The Reverse Charge Mechanism (RCM) under the Goods and Services Tax (GST) system shifts the responsibility to pay tax from the supplier to the recipient of goods or services. This mechanism is applicable in certain notified cases and is governed under Sections 9(3), 9(4) of the CGST Act, and Section 5(3), 5(4) of the IGST Act.

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📌 What is Reverse Charge Mechanism (RCM)?

Under RCM:

• The recipient pays GST directly to the government.
• Input Tax Credit (ITC) can be availed by the recipient (subject to eligibility).
• Applicable for both goods and services under specified notifications.

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📚 Categories Where RCM Applies

1. Notified goods and services (Section 9(3) / 5(3))
2. Supply from unregistered suppliers (Section 9(4) / 5(4))
3. Import of goods or services into India

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🧾 A. Goods Notified Under RCM (as per Notification No. 4/2017-Central Tax (Rate))

S.No	Description of Goods	Supplier	Recipient	Effective From
1	Cashew nuts (unshelled/peeled)	Agriculturist	Registered person	01-Jul-2017
2	Bidi wrapper leaves (Tendu)	Agriculturist	Registered person	01-Jul-2017
3	Tobacco leaves	Agriculturist	Registered person	01-Jul-2017
4	Raw cotton	Agriculturist	Registered person	15-Nov-2017
5	Silk yarn	Manufacturer from raw silk	Registered person	01-Jul-2017
6	Lottery	State Government	Distributor or agent	01-Jul-2017
7	Old/used goods, confiscated/seized goods, scrap	Government/Local authority	Registered person	13-Oct-2017
8	Metal scrap (Chapters 72–81)	Unregistered person	Registered person	10-Oct-2024
9	Mint essential oils (mentha, spearmint, etc.)	Unregistered person	Registered person	01-Oct-2021

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🧾 B. Services Notified Under RCM (as per Notification No. 13/2017-Central Tax (Rate))

S.No	Description of Service	Supplier	Recipient	Notes
1	GTA (Goods Transport Agency)	GTA	Specified entities (factories, firms, etc.)	Option to pay under forward charge at 12%
2	Legal services	Individual advocate or firm	Business entity	RCM applies
3	Sponsorship services	Any person (except body corporates w.e.f 01.04.2025)	Company/firm	RCM
4	Director services	Director (non-employee)	Company or body corporate	Always RCM
5	Security services	Non-corporate supplier	Registered person	RCM
6	Renting of immovable property (Govt to registered person)	Government	Registered person	RCM
7	Services from an arbitral tribunal	Tribunal	Business entity	RCM
8	Recovery agent services	Agent	Bank/NBFC	RCM
9	Insurance agent services	Agent	Insurance co.	RCM
10	DSA services (non-body corporate)	DSA	Bank/NBFC	RCM
11	Lending of securities (SEBI)	Lender	Borrower	RCM
12	Passenger vehicle rental (without 12% invoice)	Non-body corporate	Body corporate	RCM
13	Services by Govt (excluding court, MPs, etc.)	Govt/local authority	Business entity	RCM
14	Renting of property by unregistered person	Unregistered supplier	Registered person	From 10-Oct-2024

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⏰ C. Time of Supply under RCM (Section 12 & 13 of CGST Act)

📦 For Goods (RCM)

Time of supply = earlier of the following:

1. Date of receipt of goods
2. Date of payment (earlier of entry in books or bank debit)
3. 30 days from invoice date

👉 If none of the above, use date of entry in books of account.

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🛠️ For Services (RCM)

Time of supply = earlier of:

1. Date of payment (booked or debited in bank)
2. 60 days from invoice date

👉 If invoice not received, use date of entry in books.

✅ Note: Delay in paying RCM beyond this time results in interest liability under Section 50.

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📥 D. RCM on Import of Goods and Services

Type	GST Paid	Notes
Import of goods	IGST under Customs Act	Paid at port via Bill of Entry
Import of services	IGST under RCM	Recipient liable; applies even if supplier is overseas

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🔁 E. RCM Under Section 9(4) – Supply from Unregistered Persons

Applicable on specified goods/services when:

• Supplied by unregistered persons
• To registered recipients
• Common in real estate (promoters/builders): cement, capital goods, etc.

RCM is limited to certain cases by notification.

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✅ F. Compliance Checklist for RCM

Compliance Step	Description
📄 Self-Invoice	Mandatory for inward RCM supplies
🧾 Payment Voucher	Required for RCM supplies
📥 Cash Payment	RCM tax must be paid in cash, not ITC
🧾 GSTR-3B	Report RCM tax under “Liabilities” and claim eligible ITC
📚 Maintain Records	Document all RCM invoices and payments

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🔧 G. Recent RCM Updates (2024–2025)

• ✅ Metal scrap under RCM (from unregistered) – Effective 10 Oct 2024
• ✅ Rent from unregistered persons to registered – Under RCM from 10 Oct 2024
• ✅ Sponsorship from body corporates – Out of RCM from 01 Apr 2025

Basics of GST Registration

• Every supplier whose annual aggregate turnover in the current financial year exceeds the threshold limits (as amended from time to time) will have to get registered under GST Law.
• Please note that threshold limit is checked for Current Financial year.
• You have to apply for GST registration within 30 days from the date the turnover exceeds the given threshold limit.
• If GST Registration applied through Aadhaar then it takes only seven working days to get the registration else it may take upto 30 days.
• If your turnover exceed the threshold limit for registration in mid of the Financial year, then you are not required to pay tax on turnover upto the date of registration if you applied for registration within the required time frame.
• If in the next year, your turnover falls below the threshold limit then you may decide to surrender/cancel GST registration or you may decide to continue to pay GST on such lower turnover.
• A person can voluntary choose to get GST registration even if his turnover is less than threshold limit for gst registration.
• If your turnover crossed the threshold limit then you may decide to opt registration under composition scheme if your turnover is below the specified limit for opting for composition dealer. (The threshold of annual turnover for composition scheme was  increased to Rs.1.5 crore from 1st April 2019. The taxpayers registered under the scheme have to pay tax quarterly and file returns annually from 1st April 2019)
• Apart from threshold limit, there are certain category of persons who are required to compulsorily get registered under GST.

What is Threshold Limit for GST Registration?

1. Threshold limit for GST registration Upto 31st March 2019

Threshold limit for GST registration upto 31-03-2019 is given below:-

Category	States	Threshold Limit	Applicability
Special Category states	Puducherry, Meghalaya, Mizoram, Tripura, Manipur, Sikkim, Nagaland, Arunachal Pradesh and Uttarakhand	Rs. 20 Lakh	Upto 31.03.2019
Normal Category States	Kerala, Chhattisgarh, Jharkhand, Delhi, Bihar, Maharashtra, Andhra Pradesh, Gujarat, Haryana, Goa, Punjab, Uttar Pradesh, Himachal Pradesh, Karnataka, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu, West Bengal, Lakshadweep, Dadra and Nagar Haveli and Daman and Diu, Andaman and Nicobar Islands and Chandigarh	Rs. 10 Lakh	Upto 31.03.2019

2. Threshold limit for GST registration w.e.f. 1st April 2019

Threshold limit for GST registration w.e.f. 1st April 2019 is given below:-

Category	States	Threshold Limit	Applicability
Special Category states	Puducherry, Meghalaya, Mizoram, Tripura, Manipur, Sikkim, Nagaland, Arunachal Pradesh and Uttarakhand	Rs. 40 Lakh	W.e.f. 01.04.2019
Normal Category States	Kerala, Chhattisgarh, Jharkhand, Delhi, Bihar, Maharashtra, Andhra Pradesh, Gujarat, Haryana, Goa, Punjab, Uttar Pradesh, Himachal Pradesh, Karnataka, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu, West Bengal, Lakshadweep, Dadra and Nagar Haveli and Daman and Diu, Andaman and Nicobar Islands and Chandigarh	Rs. 20 Lakh	W.e.f. 01.04.2019

Compulsory Registration under GST

As we know that Every supplier whose annual aggregate turnover in the current financial year exceeds the threshold limits, have to get registered under GST.

Section 24 – Compulsory registration in certain cases.
Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered under this Act,––

(i) persons making any inter-State taxable supply;
(ii) casual taxable persons making taxable supply;
(iii) persons who are required to pay tax under reverse charge;
(iv) person who are required to pay tax under sub-section (5) of section 9;
(v) non-resident taxable persons making taxable supply;
(vi) persons who are required to deduct tax under section 51, whether or not separately registered under this Act;
(vii) persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise;
(viii) Input Service Distributor, whether or not separately registered under this Act;
(ix) persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52;
(x) every electronic commerce operator who is required to collect tax at source under section 52;
(xi) every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered person; and
(xii) such other person or class of persons as may be notified by the Government on the recommendations of the Council.

What is Annual Aggregate Turnover?

• Annual Aggregate Turnover is calculated for the entire financial year. For financial year 2022-23, it is from 1st April 2022 to 31st march 2023.
• Annual Aggregate Turnover is whole turnover taking all units of concern under same PAN.
• Annual Aggregate Turnover includes following-
  • Sales value of all taxable supplies/services
  • Sales on which tax paid under other person under RCM
  • Sales value of exempt Supplies/services
  • Export value of goods/services
  • Inter-state supplies between units operating under same PAN
  • Inter-state stock transfers.
• Annual Aggregate Turnover does not include following-
  • Value of inward supplies (Purchases) on which tax is payable under RCM
  • CGST/SGST
  • IGST
  • UTGST
• Aggregate Turnover is used at many places in GST such as-
  • For checking GST registration requirement
  • GST Registration under Composition Scheme
  • For checking applicability of E-invoicing
  • GST audit requirement
  • Eligibility of Quarterly Return filing requirement under QRMP Scheme.
  • HSN code requirement

Reverse Charge Mechanism (RCM) liability on purchase from unregistered person.

With implementation of GST w.e.f. 1.7.2017, A registered person was made liable to pay tax on RCM (Reverse Charge Mechanism) on each purchase of goods or service from unregistered person. But this provision goes through various changes which can be explained as follows:-

1. W.e.f. 1st July 2017 to 12th October 2017

During the period 01.07.2017 to 12.10.2017, A registered person was liable to pay tax on RCM (Reverse Charge Mechanism) on purchases of goods or service from unregistered person. But if total value of such purchases (aggregate from all unregistered persons) in a day is Rs. 5000 or less, then there is no requirement for payment of GST on RCM basis. But if a registered person purchases goods/services from unregistered person for Rs. 6000/- then RCM was applicable on whole value of Rs. 6000/-

2. W.e.f. 13th October 2017 to 31st January 2019

The Central Government vide Notification No. 38/2017 – Central Tax (Rate) dated 13th October, 2017, has amended Notification No. 8/2017 – Central Tax (Rate) dated 28th June, 2017 by omitting proviso under Paragraph 1 which deals with the exemption limit of Rs. 5000 per day available to the registered person on intra-State procurement of goods or services from any or all unregistered suppliers. Now, exemption shall be available to all the registered persons without any limit in case of supply procured from unregistered supplier. Inter-State supplies received from unregistered supplier is also exempt under corresponding notification issued under IGST Act. Therefore, any registered person procuring taxable goods/services from unregistered suppliers, shall not be required to pay CGST under reverse charge mechanism. This exemption was first brought in only upto 31.3.2018 but later extended upto 30.09.2019 vide notification numbers 10/2018 dt. 23.03.2018 , 12/2018 dt. 29.06.2018 & 22/2018 dt. 06.08.2018.

3. W.e.f. 1st February 2019 till date(April -2023)

W.e.f. 01.02.2019, CGST (Amendment) Act,2018, amended RCM Provisions on purchases from unregistered persons to specify that RCM provisions on purchase from unregistered persons are now applicable only on the class of persons to be notified in the future. Hence temporary exemption provided by notification 38/2017, from RCM Provisions on such purchases was made permanent through the amendment.

Vide notification no. 07/2019 dt. 29.03.2019, Promoters purchasing cement and capital goods from unregistered persons in Real Estate Project are brought under RCM.

GST Returns and their Due dates

Due date for filing of GST return and Default due date for payment of GST

Please refer the table given below, wherein default due date for filing of GST returns is specified along with default due date for payment of GST for each category of taxpayer. Please be informed that these default due dates are extended frequently hence we need to be updated about extended due dates for filing GST return and for payment of GST.

In the absence of any special remark in notification, If due date of filing of that return (along with which GST was to be paid) is extended then due date of payment is GST is also deemed to be extended to the same date unless separate dates are specified for payment or for calculation of interest. 

