METTUR-SALEM CHAPTER OF COST ACCOUNTANTS USHERING GOODS AND SERVICE TAX (GST)

WHAT IS GST IT IS A DESTINATION BASED TAX ON THE CONSUMPTION OF GOODS AND SERVICES IS LEVIED AT ALL STAGES RIGHT FROM MANUFACTURE UPTO FINAL CONSUMPTION CREDIT OF TAXES PAID AT THE PREVIOUS STAGES IS AVAILABLE AS SETOFF ONLY VALUE ADDITION WILL BE TAXED AND THE BURDEN OF TAX WILL BE BORNE BY THE FINAL CONSUMER

TAXABLE EVENT UNDR GST SUPPLY OF GOODS AND/OR SERVICES OR BOTH MADE FOR CONSIDERATION IN THE COURSE OR FURTHERANCE OF BUSINESS CONCEPT OF MANUFACTURE, TRADE AND PROVISION OF SERVICES STAND SUBSUMED IN THE TAXABLE EVENT KNOWN AS “SUPPLY” THE TERM SUPPLY INCLUDES TRANSFERS.

TAXABLE EVENT Contd… DUAL TAXATION SYSTEM - CGST - FOR CENTRAL GOVT - SGST – FOR STATE GOVT BOTH ARE ON SUPPLY OF GOODS OR SERVICES WITHIN THE STATE - IGST – FOR CENTRAL GOVT ON SUPPLY OF GOODS OR SERVICES INTER-STATE

SUPPLY OF GOODS UNDER CGST/SCGST The Activity involves supply of goods; The supply is for a consideration unless otherwise specifically provided for; The supply is made in the course or furtherance of business; The supply is made in the taxable territory; The supply is taxable supply; and The supply is made by a taxable person

SUPPLY OF SERVICES Any transfer of goods without transfer of Title deed. Any lease, easement, tenancy and license to occupy land Any lease or letting out of the building including a commercial, industrial or residential complex or commerce, either wholly or partly. Job Work – Any treatment or process which is being applied to another person’s goods. Business assets put to private use or non-business use whether or not for a consideration. Renting of immovable property. Development, design, programming, customization, adaptation, up-gradation, enhancement, implementation of IT software. Works Contract, including transfer of property in goods (whether as goods or in some other form) involved in execution of a Works Contract of immovable property.

TYPES OF SUPPLIES UNDER GST TAXABLE AND EXEMPT SUPPLIES INTER-STATE AND INTRA-STATE SUPPLIES COMPOSIT AND MIXED SUPPLIES ZERO RATED SUPPLIES

ZERO RATED SUPPLY UNDER GST ZERO RATED SUPPLY MEANS EXPORT OF GOODS AND/OR SERVICES OR SUPPLY OF GOODS AND/OR SERVICES TO A SEZ DEVELOPER OR A SEZ UNIT

ACTIVITIES NOT COVERED AS EITHER SUPPLY OF GOODS OR SERVICES Services by an employee to the employer in the course of or in relation to his employment Services by any Court or Tribunal established under any law Functions performed by members of Parliament, State Legislatures, members of Local authorities, constitutional functionaries Services of funeral, burial, crematorium or mortuary Sale of Land; and Actionable claims other than lottery, betting and gambling

COMMODITITES PROPOSED TO BE KEPT OUTSIDE THE PERVIEW OF GST - ALCOHAL FOR HUMAN CONSUMPTION FIVE PETROLEUM PRODUCTS VIZ. PETROLEUM CRUDE, MOTOR SPIRIT (PETROL), HIGH SPEED DIESEL, NATURAL GAS AND AVIATION TURBINE FUEL (TERMPORARILY ONLY) ELECTRICITY

EXISTING TAXES TO BE SUBSUMED UNDER GST TAXES LEVIED BY CENTRAL GOVT EXCISE DUTY DUTIES OF EXCISE (MEDICINAL AND TOILET PREPARATIONS) ADDITIONAL DUTIES OF EXCISE ADDITIONAL DUTIES OF CUSTOMS (KNOWN AS CVD) SPECIAL ADDITIONAL DUTY OF CUSTOMS (SAD) SERVICE TAX CENTRAL SURCHARGES AND CESSES RELATED TO SUPPLY OF GOODS AND SERVICES

