BY AVNS NAGESWARA RAO COST ACCOUNTANT GST - ROLE OF CMAs BY AVNS NAGESWARA RAO COST ACCOUNTANT

Goods and Service Tax [GST] Is a destination based tax on consumption of goods and services that accrues to the taxing authority, which has jurisdiction over the place of consumption [place of supply] Levied at all stages right from manufacture up to final consumption Credit of taxes paid at previous stages available as setoff. The net result: Only value addition will be taxed and Burden of tax is to be borne by the final consumer

GST replaces [subsumes] the following: I. Central Taxes: Central Excise duty Duties of Excise (Medicinal and Toilet Preparations) Additional Duties of Excise (Goods of Special Importance) Additional Duties of Excise (Textiles and Textile Products) Additional Duties of Customs (known as CVD) Special Additional Duty of Customs (SAD) Service Tax Central Surcharges and Cesses so far as they relate to supply of goods and services

II. State Taxes [As applicable]: State VAT Central Sales Tax Luxury Tax Entry Tax (all forms) Entertainment and Amusement Tax (except when levied by the local bodies) Taxes on advertisements Purchase Tax Taxes on lotteries, betting and gambling State Surcharges and Cesses so far as they relate to supply of goods and services

LEVY OF GST GST is levied by the Centre and Respective States simultaneously, on a common tax base [a dual levy] On intra-State supply of goods and / or services levied by: Centre — CGST The Respective States—SGST On inter-state supply of goods and services—IGST [CGST+SGST], levied and administered by Centre.

GOVERNING ACTS, RULES and FORMS: Central Goods and Services Tax Act, 2017 UT Goods and Services Tax Act, 2017 Respective State Goods and Services Acts RULES and FORMS: Registration Rules and Forms Composition Rules and Forms Determinations of Value Rules Invoice Rules and Forms Payment Rules and Forms ITC Rules and Forms Accounts and Records Rules Return Forms etc

CRITICAL AREAS of GST Important Definitions Registration Time and Place of Supply Valuation of supply Input Tax credit Composition scheme Filing of Returns, etc

Supply “supply” includes–– (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; (b) import of services for a consideration whether or not in the course or furtherance of business; (c) the activities specified in Schedule I, made or agreed to be made without a consideration; and (d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II.

Business (17) “business” includes–– (a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit; (b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a); (c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction; (d) supply or acquisition of goods including capital goods and services in connection with commencement or closure of business;

(e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members; (f) admission, for a consideration, of persons to any premises; (g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation; (h) services provided by a race club by way of totalisator or a licence to book maker in such club ; and (i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities;

ü ü Input Tax Credit CGST CGST SGST IGST Input tax Credits (‘ITC’) Output Liability of Input Credit of Available for credit against ü CGST CGST SGST Input tax Credits (‘ITC’) Order of utilization: First utilize for CGST Next utilize for IGST ü IGST

ü ü SGST CGST SGST IGST …. Contd. First utilize for SGST Output Liability of Input Credit of Available for credit against SGST CGST ü SGST Input tax Credits (‘ITC’) Order of utilization First utilize for SGST Next utilize for IGST ü IGST 15

ü ü ü IGST IGST CGST SGST .... Contd. Input tax Credits (‘ITC’) Output Liability of Input Credit of Available for credit against ü IGST IGST ü CGST Input tax Credits (‘ITC’) Order of utilization: IGST can be utilized against IGST or CGST or SGST in that order only ü SGST

RETURNS-IMPORTANT POINTS S No Returns/ Ledger For To be filed by 1 GSTR - 1 Outward supplies made by taxpayer (other than compounding taxpayer and ISD) 10th of the next month 2 GSTR – 2 Inward supplies received by a taxpayer (other than a compounding taxpayer and ISD) 15th of the next month 3 GSTR – 3 Monthly return (other than compounding taxpayer and ISD) 20th of the next month 4 GSTR – 4 Quarterly return for compounding Taxpayer 18th of the month next to quarter 5 GSTR – 5 Periodic return by Non-Resident Foreign Taxpayer Last day of registration 6 GSTR – 6 Return for Input Service Distributor (ISD) 7 GSTR – 7 Return for Tax Deducted at Source 8 GSTR – 8 Annual Return By 31st December of next FY 9 ITC Ledger of Taxpayer Continuous 10 Cash Ledger of Taxpayer 11 Tax Ledger of Taxpayer

REVISION of RETURNS All unreported invoices of previous tax period would be reflected in the return for the month in which they are proposed to be included. The interest, if applicable will be There would be no revision of returns. auto populated. All under-reported invoice and ITC revision will have to be corrected using credit/debit note and such credit / debit note would be reflected in the return for the month in which such adjustment is carried out. The credit/debit note will have provision to record original invoice, date etc. to enable the system to link the same with the original invoice as also to calculate the interest, if applicable. Its format will be like the invoice.

Reverse Charge Reverse Charge Mechanism [RCM] Specific Cat of goods or services Supply of taxable goods or services by URD E-Commerce operator Specified services – RCM Others – Forward Charge Goods – Forward Charge

Composition Levy A registered person, whose aggregate turnover in the preceding financial year did not exceed the prescribed limit can opt for the scheme Type of Supplier Rate Manufacturer One per cent (CGST) + One per cent (SGST) + Catering or Restaurant Two and Half per cent (CGST) + Two and Half per cent (SGST) Others Half per cent (CGST) +Half per cent (SGST)

Composition Levy, contd… Composition levy can be opted if not engaged in: Supply of services except hotel & catering services Making non-taxable supplies Making any inter-state outward supplies Manufacture of such goods as may be notified Making supply of goods through e-commerce operator

Composition Levy, contd… The registered person shall opt for composition scheme in respect of all for same PAN Can’t collect any tax from recipient Not be entitled for any credit Government may by notification increase limit of aggregate turnover from time to time Shall File quarterly returns

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