GST Return Form	Applicability	Periodicity of GSTR filing	Default due date of filing GSTR	Default Due date for payment of GST
GSTR-1 (Quartely)	Detail of outward supplies of taxable goods or services for taxpayers with Annual Turnover upto Rs. 1.5 Cr.	Quarterly	13th of the next month	20th/22nd/24th of next month along with GSTR-3B (as applicable)
GSTR-1 (Monthly)	Detail of outward supplies of taxable goods or services fro taxpayers with Annual Turnover above Rs. 1.5 Cr.	Monthly	11th of the next month	20th/22nd/24th of next month along with GSTR-3B (as applicable)
GSTR-2	Detail of inward supply of taxable goods or Services (with ITC claim)	Monthly	15th of the next month (Currently filing of this return is suspended)	NA
GSTR-3	Finalization of outward & inward supplies along with payment of tax	Monthly	20th of the next month (Currently filing of this return is suspended)	NA
GSTR-3B (Aggregate turnover exceeding Rs.5 crore in the previous financial year or Where QRMP is not opted)	Simple Return to be filed for payment of GST (Currently filing of GSTR-2 & GSTR-3 is suspended, hence GSTR-3B is in use)	Monthly	20th of the next month	20th of the next month
GSTR-3B (Aggregate turnover up to Rs.5 crore in the previous financial year where QRMP is opted)	Simple Return to be filed for payment of GST (Currently filing of GSTR-2 & GSTR-3 is suspended, hence GSTR-3B is in use)	Quartely	22nd for "x" category of states) / 24th for "Y" category of states) of the next month	The taxpayer has to deposit tax using form PMT-06 by the 25th of the following month, for the first and second months of the quarter. The taxpayers can pay their monthly tax liability either in the Fixed Sum Method (FSM), also popular as 35% challan method, or use the Assessment Method (SAM)applicable)
GSTR-4	GST Return for Taxpayers under compounding scheme	Annually (w.e.f FY 19-20)	30th April of next FY	18th of next month along with form CMP-08 (on quarterly basis)
GSTR-5	GST Return for Non-Resident Taxable person.	Monthly	20th of the next month	20th of next month along with GSTR-5
GSTR-5A	GST Return for internet service provider and OIDAR (online information and database access or retrieval	Monthly	20th of the next month	20th of next month along with GSTR-5A
GSTR-6	GST Return for Input Service Distributor	Monthly	13th of the next month	13th of next month along with GSTR-6
GSTR-7	GST Return for authorities deducting tax at source (TDS)	Monthly	10th of the next month	10th of next month along with GSTR-7
GSTR-8	Details of supplies effected through e-commerce operator and the amount of tax collected	Monthly	10th of the next month	10th of next month along with GSTR-8
GSTR-9	Annual GST return for a normal taxpayer.	Annually	31st December of next financial year	NA
GSTR-9A	Simplified Annual Return for taxable person under compounding scheme.	Annually	31st December of next financial year	NA
GSTR-9B	Annual Return for E-commerce operator.	Annually	31st December of next financial year	NA
GSTR-9C	Annual Return for taxpayers whose annual turnover exceeds Rs  2 crores during the financial year and is required to get their accounts audited and file a copy of audited annual accounts and reconciliation statement.	Annually	31st December of next financial year	NA
GSTR-10	Final Return when registration is cancelled or surrendered	Only Once	Within 3 months of the date of cancellation or date of cancellation order, whichever is later.	NA
GSTR-11	Statement of inward supply by persons having Unique Identification number  and claiming Refund	Monthly	28th of the month following the month for which statement is filed.	NA

NOTE:- These are default due dates for GST return filing and GST payment, which may be extended by notifications. 2021-22 onwards.

The above dates are default due dates, Click here to check notification for any extension in default Due date. In the absence of any special remark in notification, If due date of filing of that return (along with which GST was to be paid) is extended then due date of payment is GST is also deemed to be extended to the same date unless separate dates are specified for payment or for calculation of interest. 

GST important Due dates for Financial year 2020-21

(A) Default Due date for filing of GST return and Default due date for payment of GST (From 01-04-2020 to 31-03-2021)

Please refer the table given below, wherein default due date for filing of GST returns is specified along with default due date for payment of GST for each category of taxpayer. Please be informed that these default due dates are extended frequently hence we need to be updated about extended due dates for filing GST return and for payment of GST.

In the absence of any special remark in notification, If due date of filing of that return (along with which GST was to be paid) is extended then due date of payment is GST is also deemed to be extended to the same date unless separate dates are specified for payment or for calculation of interest. 

. 

GST Return Form	Applicability	Periodicity of GSTR filing	Default due date of filing GSTR	Default Due date for payment of GST
GSTR-1 (Quartely)	Detail of outward supplies of taxable goods or services for taxpayers with Annual Turnover upto Rs. 1.5 Cr.	Quarterly	13th of the next month	20th/22nd/24th of next month along with GSTR-3B (as applicable)
GSTR-1 (Monthly)	Detail of outward supplies of taxable goods or services fro taxpayers with Annual Turnover above Rs. 1.5 Cr.	Monthly	11th of the next month	20th/22nd/24th of next month along with GSTR-3B (as applicable)
GSTR-2	Detail of inward supply of taxable goods or Services (with ITC claim)	Monthly	15th of the next month (Currently filing of this return is suspended)	NA
GSTR-3	Finalization of outward & inward supplies along with payment of tax	Monthly	20th of the next month (Currently filing of this return is suspended)	NA
GSTR-3B	Simple Return to be filed for payment of GST (Currently filing of GSTR-2 & GSTR-3 is suspended, hence GSTR-3B is in use)	Monthly	20th (if turnover exceed 5cr. in previous FY) / 22nd (if turnover below 5cr. for "x" category of states) / 24th (if turnover below 5cr. for "Y" category of states) of the next month	20th/22nd/24th of next month along with GSTR-3B (as applicable)
GSTR-4	GST Return for Taxpayers under compounding scheme	Annually (w.e.f FY 19-20)	30th April of next FY	18th of next month along with form CMP-08 (on quarterly basis)
GSTR-5	GST Return for Non-Resident Taxable person.	Monthly	20th of the next month	20th of next month along with GSTR-5
GSTR-5A	GST Return for internet service provider and OIDAR (online information and database access or retrieval	Monthly	20th of the next month	20th of next month along with GSTR-5A
GSTR-6	GST Return for Input Service Distributor	Monthly	13th of the next month	13th of next month along with GSTR-6
GSTR-7	GST Return for authorities deducting tax at source (TDS)	Monthly	10th of the next month	10th of next month along with GSTR-7
GSTR-8	Details of supplies effected through e-commerce operator and the amount of tax collected	Monthly	10th of the next month	10th of next month along with GSTR-8
GSTR-9	Annual GST return for a normal taxpayer.	Annually	31st December of next financial year	NA
GSTR-9A	Simplified Annual Return for taxable person under compounding scheme.	Annually	31st December of next financial year	NA
GSTR-9B	Annual Return for E-commerce operator.	Annually	31st December of next financial year	NA
GSTR-9C	Annual Return for taxpayers whose annual turnover exceeds Rs  2 crores during the financial year and is required to get their accounts audited and file a copy of audited annual accounts and reconciliation statement.	Annually	31st December of next financial year	NA
GSTR-10	Final Return when registration is cancelled or surrendered	Only Once	Within 3 months of the date of cancellation or date of cancellation order, whichever is later.	NA
GSTR-11	Statement of inward supply by persons having Unique Identification number  and claiming Refund	Monthly	28th of the month following the month for which statement is filed.	NA

NOTE:- These are default due dates for GST return filing and GST payment, which may be extended by notifications.

(B) Extended Due date for Filing GST Return and Extended due date for payment of GST for the period from 01-04-2020 to 31-03-2021.

Only extended due dates of GST returns are given below and if due date of any return is not extended then default due dates as given above shall apply.

In the absence of any special remark in notification, If due date of filing of that return (along with which GST was to be paid) is extended then due date of payment is GST is also deemed to be extended to the same date unless separate dates are specified for payment or for calculation of interest. 

…

GST important Due dates for Financial year 2020-21Read More »

39th Meeting of GST council held in New Delhi today. Some of highlights are given below:-.

1. It was decided to raise the GST rate on mobile phones and specific parts to 18% form 12%.
2. A completely enhanced capacity with better system of GSTN will be made available by July 2020, instead of Jan 2021.
3. It was decided to reduce the GST rate on MRO services in respect of aircraft from 18 per cent to 5 per cent with full ITC.
4. It was decided that GST Rate on matchsticks (man-made or machine made) will be 12% for both types.
5. The council has decided to extend the deadline for filing the GST9R and GSTR9C for FY 18-19 till June 30 from March 31.
6. The council decided not to levy Late fees for the delayed filing of the annual return & reconciliation statement for 2017-18 & 2018-19 for taxpayers with aggregate turnover less than Rs 2 crore.
7. Turnover limit for mandatorily filing of GST has been increased to Rs 5 crore annual turnovers from Rs 2 crores.
8. The council has decided not to hike rates of fertilisers and footwear.

click here to download press release for 39th GST council meeting.

GST important Due dates for Financial year 2019-20

(A) Default Due date for filing of GST return and Default due date for payment of GST (From 01-04-2019 to 31-03-2020)

Please refer the table given below, wherein default due date for filing of GST returns is specified along with default due date for payment of GST for each category of taxpayer. Please be informed that these default due dates are extended frequently hence we need to be updated about extended due dates for filing GST return and for payment of GST.

In the absence of any special remark in notification, If due date of filing of that return (along with which GST was to be paid) is extended then due date of payment is GST is also deemed to be extended to the same date unless separate dates are specified for payment or for calculation of interest. 

 

GST Return Form	Applicability	Periodicity of GSTR filing	Default due date of filing GSTR	Default Due date for payment of GST
GSTR-1 (Quartely)	Detail of outward supplies of taxable goods or services for taxpayers with Annual Turnover upto Rs. 1.5 Cr.	Quarterly	13th of the next month	20th/22nd/24th of next month along with GSTR-3B (as applicable)
GSTR-1 (Monthly)	Detail of outward supplies of taxable goods or services fro taxpayers with Annual Turnover above Rs. 1.5 Cr.	Monthly	11th of the next month	20th/22nd/24th of next month along with GSTR-3B (as applicable)
GSTR-2	Detail of inward supply of taxable goods or Services (with ITC claim)	Monthly	15th of the next month (Currently filing of this return is suspended)	NA
GSTR-3	Finalization of outward & inward supplies along with payment of tax	Monthly	20th of the next month (Currently filing of this return is suspended)	NA
GSTR-3B	Simple Return to be filed for payment of GST (Currently filing of GSTR-2 & GSTR-3 is suspended, hence GSTR-3B is in use)	Monthly	20th (if turnover exceed 5cr. in previous FY) / 22nd (if turnover below 5cr. for "x" category of states) / 24th (if turnover below 5cr. for "Y" category of states) of the next month	20th/22nd/24th of next month along with GSTR-3B (as applicable)
GSTR-4	GST Return for Taxpayers under compounding scheme	Annually (w.e.f FY 19-20)	30th April of next FY	18th of next month along with form CMP-08 (on quarterly basis)
GSTR-5	GST Return for Non-Resident Taxable person.	Monthly	20th of the next month	20th of next month along with GSTR-5
GSTR-5A	GST Return for internet service provider and OIDAR (online information and database access or retrieval	Monthly	20th of the next month	20th of next month along with GSTR-5A
GSTR-6	GST Return for Input Service Distributor	Monthly	13th of the next month	13th of next month along with GSTR-6
GSTR-7	GST Return for authorities deducting tax at source (TDS)	Monthly	10th of the next month	10th of next month along with GSTR-7
GSTR-8	Details of supplies effected through e-commerce operator and the amount of tax collected	Monthly	10th of the next month	10th of next month along with GSTR-8
GSTR-9	Annual GST return for a normal taxpayer.	Annually	31st December of next financial year	NA
GSTR-9A	Simplified Annual Return for taxable person under compounding scheme.	Annually	31st December of next financial year	NA
GSTR-9B	Annual Return for E-commerce operator.	Annually	31st December of next financial year	NA
GSTR-9C	Annual Return for taxpayers whose annual turnover exceeds Rs  2 crores during the financial year and is required to get their accounts audited and file a copy of audited annual accounts and reconciliation statement.	Annually	31st December of next financial year	NA
GSTR-10	Final Return when registration is cancelled or surrendered	Only Once	Within 3 months of the date of cancellation or date of cancellation order, whichever is later.	NA
GSTR-11	Statement of inward supply by persons having Unique Identification number  and claiming Refund	Monthly	28th of the month following the month for which statement is filed.	NA

NOTE:- These are default due dates for GST return filing and GST payment, which may be extended by notifications.

 

(B) Extended Due date for Filing GST Return and Extended due date for payment of GST for the period from 01-04-2019 to 31-03-2020.

Only extended due dates of GST returns are given below and if due date of any return is not extended then default due dates as given above shall apply.

In the absence of any special remark in notification, If due date of filing of that return (along with which GST was to be paid) is extended then due date of payment is GST is also deemed to be extended to the same date unless separate dates are specified for payment or for calculation of interest. 

