B. S. Seethapathi Rao
Introduction to Goods and Services Tax
Back ground
Goods and Services Tax ( GST ) is the biggest tax reform in India. Amalgamation of large number of Central and State Taxes into a single tax. It will useful in mitigating cascading effect or double taxation in a major way. From the consumer point of view, the biggest advantage would be in terms of a reduction in the overall tax burden on goods but services become costly. GST is aid to bring in greater transparency in the tax compliances and may widen the tax base.
Challenges under the existing Indirect Tax Structure .
Previously there were four key indirect taxes in India, They are:-
> Excise Duty :- Tax on the manufacturing of goods . These tax levied on manufacturing of goods,
> Service Tax :- Tax on Provision of services. This tax levied on providing of services by service provider to service recipient.
> Value Added Tax (VAT ):- This tax levied by manufacturer at the time of sale to whole seller and whole seller sell to retailer and Retailer charge on sale to consumer within the State,
> Central State Tax:- This tax levied by the manufacturer at the time of sell to out of State whole seller or Whole seller sell to out of State Retailer ,
> Customs Duty :- This Duty paid on Import or Export of Goods by who are imported into India from out of Country.
> Only taxable event under GST will be supply of Goods or Services.
Goods and Services Tax network (GSTN ):– The company has been setup primarily to provide I T infrastructure and services to the Central and State Governments, tax payers and other stakeholders for implementation of the Goods and Services Tax (GST). Creation of common and shared IT infrastructure for functions facing taxpayers is assigned to GSTN and these are:-
> Filing of registration application for getting GST registration by the taxable person under GST Act,
> Filing of returns by the registered taxable persons as per GST Act,
> Creation of challan for tax payment,
> Settlement of IGST payment ( Setoff IGST against liability of IGST,CGST, SGST and UTGST ),
> Generation of business intelligence and analytics,
All Statutory functions to be performed by tax officials under GST like,
> Approval of registration,
> Assessment,
> Audit,
> Appeals,
> Enforcement etc.,
The above functionalities are remaining with the respective tax department.
Key futures of Goods and Services Tax:-
> GST is based on the principle of value added tax and either input tax method or subtraction method, with emphasis on voluntary compliance and accounts based system,
> It is a comprehensive levy and collection on both goods and services at the same time rate with benefit of input tax credit or subtraction of value of penultimate transaction value,
> No scope for multiple levy of tax on goods and services, such as, Sales tax, entry tax, octroi, entertainment tax, Luxury tax etc.,
> A common law an procedures throughout the country under a single administration ,
> GST is a destination based tax and levied at single point at the time of consumption of goods or services by the ultimate consumer,
> Only taxable event under GST will be supply of Goods and Services,
> Both Central and State Government will simultaneously levy tax on Intra State supply,
> GST frame work in India is technology driven and will act as a self-policing mechanism.
GST is a “ DESTINATION BASED TAX “
GST would be accruing to the taxing authority which has jurisdiction over the place of consumption which is also termed as place of supply. It is levied at all stages right from manufacturer up to final consumption with credit of taxes paid at previous stages available as setoff. In a nutshell, only value addition will be taxed and burden of tax is to be borne by the final consumer.
Structure of GST in India:
In India “Dual GST “is implemented wherein both Central and State government will levy GST on Intra-State Supply of Goods or Services as under :-
> State GST (SGST )and Central GST (CGST ) = For supply within a State. ( Intra State Supply),
> Union Territory GST (UTGST ) and Central GST (CGST ) = For supply within a State ( Intra State Supply of Union Territory),
> Union Territory ( without legislation ),
For any Inter State supply Integrated Goods and Services (IGST ) will be levied. This would be collected by the Central so that the credit chain is not disrupted.
Import of goods or Services will be treated as inter-State supplies and would be subject to IGST in addition to the applicable customs duties. IGST rate will be same all over India and will not vary from State to State. Revenue from IGST will be apportioned among Union and States by Parliament based on the recommendation of GST council.
CGST,SGST,UTGST and IGST would be levied at rates to be mutually agreed upon by the Centrl and the States under the aegis of the GST Council.
These following indirect taxes were subsumed under GST:-
> At Central level
I) Central Excise duty
II) Duties of Excise (Medical and Toilet Preparations ),
III) Additional Duties of Excise (Goods of Special Importance ),
IV) Additional Duties of Excise (Textiles and Textile Products),
V) Additional Duties of Customs (commonly known as CVD),
VI) Special Additional Duty of Customs (SAD),
VII) Service Tax
VIII) Cess and surcharges in so far as they relate to supply of goods and services .
> At State Level
I) State VAT Tax,
II) Central Sales Tax ( Levied by the Central , collected by State ),
III) Purchase Tax,
IV) Luxury Tax,
V) Entry Tax ( All Forms ),
VI) Entertainment Tax ( Except those levied by the local bodies ),
VII) Taxes on advertisement,
VIII) Taxes on lotteries, betting’s and gambling,
IX) State cess and surcharges so far as they relate to supply of goods or services.
Small Tax Payers under GST:-
Tax payers with an a from aggregate turnover in a financial year upto Rs.20 Lakhs would be exempt from tax. Aggregate turnover means “ the aggregate value of all taxable supplies ( excluding the value of inward supplies on which tax is payable by a person on reverse charge basis) exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India but excludes central tax, State tax, Union territory tax, integrated tax and cess.
For Northern States the exemption threshold shall be Rss.10 Lakhs.
Classification of Goods and Services under GST:
Harmonized System of Nomenclature (HSN) code shall be used for classifying the under the GST regime. Taxpayers whose turnover is above Rs.1.5 Crores but below Rs.5 crores shall use 2 digital code and the taxpayers whose turnover is Rs.5 Crores and above shall use 4 digital codes. Taxpayers whose turnover is below Rs.1.5 Crores are not required to mention HSN code in their invoices.
Exports under GST:
Exports will be treated as zero rated supplies. No tax will be payable on exports of goods or services, however credit of input tax credit will be available and same will be available as refund to the exporter.
Meaning of key terms in GST Act,2017:
Actionable Claim: As per Sec.2(1) of CGST Act,2017 “ actionable claim” means shall have the same meaning assigned to it in section 3 of the Transfer of Property Act,1882.
As per Sec.3 of Transfer of Property Act,1882 “Actionable claim “ means a claim to any debt, other than:-
(i) A debt secured by mortgage of immovable property or by hypothecation or ledge of movable property , or
(ii) Any beneficial interest in movable property not in position , either actual or constructive , of the claimant, which the civil courts recognize as affordable grounds for relief,
Addresses on record: As per Sec.2(3) “ Addresses on record” is relevant to determine Place of Supply in case of supplies made by a registered person to an un-registered person in relation to services. In such cases, where the Place has not been specifically provided for under the law, the address on record available in the records of the supplier would be regarded the place of Supply.
Agent: As per sec.2(5) of CGST Act, 2017 “ Agent” means agency is a relationship that can be formed validly even without consideration in terms of Section 185 of the Indian Contract Act,1872. Agent can work purely on commission basis. These following two cases are covered under Schedule III of CGST Act,2017.
(i) Supply from a principal to an agent where the agent undertakes to supply such goods on behalf of the principal, or
(ii) Supply from an agent to principal where the agent undertakes to receive such goods on behalf of the principal.
Audit: As per section 2(13) of CGST Act,2017, The definition of “Audit” under the Act I a wide term covering the examination of records, returns and documents maintained/ furnished under this Actor Rules and any other law in force. Any document, record maintained by a registered person under any law can thus be called upon and audited. It becomes critical for the person to maintain true documents / records to ensure correctness and smooth conduct of audit.
Business: Sec.2(17) of CGST Act,2017. This definition may be understood in two parts, namely:-
(i) General Activity:-Trade, commerce, etc., including incidental activities whether or not there is volume , frequency, continuity or regularly f such transactions . Principle of ejusdem generis provides that similar activities would be determined by the previous enumerated ones.
(ii) Specific Activity:-acquisition of goods including capital goods, supply by association/ club, admission of persons to a premises and services by a race club.
Business Vertical: Section 25(2) of the CGST Act,207 states that a person having multiple business verticals in a State / Union Territory is permitted to obtain separate registration for each such business vertical.
Thus, a tax payer has the following two options where it has multiple business verticals in a State /Union Territory:
(i) Obtain single registration for all the business verticals
(ii) Obtain separate registration for each business verticals.
The following pints need to noted:
The component must be a distinguishable component of the person, which is capable of being transferred or to function without affecting any other business of that person. A component cannot become a “ Business vertical” merely based on geographical differentiation.
Supplies between business verticals are deemed to be taxable supplies.
Casual Taxable Person: A person would be regarded as a casual taxable person if he undertakes supply of goods or services or both:
(i) Occasionally ,and not on a regular basis,
(ii) Either as principle or agent or in any other capacity,
(iii) In State /Union Territory where he has no fixed place of business.
Capital Goods: As per Sec.2(19) of CGST Act,2017” Goods will be regarded as capital goods if the following conditions are satisfied;
The value of such goods is capitalized in the books of account of the person claiming input tax credit,
Such goods are used or intended to be used in the course or furtherance of business.
Composite supply : A supply will be regarded as a “composite supply” if, the following elements are present:
(i) The supply should consist of two or more taxable supplies,
(ii) The supplies may be of goods or services or both,
(iii) The supplies should be naturally bundled,
(iv) They should be supplied in conjunction with each other in the ordinary course of business,
(v) One of the supplies should be a principle supply ( Principle supply means the predominate supply of goods or services of a composite supply and to which any other supply is ancillary).
Consideration: As per Section 2(31) of CGST Act,2017 “ Consideration” in relation to the supply of goods or services or both:-
(i) It refers to the payment received by the supplier in relation to the supply , Payment can be received from the recipient or any other person,
(ii) Consideration can be in the form of money or otherwise,
(iii) Deposits, as such, are not liable to tax. However, where such deposits have been applied as consideration for the supply it should tantamount to making of advances and in such cases, will be liable to tax. Merely altering the nomenclature of the payment as “deposit” would not change the nature of the receipt.
Continuous Supply of Services: As per Sec.2(33) “ Continuous supply of services “ means a supply of services which is provided , or agreed to be provided, continuously or on recurrent basis , under a contract , for a period exceeding three months with periodic payment obligations and includes supply of such services as the Government may, subject to such conditions, as it may, by notification, specify.
Electronic Cash Ledger: Electronic Cash Ledger means a cash ledger maintained in electronic form by each registered person. The amount deposited through various modes of payment, shall be credited to the electronic cash ledger. The amount available in this ledger can be used for the payment of tax, interest, penalty , fees, etc.,
Electronic Credit Ledger: Electronic credit ledger means the input tax credit register required to be maintained in an electronic form by each registered person. As a process, based on details of outward supplies filed by the suppliers, the electronic credit ledger of the recipient of goods / services would be auto populated in the GSTN under the categories matched, unmatched and provisional. The tax payer claiming input credits should review the same and accept the relevant ones for claiming input credit.
The electronic credit ledger will be debited with the amount of tax liability so adjusted against the input tax credit lying in the ledger, and will stand reduced to the extent of the claim of refund of unutilized input tax credit, if any.
Fixed Establishment: The following three elements are critical to determine whether a place is a “Fixed establishment “,
i) Having a sufficient degree of performance,
ii) Having a structure of human and technical resources; and
iii) Other than a registered place of business.
Fixed establishment is relevant to determine the location of supplier for the purpose of determining whether a supply is an Intra-State Supply or Inter-State Supply.
Input Service Distributor: Definition of Input Service Distributor provides that:-
(i) It is the office of supplier of goods and /or services ,
(ii) The said office receives tax invoices towards receipt of input services
(iii) The said office distributes credit of CGST/SGST/IGST/UTGST to a supplier of goods/services having same PAN number,
(iv) The said office issues tax invoice or other prescribed documents for distribution of credit.
A supplier of goods/ services may have various such offices such s a head office, registered office, regional office, marketing office, branch, godown, ales depot etc., which avail various input services such as security services, communication charges, courier expenses, housekeeping expenses to name a few, and pay service tax. Such units and premises ay obtain registration as an Input Service Distributor for availment of credit on such input services and distribution of credit to other units to resolve the challenge of efficient utilization of accumulated credit.
Input Tax Credit: For a tax to qualify as “ input tax credit” , it must first be “ input tax”. The law creates a separate terminology for this purpose as all input tax would not qualify as credit. Credit of input tax would be available subject to specific conditions and restrictions, and to specific persons being registered persons.
Location of the “ Recipient of services:- As per Sec.2(70) “ Location of recipient of services means “ given that services are not tangible , the determination of the location of the recipient of service could result in complications. The “ location of the recipient of services “ is essential to determine whether the supplier is an inter-State or an Intra-State supply, as such location is the residuary clause for determining the place of supply of services.
Location of the supplier of services:- As per Section 2(71) “ Location of the supplier of services” means the determination of the location of the supplier of services is equally complicated , as is in case of the recipient. The “ location of the supplier of services “ is principally essential to determine whether the supply is an inter-State or an intra-State supply(i.e. where location of supplier and place of supply are in the same State or Union Territory, the supply would be an intra-State supply, and will be an inter- State supply in any other case).
Non-Residential Taxable person : As per Sec.2(77) of CGST Act,2017,” Non-Residential Taxable Person “ means covers all person who undertake transactions involving supply of goods or services or both whether or not such supplies are taxable , so, long as such person neither has a fixed place of business nor residence in India .
Every such person who intends to affect any taxable supplies under the GST law, should compulsory obtain registration under the GST law before commencing business, irrespective of the turnover during the year. The application for registration shall be made at least 5 days prior to the commence of business.
Place of Supply:- As per section 2(86) of the CGST Act,2017 “Place of supply” means Chapter V of the IGST Act provides for determination of the “ place of supply” in respect of any supply of goods or supply of services. Place of supply is significant to determine whether a supply is an Intra-State Supply or an Inter-State Suply.
Services: As per Section 2(102) “ Services “ is wide and covers everything other than those specifically included in the definition of Goods. It specifically excludes securities ( the definition of goods also excludes securities ) thus securities will not be covered within the purview of the GST . Certain transactions which involve both supply of goods and provision of service as a single economic activity such as works contract , catering contracts, SIM cards or recharge vouchers in paper form will be considered as Services under GST.
Taxable Supply: As per Section 2(108) of CGST Act,2017 “Taxable supply” means a supply of goods or services or both which is leviable to tax under this Act.
Exempted Supply: As per Section 2(47) of CGST Act,2017 “ Exempted supply “ means supply of any goods or services or both which attracts “NIL “ rate of tax or which may be wholly exempt from tax under section 11 or under section 6 of IGST Act and includes non-taxable supply.
Non-Taxable Supply : As per section 2(78) of CGST Act,2017 “ Non-Taxable Supply “ means a supply of goods or services or both which is not leviable to tax under this Act or under the Integrated Goods and Services Tax Act.
Zero Rated Supply: As per section 16(1) of the IGST Act,2017 “ Zero Rated Supply “ means any of the following supplies of goods or services or both, namely:-
(i) Export of goods or services or both ; or
(ii) Supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit,
Nil Rated Supply: These are the taxable supplies on which tax is charged at 0% .
