India is going to implement GST from 1st July, 2017. Everyone is confusing what to do now and how to do. In this regards, at this moment these two things are most important
1. WHAT DO YOU NEED TO DO NOW
2. HOW TO TAKE CREDIT OF CLOSING STOCK IN HELD ON 30TH JUNE 2017
WHAT DO YOU NEED TO DO NOW
- Allocate your stock into quantitative details find HSN code (up to six digit) as well as Invoice wise also as on 30th
- Get Account statement from your debtors and creditors and reconcile it
- If there are any Mis-match in your VAT returns then correct it immediately and revised your returns
- Collect all your “C” forms, “H” forms and “F” forms immediately
- Finalize your books of account up to 30th June, 2017
- Collect the tax documents of your closing stock and keep a Xerox copy of them in a separate file
- Do the ageing of closing stock for 12 months
- Create a manual to decide “PLACE OF SUPPLY” of your business supply
- Classify your all kind of stock in different kind of rate wise
- Keep ready HSN code wise list of all your Inward supply and Outward supply
- Collect the GSTIN of all your vender and give your number to all your clients
- Do complete analysis of your Profit and Loss account for attracting RCM provision
- Keep final your Invoice format and keep ready your Bill Book according to new law
- Keep update your I.T. System fast computers, internet, as well as update your accounting software
- Anti Profiting clause Pass profit to your customers
- All your Inward supply must be from registered supplier
- Keep in mind that ITC of CGST and SGST of own state is allowed, IGST is allowed, but CGST and SGST of other state is not allowed
- ITC must be reversed if invoice is not paid within 180 days. Interest is also payable on the same
- ITC relating to supply commonly used for exempted as well as taxable supply- credit must be reversed proportionately
- Two type of sales Invoices
- 1 TAX Invoice: if supply is taxable
- 2 Bill of Supply: if supply is exempted
- Receipt of Advance, GST Payable
- RCM: invoice and payment voucher to be issued
- Collection of late fee or Interest on account of delayed payment: GST apply on Interest/ late fee. Supplementary invoice must be issued
- Issue of debit note/ credit note
- Loading, unloading, local freight attract same rate as supply due to composite supply
HOW TO TAKE CREDIT OF CLOSING STOCK IN HELD ON 30TH JUNE 2017
For easy understanding we can divided all provisions into 3 parts.
1. REGISTRED UNDER CENTRAL EXCISE AND SERVICE TAX
2. REGISTRED UNDER VAT ONLY AND HAVING STOCK OF EXCISE PAYING INVOICE
3. REGISTRED UNDER VAT ONLY AND DOESN’T HAVING STOCK OF EXCISE PAYING INVOICE
Now we understand all these in details.
1. REGISTRED UNDER CENTRAL EXCISE AND SERVICE TAX
- Closing CENVAT will be opening ITC in GST
- Credit must be allow in GST regime also
- File GST TRAN-1 within 90 days
- All returns of last 6 months must be
- Central TAX Credit will be CGST, VAT Credit be SGST
- Credit will only be used for payment of GST Tax, not interest or late fee
- Timely collect your “C” forms and “H” forms
2. REGISTRED UNDER VAT ONLY AND HAVING STOCK OF EXCISE PAYING INVOICE
- Not applicable for composition dealers
- Any closing stock of having excise paying documents get 100% CGST Credit in “Electronic Credit Ledger of CGST
- Goods must be taxable in GST
- These invoices are not older than 12 months
3. REGISTRED UNDER VAT ONLY AND DOESN’T HAVING STOCK OF EXCISE PAYING INVOICE
- If GST is equal or more than 18% than 60% if CGST, 30% if IGST
- If GST is less than 18% than 40% if CGST, 20% if IGST
- Goods must be identifiable
- GST TRAN-2 must be submitted for next 6 months
- Goods must be sold within 6 months
- After 6 months no Credit will be allow
- Profit must be pass to customers.
EXAMPLE
1. IF GST RATE IS BELOW 18% and WE CHARGE CGST & SGST
- SALE VALUE 1000
- CGST 6% :- 60
- SGST 6% :- 60
- TOTAL 1120
- CGST CREDIT
- 60 * 40% = 24
2. IF GST RATE IS 18% OR ABOVE 18% and WE CHARGE CGST & SGST
- SALE VALUE 1000
- CGST 14% :- 140
- SGST 14% :- 140
- TOTAL 1280
- CGST CREDIT
- 140 * 60% = 84
3. IF GST RATE IS BELOW 18% and WE CHARGE IGST
- SALE VALUE 1000
- IGST 12% :- 120
- TOTAL 1120
- IGST CREDIT
- 120 * 20% = 24
4. IF GST RATE IS 18% OR ABOVE 18% and WE CHARGE IGST
- SALE VALUE 1000
- IGST 28% :- 280
- TOTAL 1280
- CGST CREDIT
- 280 * 30% = 84
Author Bio
Please let me know the ITC on motor car purchased for business purposes in Feb 2017