 

GST Return form	Extended Due Dates for filing GST return without late fee and payment of GST without interest
GSTR-1   (Monthly: Turnover more than 1.5 crores)	April-19 to Feb-20 : 11th of the next month March-20  =10th July 2020
GSTR-1   (Quartely: Turnover upto 1.5 crores)	Apr to June-19 = 31st July 2019 July to Sept-19 = 31st Oct. 2019 Oct to Dec.-19 = 31st Jan 2020 Jan to Mar-20 = 17th July 2020
GSTR-3B (where aggregate turnover exceeds Rs. 5 cr. in previous FY)	Jan-20 = 20th Feb 20 Feb-20 = 24th June 20 (but without interest payment of GST is allowed only upto 4th April 20) March-20 =24th June 20 (but without interest payment of GST is allowed only upto 5th June 20)
GSTR-3B ( for taxpayers of ‘category X” state where aggregate turnover upto Rs. 5 cr. in previous FY)	Jan-20 =22nd Feb 20 Feb-20 = 30th June 20 March-20 = 3rd July 20
GSTR-3B ( for taxpayers of ‘category Y” state where aggregate turnover upto Rs. 5 cr. in previous FY)	Jan-20 =24th Feb 20 Feb-20 = 30th June 20 March-20 = 5th July 20
GSTR-4 (annually)	Fy 2019-20 = 31st October 20 (payment is done through CMP -08 filing of which for Q4 of 2019-20 is extended upto 7th July 2020)
GSTR-5 (monthly)	For Feb & march-20: Extended to 31st August 2020
GSTR-5A (monthly)	For Feb & march-20: Extended to 31st August 2020
GSTR-6   (Monthly)	For Feb & march-20: Extended to 31st August 2020
GSTR-7 (Monthly)	Oct -2018 to July 2019: Extended to 31st august 2019 For Feb & march-20: Extended to 31st August 2020
GSTR-8   (Monthly)   GSTR-9 & 9C	For Feb & march-20: Extended to 31st August 2020   Due date for filing GSTR-9 & GSTR-9C for FY 2019-20 is also extended to 31-3-2021

GST payment is done along with GSTR-3B, CMP-08(for com, GSTR-5, GSTR-5A, GSTR-6, GSTR-7 & GSTR-8 please refer extended due dates for these GST returns for extended due date for payment of GST.

 

Note:- Category X’ State/UTs are: Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, the Union Territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands and Lakshadweep.

 

‘Category Y’ State/UTs are: Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand, Odisha, the Union Territories of Jammu and Kashmir, Ladakh, Chandigarh and Delhi.

 

(C) Applicable interest on late payment of GST for FY 2019-20.

 

• Where GST is paid after due date :- Interest @18% p.a.
• Where Excess ITC/reduction Claimed : Interest @24% p.a.

 

Interest on late payment of GST is calculated on day to day basis starting from the next day after due date to the date of actual payment.

 

But interest rate is relaxed to 9% p.a. if payment is done within the period specified in the table given below and if payment is not done even in this period that normal interest rate of 18% p.a. shall apply after that.

 

GST Retuns for Payment of GST	only 9% p.a interest if payment is made upto
GSTR-3B (where aggregate turnover exceeds Rs. 5 cr. in previous FY)	Feb-20 =24-06-20 March-20 = 24-6-20
GSTR-3B ( for taxpayers of ‘category X” state/UTs where aggregate turnover upto Rs. 5 cr. in previous FY)	Feb-20 =30-09-20 March-20 = 30-09-20
GSTR-3B ( for taxpayers of ‘category Y” state/UTs where aggregate turnover upto Rs. 5 cr. in previous FY)	Feb-20 =30-09-20 March-20 = 30-09-20

 

…

GST important Due dates for Financial year 2019-20Read More »

TDS is introduced in GST w.e.f. 01.10.2018: All about TDS in GST Law

GST Law mandates Tax Deduction at Source (TDS) vide Section 51 of the CGST/SGST Act 2017, Section 20 of the IGST Act, 2017 and Section 21 of the UTGST Act, 2017. GST Council in its 28th meeting held on 21.07.2018 recommended the introduction of TDS from 01.10.2018. CBIC vide Notification no. 50/2018-CT dated 13.09.2018, has notified that above provisions TDS would be applicable w.e.f 01.10.2018.

Some important provisions relating to TDS in GST law are as given below:-

• Following would be the deductors of tax in GST:-

  (a) a department or establishment of the Central Government or State Government; or
  (b) local authority; or
  (c) Governmental agencies; or
  (d) an authority or a board or any other body,-
  (i) set up by an Act of Parliament or a State Legislature; or
  (ii) established by any Government,
  with fifty-one per cent. or more participation by way of equity or control, to carry out any function; or
  (e) a society established by the Central Government or the State Government or a Local Authority under the Societies Registration Act, 1860 (21 of1860); or
  (f) public sector undertakings.

 

• Registration of Deductor:-

  Deductor is required to take registration [Sec 24(vi)] through common portal www.gst.gov.in by using PAN/TAN for deducting tax.

 

• Threshold Limit :-

  Tax is required to be deducted from the payment made / credited to a supplier, if the total value of supply under a contract in respect of supply of taxable goods or services or both, exceeds Rs. 2,50,000/- (Rupees two lakh and fifty thousand).
  This value shall exclude the taxes leviable under GST (i.e. ‘Central tax’, ‘State tax’, ‘UT tax’, ‘Integrated tax’ & Cess).

 

• Conditions and Rate of deduction:-Tax deduction is required if all the following conditions are satisfied –

  (a). Total value of taxable supply > Rs.2.5 Lakh under a single contract. This value shall exclude taxes & cess leviable under GST.
  (b). If the contract is made for both taxable supply and exempted supply, deduction will be made if the total value of taxable supply in the contract > Rs.2.5 Lakh. This value shall exclude taxes & cess leviable under GST.
  (c). Where the location of the supplier and the place of supply are in the same State/UT, it is an intra-State supply and TDS @ 1% each under CGST Act and SGST/UTGST Act is to be deducted if the deductor is registered in that State or Union territory without legislature.
  (d). Where the location of the supplier is in State A and the place of supply is in State or Union territory without legislature – B, it is an inter-State supply and TDS @ 2% under IGST Act is to be deducted if the deductor is registered in State or Union territory without legislature – B.
  (e). Where the location of the supplier is in State A and the place of supply is in State or Union territory without legislature B, it is an inter-State supply and TDS @ 2% under IGST Act is to be deducted if the deductor is registered in State A.
  (f). When advance is paid to a supplier on or after 01.10.2018 to a supplier for supply of taxable goods or services or both.

 

• Tax deduction is not required in following situations:

  a) Total value of taxable supply ≤ Rs. 2.5 Lakh under a contract.
  b) Contract value > Rs. 2.5 Lakh for both taxable supply and exempted supply, but the value of taxable supply under the said contract ≤ Rs. 2.5 Lakh.
  c) Receipt of services which are exempted. For example services exempted under notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017 as amended from time to time.
  d) Receipt of goods which are exempted. For example goods exempted under notification No. 2/2017 – Central Tax (Rate) dated 28.06.2017 as amended from time to time.
  e) Goods on which GST is not leviable. For example petrol, diesel, petroleum crude, natural gas, aviation turbine fuel (ATF) and alcohol for human consumption.
  f) Where a supplier had issued an invoice for any sale of goods in respect of which tax was required to be deducted at source under the VAT Law before 01.07.2017, but where payment for such sale is made on or after 01.07.2017 [Section 142(13) refers].
  g) Where the location of the supplier and place of supply is in a State(s)/UT(s) which is different from the State / UT where the deductor is registered.
  h) All activities or transactions specified in Schedule III of the CGST/SGST Acts 2017, irrespective of the value.
  i) Where the payment relates to a tax invoice that has been issued before 01.10.2018.
  j) Where any amount was paid in advance prior to 01.10.2018 and the tax invoice has been issued on or after 01.10.18, to the extent of advance payment made before 01.10.2018.
  k) Where the tax is to be paid on reverse charge by the recipient i.e. the deductee.
  l) Where the payment is made to an unregistered supplier.
  m) Where the payment relates to “Cess” component.

 

• TDS return:

  The filing the TDS Return in FORM GSTR-7 can be done both through the online mode in the GST portal as well as by using the offline tool.

 

• Time Limit, interest & Penalty :-

Make payment of deducted tax to the Government within 10 days after the end of the month in which deduction was made.

Submit return in Form GSTR-7 within 10 days after the end of the month in which deduction was made

Furnish system generated TDS certificate in Form GSTR-7A to the deductee within 5 days of crediting payment of TDS to the Government i.e. furnishing FORM GSTR-7.

Fails to furnish FORM GSTR-7 within due date:
Late fee payable (Section 47(1)): Rs. 100/- + Rs. 100/- per day (Maximum Rs. 5000/-) under CGST Act & SGST /UTGST Act separately.

Fails to make payment of deducted tax:
Both deducted tax and interest to be paid [Sec 50(1) read with Sec 51(6)]

Fails to furnish FORM GSTR-7A within due date:
Late fee payable [Section 51(4)]: Rs.100/- + Rs.100/- per day (Maximum Rs.5000/-) under CGST Act & SGST/UTGST Act separately

If excess amount deducted:
Refund may be claimed by the deductor / dedcutee as the case may be (if excess tax gets credited to the deductee then no refund shall be granted to the deductor)

All about Reverse charge Mechanism In GST.

What is Reverse Charge

Normally Supplier of goods or services is liable to pay tax to Government. Supplier collect tax amount from receiver along with value of goods or services and deposit it to the government. But in case of reverse charge, changeability gets reversed and Receiver of goods or services is liable to pay tax directly to Government.

Normal Charge:-

Supplier receives tax from buyer along with value of supply and deposit it to Government.

Reverse Charge:-

Supplier only receives value of supply from buyer and buyer is liable to deposit tax amount to Government directly.

Cases where Reverse Charge is Applicable.

A. Supply from an Unregistered dealer to a Registered dealer

Section 9 (4) of the Central Goods and Services Tax, 2017 (CGST Act in short) and Section 5(4) of Integrated Goods and Services Tax, 2017 (IGST Act in short) provides that tax in respect of the supply of taxable goods or services or both by a person, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

But these provisions kept on hold through various notification issued time to time. Recently these provisions are postponed till 30.09.2018 vide notification dated 29.06.2018. TDS provisions of GST are also postponed till 30.09.2018.

Download CGST notification

Download IGST Notification

Refer below given analysis of applicability of RCM in case of unregistered person:-

Applicability of IGST-RCM on Unregistered person u/s 5(4):-

1. 1^st July, 2017 to 12^th October, 2017:- IGST is payable on RCM basis on all interstate supply of goods or services or both, from very first rupee, received by a registered person from an unregistered person from outside state,
2. 13^th October, 2017 upto 30th Sept. 2018:- No IGST is payable on RCM basis on all interstate supply of goods or services or both, received by a registered person from an unregistered person located outside the state.
3. IGST shall be payable on RCM basis from 1^st Oct, 2018 on all interstate supply of goods or services or both, from very first rupee, received by a registered person from an unregistered person from outside state.

Applicability of CGST-RCM on Unregistered person u/s 9(4):-

1. 1^st July, 2017 and upto 12^st oct., 2018:- Exemption to all intra-state supply of goods or services or both was granted to the registered person who receives such supply from an unregistered person from payment of CGST on RCM basis subject to thresh hold limit of Rs. 5,000.00 per day in aggregate as provided by way of a proviso to notification 8/2017.
2. 13th Oct, 2018 and upto 30th Sept, 2018:That the exemption from payment of GST on RCM basis for receipt of intra-state supply of goods or services or both by a registered person from an unregistered person is applicable without any threshold limit w.e.f. 1^st July, 2017 and upto 31^st March, 2018.(Thershold limit of Rs. 5000/- omitted by notification 38/2017 dated 13.10.2017.
3. If GST on RCM basis has not be paid by a registered person in compliance of Notification 8/2017 supra, there is no need to deposit the same now.
4. Registered dealer can claim refund of GST paid on RCM basis upto 12^th October, 2017 where the GST paid on RCM was not eligible for ITC
5. That CGST and SGST shall be payable on RCM basis from 1^st Oct., 2018 on all intra-state supplies of goods or services or both,received by a registered person from an unregistered person.

B. Services through an e-commerce operator

If an e-commerce operator supplies services then reverse charge will be applicable to the e-commerce operator. He will be liable to pay GST.

For example, UrbanClap provides services of plumbers, electricians, teachers, beauticians etc. UrbanClap is liable to pay GST and collect it from the customers instead of the registered service providers.

If the e-commerce operator does not have a physical presence in the taxable territory, then a person representing such electronic commerce operator for any purpose will be liable to pay tax. If there is no representative, the operator will appoint a representative who will be held liable to pay GST.

C. Supply of certain goods and services specified by CBEC

CBEC has issued a list of goods and a list of services under section 9(3) of CGST Act, on which reverse charge is applicable.