Steps for Charging GST: The following steps to be followed to charge Goods and Services Tax:
| STEP | ACTION | SIGNIFICANCE |
| STEP-1 | Determine whether the activity is a supply within the meaning of Sec.7(1) of CGST Act,2017. | GST is a tax on the supply of goods or services or both. Hence whether GST will be applicable or not will depend whether or not there is a supply. |
| STEP-2 | Determine whether the said supply is “ Supply of goods or Supply of Service. | The distinction between Supply of Goods and Supply of Service is significant in order to determine:-
i). Place of provision, ii). Point of taxation, iii). Rates of taxes. |
| STEP-3 | Determine the “ Place of Supply “ | GST is destination based tax and hence determination of place of supply is significant. |
| STEP-4 | Determine whether the supply is an “ Intra State Supply “ or Inter State Supply” | Based on the place of supply the supply shall be classified into:-
Intra-State Supply on which CGST and SGST (or UTGST ) is applicable or Inter-State Supply on which IGST I applicable. |
| STEP-5 | Determine Time of Supply | Time of Supply fixes the point when the liability to charge GST arises. It also helps in determining which rate of tax will be applicable in case there is any change in GST rates of a particular goods or services. |
| STEP-6 | Identify the rate of tax and applicable GST Compensation Cess based on Goods and Services. | GST rates are broadly categorized into @0%,@5%, @12%, @18% and @28% based on the goods and services. Hence, the exact rate of the goods or services in question needs to be determined s given in the GST rates schedule. |
| STEP-7 | Determine the Value of Supply as per the Valuation principles. | Transaction Value of the goods or Services shall be the value in normal circumstances. However , if the conditions associated with using Transaction Value is not satisfied or it is not possible to use transaction value then Valuation rules shall be used to determine the Value of supply. |
| STEP-8 | Charge tax at the rate determined in Step-6 on the value determined in Step-7 | Tax shall be charged based on value of supply and tax charged. |
Valid Return: As per Sec.2(117)of the CGST Act, Valid return means a return furnished under sub-section (1) of section 39 on which self –assessed tax has been paid in full.
Voucher: As per Sec.2(118) of CGST Act,2017, “ Voucher” means an instrument where is an obligation to accept it as consideration or part consideration for a supply of goods or services or both and where the goods or services or both to be supplied or the identities of their potential suppliers are either indicated on the instrument itself or in related document, including the terms ad condition of use of such instrument.
Registration under GST is the first and most important issue:
Section 22(1) of CGST Act,2017” every supplier shall be liable to be registered under this Act in the State or Union Territory, other than special category States, from where he makes a taxable supply of goods and services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees;
Provided that whether such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakhs rupees.
Explanation:- For the purpose of this section,-
(i) The expression” aggregate turnover” shall include all supplies made by the taxable person , whether on his own account or made on behalf of all his principals;
(ii) The supply of goods, after completion of job-work by a registered job worker shall be treated as the supply of goods by the principal referred to in section 143, and the value of such goods shall not be included in the aggregated turnover of the registered job worker;
(iii) The expression’ special category States’ shall mean the States as specified in sub-clause (g) of clause 4 of article 279A of the Constituation.
Commentary: Section 22(1) of CGST ACT,2017 explain the procedure of “ Registration “ under GST Law. As per that section every supplier shall be liable to be registered in the State or Union Territory (other than special category states ) from where he makes supply of goods or services or both. If his aggregate turnover in a financial year exceeds Rs.20 Lakhs . In case of “ special category states” registration is required if his aggregate turnover in a financial year exceeds Rs. 10 Lakhs. These States are Aarunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.
Aggregate turnover: For purpose of section 22 of CGST ACT,2017, the expression “ aggregate turnover “ shall include all supplies made by the taxable person, whether on his own account or made on behalf of all his principles.
In case of job work, value of material will be included in aggregate turnover of principal: The supply of goods , after completion of job-work, by a registered job worker shall be treated as the supply of goods by the principle referred to in section 143, and the value of such goods shall not be included in the aggregate turnover of the registered job worker.
Are they exempt from payment of GST : The exemption from registration implies that such persons will be exempt from payment of GST. However , technically, exemption from registration and exemption from GST liability re independent issues.
Registration on transfer of business:
Section 22(3) of CGST ACT,2017, Where business carried on by a taxable person registered under this Act is transferred , whether on account of succession or otherwise , to another person as a going concern, the transferee or the successor, as the case may be, shall be liable to be registered with effect from the date of such transfer.
Commentary: Where a business carried on by a taxable person registered under this Act is transferred whether on account of succession or otherwise , to another person as a going concern , the transferee , or the successor, as the case may be , shall be liable to be registered with effect from the date of such transfer or succession .
Section 22(4) of CGST Act,2017: Notwithstanding anything contained in sub-section (1) and (3) , in a case of transfer pursuant to sanction of a scheme or an arrangement for amalgamation or as the case may be, e-merger of two or more companies pursuant to an order of a High Court, tribunal or otherwise , the transferee shall be liable to be registered , with effect from the date on which the Register of Companies issues a certificate of incorporation giving effect to such order of the High Court or Tribunal.
Commentary: In case of transfer pursuant to sanction of a scheme or an arrangement for amalgamation or, as the case may be, de-merger of two or more companies by an order of High Court or Tribunal or otherwise , the transfer shall be liable to be registered , where required, with effect from the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High Court or Tribunal. Parallel provision has been made in section 87 of CGST Act,2017 . Provision for transfer f Input Tax Credit has been made in section 18(3) of CGST Act,2017.
As per section 23(2) these following persons are not to register under GST :
The following person are not require to register under GST Law. Government can grant exemption to other category of persons on recommendation of GST Council by notification .
a). Any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or are wholly exemption from tax under this Act or under IGST Act does not require registration as per section 23(1)(b) of CGST ACT,2017.
b). An agriculturist , to the extent of supply of product out of cultivation of land does not require registration as per section 23(1)(b) of CGST ACT,2017. “Agriculturist” means an individual or a Hindu Undivided Family who undertakes cultivation of land,(a) by own land )b) by the labour of family, or (c) servants on wages payable in cash or kind or by hired labour under personal supervision or the personal supervision of any member of the family .
Persons requiring registration without threshold limit of Rs.20 lakhs other than Eastern States(Rs.10 Lakhs):
The following categories of person shall be required to be registered under the Act, even if their aggregate turnover is below specified limit;
A) Persons making any inter-State taxable supply of goods or services or both,
B) Casual taxable persons making taxable supply of goods or services or both,
C) Persons who are required to pay tax under reverse charge,
D) Persons who are required to pay tax under section 9(5) of CGST ACT,2017 i.e . “ E- Commerce operator s,
E) Non-resident taxable persons making taxable supply of goods or services or both,
F) Persons who are required to deduct tax under section 51 (TDS) , whether or not separately registered under the Act, (Thus separate registration is require for TDS purpose).
G) Persons who supply goods or services or both on behalf of other taxable persons whether as an agent or otherwise,
H) Input Service Distributor whether or not separately registered under the Act . (Thus , separate registration is required for ISD purpose),
I) Person who supply goods or services or both , other than supplies specified under section 9(5) , through such electronics commerce operator who is required to collect tax under section 52 (Under Section 9 (5) of CGST ACT,2017, Government can notify e-commerce operators who will liable to pay entire GST).
J) Every electronic commerce operator,
K) Every person supplying online information and data base access or retrieval services (OIDAR) from a place outside India to a person in India, other than a registered taxable person and
L) Such other person or class of persons as may be notified by the Central Government or a State Government on the recommendations of the GST Council.
Notes on “Registration” under GST Scenario to be continued…….
Requirement and procedure for registration: Sec.25(1) of CGST ACT,2017, Every person who is liable to be registered under section 22 or section 24 shall apply for registration in every such State or Union territory in which he is so liable within thirty days from the date on which he become liable to registration , in such manner and subject to such conditions s may be prescribed;
Provided that a casual taxable person or a non-resident taxable person shall apply for registration at least five days prior to the commencement of business.
Explanation:- Every person who makes a supply from the territory water of India shall obtain registration in the coastal State or Union Territory where the nearest point of the appropriate base line is located.
Commentary: Section 25(1) of CGST Act,2017, “ Every person who is liable to be registered under section 22 or 24 shall apply for registration in every such State in which he is so liable with thirty days from the date on which he becomes liable to registration , in such manner and subject to such conditions as may be prescribed.
A casual taxable person or a non-resident taxable person shall apply for registration at least five days prior to the commencement of business. He must have income tax PAN number.
Person supplying goods and services from territorial waters: Every person who makes a supply from the territorial waters of India shall obtain registration in the coastal State or Union territory where the nearest point of the appropriate base line is located. Area up to 12 nautical miles belong to State / Union Territory at least as far as GST is concerned as per Sec.9 of IGST Act,2017.
Application for registration: Every person ( other than a non-resident taxable person , supplying online information and data base access or retrieval services from a place outside India to a non-taxable online recipient referred to in section 14 of the Integrated Goods and Services Tax Act,2017, a person required to deduct tax at source under section 51 and a person required to collect tax at source under section 52) who is liable to be registered under section 25(1) and every person seeking registration under section 25(3) ( the applicant) hall, before applying , declare his Permanent Account Number (PAN), mobile number, e-mail address, State or Union Territory in Part-A of form GST REG-01 on the Common Portal either directly or through a Goods and Services Tax Practitioner .
Provided that a Special Economic Zone unit or Special Economic Zone developer shall make a separate application for registration as a business as a business vertical distinct from its other units located outside the Special Economic Zone as per proviso to Rule 1(1) of Registration Rules, 2017.
Validation of details and temporary number: The PAN shall be validated online by the Common Portal from the database maintained by CBDT. The mobile number declared under rule 1(1) shall be verified through a one-time password send to the said mobile number, and the e-mail addresses declared under rule1(1) shall be verified through a separate one time password sent to the said e-mail address, as per Rule 1(2)of Registration Rules.
On successful verification of the PAN , mobile number and e-mail address, a temporary reference number shall be generated and communicated to the applicant on the said mobile number and e-mail address.
Provision in respect of casual taxable person: A person applying for registration as a casual taxable person shall be given a temporary reference number by the Common Portal for making advance deposit of tax in accordance with the provisions of section 27 and the acknowledgement under rule 1(5) shall be issued electronically only after the said deposit in the electronic cash ledger as per rule 16 of Registration Rules.
Provision in respect of casual taxable person: A person applying for registration as a casual taxable person shall be given a temporary reference number by the Common Portal for making advance deposit of tax in accordance with the provisions of section27 and the acknowledgement under rule 1(6) of Registration Rules,2017.
Submission of application after verification : Under the reference number generated under rule 1(3), the applicant shall electronically submit an application in Part B of the GST REG-1, duly signed along with document specified in the said Form at the Common Portal, either directly or GST Practitioner or through a Facilitation Centre notified by the Commissioner. On receipt of application under rule 1(4) , an acknowledgement shall be issued electronically to the applicant in for GST REG-2 as per Rule 1(5) of Registration Rules,2017.
Submission of application after verification: Using the reference number generated under rule 1(3), the application shall electronically submit an application in Part-B of form GSTS REG-01, duly signed , along with documents specified in the said Form at the Common Portal , either directly or through GST Practitioner or Facilitation Centre notified by the Commissioner. On receipt of the application under rule-1(4) , an acknowledgement shall be issued electronically to the applicant in form REG-02 as per rule 1(5) of registration Rule, 2017.
Verification of the application and approval: The application shall be forwarded to the officer who shall examine the application and the accompanying documents and if the same are found to be in order , approve the grant of registration to the applicant within three workings from the date of submission of application as per rule 2(1) of Registration Rules, 2017.
Where the application submitted under rule -1 is found to be deficient, either is terms of any information or any document required t be furnished under the said rule, or where the proper officer requires any clarification with regard to any information provided in the application or documents furnished therewith, he may issue a notice to the applicant electronically in form GST REG-03 within three working days from the date of receipt of such intimation. The application for registration , other than PAN, State, mobile number and e-mail address declared in Part-A of form GST REG-1, as per Rule 2(2) of Registration Rules,2017.
Where the proper officer is satisfied with the clarification , information or documents furnished by the applicant , he may approve the grant of registration to the applicant. Within seven working days from the date of receipt of such clarification or information or documents as per Rule 2(3) of Registration Rules,2017.
Where no reply is furnished by the applicant is response to the notice issued under rule2(2), within the prescribed period or where the proper officer is not satisfied with the clarification , information or document furnished , he shall , for reasons to be recorded in writing, reject such application inform to the applicant electronically in form GST 05 as per rule 2(4) of Registration Rules,2017.
Deemed registration if no action within 3 to 7 days: The application for grant of registration shall be deemed to have been approved, i.e. the proper officer fails to take any action (a) within 3 working days from the date of submission of application, or (b) within 7 working days from the date of receipt of clarification , information, or document furnished by the applicant under Rule 2(5) and Rule 2(5) of Registration Rules,2017.
Issue of deemed registration certificate in case of deemed registration: Where the registration has been granted under rule 2(5) , the applicant shall be communicated the registration number and the registration certificate under rule 3(1) , duly signed , shall be made available to him on the Common Portal within 3 days after expire of the period specified in rule 2(5) and Rule 3(5) of Registration Rules,2017.
Effective date of registration: The registration shall be effective from the date on which the person becomes liable to registration where the application for registration has been submitted within 30 days from such date as per Rule 3(2) of Registration Rules,2017.
Where an application for registration has been submitted by the applicant after 30 days from the date of his becoming liable to registration , the effective date of registration shall be the date of grant of registration under Rule 2(1) , 2(3) or 2(5) of Registration Rules,2017.
Digital signature on registration certificate: Every certificate of registration made available on the Common Portal shall be digitally signed by the proper officer under the Act, as per Rule 3(4) of Registration Rules,2017.
Physical verification of business premises in certain cases: Where the proper officer is satisfied that the physical verification of the place of business of a registered person is required after grant of registration, he may get such verification done and the verification report along with other documents including photographs, shall be uploaded in form GST REG-29 on the Common Portal within 15 working days following the date of such verification as per Rue 17 of Registration Rules,2017.
Sec.25(4) of CGST Act,2017, A person who has obtained or is required to obtain more than one registration , whether in one State or Union Territory or more than State or Union Territory shall, in respect of each such registration , be treated as distinct person for the purpose of distinct persons for the purpose of this Act.
Sec.25(5) of CGST Act,2017, Where a person who has obtained or is required to obtain registration in a State or Union territory in respect of an establishment , has an establishment in another State or Union territory , then such establishment shall be treated as establishment of distinct persons for this purposes of the Act.
Commentary: Generally a person should obtain single registration in State, even if he has multiple factories, godowns or sales offices or branches within the State or Union Territory. A person having different categories of business (termed as business verticals), he can, at his option , obtain multiple registration within a State or Union Territory.
If a person obtain separate registration with same PAN number within State or Union Territory , these will be treated as establishment of distinct persons for the purposes of this Act. Thus, they will be treated as separate taxable persons for all purposes of GST, including free supply , tax invoice, job work, returns, payment of taxes etc.
A person having multiple business verticals in a State or Union Territory may obtain a separate registration for each business vertical, subject to such conditions as may be prescribed. He must have income tax PAN number.
For the purpose of this clause, factories that should be considered in determining whether products or services are related includes:-
(a) The nature of the products or services.
(b) The nature of the production processes,
(c) The types or class of customers for the products or services,
(d) The methods used to distribute the products or provide the services, and
(e) The nature of the regulatory environment ( wherever applicable) , including banking, insurance, or public utilities.
As per section 25(2) of CGST Act,2017,A person seeking registration under this Act shall be granted a single registration in a State or Union Territory.
Provided that a person having multiple business verticals in a State or Union territory may be granted a separate registration for each business vertical , subject to such condition as may be prescribed.
