Aurangabad Branch of WIRC of ICAI
GST Course
20-May-17
by CA Sanket Shah
Topics
Transitional Provisions
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Migration of existing registrations
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Transition for ITC
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Transitional provisions for Job work
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Miscellaneous Transitional provisions
Issues in GST implementation
Transition Provisions
Registration
Existing Registrants:
● Automatic - Provisional Registration
● Submission of documents (6 months) - Final
Registration
Registration is not required under new Law –
Application to be filed within 30 days
Portal to be opened again from 1st June to 15th
June
Transfer of credits availed under existing law
Allowances/ Conditions:
● All Credits under existing law to be carried forward to
ECL
● Credit should be admissible under new law
● Should not relate to goods manufactured and cleared
under such exemption notifications as are notified by
Government
● Returns for last 6 months under old law to be filed
● Online Application in FORM GST TRAN-1 to be
submitted within 60 days from the appointed day
Availment of un-availed credit on capital goods
Allowances/ Conditions:
● Un-availed portion of credit of CG means that portion
which was eligible under the old law to the extent not
availed
● Credit should be admissible under old and new law
● Credit is not carried forward in the return furnished under
existing law
● Online Application in FORM GST TRAN-1 to be
submitted within 60 days from the appointed day
● Following particulars in respect of every item of capital
goods are to be specified in the application:
● ITC
availed under each of the existing laws
● ITC yet to be availed under each of the existing laws till the
appointed day
Credit on input held by RTP - CGST
● RTP not required to take registration under old
law ie Excise/ Service tax, FSD, SSD, registered
Importer, Depot of Manufacturer
● Mfg of exempted goods or provision of exempted
services, WCT services exempt under 26/2012
Credit of inputs held in
● Stock
● Contained in semi-finished goods
● Contained in finished goods
● Used for making taxable supplies
● Document evidencing payment of tax
● Not earlier than 12 months from new law
● Credit is eligible under new law
● RTP passes on the benefit by reduction of price
● Supplier not eligible for abatement under new Act
● Online submission within 60 days from the appointed
day specifying details of stock held
Credit on input held by RTP - SGST
● RTP not required to take registration under old law ie
supplier of exempted goods
● Composition Tax Payer
● Tax at 1st point of sale and subsequent sale on taxable
Credit of inputs held in
● Stock
● Contained in semi-finished goods
● Contained in finished goods
● Used for making taxable supplies
● Document evidencing payment of tax
● Not earlier than 12 months from new law
● Credit is eligible under new law
● RTP passes on the benefit by reduction of price
● Online submission within 60 days from the appointed
day specifying details of stock held
Credit on input held by RTP – Document
evidencing payment of tax not available
RTP other than Manufacturer and Supplier of Services
Credit shall be allowed as below:
● At 40% of the Central tax applicable on supply of such goods after
the appointed date
● Shall be credited to ECL after Central tax is paid on such supply
● Scheme is available for six tax periods from the appointed date
Conditions:
● Goods not wholly exempt from excise duty under First Sch of Central
Excise or were not nil rated
● Document for procurement of goods is available
● Online Application in FORM GST TRAN-1 to be submitted within 60
days from the appointed day specifying details of stock held
● Separate form to be filed for each of the six tax period giving details
of supplies of such goods
● Stock of goods on which credit is availed is so stored that it can be
easily identified by RTP
Credit of input or input services received after
appointed date
Credit of eligible duties in input or input services received after
appointed date on which tax was paid by the supplier under the
existing law will be available
Allowances/ Conditions:
● Invoice of duty paying document is accounted in books within 30
days from the appointed day
● Following Details are to be submitted online within 60 days
● Details i.e. name of supplier, invoice details, description, quantity
and value of goods or services
● Amount of eligible taxes or duties charged by the supplier
● Date of receipt of goods or services is entered in the books of
accounts of recipient
ITC in transition – Other cases
Cases where credits are allowed:
● Tax being paid at fixed rate or paying fixed amount in lieu of tax
under the existing law
● Centralized registration
● Credit of cenvat balance in the last return under the existing law be
credited to ECL
● Return under the existing law needs to be filed within 3 months
(including revision if any only to the extent of reduction in ITC)
● Credit should be admissible under the new law
● Such credit can be transferred to any other registered person with
same PAN, who was already covered under Centralized
registration under the existing law
● Credit reversed on completion of 3 months due to non-payment to
vendor
● Credit can be re-claimed if payment to vendor has been done
