METTUR-SALEM CHAPTER OF
COST ACCOUNTANTS
USHERING GOODS AND
SERVICE TAX
(GST)
WHAT IS GST
• IT IS A DESTINATION BASED TAX ON THE
CONSUMPTION OF GOODS AND SERVICES
• IS LEVIED AT ALL STAGES RIGHT FROM
MANUFACTURE UPTO FINAL CONSUMPTION
• CREDIT OF TAXES PAID AT THE PREVIOUS
STAGES IS AVAILABLE AS SETOFF
• ONLY VALUE ADDITION WILL BE TAXED AND
THE BURDEN OF TAX WILL BE BORNE BY THE
FINAL CONSUMER
TAXABLE EVENT UNDR GST
• SUPPLY OF GOODS AND/OR SERVICES OR
BOTH MADE FOR CONSIDERATION IN THE
COURSE OR FURTHERANCE OF BUSINESS
• CONCEPT OF MANUFACTURE, TRADE AND
PROVISION OF SERVICES STAND SUBSUMED
IN THE TAXABLE EVENT KNOWN AS “SUPPLY”
• THE TERM SUPPLY INCLUDES TRANSFERS.
TAXABLE EVENT
Contd…
• DUAL TAXATION SYSTEM
• - CGST - FOR CENTRAL GOVT
• - SGST – FOR STATE GOVT
BOTH ARE ON SUPPLY OF GOODS OR SERVICES
WITHIN THE STATE
• - IGST – FOR CENTRAL GOVT
ON SUPPLY OF GOODS OR SERVICES INTERSTATE
SUPPLY OF GOODS UNDER
CGST/SCGST
• The Activity involves supply of goods;
• The supply is for a consideration unless
otherwise specifically provided for;
• The supply is made in the course or
furtherance of business;
• The supply is made in the taxable territory;
• The supply is taxable supply; and
• The supply is made by a taxable person
SUPPLY OF SERVICES
• Any transfer of goods without transfer of Title deed.
• Any lease, easement, tenancy and license to occupy land
• Any lease or letting out of the building including a commercial,
industrial or residential complex or commerce, either wholly or partly.
• Job Work – Any treatment or process which is being applied to another
person’s goods.
• Business assets put to private use or non-business use whether or not
for a consideration.
• Renting of immovable property.
• Development, design, programming, customization, adaptation, upgradation, enhancement, implementation of IT software.
• Works Contract, including transfer of property in goods (whether as
goods or in some other form) involved in execution of a Works
Contract of immovable property.
TYPES OF SUPPLIES UNDER GST
•
•
•
•
TAXABLE AND EXEMPT SUPPLIES
INTER-STATE AND INTRA-STATE SUPPLIES
COMPOSIT AND MIXED SUPPLIES
ZERO RATED SUPPLIES
ZERO RATED SUPPLY UNDER GST
• ZERO RATED SUPPLY MEANS EXPORT OF
GOODS AND/OR SERVICES OR SUPPLY OF
GOODS AND/OR SERVICES TO A SEZ
DEVELOPER OR A SEZ UNIT
ACTIVITIES NOT COVERED AS EITHER
SUPPLY OF GOODS OR SERVICES
• Services by an employee to the employer in the course
of or in relation to his employment
• Services by any Court or Tribunal established under any
law
• Functions performed by members of Parliament, State
Legislatures, members of Local authorities,
constitutional functionaries
• Services of funeral, burial, crematorium or mortuary
• Sale of Land; and
• Actionable claims other than lottery, betting and
gambling
COMMODITITES PROPOSED TO BE
KEPT OUTSIDE THE PERVIEW OF GST
- ALCOHAL FOR HUMAN CONSUMPTION
- FIVE PETROLEUM PRODUCTS VIZ.
PETROLEUM CRUDE, MOTOR SPIRIT (PETROL),
HIGH SPEED DIESEL, NATURAL GAS AND
AVIATION TURBINE FUEL (TERMPORARILY
ONLY)
- ELECTRICITY
EXISTING TAXES TO BE SUBSUMED
UNDER GST
• TAXES LEVIED BY CENTRAL GOVT
- EXCISE DUTY
- DUTIES OF EXCISE (MEDICINAL AND TOILET
PREPARATIONS)
- ADDITIONAL DUTIES OF EXCISE
- ADDITIONAL DUTIES OF CUSTOMS (KNOWN AS CVD)
- SPECIAL ADDITIONAL DUTY OF CUSTOMS (SAD)
- SERVICE TAX
- CENTRAL SURCHARGES AND CESSES RELATED TO
SUPPLY OF GOODS AND SERVICES
EXISTING TAXES TO BE SUBSUMED
UNDER GST ....... Contd.