Commentary: As per section 25(2) “any person having multiple business verticals within a State or a Union Territory , requiring a separate registration for any of its business verticals under section 25(2) of CGST ACT,2017 shall be granted separate registration in respect of each of the verticals subject to the following conditions;
(a) Such person has more than one business verticals as defined in section 2(18) of CGST Act,2017,
(b) No business verticals of a taxable person shall be granted registration to pay tax under section 10 (composition scheme ) if any one of the other business verticals of the same person is paying tax under section.9.
Where any business verticals of a registered person that has been granted a separate registration becomes ineligible to pay tax under section 10, all other business verticals of the said person shall become ineligible to pay tax under the said section .
All separately registered business verticals of such person shall pay tax under this Act on supply of goods or services or both made to another registered business verticals of such person and issue a tax invoice for such supply.
A registered person eligible to obtain separate registration for business verticals may submit a separate application in form GST REG-01 in respect of each such verticals.
Schedule-II , S.No.5 . Supply of services as per GST Act,2017:-
The following shall be treated as supply of service, namely:-
(a) Renting of immovable property ,
(b) Construction of a complex , building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier.
Explanation:- For the purpose of this clause:-
1) The expression “ competent authority “ means the Government or any authority authorized to issue completion certificate under any law for the time being in force and in case of non-requirement of such certificate for such authority , from any of the following , namely:-
(a) An architect registered with the Council of Architecture constituted under the Architects Act,1972; or
(b) A Charted engineer registered with the Institution of Engineers (India) ; or
(c) A licensed surveyor of the respective local body of the city or town or village or development or planning authority,,
2) The expressions “ construction “ includes additions, alterations, replacements or remodeling of any existing civil structure,
(c) temporary transfer or permitting the use or enjoyment of any intellectual property right.
(d) development, design, programming, customization, adaptation, up gradation, enhancement, implementation of information technology software,
(e) agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act; and
(f) transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration.
Schedule II, S.No.6 of the CGST Act,2017, Composite Supply:-
The following composite supplies shall be treated as a supply of services namely:-
(a) Works contract as defined in clause (119) of section 2; and
(b) Supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink ( other than alcoholic liquor for human consumption ), where such supply or service is for cash, deferred payment or other valuable consideration.
Examples – 1.
Determination of Time of Supply of Services: Determination of time of supply in each of the following situation in accordance with Section 13 of CGST Act.
| Case | Provision of Service | Due Date for issue of Invoice | Issue of Invoice | Receipt of Payment |
| Case. A | 10th Sept’2017 | 10th Oct’2017 | 10th Oct’2017 | 20th Oct’2017 |
| Case. B | 10th Sept’2017 | 10th Oct’2017 | 15th Oct’2017 | 20th Oct’2017 |
| Case. C | 10th Sept’2017 | 10th Oct’2017 | 5th Oct’2017 | 20th Oct’2017 |
| Case. D | 10th Sept’2017 | 10th Oct’2017 | 5th Oct’2017 | 5th Oct’2017 |
Determination of time of supply of services:
| Case | Provision of Service | Due date for issue of Invoice | Issue of Invoice | Receipt of Payment | Time of Supply | Reason |
| Case. A | 10th Sep’17 | 10th Oct’17 | 10th Oct’17 | 20th Oct’17 | 10th Oct’1 | In this case, Invoice was issued within due date and hence time of supply will earlier of following :-
a. Date of issue of invoice.10th Oct’17 b. Date of receipt of payment 20th Oct’17 c. Time of supply 10th Oct’17. |
| Case. B | 10th Sep’17 | 10th Oct’17 | 15th Oct’17 | 20th Oct’17 | 10th Sep’17 | In this case , Invoice was not issued within due date and hence time of supply will earlier of following:-
a. Date of provision of service is 10th Sep’17, b. Date of receipt of payment is 20th Oct17
c. Time of Supply is 10th Sep’17 |
| Case. C | 10th Sep’17 | 10th Oct’17 | 5th Oct’17 | 20th Oct’17 | 5th Oct’17 | In this case , Invoice was issued within due date and hence time of supply will earlier of following:-
a. Date of issue of Invoice is 5th Oct’17, b. Date of receipt of payment 20th Oct’17, c. Time of supply is 5th Oct’17. |
| Case. D | 10th Sep’17 | 10th Oct’17 | 5th Oct’17 | 5th Sep’17 | 5th Sep’17 | In this case , Invoice as issued within due date and hence time of supply will earlier of following:-
a. Date of issue of Invoice is 5th Oct’17, b. Date of receipt of payment is 5th Sep’17, c. Time of supply is 5th Sep’17. |
Example – 2.
Determination of Time of Supply of Services: Determine the time of supply in each of the following situation in accordance with Section 13.
| Case | Provision of Service | Date of Invoice | Date of receipt of payment | Amount Received |
| Case. A | 10th Nov’17 | 30th Nov’17 | 15th Dec’7 | Rs.20,00,000/- |
| Case. B | 10th Nov’17 | 30th Nov’17 | 15th Dec’17 | Rs.15,00,000/- |
| Case. C | 10th Nov’17 | 30th Nov’17 | 15th Nov’17,
10th Dec’17
|
Rs. 5,00,000/-,
Rs.10,00,000/- |
| Case. D | 10th Nov’17 | 30th Nov’17 | 6th Nov’17,
9th Nov’17 |
Rs. 2,00,000/-,
Rs. 4,00,000/- |
| Case. E | 10th Nov’17 | 30th Nov’17 | 30th Apr’18 | Rs. 2,00,000/- |
Determinations of time of supply of services in each of the cases are as follows:-
| Case | Provision of Service | Date of Invoice | Date of receipt of Payment | Amount Received | Time of Supply | Reason |
| Case. A | 10th Nov’17 | 30th Nov’17 | 15th Dec.17 | Rs.20,00,000/- | 30thNov’17 | As the invoice is issued within the due date, the time of supply will be earlier of issue of invoice or receipt of payment. |
| Case. B | 10th Nov’17 | 30th Nov’17 | 15th Nov17 | Rs.15,00,000/- | 15thNov’17 | As the invoice is issued within the due date , the time of supply will be earlier of issue of invoice or receipt of payment. |
| Case. C | 10th Nov’17 | 15th Dec’17 | 15th Nov’17 | Rs. 5,00,000/- | 15thNov’17 | As the invoice is issued within the due date, the time of supply will be earlier of issue of invoice or receipt of payment. Further as, per Explanation 1 the time of supply will be to the extent covered in the invoice or advance received. |
| 10th Dec’17 | Rs.10,00,000/- | 30thNov’17 | As the invoice is issued within the due date, the time of supply will be earlier of issue of invoice or receipt of payment. | |||
| Case. D | 10th Nov’17 | 30th Nov’17 | 6th Nov’17
9th Nov’17 |
Rs. 2,00,000/-
Rs.4,00,000/- |
6th Nov’17
9th Nov’17 |
As the invoice is issued within due date , the time of supply will be earlier of issue of invoice or receipt of payment. Further , as per Explanation 1 the time of supply will be to the extent covered in the invoice or advance received. |
| Case. E | 10th Nov’17 | 15th Dec’17 | 30th Apr’18 | Rs.2,00,000/- | 10thNov’17 | As the invoice is not issued within the due date the time of supply will be the date of provision of service or receipt of money whichever is earlier. |
Time of Supply of Services in case of Reverse Charge: As per Section 13 (3) of CGST Act,2017 “ In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earlier of the following dates, namely:-
(i) The date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account , whichever is earlier; or
(ii) The date immediately following sixty days from the date of issue of invoice or any other document , by whatever name called, in lieu thereof by the supplier;
PROVIDED that where it is not possible to determine the time of supply under clause (i) or clause (ii) , the time of supply shall be the date of entry in the books of account of the recipient of supply;
PROVIDED FURTHER that in the case of supply by “ associated enterprises” where the supplier of service is located outside India, the time of supply shall be the date of entry in the books of account of the recipient of supply or the date of payment, whichever is earlier.
In order to determine the time of supply of services in case of reverse charge , earlier of the following shall be considered:-
(i) Date of making payment,
(ii) 60 days from date of invoice.
It is to be noted that date of “ receipt of services” is not relevant for the purpose of determining the time of supply of services under reverse charge basis. Further 60 days from the date of invoice has been granted in case of supply of services unlike goods where only 30 days from the date of invoice is granted to determine time of supply.
Example: Time of Supply in case of Reverse Charge:
Determine time of supply in each of the following independent situation where tax is payable under Reverse Charge:-
| Case | Date of receipt of service | Date of invoice | Date of Payment |
| Case. A | 12th Dec’17 | 15th Dec’17 | 15th Dec’17 |
| Case. B | 12th Dec’17 | 15th Dec’17 | 10th Jan’18 |
| Case. C | 12th Dec’17 | 15th Dec’17 | 20th Feb’18 |
Determine time of supply in each of the following independent situation where tax is payable under Reverse Charge in the situations:-
| Case | Date of receipt of Service | Date of Invoice | 60 days from date of invoice | Date of payment | Time of Supply | Reason |
| Case. A | 12th Dec’17 | 15th Dec’17 | 13th Feb’18 | 15th Dec’17 | 15th Dec’17 | Time of supply will be earlier of the following:-
1.Date of making payment 15th Dec’17, 2. 60 days from date of invoice 13th Feb’17, 3. Time of supply is 15th Dec’17. |
| Case. B | 12th Dec’17 | 15th Dec’17 | 13th Feb’18 | 10th Jan’18 | 10th Jan’18 | Time of supply will be earlier of the following : 1. Date of making payment 10th Jan’18,
2. 60 days from the date of invoice 13th Feb’18 3. Time of supply is 10th Jan’18. |
| Case. C | 12th Dec’17 | 15th Dec’17 | 13th Feb’18 | 20th Feb’18 | 13th Feb’18 | Time of supply will be earlier of the following:-
1.Date of making payment 20th Feb’18, 2. 60 days from date of invoice 13th Feb’18, Time of supply is 13th Feb’18. |
Time of supply in case of “ associated enterprises” where the supplier is located outside India:-
Proviso of Section 13(3) states that the in case of the “ associated enterprises “ where the supplier of services is located outside India the time of supply shall be the earlier of the following:-
(i) Date of entry in the books of recipient,
(ii) Date of payment.
Time of Supply in case of supply of Vouchers:
As per Sec.2(118) of CGST Act,2017, “ Voucher means an instrument where there is an obligation to accept it as consideration or part consideration for a supply of goods or services or both and where the goods or services or both to be supplied or the identities of their potential suppliers are either indicated on the instrument itself or in related documentation including the terms and conditions of us of such instrument.
Time of supply in case of services:
As per Section 12(4) of the CGST Act,2017, In case of supply of vouchers, by whatever name called, by a supplier , the time of supply shall be –
(i) The date of issue of voucher , if the supply is identifiable at that point; or
(ii) The date of redemption of voucher, in all other cases.
The use of vouchers has increased many folds in recent time and in different forms. They included for instance prepaid telecom cards, gift cards and price discount coupons for the purchase of goods or services. Vouchers can be two types. 1. Single Purpose Vouchers (SPV) and Multi -Purpose Vouchers ( MVP ).
1. Single Purpose Voucher (SPV ) is a voucher carrying a right to receive a specific supply of goods or services , i.e. the supply is identifiable at the time of issue of the voucher. Consequently, time of supply for such voucher shall be date of issue of the voucher. For example, where an online retailer supplying digital services sells a voucher to a consumer which can only be redeemed for digital services, then that supply is taxed at the time the voucher is issued as if it were a supply of digital services.
Example:
Single Purpose Voucher: ABC Ltd purchased for its customers 100 vouchers on 20th Dec’2017 worth Rs. 1000 each from P Ltd., a footwear manufacturing company. The vouchers were issued by P Ltd., on 1st Dec’2017.The vouchers can be encashed at retail outlets of ABC Ltd. The employees of XYZ Ltd. Encashed the sae on 1st Jan’ 2018. Determine time fo supply.
Ans: In case of supply of vouchers by a supplier, the time of supply shall be the date of issue of Voucher , If the supply is identifiable at that point. In this case the supply of goods., footwear Identified with the voucher, hence the time of supply shall be the date of issue of such vouchers by P ltd i.e. 21st Dec’17.
2. Multi-Purpose Voucher (MPV ) is any voucher which is not single – purpose voucher. These vouchers cannot be identified for redemption against a specific goods or services and the person holding such voucher can redeem it against range of goods or services. The time of supply in case of such vouchers shall be the date of redemption.
Example: 1.
Mr. A has purchased an Amazon gift voucher worth Rs.5,000/- on 5th Jan’2018. He has gifted the voucher in the marriage ceremony of Mr. X on 21st Jan’2018. Mr. X encashed the voucher by making part payment of a Handy Cam which he purchased on 1st Feb’2018 worth Rs.30,000/- . Determine time of supply.
Ans: In this case supply is not identifiable at the time of issue of voucher as the holder of the voucher can redeem such voucher against any product listed on the portal of Amazon. Thus, time of supply in this will be 1st Feb’2018 i.e. date of redemption of voucher.
Exmple:2.
Will the time of supply differ if the voucher itself is not electronically supplied in an online transaction, but takes the form if a physical voucher containing information of the amount of credit available to the user, or an access code on a plastic card that can be used to purchase and download electronically supplied music r games?
Ans: The time of supply in case of voucher will not change whether or not the vouchers are in electronic form or take the form of physical voucher. What matter here is the underlying supply.
Time of supply in other cases:
As per Section 13(5) of the Central Goods and Services Tax Act,2017 states that: Where it is not possible to determine the time of supply under the provisions of sub-section (2) or sub-section (3) or sub-section (4) , the time of supply shall be:
(i) In a case where a periodical return has to be filed, be the date on which such return is to be filed; or
(ii) In any other case, be the date on which the tax is paid.
Time of supply for addition in value of supply by way of Interest, Late Fee or Penalty:
As per Section 13 (6) of the CGST Act,2017 state that” The time of supply to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration shall be the date on which the supplier receives such addition in value”.
Example:
Q.M/s. S B Company, A.P a registered supplier supplied certain services to M/s. XYZ company on 6 months credit with a penalty clause of 5% of invoice value for delayed payment. The invoice was dated 1st November. M/s. XYZ company could not make payment on the due date due to unavoidable circumstances. M/s. XYZ Company however made the payment on the invoice value on 5th May’2018. M/s. SB Company raised a debit note for the penalty amount. This however went into dispute which was finally settled with XYZ company to pay half the penalty. The amount was paid on 12th Dec’2018.
Ans: (i) Time of supply for invoice value: Time of supply will be the invoice date . i.e. 1st Nov’2017,
(ii). Time of supply for penalty: Time of supply will be date of payment i.e. 12th Dec’2018.
Time of supply in case of Change in Rate of Tax: Section 14 of the CGST Act,2017, state that “Notwithstanding anything contained in section 12 or section 13 , the time of supply , in cases where there is a change in the rate of tax in respect of goods and services, shall be determined in the following manner:
Sec.14(a) In case of the goods or services or both have been supplied before the change in rate of tax ,
(i) Where the invoice for the same has been issued and the payment is also received after the change in rate of tax , the time of supply shall be the date of receipt of payment or the date of issue of invoice, whichever is earlier; or
(ii) Where the invoice has been issued prior to change in rate of tax , but the payment is received after the change in rate of tax , the time of supply shall be the date of issue of invoice; or
(iii) Where the payment is received before the change in rate of tax, but the invoice for the same is issued after the change in rate of tax, the time of supply shall be the date of receipt of payment.
