© Indirect Taxes Committee, ICAI

© Indirect Taxes Committee, ICAI
HOW TO FILE LAST RETURN PRE- GST (IMPORTANCE OF LAST RETURN UNDER SERVICE TAX i.e. CURRENT REGIME AND RELEVANT RECONCILIATION) 1st RETURN IN GST (IMPORTANCE OF 1st RETURN AND AUTOMATION ETC.) GST RECONCILIATION PRE-GST & POST GST © Indirect Taxes Committee, ICAI

RETURNS UNDER GST Relevant Section 32 to 42 of Revised Model GST Law Draft GST Rules contain 25 Rules & 27 Formats Self assessment of tax liability by tax payer Common return for C, S & I Separate returns for separate categories Payment of tax is a must for a valid return © Indirect Taxes Committee, ICAI

GSTR – 1 - SEC 32 To be filed by Registered Taxable person (RTP), Non-Resident Taxable person and supplies effected through ecommerce) Details of outward supplies of taxable goods and/or services effected. The "Detail of Outward supplies" shall include invoice, debit notes, credit notes and revised invoices issued during tax period On or before 10th day of the month succeeding the tax period. Every RTP who has been communicated the details under section 33[3] & 33[4] by recipient of supplies, can either accept or reject the detail so communicated on or before 17th of the next month following the tax period. The detail furnished by him under point 1 shall stand amended. To be filed electronically Details to be made available to each recipient electronically thru common portal after the due date of filing GSTR 1 Details added, corrected, deleted by recipient in form GSTR 2 or 4 to be made available to supplier in 1A Supplier may accept or reject the modifications made by recipient GSTR1 furnished by supplier to stand amended to the extent of modifications accepted by it Invoice level data – problem – one invoice having two HSN codes or one HSN & 1 SAC..will we be allowed to file multiple rows for one inv – lengthy Typical inv details – GSTIN, inv no, date, HSN, SAC, taxable value, invoice value, tax rate, amount of tax, place of delivery/supply SS will not be allowed to upload missing inv after 10th, any increase or decrease in inv to be based on GSTR2 of recipient © Indirect Taxes Committee, ICAI

GSTR – 1A The details of inward supplies added, corrected or deleted by the recipient in his FORM GSTR-2 shall be made available to the supplier electronically in FORM GSTR-1A The details of inward supplies added, corrected or deleted by the recipient in his FORM GSTR-2 or FORM GSTR-4 shall be made available to the supplier electronically in FORM GSTR-1A and such supplier may either accept or reject the modifications made by the recipient and FORM GSTR-1 furnished by the supplier shall stand amended to the extent of modifications accepted by him. © Indirect Taxes Committee, ICAI

GSTR – 2 - SEC 33 To be filed by RTP, Non-Resident Taxable person and supplies effected through E-Commerce To be filed Monthly after 10th and before 15th of succeeding month of relevant tax period Details of inward supplies of taxable goods and/or services claiming input tax credit Taxable person required to furnish the details of inward supplies of goods and/or services received during a tax period shall, on the basis of details contained in Part A of FORM GSTR-2A, prepare such details and furnish the same in FORM GSTR-2, after including therein details of such other inward supplies, if any, required to be furnished. The recipient of goods and/or services shall specify the inward supplies in respect of which he is not eligible, either fully or partially, for input tax credit in FORM GSTR-2 where such eligibility can be determined at the invoice level. © Indirect Taxes Committee, ICAI

GSTR – 2A – RETURN RULE 2 After due date of filing GSTR 1 Details of inward supplies made available to the recipient on the basis of FORM GSTR-1 furnished by the supplier The details of outward supplies furnished by the supplier shall be made available to each of the registered taxable persons (recipients) in Part A of FORM GSTR-2A after the due date of filing of FORM GSTR-1. The details of invoices furnished by an Input Service Distributor in his return in FORM GSTR-6 under rule 7 shall be made available to the recipient of credit in Part B of FORM GSTR 2A and the said recipient may include the same in FORM GSTR-2. © Indirect Taxes Committee, ICAI

