proper books
of accounts.

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Reverse Charge
Mechanism

 Under GST, a registered person

purchasing goods/ services
from unregistered person has to
pay tax on those goods/ services
on his behalf on reverse charge
basis.

 This will lead to an extra

blockage of capital.
 Though he will be allowed to claim input credit of such tax paid on
reverse charge basis.
Payment of Tax

 System of Electronic Cash Ledger and Electronic Credit Ledger

 Tax can be deposited by internet banking, NEFT / RTGS,

debit/credit card and Over The Counter (OTC)

 OTC cash payment of Rs 10000 and above by private companies

and traders will not be allowed

 Date of credit to the Govt. account in the authorized bank is the

date of payment for credit in electronic cash ledger
  Interest, Penalty and Fees cannot be paid by debiting the
Electronic Credit Ledger
Returns

• Every registered taxable person to furnish returns

• Submission of return - Through online mode

• Nil Return is also to be filed

• Returns to be filed on monthly basis.

• Error or omission may be rectified - No specific provision for

revision prescribed
• Common e-Return for CGST, SGST & IGST
Returns Under GST

Return Flow (GSTR1- GSTR3)

 GSTR-3

20th of Next Month

Final return with
payment of liability

Input Tax Credit finalized in 2 months period for

Purchaser Ledger for Reconciliation of unmatched
matched Transaction Matched transaction

Unmatched

ITC reversed to be paid along with

interest by purchaser
Extension in Return Filing Date

 The Goods and Services Tax (GST) Council extended the deadline
for filing return for the first two months.

 The relaxation is meant for the first two months of July and
August.

 However, they will have to file the return with invoice-wise details
for both the month in September itself.

 No late fees and penalty would be levied in the interim period.

• RECTIFICATION- Rectification allowed till 30th September or date
of filing of annual return whichever is earlier
• NON-FILING OF RETURN- Cancellation of registration for non-
filing of returns for 3 consecutive tax periods

• PENALTY- NON FILING OF RETURN

• Late Fee – Rs.100 per day subject to a maximum of Rs.5,000

• Late Fee - Annual Return Rs. 100 per day subject to a maximum
of 0.25 % of the aggregate turnover of the defaulter
Refund

• No refund shall be granted if the amount is less than

Rs.1000/-
 • Refund application has to be made within 2 years from
the relevant date.
• Time limit of 2 years not applicable on refund of balance in
electronic cash ledger.
• Such refund can be claimed only in returns furnished u/s 34

• Refund will be adjusted against any dues of taxes, interest,

penalties, fees of existing regime and GST tax regime.
Input Tax Credit

• Input tax means IGST (including that on import of goods),

CGST and SGST charged on any supply of goods or services.
• The existing concept of Partial credit on Purchase of Capital
Goods (i.e 50% in year of receipt & 50% in subsequent years)
has been done away with.

• If recipient fails to pay to the supplier of service within 180

days of date of issue of invoice, ITC would be added to the
output tax liability of recipient and would be payable by him
along with interest.

Conditions for availing ITC

He is in possession of Tax invoice or

 Debit Note

He has received the Goods/

Services

The tax charged in respect of such

supply has been actually paid to the
Government, either in cash or
through utilisation of input tax credit
Registered admissible in respect of the said
Taxable supply;

Person He has furnished the return u/s 39

ITC on the Basis of use of Inputs

For Business
ITC Available
purposes
Use of input tax
credit
For Other ITC not
Purposes Available
Set off Heads
CROSS UTILIZATION ALLOWED

•Before GST

X Y Z
Rs. 100 Rs.250

Manufacturer Dealer Buyer

Mumbai Surat Surat
CST VAT
No credit of CST against
VAT
•After GST

X IGST Y SGST & CGST Z

Rs. 100 Rs.250
Manufacturer
Dealer Buyer

Use of input tax

credit: Partly for

Zero- Non
Taxable Exempt Nil-rated
rated taxable
Supplies Supplies Supplies
Supplies Supplies