EXISTING TAXES TO BE SUBSUMED UNDER GST ....... Contd. TAXES LEVIED BY STATE GOVT STATE VAT CENTRAL SALES TAX LUXURY TAX ENTRY TAX ( ALL FORMS ) ENTERTAINMENT AND AMUSEMENT TAX TAXES ON ADVERTISEMENTS PURCHASE TAX TAXES ON LOTTERIES, BETTING AND GAMBLING STATE SURCHARGES AND CESSES RETLATED TO GOODS AND SERVICES

IMPORTS UNDER GST REGIME IMPORTS OF GOODS AND SERVICES WILL BE TREATED AS INTER-STATE SUPPLIES AND IGST WILL BE LEVIED. THE INCIDENCE OF TAX WILL FOLLOW THE DESTINATION PRINCIPLE AND THE TAX REVENUE IN CASE OF SGST WILL ACCRUE TO THE STATE WHERE THE IMPORTED GOODS AND SERVICES ARE CONSUMED. FULL AND COMPLETE SET OFF WILL BE AVAILABLE ON THE GST PAID ON IMPORT ON GOODS AND SERVICES.

EXPORTS UNDER GST REGIME EXPORTS WILL BE TREATED AS ZERO RATED SUPPLIES. NO TAX WILL BE PAYABLE ON EXPORTS OF GOODS AND SERVICES. HOWEVER, CREDIT OF INPUT TAX WILL BE AVAILABLE AND SAME WILL BE AVAILABLE AS REFUND TO THE EXPORTERS. EXPORTER WILL HAVE AN OPTION TO EITHER PAY TAX ON THE OUTPUT AND CLAIM REFUND OF IGST OR EXPORT UNDER BOND WITHOUT PAYMENT OF IGST AND CLAIM REFUND OF INPUT TAX CREDIT.

LIABILITY FOR REGISTRATION IN GST YOUR AGGREGATE TURNOVER IS RS.10 LAKHS AND ABOVE (FOR NORTH EAST INDIA, SIKKIM, J&K, HIMACHAL PRADESH, JHARKAND) YOUR AGGREGARE TURNOVER IS RS.20 LAKHS AND ABOVE (FOR REST OF INDIA) ALL EXISTING DEALERS REGISTERED WITH ANY OF THE CURRENT LAWS (VAT/EXCISE/SERVICE TAX) WILL NEED TO REGISTER UNDER GST BY DEFAULT

COMPULSORY REGISTRATION the following categories of persons shall be required to be registered compulsorily irrespective of the threshold limit: i) persons making any inter-State taxable supply; ii) casual taxable persons; iii) persons who are required to pay tax under reverse charge;

COMPULSORY REGISTRATION contd.. iv) persons who supply goods and/or services on behalf of other registered taxable persons whether as an agent or otherwise; v) Input service distributor (whether or not separately registered under the Act) vi) persons who are required to collect tax u/s 51 & 52; vii) every electronic commerce operator viii) every person supplying online information and data base retrieval services from a place outside India to a person in India, and, ix) such other person or class of persons as may be notified by the Central Government or a State Government on the recommendations of the Council.

BENEFITS OF REGISTRATION UNDER GST Legally recognized as supplier of goods or services. Proper accounting of taxes paid on the input goods or services which can be utilized for payment of GST due on supply of goods or services or both by the business. Legally authorized to collect tax from his purchasers and pass on the credit of the taxes paid on the goods or services supplied to purchasers or recipients. Getting eligible to avail various other benefits and privileges rendered under the GST laws.

BENEFITS AVAILABLE FOR SMALL TAX PAYERS UNDER GST REGIME TAX PAYERS WITHIN AN AGGREGATE TURNOVER IN A F.Y. UPTO 20 LAKHS/10 LAKHS (FOR NE AND SPECIAL CATEGORY STATES) WOULD BE EXEMPT FROM TAX HOWEVER, TAX PAYERS MAKING INTER-STATE SUPPLIES OR PAYING TAX ON REVERSE CHARGE BASIS SHALL NOT BE ELIGIBLE FOR THRESHOLD EXEMPTION.

