Finally, within few hours, the biggest tax reform, since independence i.e. GST after crossing all the setbacks, COMING INTO PICTURE. In a short span of time, GST became the talk of the nation. The waves of GST are all around the corner. What actually will happen, How will happen, these questions are continuously running in every head. We are left with hardly few hours to get all our answers. Yes, the wait is about to over, tonight is the official launch of the goods and services tax (GST) i.e. mid-night of 30 June and 1 July. So, get ready with the biggest Tax reform, with the following main aspects of GST.

Till not we discussed much about GST related topic. In this write- up, only the overview of GST is being covered.

INTRODUCTION

Intra- State Supply—CGST+SGST Intra- State Supply---CGST+SGST

Inter- State Supply—IGST

Inter- State Supply---IGST

REGISTRATION

Eligibility

Conditions Trigger limit (In Rs)
For North Eastern States 10 lakhs
For Rest of India 20 lakhs

 Mandatory Registration

  • persons making any inter-State taxable supply;
  • casual taxable persons making taxable supply;
  • persons who are required to pay tax under reverse charge;
  • person who are required to pay tax under sub-section (5) of section 9;
  • non-resident taxable persons making taxable supply;
  • persons who are required to deduct tax under section 51, whether or not separately registered under this Act;
  • persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise;
  • Input Service Distributor, whether or not separately registered under this Act;
  • persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52;
  • every electronic commerce operator;
  • every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered person; and
  • such other person or class of persons as may be notified by the Government on the recommendations of the Council.

Persons not required to be registered

  • any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tax Act;
  • an agriculturist, to the extent of supply of produce out of cultivation of land.

Associated Forms

Sr. No. Form Number Description
1. GST REG-01 Application for Registration (Other than a non-resident taxable person, a 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, a person required to deduct tax at source under section 51 and a person required to collect tax at source under section 52))
2. GST REG-02 Acknowledgement
3. GST REG-03 Notice for Seeking Additional Information / Clarification / Documents relating to Application for < Registration/Amendment/Cancellation>
4. GST REG-04 Clarification/additional information/document for
5. GST REG-05 Order of Rejection of Application for
6. GST REG-06 Registration Certificat
7. GST REG-07 Application for Registration as Tax Deductor at source (u/s 51) or Tax Collector at source (u/s 52)
8. GST REG -08 Order of Cancellation of Registration as Tax Deductor at source or Tax Collector at source
9. GST REG-09 Application for Registration of Non Resident Taxable Person
10. GST REG 10 Application for registration of person supplying online information and data base access or retrieval services from a place outside India to a person in India, other than a registered person
11. GST REG-11 Application for extension of registration period by casual / non-resident taxable person
12. GST REG-12 Order of Grant of Temporary Registration/ Suo Moto Registration
13. GST REG-13 Application/Form for grant of Unique Identity Number (UIN) to UN Bodies/ Embassies /others
14. GST REG-14 Application for Amendment in Registration Particulars (For all types of registered persons)
15. GST REG-15 Order of Amendment
16. GST REG-16 Application for Cancellation of Registration
17. GST REG-17 Show Cause Notice for Cancellation of Registration
18. GST REG-18 Reply to the Show Cause Notice issued for Cancellation
19. GST REG-19 Order for Cancellation of Registration
20. GST REG-20 Order for dropping the proceedings for cancellation of registration
21. GST REG-21 Application for Revocation of Cancellation of Registration
22. GST REG-22 Order for revocation of cancellation of registration
23. GST REG-23 Show Cause Notice for rejection of application for revocation of cancellation of registration
24. GST REG-24 Reply to the notice for rejection of application for revocation of cancellation of registration
25. GST REG-25 Certificate of Provisional Registration
26. GST REG-26 Application for Enrolment of Existing Taxpayer
27. GST REG-27 Show Cause Notice for cancellation of provisional registration
28. GST REG-28 Order of cancellation of provisional registration
29. GST REG-29 Application for cancellation of provisional registration
30. GST REG-30 Form for Field Visit Report

TAX INVOICE

Eligibility

A 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 a tax invoice showing the description, quantity and value of goods, the tax charged thereon and the particulars prescribed in relevant rule.

Time limit for issuing tax invoice 

The invoice in case of taxable supply of services, shall be issued within a period of thirty days from the date of supply of service.

Provided that where the supplier of services is an insurer or a banking company or a financial institution, including a non-banking financial company, the period within which the invoice or any document in lieu thereof is to be issued shall be forty five days from the date of supply of service.

BILL OF SUPPLY 

A registered person supplying exempted goods or services or both or paying tax under composition scheme, instead of a tax invoice, a bill of supply containing such particulars and in such manner as prescribed in relevant rules.