(b). In case the goods or services have been supplied after the change in rate of tax:
(i) Where the payment is received after the change in rate of tax but the invoice has been issued prior to the change in rate of tax, the time of supply shall be the date of receipt of payment, or
(ii) Where the invoice has been issued and the payment is received before the change in rate of tax , the time of supply shall be the date of receipt of payment or date of issue of invoice, whichever is earlier; or
(iii) Where the invoice has been issued after the change in rate of tax but the payment is received before the change in rate of tax , the time of supply shall be the date of issue of invoice.
Provided that the date of receipt of payment shall be the date of credit in the bank account if such credit in the bank account is after four working days from the date of change in the rate of tax.
Explanation: For the purpose of this section , “ the date of receipt of payment “ shall be the date on which the payment is entered in the books of accounts of the supplier or the date on which the payment is credited to his bank account, whichever is earlier.
Example-1.
(i) Where the goods or services are supplied before the change in rate of tax:
| Condition | Time of Supply | Applicable Rate |
| Where :- Invoice and
:- Payment Is also received after the change in rate of tax |
Earlier of :- Date of receipt of payment, Date of issue of invoice | New Rate |
| Invoice is issued prior to change in rate:
Payment is received after the change in rate of tax. |
Date of issue of issue of Invoice | Old Rate |
| Payment is received prior the change in rate of tax:
Invoice is issued after change in rate. |
Date of receipt of payment | Old Rate |
(ii) Where the goods or services are supplied after the change in rate of tax:
| Condition | Time of Supply | Applicable Rate |
| Payment received after change in rate:
Invoice is issued prior to change in rate
|
Date of receipt of payment | New Rate |
| Invoice is issued and
Payment is received: Prior to the change in rate of tax |
Earlier of :- Date of receipt of payment,
Date of issue of Invoice |
Old Rate |
| Invoice is issued after change in rate:
Payment is received before the change in rate of tax. |
Date of issue of invoice | New Rate |
In order to explain the above provision let us assume that the rate of tax has changed with effect from 1st may ‘2018.
| Sec. Ref. | Date of supply of goods / services | Date of invoice | Date of receipt of payment | Time of supply as per sec.14 |
| 14(a)(i) | 15th April’2018
(Before Change) |
10t May’2018
(After Change) |
16th May’2018
(After Change) |
10th May’2018 |
| 14(a)(ii) | 15th April’2018
(Before Change) |
25th April’2018
(Before Change) |
16th May’2018
(After change) |
25th April’2018 |
| 14(a)(iii) | 15th April’2018 | 5th May’ 2018
(After Change ) |
10th April’2018 (Before Change) | 10th April’2018 |
| 14(b)(i) | 15th May’2018
(After Change ) |
25th April’2018
(Before Change) |
6th My’2018
(After Change ) |
6th May’2018 |
| 14(b)(ii) | 15th May’2018
(After Change) |
25th April’2018
(Before Change) |
27th April’2018
(Before Change) |
25th April’2018 |
| 14(b)(iii) | 15th May’2018
(After Change) |
20th May’2018
(After Change) |
25th April’2018
(Before Change) |
20th May’2018 |
It is to be noted here that the “Time of Supply under Section 14 gives relevance to the two out of the three events (i.e. Date of supply of goods / services , Date of Invoice and Date of Payment ) which happens before or after the date of change in rate of tax.
Supply of exempt services shall not make the taxpayer ineligible for Composition Scheme:
Central Government through Order No. 01/2017 –Central Tax has issued The CGS ( Removal of Difficulties ) Order ,2017 dated 13th October 2017 clarifying that if a person supplies goods and /or services referred to in clause (b) of paragraph 6 of Schedule II of the said Act and also supplies ay exempt services including services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount , the said person shall not be ineligible for the composition scheme under section 10 subject to the fulfillment of all other conditions specified therein.
Reverse Charge in case of Supply of specified goods or services:
As per sec.9(3) of the CGST Act,2017, The Government may, on the recommendations of the Council, by notification, specifies categories of supply of goods and services or both , the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.
The essential ingredients for levy of tax on reverse charge basis are:
(1) The goods and services on which tax will be collected under reverse charge basis shall be recommended by the GST council formed under the Constitution of India,
(2) Tax shall be payable by the recipient of goods or services,
(3) All the other provisions of this act shall apply to such person s if he is the person liable for paying the tax.
Commentary Notes on Tax Invoice, Debit Note and Credit Note under GST Scenario (GST ACT,2017 ).
Sec.31 (1) of GST ACT,2017 “ Every Registered person supplying taxable goods shall, before or at the time of :-
(a) removal of goods for supply to the recipient where the supply involves movement of goods ; or
(b) delivery of goods or making available thereof to the recipient , in any other case ,
Issue tax invoice showing the description , quantity and value of goods , the tax charged thereon and such other particulars as may be prescribed:
Provided that the Government may, on the recommendations of the Council, by notification , specify the categories of goods or supplies in respect of which a tax invoice shall be issued, within such time and in such manner as may prescribed .
Rule 7 of GST Invoice Rules, 2017” Every registered taxable person shall be issued Tax Invoice for supply of goods and service with these following particulars.
Commentary: As per Sec.31 read with rule 7 of GST ACT,2017” Every registered taxable person supply of goods and service to another taxable person shall raise TAX INVOICE with the following particulars”
(a) Name , addresses and GSTIN of the supplier,
(b) A consecutive serial number , in one, or multiple series, containing alphabets or numerals or special characters hyphen or dash and slash symbolized as and respectively, and any combination thereof , unique for a financial year;
(c) Date of issue ;
(d) Name, addresses and GSTIN or UIN , if registered , of the recipient;
(e) Name and addresses of the recipient and the addresses of delivery , along with the name of State and its code, if such recipient is unregistered and where the value of taxable supply is fifty thousand or more;
(f) HSN code of goods or Accounting code of services,
(g) Description of goods or services ;
(h) Quantity in case of goods and unit or Unique Code thereof;
(i) Total value of supply of goods or service or both;
(j) Taxable value of supply of goods or services or both taking into account discount or abatement if any;
(k) Rate of Tax (Central tax, State tax, Integrated tax , Union Territory tax or cess) ;
(l) Amount of Tax Charged in respect of taxable goods or services ( CGST, SGST,IGST and UTGST or Cess);
(m) Place of supply along with the name of State , in the case of supply in the course of inter-State trade or commerce;
(n) Address of delivery where the same is different from the place of supply;
(o) Whether the tax is payable on reverse charge basis; and
(p) Signature or digital signature of the supplier or his authorized representative.
Every Registered Taxable person is having supply of goods and services and value of such invoice is more than Rs.200/-, they shall issue “ Tax Invoice” as per Sec.31 read with Rule 7 should contain HSN Code of goods and Accounting Code for services .
If any registered taxable person is having supply of goods and services to person resident in out of Country or SEZ area , for export such invoice should contain clear endorsement with required details.
If any registered taxable person supply of goods and service to any person and the value of each invoice is below Rs.200/- for such invoices he has to raise consolidate invoice may be issued at the end of the day. As per Sec.31 (3) of CGST Act.
Tax Invoice in relation to supply of goods: A registered taxable person supplying taxable goods shall, before or at the tie of :- (a) .removal of goods for supply to the recipient where the supply involves movement of goods, or (b) . delivery of goods or making available thereof to the recipient.
“Removal “ in elation of goods, means (a). dispatch of the goods for delivery by the supplier thereof or by any other person acting on behalf of such supplier, or (b). collection of the goods by the recipient thereof or by any other person acting on behalf of such recipient .
Registered taxable person can raise Tax invoice in TRIPLICATE with specified marking.
Registered taxable person is having supply of services and has to issued Tax Invoices within 30 days for such supplies. In case of banking companies, NBFC or Financial Institutions invoice can be issued within 45 days and he can raise Tax Invoice for such supply of services in duplicate with specified marking. In case of Banking company, Financial Institutions , NBFC and Telecom operator providing services to their own branch in another State, they may issue on quarterly basis.
Tax Invoice in relation to “ Continuous supply of goods”: “Continuous supply of goods “ means a supply of goods which is provided , or agreed to be provided, continuously or on recurrent basis, under a contract , whether or not by means of wire , cable, pipeline or other conduit, and for which the supplier invoices the recipient on a regular or periodic basis and includes supply of such goods.
In case of continuous supply of goods, where successive statement of accounts or successive payments are involved , the invoice shall be issued before or at the time of each statements is issued or, as the case may be , each such payment is received .
If any registered taxable person is having exempted goods or service or when tax is paid under Composition scheme, the supplier should issue “BILL OF SUPPLY” instated of Tax Invoice with details specified in Rule 4 of GST Invoice Rules, 2017.
Tax Invoice in relation to when goods sent on approval basis: Where the goods being sent or taken on approval for sale or return are removed before the supply takes place, the invoice shall be issued before or at the tie of supply or six months from the date of removal, whichever is earlier. Thus, tax invoice must be issued within six months from the removal. Bill of Supply may be issued at the time of removal of goods.
If any registered taxable person received an Advance for supply of goods and services, he should be issued “RECEIPT VOUCHER” with details as specified in Rule 5 of GST Invoice Rules. At that stage, GST is payable but recipient of such goods and services is not eligible to claim Input Tax Credit as goods and services or both have not been received by him.
Issue of Delivery Challan instated of tax invoice for transport of goods in specific circumstances:-
For the following purposes, a delivery challan may be issued by the consigner instated of tax invoice
(a) supply of liquid gas where the quantity at the time of removal from the place of business of the supplier is not known,
(b) transportation of goods for job woek,
(c) Transportation of goods for reasons other than by way of supply, or
(d) such other supplies as may be notified by the Board ,rule 8(1) of Invoice Rules.
The delivery challan, serially numbered should be issued at the time of removal of goods for transportation , containing following details;- (i) date and number of the delivery challan, (ii). Name, addresses and GSTIN no of the consigner , if registered (iii) name , addresses and GSTIN or UIN of the consignee, if registered (iv) HSN Code and description of goods (v) quantity (provisional, where the exact quantity being supplied is not known, (vi) taxable value (vii) tax rate and tax amount , central tax, State tax, integrated tax , Union territory tax or cess , where the transportation is for supply to the consignee (viii) place of supply , in case of inter-State movement, and (ix) Signature.
Delivery challan to be in triplicate: The delivery challan shall be prepared in triplicate , in case of supply of goods with following marking :- (a) the original copy being marked as ORIGINAL FOR CONSIGNEE, (b). the duplicate copy being marked as DUPLICATE FOR TRANSPORTER , and (c) the triplicate copy being marked as TRIPLICATE FOR CONSIGNER , as per rule 7(3) of Invoice Rules.
If goods are transported with delivery challan in lieu of invoice , the same shall be declared in FORM WAY BILL as per rule 7(3) of GST Invoice rules,2017.
If Tax Invoice could not be issued at the time of removal:- Where the goods being transported are for the purpose of supply to the recipient but the tax invoice could not be issued at the time of removal of goods for the purpose of supply, the supplier shall issue tax invoice after delivery of goods as per Rule 7(4) of Invoice Rules. In view of this rule , in my opinion that non-issue of tax invoice at the tie of removal is not an offence. If it is not possible to issue tax invoice , at lease delivery challan should be issued.
Notes on Credit and Debit Notes: Sec.34(3) of CGST ACT,2017,” Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to be less than taxable value or tax payable in respect such supply , the registered person, who has supplied such goods or services or both , shall issue to the recipient a debit note containing such particulars as may be prescribed.
Commentary: Notes on Credit and Debit Notes: As per Sec.34(3) of CGST ACT,2017 , Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply , or where the goods supplied are returned by the recipient, or where goods or services supplied are found to be deficient, the registered person , who has supplied such goods or services or both , may issue to the recipient a credit note containing such particulars as may be prescribed.
Commentary continue on Credit notes and Debit Notes: Declaration in return of details of credit notes issued “ any registered person who issues a credit note in relation to a supply of goods or services or both shall declare the details of such credit notes in the return for the month during which such credit not has been issued but not later than September following the end of the year in which such supply was made, or the date of filing of the relevant annual return, whichever is earlier , and the tax liability shall be adjusted in the manner specified in this Act as per Sec . 34(2) of CGST ACT,2017.
Reduction in tax liability subject to unjust enrichment : Reduction in output tax liability of the supplier shall be permitted if the incidence of tax and interest on such supply has been passed on to any other person as per proviso to section 34(2) of CGST Act,2017. Thus, if the credit is not accepted by recipient and if he does not reverse equivalent input tax credit, reduction in tax liability will not be allowed to supplier.
Debit Note or supplementary invoice with GST if amount charged was less:
Sec.34(3) of CGST ACT,2017, Any registered person who issues a credit note in relation to a supply of goods or services or both shall declare the details of such credit note in the return for the month during which such credit note has been issue but not later than September following the end of the financial year in which such supply was made, or the date of furnishing of the relevant annual return, whichever s earlier , and the tax liability shall be adjusted in such manner as may be prescribed.
Provided that no reduction in output tax liability of the supplier shall be permitted, if the incidence of tax and interest on such supply has been passed on to any other person.
Commentary on Sec.34(3) of CGS ACT,2017, Where a tax invoice has been issued for supply of any goods or services or both and the taxable value and / or tax charged in that tax invoice is found to be less than the taxable value and / or tax payable in respect of such supply , the taxable person , who has supplied such goods and services or both , shall issue to the recipient a debit note containing such particulars as may be prescribed.
Debit note shall include a supplementary invoice as per explanation to section 34(4) of the CGST ACT.
Declaration of debit note in the return of supplier:
Sec.34(4)of CGST ACT,2017, “ Any registered person who issues a debit in relation to a supply of goods or services or both shall declare the details of such debit note in the return for the month during which such debit note has been issued and the tax liability shall be adjusted in such manner as may prescribed.
Explanation:- For the purpose of this Act , the expression “ debit note” shall include a supplementary invoice.
Commentary : Sec.34(4) of CGST ACT, “ Any registered person who issues a debit note in relation to a supply of goods and services or both shall declare the details of such debit note in the return for the month during which such debit note has been issued and the tax liability shall be adjusted in such manner s may be prescribed.
Relevant Sections: Sec.16 to Sec.21 red with Rules 1 to 7 of CGST,SGST and UTGST Acts,2017.
Input Tax Credit (ITC) is the core concept of GST as GST is destination based Tax.. ITC avoids cascading effect of taxes.
Definition of Input Tax and Input Tax Credit under GST Law,2017:
Section 2(62) of CGST Act,2017,” Input tax” defines as follows:-
Input tax in relation to a registered person , means the central tax (CGST), State tax (SGST) , integrated tax (IGST) or Union territory tax (UTGST ) charged on any supply of goods or services or both made to him and includes:-
(a) The integrated goods and service tax charged on imports of goods,
(b) The tax payable under the provisions of sub-sections (3) and (4) of section 9( Reverse charge of CGST )
(c) The tax payable under the provisions of sub-sections (3) and (4) of section 5 of the Integrated Goods and Services tax Act ( reverse charge under IGST) ,
(d) The tax payable under the provisions of sub-section (3) and subsection (4) of section 9 of the respective State Goods and Services Tax Act ( reverse charge under SGST) or
(e) The tax payable under the provisions of sub-section (3) and sub-section (4) of section of 7 of the Union Territory Goods and Services Tax Ac,(Reverse charge under UTGST).
But does not include the tax paid under the composition levy.
Section 2(63) of CGST Act,2017, “Input Tax Credit “ means the credit of input tax. i. e. whatever tax paid on inward supply of goods and services or both.