GSTR – 3 – SECTION 34 READ WITH RULE 3
Monthly by 20th of succeeding month of relevant tax period ISD to file monthly by 10th of succeeding month of relevant tax period Monthly return on the basis of finalization of details of outward supplies and inward supplies along with the payment of amount of tax Part A of the return shall be electronically generated on the basis of information furnished through returns in FORM GSTR-1, FORM GSTR-2 , electronic credit ledger, electronic cash ledger and electronic tax liability register of the taxable person Every registered taxable person discharges his liability towards tax, interest, penalty, fees or any other amount payable under the Act or these rules by debiting the electronic cash ledger and/or electronic credit ledger as per the details contained in Part B of the return in FORM GSTR-3 Two parts: Part A, Part B © Indirect Taxes Committee, ICAI

GSTR – 3A Notice to a RTP who fails to furnish return under section 27 and section 31 A notice in FORM GSTR-3A shall be issued, electronically, to a registered taxable person who fails to furnish return. © Indirect Taxes Committee, ICAI

MATCHING OF ITC – SEC 37 After the due date of furnishing the form GSTR 3 Following details to be matched (a) GSTIN of the supplier (b) GSTIN of the recipient (c) Invoice/Debit Note date (d) Invoice/Debit Note number (e) Taxable value (f) Tax amount If the due dates for 1 & 2 are extended, the date for matching ITC claims shall also be extended © Indirect Taxes Committee, ICAI

MATCHING OF ITC – SEC 37 The claim of input tax credit in respect of invoices and debit notes in FORM GSTR-2 that were accepted by the recipient in FORM GSTR-2A without amendment shall be treated as matched if the corresponding supplier has furnished a valid return The claim of input tax credit shall be considered as matched, where the amount of input tax credit claimed is equal to or less than the output tax paid on such tax invoice or Debit Note, by the corresponding supplier Communication of rectification of discrepancy in claim of ITC Any discrepancy found shall be communicated electronically in GST ITC 1 thru common portal on or bfr the last date of the month in which matching is carried SS may mke rectifications in statement of o/w ss Recipient may mke rectifications in statement of i/s Where discrepancy is not matched, the same is added to output tax liability of recipient in GSTR 3 of the month succeeding the mth in which discrepancy is made available © Indirect Taxes Committee, ICAI

MATCHING OF ITC – SEC 37 The final acceptance of claim of input tax credit in respect of any tax period, shall be made available to the registered taxable person making such claim in FORM GST ITC-1 The claim of input tax credit in respect of any tax period which had been communicated as mismatched but is found to be matched after rectification by the supplier and/or recipient shall be finally accepted and made available to the taxable person making such claim in FORM GST ITC-1 © Indirect Taxes Committee, ICAI

GSTR – 9 – SEC 39 Annual Return to be filled by 31st December of the subsequent FY Every RTP whose aggregate turnover during a financial year exceeds one crore rupees shall get his accounts audited and he shall furnish a copy of audited annual accounts and a reconciliation statement, duly certified, in FORM GSTR-9B © Indirect Taxes Committee, ICAI

STR – 10 – SEC 40 Final Return - 3 months from the date of cancellation of registration For Cancellation of registration Rectification not revision – proviso to sec 34(9) – bfr due date of furnishing return for September of the ffy or actual date of annual return © Indirect Taxes Committee, ICAI

MATCHING, REVERSAL & RECLAIM OF ITC
Relevant Sec - 37 After due date of filing GSTR 3, i.e. 20th of following month Details of inward supply furnished in GSTR 2 (by 15th) to be matched with the outward supply in GSTR 1 (by 10th) of the supplier The claim of Input Tax Credit in respect of inward supply that match with corresponding outward supply shall be finally accepted © Indirect Taxes Committee, ICAI

MATCHING, REVERSAL & RECLAIM OF ITC …. (Continued)
2 situations may arrive – ITC claimed by recipient is in excess of tax declared by supplier or the supplier does not declare the tax Mismatch to be communicated to both parties Duplicate claims to be communicated only to the recipient ITC to be accepted after due rectification ITC subject to sec 16 & 17 Discrepancy may not be rectified by supplier in month in which it is communicated – ITC provisionally taken by the recipient to be added to output tax of the month succeeding month in which discrepancy communicated © Indirect Taxes Committee, ICAI

MATCHING, REVERSAL & RECLAIM OF ITC …. (Continued)
Reclaim of credit – recipient may reclaim the credit after the supplier has rectified the details in its valid return Rectification allowed before the due date of filing return for September i.e. 20th October of the FFY or filing of Annual Return whichever is earlier If credit notes are issued – reduction in output tax liability to be claimed in GSTR 1 – not allowed if incidence of tax passed to recipient If debit notes are issued – in cases where tax invoice is issued and the tax charged is less than the tax payable – details to be added in the return for the month in which such debit note is issued © Indirect Taxes Committee, ICAI

