1. Awareness on GST Rajkot Branch of WIRC of ICAI 20.08.2016 - SaturdayBy
CA. Abhishek P. Doshi
K S D & Associates, Rajkot
Abhishek P. Doshi

2. Highlights of Presentation
K S D
& Associates
Why GST?
Constitution Amendment Bill
Way Forward
Taxes to Go & Remain
Dual GST Structure
Model GST Law
Levy – Concept of Supply – Inter-State Supply & Place of Supply - Time of Supply – Valuation – Input Tax Credit – Compliance Provisions – Transitional Provisions – Jobwork – E-commerce
Abhishek P. Doshi

3. Why GST?

4. Present Tax Structure (Major Indirect Taxes)
Why GST?
K S D
& Associates
Present Tax Structure (Major Indirect Taxes)
By Central Government:
Excise Duty on Median Rate of 12.5%
Service Tax on provision of 15%
Custom Duty on import & Median Rate of 24%
By State Government:
VAT on sale 4% or 12.5%
Abhishek P. Doshi

5. Why GST? K S D Limitations in Current Tax Structure Cascading Effect
& Associates
Limitations in Current Tax Structure
Cascading Effect
Multiple Taxes
Lack of uniformity
Complex Tax Administration
Low level of Digitalization at State level
Goods v/s. Service Disputes
Abhishek P. Doshi

6. Constitution Amendment Bill

7. Constitution Amendment Bill
K S D
& Associates
At present, the Centre and State have specific powers to levy and collect taxes.
The constitution amendment bill provides for following amendments.
To provide powers to levy and collect GST to both Centre and States.
To authorize Centre to levy and collect IGST.
To set-up GST Council comprising of Union Finance Minister and State Finance Minster. The council will provide suggestion on various aspect of GST law and its implementation.
To provide for 100% compensation to states for any loss for 5 years.
Abhishek P. Doshi

8. Way Forward…

9. Way Forward
K S D
& Associates
Constitution Amendment bill to be ratified by 16 states.
President Assent to the Bill
GST Council to be constituted within 60 days
Suggestion by GST Council on draft Law, Rate with band of Goods & Service Tax, Place of Supply rules and other matters.
The CGST and IGST draft law need to be passed by Parliament.
The SGST law need to be passed by assemblies of all the states.
Abhishek P. Doshi

10. Way Forward K S D GST Network
& Associates
GST Network
GSTN will provide IT infrastructure for GST and various other services to Government as well as stake holders.
GSTN has been incorporated as section 8 company with 49% equity by Government and 51% by non government institutions.
The GSTN will provide services of PAN based registration, platform for return filing, manage system for payment of taxes, common interaction platform for Governments and Stakeholders etc.
Abhishek P. Doshi

11. Taxes to Go & Remain

12. Taxes to go K S D Excise Duty Service Tax
& Associates
Excise Duty
Service Tax
Additional Customs Duty (CVD)
Special Additional Duty of Customs (SAD)
VAT
CST
Entry Tax - Octroi
Luxury Tax
Entertainment Tax
Abhishek P. Doshi

13. Taxes to remain K S D Basic Custom Duty Stamp Duty Property Tax
& Associates
Basic Custom Duty
Stamp Duty
Property Tax
Toll Taxes
Road Tax
Export Duty
Electricity Duty
Abhishek P. Doshi

14. Dual GST Structure

15. Dual GST Structure K S D & Associates Supply Tax Intra State Supply
CGST
SGST
Inter State Supply
IGST
Import
BCD
IGST (in place of CVD and SAD)
Exports
Zero rated
Abhishek P. Doshi

16. GST Model Law

17. GST Model Law K S D Central/State Goods and Service Tax Act, 2016
& Associates
Central/State Goods and Service Tax Act, 2016
Chapters 25, Sections 162, Schedules 4
GST Valuation (Determination of the Value of Supply of Goods and Services) Rules, 2016
Integrated Goods and Service Tax Act, 2016
Chapters 11, Sections 33
Business Processes related to GST Registrations, Payments, Returns and Refunds issued by Empowered Committee of State Finance Ministers.(2015)
Abhishek P. Doshi

