1. ONE NATION ONE TAX CA. Karan Singal B.Com., FCA, CCNPO
Certified Concurrent Auditor (ICAI)
Past PDC committee member of NIRC of ICAI
ONE NATION
ONE TAX

2. Theme of GST Levy Rate Place of Supply Credit Valuation Exclusions
Dual GST Model
On Intra state supply CGST + SGST.
On Inter state supply IGST.
5 Tier rate structure – 5%, 12%, 18%, 28%, 40%
Cess on some goods like Luxury cars, Tobacco etc.
POS Rules will determine the Levy/ Credit/jurisdiction
Different rules for different situations can raise confusion
Credit
Valuation
Exclusions
Credit for whole GST paid on supply/expenses except few cases.
Credit in case of inter state transactions.
Valuation as per valuation rules
Valuation rules for FOC and related party transactions.
No Levy over petroleum product, alcohol.
Basic custom duty and stamp duty.

3. Impact Analysis Process & Controls Funds & Profits
Multiple Returns
Reverse Charge
Unregistered Vendors
Mismatch analysis
Existing Credits
Existing Inventory
Hidden Taxes on existing Inventory
Monthly Profitability
Mgmt of Pool of Credits
Working Capital
Pricing
IT System
A/c & Control Management
Compliance Mgmt
Vendor Compliance Management
Process & Controls
Funds & Profits
Compliance
Transitional Provision

4. Taxes under GST State 1 State 2 Flow of Credit CGST + SGST CGST SGST
IGST
IGST
Branch Transfer
CGST
SGST
IGST
Supplier
IGST
IGST
CGST
IGST
SGST
Customer
CGST
SGST

5. TRANSITIONAL PROVISIONS
Existing Assessee?
Input tax credits?
Incomplete Contracts/ transactions?
Revision of Existing Returns?
Pending Refunds?
Pending Proceedings?

6. Registration Process of Existing Assessee

7. Migration of registered taxable person under existing laws
Every assesse will be granted provisional registration under GST in Form REG-25
If assesse is not liable for GST registration, can apply for cancellation of Registration in form REG-28.
If assesse is liable for GST registration then after submission of document in form REG-24 to the satisfaction of Proper officer, final GST RC will be granted in REG-06
S. 139 of CGST Act & S. 17 of UGST Act

8. Key notes
Provisional certificate of registration will be granted irrespective of whether existing taxable person is liable for registration under GST as per section 22 or not.
Assesse may be registered in more than one Acts under existing laws but under GST it will be given single registration against single PAN.
In case assesse is registered in more than one state in that case Provisional certificate of registration will be issued for each state where assesse is registered.

9. Transitional Provisions For Input Tax Credits

10. Eligibility for existing Input Credits
Existing Assessee can move input credits to electronic credit ledger provided:
Person should not opt to pay tax under section 10 i.e. composition levy.
Said credit must be eligible under existing laws
Should be admissible as input tax credit under GST Act.
Shall file details in Form GST TRAN-1 within 90 days from appointed day. Such period can be extended further for maximum upto 90 days
Inputs received from Export oriented unit or Unit located in Electronic Hardware Technology Park will be allowed according to subrule (7) of rule 3 of Cenvat Credit rules 2004.
S. 140(1) of CGST Act & S. 18(1) of UGST Act

11. Credit carried forward in a return
Any input credit carried forward in return under existing laws can be moved to electronic credit ledger of registered taxable person under GST.
Cenvat credits will move as CGST credit
Credit for State taxes including entry tax will move as SGST credit
S. 140(1) of CGST Act & S. 18(1) of UGST Act

12. Credit carried forward in a return
Conditions
Assessee must have filed ALL RETURNS required under existing law for the period of 6 months immediately preceding the appointed date.
In respect of sale against forms for e.g. C/H/F/E forms , Assessee must specify the value of claims under these forms and credit upto such claim will be allowed only after submission of serial no. and value of such forms.
S. 140(1) of CGST Act & S. 18(1) of UGST Act