LATE FEE Rs. 100 per day of delay subject to maximum of Rs. 5000 Annual return – late fee of Rs. 100 per day subject to a maximum of amount calculated at quarter percent of his turnover in the State © Indirect Taxes Committee, ICAI

SEC CARRY FORWARD OF CENVAT CREDIT IN RETURN TO BE ALLOWED AS TAX CREDIT IN GST RTP other than a person opting to pay tax under Composition Levy shall be allowed to take credit of CENVAT as available on the day immediately preceding the day on which GST Act comes into force. Tax credit has to be taken as opening balance in Electronic Ledger i.e. online Input Tax Credit Ledger in GSTIN CENVAT Credit available under Service Tax as on date preceding to GST Act date shall be carried forward in Electronic Ledger under the head “CGST” Tax Credit has to be carry forward provided the same is admissible both under present and in GST law * The above provisions shall be incorporated under respective CGST and SGST Acts TP – 167 – 197 Doubtful credits – treatment CC audit Invoices in order RCM credit exemplify: no itc on furniture is available under the current regime, under GST is capitalized can be treated as CG u/s 2(19) Credit of WCT to developers © Indirect Taxes Committee, ICAI

SEC UNAVAILED CENVAT CREDIT ON CAPITAL GOODS NOT CARRY FORWARD IN RETURN TO BE ALLOWED IN GST IN CERTAIN SITUATION Unavailed CENVAT credit means that the Tax credit on capital goods which have not been availed. For e.g. in the present Excise law, CENVAT credit is 50% of Tax amount during first year and remaining 50% to be claimed in next F.Y. Hence 50% CENVAT Credit on Capital goods acquired during F.Y remains unavailed in , which can be claimed in GST Regime Capital Goods shall have meaning as defined in clause 2(a) of CENVAT Credit Rules Tax Credit is allowed provided the same is admissible both under present and in GST law The above provisions shall be incorporated under respective CGST and SGST Acts Proper quantification CG purchased in may 17 – credit allowed for entire CE paid in same FY © Indirect Taxes Committee, ICAI

SEC CREDIT OF ELIGIBLE DUTIES AND TAXES IN RESPECT OF INPUTS HELD IN STOCK TO BE ALLOWED IN CERTAIN SITUATIONS Any person who is into the provision of Exempted Services is exempted from Registration under the present Law. Under GST, these persons besides providing Works Contract Services, shall have to get himself registered under the GST Act if the products / services come out of exemption or is subject to levy under the GST Act Such registered persons under the GST Act shall be eligible to claim Input Tax credit in respect of Inputs, WIP held in stock , Inputs contained in final products as on the date immediately preceding to the date from which GST Act comes into force Inputs are used for making taxable supply under the Act Benefit of reduced price passed on to customer Possession of invoice Imp in first return under GST Vis a vis the SP – providing exempt services not liable to service tax under the erstwhile regime, or WCT services with abatement Can avail credit of duty paid on inputs held on stock provided Stock statement as on 30/6/17 – imp of first return Make sure all invoices are ready Inv shd not be issued earlier than 12 months – maintain stock at minimum Pricing policy – anti profiteering The supplier is not eligible for any abatement under the act WC – mention of notification 26/2012- appears to be a drafting error WC – recd 60% payment against say 20% job done. Has inputs as on 30/6 that will suffice project completion for the next 30%. Now under GST regime, will he be allowed the credit of these inputs considering service tax on output against these inputs has suffered service tax and will not suffer GST again. © Indirect Taxes Committee, ICAI

SEC 170 – CREDIT TO BE ALLOWED IN CERTAIN SITUATIONS
Service provider engaged in provision of taxable and exempt service shall be entitled to take credit of: Cenvat credit carried forward in a return furnished under the earlier law Cenvat credit of eligible duties in respect of inputs held in stock or semi finished or finished goods relating to exempted goods or services For SP providing both taxable and exempt services No such provision contained in SGST act – may be drafting error Credit will be available provided Prepare a stock statement as on 30/6/17 attributable to provision of exempted services which will now be taxable CC reversal pertaining to and 17-18 © Indirect Taxes Committee, ICAI