A registered person may not issue a bill of supply if the value of the goods or services or both supplied is less than two hundred rupees subject to such conditions and in such manner as prescribed in relevant rules.

RECEIPT VOUCHER 

A registered person shall, on receipt of advance payment with respect to any supply of goods or services or both, issue a receipt voucher or any other document, containing such particulars as prescribed in relevant rules, evidencing receipt of such payment.

REFUND VOUCHER 

Where, on receipt of advance payment with respect to any supply of goods or services or both the registered person issues a receipt voucher, but subsequently no supply is made and no tax invoice is issued in pursuance thereof, the said registered person may issue to the person who had made the payment, a refund voucher against such payment. 

CREDIT & DEBIT NOTE 

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 or both 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 prescribed in relevant rule.

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 the taxable value or tax payable in respect of 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 prescribed in relevant rules.

COMPOSITION SCHEME 

Eligibility 

A registered person, whose aggregate turnover in the preceding financial year did not exceed seventy five lakh* rupees, may opt to pay, in lieu of the tax payable by him.

*For special Category States, the threshold limit is fifty lakh rupees, except Uttarakhand.

Rate of tax of the composition levy

Category of registered persons Rate of tax
Manufacturers, other than manufacturers of such goods as may be notified by the Government one per cent
Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule II two and a half per cent
Any other supplier eligible for composition levy under section 10 and the provisions of this Chapter half per cent

 Non availability for Input Tax Credit

The person opting for Composition scheme is not eligible to take Input Tax Credit.

No need to file fresh intimation every year

The registered person paying tax under composition scheme may not file a fresh intimation every year and he may continue to pay tax under the said section subject to the provisions of the Act and these rules.

List of composition formats

Sr. No. Form No. Description
1 GST CMP-01 Intimation to pay tax under section 10 (composition levy) (Only for persons registered under the existing law migrating on the appointed day)
2 GST CMP-02 Intimation to pay tax under section 10 (composition levy) (For persons registered under the Act)
3 GST CMP-03 Intimation of details of stock on date of opting for composition levy (Only for persons registered under the existing law migrating on the appointed day)
4 GST CMP-04 Intimation/Application for withdrawal from composition Levy
5 GST CMP-05 Notice for denial of option to pay tax under section 10
6 GST CMP-06 Reply to the notice to show cause
7 GST CMP-07 Order for acceptance / rejection of reply to show cause notice

 ACCOUNTS & RECORDS 

Maintenance of accounts by registered persons

Every registered person shall keep and maintain, at his principal place of business, as mentioned in the certificate of registration, a true and correct account of—

(a) production or manufacture of goods;

(b) inward and outward 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 prescribed in relevant rules. 

RETURNS

Type of Return Time Period of filling of Return Return
Outward Return 10th of next month GSTR-1
TDS Return 10th of next month GSTR-7
Return by Input Service Distributor 13th of next month GSTR-6
Inward Return 15th of next month GSTR-2
Return by Composition Supplier 18th day from the end of quarter GSTR-4
Monthly return 20th of next month GSTR-3
Annual Return 31st December of next year GSTR-9
Periodic return by non-resident foreign taxpayer 20th Day of next month or with 7 days of Last day of registration GSTR-5

But for the first two months right after the roll out of GST, the rate would be:

Name of the Person Actual Date Extended Date for the 1st two months
Outward Supplier (for the month of July) 10th  August 5th September
Outward Supplier (for the month of August) 10th September 20th September
Inward Supplier Supplier (for the month of July) 15th August 10th September
Inward Supplier (for the month of August) 15th September 25th September

E- Commerce (TCS)  

In a layman term, e- commerce is defined as the use of electronic transmission medium (tele-communication) to engage in the exchange, including buying and selling of products and services requiring transportation either physically or digitally from location to location.

Important points under E- commerce:

  • Every person falls in the ambit of GST Registration
  • Uniform Tax Rate
  • Compliances under GST- Every electronic commerce operator required to collect tax at source under section 52 shall furnish a statement in FORM GSTR-8 electronically
  • Benefit of composition scheme is not available

SET OFF PROVISIONS WITH RESPECT TO ITC

The amount of input tax credit available in the electronic credit ledger of the registered person on account of-

(a) integrated tax shall first be utilised towards payment of integrated tax and the amount remaining, if any, may be utilised towards the payment of central tax and State tax, or as the case may be, Union territory tax, in that order;

(b) the central tax shall first be utilised towards payment of central tax and the amount remaining, if any, may be utilised towards the payment of integrated tax;

(c) the State tax shall first be utilised towards payment of State tax and the amount remaining, if any, may be utilised towards payment of integrated tax;

(d) the Union territory tax shall first be utilised towards payment of Union territory tax and the amount remaining, if any, may be utilised towards payment of integrated tax;

(e) the central tax shall not be utilised towards payment of State tax or Union territory tax; and (f) the State tax or Union territory tax shall not be utilised towards payment of central tax.