Click Here for list of services under Reverse Charge. (Click here to download)

List of the Services Notified for Reverse Charge under section 9(3) of CGST Act 

S No	Description of supply of Service	Supplier of service	Recipient of service
1	Any service supplied by any person who is located in a non-taxable territory to any person other than nontaxable online  recipient.	Any person located in a non-taxable territory	Any person located in the taxable territory other than nontaxable online recipient.
2	GTA Services	Goods Transport Agency (GTA) who has not paid integrated tax at the rate of 12%	Any factory, society, cooperative society, registered person, body corporate, partnership firm, casual taxable person; located in the taxable territory
3	Legal Services by advocate	An individual advocate including a senior advocate or firm of advocates	Any business entity located in the taxable territory
4	Services supplied by an arbitral tribunal to a business entity	An arbitral Tribunal	Any business entity located in the taxable territory
5	Services provided by way of sponsorship to any body corporate or partnership firm	Any person	Any body corporate or partnership firm located in the taxable territory
6	Services supplied by the Central Government, State Government, Union territory or local authority to a business entity excluding, – (1) renting of immovable property, and (2) services specified below- (i)services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than Central Government, State Government or Union territory or local authority;(ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port oran airport (iii) transport of goods or passengers.	Central Government, State Government, Union territory or local authority	Any business entity located in the taxable territory
6A	Services supplied by the Central Government, State Government, Union territory or local authority by way of renting of immovable property to a person registered under the Central Goods and Services Tax Act, 2017 (12 of 2017).** Added with effect from 25.01.2018	Central Government, State Government, Union territory or local authority	Any person registered under the Central Goods and Services Tax Act, 2017 read with clause (v) of section 20 of Integrated Goods and Services Tax Act, 2017.
7	Services supplied by a director of a company or a body corporate to the said company or the body corporate	A director of a company or a body corporate	The company or a body corporate located in the taxable territory
8	Services supplied by an insurance agent to any person carrying on insurance business	An insurance Agent	Any person carrying on insurance business, located in the taxable territory
9	Services supplied by a recovery agent to a banking company or a financial institution or a non banking financial company	A recovery Agent	A banking company or a financial institution or a non banking financial  company, located in the taxable territory
10	Services supplied by a person located in non- taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India	A person located in non-taxable territory	Importer, as defined in clause (26) of section 2 of the Customs Act, 1962 (52 of 1962), located in the taxable territory
11	Supply of services by an author, music composer, photographer, artist or the like by way of transfer or permitting the use or enjoyment of a copyright covered under section 13(1) (a) of the Copyright Act, 1957 relating to original literary, dramatic, musical or artistic works to a publisher, music company, producer or the like	Author or music composer, photograph her, artist, or the like	Publisher, music company, producer or the like, located in the taxable territory
12	Supply of services by the members of Overseeing Committee to Reserve Bank of India	Members of Overseeing Committee constituted by the Reserve Bank of India	Reserve Bank of India.

 

List of Goods under reverse charge.

List of the notified goods under section 9(3) of CGST Act on which Reverse Charge Mechanism is applicable:-

S No	Particulars of supply of Goods	Supplier of Goods	Recipient of Goods
1	Cashew nuts, not shelled or peeled	Agriculturist	Any registered person
2	Bidi wrapper leaves (tendu)	Agriculturist	Any registered person
3	Tobacco leaves	Agriculturist	Any registered person
4	Silk yarn	Any person who manufactures silk yarn from raw silk or silk worm cocoons for supply of silk yarn	Any registered person
5	Raw cotton	Agriculturist	Any registered person.
6	Supply of lottery	State Government, Union Territory or any local authority	Lottery distributor or selling agent
7	Used vehicles, seized and confiscated goods, old and used goods, waste and scrap	Central Government, State Government, Union territory or a local authority	Any registered person

Time of Supply in Case of Reverse Charge.

A. Time Of Supply in case of Goods

In case of reverse charge, the time of supply shall be the earliest of the following dates:

• the date of receipt of goods
• the date of payment*
• the date immediately after 30 days from the date of issue of an invoice by the supplier

If it is not possible to determine the time of supply, the time of supply shall be the date of entry in the books of account of the recipient.

*This point is no more applicable based this Notification No. 66/2017 – Central Tax issued on 15.11.2017

B. Time Of Supply in case of Services

In case of reverse charge, the time of supply shall be the earliest of the following dates:

• The date of payment
• The date immediately after 60 days from the date of issue of invoice by the supplier

If it is not possible to determine the time of supply, the time of supply shall be the date of entry in the books of account of the recipient.

Other Important Points about Reverse Charge.

• Self-invoicing is to be done when you have purchased from an unregistered supplier AND such purchase of goods or services falls under reverse charge. This is due to the fact that your supplier cannot issue a GST-compliant invoice to you, and thus you become liable to pay taxes on their behalf. Hence, self-invoicing, in this case, becomes necessary.
• All taxpayers required to pay tax under reverse charge have to register for GST and the threshold of Rs 20 Lakhs is not applicable to them.
• Tax paid on reverse charge basis will be available for input tax credit if such goods and/or services are used, or will be used, for business. The recipient (i.e., who pays reverse tax) can avail input tax credit. But ITC cannot be used for payment of tax under reverse charge.
• An ISD cannot make purchases liable to Reverse Charge. If the ISD wants to procure such supplies and take the Reverse Charge paid as credit, the ISD should register as a Normal Taxpayer.
• Unlike Service Tax, there is no concept of partial reverse charge in GST.

CBDT has released parameters for manual selection of Income Tax Returns for Complete Income Tax Scrutiny during financial year 2018-19 vide Instruction No. 04/2018 Dated: 20th August 2018.

Niti Aayog has suggested the government to bring down import duty on gold from the existing level of 10 per cent and also slash the GST rate on the precious metal from the current 3 per cent. It has also recommended the govt to review and revamp the gold monetisation scheme and the sovereign gold bond scheme and introduce new gold savings account in banks.

CBIC extends the due dates for filing Form GSTR-3B for the m/o JUL’18 & AUG’ 18 for the registered persons in the flood affected Kerala, Kodagu district in Karnataka and Mahe in the UT of Puducherry to 05.10.18 & 10.10.18 respectively– NotiNo.36/2018 – CT, dt.24.08.18.

The office of the state GST (erstwhile commercial tax department) has issued a notification offering existing taxpayers a window till August 31 to complete their migration to GST.

SEBI extended the trading timings in securities lending and borrowing (SLB) segment by over two hours till 5 pm. “It has been decided to permit stock exchanges to set their trading hours in the SLB Segment… between 9 AM and 5 PM,” the Securities and Exchange Board of India (Sebi) said in a circular.

ICAI releases ICAI Valuation Standards effective for the valuation reports issued on or after 1st July, 2018. https://resource.cdn.icai.org/51432vsb41162.pdf.

Credit: CA Raj Chawla.

As per GST Portal, Last date of filing GSTR-3B for the month of July, 2018 has been extended to 24th Aug, 2018. Official Order is expected in sometime.

For visiting the GST portal please click the following link

https://www.gst.gov.in/

Due dates for filing GSTR 1 for all months from July 2018 till March 2019 has been extended to 11th of the next month.

Download notification

Summary of GST meeting 4th August 2018:

1. GOM for MSME Issues:

a. GST Council constitutes a Group of Ministers (GoM) to look into issues of MSME’s.

b. Finance Minister’s of Assam, Delhi, Punjab & Kerala will be part of this GoM.

c. Finance Minister of State – Shri Shiv Pratap Shukla ji will be head of this GoM.

Further a Sub-Committee to be formed under this GoM. This Committee will interact with MSME’s and listen to issues like

i. Return filing with Turnover upto Rs. 1.50 Crores

ii. Competition & Benefits of co’s with turnover upto Rs. 1.50 Crores

Further another sub-committee named fitment committee will submit report and will provide suggestions where rate changes are required.

2. Adding more MSME in GST Network

a. After GST Council meeting Mr. Sushil Modi, Finance Minister of Bihar, stated that it was also discussed to add more MSME to the GST Network.

b. He also discussed that steps would be taken in next meeting to benefit MSME’s. 

3. Cash Back Facility:

a. GST Council gives approval for Pilot Project to promote Digital Payments through cash back of GST. 

b. 20% cash back of GST paid to be proposed. Subject to maximum Rs. 100/-.

c. Cash Back applicable on payments through RuPay Debit Card, Bhim, USSD etc.

d. It’s on wish of States to launch this incentive scheme or not.

4. West Bengal opposes idea of Digital incentivization of GST!!

a. West Bengal Finance Minister Mr. Amit Mitra opposes the idea of Digital incentivization.

b. He said that these incentives will come from the GST’s revenue that was collected dearly. 

c. He also says that total revenue loss in Q1 has been Rs 43,000 cr. 

5. Next meeting to be held on month end of September’18 at Goa.

 

The GST Council in its 28^th GST Council Meeting held on July 21, 2018 under the Chairmanship of Shri Piyush Goyal, Union Minister for Railways, Coal, Finance & Corporate Affairs has approved the new return formats. The Council had earlier approved the basic principles of GST return design and directed the law committee to finalize the return formats and changes in law. In pursuance thereof, the CBIC has placed Note on draft GST simplified returns and return formats in public domain on July 30, 2018 for perusal and feedback of stakeholders. The Note on draft format of GST simplified return, inter alia, contains brief note which lists the salient features of the new return format and business process for the information of trade and industry and other stakeholders in two parts i.e. Part – A which specifies the Key features of Monthly Return and Part – B which specifies the Key features of Quarterly Return in GST. Gist of both the parts is summarized hereunder for easy digest:

Part A: Key features of the Monthly Return

 

• Monthly Return and due-date:

o  All taxpayers except small taxpayers, composition dealer, Input Service Distributor (ISD), Non-resident registered person, persons liable to deduct tax or collect tax at source u/s 51/52 of CGST Act, 2017 shall file one monthly return.
o Dates of return filing will be on staggered manner based on the reported turnover in last year i.e. 2017-18, annualized for the full year. A newly registered taxpayer shall be classified on the basis of self-declaration of the estimated turnover
o  The due date for filing of monthly return for the large taxpayer shall be 20^th of the next month

• Nil return and Small taxpayers:

o   Taxpayers having no purchases, no output tax liability and no input tax credit shall file one NIL return for the entire quarter through SMS facility.

o    Taxpayers having a turnover up to Rs. 5 Cr. in the last financial year shall be considered as small taxpayer, who will have optional facility to file quarterly return with monthly payment of taxes on self-declaration basis.

• Continuous uploading and viewing

o      Facility of continuous uploading of invoices is available to supplier anytime during the month which shall also be continuously visible to the recipient.

o      Invoices uploaded by the supplier by 10^th of succeeding month shall be auto-populated in the liability table of the main return of the supplier

o     After the due date for the filing of return is over, the recipient shall also be able to see the return filing status of the supplier and thus be aware that whether the tax liability on purchases made by him has been discharged by the supplier or not.

• Due date for uploading invoices and action to be taken by the recipient

o   Taxes payable on invoices uploaded by the supplier by 10^th of the next month which can be availed as ITC shall be posted in the relevant field of the input tax credit table of the return of the recipient by 11^th of the next month

o   Invoices uploaded after 10^thof next month by the supplier shall get posted in the relevant field of the return of the subsequent month of the recipient though viewing shall be continuous.

o    After 11^th of the next month, the recipient shall be able to accept, reject or keep pending a particular invoice

but the maximum limit of eligible ITC will be based on the invoices uploaded by the supplier upto 10^th of the subsequent month.

o  In the transition phase of six months, the recipient would be able to avail ITC on self-declaration basis even on the invoices not uploaded by the supplier by 10^th of the next month or thereafter using the facility of availing ITC on missing invoices.

• Invoice uploaded but return not filed:

o    It shall be treated as self-admitted liability by the supplier.

o    Recovery proceedings shall be initiated against him after allowing for a reasonable time for filing of the return  and payment of taxes.

• Unidirectional Flow of document:

o  The invoices or debit notes uploaded by the supplier shall be the valid document for availing ITC by the  recipient.

o   The Invoices or debit notes which have not been uploaded by the supplier and the recipient has availed ITC shall be considered as “missing invoices”. If such missing invoices are not uploaded by the supplier within prescribed time period, then ITC on such invoices or debit notes shall be recovered from the recipient.

• Missing invoice reporting:

o   Missing invoices shall be reported by the supplier in the main return for any tax period with interest or penalty as applicable.

o   Reporting of missing invoices by recipient can be delayed up to two tax periods to allow recipient to follow up and get the missing invoice uploaded from the supplier.

o   Taxpayers filing quarterly returns shall report missing invoices in the next quarter.

• Payment of tax:

o   Liability declared in the return shall be discharged in full at the time of filing of the return by the supplier in the present return FORM GSTR 3B.

• Recovery of Input tax credit:

o   There will be no automatic reversal of ITC at the recipient’s end where taxes has not been paid by the supplier.

o   In case of default in payment of taxes by the supplier, recovery shall be first made from the supplier. Only in exceptional circumstances like missing taxpayer, closure of business by the supplier, etc., recovery shall be made from the recipient.