Section 155 of CGST Act,2017, “ Where any person claims that he is eligible for input tax credit under this Act, the burden of proving such claim shall lie on such person.
Input Tax Credit is eligible only when it is credited to electronic credit ledger of taxable person.
Eligibility and conditions for taking input tax credit:
Section 16(1) read with rule 1 of CGST,SGST AND UTGST ACTs,2017, Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 9 , be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course of furtherance of his business and the said amount shall be credited to the electronic ledger of such person.
Commentary: Section 16(1) read with rule 1, of CGST,SGST and UTGST Acts,2017 deals with Eligibility and conditions for taking input tax credit under GST scenario. Every registered taxable person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49 of CGST ACT,2017, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person and the said amount shall be credited to the electronic credit ledger of such person.
Electronic Credit Ledger define in Section 49(2) of CGST ACT,2017 ,” The input tax credit as self-assessed in the return of a registered person shall be credited to his electronic credit ledger, , in accordance with section 41, to be maintained in such manner s may be prescribed.
Electronic credit ledger is the input tax credit ledger in electronic form maintained at the common portal for each registered taxable person. This credit can be utilized for GST liability as specified in section 49(4) f CGST ACT,2017.
As per Section 2(59) of CGST ACT,2017” Input “ means any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business .
As per section 2(60) of CGST ACT,2017” Input Service “ means any service used or intended to be used by a supplier in the course or furtherance of business.
As per Section 2(83) of CGST Act,2017, “ Out ward supply” means in relation to a person , means supply of goods or services , whether by sale, transfer, barter, exchange, license, rental, lease or disposal or any other mode, made or agreed to be made by such person in the course or furtherance of business.
Documentary requirement and conditions for claiming input tax credit:
Section 16(2)read with rule 2 of CGST ACT ,SGST ,UTGST Acts,2017,” Notwithstanding anything contained in this section , no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless,-
(a) he is in possession of tax invoice or debit note issued by supplier registered under this Act, or such other tax paying documents as may be prescribed;
(b) he has received the goods or services or both,
Explanation:- For the purpose of this clause , it shall be deemed that the registered person has received the goods where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise , before or during movement of goods, either by way of transfer of documents of title to goods or otherwise.
Commentary: Sec.16(2) read with rule 2 of CGST<SGST and UTGST Act,2017 and rule1(1),(2) of Input Tax Credit Rules, 2017,” The input tax credit shall be availed by a registered person, including the Input Service Distributor, on the basis of any of the following documents.
a. An invoice issued by the supplier of goods or services or both in accordance with the provisions of section 31( Invoice of supplier of goods or services or both),
b. A debit note issued by supplier in accordance with the provisions of section 34,
c. A bill of entry,
d. An invoice issued in accordance with the provisions of section 31(3)(f) (tax paid on reverse change basis),
e. A document issued by an Input Service Distributor in accordance with the provisions of Invoice Rules,
f. A document issued by an Input Service Distributor, as prescribed in rule 4(1) of Input Tax Credit Rules,2017.
Input Tax Credit only if invoice complete in all respects: Input tax credit shall be availed by a registered person only if all the applicable particulars as prescribed in Invoice Rules are contained in the said document, and the relevant information, as contained in the said document, is furnished in form GSTR-2 by such person as per Rule 1(2) of Input Tax Credit Rules.
Input tax credit cannot be taken after one year from date of invoice or filling of annual return:
As per section 16(4) of CGST Act,2017, A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return whichever is earlier.
Commentary: A taxable person shall not be entitled to take input tax credit in respect of any supply of goods and / or services to him after the expiry of one year from the date of issue of tax invoice relating to such supply. (section18 (2) of CGST Act,2017).
Further, a taxable person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both, after the filling of the return under section 39 of CGST Act for the month of September following end of financial year to which such invoice or invoice relating to debit note pertains or filing of the relevant annual return, whichever is earlier. In view of section 16(4) , in case of invoices receive after October, the taxable person gets less than one year to take input tax credit.
No Input tax credit if GST was paid by supplier on advance paid to him: Normally, Input Tax Credit is taken on the basis of “Electronic Credit Ledger : , However , if advance payment was made before receipt of goods and services , input tax credit cannot be taken as goods and services are not received. At the time of payment of GST on advance, the supplier of goods and services cannot issue tax invoice. He has to issue only ”receipt voucher”.
Requirements for availing Input Tax Credit: As per section 16(2) of CGST Act, 2017, registered taxable person shall not be entitled to the credit of any of goods or services or both to him unless following conditions are satisfied .
(a) He is in possession of a tax invoice or debit note issued by a supplier registered under GST Act or such other tax paying document as may be prescribed,
(b) He has received the goods or services or both,
(c) Subject to section 41 of CGST Act, the tax charged in respect of such supply registered 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 39.
Inputs or capital goods received in installments:- Where the goods against an invoice are received in lots or installments, the registered taxable persons shall be entitled to the credit upon receipt of the last lot of installment.
Delivery to transporter by supplier is sufficient to take input tax credit:- For the purpose of section 16(2)(b) of CGST Act,2017 it shall be deemed that the taxable person has received the goods where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting s an agent or otherwise , before or during movement of goods, either by way of transfer of documents of title to goods or otherwise.
Input Tax Credit only after supplier makes payment of GST: The receiver ( of goods and services ) can take provisional credit on bass of return filed by supplier. However, he will be eligible to take final Input Tax Credit only after the supplier of such goods and services has paid the tax.
Taking input tax credit in respect of inputs sent for job work: Input tax credit is available in respect of goods send for job work and brought back for further use. The procedures for claiming of input tax credit in respect of inputs sent for job work provide my notes in detail separately.
Reversal of input tax credit if payment not made to supplier within 180 days: Section 16(2) of CGST Act,2017 ,” Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless:-
(a) He is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed,
(b) He has received the goods or services or both.
Explanation: – For the purposes of this clause, It shall be deemed that the registered person has received the goods where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, wither by way of transfer of document of title to goods or otherwise.
Commentary: Where a recipient fails to pay to the supplier of goods or services or both (other than the supplies on which tax is payable on reverse charge basis) , the amount towards the value of supply along with tax payable thereon within a period of 180 days from the date of issue of invoice by the supplier , an amount equal to the input tax credits availed by the recipient shall be added to his out put tax liability , along with interest thereon, in such manner as may be prescribed. If the recipient later makes payment to supplier, he can take input tax credit.
Proportionate reversal if part amount paid: Through the provision does not specifically say so, it is logical to say that if 90% amount of supplier ‘s invoice (including tax amount ) is paid, only 10% tax amount should be reversed.
Pay tax with interest even if supplier has paid full tax to Government : On one hand, post supply discounts are not allowed as deduction from ‘ value’ for GST. On the other hand , if less amount is paid to supplier , corresponding input tax credit is required to be reversed with interest, even when entire tax amount has been paid to Government by supplier.
Procedure for reversal of input tax credit in case of non-payment of consideration:
A registered person, who has availed of input tax credit on any inward supply of goods or services or both , but fails to pay the supplier thereof the value of such supply along with the tax payable thereon within the time limit specified in the second proviso to section 16(2) , shall furnish the details of such supply and the amount of input tax credit availed of in form GSTR-2 for the month immediately following the period of one hundred and eighty days form the date of issue of invoice as per rule1(2) of Input Tax Credit Rules,2017.
The mount of input tax credit referred to in sub-rule 2(1) shall beaded to the output tax liability of the registered person for the month in which the details are furnished as per rule 2(2) of the input Tax Credit Rules,2017.
The registered person shall be liable to pay interest at the rate notified under section 50(1) of CGST Act,2017 for the period starting from the date of availing credit on such supplies till the date when the amount add to the output tax liability , as mentioned in rule 2(2) , is paid as per rule 2(3) of Input Tax Credit Rules,2017.
Apportionment of credit and blocked credits: Sec.17(1) of CGST ACT,2017,” Where the goods or services or both are used by the registered person partly for the purpose of any business and partly for other purposes, the amount of credit shall be restricted to so much of the input tax as is attributed to the purpose of his business.
Commentary: As per section 17(1) of CGST Act, 2017, any taxable person can received from a registered person any goods or services or both are used partly for the purpose of any of his business and partly for other purpose (not for business purpose) , the amount of credit shall be restricted to the extent of value of goods or services or both only and balance of credit is reversed and not eligible to claim as credit.
Sec.17 (2) of CGST Act, 2017, Where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under this Act or under the Integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax as is attributed to the said taxable supplies including zero-rated supplies.
Commentary: As per section 17(2) of CGST Act, 2017, where the goods or services or both used by the registered person partly for effecting taxable supplies including zero- rated supplies under this Act or the Integrated Goods and Services Tax Act and partly for effecting for exempted supplies under the said Acts, the amount of credit shall be restricted to the extent of taxable supplies and Zero-rated supplies but not eligible to claim input tax credit to the extent of exempted supplies of goods and services or both.
Sec.17(3) of CGST ACT,2017, The value of exempted supply under sub-section (2) shall be such as may be prescribed, and shall include supplies on which the recipient is liable to pay tax on reverse charge basis, transactions in securities, sale of Land and subject to clause (b) of paragraph 5 of Schedule II, sale of building.
Commentary: As per sec. 17(3) of CGST Act2017, the value of exempted supply under sub-section (2) shall be such as may be prescribed, and shall include supplies on which the recipient is liable to pay tax on reverse charge basis, transactions in securities, sale of Land and subject to clause (b) of paragraph 5 of Schedule II, sale of building, is not eligible to claim ITC on the purchases of such goods or services are used in the above transactions. So, to that extent ITC reversed by the taxable person.
The following supply of goods and services are not eligible for Input Tax Credit:
As per Sec.17(5) (a) of CGST Act,2017, Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18 , input tax credit shall be available in respect of the following namely:-
Motor vehicles and other conveyances except when they are used :-
(i) For making the following taxable supplies , namely:-
(A) Further supply of such vehicles or conveyances; or
(B) Transportation of passengers; or
(c) Imparting training on driving, flying, navigation such vehicles or conveyances;
(ii) For transportation of goods;
Commentary: Motor vehicles and other conveyances are not eligible for ITC except in following cases:
(i) For making the following taxable supplies , namely:-
(a) Further supply of such vehicles or conveyances; or
(b) Transportation of passengers; or
(c) Imparting training on driving, flying, navigation such vehicles or conveyances;
(ii) For transportation of goods; as per sec.17(5)(a) of CGST Act,2017.
As per section 17(5)(b) “ the following supply or services or both are not eligible for input tax credit.
(i) Food and beverages outdoor catering, beauty treatment ,health services, cosmetic and plastic surgery except where an inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply;
(ii) Membership of a club, health and fitness center ;
(iii) Rent-a – cab , life insurance and health insurance except where:-
(A) The Government notifies the services which are obligatory for an employer to provide to its employees under any law for the time being in force; or
(B) Such inwards supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as part of a taxable composite or mixed supply; and
(iv) Travel benefits extended to employees on vacation such as leave or home travel concession;
Commentary: As per Section 17(5)(b) of CGST Act,2017, These following supply of goods and services or both are not eligible for input tax credit;-
(i) Food and beverages outdoor catering, beauty treatment ,health services, cosmetic and plastic surgery except where an inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply;
(ii) Membership of a club, health and fitness center ;
(iii) Rent-a – cab , life insurance and health insurance except where:-
(C) The Government notifies the services which are obligatory for an employer to provide to its employees under any law for the time being in force; or
(D) Such inwards supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as part of a taxable composite or mixed supply; and
(iv) Travel benefits extended to employees on vacation such as leave or home travel concession;
The above expenses are mainly for personal use. In respect of services covered under this clause , the input tax credit is eligible when used by registered person to provide similar services or as part of mixed supply or composite supply.
Who paid tax under composition such taxable person is not eligible to claim ITC: Goods and services or both on which tax has been paid under section 10 ( composition scheme) are not eligible as per Sec.17 ( e) CGST Act,2017.
Goods or services or both received by a non-resident taxable person : Goods or services or both received by a non- resident taxable person are not eligible for input tax credit, except on goods imported by him as per section 17(5) ( f) of CGST Act,2017.
Goods or services used for person consumption: Goods or services or both used for personal consumption are not eligible for input tax credit as per Sec.17(5) (g) of CGST Act,2017.
Lost, stolen , destroyed goods and free samples: Goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples are not eligible for input tax credit as per sec.17(5) (h) of CGST ACT,2017.
GST paid after detection of fraud or suppression or gods removed I contravention of GST Act,2017: Any tax paid in terms of section 74,12, and 130 of CGST Act, are not eligible for input tax credit. This covers GST paid after detection of fraud or suppression or goods removed in contravention of GST Act,2017 as per sec.17(5) (i) of CGST Act,2017.
Input Tax Credit on Capital Goods: Entire Input Tax Credit of GST paid on capital goods will be available in first year itself, as these are goods. Capital goods means goods, the value of which is capitalized in the books of account of the person claiming the credit and which are used or intended to be used in the course or furtherance of business.
As per Sec.16(3) of CGST,SGST and UTGST Acts, 2017, Input Tax Credit of tax not allowed if depreciation claimed on tax component : Where the registered taxable person has claimed depreciation on the tax component of the cost of capital goods under the provisions of the Income Tax,1961, the input tax credit on the said tax component shall not be allowed.
Ineligibility of Input Tax Credit on pipelines and telecommunication tower: Credit of input tax in respect of pipelines outside the factory and telecommunication towards fixed to earth by foundation or structural support including foundation and structural support re not eligible for input tax credit.
Removal of Capital goods after use: As per Sc.18(6) read with rule 5of CGST,SGST and UTGST Act,2017 , In case of supply of capital goods on which input tax credit has been taken , the registered person shall pay an amount equal to the input tax credit taken on the said capital goods or plant and machinery reduced by the percentage points as may be specified or the tax on the transactions value of such capital goods or plant and machinery determined under sec. 15 of CGST Act, whichever is higher. In case of bricks , molds and dies , jigs and fixtures are supplied as scrap, the taxable person may pay tax on the transaction value of such goods determined under sec.15 of CGST Act.
Merger, amalgamation or sale of business: As per sec.18(3) red with rule 6 of CGST,SGST ,UTGST Acts,2017, Where there is a change in the constitution of a registered person on account of sale, merger, demerger, amalgamation, lease or transfer of the business with the specific provision for transfer of liabilities , the said registered person shall be allowed to transfer the input tax credit which remains unutilized in his electronic credit ledger to such sold , merged, demerged, amalgamated, leased or transferred business in FORM GST ITC -02, electronically on the Common Portal long with a request for transfer of unutilized input tax credit lying in his electronic credit ledger to the transferee.
“What are the records and Accounts to be maintained by the registered taxable person as per GST Act,2017” :-
1. As per Section 35(1) of CGST ACT/SGST ACT/UTGST ACT / IGST ACTS “ Every registered person shall keep and maintain , at his principle place of business , as mentioned in the certificate of registration, a true and correct account of the such business as below :
(a) Production and manufacturing of goods; ( In case of Manufacturing business)
(b) Inward and out ward supply of goods or services or both,
(c) Stock of goods,
(d) Input tax credit availed,
(e) Output tax payable and paid; and
(f) Such other particulars as may be prescribed.
Provided that where more than one place of business is specified in the certificate of registration, the accounts relating to each place of business shall be kept at such place of business;
Provided that the registered person may keep and maintain such accounts and other particulars in electronic form in such manner as may be prescribed.
Commentary: As per Sec 35(1) of CGST ACT/SGST ACT/UTGST ACT/IGST ACT,2017 we have to refer some of definitions of GST ACT,2017.