VOLUNTARY REGISTRATION UNDER GST IRRESPECTIVE OF NOT CROSSING THRESHOLD LIMIT, LAW ALLOWS FOR “VOLUNTARY “ REGISTRATION. DEALER VOLUNTARILY REGISTERED CAN AVAIL ITC ON INPUTS AND INPUTS CONTAINED IN FINISHED/SEMI-FINISHED GOODS IN STOCK ON THE DAY BEFORE YOU ARE GRANTED REGISTRATION.

RECEIPT OF SUPPLIES FROM UNREGISTERED PERSONS IN CASE OF RECEIPT OF SUPPLIES FROM AN UNREGISTERED PERSON, THE REGISTERED PERSON WHO IS RECEIVING GOODS OR SERVICES SHALL BE LIABLE TO PAY TAX UNDER REVERSE CHARGE MECHANISM.

CONDITION FOR OBTAING ITC Following four conditions are to be satisfied by the registered taxable person for obtaining ITC: (a) he is in possession of tax invoice or debit note or such other tax paying documents as may be prescribed; (b) he has received the goods or services or both; (c) the supplier has actually paid the tax charged in respect of the supply to the government; and (d) he has furnished the return under section 39.

INPUT TAX CREDIT A REGISTERED PERSON IS ENTITLED TO TAKE CREDIT OF INPUT TAX CHARGED ON ANY SUPPLY OF GOODS OR SERVICES WHICH ARE USED AND INTENDED TO BE USED IN THE COURSE OR FURTHERANCE OF HIS BUSINESS THIS CONCEPT OF “FURTHERANCE OF BUSINESS” WILL REDUCE YOUR COST OF OPERATION AND DIRECTLY INCREASE THE NET MARGIN OF YOUR BUSINESS.

FLOW OF INPUT CREDIT - SGST INPUT CREDIT AGAINST SGST AND IGST OUTPUT - CGST INPUT CREDIT AGAINST CGST AND IGST OUTPUT - IGST INPUT CREDIT AGAINST SGST, CGST AND IGST OUTPUT ITC CREDIT OF SGST IS NOT AVAILABILE AGAINST CGST OUTPUT OR VICE-A-VERSA

SCENARIOS WHERE YOU CANNOT AVAIL INPUT TAX CREDIT REGISTRATION NOT APPLIED FOR WITHIN 30 DAYS FROM THE DATE ON WHICH YOU BECOME LIABLE TO REGISTER AFTER THE TIME LIMIT FOR AVAILING INPUT TAX CREDIT IS CROSSED I.E. WITHIN THE EARLIEST OF THE FOLLOWING DATES : - 1 YEAR OF DATE OF INVOICE ; OR - THE DATE OF FILING OF THE RETURN FOR SEPTEMBER OF THE NEXT F.Y.; OR - THE DATE OF FILING OF THE ANNUAL RETURN (DUE DATE IS 31ST DECEMBER OF THE NEXT F.Y.)

RESTRICTION ON PERIOD FOR AVAILMENT OF ITC In cases of new registration, change from composition to normal scheme, from exempt to taxable supplies, - the concerned person cannot avail ITC after the expiry of one year from the date of issue of tax invoice relating to such supply.

ITEMS NOT ELIGIBLE FOR ITC Items of personal consumption; inputs use of which results into formation of an immovable property (except plant and machinery); telecommunication towers; pipelines laid outside the factory premises, etc; and taxes paid as a result of detection of evasion of taxes

COMPOSITION LEVY SMALL DEALERS AND BUSINESSES COULD OPT FOR THE COMPOSITION SCHEME KNOWN AS COMPOSITION LEVY. UNDER THE SCHEME, A COMPOSIT TAX PAYER PAYS TAX ONLY AT A CERTAIN PERCENTAGE OF HIS TURNOVER RATE OF LEVY IS YET TO BE NOTIFIED

THRESHHOLD LIMIT FOR COMPOSITION LEVY AGGREGATE TURNOVER OF THE PERSON HAVING SAME PAN RS. 10 LAKHS IN RESPECT OF NORTH EAST INDIA, SIKKIM, J&K, HP, UTTARKHANT (SPECIFIED STATES) RS. 20 LAKHS(FOR REST OF INDIA) DURING THE PREVIOUS F.Y., BUT DOES NOT EXCEED RS.50 LAKHS.