13. Unavailed credit on capital goods
A registered taxable person is eligible to take credit of unavailed input credit as CGST/SGST to electronic credit ledger
Unavailed tax credit means amount that remains after subtracting the amount of tax credit already availed from the aggregate amount of tax credit.
Capital goods shall have the same meaning as assigned to it in any existing law.
Condition
Such credit should not be c/f in a return furnished in earlier law.
S. 140(2) of CGST Act & S. 18(2) of UGST Act

14. Unavailed credit on capital goods
Key notes
It is mentioned that only eligible credits are allowable so any cenvat credit on capital goods used outside the premises of factory will not be allowed.
Invoices for procurement of capital goods must be in possession.
For eg.
A manufacturer purchased a Machine on Dec’16 of Rs /- i.e. Purchase price /- Excise duty 25000/- . As per Cenvat Credit rules 2004, duty paid on capital goods can be claimed in 2 years.
Now While filing return for Jan’17 manufacturer has availed credit of Rs /- in that case on 1st july 2017 unavailed credit with the manufacturer will be Rs /-
S. 140(2) of CGST Act & S. 18(2) of UGST Act

15. Eligible duties & taxes on stock in hand
An eligible registered taxable person can avail credit of eligible duties & taxes on stock, semi finished and finished goods available on appointed day.
Not liable to be registered (i.e. Retail Traders, SSI)
Manufacturers of Exempted goods
Provider of Exempted services
Provider of Works Contract Services and availing benefit of Notification No. 26/2012
FSD / SSD or Registered Importers
Eligible assesse means who as per earlier law
S. 140(3) of CGST Act & S. 18(3) of UGST Act

16. Eligible duties & taxes on stock in hand
When assesse is having duty/tax paid invoices or documents:
Assesse can avail credit for whole amount of duty/taxes paid against such invoice or document.
Conditions
Such goods are used or intended to be used for taxable supplies.
Such invoices must not be older than 12 months
In case of supplier of service assesse not availing any abatement under GST.
S. 140(3) of CGST Act & S. 18(3) of UGST Act

17. Eligible duties & taxes on stock in hand
When assesse does not have duty/tax paid invoices or documents:
In that case only TRADERS are allowed to avail credit on stock as follows:
Rate of IGST on such item
18% or More in IGST
Can claim 30% of IGST Payable on supply of old stock as credit for 6 month after appointed day
Less than 18% in IGST
Can claim 20% of IGST Payable on supply of old stock as credit for 6 month after appointed day
S. 140(3) of CGST Act & S. 18(3) of UGST Act

18. Eligible duties & taxes on stock in hand
Rate of CGST/ SGST/ UTGST on such item
9% or More
Can claim 60% of CGST/ SGST/ UTGST Payable on supply of old stock as credit for 6 month after appointed day
Less than 9%
Can claim 40% of CGST/ SGST/ UTGST Payable on supply of old stock as credit for 6 month after appointed day
S. 140(3) of CGST Act & S. 18(3) of UGST Act

19. Eligible duties & taxes on stock in hand
Case Study Trader A possess 10 Pcs Stock X of Rs /- against which he possess invoice bearing excise duty 12500/- and 20 pcs Stock Y of Rs /- against which he does not possess invoice where only Sales tax mentioned. In 1st tax period under GST 2 pcs stock Y 20000/- per piece. Till the end of 6 tax periods only 10 pcs of stock Y sold and No pcs of stock X sold. (assume GST rate of 18%) Now in case of Stock X as on appointed day he have total stock of Rs /- where duty of Rs /- would be available for credit under GST against stock X whether stock sold or not. in case of Stock Y In first tax period GST payable Rs. 7200/- (40000 X 18%) Now A can claim credit of Rs. 2160/- (7200 X 30%) so Net tax payable will be 5040/-. Same procedure to be followed for 6 tax periods. At the end of 6th tax period A left with 10 pcs of stock Y from old stock. Now after that period he will not be eligible to take any credit on supply of old stock of Y.
S. 140(3) of CGST Act & S. 18(3) of UGST Act