• Locking of Invoices:

o    Locking of invoices raised by supplier means acceptance of transaction reported in the Invoices by the recipient.

o     On filing of the return by recipient, all invoices shall deemed to be accepted except invoices kept pending or rejected.

o    A wrongly locked invoice shall be unlocked online by the recipient himself subject to reversal of ITC by him and online confirmation thereof.

• Amendment of invoices:

o       Amendment of an invoice is only possible where ITC has not been availed and Invoice is not locked by the recipient.

o    Invoices on which ITC has been availed by the recipient (i.e. locked invoices) will not be allowed to be amended by the supplier and to amend the reported particular of such invoices; a credit or a debit note will have to be issued by the supplier.

• HSN:

o    Now the table for reporting supplies with the tax liability at various tax rates shall not capture HSN but would continue to capture supplies at different tax rates as is the present practice.

o      The details of HSN shall be captured at four digits or more in a separate table in the regular monthly return.

• Return format:

o     The main return shall have two main tables – one for reporting supplies on which tax liability arises and one for availing ITC.

o   Return shall have annexure of invoices which shall auto-populate the output liability table in the main return.

• Payment of multiple liability to be summarized period wise:

o      Liability in the return arising out of invoices of different dates shall be summarized period wise. However, one payment for the total tax liability on all tax invoices shall be allowed to be made.

o      Interest shall be calculated on invoices which are reported late.

• Amendment return:

o     Facility for filing of amendment return shall be available to taxpayer. Amendment return is different than a regular return.

o     Two amendment returns can be filed for each tax period within the time period specified in Section 39(9) of the CGST Act, 2017 i.e. by due date for furnishing September month return or second quarter following end of financial year or actual date of furnishing relevant annual return, whichever is earlier.

o   Amendment of entries which flow from the annexure of the main return shall be allowed only with the amendment of the details filed in the annexure.

• Amendment of missing invoices:

o    Amendment of missing invoices reported later by the supplier shall be carried out through the amendment return of the relevant tax period to which the invoice pertains.

o    Thus, it is better to avail the amendment facility once all the invoices are uploaded, so that invoices reported late can also be amended through the amendment return.

• Amendment of details other than that of invoice:

o    All user entries of ITC table in the main return would be allowed to be amended.

o    Change in the closing balance of ITC shall be affected based on the declaration in the amendment return of the taxpayer. Thus, the opening and closing balances of intervening month(s) shall not get impacted.

• Payment due to amended liability & Negative liability:

o    Payment would be allowed to be made through the amendment return as it will help save interest liability for the taxpayer. ITC, if available in the electronic credit ledger can also be used for payment of the liability in the amendment return.

o    Negative liability arising from the amendment return shall be carried forward as negative liability in the regular return of the next tax period.

o    For change in liability of more than 10% through an amendment return, a higher late fee may be prescribed to ensure that reporting is appropriate in the regular return.

• Exports:

o    The table for export of goods in return would contain details of the Shipping Bill also which can be filled either at the time of filing the return or after filing the return. A separate facility for uploading shipping bill details at a later date shall be provided to the exporters.

o    Filing the details of the Shipping Bill in the return at a later date shall not be considered as filing of an amendment return.

o    Once the information of Shipping Bill is completed, the entire data shall be transmitted to the ICEGATE. The amended data would also be transmitted to ICEGATE.

o    Till data starts flowing online from ICEGATE or SEZ online in the input tax credit of the return, credit on imports and supplies from SEZ shall be availed on self-declaration basis.

• Supply side control:

o    For a newly registered taxpayer and a taxpayer who has defaulted in payment of tax beyond a time period and/or above a threshold, uploading of invoices shall be allowed only up to that threshold amount or only after the default in payment of tax is made good respectively.

o    If the supplier does not make the default good, the invoice of such supplier shall not be populated in the viewing facility of the recipient and consequently, the recipient would not be able to avail ITC on such invoices till the default in payment of tax by the supplier for the past period is made good.

• Profile based return:

o    A questionnaire shall be provided to the taxpayer and only such part of return shall be shown to him which is relevant to his profile.

• Purchase information in the annual return:

o    Invoices/ Supplies on which the recipient does not intend to take ITC but are kept pending or rejected will have to be reported separately in the Annual return.

• Suspension of registration:

o    From the date of suspension to the date of cancellation of registration, return would not be required to be filed and also invoice uploading shall not be allowed for the period beyond the date of suspension.

 

Part B: Features of Quarterly Returns:

 

• Quarterly filing and monthly payments:

o    A facility has been provided to small taxpayer to file quarterly return, who had a turnover up to Rs. 5 Cr. in the last financial year.

o    But such taxpayer will pay their taxes on monthly basis and avail ITC on self-declaration basis to pay the monthly taxes.

 

• Quarterly or monthly return:

o    Option for filing monthly or quarterly return shall be taken at the beginning of the year. Thereafter they would continue to file the return during the year as per option selected

o    Option to change from monthly to quarterly or vice-versa shall be allowed only once and at the beginning of any quarter.

 

• Options in quarterly return:

o  Small taxpayers having turnover up to Rs. 5 Cr. would have option to file one of three forms, namely – Quarterly return, Sahaj or Sugam.

o  Quarterly return shall be akin to the monthly return except that it has been simplified and shall not have the compliance requirement in relation to –

I. Missing and pending invoices as small taxpayers do not use these procedures in their inventory management.

II.Supplies such as non-GST supply, exempted supply etc. as they do not create any liability.

III.The details of ITC on capital goods credit shall also not be required to be filled.

This information shall be required to be filled in the Annual Return. Small taxpayers who would like to facility of missing and pending invoice may file monthly return.

 

• Quarterly Return:

o    Option to create profile in the quarterly return shall also be available. Sahaj and Sugam are predetermined profiles of the quarterly return.

 

• Sahaj and Sugam Returns:

o    Small taxpayers often have purchases only from the domestic market and sales in the domestic market i.e. B2B purchases locally and supplies either as B2C or B2B+B2C.

o Two simplified quarterly returns are proposed for them -“Sahaj” (only B2C outward supplies) and “Sugam” (both B2B and B2C outward supplies).

 

• Uploading of invoices:

o    The recipients from these small taxpayers would need uploaded invoice for availing ITC.

o   Thus, small taxpayers would be given facility to continuously upload invoices in normal course. Invoices uploaded by 10^th of the following month which would be available as ITC to the recipient in the same month as is the case in case of purchases from large taxpayers.

 

• Payment declaration form for payment of monthly taxes:

o    Small taxpayers would continue to pay taxes on monthly basis by using a payment declaration form in first and second month of every quarter.

o    In the payment declaration form, self-assessed liability and ITC on self-declared basis shall be declared.

o   Late payment of tax liability including that in first and second month of the quarter shall attract interest liability.

• HSN:

o    HSN wise details would need to be provided at 4-digit level or more in the quarterly return.

• Pending and missing invoices:

o    Quarterly return shall not have the compliance requirement of missing and pending invoices as small businesses do not use these procedures in their inventory management.

 

(Credit: Compiled by A2Z Taxcorp LLP)

28st GST Council meeting held on 21^st July 2018 and we are presenting here the key decisions taken in this meeting . Some of the decisions will be given effect by way of issuing Notifications and few are to be placed in Parliament to amend the GST Laws.

Key Decisions:-

• Return Simplification. Quarterly returns for Taxpayers with turnover up to Rs. 5 crores with monthly tax payments. 93% to fall under this category.
  
• GST on the supply of e-books reduced from 18 to 5%.
• Composite supply of food and drinks in restaurant, mess, canteen,
  eating joints and such supplies to institutions (educational, office, factory, hospital) on a contractual basis to be taxed at 5%.
• GST exempted on Sanitary pads, Deities made of stone, marble or wood, Raakhis, without any precious metals, the Raw material used in brooms Commemorative coins circulated by the RBI or government, Saal leaves, Fortified milk
• GST reduced from 12% to 5% on Handloom dari, Fertilizer grade phosphoric acids
• GST reduced from 28% to 18 %: Lithium-ion batteries, Vaccum cleaners, Food grinders, mixers, Shavers, hair clippers, Storage water heaters, Electric smoothing irons, Watercooler, Ice cream freezer, Refrigerators, Hand dryers, Cosmetics, Perfumes, Scents, Paint, Varnishes
• GST on Hotel Tariffs based on actual transaction value instead of declared tariff
• Cross border-related party transactions in sectors like banking, IT to be exempted from GST
• Major reliefs/exemptions to service sectors in (i) Agriculture, farming and food processing industry, (ii) Education, training and skill development, (iii) Pension, social security and old age support.
• Refund to fabrics on account of inverted duty structure
• The opening of Migration Window till 31^st August 2018 without any late fee.
• The upper limit of turnover for opting for composition scheme to be raised from Rs. 1 crore to Rs. 1.5 crore.
• Composition dealers to be allowed to supply services (other than restaurant services), for up to a value not exceeding 10% of turnover in the preceding financial year or Rs. 5 lakhs, whichever is higher.
• GST under RCM on supplies made by unregistered persons to be restricted to only notified categories and supplies.
• The threshold registration exemption limit in the States of Assam, Arunachal Pradesh, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand to be increased to Rs. 20 Lakhs from Rs. 10 Lakhs.
• Taxpayers may opt for multiple registrations within a State/Union territory in respect of multiple places of business located within the same State/Union territory.
• Mandatory registration is required for only those e-commerce operators who are required to collect tax at source.
• Registration to remain temporarily suspended while the cancellation of registration is under process so that the taxpayer is relieved of continued compliance under the law.

• No GST on Supply of goods to any person from outside India before clearance for home consumption

• The scope of input tax credit is being widened, and it would now be made available in respect of the following:

a. Few exempted supplies specified in Schedule III;

b. Motor vehicles for transportation of persons having a seating capacity of more than thirteen (including the driver), vessels and aircraft;

c. Motor vehicles for transportation of money for or by a banking company or financial institution;

d. Services of general insurance, repair and maintenance in respect of motor vehicles, vessels and aircraft on which credit is available; and

e. Goods or services which are obligatory for an employer to provide to its employees, under any law for the time being in force.

• No Interest liability on the reversal of input tax credit on failure to pay to the Supplier by the recipient within 180 days from the date of issue of invoice

• Registered persons may issue consolidated credit/debit notes in respect of multiple invoices issued in a Financial Year.

• Supply of services to qualify as exports, even if payment is received in Indian Rupees, where permitted by the RBI.
  

 

28th GST Council meet on Saturday i.e. 21st July 2018: Return simplification, law tweaks, setting up of tribunal on table

The proposed amendments to the goods and services tax (GST)-related laws, simplification of GST returns, the creation of GST appellate tribunal and the revenue position of states will be among the key items slated for discussion in the upcoming 28th GST Council meeting on Saturday. Rate cuts and clarification for 40 handicraft items, 32 services and 35 goods including exemption to marble/stone idols, sanitary napkins, sal leaves will also be discussed, alongside reports of six committees and ministerial panels on issues such as the imposition on cess on sugar and levies on lottery, officials said (as published in Indian Express).Click here to read full news.

GST important Due dates for Financial year 2018-19

(A) Due date for payment of GST (From 01-04-2018 to 31-03-2019)

Taxpayer	Periodicity of GST Payment	Due Date for payment of GST
Taxpayers with Annual Turnover upto Rs. 1.5 Crore (filing GSTR-1 on quarterly basis)	Monthly	20th of Next month after the month in which Time of Supply occurs along with GSTR-3B
Taxpayers with Annual Turnover above Rs. 1.5 Crore (filing of GSTR-1 on monthly basis)	Monthly	20th of Next month after the month in which Time of Supply occurs along with GSTR-3B
Taxpayers under composition scheme (filing GSTR-4 on quarterly basis)	Quarterly	18th of Next month after the quarter in which Time of Supply occurs along with GSTR-4
Non-Resident Taxable person (Filing GSTR-5)	Monthly	20th of Next month for every month along with GSTR-5.
Authorities deducting tax at source (TDS) (filing GSTR-7)	Monthly	10th of Next month after the month in which Time of Supply occurs along with GSTR-7.
E-commerce operator (filing GSTR-8)	Monthly	10th of Next month after the month in which Time of Supply occurs along with GSTR-8

(B) Due date for Filing GST Return (From 01-04-2018 to 31-03-2019)

GSTR-1-Detail of outward supplies of taxable goods or services (Default due date is 10th of Next month), Extended due date is given Below:-

• For Taxpayer with aggregate turnover upto Rs. 1.5 crore need to file GSTR-1 on quarterly basis:

April 2018 to June 2018: Extended due date is 31st Oct 2018

July 2018 to Sept 2018: Extended due date is 30th Oct. 2018

Oct 2018 to Dec. 2018: Extended due date is 31st Jan. 2019

Jan. 2019 to March 2019: Extended due date is 30th April 2019

• For Taxpayer with aggregate turnover above Rs. 1.5 crore, need to file GSTR-1 on monthly basis:

April 2018 to September 2018: Extended due date is 31st Oct 2018

Due date for GSTR-3B & GSTR-1 only for newly migrated taxpayers for months July 2017 to Nov 2018 is extended till 31st December 2018