•
-
TAXES LEVIED BY STATE GOVT
STATE VAT
CENTRAL SALES TAX
LUXURY TAX
ENTRY TAX ( ALL FORMS )
ENTERTAINMENT AND AMUSEMENT TAX
TAXES ON ADVERTISEMENTS
PURCHASE TAX
TAXES ON LOTTERIES, BETTING AND GAMBLING
STATE SURCHARGES AND CESSES RETLATED TO GOODS
AND SERVICES
IMPORTS UNDER GST REGIME
• IMPORTS OF GOODS AND SERVICES WILL BE
TREATED AS INTER-STATE SUPPLIES AND IGST
WILL BE LEVIED.
• THE INCIDENCE OF TAX WILL FOLLOW THE
DESTINATION PRINCIPLE AND THE TAX REVENUE
IN CASE OF SGST WILL ACCRUE TO THE STATE
WHERE THE IMPORTED GOODS AND SERVICES
ARE CONSUMED.
• FULL AND COMPLETE SET OFF WILL BE AVAILABLE
ON THE GST PAID ON IMPORT ON GOODS AND
SERVICES.
EXPORTS UNDER GST REGIME
• EXPORTS WILL BE TREATED AS ZERO RATED
SUPPLIES. NO TAX WILL BE PAYABLE ON EXPORTS
OF GOODS AND SERVICES.
• HOWEVER, CREDIT OF INPUT TAX WILL BE
AVAILABLE AND SAME WILL BE AVAILABLE AS
REFUND TO THE EXPORTERS.
• EXPORTER WILL HAVE AN OPTION TO EITHER PAY
TAX ON THE OUTPUT AND CLAIM REFUND OF
IGST OR EXPORT UNDER BOND WITHOUT
PAYMENT OF IGST AND CLAIM REFUND OF INPUT
TAX CREDIT.
LIABILITY FOR REGISTRATION IN GST
• YOUR AGGREGATE TURNOVER IS RS.10 LAKHS
AND ABOVE (FOR NORTH EAST INDIA, SIKKIM,
J&K, HIMACHAL PRADESH, JHARKAND)
• YOUR AGGREGARE TURNOVER IS RS.20 LAKHS
AND ABOVE (FOR REST OF INDIA)
• ALL EXISTING DEALERS REGISTERED WITH ANY
OF THE CURRENT LAWS (VAT/EXCISE/SERVICE
TAX) WILL NEED TO REGISTER UNDER GST BY
DEFAULT
COMPULSORY REGISTRATION
• the following categories of persons
shall be required to be registered
compulsorily irrespective of the
threshold limit:
• i) persons making any inter-State
taxable supply;
• ii) casual taxable persons;
• iii) persons who are required to pay
tax under reverse charge;
COMPULSORY REGISTRATION contd..
• iv) persons who supply goods and/or services on
behalf of other registered taxable persons whether as
an agent or otherwise;
• v) Input service distributor (whether or not separately
registered under the Act)
• vi) persons who are required to collect tax u/s 51 &
52;
• vii) every electronic commerce operator
• viii) every person supplying online information and
data base retrieval services from a place outside India
to a person in India, and,
• ix) such other person or class of persons as may be
notified by the Central Government or a State
Government on the recommendations of the Council.
BENEFITS OF REGISTRATION UNDER
GST
• Legally recognized as supplier of goods or
services.
• Proper accounting of taxes paid on the input
goods or services which can be utilized for
payment of GST due on supply of goods or
services or both by the business.
• Legally authorized to collect tax from his
purchasers and pass on the credit of the taxes
paid on the goods or services supplied to
purchasers or recipients.
• Getting eligible to avail various other benefits
and privileges rendered under the GST laws.
BENEFITS AVAILABLE FOR SMALL TAX
PAYERS UNDER GST REGIME
• TAX PAYERS WITHIN AN AGGREGATE
TURNOVER IN A F.Y. UPTO 20 LAKHS/10 LAKHS
(FOR NE AND SPECIAL CATEGORY STATES)
WOULD BE EXEMPT FROM TAX
• HOWEVER, TAX PAYERS MAKING INTER-STATE
SUPPLIES OR PAYING TAX ON REVERSE
CHARGE BASIS SHALL NOT BE ELIGIBLE FOR
THRESHOLD EXEMPTION.