18. Levy & Concept of Supply

19. Levy (Charging Section)
K S D
& Associates
There shall be levied a tax called the Central / State Goods and Services Tax (CGST/SGST) on all intra-state supply of goods and / or services at the rate specified in schedule…. to this Act and collected in such manner as may be prescribed. [Section 7(1)]
The CGST / SGST shall be paid by every taxable person in accordance with provisions of this Act. [Section 7(2)]
Abhishek P. Doshi

20. Supply K S D Supply includes
& Associates
Supply includes
For Consideration (furtherance of business)
- sale, transfer, barter, exchange, license, rental, lease or disposal
Whether or not for consideration or furtherance of business
- Importation of Service
Supply without consideration
- List as per schedule I
Abhishek P. Doshi

21. Supply K S D & Associates Supply without consideration (Schedule I)
Permanent transfer / disposal of business assets.
Temporary application of business assets to a private or non-business use.
Services put to a private or non-business use.
Assets retained after deregistration.
Supply of goods and / or services by a taxable person to another taxable or non-taxable person in the course or furtherance of business
Provided that supply of goods by a registered taxable person to a job worker in terms of section 43A shall not be treated as supply.
Abhishek P. Doshi

22. Supply
K S D
& Associates
Supply of any branded services by an aggregator as defined in section 43B under any brand name or trade will be supply of aggregator.
Abhishek P. Doshi

23. Goods / Services
K S D
& Associates
“goods” means every kind of movable property other than actionable claim and money but includes securities, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under the contract of supply. [section 2(48)]
Explanation – the term movable property shall not include intangible property.
Abhishek P. Doshi

24. Goods / Services K S D “service” means anything other than goods:
& Associates
“service” means anything other than goods:
Explanation – Service include intangible property and actionable claim but does not include money.
Schedule II specified certain activities to be treated as supply of goods or services.
Schedule II provides that works contract will be supply of services.
Abhishek P. Doshi

25. Taxable Person
K S D
& Associates
Taxable person means a person who carries on any business at any place in India / State of _______ and who is registered or required to be registered under schedule III of this Act.
Provided that an agriculturist shall not be considered as a taxable person.
The State Government / Central Government or Local Authority should also be regarded as Taxable person except for the transactions specified in schedule IV of the Act.
Threshold limit is Rs. 10 lacs (Rs. 5 lacs for North East States)
Abhishek P. Doshi

26. Taxable Person
K S D
& Associates
Following persons shall not be considered as Taxable person.
(a) services by an employee to employer in the course of or in relation to his employment.
(b) any person engaged in the business of exclusively supplying goods and / or services that are not liable to tax under this Act.
(c) any person liable to pay tax under reverse charge, receiving services of value not exceeding Rs. _____ in a year for personal use…
Abhishek P. Doshi

27. Business K S D & Associates “business” includes -
(a) any trade, commerce, manufacture, profession, vocation or any other similar activity, whether or not it is for a pecuniary benefit;
(b) any transaction in connection with or incidental or ancillary to (a) above;
(c) any transaction in the nature of (a) above, whether or not there is volume, frequency, continuity or regularity of such transaction;
(d) supply or acquisition of goods including capital assets 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, as the case may be;
(f) admission, for a consideration, of persons to any premises; and
(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;
Abhishek P. Doshi

28. Inter-State Supply & Place of Supply

29. Inter-State / Intra-state
K S D
& Associates
Inter-State Supply means any supply where the location of the supplier and the place of supply are in different states.
Intra-State Supply means any supply where the location of the supplier and the place of supply are in same state.
Abhishek P. Doshi

30. Place of Supply of Goods
K S D
& Associates
If movement of good is involved – the location of goods at the time at which movement of goods terminates
If goods moved on direction of third person – the principal place of business of such third person
If movement is not involved – the location of such goods at the time of delivery to recipient
If goods are installed or assembled at site – the place of such installation or assembly
Goods supplied on board a conveyance – the location at which such goods are taken on board.
Not determinable – As per the law to be made
Abhishek P. Doshi

