Goods returned or price revision after appointed date, under which act concerned document will be issued. (Old Act or GST)
Sec 142 deal with the point of taxation during transition phase, which determine in which law tax has to be paid. Sec 142 (11) of transition provision produce here;
(a) Notwithstanding anything contained in section 12, no tax shall be payable on goods under this Act to the extent the tax was leviable on the said goods under the Value Added Tax Act of the State;
(b) Notwithstanding anything contained in section 13, no tax shall be payable on services under this Act to the extent the tax was leviable on the said services under Service Tax Act.
For example
If we received advance payment for service the point of taxation will be the date of receipt of advance. If we received advance as on 26.06.2017 then point of tax will be 26.06.2017 and the transaction shall attract service tax.
141 (5) A registered person shall be entitled to take, in his electronic credit ledger, credit of eligible duties and taxes in respect of inputs or input services received on or after the appointed day but the duty or tax in respect of which has been paid by the supplier under the existing law, subject to the condition that the invoice or any other duty or tax paying document of the same was recorded in the books of account of such person within a period of thirty days from the appointed day:
Provided that the period of thirty days may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding thirty days:
Provided further that said registered person shall furnish a statement, in such manner as may be prescribed, in respect of credit that has been taken under this sub-section.
For example
If we received advance payment for service the point of taxation will be the date of receipt of advance. If we received advance Rs 1, 00,000 as on 26.06.2017 then point of tax will be 26.06.2017 and the transaction shall attract service tax.
Case (a) Invoice has been issue as on 10.07.2017 for Rs 1,00,000/-.
The invoice has been issue under Service tax act @ 15% tax. The recipient will be eligible for input tax credit of service tax paid on the basis of invoice, and shall furnish a statement in GST, in such manner as may be prescribed, for carried forward credit of service tax.
Case (b) Invoice has been issue as on 10.07.2017 for Rs 2,00,000/-.
The invoice of Rs 1,00,000/- has been issue under Service tax act @ 15% tax. The recipient will be eligible for input tax credit of service tax paid on the basis of invoice, and shall furnish a statement in GST, in such manner as may be prescribed, for carried forward credit of service tax.
Balance of RS 1,00,000/- shall be taxable under GST Act, the point of taxation will be after GST.
Goods Returned After GST.
142. (1) Where any goods on which duty, if any, had been paid under the existing law at the time of removal thereof, not being earlier than six months prior to the appointed day, are returned to any place of business on or after the appointed day, the registered person shall be eligible for refund of the duty paid under the existing law where such goods are returned by a person, other than a registered person, to the said place of business within a period of six months from the appointed day and such goods are identifiable to the satisfaction of the proper officer:
Provided that if the said goods are returned by a registered person, the return of such goods shall be deemed to be a supply.
Example:
Mr A sale goods of RS 1,00,000/- to MR.B as on 26.06.2017 under VAT Law and goods return as on 10.07.2017.
Case (a) If Mr.B is registered person, the Mr.B shall issue invoice under GST and charge applicable GST. Mr A will be eligible to take the credit of GST.
Case (a) If Mr.B is unregistered person, the Mr.A shall be eligible for refund of VAT paid if he pass the benefit of tax refund to Mr.B and shall issue invoice Credit note under Vat Law of RS 1,00,000/- along with applicable VAT.
Price Revision after GST.
142 (2) (a) where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or services or both is revised upwards on or after the appointed day, the registered person who had removed or provided such goods or services or both shall issue to the recipient a supplementary invoice or debit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act such supplementary invoice or debit note shall be deemed to have been issued in respect of an outward supply made under this Act;
(b) where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or services or both is revised downwards on or after the appointed day, the registered person who had removed or provided such goods or services or both may issue to the recipient a credit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act such credit note shall be deemed to have been issued in respect of an outward supply made under this Act:
Example:
Mr. A entered a contract with Mr.B for RS 200,000/- he made supply of goods up to 30- 06- 2017 of RS 1, 00,000/- and charge and paid VAT.
Case(a) After GST price revised upward to RS 2,50,000/- then Mr. A shall issue a debit note of RS 50,000/- and invoice of remaining 1,00,000/- in respect of supply made after GST Act. it is deemed that debit note issue against the invoice of RS 100000/- issue after appointed date.
Case (b) After GST price revised downward to RS 1,50,000/- then Mr. A shall issue a Credit note of RS 50,000/- and invoice of remaining 1,00,000/- in respect of supply made after GST Act. it is deemed that Credit note issue against the invoice of RS 1,00,000/- issue after appointed date.
Goods return after GST In case of goods send on approval basis.
142 (12) Where any goods sent on approval basis, not earlier than six months before the appointed day, are rejected or not approved by the buyer and returned to the seller on or after the appointed day, no tax shall be payable thereon if such goods are returned within six months from the appointed day:
Provided that the said period of six months may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding two months:
Provided further that the tax shall be payable by the person returning the goods if such goods are liable to tax under this Act, and are returned after a period specified in this sub-section:
Provided also that tax shall be payable by the person who has sent the goods on approval basis if such goods are liable to tax under this Act, and are not returned within a period specified in this sub-section.
Example:
Mr A send goods of RS 100000/- to MR.B on challan without VAT as on 26.06.2017 and goods return as on 10.07.2017.
Case (a) If Mr.B returns the goods within 6 month no tax will be liable.
Case (b) If Mr.B returns the goods after 6 month, MR B shall issue Invoice under GST and charge GST.
(Author CA Amit Kumar can be reached at caamitdhama@gmail.com)
Author Bio
Dear Sir
Case 1: We receive goods from our manufacturing unit at the branch under Stock Transfer with Excise Duty Invoice.
These stocks are lying in closing stock as on 30.06.2017
In GST Period how much can we take input under CGST and SGST for this ED Paid invoice
Case 2: The ED paid stocks received at one branch are again transferred to other branches as Stock Transfer Outward. Receiving branch receive this goods as stock transfer Inward.
In this Stock Transfer documents there is no specification for ED and these stocks are lying as closing stock in their depot as on 30.06.2017.
In GST Period how much can we take input under CGST and SGST for these stocks where there is no reference to ED and VAT.