CONDITIONS FOR A COMPOSITE TAX PAYER CANNOT BE ENGAGED IN SUPPLY OF SERVICES, OTHER THAN RESTAURENT SERVICES CANNOT BE ENGAGED IN MANUFACTURE OF SPECIFIC NOTIFIED GOODS CANNOT SUPPLY GOODS NOT TAXABLE UNDER CGST/SGST/UGST CANNOT SUPPLY GOODS THROUGH AN E-COMMERCE OPERATOR CANNOT BE ENGAGED IN INTER-STATE SUPPLY OF GOODS

TAX REFUND UNDER GST TAX PAID ON INWARD SUPPLY OF GOODS AND/ OR SERVICES WHICH HAVE BEEN EXPORTED PROVIDED THE GOODS ARE NOT SUBJECT TO EXPORT DUTY. UNUTILIZED INPUT TAX CREDIT DUE TO INVERTED DUTY STRUCTURE I.E. THE RATE OF TAX ON INPUTS IS HIGHER THAN THE RATE OF OUTPUT SUPPLIES. HOWEVER, REFUND IS NOT APPLICABLE WHEN SUPPLIES ARE “NIL” RATED OR FULLY EXEMPT. UNUTILIZED INPUT TAX CREDIT DUE TO OUTPUT SUPPLIES BEING EXPORTS OR ZERO RATED SUPPLIES.

RETURNS UNDER GST GSTR-1 A normal registered taxpayer has to file the outward supply details in GSTR-1 in relation to various types of supplies made in a month, namely outward supplies to registered persons, outward supplies to unregistered persons (consumers), details of Credit/Debit Notes, zero rated, exempted and non-GST supplies, exports, and advances received in relation to future supply.

RETURNS UNDER GST GSTR-2 While a large part of GSTR-2 will be auto-populated from GSTR-1, there are some details that only recipient can fill like details of imports, details of purchases from non-registered or composition suppliers and exempt/non-GST/nil GST supplies etc.

RETURNS UNDER GST GSTR-3 At any stage, but before September of the next financial year, supplier can upload the invoice and pay duty and interest on such missing invoices in his GSTR-3 of the month in which he had earlier failed to upload the invoice. The recipient shall be eligible to reduce his output tax liability to the extent of the amount in respect of which the supplier has rectified the mis-match. The interest paid by the recipient at the time of reversal will also be refunded to the recipient by crediting the amount in corresponding head of his electronic cash ledger.

RETURNS UNDER GST GSTR-4 Composition tax payers do not need to file any statement of outward or inward supplies. They have to file a quarterly return in Form GSTR-4 by the 18th of the month after the end of the quarter. In their return, they have to declare summary details of their outward supplies along with the details of tax payment. They also have to give details of their purchases in their quarterly return itself, most of which will be auto populated.

ANNUAL RETURN UNDER GST All taxpayers filing return in GSTR-1 to GSTR-3, are required to file an annual return. Casual taxpayers, taxpayers under composition scheme, non- resident taxpayers, ISDs and persons authorized to deduct/collect tax at source are not required to file annual return.

FINAL RETURN UNDER GST Final Return has to be filed only by those registered persons who have applied for cancellation of registration. The Final return has to be filed within three months of the date of cancellation or the date of cancellation order.

REVISION OF RETURN UNDER GST In GST since the returns are built from details of individual transactions, there is no requirement for having a revised return. Any need to revise a return may arise due to the need to change a set of invoices or debit/ credit notes. Instead of revising the return already submitted, the system will allow changing the details of those transactions (invoices or debit/credit notes) that are required to be amended. They can be amended in any of the future GSTR- 1/2 in the tables specifically provided for the purposes of amending previously declared details.