GSTR-3B- Simple return for payment of GST only for July-17 to Sept-18 (Default due date is 20th of Next month), Extended due date is given Below:-

Month	Last Date of filing GSTR-3B
Apr-2018	22nd May 2018
May-2018	20th June 2018
Jun-2018	20th July 2018
Jul-2018	24th August 2018
Aug-2018	20th September 2018
Sept-2018	20th October 2018
Oct-2018	20th of next month
Nov-2018	20th of next month
Dec-2018	20th of next month
Jan-2019	20th of next month
Feb-2019	20th of next month
march-2019	20th of next month

Due date for GSTR-3B & GSTR-1 only for newly migrated taxpayers for months July 2017 to Nov 2018 is extended till 31st December 2018

Due date of other GST returns is given below:- 

GST Return form	Return particulars	Default Due Date	Extended Due Date (if extended)
GSTR-2 (Monthly)	Detail of inward supply of taxable goods or Services (with ITC claim)	15th of next month	Extended due date shall be worked out by a committee of officers and shall be intimated in due course of time.Filing currently suspended
GSTR-3 (Monthly)	Finalization of outward & inward supplies along with payment of tax	20th of next month	Extended due date shall be worked out by a committee of officers and shall be intimated in due course of time.Filing currently suspended
GSTR-4 (Quarterly)	Return for Taxpayers under compounding scheme	18th of next month after end of quarter.
GSTR-5 (Monthly)	Return for Non-Resident Taxable person.	20th of the next month
GSTR-6 (Monthly)	Return for Input Service Distributor	13th of the next month	April-2018  to June-2018: Extended to 31st July 2018. July-2018 to March-2019: Not yet announced.
GSTR-7 (Monthly)	Return for authorities deducting tax at source (TDS)	10th of the next month	–
GSTR-8 (Monthly)	Details of supplies effected through e-commerce operator and the amount of tax collected	10th of the next month	–
GSTR-9 (Annually)	Annual Return	31st December of next financial year	Extended to 31st Dec. 2020
GSTR-9A (Annually)	Simplified Annual Return for taxable person under compounding scheme.	31st December of next financial year	GSTR-9A filing for composition taxpayers waived off for FY 2017-18 and FY 2018-19
GSTR-9B (Annually)	Annual Return for E-commerce operator.	31st December of next financial year	–
GSTR-9C (Annually)	Annual Return for taxpayers whose annual turnover exceeds Rs  2 crores during the financial year and is required to get their accounts audited and file a copy of audited annual accounts and reconciliation statement.	31st December of next financial year	Extended to 31st Dec. 2020
GSTR-10 (Only Once)	Final Return when registration is cancelled or surrendered	Within three months of the date of cancellation or date of cancellation order, whichever is later.	–
GSTR-11 (Monthly)	Statement of inward supply by persons having Unique Identification number  and claiming Refund	28th of the month following the month for which statement is filed.	–

Note:  (1) Normal Late fees for filing GST Returns is as follows:-

• Rs. 200 per day of delay
• Rs. 100 per day of delay for taxpayers having Nil tax liability for the month.

(This is subject to maximum limit of Rs. 5000 but maximum limit for delay in filing GSTR-9 is 0.25% of turnover for that financial year)

(2) Reduced Late fees for filing GST Returns is as follows:-

CBIC has notified reduced amount of late fees for a delay in filing some GST returns for a temporary period as a relief measure for businesses having difficulties using GST portal. But the reduced fee is not applicable for GSTR-7, GSTR-8, GSTR-5A & GSTR-9. normal late fee will apply for these cases. Reduced late fee is as follows:

• Rs. 50 per day of delay
• Rs. 20 per day of delay for taxpayers having Nil tax liability for the month.

(2) Some of late fees are waived off completely and some are reduced. Detail is provided below:-

Following are the changes that have been made on the applicability of the late fee law:

(3) Interest on late payment of GST is 18% p.a. on the amount of outstanding tax to be paid upto the date of payment.

Note;-The late fee waiver for GSTR-1 for the period July 2017 to November 2019, further extended till 17th January 2020 from 10th January 2020.

Section 9 (4) of the Central Goods and Services Tax, 2017 (CGST Act in short) and Section 5(4) of Integrated Goods and Services Tax, 2017 (IGST Act in short) provides that tax in respect of the supply of taxable goods or services or both by a person, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

But these provisions kept on hold through various notification issued time to time. Recently these provisions are postponed till 30.09.2018 vide notification dated 29.06.2018. TDS provisions of GST are also postponed till 30.09.2018.

Download CGST notification

Download IGST Notification

Refer below given analysis of applicability of RCM in case of unregistered person:-

Applicability of IGST-RCM on Unregistered person u/s 5(4):-

1. 1^st July, 2017 to 12^th October, 2017:- IGST is payable on RCM basis on all interstate supply of goods or services or both, from very first rupee, received by a registered person from an unregistered person from outside state,
2. 13^th October, 2017 upto 30th Sept. 2018:- No IGST is payable on RCM basis on all interstate supply of goods or services or both, received by a registered person from an unregistered person located outside the state.
3. IGST shall be payable on RCM basis from 1^st Oct, 2018 on all interstate supply of goods or services or both, from very first rupee, received by a registered person from an unregistered person from outside state.

Applicability of CGST-RCM on Unregistered person u/s 9(4):-

1. 1^st July, 2017 and upto 12^st oct., 2018:- Exemption to all intra-state supply of goods or services or both was granted to the registered person who receives such supply from an unregistered person from payment of CGST on RCM basis subject to thresh hold limit of Rs. 5,000.00 per day in aggregate as provided by way of a proviso to notification 8/2017.
2. 13th Oct, 2018 and upto 30th Sept, 2018:That the exemption from payment of GST on RCM basis for receipt of intra-state supply of goods or services or both by a registered person from an unregistered person is applicable without any threshold limit w.e.f. 1^st July, 2017 and upto 31^st March, 2018.(Thershold limit of Rs. 5000/- omitted by notification 38/2017 dated 13.10.2017.
3. If GST on RCM basis has not be paid by a registered person in compliance of Notification 8/2017 supra, there is no need to deposit the same now.
4. Registered dealer can claim refund of GST paid on RCM basis upto 12^th October, 2017 where the GST paid on RCM was not eligible for ITC
5. That CGST and SGST shall be payable on RCM basis from 1^st Oct., 2018 on all intra-state supplies of goods or services or both,received by a registered person from an unregistered person.

What is Job Work?

Any treatment or process undertaken by a person on goods belonging to another registered person is called as Job Work. The registered person on whose goods job work is performed is called Principal and the person who treats or processes the goods sent by the principal is called Job Worker. For Example, M/s ABC sent yarn to M/s XYZ for the purpose of dyeing on it. After completion of dye work, material will be sent back to M/s ABC. It is a job work. In another exampl, M/s ABC sent his machinery to M/s XYZ for repair work. After completion of repair work, machinery will be sent back to M/s ABC. It is a Job Work.

Taxability of Job Work in GST regime.

• The principal manufacturer will be allowed to take credit of tax paid on the purchase of goods sent on job work.
• As per Section 143 of CGST Act, the principal can send the goods to a job worker for job work without payment of tax if it is received back in prescribed time limit.
• If the goods are not brought back or supplied from the place of job worker, within the stipulated time, it is considered as supply on the date when the goods were sent to job worker (in case good are sent  directly from the place of supply of the supplier of such goods then Date of receipt by job worker) and the invoice should be issued by the principal for the same or challan issued will be treated as an invoice for such supply.

• The principal can also send the goods from the place of one job worker to another and so on.
• E-waybill is required to be generated irrespective to value of goods sent in case of inter-state movement of goods for job work.

Time limit for receiving back the goods sent for Job Work

• To avail tax free movement of goods forbjob work, goods sent for Job Work must be received back by the principal manufacture within the following period:

1. Capital Goods- 3 years
2. Input Goods- 1 year

• The principal should, within one year in case of inputs and three years in case of capital goods, bring back the goods or supply the same directly from the place of job worker including supply for export purpose.
• The provisions of return of goods is not applicable in case of moulds and dies, jigs and fixtures or tools supplied by the principal to job-worker.

Points to be noted for Job Work

• The job worker can also use his own goods, in addition to the goods sent by the principal, for providing the services of job work.
• The job worker need not necessarily to get GST registration for sending the goods by the principal for job work
• The job worker is to get registration only when his turnover exceeds the threshold limit of Rs.20 lakhs in a financial year, irrespective of his place of business is in the same state where principal is located or outside state
• The principal can supply the goods, after the completion of job work, from the place of job worker provided that the place has been declared as his additional place of business except in case the job worker is registered
• All goods sent for job work must be accompanied by a challan. The challan will be issued by the principal.
• Any waste and scrap generated during the job work process may be supplied by the job worker on payment of tax, if he is registered, or by the principal, if the job worker is unregistered
• The principal is allowed to take input credit on the inputs/capital goods that is sent to job worker for job work purpose even the inputs are sent to job worker directly from the supplier.
• The period of one year/three years is counted from the date of receipt of inputs/capital goods by the job worker.
• The goods can be sent by the principal to the job worker, and vice versa and from the job worker to another job worker by delivery challan as prescribed
• The principal is required to file the GST ITC-04 every quarter by 25th day from the end of the quarter about the details of job work sent and received back
• The delivery challan should be prepared in triplicate.  Two copies of the same may be sent to job worker along with goods.  The job worker should send one copy of the challan while returning the goods to the principal
• Where the goods are sent from one job worker to another job worker, either principal or job worker can issue the challan or the challan issued by the principal can be endorsed by the job worker indicating the quantity and description of goods and so on
• Where the goods move from the place of supplier to the job worker directly, the principal should issue a delivery challan to the job worker directly.  The goods should be moved along with invoice mentioning the job worker as consignee
• In case of imports, the goods can be moved from customs to job worker with a copy of bill of entry along with delivery challan issued by the principal
• Where the goods are sent by one job worker to another job worker in piecemeal, the challan issued by the principal cannot be endorsed.  A fresh challan to be issued by the job worker
• The value of moulds and dies, jigs and fixtures or tools may not be included in the value of job work service provided its value has been factored in the price of job work service
• Place of supply shall be determined, where the goods are supplied from the place of job worker, based on the place of the principal

 

What is E-Way Bill?

E-way bill is an electronic document generated online from E-way bill portal (https://ewaybillgst.gov.in/) which is required to be carried by the person-in-charge of conveyance for movement of goods from one place to another. E-way bill document contains 12 digit EWB number. Section 68 of the Central Goods and Services Tax Act, 2017 read with Rule 138 of CGST Rules, 2017 deals with provision relating to E-Way Bill. The Central Government has notified www.ewaybillgst.gov.in as the Common Goods and Services Tax Electronic Portal for furnishing electronic way bill.

In other words, An e-way bill is a permit generated in electronic form, which is required to be generated and carried along for the movement of goods of value more than Rs. 50,000 from one place to another place. Rule 138 of the CGST Rules, 2017 provides for the e-way bill mechanism and in this context it is important to note that “information is to be furnished prior to the commencement of movement of goods” and “is to be issued whether the movement is in relation to a supply or for reasons other than supply”.

E-way bill is a mechanism to ensure that goods being transported comply with the GST Law and is an effective tool to track movement of goods and check tax evasion. The person in charge of a conveyance shall carry (1) Invoice/Bill of supply/Delivery challan  (2) Copy of E Way Bill.

What information required for generating E-way Bill?

An E-Way bill consists of two parts-

Part A comprising of details of GSTIN of recipient, place of delivery (PIN Code), invoice or challan number and date, value of goods, HSN code, transport document number (Goods Receipt Number or Railway Receipt Number or Airway Bill Number or Bill of Lading Number) and reasons for transportation;

Part B comprising of transporter details (Vehicle number).  

As per Rule 138 of the CGST Rules, 2017,every registered person who causes movement of goods (which may not necessarily be on account of supply) of consignment value more than Rs. 50000/- is required to furnish above mentioned information in part A of e-way bill. The part B containing transport details helps in generation of e-way bill. Get ready following documents for generation of E-way Bill:-

1. Invoice/ Bill of Supply/ Challan related to the consignment of goods
2. Transport by road – Transporter ID or Vehicle number
3. Transport by rail, air, or ship – Transporter ID, Transport document number, and date on the document

Who is required to generate E-way Bill?

• E-way bill is to be generated by the consignor or consignee himself if the transportation is being done in own/hired conveyance or by railways by air or by Vessel.
• If the goods are handed over to a transporter for transportation by road, E-way bill is to be generated by the Transporter. Where neither the consignor nor consignee generates the e-way bill and the value of goods is more than Rs.50,000/- it shall be the responsibility of the transporter to generate it.
• Where goods are sent by a principal located in one State to a job worker located in any other State, the e-way bill shall be generated by the principal irrespective of the value of the consignment.
• Where handicraft goods are transported from one State to another by a person who has been exempted from the requirement of obtaining registration, the e-way bill shall be generated by the said person irrespective of the value of the consignment.