SEC 171 – CREDIT IN RESPECT OF INPUT SERVICES DURING TRANSIT
Credit shall be allowed to a RTP in his ECL, for duties or taxes paid for inputs or input services received after appointed date, but taxes paid before subject to condition that the invoice or any such document is recorded in books of accounts within 30 days from appointed date 30 days may further be extended by another 30 days on sufficient cause being shown Proper statement to be furnished Arises where input services recd after appointed date but payment made bfr Inv must be recorded in books with 30 days Precautions Make sure that the tax against the same deposited by supplier within 30/6 and certificate may be obtained to this extent CC audit – not double credits are taken © Indirect Taxes Committee, ICAI

SEC CREDIT OF ELIGIBLE DUTIES AND TAXES ON INPUTS HELD IN STOCK TO BE ALLOWED TO A TAXABLE PERSON SWITCHING OVER FROM COMPOSITION SCHEME Any Registered person who is paying tax in the capacity of Composite Tax Payer at a fixed rate or fixed amount under the present tax law of Centre / State shall be eligible to take input Tax credit in Electronic Credit Ledger in respect of Inputs, WIP held in stock, input contained in Finished Goods as on the date immediately preceding to the date from which GST Act comes into force Tax Credit is allowed provided the same is admissible both under present and in GST law The above provisions shall be incorporated under respective CGST and SGST Acts Invoice should not be of a date earlier than 12 months immediately preceding the appointed day Whether abatement under current regime treated as composition scheme as above Whether at all this applies to a service provider © Indirect Taxes Committee, ICAI

Sec 185 - REVISION OF RETURNS
Where any duty / interest / penalty or any other amount stands recoverable due to Revision in Return furnished under earlier law, the same shall be recovered as Tax arrears and amount shall not be admissible as input tax credit under this Act Where any duty / interest / penalty or any other amount becomes Refundable due to Revision in Return furnished under earlier law, the same shall be refunded to him in Cash or as per the provisions of earlier act The above provisions shall be incorporated under respective CGST and SGST Acts 185 – basically gives time to reverify the output tax liability in the earlier returns, CC claimed Precautions: Bfr filing return: Each and every invoice recorded Better idea to avoid dispute and pay tax in case of ambiguity so that receiver can claim credit After filing return: Review the last return for missed invoices or credits © Indirect Taxes Committee, ICAI

SEC 190 – CREDIT DISTRIBUTION BY AN ISD
Applies to a taxable person registered as an ISD For services received prior to 01/07/2017 – even if invoice received on or after 01/07/2017 – credit is eligible for distribution under GST regime Precautions When filing last return as ISD, better to demarcate invoices which are considered for distribution as on 30/06/2017 When filing first return under GST, tag the invoices which are received under GST regime for services recd under the earlier regime but not considered earlier © Indirect Taxes Committee, ICAI

SEC 191 – TRANSFER OF UNUTILIZED CENVAT CREDIT FOR CENTRALIZED REGISTRATION Applies to Central laws only where person has centralized registration under service tax Provisions: Credit shall be c/f in the last return Return must be filed within 3 months from 01/07/2017 Credit may be transferred to any of the registered taxable person having same PAN for which centralized registration was obtained Precautions All eligible credits to be availed in the return If return is required to be revised, to ensure the same is done within 3 months from 01/07/2017 © Indirect Taxes Committee, ICAI

SEC 197 – CENVAT CREDIT Where credit availed under earlier law reversed due to non payment of consideration within 3 months Can be reclaimed provided the payment is made within 3 months from appointed date CCR 4(7) Talk about 2nd proviso to 16(2) © Indirect Taxes Committee, ICAI

SEC 188 – TAXABILITY OF SUPPLY OF SERVICES IN CERTAIN CASES
This deals with the Point of Taxation Where the POT arises under the erstwhile regime, tax to that extent to b paid under the earlier law Precautions Calculate POT as per the Rules Ensure all invoices are issued irt of completed services within 30/06/2017 and shown in return Pay service tax on advance payment and reflect in return Proper documentation irt advances to avoid litigation Exemplify: DOS 10/6 DOI 9/7 DOP 1/7 POT is under GST DOI 19/7 POT is under earlier regime with int © Indirect Taxes Committee, ICAI

Thank You For any Clarification, Please Contact
Indirect Taxes Committee of ICAI ; Website: © Indirect Taxes Committee, ICAI © Indirect Taxes Committee, ICAI

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