within 3 months from the appointed day
Goods sent to Job worker
● Inputs and Semi-finished goods returned within 6
months – no tax
● Commissioner can extend by further period of
upto 2 months
Goods can be directly cleared from the premises of the
job worker
Returned after 6 months
● Input tax credit to be reversed on the same
Details of inputs/ semi-finished goods held by
principal at various premises of job workers
(separately) needs to be submitted online within in
60 days
Tax paid goods (sent within 6 months before
appointed) returned after GST Date
Returned within 6 months
● By RTP – tax to be paid on such supply
● By Non-RTP – Refund to be claimed by Supplier
Returned after 6 months
● By RTP – tax to be paid on such supply
● By Non-RTP – No refund option with Supplier
Goods are identifiable to the satisfaction of officer
Price revision after GST Date
Contract entered prior to GST Date
Goods/ Services sent/ provided before GST Date
Raise Supplementary Debit/Credit Note
Within 30 days from revision
Upward revision – GST payable
Downward revision – GST liability reduction,
subject to ITC reduction by buyer
Refund of old taxes
● Refund of old taxes – Cenvat/ VAT Input tax
● Refund of old taxes paid relating to export of
goods/ services before or after the GST date
● To be paid in cash only
● No refund allowed if cenvat/ ITC carried forward
● Claim rejected (fully or partially) – credit will lapse
● Refund of tax paid under old law
● Relating to services not provided
● To be discharged in cash only
Goods sent (sent within 6 months before
appointed) on Approval Basis
Details of goods sent to be submitted online in 60
days
Returned within 6 months or extended period
● No tax payable
Returned after 6 months or extended period
● Tax to be paid on such supply by the person
returning the goods
Goods not returned after 6 months or extended
period
● Tax to be paid on such supply
Transactions/ Contracts extending beyond GST
Date
General Principle
Once tax is paid under earlier law, tax not payable
again under new law
Goods and/or Services supplied after GST date
under long term contract would be taxable under
GST
If the point of taxation was in earlier period and tax
paid thereof – No GST
Transition for existing projects
Vat @ 1%
ST @ 4.5%
Total @ 5.5%
Pre-GST:
Agreement registered 1% VAT
paid
ST paid on partial receipts
GST:
GST payable on whole
agreement
Deduction of VAT and ST paid
will be available
(Law interpretation can lead to alternate
tax positions also)
GST @
12-18%
Transition for existing projects
Vat @ 1%
ST @ 4.5%
Total @ 5.5%
Pre-GST:
ST paid on partial receipts
Agreement not registered and
1% VAT not due
GST:
GST payable on whole
agreement
Deduction of VAT and ST paid
will be available
(Law interpretation can lead to alternate
tax positions also)
GST @
12-18%
Other relevant aspects
● Old taxes to be paid under new law as arrears and
ITC would not be available on the same
● Any amount refundable under old law:
● Subject to incidence of tax not being passed on
to consumer
● Any proceeding relating to old laws will be
completed in accordance with that law and:
● Tax payable shall be recovered as arrears
under new law (not admissible as ITC)
● Refund be granted in cash as per old law
● Any revision of return:
● Tax payable shall be recovered as arrears
under new law (not admissible as ITC)
● Additional credit be claimed as refund
(provided revised return filed within due dates)
● Goods/services supplied after GST date are
taxable under new law (relating to contract
entered before GST date
Challenges
Challenges in GST Implementation
Anti-profiteering
● Pre-GST and Post-GST cost break up for products
● Impact of additional credits vis-à-vis increase in compliance cost
● Issues may come up during Audit by department
● Classification
● Composite/ Mixed/ Goods/ Services/ Works Contract
● Working Capital Issues
● Due to increase in tax rates (e.g. Service tax 15% to GST 18%)
● Inter-state purchases/ stock transfers would be subject to full GST
● Higher Compliance cost
● RCM
● All URD could be subject to RCM
● Cash flow impact
● Vendor master to be updated
● Additional compliances like raising invoices, etc
● Stock as on last day
● Matching physical stock (value and quantity) with books and
statement for GST
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Challenges in GST Implementation
Transfer of Credits
● Last return under old law
● Excise credits – 40% scheme
● Non-submission of forms – credit reduced to that extent
● Reconciliation of credit – books v/s returns
● Accounting/ Audits/ Technology
● Small tax payers
● Income tax returns filed under Section 44AD
● Huge Quantum of compliance
● Higher compliance cost
● Finalization of tax/ vat audit for FY 16-17 by June 2017
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Thank you
CA Sanket Shah
+91 98201 21908
[email protected]
Disclaimer:
● My comments are based on GST Act assented on 12th April 2017 and various updates (available in public
domain)
● This publication contains information in summary form and is therefore intended for general guidance only. It
is not intended to be a substitute for detailed research or the exercise of professional judgment. On any
specific matter, reference should be made to the appropriate advisor.
● This presentation is prepared and circulated for GST Course organized by Aurangabad Branch of WIRC of
ICAI only