ITC not
ITCAvailable
ITC Available ITC not available
available

Mumbai
Surat Surat
Input Tax Credit of Rs100 Allowed
Restrictions on ITC

Depreciation claimed on Tax

ITC not Available
component of the cost of
capital goods under IT Act

ITC in respect of supply of

goods or services or both
ITC not Available
after the expiry of 1 year
from the date of issue of
tax invoice
Supply of goods and services being:

Food & Outdoor Beauty

Beverage Catering Treatment
Allowed ONLY if goods/
services of a
Health Cosmetic and
particular category
Services Plastic Surgery are used towards making
taxable outward
supplies of the same
category

Travel
Membership Benefits
Health
of club to
and
Fitness employee
Centre
Life/ health Rent-
Insurance acab

Allowed ONLY if where the services are notified as obligatory

for an employer to provide an NEVER allowed employee
Input tax credit is not available for-

 Works contracts services when supplied for construction of

immovable property, other than plant and machinery, except
where it is an input service for further supply of works contract
service.

 Goods or services received by a taxable person for

construction of an immovable property on his own account,
other than plant and machinery, even when used in course or
furtherance of business.
 Motor Vehicle

 Driving
ITC for
Motor Except  Transportation of
Vehicles when goods & passenger
will NOT they are
be used for:  Further supply of
available such vehicle
Input Tax Credit will not be lost in Transition to
GST

CATEGORY OF DETAILS TO BE AMOUNT OF ITC

TAXPAYER PROVIDED AVAILABLE
Manufacturers and Service Closing balance of Cenvat Closing balance of Cenvat
providers already credit. credit as per last return.
registered under existing
Central laws.
Manufacturers and Service Balance of un-availed Amount of Cenvat credit
providers already Cenvat credit on capital on Capital Goods not
registered under existing goods. availed earlier.
Central laws.
Manufacturers and Service Stock of inputs to be used Amount of duty paid as
providers Supplying for making taxable per available duty paid
Exempted Goods / supplies when duty paid invoice.
Services under existing invoices available.
laws (not liable to be
registered under existing
Central laws)
CATEGORY OF DETAILS TO BE AMOUNT OF ITC
TAXPAYER PROVIDED AVAILABLE

Trader (not liable to be Stock of inputs to be used Amount of duty paid as per
registered under existing for making taxable supplies invoice details submitted
Central laws) where duty paid invoices
available
 Trader (not liable to Stock of inputs to be used
be registered under for making taxable supplies
existing Central laws) where duty paid invoice not
available.
Intra-State Supplies:-
- 60% of the Central tax
paid (in case rate of total
tax is 18% or 28%). -
40% of the central tax
paid (in case rate of total
tax is tax 5% or 12%)

Inter State Supplies:-

30% of the integrated tax
paid (in case rate of total
tax is 18% or 28%). - 20%
of the integrated tax paid
(in case rate of total tax is
5% or 12%)
The above details are to be filed in form GSTR Trans1 & Trans 2 on or
before 30th September, 2017.
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Anti-Profiteering Clause

 The term “profiteering” means making unreasonably high

profits in the course of ordinary trade or business.

 In order to protect consumers and ensure proper levy of GST,

Government has incorporated an anti-profiteering clause.

 The reason behind the anti-profiteering clause is to pass Input

Tax Credit benefits to the consumer in the form of lower
prices.

 The government is authorized to impose penalties in the event

such price reductions are not implemented.
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 Example:

 Today, a ghee Dosa at a

restaurant in Delhi costs Rs 160.
GST rates of ghee are now fixed
at 12%, which is a reduction of
0.5% from the current 12.5% tax
for ghee in Delhi. So, now
Government will examine
whether this restaurant has
actually reduced its price or not
to pass on the benefit of lower
GST rate to its consumers.

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 GST Preparedness Checklist

 Complete GST Migration and obtain provisional GSTIN.

 Identify HSN Code of Finished Goods,Raw Material and Consumable.

 Identify proposed GST rates for Finished Goods, Raw Material and
Consumables.

 Identify which of the purchase of goods/services on which GST is to be paid

on reverse charge.

 Verify books to ensure no credit has been left to be taken in returns under
existing law.

 File all the returns up to appointed date under existing laws.

 Comply and update details of your vendor such as name, address, GSTIN
etc.
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J D Shah Associates