20. Eligible duties & taxes on stock in hand
Conditions
Such person having the documents of procurement of goods.
Such goods were not wholly exempt from duty of excise specified in first schedule to the Central Excise Tariff Act, 1985 or were nil rated / not wholly exempt from tax under VAT Acts as the case may be.
Such stock must be stored in a way that it can be identified easily.
This scheme shall be available only for 6 tax periods from the appointed day.
Person availing the scheme must furnish details of such stock at the end of each of 6 tax periods along with details of supply from such stock in FORM GST TRAN – 2
Such person will pass on the credit availed by way of reduced prices to the recipient. Department can verify the same under Anti profiteering clause and in case of incompliance, can levy penalty. Same can be understood by following case study
S. 140(3) of CGST Act & S. 18(3) of UGST Act

21. GST-1 (Revenue Constant) GST-2 (Profit Constant)
Case Study
Mr. A deals in item X which he used to buy at Rs plus VAT and Sell at Rs plus VAT. Rate of VAT 5% and Under GST Act rate of GST is 18%. Purchase invoice he receives does not have Excise duty.
Impact Analysis
Particular
Current
GST-1 (Revenue Constant)
GST-2 (Profit Constant)
Revenue
6000
5693
Expenses
5000
4676
4693
Output Tax
300
1080
1196
Input Tax Credit
250
Addition GST Credit
N.A.
324
359
Net Tax 50
506
587
Non Creditable tax
556
Total IDT cost for consumer
856
Net Profit supplier
1000
1324
S. 140(3) of CGST Act & S. 18(3) of UGST Act

22. Manufacturer/service provider of exempted and non exempted
A Registered Taxable Person Who, As per earlier laws
Manufacturer of Exempted as well as non exempted goods as per Central Excise Act, 1944
Provider of Exempted as well as Non Exempted Services
shall entitled to take credit of eligible duties and & taxes in respect of inputs held in stock on appointed date in
For Non Exempted goods/services as per S. 140(1)/18(1)
For exempted goods/services as per S. 140(3)/18(3)
Condition
Specify details of stock on appointed day.
S. 140(4) of CGST Act & S. 18(4) of UGST Act

23. Inputs and Input services in-transit
A Registered Taxable Person shall entitled to take credit, Who
Received some Inputs or Input services after the appointed day
Duties and taxes in respect of which has been paid by supplier before the appointed day
Provided
Invoice or any other document evidencing the payment of duties /taxes booked in the books of accounts Within 30 days from the appointed date. Such period can be extended for further 30 days.
S. 140(5) of CGST Act & S. 18(5) of UGST Act

24. Inputs and Input services in-transit
Details to be furnished
Name of supplier, serial no. and date of issue of invoice by the supplier.
Description and value of goods and services.
Quantity in case of goods and the unit code.
The amount of eligible taxes and duties or, as the case may be, the value added tax (or entry tax) charged by supplier.
Date on which receipt of goods and services entered in books.
S. 140(3) of CGST Act & S. 18(3) of UGST Act

25. Credit for Composition tax payer
As per earlier laws paying tax
At fixed rate
As fixed amount
i.e. assesse who was paying tax under composition scheme.
Such assesse shall entitled to take credit of eligible duties and & taxes in respect of inputs held in stock on appointed date if switch over from composition scheme
PROVIDED
Inputs used or intended to be used for taxable supply.
Is in possession of invoice or other prescribed documents evidencing the payment of duty
Such invoices must not be older than 12 months
S. 140(6) of CGST Act & S. 18(6) of UGST Act

26. Input Service Distributor
Input Service Distributer
ISD can distribute credit in respect of services received before appointed date even if invoice for the same received after appointed day
Key Points
Can distribute credit to units having same PAN.
Date of receipt of invoice is immaterial. Main key factor is services must be received before appointed date.
S. 140(7) of CGST Act

27. Input Service Distributor
Process of Distribution of credit will be as follows:
Invoice Received
Before Appointed Date
ISD have to claim input under existing laws and then move same as CGST to Electronic Credit ledger
After Appointed Date
Received Inter state invoice then move as IGST
Intra state Branch Distribution – CGST
Inter state Branch Distribution – IGST
Received Intra state invoice then move as CGST
S. 140(7) of CGST Act

28. Unutilized credit with taxable person having centralized registration
Such cenvat credit can be taken to electronic credit ledger of taxable person and he can transfer such credit to any taxable person having the same PAN i.e. for any of its unit.
PROVISO
He files his return, for the period ending just before the appointed day within 3 months.
Such return can be either original return or revise return with reduced credit.
Said credit must be admissible as ITC under GST law.
S. 140(8) of CGST Act