REVERSE CHARGE

“Reverse Charge” means the liability to pay tax by the recipient of supply of goods or services or both instead of the supplier of such goods or services or both.

Services under Reverse Charge

Sl. No. Service Provider of service (Percentage of service tax payable by service provider is NIL) Recipient of Service Percentage of service tax payable by any person other than the service provider
1. Taxable services provided or agreed to be provided by any person who is located in a non-taxable territory and received by any person located in the taxable territory other than non-assessee online recipient (OIDAR) Any person who is located in a nontaxable territory Any person located in the taxable territory other than non-assessee online recipient (Business Recipient) 100%
2. Services provided or agreed to be provided by a goods transport agency (GTA) in respect of transportation of goods by road Goods Transport Agency (GTA) (a) any factory registered under or governed by the Factories Act, 1948;

(b)any society registered under the Societies Registration Act, 1860 or under any other law for the time being in force in any part of India;

(c) any co-operative society established by or under any law;

(d)any person registered under CGST/SGST/UTGST Act; (e) any body corporate established, by or under any law; or

(f) any partnership firm whether registered or not under any law including association of persons.

(g) Casual taxable person

3. Services provided or agreed to be provided by an individual advocate or firm of advocates by way of legal services, directly or indirectly An individual advocate or firm of advocates Any business entity.
4. Services provided or agreed to be provided by an arbitral tribunal An arbitral tribunal Any business entity.
5. Sponsorship services Any person Anybody corporate or partnership firm
6. Services provided or agreed to be provided by Government or local authority excluding, – (1) renting of immovable property, and (2) services specified below-

(i)                services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than Government;

(ii)               services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;

(iii) transport of goods or passengers

Government or local authority Any business entity.
7. Services provided or agreed to be provided by a director of a company or a body corporate to the said company or the body corporate; A director of a company or a body corporate A company or a body corporate.
8. Services provided or agreed to be provided by an insurance agent to any person carrying on insurance business An insurance agent Any person carrying on insurance business.
9. Services provided or agreed to be provided by a recovery agent to a banking company or a financial institution or a non-banking financial company A recovery agent A banking company or a financial institution or a non-banking financial company.
10. Services by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India A person located in non-taxable territory to a person located in non-taxable territory Importer as defined under clause (26) of section 2 of the Customs Act, 1962.
11. Transfer or permitting the use or enjoyment of a copyright covered under clause (a) of sub-section (1) of section 13 of the Copyright Act, 1957 relating to original literary, dramatic, musical or artistic works Author or music composer, photographer, artist, etc. Publisher, Music company, Producer
12. Radio taxi or Passenger Transport Services provided through electronic commerce operator Taxi driver or Rent a cab operator Any person 100% by Electronic Commerce Operator

INPUT TAX CREDIT 

Conditions for availing ITC: 

(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 prescribed under relevant rules;

(b) he has received the goods and/ or services;

(c) the tax charged in respect of such supply has been actually paid to 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 Returns under section 34.

Cases where ITC shall not be allowed

(a) Where the registered person has claimed depreciation on the tax component of the cost of capital goods and plant and machinery under the provisions of IT Act, 1961

(b) 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.

In my upcoming articles, Ifs and Buts about ITC will be discussed. 

Hope this information will help you in your Professional endeavors. For further assistance/query, feel free to write to us. 

Author: C S Ekta Maheshwari is the Author of this article and is Company Secretary by profession. The Author can be reached at csektamaheshwari14@gmail.com 

Disclaimer: The entire contents of this article is solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation.. It doesn’t constitute professional advice or a formal recommendation. The author has undertook utmost care to disseminate the true and correct view and doesn’t accept liability for any errors or omissions. You are kindly requested to verify & confirm the updates from the genuine sources before acting on any of the information’s provided herein above.

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6 responses to “And Countdown Begins For Big Bang Tax Reform- A Quick Recap to Important Aspects of GST”

  1. ASHIS MAJUMDER says:

    Thanks Ekta for consolidation

  2. vicky261 says:

    I have read almost all your articles. Very informative and well defined. Keep it up.

  3. Ekta Maheshwari says:

    Thanks for the appreciation………..

  4. GD Thakur says:

    valuable articles madam.Very helpful for the business as well as the deptt officers.

  5. Guru charan says:

    Nice article. Thanks for Sharing.
    CMA Guru Charan

  6. Rahul says:

    Well covered summary on GST.
    Good to read

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