Sub-clause 85 of Sec.2 of ACT “ Place of business” incudes (a) a place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods or services or both; or
(b) a place where a taxable person maintains his books of accounts ; or
(c) a place where a taxable person is engaged in business through an agent, by whatever name called;
Sec.2(72) of CGST Act,2017, “Manufacture” means processing of raw material or inputs in any manner that results in emergence of a new product having a distinct name, character and use and the term “ manufacturer” shall be constructed .
Sub-clause 89 of Sec.2 of Act” principle place of business “ means the place of business specified as the principle place of business in the certificate of registration
So, in my opinion every registered taxable person shall keep the above mentioned records at where he has mentioned in his GST registration certificate as principle place of business may keep and maintain such accounts and other particulars in the electronic form in the manner prescribed.
Further in case of multiple places of business ( as specified in the certificate of registration ), the accounts relating to each place of business shall be kept at the respective places of business concerned . Hence, all records are to be maintained at each place of business.
Sec.35(2) of the CGST ACT/SGST ACT/UTGST ACT/IGST ACT “ every owner or operator of warehouse or godown or any other place used for storage of goods and every transporter, irrespective of whether he is a registered person or not, shall maintain records of the consigner, consignee and other relevant details of the goods in such manner as may be prescribed.
Commentary: As per Sec 35(2) of the CGST ACT/SGST ACT/UTGST ACT/IGST ACT” Every owner or operator of warehouse or godown or where the goods are stored such storage owner , every transporter, whether he is registered or not he shall maintain records relating to consigner and consignee , description of the goods , invoice details of receipt of goods etc., in electronic format as may be prescribed.
Sec.35(3) of the CGST ACT/SGST ACT/UTGST ACT/IGST ACT “ The Commissioner may notify a class of taxable persons to maintain additional accounts or documents for such purpose as may be specified therein.
Commentary: As per Sec.35 (3) of the CGST ACT/SGST ACT/UTGST ACT/IGST ACT “ The Commissioner may notify that certain class of taxable persons shall maintain additional records or documents, such class of taxable persons shall maintain such additional records and documents at such place of business or principle place of business which is mentioned in his registration certificate under GSTIN.
Sec.35(4) of the CGST ACT/SGST ACT/UTGST ACT/IGST ACT” Where the Commissioner considers that any class of taxable persons is not in a position to keep and maintain accounts in accordance with the provisions of this section, he may, for reasons to be recorded in writing , permit such class of taxable persons to maintain accounts in such manner as may be prescribed.
Commentary: Sec.35(4) of the CGST ACT/SGST ACT/UTGST ACT/IGST ACT “ Where the commissioner considered that any class of taxable person shall maintain additional records and documents such taxable person is unable to maintain such additional records and documents , he may file request in writing to the commissioner with reasons for unable to maintain additional records and documents , if the commissioner permit such class of taxable persons to maintain accounts and records in such manner as may prescribed.
Sec.35(5) of the CGST ACT/SGST ACT/UTGST ACT/IGST ACT “ Every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a Charted Accountant or a Cost Accountant and shall submit a copy of the audited annual accounts, the reconciliation under sub-section (2) of Section 44 and such other documents in such form and manner as may be prescribed.
Commentary: Sec.35(5) of the CGST ACT/SGST ACT/UTGST ACT/IGST ACT “ Every registered taxable person whose annual turnover of supply of goods or supply of services or both cross Rs.2 Crore , he shall get audited his annual accounts and reconciliation statement under sub-section(2) of section 44 of CGST ACT must be certified by the Chartered Accountant or Cost Accountant in Form GSTR-9C, electronically ,as per Rule 80(3) of the CGST and SGST Act,2017.
Registers to be maintained by different assesse:
| Type of Register | Information Required | Maintenance by |
| Import/Export Register | Import/ export of goods & services with relevant documents separately for manufacturing, trading and provision services | All assesses |
| RCM Register | Supplies under Reverse charge mechanism with relevant documents separately for manufacturing, trading and provision of services. | All assesses |
| Stock Register | Register to provide correct balance of raw materials, FG’s scrap/wastage for each commodity received and supplied with details such as opening, receipt, supply, goods, lost, stolen, destroyed, written off or disposed of by way of gift or free samples. | All assesses except composition dealers. |
| Advance Registers | Details of advances received, paid and adjustments made | All Assesses |
| Output tax | i).Tax payable (Including RCM) tax collected and paid, ITC available and claimed,
ii). Register of tax invoice, credit/debit note, delivery challan issued and received for a tax period. |
All Assesses except composition dealers. |
| Other Register | i). Name and Complete addresses of supplier,
ii). Name and Complete addresses of customer, iii). Stock details and addresses of premises of stored goods including storage during in transit. |
All Assesses |
| Accounts containing | Authorization and accounts in respect of each principal, details of description, value and quantity of goods / services received and supplied and taxes paid on it on behalf of every principal. | Agents |
| Production Register | Quantitative details to be maintained for :-
i). Raw material/services used in manufacturing, ii). Goods manufactured ( including the wastage and by products). |
Manufacturers |
| Service Provision Register | Details of services supplied , quantitative details of goods used, details of input services used for provision of services | Service Providers. |
| Accounts for each work contract | i). Names and addresses of persons on whose behalf of works contract is executed,
ii). Description, value and quantity of goods /services received and utilized , iii). Payment receipts details. iv). Names and addresses of supplier from whom goods/services are received. |
Works Contract |
| Records of Goods | Records of goods handed on behalf of the registered person | C&F agent/ carrier |
| Goods transport Register | Records of goods transported , delivered and goods stored in transit for each branch | Transport of goods |
| Warehouse / Godown Register | i). Books of accounts for every storage period with details pertaining to its dispatch , movement, receipt and disposal,
ii).Further , goods stored shall be (i) identifiable item wise and owner wise and (ii) Physical verification hall be feasible. |
Owner or operator of a warehouse. |
Returns filling under GST Scenario as per GST ACT,2017.
As per Sec.37 (1) of CGST/SGST/UTGST,2017: Every registered person, other than an Input Service distributor, a non-resident taxable person and a person paying tax under the provisions of section 10 or section 15 or section 52 , shall furnish , electronically , in such form and manner as may be prescribed , the details of outward supplies of goods or services or both effected during a tax period on or before the ten day of the month succeeding the said period and such details shall be communicated to the recipient of the said supplies within such time and in such manner as may be prescribed:
Provided that the registered person shall not be allowed to furnish the details of outward supplies during the period from the eleventh day to the fifteenth day of the month succeeding the tax period,
Provided also that any extension of the limit Commissioner of State tax or Commissioner of Union territory tax shall be deemed to be notified by the Commissioner.
Rule 1 of GST Return Rules of CGST /SGST/UTGST .2017 : Every registered person required to furnish the details of outward supplies of goods and services or both under Sec.37 (1) shall furnish such details in Form GSTR-1 electronically through the Common Portal either directly or through GST Practitioner or Facilitation notified by the Commissioner.
Sub-rule 1 of Rule a of GST return rules, 2017, The details of outward supplies of goods and services or both furnished in Form GSTR-1 shall include inter alis,
(a) Invoice wise details of all (i) inter-State and intra –State supplies made to registered persons; (ii). Inter –State supplies with invoice value more than two and a half of lakh rupees made to unregistered persons,
(b) Consolidated details of all (i) intra-State supplies made to unregistered persons for each rate of tax; and
(ii) State wise inter-State supplies with invoice value less than two and half lakh rupees made to unregistered persons for each rate of tax and
(c) Debit and credit notes, if any issued during the month for invoices issued previously .
Commentary: Sec37(1) read with Rule 1(1) of CGST /SGST/UTGST Act,2017 :Every Registered taxable person other than an Input Service distributor, a non-resident taxable person and a person paying tax under the provisions of section 10 or section 15 or section 52 , shall furnish , electronically , in such form and manner as may be prescribed , the details of outward supplies of goods or services or both effected during a tax period on or before the ten day of the month succeeding the said period . Such registered taxable person furnished the details of outward supplier as below format:-
(a) Invoice wise of inter-State and intra-State supplies made to registered taxable persons,
(b) Inter-State supplies with invoice value more than Rs.2.50Lakhs made to unregistered persons,
(c) Consolidated details of intra-State supplies made to unregistered persons for each rate of tax,
(d) State wise inter-State supplies with invoice value less than Rs. 2.5 Lakhs made to unregistered persons for each rate of tax ;
(e) Debit note and Credit notes if any issued during the month for invoice issued previously.
Please refer PDF format of GSTR-1 .
Sec.37 (2) of CGST /SGST/UTGST Act,2017 “Every registered person who has been communicated the details under sub-section (3) of Section 38 or the details pertaining to inward supplies of Input Service Distributor under sub-section (4) of section 38 , shall either accept r reject the details so communicated, on or before the seventeenth day, but not before the fifteenth day , of the month succeeding the tax period and the details furnished by him under sub-section (1) shall stand amended accordingly.
As per rule 1(3) of GST Return Rules, 2017,The Supplier upload his outward supplies such details shall be made available electronically to the concerned registered persons ( recipients ) in Part A of Form GSTR – 2A, (registered person paying tax under normal scheme) in Form GSTR-4A ( Person paying tax under composition scheme ) and in Form GSTR-6A (ISD ) through the Common Portal after the due date of filling of form GSTR-1.
As per rule 1(4) of CGST/SGST/UTGST Rules, 2017 “ The details of inward supplies added, corrected or deleted by the recipient in his Form GSTR-2 under section 38 or Form GSTR -4 under Section 39 shall be made available to the supplier electronically in Form GSTR – 1A through the Common Portal and such supplier may either accept or reject the modification made by the recipient and Form GSTR-1 furnished earlier by the supplier shall stand amended to the extent of modifications accepted by him.
Commentary: Recipient of goods and services will get details of supplies made by supplier. This would include tax invoice, debit notes, credit notes and revised invoices. Input Service Distributor also has to communicate details of documents issued by him under section 20(1) of CGST Act,2017, for distribution of input tax credit by filling returns after end of the Month, and also recipient will get details of TDS and TCS made. These will be electronically communicated to recipient. These will be received by recipient of supplies of goods or services or both in Form GSTR-2A. The recipient has to verify , validate, modify or delete the details relating to outward supplies and debit notes and credit notes received by him from supplier.
Return in respect of supplies received by the recipient: The recipient is required to file return in form GSTR-2 in respect of his inward supplies under CGST/SGST/UTGST/IGSTACT. IGST paid on imports and SGST,UTGS<CGST and IGST payable under reverse charge by fifteenth of following month.
Every registered person, other than Input Service Distributor or non-resident taxable person paying tax under the provisions of Sec.10,sec.51 or sec.52 shall furnish , electronically , the details of (a) inward supplies of goods and services or both on which tax is payable on reverse charge basis under ACT and (b) inward supplies of goods or services or both taxable under the Integrated Goods and Services Tax Act or (c) on which integrated goods and service tax is payable under section 3 of the Customs Tariff Act,1975, and (d) credit and debit notes received in respect of such supplies during a tax period after the tent day but on or before the fifteenth day of the month succeeding the tax period in such form and manner as may be prescribed.
Procedure for furnishing details of inward supplies in Form GSTR-2 under GST ACT,2017: Sec38(1) Every registered other than an Input Service Distributor or a non-resident taxable person or a person paying tax under the provisions of section 10, section 51,or section 52, shall verify , validate modify or delete, if required , the details relating to outward supplies and credit or debit , notes communicated under sub-section (1) of section 37 to prepare the details of his inward supplies and credit and debit notes and may include therein, the details of inward supplies and credit and debit notes received by him in respect of such supplies that have not been declared by the supplier under sub-section (1) of section 37.
Commentary: Every registered person required to furnish the details of inward supplies of goods or services or both received during a tax period under Section 38(2) of CGST ACT,2017, shall, on the basis of details contained in part A, Part B , Part C and Part D of form GSTR-2A, prepare such details as specified in section 38(1) and furnish the same in form GSTR-2 electronically through the Common Portal , either directly or from a Facilitation Centre and Through GST Practitioner.
He can include details of such other inward supplies required to be furnished under section 38(2) of CGST Act. He will also include unmatched details, as per section 38(5) of CGST ACT,2017. The details of inward supplies of goods or services or both furnished in Form GSTR-2 shall include , inter alia (i)Invoice wise details of all inter-State and intra –State supplies received from registered persons or unregistered person (b). import of goods and services made, (c). debit and credit notes , if any , received from supplier as per Rule 2(8) of Return Rules, 2017 .
Eligibility and non-eligibility of input tax credit shall be indicated: The registered person 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. He will also declare the quantum of ineligible input tax credit on inward supplies which is relatable to non-taxable supplies or for purposes other than business and cannot be determined at the invoice level in form GSTR-2.
Details of invoices of ISD to be added in GSTR-2: 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 electronically through the Common Portal and the said recipient may include the same in form GSTR-2.
Details of TDS to be added in GSTR-2: The details of tax deducted at source furnished by the deductor under subsection (3) of section 39 in form GSTR-7 shall be made available to the deductee in Part C of form GSTR-2A electronically through he Common Portal and the said deductee may include the same in Form GSTR-2.
Details of TCS to be added in GSTR-2: The details of tax collected at source furnished by an e-commerce operator under section 52 in FORM GSTR-8 shall be made available to the concerned person in Part D of form GSTR-2A electronically through the Common Portal and such taxable person may include the same in form GSTR-2.
Sec.38(4) of CGST ACT: The details of supplies modified , deleted, or included by the recipient in the return furnished under sub-section (2) or sub-section (4) of Section 39 shall be communicated to the supplier concerned in such manner and within such time as may be prescribed.
Commentary: Details amended or modified or deleted by recipient to be informed to supplier:” The details of supplies modified, deleted or included by the recipient in the return furnished under section 38(2) or Section 38(4) of CGST ACT (Return by Input Service Distributor ) shall be communicated to the supplier concerned in such manner and within such time as may be prescribed, Section 38(3) and 38(4) of CGST Act”.
Acceptance or rejection of changes by supplier: The amendment, modifications, or deletions made by recipient will be informed to supplier in form GSTR-1A. He can either accept or reject the details communicated to him on or before seventeenth day but not fifteenth day of succeeding month. If he accepts the amendment, is return under Section 37(1) of CGST ACT (GSTR-1) shall stand amended accordingly as per Section 37(2) of the CGST ACT,2017.
Thus, supplier has two day to accept the changes made by supplier. Kindly note that after tenth of a month , the supplier cannot add fresh invoice, credit note or debit note. He can only accept or reject. If he accepts, it may result in short payment of tax. In that case, he is liable to pay tax with interest.
Sec.38(5) of CGST ACT: Any registered person, who has furnished the details under sub-section (2) for any tax period and which have remained unmatched under section 42 or section 43 , shall , upon discovery of any error or omission therein, rectify such error or omission in the tax period during which such error or omission is noticed in such manner as may be prescribed , and shall pay the tax and interest , if any , in case there is a short payment of tax on account of such error or omission , in the return to be furnished for such tax period.
Provided that no rectification of error or omission in respect of the details furnished under sub-section (2) shall be allowed after furnishing of the return under section 39 for the month of September following the end of the financial year to which such details pertain, or furnishing of the relevant annual return, whichever is earlier.
Commentary: Rectification of details by supplier; The details supplied by supplier and recipient will be matched as per provisions of sections 42 and 43 of CGST Act,2017. Any registered person, who has furnished the details under section 37 (1) for any tax period and which have remained unmatched under section 42 or section 43 , shall upon discovery of any error or omission therein, rectify such error or omission in such manner as may be prescribed, and shall pay the tax and interest , if any , in case there is a short payment of tax on account of such error or omission , in the return to be furnished for such tax period as per Section 37(3)of CGST ACT,2017.
