⇒ What is the significance of migration process?
Migration of existing registered persons into the GST is an exercise for updation and validation of data of existing taxpayers registered with various tax authorities for use at GST Network (GSTN) post implementation of GST. This process may not be construed as completion of registration process under GST.
⇒ What are the ramifications if existing taxpayers does not enroll for GST?
The model GST law is not in existence as of now and hence it can be concluded that legally, there is no such consequences of not enrolling for GST. However, we would advise to complete the enrollment procedure to contribute the movement.
⇒ In case an invoice having cenvat credit is not booked in the accounts before appointed date and the same is also not claimed in the last return filed in earlier law, then such cenvat credit can be claimed under GST regime?
As per section 167, a cenvat credit can be carried forward in electronic credit ledger only if the same was claimed in the return filed for the period ending with the day immediately preceding the appointed day,
⇒ Whether excise duty charged on capital goods purchased before appointed date but received after the appointed date can be claimed as Input tax credit under GST regime?
No. Only inputs or input services in transit are covered in the revised model law for transitional benefits with the fulfillment of two conditions. First, tax paid before appointed date and invoice booked within 30 days from the appointed date.
⇒ Whether a manufacturer, manufacturing excisable goods before appointed date but the turnover was below the threshold of Rs. 1.50 Crores, will be eligible to get the benefit of cenvat credit on inputs lying in the stock of raw material or in the semi-finished or finished goods?
Yes. According to section 169, a registered taxable person who was engaged in the manufacture of exempted goods shall be entitled to take, in his electronic credit ledger, credit of excise duty(CGST) or credit of state VAT(SGST) in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock as on the appointed date subject to few conditions.
⇒ Can a centralized registered service provider under earlier law, having 6 branches and 1 head office in India, claim the cenvat credit carried forward in the last return for all 7 registered taxable person?
Yes. As per section 191, a taxable person can take credit of the amount of cenvat credit carried forward in the last return filed under earlier provisions in such a manner as may be prescribed. That means, government is intending to give some twist to this provision with respect to availing the cenvat credit under GST regime from service tax regime.
⇒ Whether an invoice which is raised before appointed date but service has been rendered post appointed date, can be claimed in electronic credit ledger?
Yes. As per section 171, a registered taxable person is entitled to avail input tax credit of taxes paid under earlier law but booked in the GST regime within 30 days from the appointed date. This is called as provision for inputs or input services in transit.
⇒ What will be the situation if there is a change in terms of contract (entered prior to appointed date) with respect to contract value after appointed date?
As per the section 178, if there is an upward revision in price of the goods or services, then it shall be deemed that the supply is made under this act and debit note or supplementary invoices may be issued within 30 days of the price revision. If there is an downward revision in price of the goods or services, then credit note may be issuedof the price revision by the registered taxable person. However, the reduction in liability shall only be allowed if there is a corresponding reduction in input tax credit of recipient.
⇒ Whether EC/SHEC reflected into the return filed under service tax law shall be allowed to be carried forward in electronic credit ledger?
Yes. Section 167 provides that cenvat credit claimed in the return filed for the period prior to the appointed date shall be allowed to be carried forward in electronic credit ledger as CGST provided such credit is eligible in GST law.
⇒ Will the credit be available if invoice is made on or before 30thJune, 2017 and the invoice is received by the recipient on or after 1st July, 2017 assuming the applicability of GST from 1st July, 2017?
Yes. Section 171 provides that invoices raised prior to appointed date and received after the appointed date shall be available for input tax credit under GST law provided taxes are paid before appointed date and invoice has been recorded by the receiver within 30 days of appointed dated in his books of accounts.
⇒ What are the conditions to pay tax under earlier law in case of progressive or periodic supply of services or goods?
As provided in section 187, it is possible that incase of progressive supply earlier law shall be applicable if the whole consideration for supply has been received and taxes has already been paid under the earlier law before the appointed date i.e. even if the services are yet to be rendered but consideration has been received and taxes has been paid then GST provisions shall not be applicable.
⇒ Once the original return is filed, can the assessee revise the return?
Yes. The assessee may revise the original return filed under the earlier law. However, the time period of 3 months from the appointed day shall also apply to the revised return. Further, assessee shall not be allowed to claim more credit than the credit claimed in the original return.
Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. The observations of the authors are personal view and this cannot be quoted before any authority without the written permission of the authors. This article is meant for general guidance and no responsibility for loss arising to any person acting or refraining from acting as a result of any material contained in this article will be accepted by authors. It is recommended that professional advice be sought based on the specific facts and circumstances. This article does not substitute the need to refer to the original pronouncements on GST.
(Authors – CA Neeraj Kumar and CA Deepak Arya, RAPG & Co. Chartered Accountants from Delhi and can be reached at firstname.lastname@example.org, 9999836182/9818449179)