31. Place of Supply of Services
K S D
& Associates
General Rule - if registered person, the location of such person or else, the location of recipient where address on record exists otherwise the location of supplier of services.
In relation to immovable property – the location of such property
Restaurant, catering, fitness, beauty treatment etc. – the location at which the services are actually performed
Training Services – if to registered person, location of such person or the location at which services are actually performed
Admission to an event or amusement park – the location of such event or park
Abhishek P. Doshi

32. Place of Supply of Services
K S D
& Associates
Organization of an event including conference etc. - if to registered person, location of such person or the location at which services are actually performed.
Goods Transportation Services - if to registered person, location of such person or the location at which such goods are handed over for their transportation.
Passenger Transportation Services - if to registered person, location of such person or the place where the passenger embarks on the conveyance for continuous journey.
Services provided on board a conveyance – the first schedule point of departure.
Abhishek P. Doshi

33. Place of Supply of Services
K S D
& Associates
Telecommunication services including broadcasting, cable, direct to home etc. – the location at which telecommunication line, leased circuits, cable connection or dish antenna is installed. For mobile connection (postpaid) – the billing address of recipient of services. For mobile connection (pre-paid) – the location at which such pre-payment receives and if received through electronic mode, the location of recipient on record.
Banking & Financial Services – the location of recipient of service on record. If services not linked with account, the location of supplier of services.
Insurance Services - if to registered person, location of such person or the location of recipient of service on record.
Abhishek P. Doshi

34. Time of Supply

35. (Earliest of any of following events)
Time of Supply of Goods
K S D
& Associates
Normal Supply of Goods
Reverse Charge
Goods sent for approval
In Case of Continuous Supply
(Earliest of any of following events)
Any of one
Date on which goods removed by supplier / Date on which goods available to recipient
Date of receipt of goods
The time when it becomes known.
If successive statement of account or payment involves – date of expiry of such statement.
Date of Invoice
Date of receipt of invoice
Date of receipt of payment
Date of payment made
Six months from the date of removal
If no successive statement – date of invoice or date of receipt of payment.
Date on which the recipient shows the receipt in books of accounts.
Date of debit in books of accounts.
Abhishek P. Doshi

36. Time of Supply of Services
K S D
& Associates
Normal Supply of Services
Reverse Charge
In Case of Continuous Supply
If invoice issued within time, date of invoice or date of receipt of payment (earlier)
(Earliest of any of following events)
If due date of payment is ascertainable, the date on which such payment is to be made.
If invoice not issued within time, date of completion of service or date of receipt of payment (earlier)
Date of receipt of services
Date of receipt of invoice
If due date of payment is not ascertainable, the date of invoice or receipt of payment (earlier)
Date on which the recipient shows the receipt in books of accounts.
Date of payment made
Date of debit in books of accounts.
Payment linked with completion – on completion of such event
Abhishek P. Doshi

37. Valuation

38. Valuation K S D & Associates
If the price only consideration and supply to unrelated parties, the transaction value will be value of supply.
The transaction value will include following
Any amount liable to be paid by supplier but paid by recipient
Value of goods / services supplied by recipient free of cost or at discounted rate
Taxes other than GST
Royalties and license fees related to supply
Incidental expenses such packing and commission etc.
Any reimbursable expenditure or cost
Any discount or incentive that ma be allowed after supply
The transaction value will not include any post supply discount linked with agreement or discount at the time of supply linked to invoice.
Abhishek P. Doshi

39. Valuation
K S D
& Associates
In following circumstance, the valuation will be governed by valuation rules.
The consideration is not in money wholly or partly
The supplier and recipient are related persons and prince is influenced by such relationship
There is reason to doubt the truth or accuracy of transaction value
Business transaction such as pure agent, money changer, insurer, air travel agent and distributor or selling agent of lottery
Such other supplies as notified by Government
Abhishek P. Doshi