Rectification by supplier latest by 20th October or 31st December of following financial year: No rectification of error or omission in respect of the details furnished under section 37(1) shall be allowed after furnishing of the return under section 39 for the month of September following the end of financial year to which such details pertain, or furnishing of the relevant annual return, whichever is earlier as proviso to section 37(3) of CGST Act,2017.
Sec.39(1) of CGST ACT,2017 : Every registered person , other than Input Service Distributor or a non-resident taxable person or a person paying tax under the provisions of section 10, section 51, or section 52 shall, for every calendar month or part thereof, furnish , in such form and manner as may be prescribed , a return, electronically, of inward and outward supplies of goods or services or both , input tax credit availed, tax payable , tax paid and such other particulars as may be prescribed , on or before the twentieth day of the month succeeding such calendar month or part thereof.
Commentary: Monthly / Quarterly Returns: Every registered taxable person other than Input Service Distributor, Non-resident taxable person , person paying tax under section 10 (Composition scheme ), section 51 (TDS) or section 52 (TCS by e-commerce operator) shall file monthly return electronically within twenty days after the end of such month. The return shall contain details of inward and outward supplies of goods or services or both input tax credit availed tax payable, tax paid and other prescribed particulars as per Section 39(1) of CGST ACT,2017.
Sec.39(2) f CGST ACT,2017: “ A registered person paying tax under the provisions of section 10 shall , for each quarter or part thereof, furnish , in such form and manner as may be prescribed , a return , electronically, of turnover in the State or Union territory , inward supplies of goods or services or both tax payable and tax paid within eighteen days after the end of such quarter.
Commentary: A registered taxable person paying tax under the provisions of section 10 of this Act (composition scheme ) shall file quarterly return within eighteen days after the end of such quarter as per Section 39(2) of CGST ACT,2017.
“Quarter” shall mean a period of comprising three consecutive calendar months, ending on the last day of March, June, September and December of a calendar year as per sec 2(92) of CGST ACT,2017.
“Tax period “means the period for which the tax return is required to be filed as per section 2(106) of CGST ACT,2017.
“ Due date for payment of tax” Every registered taxable person filling return shall pay the tax due as per such return on or before the last date on which he is required to furnish such return as per section 39(7) of CGST ACT,2017.If last date for filling return is extended by commissioner last date for payment of tax will also get extended automatically.
Sec39(3) of CGST ACT,2017: “ Every registered person require to deduct tax at source under the provisions of section 51 shall furnish , in such form and manner as may be prescribed , a return , electronically, for the month in which such deduction have been made within ten days after the end of the month..
Commentary: “Monthly return and payment before tenth in case f TDS”: Decuctor deducting tax under section 51 od CGST ACT is required to pay TDS amount to Government .The return is to be filed in prescribed form and manner within ten days after end of each month as per section 39(3) of CGST Act, 2017.
Sec.39 (4) of CGST ACT,2017: “ Every taxable person registered as an Input Service Distributor shall, for every calendar month or part thereof , furnish , in such form and manner as may be prescribed , a return, electronically, within thirteen days after the end of such month.
Commentary: “Monthly return by Input Service Distributor within 13 days”;Input Service Distributor (ISD) has to file monthly return by thirteen of following month as per Section 39(4) of CGST ACT,2017. Monthly return is not mandatory for Input Service Distributor ( ISD ) , person covered under TDS, non-resident taxable person or e-commerce operator making tax collection at source (TCS) , if there is no transaction during a month.
As per Sec.39(5) of CGST ACT,2017:” Every registered non-resident taxable person shall, for every calendar month or part thereof, furnish , in such form and manner as may be prescribed, a return , electronically , within twenty days after the end of a calendar month or within seven days after the last day of the period of registration specified under sub-section (1) of section 27, whichever is earlier.
Commentary : “ Return by non-resident taxable person by 20th of following month”: Non- resident taxable person has to file electronically monthly return by 20th of following month or within in seven days after last day of registration under section 27(2) of CGST ACT,2017 whichever is earlier as per section 39(5) of CGST ACT,2017. If there is no transaction in a particular month, he is not required to file return for that month as per section 39(8) of CGST ACT,2017.
Sec.39(6) of CGST ACT,2017: The Commissioner may, for reasons to be recorded in writing , by notification, extended the time limit for furnishing the returns under this section for such class of registered persons as maybe prescribed.
Commentary:“ Extension of time limit of filling return”; Commissioner can extend the time limit for furnishing such return by issuing notification . Any extension granted by Commissioner of State GST/UTGST shall be deemed to be notified by Commissioner as per section 39(6) of CGST ACT,2017. To ensure uniformity all over India, such notification shall be issued by Commissioner or Joint Secretary in Board as per Section 168(2) CGST ACT,2017.
As per Sec.39(8) of CGST ACT,2017: Every registered person who is required to furnish a return under sub-section (1) or sub-section (2)shall furnish a return for every tax period whether or not any supplies of goods or services or both have been made during such tax period.
Commentary: “Nil return mandatory even if no supplies made” Every registered taxable person who is required to file return under section 39(1) or 39(2) shall furnish a return for every tax period , whether or not any supplies of goods or services or both have been effected during such tax period as per section 38 (8) of CGST ACT,2017.
Rectification of unmatched details by recipient: The details supplied by supplier and recipient will be matched as per provisions of sections 42 and 43 of CGST ACT,2017. If these do not match , it will obviously result in short payment of GST. In that case, he is liable pay tax with interest. Any registered taxable person , who has furnished the details under section 38(1) for any tax period and which have remained unmatched under sec.42 or sec.43, shall, upon discovery of any error or omission therein, rectify such error or omission in the tax period during which such error or omission in noticed in such manner as may be prescribed, and shall pay the tax and interest, if any , in case there is a short payment of tax on account of such error or omission, in the return to be furnished for such period as per section 38(3) of CGST Act,2017.
Rectification latest by 20th October or 31st December of following financial year: No rectification of error or omission in respect of the details furnished under section 38(2) shall be allowed after furnishing of the return under section 39 for the month of September following the end of the financial year to which such details pertain, or furnishing of the relevant annual return, whichever is earlier as per proviso to section 38(3) of CGST ACT,2017.
Sec.40 of CGST ACT,2017: Every registered person who has made outward supplies in the period between the date on which he became liable to registration till the date on which registration has been granted shall declare the same in the first return furnished by him after grant of registration.
Commentary: As per Sec.40 of CGST ACT,2017: Every registered taxable person who has made outward supplies in the period between the date on which he became liable to registration till the date of which registration has been granted shall declare the same in the first return filed by him after grant of registration. Whatever supplies made prior to registration to be included in first return.
Sec.41 (1) of CGST ACT,2017: Every registered person shall subject to such conditions and restrictions as may be prescribed , be entitled to take the credit of eligible input tax, as self-assessed, in his return and such amount shall be credited on a provisional basis to his electronic credit ledger.
Commentary: As per Sec.41(1) of CGST ACT, 2017 “ Every registered person shall be entitled to take credit of eligible input tax, as self-assessed in his return and such amount shall be credited, on a provisional basis to his electronic credit ledger. This credit can be utilized only for payment of self – assesses tax liability as per return U/s .sec.41(2) of CGST ACT,2017.
Sec.46 of CGST ACT,2017: Where a registered person fails to furnish a return under section 39 or section 44 or section 45 , a notice shall be issued requiring him to furnish such return within fifteen days in such form and manner as may be prescribed.
Commentary:“ Notice to Non-filers of returns”: If a registered taxable person fails to furnish a return under section 39,44,or 45 , a notice shall be issued requiring him to furnish such return within 15 days in prescribed form ad manner as per Section 46 of CGST ACT,2017. A notice in Form GSTR-3 A shall be issued, electronically, to a registered person who fails to furnish return under section 39 and section 45 of CGST ACT,2017 read with rule9 of Returns Rules,2017.
“ Procedure for submission of monthly return in Form GSTR-3 and payment of tax”: Monthly return shall be submitted in Form GSTR-3 electronically through the Common Portal either directly or through a Facilitation center or GST Practitioner as per Rule 3(1) of Return Rules,2017.
Part A of the return under rule 3(1) shall be electronically generated on the basis of information furnished through returns in form GSTR-1, form GSTR-2 and based on other liabilities of preceding tax periods.
“Discharge of tax liability”: Every registered person furnished the return shall, subject to the provisions of section 49 discharge his liability towards tax, interest, penalty, fees or any other amount payable under the ACT or these rules by debiting the electronic cash ledger or electronic credit ledger and include the details in Part B of the return in form GSTR-3
“ Refund of balance in Electronic Cash Ledger can be claimed”: A registered person, claiming refund of any balance in the electronic cash ledger in accordance with section 49(6) , may claim such refund in Part B of the return in form GSTR-3. Such return shall be deemed to be an application filed under section 54 of CGST ACT,2017.
“ Return in form GSTR-3B if time limit for GSTR-1, or GSTR-2 was extended”: Where the time limit for furnishing of details in form GSTR-1 under section 37 and in form GSTR-2 under section 38 has been extended , return in form GSTR-3B in lieu of form GSTR -3 , may by furnished in such manner as may be notified as per rule 3(5) of Return Rules, 2017.
“ Procedure for submission of quarterly return by the composition supplier in form GSTR-4”: Registered person paying tax under section 10 (Composition scheme ) shall , after adding ,correcting or deleting the details in form GSTR-4A, furnishing a quarter return in form GSTR-4 electronically through the Common Portal, either directly or through a Facilitation Centre. The registered person shall discharge his liability towards tax, interest , penalty, fees or any other amount payable under the ACT or these rules by debiting the electronic cash ledger, as he cannot utilize Input Tax Credit as per rule 4(2) of Return Rules,2017.
The return furnished under sub-rule (1) shall include, a). invoice wise inter-State and intra -State inward supplies received from registered and un-registered persons b) import of goods and services made, c). consolidated details of outward supplies made, and d). debit and credit notes issued and received, if any.
“ Person switching from normal scheme to composition scheme to submit details for next six months”: A registered person who has opted to pay tax under section 10 from the beginning of a financial year , shall furnish the details of outward and inward supplies and return under rule 1, rule2, and rule 3, relating to the period during which the person was liable to furnish such details and returns. He will furnish such return till the due date of furnishing the return for the month of September of the succeeding financial year or furnishing of annual return of the preceding financial year , whichever is earlier as per rule 4(5) of CGST Rules, 2017.
Sec.39(8) subject to the provisions of sections 37 and 38 , if any registered person after furnishing a return under sub-section (1) or sub-section (2) or sub-section (3) or sub- section (4) or sub-section(5) discovers any omission or incorrect particulars therein, other than as a result of scrutiny , audit, inspection or enforcement activity by the tax authority he shall rectify such omission or incorrect particulars in the return to be furnished for the month or quarter during which omission or incorrect particulars are noticed , subject to payment of interest under this Act.
“ Provided that no such rectification of any omission or incorrect particulars shall be allowed after the due date for furnishing of return for the month of September or second quarter following the end of the financial year , or the actual date of furnishing f relevant annual return, whichever is earlier.
Rectification of mistake can be made in subsequent return: As per Sec.39(9) of CGST ACT, If any taxable person after furnishing a return discovers any omission or incorrect particulars therein, he can rectify such omission or incorrect particulars in the return to be furnished for the month or quarter during which such omission or incorrect particulars are notice by filling revised return.
Commentary on Sec.39(9) on returns is continued : Interest is payable where applicable. Such rectification cannot be done if mistake or short payment was found during scrutiny, audit, inspection or enforcement activity by the tax authority. Such rectification is not allowed after the due date for filling of return for the month of September or second quarter , as the case may be , following the end of the financial year, or the actual date of filling of relevant annual return, whichever is earlier as per proviso to section 39(9) of CGST ACT.
Subsequent return cannot be field if return for previous period was not filed:
Section 39(10) of CGST ACT.2017, “ A registered person shall not be allowed to furnish a return for a tax period if the return for any of the previous tax periods has not been furnished by him.
Commentary: Sec.39(10) A registered person shall not be allowed to furnish a return for a tax period if the return for any of the previous tax periods as not been furnished by him.
Supplies made prior to registration to be included in First return:
Section 40 of CGST ACT,2017, “ Every registered person who has made outward supplies in the period between the date on which he became liable to registration till the date on which registration has been grated shall declare the same in the first return furnished by him after grant of registration.
Commentary: Every registered taxable person who has made outward supplies in the period between the date on which he became liable to registration till the date on which registration has been granted shall declare the same in the first return filed by him after grant registration.
Claim of input tax credit and provisional acceptance:
Sec.41(1) of CGST ACT,2017,” Every registered person shall, subject to such condition and restrictions as may be prescribed , be entitled to take the credit of eligible input tax, as self-assessed, in his return and such amount shall be credit on a provisional basis to his electronic credit ledger.
Sec.41 (2) of CGST ACT,2017,” The credit referred to in sub-section (1) shall be utilized only for payment of self-assessed output tax as per the return referred to in the said sub-section.
Commentary : Sec.41(1) of CGST ACT,2017, Every registered person shall be entitled to take credit of eligible input tax , as self –assessed, in his return and such amount shall be credited, on a provisional basis, to his electronic credit ledger. “Electronic credit ledger “ means the electronic credit ledger referred o in section 49(1) of CGST ACT. This credit can be utilize only for payment of self-assesses tax liability as per return.
Sec.42(1) of CGST ACT,2017,Matching ,reversal and reclaim of input tax credit: “The details of every inward supply furnished by a registered person ( hereafter in this section referred to as the “recipient” ) for a tax period shall, in such manner and within such time as may be prescribed , be matched –
(a) With the corresponding details of outward supply furnished by the corresponding registered person (hereafter in this section referred to as the “ supplier” in his valid return for the same tax period or any preceding tax period,
(b) With the integrated goods and services tax paid under section 3 of the Customs Tariff ACT, 1975 in respect of goods imported by him; and
(c) For duplication of time of input tax credit.
Commentary: As per section 42 (1) of CGST ACT,2017, The details of every inward supply furnished by a registered person ( hereafter in this section referred to as the “recipient” ) for a tax period shall, in such manner and within such time as may be prescribed , be matched –
(a) With the corresponding details of outward supply furnished by the corresponding registered person (hereafter in this section referred to as the “ supplier” in his valid return for the same tax period or any preceding tax period,
(b) With the integrated goods and services tax paid under section 3 of the Customs Tariff ACT, 1975 in respect of goods imported by him; and
(c) For duplication of time of input tax credit.
Claim of Input Tax Credit accepted or not accepted are communicated to recipient:
Sec.42(1)Matching, Reversal and reclaim of input tax credit: Sec 41(2)of CGST ACT,2017.”The claim of input tax credit in respect of invoices or debit notes relating to inward supply that match with the details of corresponding outward supply of or with integrated goods and services tax paid under section 3 of Customs Tariff Act,1975 in respect of goods imported by him shall be finally accepted and such acceptance shall be communicated in such manner as may be prescribed, to the recipient.
Commentary: As per Sec. 42(1)of CGST ACT,2017, The supplier of goods and services shall communicate relating to claim of input tax credit in respect of invoices or debit notes that match with the details of corresponding outward supply or with Integrated Goods and Services Tax paid on imported shall be finally accepted or not accepted are communicated to the recipient.