 

When E-way Bill is required?

E-way bill is required only in the case of movement of goods of consignment value exceeding Rs. 50,000/-.For certain specified Goods, the e-way bill need to be generated mandatorily even if the Value of the consignment of Goods is less than Rs. 50,000. 

• inter-State movement of Goods by the Principal to the Job-workers.
• Inter-State Transport of Handicraft goods by a dealer exempted from GST registration u/s 24(i) &(ii)
• registered person or the transporter, as the case may be may generate E-way bill voluntarily even if the value of consignment is less than Rs. 50,000/-.

List of goods where e-way bill is not required

1. Goods being transported are alcoholic liquor for human consumption, petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas or aviation turbine fuel.

2. Goods being transported are exempt from tax under notification No. 7/2017-Central Tax(Rate), dated 28th June 2017 published in the Gazette of India, Extraordinary, Part II,Section 3, Sub-section (i), vide number G.S.R 679(E)dated the 28th June, 2017 asamended from time to time and notification No. 26/2017- Central Tax (Rate), dated the 21st September, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1181(E) dated the 21st September, 2017 asamended from time to time;

3. Goods, other than de-oiled cake, being transported, given in the Schedule appended to notification No. 2/2017- Central tax (Rate) dated the 28th June, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 674 (E) dated the 28th June, 2017 as amended from time to time.

4. Goods specified in the annexure below:

• Liquefied petroleum gas for supply to household and non domestic exempted category (NDEC) customers
• Kerosene oil sold under PDS
• Postal baggage transported by Department of Posts
• Natural or cultured pearls and precious or semi-precious stones; precious metals and metals clad with precious metal (Chapter 71).
• Jewellery, goldsmiths’ and silversmiths’ wares and other articles (Chapter 71)
• Currency
• Used personal and household effect.
• Coral, unworked (0508) and worked coral (9601)

No E-way bill required in Following cases

• Transport of goods as specified above.
• Any movement of goods caused by defence unit.
• Transportation of empty cargo containers.
• goods being transported by a non-motorised conveyance;
• Transportation of goods upto a distance of 20 kilometers from the place of the business of the consignor to a weighbridge for weighment .
• Where the consignor of goods is the Central Government, Government of any State or a local authority for transport of goods by rail.
• Where the distance between the consigner or consignee and the transporter is less than 50 Kms and transport is within the same state.
• goods being transported from the port, airport, air cargo complex and land customs station to an inland container depot or a container freight station for clearance by Customs.
• Consignment value less than Rs. 50,000/

Date of Implementation:

  The GST council , in its 26th Meeting held on 10.03.2018 at New Delhi has decided to implement the e-way bill for inter-State movement of goods across the country w.e.f 01.04.2018. The Central Government Vide Notification No.15/2018-Central Tax Dated 23-03-2018 has notified 1st April 2018 as the appointed date.

·         For intra-state movement of goods E-way bill roll out is planned from 15th April 2018 in a phased manner by grouping the States/UT into four lots. GST Council in the coming days shall announce this arrangement.Karnataka has already notified the e-way bill requirement for movement of goods within the State.

 Registration on E-way Bill portal:

• Registration on www.ewaybill.nic.in is not to be understood as registration under section 22 of CGST Act, 2017 because persons who are already registered under section 22 are also required to register on this portal.
• All the registered persons under GST shall also register on the portal of e-way bill using his GSTIN. Once GSTIN is entered, the system sends the OTP to his registered mobile number and after authenticating the same, the system enables him to generate his/her username and password for the e-way bill system.
• After generation of username and password of his choice, he/she may proceed to make entries to generate e-way bill.
• There may be some transporters, who are not registered under the Goods and Services Tax Act and if such transporters causes the movement of goods for their clients, they are required to generate the e-way bill on behalf of their clients or update the vehicle number for e-way bill. Hence, they need to enroll on the e-way bill portal and generate the 15 digits Unique Transporter ID (TRANSIN)
• Some business may have multiple branches within a state. Under these circumstances, the main user can create sub-users and assign the roles to them. He can assign generation of EWB or rejection or report generation activities based on requirements. ØFor every principal/additional place of business, user can create maximum of three (3) sub-users.

Mode of Generation of E-way Bill

E Way Bill can be generated by either of two methods:-

·         On the Web

·         Via SMS  

Manuals available on E way bill portal.

Validity of E-way Bill

Temporary number generated after filing PART-A shall be valid for 15 days for updation in PART B.

·         E Way bill may be cancelled electronically on the common portal/ through SMS within 24 hours of generation, provided it has not been verified in accordance with Rule 138B.

·         After Generation an E-way bill is valid for:-

Up to 100 Kms-1 Day

For every additional 100KM or Part thereof- Additional 1 Day

For Over Dimensional Cargo (ODC) Upto 20Km -1 Day,

For every additional 20 KM or Part thereof- Additional 1 Day

If validity of the e-way bill expires, the goods are not supposed to be moved. However, under circumstance of ‘exceptional nature’, the generator of the e-way bill can generate another e-way bill, by entering the e-way bill number and part-B. Now, the system generates the new e-way bill with Part-A information of previous e-way bill and new Part-B information.Validity of Eway bill can be extended also. The generator of such Eway bill has to either four hours before expiry or within four hours after its expiry can extend Eway bill validity.

E-way Bill Forms:

·         FORM GST EWB-01-Single E Way Bill -To be generated by Consignor/ Consignee/ Transporter

·         FORM GST EWB-02 Consolidated E Way Bill To be generated by Transporter (before movement of goods)

·         FORM GST EWB-03 Verification Report To be generated by proper officer (inspection report within max of 3 days)

·         FORM GST EWB-04 Report of Detention To be generated by Transporter (If vehicle detained for more than 30 minutes)

Acceptance of E-way Bill

The person to whom the information under Rule 138(11) in Part A of FORM GST EWB-01 is made available has to communicate his acceptance or rejection within seventy two hours of the details being made available to him on the common portal, or the time of delivery of goods whichever is earlier, otherwise it shall be deemed that he has accepted the said details.

Consequences of Non-Compliance:

·         If e-way bills, wherever required, are not issued in accordance with the provisions contained in Rule 138 of the CGST Rules, 2017, the same will be considered as contravention of rules.

·         As per Section 122 of the CGST Act, 2017, a taxable person who transports any taxable goods without the cover of specified documents (e-way bill is one of the specified documents) shall be liable to a penalty of Rs.10,000/- or tax sought to be evaded (wherever applicable) whichever is greater.

·         As per Section 129 of CGST Act, 2017, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made there under, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure.

Cancellation of E-way Bill?

Where an e-way bill has been generated under this rule, but goods are either not transported or are not transported as per the details furnished in the e-way bill, the e-way bill may be cancelled electronically on the common portal, either directly or through a Facilitation Centre notified by the Commissioner, within 24 hours of generation of the e-way bill. However, an e-way bill cannot be cancelled if it has been verified in transit in accordance with the provisions of rule 138B of the CGST Rules, 2017 .

Points to be noted for E-way bill:

• E-way bill not required for exempted goods.In case, sales invoice includes both taxable as well as exempted supplies then value of only taxable supplies will be considered considered for the purpose of e-way Bill. This is a major relief for FMCG companies.
• Vehicle detail will not be required in case the moment of Goods is within 50 kilometers previously this limit was only 10 kilometers. This will help small businesses operating within 50 km.
• One more big change in respect of intra state movement of goods is that E-way bill will not be required in case value of each consignment is less than 50000 even if total value of consignment in a vehicle is more than 50000. This is a major relief for E-Commerce and courier companies however government should consider to extend this relief to inter-state movement also.
• The validity of E-way bill will now till the Midnight of the day immediately following the date of generation of e-way Bill previously the validity of e way bill was only 24 hours. For example if an E-way bill is generated on 8th march 2018 at 3 p.m. for movement upto 100 km.Then the validity of this e-waybill would be till the Midnight of 9th March 2018. But in the earlier rules the validity would have been only upto 3 p.m of 9th March 2018. For distance above 100 kilometre, one additional day is provided for each hundred kilometre.
• Now a job worker can also generate E waybill in case of interstate movement of goods to a job worker irrespective of value of consignment.

Procedure for generation of E-way Bill:

·         Log in on EWB portal (E-WayBill System (ewaybillgst.gov.in))

·         Enter the Username, password and Captcha code, Click on ‘Login’

·         Click on ‘Generate new’ under ‘E-waybill’ option appearing on the left-hand side of the dashboard.

·         Enter the following fields on the screen that appears:

a) Transaction type (Outward/Inward)

b) Sub type (supply/Import/Export/SKD/CKD/Job work/own use/Sales Return/Others etc.)

c) Document type: Select either of Invoice / Bill/ challan/ credit note/ Bill of entry or others if not Listed

d) Document No. : Enter the document/invoice number

e) Document Date: Select the date of Invoice or challan or Document (future date not allowed)

f) From/ To: Depending on whether you are a supplier or a recipient

g) Item Details: Add the details of the consignment (HSN code-wise) in this section

h) Transporter details: The mode of transport(Road/rail/ship/air) and the approximate distance covered (in KM) needs to be compulsorily mentioned in this part. Apart from this Transporter name, transporter ID, transporter Doc. No. & Date OR Vehicle number in which consignment is being transported

·         Click Submit

·         Request will be processed and the e-way bill in FORM GST EWB-01 with a unique 12 digit number is generated

·         Click on ‘Print EWB’ sub-option under ‘e-Waybill’ option

·         Print and carry the e-way bill for transporting the goods in the selected mode of transport

·         The Invoice/ Bill/ Challan related to the consignment of goods must be in hand.

·         If transport is by road – Transporter ID or the Vehicle number.

·         If transport is by rail, air, or ship – Transporter ID, Transport document number, and date on the document.

Important GST updates vide recent GST notifications dt. 28th March 2018:

1. Due date for filing GSTR-6 for the period of July 2017 to April 2018 has been extended to 31st May 2018.
2. Due date for filing trans-2 form has been extended to 30th June 2018.
3. Due date for filing GSTR-1 for the quarter ending on 30th June 2018 is announced as 31st July 2018, for those who are required to file GSTR-1 on quarterly basis.
4. For those who are required to file GSTR-1 on monthly basis following due dates are announced:
   @31st may for April 2018
   @ 10th June for May 2018.
   @ 10th July for June 2018.
5. Those taxpayers want to opt for GST composition scheme for financial year 2018-19, are required to file an intimation in form GST CMP-2 before 31st March 2018.
6. Due date for filing of RFD-10 to claim the refund of tax by UN agencies & notified others extended to 18 months from last date of each quarter.
7. Government also issued certain notifications to give effect to decision taken in 26th meeting of GST Council like:

@ Implementation of e-way Bill For interstate movement of goods w.e.f 1st April, and for intra State movement of goods states are divided into four groups and e-way bill will be implemented in a phased manner.
@ filing of GSTR-3B is continued for three more months upto June 2018.
@ Applicability of reverse charge on an unregistered dealer is further deferred till 30th June 2018.
@ Applicability of TDS provisions are also referred little 30th June 2018 etc.

GST important Due dates for Financial year 2017-18

(A) Due date for payment of GST (From 01-07-2017 to 31-03-2018)

Taxpayer	Periodicity of GST Payment	Due Date for payment of GST
Taxpayers with Annual Turnover upto Rs. 1.5 Crore (filing GSTR-1 on quarterly basis)	Monthly	20th of Next month after the month in which Time of Supply occurs along with GSTR-3B
Taxpayers with Annual Turnover above Rs. 1.5 Crore (filing of GSTR-1 on monthly basis)	Monthly	20th of Next month after the month in which Time of Supply occurs along with GSTR-3B
Taxpayers under composition scheme (filing GSTR-4 on quarterly basis)	Quarterly	18th of Next month after the quarter in which Time of Supply occurs along with GSTR-4
Non-Resident Taxable person (Filing GSTR-5)	Monthly	20th of Next month for every month along with GSTR-5.
Authorities deducting tax at source (TDS) (filing GSTR-7)	Monthly	10th of Next month after the month in which Time of Supply occurs along with GSTR-7.
E-commerce operator (filing GSTR-8)	Monthly	10th of Next month after the month in which Time of Supply occurs along with GSTR-8

Note: If due date of filing of that return (along with which GST is paid) is extended then due date of payment of GST may also deemed to be extended.