40. Valuation K S D & Associates
Valuation Rules – Value can be determined by following sequentially rule 4 to 6
Rule 4 – Value by Comparison of goods / services of like kind and quality.
Rule 5 – Value by computed value method i.e. cost, charges for design and brand and profit and general expenses
Rule 6 – Residual Method i.e. value determined by reasonable means consistent with the principles and general provisions of these rules
Rule 7 – provides the mechanism, where the declared value can be rejected
Rule 8 – provides the mechanism for value in special case of pure agent, money changer.
Abhishek P. Doshi

41. Input Tax Credit (ITC)

42. Input Tax Credit
K S D
& Associates
"input tax" in relation to a taxable person, means the {IGST and CGST}/{IGST and SGST} charged on any supply of goods and/or services to him which are used, or are intended to be used, in the course or furtherance of his business and includes the tax payable under sub-section (3) of section 7;
ITC Availability
Nature of Liability
IGST
CGST
SGST
Credit that can be utilised
Abhishek P. Doshi

43. Input Tax Credit K S D Exclusions
& Associates
Exclusions
Construction and Works Contract Services for immovable property other than plan & machinery.
Goods and / or Services which are used primarily for personal use or consumption of any employee.
Motor Vehicles
Goods and / or Service on which tax has been paid u/s. 8 (composition levy)
Goods and / or Services used for private or personal consumption to the extent they are so consumed.
Abhishek P. Doshi

44. Input Tax Credit K S D & Associates ITC of Stock
If the person has applied for registration within 30 days from the date on which he becomes liable fore registration, the credit of inputs held in stock and inputs contained in semi finished or finished goods on the day immediately preceding the date on which he becomes liable to pay tax will be available.
If the person takes voluntary registration, the credit of inputs held in stock and inputs contained in semi finished or finished goods on the date of registration will be available.
Where the taxable person cease to pay tax u/s. 8 (composition levy), the credit of inputs held in stock and inputs contained in semi finished or finished goods on the day immediately preceding the date on which he becomes the liable to pay tax u/s. 7 (normally).
Abhishek P. Doshi

45. Input Tax Credit K S D & Associates
Where the goods and / or services are used by the taxable person partly for business purpose and partly for other purpose, proportionate credit will be available.
Where the goods and / or services are used by the taxable person partly for effecting taxable supply and partly for non-taxable supply including exempt supply but excluding zero rate supply, proportionate credit will be available.
In case of change in constitution of business due to sale, merger, demerger, amalgamation, lease or transfer of business with conditions for transfer of liabilities, the unutilized credit will be allowed.
Abhishek P. Doshi

46. Input Tax Credit K S D Conditions Time Limit & Associates
(a) he is in possession of a tax invoice, debit note, supplementary invoice or such other taxpaying document as may be prescribed, issued by a supplier registered under this Act or the IGST Act;
(b) he has received the goods and/or services;
(c) the tax charged in respect of such supply has been actually paid to the credit of the appropriate Government, either in cash or through utilization of input tax credit admissible in respect of the said supply; and
(d) he has furnished the return under section 27:
Time Limit
No Credit can be availed after filing of return u/s. 27 for the month of September following the end of the year to which such invoice pertains or filing of annual return, whichever is earlier.
Abhishek P. Doshi

47. Input Tax Credit
K S D
& Associates
Where the taxable person who has availed input tax credit, switches over to composition levy u/s.8 or goods and / or services become exempt, he shall pay the tax equivalent to input tax of inputs held in stock or contained in semi – finished or finished goods.
Provided that after such payment if any excess credit lying with the person will be lapsed.
Abhishek P. Doshi

48. Compliance Provisions

49. Compliance Provisions
K S D
& Associates
Registration
Schedule III provides list of persons who are required to get registered.
State wise and business vertical wise registration available.
Threshold limit for registration is Rs. 9 lacs (Rs. 4 lacs for NE state) (non taxable, exempt supplies to be counted for threshold limit)
PAN linked unique identity number
Compulsory registration for person making inter-state transfer, person liable on reverse charge, casual taxable person, person paying TDS u/s. 37, Non-resident taxable person, E-commerce operator, Agreegator, Input Service Distributor
Abhishek P. Doshi