Sec.42(3) of the CGST ACT, Where the input tax credit claimed by recipient in respect of an onward supply is in excess of the tax declared by the supplier for the same supply or the outward supply is not declared by the supplier in his valid return , the discrepancy shall be communicated to both such persons in such manner as may be prescribed.
Sec.42(4) of CGST ACT, The duplication of claims of input tax credit shall be communicated to the recipient in prescribed format.
Commentary: As per Sec 42(3) and (4) of CGST ACT, Intimation of claim of input tax credit on the same invoice more than once, Duplication of claims of input tax credit in the details of inward supplies shall be communicated to the registered person in form GST MIS-1 electronically through the Common portal.
Sec.42(5) of CGST ACT,2017,” The amount in respect of which any discrepancy is communicated under –section (3) and which is not rectified by the supplier in his valid return for the month in which discrepancy is communicated shall be added to the output tax liability of the recipient, in such manner as may be prescribed , in his return for the month succeeding the month in which the discrepancy is communicated.
Commentary: Sec. 43(5) of CGST ACT,2017” If discrepancy not rectified , it will be added as output tax liability in next month. The amount in respect of which any discrepancy is communicated under section 42(3) and which is not rectified by the supplier in his valid return for the month in which the discrepancy is communicated shall be added , to the output tax liability of the recipient in his return for the month succeeding the month in which the discrepancy is communicated.
Sec.42(6) of CGST ACT,2017 “ The amount in respect of any reduction in output tax liability that is found to be on account of duplication of claim shall be added to the output tax liability of the supplier in his return for the month in which such duplication is communicated.
Commentary: Duplication of claims to be added as liability, the amount claimed as input tax credit that is found to be in excess on account of duplication of claims shall be added to the output tax liability of the supplier in his return for the month in which such duplication is communicated.
Sec.42(7) of CGST ACT,2017, “The recipient shall be eligible to reduce , from his output tax liability , the amount added under sub-section (5), if the supplier declares the details of the invoice or debit note inhis valid return within the time specified in sub-section (9) of section 39.
Commentary: As per Sec.42(7) of CGST ACT,2017, “The recipient shall be eligible to reduce , from his output tax liability , the amount added under sub-section (5), if the supplier declares the details of the invoice or debit note in his valid return within the time specified in sub-section (9) of section 39.
Note that under section 39(9) of CGST ACT, rectification or correction is possible up to return of next September r filling of Annual Return for financial year, whichever is earlier.
Interest payable by supplier if output tax liability added: A recipient in whose output tax liability any amount has been added under section 42(5) or section 42(6), shall be liable to pay interest, at the rate specified under section 50(1) on the amount so added from the date of availing of credit till the corresponding additions are made under section 42(5) or section 42(6) as per section 42(8) of CGS ACT,2017.
Refund of Interest to taxable person if reduction in output liability accepted:
As per Sec.42(9) o CGST ACT,2017, Where any reduction in output tax liability is accepted under sub-section (7) , the interest paid under sub-section (8) shall be refunded to the recipient by crediting the amount in the corresponding head of his electronic cash ledger in such manner as may be prescribed.
Commentary: “ Where any reduction in output tax liability is accepted under section 42(7) , the interest paid under section 42(8) shall be refunded to the recipient by crediting the amount in the corresponding head of his electronic cash ledger”. The amount of interest to be credited in any case shall not exceed the amount of interest paid by supplier as per proviso to section 42(9) of CGST ACT,2017.
Procedure for refund of interest paid on reclaim of reversals: The interest to be refunded under section 42(9) or section 43(9) of shall be claimed by the registered person in his return in form GSTR-3 and shall be credited to his electronic cash ledger in FOM GST PMT-3 and the amount credited shall be available for payment of any future liability towards interest or the taxable person may claim refund of he amount under section 54 (10) of CGST ACT,2017.
Interest on amount reduced from output tax liability in contravention of provision: The amount reduced from output tax liability in contravention of the provision of section 43(7) shall be added to the output tax liability of the supplier in his return for the month in which such contravention takes place. Such supplier shall be liable to pay interest on the amount so added at rate specified in section 50(3) of CGST ACT,2017,Sec.43(10) of CGST ACT,2017.
Procedure for matching of claim of reduction in the output tax liability in respect of credit note: The following details relating the claim of reduction in output tax liability shall be matched under section 43 after the due date for furnishing the return in form GSTR- 3, (a) GSTIN of the supplier ; (b) GSTIN of the suppler ;(c) credit note number ; (d) credit note ; ( e) taxable value (f) tax amount as per rule 14 of Return rules,2017.
Where the time limit for furnishing FORM- GSTR-1 under section 37 and Form GSTR-2 under section 38 has been extended, the date of matching of claim of reduction in the output tax liability shall be extended accordingly.
The claim of reduction in output tax liability due to issuance of credit notes in form GSTR-1 that were accepted by the recipient in form GSTR-2 without amendment shall be treated as matched if the corresponding recipient has furnished a valid return.
Claim is matched if ITC claimed s equal to or less than output tax paid: 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.
Final acceptance of input tax credit and its communication in form GST MIS-1 in respect of invoice or debit note: The final acceptance of claim of input tax credit in respect of any tax period, specified in section 42(2), shall be made available electronically to the registered person making such claim in form GST MIS-1 through the Common Portal , as per 11(1) of Return Rules,2017.
The claim of input tax credit in respect of any tax period which had been communicated as mismatched but is found to be attached after rectification by the supplier or recipient shall be finally accepted and made available electronically to the person making such claim in form GST MIS-1 through the Common Portal, as per 11(2)of Return Rules,2017.
Sec.45(1) of CGST Act,2017, “ Every registered person, other than an Input an Input Service Distributor, person paying tax under section 51 or section 52 casual taxable person and a non-resident taxable person , shall furnish an annual return for every financial year electronically in such form and manner as may be prescribed on or before the thirty –first day of December following the end of such financial year.
Commentary: Annual Return in form GSTR-9 or GSTR-9A: Annual return has to be filed by 31st December following the close of financial year under section 44 of CGST Act,2017. The return is to be filed by registered person supplying goods or services or both. The Annual return is not required to be filed by Input services Distributor, person paying TDS under section 51, e-commerce operator paying TCS under section 52, casual taxable person and a non-resident taxable person.
Following registered persons have to file annual returns: 1). Those charging GST invoices paying GST on monthly basis, 2). Persons paying GST under composition scheme, 3). Persons have to file NIL return if they are not paying GST, long as they are registered under GST.
Every registered person , other than Input Service Distributor, a person paying tax under section 51 or section 52, a causal taxable person and a non-resident taxable person, shall furnish an annual return for every year electronically in such form and manner as may be prescribed on or before the thirty –first day of December following the end of such financial year.
Procedure for filling Annual Return in form GSTR-9 or GSTR-9A: An annual return as specified under section 44(1) of CGST Act will be filed electronically in form GSTR-9 through Common Portal either directly or through a Facilitation Centre.
A person paying tax under section 10 of CGST ACT, 2017, (composition scheme) shall furnish the annual return in for GSTR-9A , as per rule 21(1) of Return Rules,2017.
Sec.44(2) of CGST Act,2017, “ Every registered person who is required to get his accounts audited in accordance with the provisions of sub-section (5) of section 35 shall furnish , electronically, the annual return under sub-section (1) along with a copy of the audited annual accounts and a reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year with the audited annual financial statement , and such other particulars as may be prescribed.
Commentary: Audit report in form GSTR-9B if aggregate turnover exceeds Rs. Two crore: Every registered taxable person who is required of get his accounts audited in accordance with the provisions of section 35(5) of CGST Act shall furnish, electronically, the annual return under sec. 44(1) long with a copy of the audited annual accounts and reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year with the audited annual financial statement, and such other particulars as may be prescribed.
Final return after cancellation of GST registration:
As per section 45 of CGST ACT,2017, Every registered person who is required to furnish a return under subsection (1) of section 39 and whose registration has been cancelled shall furnish a final return within three months of the date of cancellation or date of order of cancellation, whichever is later, in such form and manner may be prescribed.
Commentary: “Every registered taxable person who is required to file return under section 39(1) of CGST ACT,2017, and whose registration has been canceled shall furnish a final return within 3 months of the date of cancellation order, whichever is later.
An input service distributor, a non-resident taxable person and person paying tax under the provision of section 10 (composition scheme ) , section 51 (TDS) or section 52 (TCS by e – commerce operator) is not required to file return under section 39of CGST Act,2017. Hence , they are not required to file final return after cancellation.
Procedure for filling return: Every registered taxable person required to furnish a final return under section 45, shall furnish such return electronically in FOR GSTR-10 through the Common Portal either directly or through GST tax practitioner.
Section 46 of CGST ACT,2017,” Where a registered taxable person fails to furnish a return under section 39, or section 44 or section 45 , a notice shall be issued requiring him to furnish such return within fifteen days in such form and manner may be prescribed.
Commentary: Notice to non-filers of returns: If a registered taxable person fails to furnish a return under section 39,44 or 45 , a notice shall be issued requiring him to furnish such return within 15 days in prescribed form and manner.
Submission of return by non-resident taxable person in FORM GSTR -5: Every registered non-resident taxable person shall furnish a return in FORM GSTR-5 electronically through the Common Portal, either directly or through tax practitioner.
The return should include details of outward supplies and inward supplies. He shall pay the tax, interest, penalty, fees or any other amount payable under the Act or these rules within twenty days after the end of a tax period or within seven days after the last day of the validity period of registration, whichever is earlier as per rule 5 of Return Rules,2017.
Submission of return by an Input Service Distributor (ISD) in FORM GSTR-6: The Input Service Distributor shall, after adding, correcting or deleting the details contained in Form 6A, furnish electronically a return in form GSTR-6, Containing the details of tax invoices on which credit has been received and those issued under section 20, through the Common Portal either directly or through GST practitioner.
Submission of return by a person required to deduct tax at source in form GSTR-7: Every registered taxable person required to deduct tax at source under section 51 shall furnish a return in form GSTR-7 electronically through the Common Portal either directly or through GST practitioner as per rule 7(1) of Return Rules,2017.
Levy of late fee:
Section 47(1) of CGST ACT,2017” Any registered person who fails to furnish the details of outward or inward supplies required under section 37 or section 38,or return required under section 39 or section 45 by the due date shall pay a late fee of one hundred rupees for every day during which such failure continues subject to a maximum amount of five thousand rupees.
Commentary: As per section 47(1) levy late fee for late filling of details and returns” Any registered person who fails to furnish the details of outward or inward supplies required under section 37 or section 38,or return required under section 39 or section 45 by the due date shall pay a late fee of one hundred rupees for every day during which such failure continues subject to a maximum amount of five thousand rupees.
Section 47(2) of CGST ACT,2017” Any registered person who fails to furnish the return required under section 44 by the due date shall be liable to pay late fee of one hundred rupees for every day during which such failure continue subject to a maximum f an amount calculated to a quarter per cent. Of his turnover in the State or Union Territory.
Commentary: As per section 47(2) of CGST ACT,2017’ Any registered person who fails to furnish the return required under section 44(annual return) by the due date shall be liable to pay late fee of one hundred rupees for every day during which such failure continue subject to a maximum of an amount calculated to a quarter per cent. Of his turnover in the State or Union Territory i.e . 0.25% of turnover in State or Union Territory.
Submission of statement of supplies by an e-commerce operator in form GSTR-8:
As per section 52(1) of CGST Act,2017,” Notwithstanding anything to the contrary contained in this Act, every electronic commerce operator (hereafter in this section referred to as the “operator” , not being an agent, shall collect an amount calculated at such rate not exceeding one percent ., as may be notified by the Government on the recommendations of the Council, of the net value of taxable supplies made through it by other supplies where the consideration with respect to such supplies is to be collected by the operator.
Commentary: As per Section 52(1) of CGST ACT,2017,Every electronic operator required to collect tax at source under section 52 shall furnish a statement in form GSTR-8 electronically through the Common Portal, either directly or through GST Practitioner containing details of supplies effected through such operator and the amount of tax collected, Rule 8(1) of CGST Return Rules. The details furnished by the operator under rule 8(1) shall be made available electronically to each of the suppliers in Part D of form GSTR-2A on the Common Portal after the due date of filling of form GSTR-8.
Matching of details furnished by the e-commerce operator with the details by the supplier:
The following details relating to the supplies made through an e-Commerce operated as declared in form GSTR-8, shall be matched with the corresponding details declared by the supplier in form GSTR-1,(a) GSTIN of the supplier (b) GSTIN or UIN of the recipient, if the recipient is a registered person, (c) State of place of supply (d) invoice number of the supplier ( e) date of invoice of the supplier (f) taxable value, and (g) tax amount as per rule 19(1)of GST Return Rules,2017.
For all supplies where the supplier is not required to furnish the details separately for each supply, the following details relating to such supplies made through an e—Commerce operator , as declared in form GSTR-8, shall be matched with the correspondence details declared by the supplier in form GSTR- (a) GSTIN of the supplier, (b) State of supply ( c ) total taxable value of all supplies made in the State through e-commerce portal, and (d) tax amount on all supplies made in the State.
Generation of Challan for making payment: Rule 82(2) of the CGST Rules, 2017 states that any person , or a persons on his behalf , shall generate a challan in FOR GST PMT-06 on the common portal and enter the details of the amount to be deposited by him towards tax, interest, penalty, fees or any amount. The Challan in FORM GST PMT-06 generated at the common portal shall be valid for a period of 15 days.
Modes of Payment: Rule 87(3) of the CGST Act,2017 states that the deposit under sub-rule (2) shall be made through any of the following modes:
(i) Internet Banking through authorized banks,
(ii) Credit card or Debit card through the authorized banks,
(iii) National Electronic Fund Transfer (NEFT) or Real Time Gross Settlement (RTGS) from any Bank,
(iv) Over the Counter payment through authorized banks for deposit up to Rs.10,000/- per challan per tax period, by cash, cheque or demand draft.
Payment by person not registered: As per Rule 87 (4) of CGST Rules, 2017 states that any payment required to be made by a person who is not registered under the Act, shall be made on the basis of a temporary identification number generated through the Common Portal.
Utilization of amount on Electronic Credit Ledger:
Credit of IGST for payment of IGST, CGST and SGST/UTGST: Under Sec.49(5)(a) of CGST Act,2017 and Sec.9(a) of UTGST Act,2017 , The amount of input tax credit available in the electronic ledger of the registered person on account of integrated tax shall first be utilized towards payment of integrated tax and the amount remaining , if any , may be utilized towards the payment of central tax and State tax, or as the case may be Union territory tax , in that order .
Credit of CGST for payment of CGST and IGST : As per Sec.49(5)(b) of CGST Act,2017,the amount of input tax credit available in the electronic credit ledger of the registered person on account of the central tax shall be first be utilized towards payment of central tax and the amount remaining , if any, may be utilized towards the payment of integrated tax.
Credit of SGST for payment of SGST and IGST: As per Sec.49(5)( c) of CGST Act,2017,the amount of input tax credit available in the electronic credit ledger of the registered person on account of the State tax shall be first be utilized towards payment of State tax and the amount remaining , if any, may be utilized towards payment of integrated tax.
Credit of UTGST for payment of UTGST and IGST: As per Sec.49(5)(d) of CGST ACT,2017, the amount of input tax credit available in the electronic credit ledger of the registered person on account of the State tax shall first be utilized towards payment of State tax and the amount remaining , if any, may be utilized towards payment of integrated tax.
Author – B.S.Seethapathi Rao, Chairman, AIFTP (Southern Zone), BSR Associates, Tax Consultants, Kakinada
Author Bio
Very good. sufficiently informative.