29. Reversed Cenvat Credit
As per Cenvat Credit rules 2004 if any invoice against which Cenvat credit is availed remains unpaid for 3 months then Cenvat credit availed to be reversed till the time of payment.
In case cenvat credit reversed under earlier law due to non payment of consideration, such credit can be claimed again
Condition
Such person has made payment of consideration
within 3 months from the appointed day
S. 140(9) of CGST Act

30. Transitional Provisions For Incomplete contracts/transactions

31. Material removed for Job work/ other process
Raw material
Semi-finished
Sent for job work/ other process before appointed day
Returned within 6 Months
No tax liability
Not returned within 6 months
Input taken will be recovered as arrear
Finished Goods
Manufacturer and job worker both must declare such goods in Form GST TRAN - 1.
Note
In case of semi finished and finished goods manufacturer can supply said goods directly from job worker’s premises after paying the tax applicable.
S. 141(1),(2),(3),(4) of CGST Act & S. 19(1),(2),(3),(4) of UGST Act

32. Tax paid Goods Returned after appointed date
By Unregistered Person within 6M
Refund can be claimed by seller for tax paid
By Registered
Person anytime
Treat as Supply under GST
PROVISO
In case of return from unregistered dealer said goods has not been removed not being earlier than six months prior to appointed date.
S. 142(1) of CGST Act & S. 20(1) of UGST Act

33. Issue of supplementary invoices, debit/credit notes
In case of Price revision through supplementary invoice or debit/credit note, pursuant of a contract Such document deemed to be issued in respect of outward supply under GST Act.
PROVISO
Invoice or debit or credit note issued within 30 days of price
revision
In case of downward revision of price i.e. credit note, recipient
of credit note reduced his input tax credit.
S. 142(2) of CGST Act & S. 20(2) of UGST Act

34. Long Term Contracts
Long term construction/work contracts Goods or Services or both Supplied on or after appointed day liable to be taxed a per GST Act. Even if the construction contract or works contract is entered into prior to the date of introduction of GST, the contracts would be taxable under GST Act.
S. 142(10) of CGST Act & S. 20(9) of UGST Act

35. Point of Taxation before appointed day
Notwithstanding anything contained in section 12 or section 13 of CGST Act no tax shall be payable on goods/services under GST Act if tax was leviable under earlier laws.
Point of Taxation
Before appointed Day than not taxable under GST Act
After appointed day than taxable under GST Act
S. 142(11) of CGST Act & S. 20(10) of UGST Act

36. Goods sent on approval basis returned
With in 6 Months
No tax payable
After 6 Months
Tax payable by buyer
Not returned
Tax payable by seller
S. 142(12) of CGST Act & S. 20(11) of UGST Act

37. Transitional Provisions For Pending refunds/ proceedings/ revise return

38. Refund filed in General
Pending Refund
Refund filed in General
Refund filed for goods or services exported before or after the appointed day against which tax paid before appointed day.
Refund filed for tax paid under existing law against which services not provided.
Processing will be done under existing laws.
Refund arise will be paid in cash.
Claim got rejected fully or partially then amount so rejected shall lapse.
S. 142(3),(4),(5) of CGST Act & S. 20(3),(4) of UGST Act

39. Pending proceedings
Any proceeding in relation to Assessment, appeal, review or reference, Cenvat credit or Output tax whether initiated before or after appointed day will be processed under existing law.
Due to result of proceeding if any amount become
Refundable
Shall be refunded in cash
Recoverable
Shall be recovered as arrear and such amount will not be admissible as ITC
S. 142(6),(7),(8) of CGST Act & S. 20(5),(6),(7) of UGST Act

40. Revise returns
In case assesse files revise returns after appointed day for the return filed for the period ending before appointed day then such return will be processed under existing laws.
Due to result of revise return if any amount become
Refundable
Shall be refunded in cash
Recoverable
Shall be recovered as arrear and such amount will not be admissible as ITC
S. 142(9) of CGST Act & S. 20(8) of UGST Act

41. THANK YOU CA. Karan Singal Mobile : 9891360821 Mail : cakaransingal@gmail.com