50. Compliance Provisions
K S D
& Associates
Returns
Form
Return Type
Due Date
GSTR-1
Outward Supply
10th of next month
GSTR-2
Inward Supply
15th of next month
GSTR-3
Monthly Return
20th of next month
GSTR-4
Composition Scheme
18th of next month from the end of the quarter
GSTR-7
Person paying TDS
GSTR-6
ISD
13th of next month
GSTR-8
Annual Return
31st December of following year
Final Return
Within 3 months of cancellation or cancellation order, whichever is later
Abhishek P. Doshi

51. Compliance Provisions
K S D
& Associates
Returns
If tax due is not paid, return will be treated as invalid return.
Nil returns will be required to file.
The registered person shall not be allowed to furnish return for a tax period, if valid return for any previous tax period has not been furnished by him.
No rectification can be made after 20th October of next financial year or date of filing of annual return whichever is earlier.
Late fees will be Rs. 100 per day subject to maximum of Rs. 5000/-.
Abhishek P. Doshi

52. Compliance Provisions
K S D
& Associates
Refunds
Refund can be claimed on account of export or unutilized credit due to rate of tax on inputs is higher than rate of tax on output.
Refund application need to be made within 2 years from the relevant date.
Provisionally, 80% of refund can be released and remaining 20% after verification of details.
If refund application is for less than Rs. 5 lacs, only declaration and proof of incidence of tax will be sufficient.
If refund order is subject matter of appeal or further proceeding, the commissioner or board may withhold the refund till such time as he may determine.
Abhishek P. Doshi

53. Transitional Provisions

54. Transitional Provisions
K S D
& Associates
Registration
Provisional certificate will be issued to all existing registered person.
Provisional certificate will be valid for 6 months or extended period.
Need to submit prescribed documents within the prescribed time.
Final Registration certificate will be issued on submission of documents.
If failed to submit the documents, the registration will be cancelled.
Abhishek P. Doshi

55. Transitional Provisions
K S D
& Associates
CENVAT Credit
Carry forward of CENVAT Credit / Input Tax Credit will be allowed as shown in last return filed.
Un availed CENVAT Credit of Capital Goods to be allowed in certain cases.
Credit should be eligible credit under earlier law as well as GST law.
Credit of inputs and inputs contained in semi-finished / finished goods will be allowed, if not availed earlier due to either non-registration, claiming exemption or paying under composition scheme. However, credit will be allowed only for invoices of last 12 months.
Abhishek P. Doshi

56. Transitional Provisions
K S D
& Associates
If exempted or duty paid goods are returned within 6 months from the appointed day, no tax under GST will be payable. However, if goods were returned after 6 months, tax will be payable under GST regime.
If there is revision in contract price, the supplementary invoice or debit note or credit note to be issued within 30 days of revision. Accordingly liability will be reduced or increased in GST regime.
Pending refund claim will be disposed off as per provisions of earlier law.
Pending appeal, revision, review will be disposed off as per earlier law.
Abhishek P. Doshi

57. Job-work & E-commerce

58. Jobwork
K S D
& Associates
The principal can send and bring back the goods to / from job-worker without payment of tax subject to permission.
Goods can be directly sent to premised of job-worker. The credit of the same will be available to principal.
The principal can clear the goods from the place of job-worker subject to payment of tax.
Abhishek P. Doshi

59. E-Commerce
K S D
& Associates
In case of aggregator providing services under their brand name or trade name, the supply will be considered as supply by aggregator.
The concept of e-commerce operator has been introduced.
The e-commerce operator, who provide market place on electronic mode, will be liable to collect tax at source from the supplier of goods and / or services.
The e-commerce operator will also be required to file return of such tax collected at source.
Abhishek P. Doshi

60. Thank You (For any query you may write at adoshi@ksdassociates.com)
Abhishek P. Doshi