VOLUNTARY REGISTRATION UNDER
GST
• IRRESPECTIVE OF NOT CROSSING THRESHOLD
LIMIT, LAW ALLOWS FOR “VOLUNTARY “
REGISTRATION.
• DEALER VOLUNTARILY REGISTERED CAN AVAIL
ITC ON INPUTS AND INPUTS CONTAINED IN
FINISHED/SEMI-FINISHED GOODS IN STOCK
ON THE DAY BEFORE YOU ARE GRANTED
REGISTRATION.
RECEIPT OF SUPPLIES FROM
UNREGISTERED PERSONS
IN CASE OF RECEIPT OF SUPPLIES FROM AN
UNREGISTERED PERSON, THE REGISTERED
PERSON WHO IS RECEIVING GOODS OR
SERVICES SHALL BE LIABLE TO PAY TAX UNDER
REVERSE CHARGE MECHANISM.
CONDITION FOR OBTAING ITC
• Following four conditions are to be satisfied by the
registered taxable person for obtaining ITC:
• (a) he is in possession of tax invoice or debit note or
such other tax paying documents as may be
prescribed;
• (b) he has received the goods or services or both;
• (c) the supplier has actually paid the tax charged in
respect of the supply to the government; and
• (d) he has furnished the return under section 39.
INPUT TAX CREDIT
A REGISTERED PERSON IS ENTITLED TO TAKE
CREDIT OF INPUT TAX CHARGED ON ANY SUPPLY
OF GOODS OR SERVICES WHICH ARE USED AND
INTENDED TO BE USED IN THE COURSE OR
FURTHERANCE OF HIS BUSINESS
THIS CONCEPT OF “FURTHERANCE OF
BUSINESS” WILL REDUCE YOUR COST OF
OPERATION AND DIRECTLY INCREASE THE NET
MARGIN OF YOUR BUSINESS.
FLOW OF INPUT CREDIT
- SGST INPUT CREDIT AGAINST SGST AND IGST
OUTPUT
- CGST INPUT CREDIT AGAINST CGST AND IGST
OUTPUT
- IGST INPUT CREDIT AGAINST SGST, CGST AND
IGST OUTPUT
ITC CREDIT OF SGST IS NOT AVAILABILE AGAINST
CGST OUTPUT OR VICE-A-VERSA
SCENARIOS WHERE YOU CANNOT
AVAIL INPUT TAX CREDIT
• REGISTRATION NOT APPLIED FOR WITHIN 30 DAYS
FROM THE DATE ON WHICH YOU BECOME LIABLE TO
REGISTER
• AFTER THE TIME LIMIT FOR AVAILING INPUT TAX
CREDIT IS CROSSED I.E. WITHIN THE EARLIEST OF THE
FOLLOWING DATES :
- 1 YEAR OF DATE OF INVOICE ; OR
- THE DATE OF FILING OF THE RETURN FOR
SEPTEMBER OF THE NEXT F.Y.; OR
- THE DATE OF FILING OF THE ANNUAL RETURN (DUE
DATE IS 31ST DECEMBER OF THE NEXT F.Y.)
RESTRICTION ON PERIOD FOR
AVAILMENT OF ITC
• In cases of new registration,
• change from composition to normal scheme,
• from exempt to taxable supplies,
- the concerned person cannot avail ITC after
the expiry of one year from the date of issue of
tax invoice relating to such supply.
ITEMS NOT ELIGIBLE FOR ITC
• Items of personal consumption;
• inputs use of which results into formation of
an immovable property (except plant and
machinery);
• telecommunication towers;
• pipelines laid outside the factory premises,
etc; and
• taxes paid as a result of detection of evasion
of taxes
COMPOSITION LEVY
• SMALL DEALERS AND BUSINESSES COULD OPT
FOR THE COMPOSITION SCHEME KNOWN AS
COMPOSITION LEVY.
