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Goods & Service Tax

(GST)
CA. Amit Choudhari

Topics
(1) Levy of, and exemptions from, tax
including composition scheme
(2) Time of Supply of goods
(3) Time of Supply of services
(4) Value of supply of goods
(5) Value of supply of services
(6) Input tax credit vs matching of return

Topics

(1) Levy of, and exemptions from tax


including composition scheme

Levy and Collection of CGST


and SGST

CGST/SGST shall be levied on all intra-State supplies


of goods or services
Rates would be specified in the schedule

The CGST/SGST shall be paid by every taxable person


Taxable Person means a person who carries on any business
at any place in India and who is registered or required to be
registered under Schedule III of this Act:
If aggregate turnover in a financial year is less than Rs. 10
Lakhs or Rs. 5 lacs (if taxable person conducts his business in
any of the NE States including Sikkim).
The Central Government, a State Government or any local
authority shall be regarded as a taxable person

Levy and Collection of CGST


and SGST

Not be considered as taxable persons


An agriculturist shall not be considered as a taxable person.
Any person who provides services as an employee to his
employer in the course of, or in relation to his employment,
or by any other legal ties creating the relationship of
employer and employee as regards working conditions,
remunerations and employers liability;
any person engaged in the business of exclusively supplying
goods and/or services that are not liable to tax under this
Act;
any person, liable to pay tax under sub-section (3) of
section 7, receiving services of value not exceeding ______
rupees in a year for personal use, other than for use in the
course or furtherance of his business.

Levy and Collection of CGST


and SGST

The Central or State Government would


specify categories of supply of goods or
services, the tax on which is payable on
reverse charge basis
Under reverse charge mechanism tax shall be
paid by the person receiving such goods or
services

Composition Levy

Composition scheme available if the


turnover in a financial year does not exceed
Rs. 50 Lakh
Tax rate would be prescribed (but not less than
one percent of the turnover)

Scheme not available to a taxable person


who effects any inter-State supplies of
goods or services.

Composition Levy

A taxable person covered under


composition shall not collect any tax from
the recipient on supplies

A taxable person covered under


composition shall not be entitled to any
credit of input tax on goods/ services
purchased

Power to grant exemption from


tax

The Central or a State Government may


specify goods and/or services of any
specified description from the whole or any
part of the tax leviable thereon
if it is necessary in the public interest so to do
on the recommendation of the Council

Topics

(2) Time of Supply of goods

Time of supply

The liability to pay CGST / SGST on the


goods shall arise at the time of supply

Time of supply of goods is the earliest of:


Date of removal/ making available goods by the
supplier;
Date of issue of invoice;
Date of receipt of payment by the supplier; or
Date on which the recipient shows the receipt of
goods in his books of accounts.

Topic

Input tax credit vs matching of return

Input tax credit vs matching of


return

Input tax credit (ITC) entitlement is


dependent upon inputs/ input services used
or intended to be used by a supplier for
making an outward supply, with various
exclusions prescribed.
Key exclusions are goods/ services used primarily
for personal consumption
Goods/ services used by employees
Goods/ services acquired for construction of
immovable property

Input tax credit vs matching of


return

ITC is available to registered taxable person


with reference to supply of goods and
services subject to:
Possession of tax invoice or other prescribed tax
paying document.
Receipt of the goods and or services
Actual payment of tax charged in respect of such
supply to the Government by the supplier, and
Furnishing of return

Input tax credit vs matching of


return

ITC will not be available beyond a period of


one year from the date of issue of invoice in
case of new registration.

ITC will not be allowed in respect of any


invoice
after September following the end of financial
year or
filing of the annual return
whichever is earlier.

Input Tax credit distribution

Distribution of credit by Input Service Distributor (ISD) is


restricted to tax on input services and not in respect of
goods

Manner of distribution of credit by ISD has been prescribed


as follows :
Credit of both CGST and SGST can be distributed against invoice or
other prescribed document
Credit attributable to any recipient of supply shall be distributed
only to such recipient
Credit attributable to more than one recipient to be distributed prorata to such recipients in the ratio of turnover.
Credits of GST paid on inputs or capital goods cannot be distributed

Utilisation of credit

Utilisation of credit
IGST shall be utilised first towards payment of
IGST and the remaining amount, if any, can be
utilised towards payment of CGST and SGST
CGST shall be utilised first towards payment of
CGST and the remaining amount, if any, can be
utilised towards payment of IGST.
SGST shall be utilised first towards payment of
SGST and the remaining amount, if any, can be
utilised towards payment of IGST
There is no cross credit utilization permitted
between CGST and SGST.

Matching, reversal and reclaim


of input tax credit

The details of every inward supply furnished


by a taxable person for a tax period shall, in
the manner and within the time prescribed,
be matched-

Utilisation of credit

Utilisation of credit
IGST shall be utilised first towards payment of
IGST and the remaining amount, if any, can be
utilised towards payment of CGST and SGST
CGST shall be utilised first towards payment of
CGST and the remaining amount, if any, can be
utilised towards payment of IGST.
SGST shall be utilised first towards payment of
SGST and the remaining amount, if any, can be
utilised towards payment of IGST
There is no cross credit utilization permitted
between CGST and SGST.

Transitional Provisions

Model GST law provides for transfer of


unutilised CENVAT credit and VAT Input tax
credit (ITC) availed under the existing laws
subject to following:
Amount is reflected as carry forward in the return
Such credit is admissible under the earlier Law as
well as the GST Law

Unavailed CENVAT credit on capital goods,


not carried forward in a return, will be
allowed in certain situations.