• UNDER THE SCHEME, A COMPOSIT TAX PAYER
PAYS TAX ONLY AT A CERTAIN PERCENTAGE OF
HIS TURNOVER
• RATE OF LEVY IS YET TO BE NOTIFIED
THRESHHOLD LIMIT FOR
COMPOSITION LEVY
AGGREGATE TURNOVER OF THE PERSON
HAVING SAME PAN
- RS. 10 LAKHS IN RESPECT OF NORTH EAST
INDIA, SIKKIM, J&K, HP, UTTARKHANT
(SPECIFIED STATES)
- RS. 20 LAKHS(FOR REST OF INDIA)
DURING THE PREVIOUS F.Y., BUT DOES NOT
EXCEED RS.50 LAKHS.
CONDITIONS FOR A COMPOSITE TAX
PAYER
• CANNOT BE ENGAGED IN SUPPLY OF SERVICES,
OTHER THAN RESTAURENT SERVICES
• CANNOT BE ENGAGED IN MANUFACTURE OF
SPECIFIC NOTIFIED GOODS
• CANNOT SUPPLY GOODS NOT TAXABLE UNDER
CGST/SGST/UGST
• CANNOT SUPPLY GOODS THROUGH AN ECOMMERCE OPERATOR
• CANNOT BE ENGAGED IN INTER-STATE SUPPLY OF
GOODS
TAX REFUND UNDER GST
• TAX PAID ON INWARD SUPPLY OF GOODS AND/ OR
SERVICES WHICH HAVE BEEN EXPORTED PROVIDED
THE GOODS ARE NOT SUBJECT TO EXPORT DUTY.
• UNUTILIZED INPUT TAX CREDIT DUE TO INVERTED
DUTY STRUCTURE I.E. THE RATE OF TAX ON INPUTS IS
HIGHER THAN THE RATE OF OUTPUT SUPPLIES.
HOWEVER, REFUND IS NOT APPLICABLE WHEN
SUPPLIES ARE “NIL” RATED OR FULLY EXEMPT.
• UNUTILIZED INPUT TAX CREDIT DUE TO OUTPUT
SUPPLIES BEING EXPORTS OR ZERO RATED SUPPLIES.
RETURNS UNDER GST
GSTR-1
A normal registered taxpayer has to file the
outward supply details in GSTR-1 in relation to
various types of supplies made in a month, namely
outward supplies to registered persons, outward
supplies to unregistered persons (consumers),
details of Credit/Debit Notes, zero rated, exempted
and non-GST supplies, exports, and advances
received in relation to future supply.
RETURNS UNDER GST
GSTR-2
• While a large part of GSTR-2 will be autopopulated from GSTR-1, there are some
details that only recipient can fill like details
of imports, details of purchases from nonregistered or composition suppliers and
exempt/non-GST/nil GST supplies etc.
RETURNS UNDER GST
GSTR-3
• At any stage, but before September of the next financial
year, supplier can upload the invoice and pay duty and
interest on such missing invoices in his GSTR-3 of the
month in which he had earlier failed to upload the invoice.
• The recipient shall be eligible to reduce his output tax
liability to the extent of the amount in respect of which the
supplier has rectified the mis-match. The interest paid by
the recipient at the time of reversal will also be refunded
to the recipient by crediting the amount in corresponding
head of his electronic cash ledger.
RETURNS UNDER GST
GSTR-4
Composition tax payers do not need to file any
statement of outward or inward supplies. They
have to file a quarterly return in Form GSTR-4 by
the 18th of the month after the end of the quarter.
In their return, they have to declare summary
details of their outward supplies along with the
details of tax payment. They also have to give
details of their purchases in their quarterly return
itself, most of which will be auto populated.
ANNUAL RETURN UNDER GST
All taxpayers filing return in GSTR-1 to GSTR-3,
are required to file an annual return.
Casual taxpayers, taxpayers under composition
scheme, non- resident taxpayers, ISDs and
persons authorized to deduct/collect tax at
source are not required to file annual return.
FINAL RETURN UNDER GST
Final Return has to be filed only by those
registered persons who have applied for
cancellation of registration. The Final return
has to be filed within three months of the date
of cancellation or the date of cancellation
order.
REVISION OF RETURN UNDER GST
• In GST since the returns are built from details of
individual transactions, there is no requirement for
having a revised return.
• Any need to revise a return may arise due to the need
to change a set of invoices or debit/ credit notes.
Instead of revising the return already submitted, the
system will allow changing the details of those
transactions (invoices or debit/credit notes) that are
required to be amended.
• They can be amended in any of the future GSTR- 1/2
in the tables specifically provided for the purposes of
amending previously declared details.