(B) Due date for Filing GST Return (From 01-07-2017 to 31-03-2018)

GST Return form	Return particulars	Default Due Date	Extended Due Date (if extended)
GSTR-1 (Monthly)	Detail of outward supplies of taxable goods or services	10th of next month	For Taxpayer with aggregate turnover upto Rs. 1.5 crore need to file GSTR-1 on quarterly basis: July 2017 to March 2018: Extended to 31st October 2018 For Taxpayer with aggregate turnover above Rs. 1.5 crore need to file GSTR-1 on Monthly basis: July 2017 to March 2018: Extended to 31st October 2018
GSTR-2 (Monthly)	Detail of inward supply of taxable goods or Services (with ITC claim)	15th of next month	July-2017 to March-2018:  Extended due date shall be worked out by a committee of officers and shall be intimated in due course of time.Filing currently suspended.
GSTR-3 (Monthly)	Finalization of outward & inward supplies along with payment of tax	20th of next month	July-2017 to March-2018:  Extended due date shall be worked out by a committee of officers and shall be intimated in due course of time.Filing currently suspended.
GSTR-3B (Monthly)	Simple return for payment of GST only for July-17 to march-18	20th of next month	July-2017:       28 August 2017 Aug-2017 to Nov-2017: 20th of Next month. Dec-2017: Extended to 22nd January 2018 Jan-2018- to march-2018: 20th of Next month
GSTR-4 (Quarterly)	Return for Taxpayers under compounding scheme	18th of next month after end of quarter.	July-2017 to Sept-2017:  Extended to 24th December 2017. Oct-2017 to Dec.-2017: 18th January 2018. Jan.-2018 to mar-2018: 18th April 2018.
GSTR-5 (Monthly)	Return for Non-Resident Taxable person.	20th of the next month	July-2017 to Dec-2017:  Extended to 31st January 2018. Jan.-2018 to march-2018: 20th of Next month.
GSTR-6 (Monthly)	Return for Input Service Distributor	13th of the next month	July-2017 to March-2018: Extended to 31st July 2018 (vide notification dated 31.05.2018)
GSTR-7 (Monthly)	Return for authorities deducting tax at source (TDS)	10th of the next month	–
GSTR-8 (Monthly)	Details of supplies effected through e-commerce operator and the amount of tax collected	10th of the next month	–
GSTR-9 (Annually)	Annual Return	31st December of next financial year	Extended to 31st December 2019
GSTR-9A (Annually)	Simplified Annual Return for taxable person under compounding scheme.	31st December of next financial year	GSTR-9A filing for composition taxpayers waived off for FY 2017-18 and FY 2018-19
GSTR-9B (Annually)	Annual Return for E-commerce operator.	31st December of next financial year	–
GSTR-9C (Annually)	Annual Return for taxpayers whose annual turnover exceeds Rs  2 crores during the financial year and is required to get their accounts audited and file a copy of audited annual accounts and reconciliation statement.	31st December of next financial year	Extended to 31st December 2019
GSTR-10 (Only Once)	Final Return when registration is cancelled or surrendered	Within three months of the date of cancellation or date of cancellation order, whichever is later.	–
GSTR-11 (Monthly)	Statement of inward supply by persons having Unique Identification number  and claiming Refund	28th of the month following the month for which statement is filed.	–

Note:  (1) Normal Late fees for filing GST Returns is as follows:-

• Rs. 200 per day of delay
• Rs. 100 per day of delay for taxpayers having Nil tax liability for the month.

(This is subject to maximum limit of Rs. 5000 but maximum limit for delay in filing GSTR-9 is 0.25% of turnover for that financial year)

(2) Reduced Late fees for filing GST Returns is as follows:-

CBIC has notified reduced amount of late fees for a delay in filing some GST returns for a temporary period as a relief measure for businesses having difficulties using GST portal. But the reduced fee is not applicable for GSTR-7, GSTR-8, GSTR-5A & GSTR-9. normal late fee will apply for these cases. Reduced late fee is as follows:

• Rs. 50 per day of delay
• Rs. 20 per day of delay for taxpayers having Nil tax liability for the month.

(2) Some of late fees are waived off completely and some are reduced. Detail is provided below:-

Following are the changes that have been made on the applicability of the late fee law:

(3) Interest on late payment of GST is 18% p.a. on the amount of outstanding tax to be paid upto the date of payment.

Note;-The late fee waiver for GSTR-1 for the period July 2017 to November 2019, further extended till 17th January 2020 from 10th January 2020.

26th Meeting of GST council held today i.e 10th March 2018 in New Delhi under chairmanship of Sh. Arun jaitley. GST return filing process was expected to be simplified but GST council could not reach a decision and current system of GST return filing is continued and GSTR-3B is decided to be continued for three more months. The GST Council discussed two models for returns filing but no decision could be taken regarding simplification of GST return. The following are the major recommendations made by GST council in its 26th meeting:-

• E-way is recommended to be implemented w.e.f. 1st April for Inter-State movement of goods. From April 1, inter-state movement of goods will need generation of E-Way bills. Click below link to read changes made in E-way bill rules on 8th march 2018, for simplification. Click here.
• Intra-state E-way bill is recommended to be rolled out in phased manner.For this purpose,  states are divided in four groups. After 1st April, one group of state will be added each week and it will be implemented across the country by April-end.
• The GST Council discussed two models for returns filing but no decision could be taken regarding simplification of GST return. A panel of ministers are given the task of framing one-page GST return. Meanwhile current process of GSR return filing is continued for three more month i.e. upto 30th June 2018. It means GSTR-3B, which was to be discontinued after March-2018, now continued for three more months i.e. upto June-2018.
• Reverse charge for unregistered vendor was postponed till 31st march 2018. Now is it further deferred upto 1st July 2018.
• E-Wallet scheme is deferred by six months. Exporters presently availing various export promotion schemes can now continue to avail such exemptions on their imports up to October 1, by which time an e-wallet scheme is expected to be in place to continue the benefits in future.
• TDS/TCS mechanism under GST Law has also been postponed till June 30.

GST due dates for FY 2017-18

Under GST regime, an e-waybill needs to be generated and carried for movement of goods above rupees 50000.

Previously on the Recommendation of GST Council,1st February 2018 was fixed as the date from which provisions related to e-way bill shall come into force w.r.t. interstate movement of goods. But due to technical glitches the same was postponed.

On 24th February 2018 group of ministers(GoM) recommended 1st April as the date for compulsory implementation of e way bill for interstate movement of goods. The Recommendation of GoM would be considered by the GST council in its 26th meeting on 10th March.

As per government, all the states shall have to compulsory implement National E-waybill for intra state movement of goods latest by 1st June.

To make it possible, to implement E-way Bill as per above Target Dates, Government makes following changes in E-Way Bill rules-

• In case, sales invoice includes both taxable as well as exempted supplies then value of only taxable supplies will be considered considered for the purpose of e-way Bill. This is a major relief for FMCG companies.
• Vehicle detail will not be required in case the moment of Goods is within 50 kilometers previously this limit was only 10 kilometers. This will help small businesses operating within 50 km.
• One more big change in respect of intra state movement of goods is that E-way bill will not be required in case value of each consignment is less than 50000 even if total value of consignment in a vehicle is more than 50000. This is a major relief for E-Commerce and courier companies however government should consider to extend this relief to inter-state movement also.
• The validity of E-way bill will now till the Midnight of the day immediately following the date of generation of e-way Bill previously the validity of e way bill was only 24 hours. For example if an E-way bill is generated on 8th march 2018 at 3 p.m. for movement upto 100 km.Then the validity of this e-waybill would be till the Midnight of 9th March 2018. But in the earlier rules the validity would have been only upto 3 p.m of 9th March 2018. For distance above 100 kilometre, one additional day is provided for each hundred kilometre.
• Now a job worker can also generate E waybill in case of interstate movement of goods to a job worker irrespective of value of consignment.

Government brought these changes in E-Way bill rules just two days before 26th meeting of GST Council. Hence it is expected that Government is keen to implement mandatory E waybill for interstate movement of goods w.e.f 1st April 2018.

Under GST regime, an e-waybill needs to be generated and carried for movement of goods above rupees 50000.

Previously on the Recommendation of GST Council,1st February 2018 was fixed as the date from which provisions related to e-way bill shall come into force w.r.t. interstate movement of goods. But due to technical glitches the same was postponed.

On 24th February 2018 group of ministers(GoM) recommended 1st April as the date for compulsory implementation of e way bill for interstate movement of goods. The Recommendation of GoM would be considered by the GST council in its 26th meeting on 10th March.

As per government, all the states shall have to compulsory implement National E-waybill for intra state movement of goods latest by 1st June.

On 24-02-2018, in the meeting of GoM (Group of Ministers), it is decided to start the inter-state movement of goods worth more than Rs. 50000/- through E-way Bill mechanism from 1st April 2018.
The GoM meet, however, remained inconclusive on how to simplify the GST return filing process. However final decision will be taken in 26th meeting of GST council which is scheduled on 10th March 2018.

Composition Scheme in GST: Updated with 23rd meeting of GST Council

Composition Scheme is introduced to give relief to small taxpayer i.e. taxpayer having limited value of aggregate turnover. It is very difficult for small taxpayer to comply with complete procedure established by the law. They may have to incur higher percentage of their earnings for compliance of tax procedures. Hence easy procedures is laid done by the law maker for such small taxpayers which is named as “Composition Scheme”. This scheme is optional for small taxpayers. Under composition scheme tax is payable at a fixed percentage on turnover.

Threshold Limit for Composition Scheme

Threshold limit of aggregate turnover is increased to 1.5 crore from earlier limit of Rs. 1 crore as per decision taken in 23rd meeting of GST council held on 10th November. Hence as of now, A taxpayer whose turnover is up to Rs 1.5 crore can opt for Composition Scheme. In case of North-Eastern states and Himachal Pradesh, the limit is now Rs 75 lakh.

How to opt for Composition Scheme

A taxpayer who want to opt for composition scheme, has to give intimation in form GST CMP-01 or 02 at the beginning of every financial year. For 2017-18, this intimation was required to be filed before 16th August 2017. This Scheme will be applicable from the 1st day of the next month of submitting intimation. If a registered taxpayer submits the form GST CMP-01 on 19th Oct then composition scheme will apply from 1st Nov.

Conditions for Composition Scheme

Following conditions must be satisfied by person opting for composition scheme:-

• No Input Tax Credit can be claimed by a dealer opting for composition scheme
• Composition dealers can not charge GST from their customer. They have to deposit GST from their pocket.
• Composition dealers can not issue ‘Tax Invoice’.
• The taxpayer cannot make any inter-state supply of goods.
• The dealer can supply GST exempted goods.
• Taxpayer has to pay tax at normal rates for transactions under Reverse Charge Mechanism
• The taxpayer has to mention the words ‘composition taxable person’ on every notice or signboard displayed prominently at their place of business.
• The taxpayer has to mention the words ‘composition taxable person’ on every bill of supply issued by him.
• Those supplying goods can provide services of upto Rs. 5 lakh.

Who can not opt for composition Scheme

The following taxpayers cannot opt for this scheme:

• Supplier of services other than restaurant related services.
• Taxpayer having aggregate turnover above threshold limit.
• Businesses which supply goods through an e-commerce operator.
• A taxpayer making inter-state supply of goods.
• Manufacturer of ice cream, pan masala, or tobacco.
• Casual taxable person or a non-resident taxable person.
• Businesses which supply goods through an e-commerce operator.

GST rate for composition Scheme

Return for taxpayer of Composition Scheme

A taxpayer under composition scheme is required to file quarterly return in form GSTR-4 and annual return in form GSTR-9A. GSTR-4 is required to be filed before 18th the month after the end of respective quarter. GSTR-9A is required to be filed before 31st December of next financial year.

For the June to Sept.-17 quarter (quarter ending on 30-09-2017), GSTR-4 was required to be filed before 18th October which is extended to 24th December 2017  as per decision taken in 23rd meeting of GST Council held on 10th November.

Advantages of Composition Scheme

Opting for composition scheme is advantageous in following manner:-

1. Required to file only 5 return in place of 37 return in a year.
2. Less percentage of tax payable.
3. Competitive benefit because GST is not charged in invoice, Hence can afford to reduce prices.
4. Less procedural compliance.
5. Dealer registered under composition scheme is not required to maintain detailed records.

Disadvantages of Composition Scheme

Opting for composition scheme have following disadvantages:-

1. Taxpayer can not claim Input tax credit.
2. The taxpayer will not be eligible to supply goods through an e-commerce portal
3. The taxpayer cannot make any inter-state supply of goods.

Formats for Composition Scheme

Form No.	Description
GST CMP-01	Intimation to pay tax under section 10 (composition levy) (Only for persons registered under the existing law migrating on the appointed day)
GST CMP-02	Intimation to pay tax under section 10 (composition levy) (For persons registered under the Act)
GST CMP-03	Intimation of details of stock on date of opting for composition levy (Only for persons registered under the existing law migrating on the appointed day)
GST CMP-04	Intimation/Application for withdrawal from composition Levy
GST CMP-05	Notice for denial of option to pay tax under section 10
GST CMP-06	Reply to the notice to show cause
GST CMP-07	Order for acceptance / rejection of reply to show cause notice

Financial Funda

23rd GST Council meet held on 10th November 2017 in Guwahati. This 23rd meeting came up with new decisions to ease tax rates and compliance issues. GST Council lowered tax rates on 177 items from 28% to 18%.  The panel also decided to move 13 items from the 18% tax slab to 12%, another six from 18% to 5% and eight items from 12% to the 5% tax slab. Six other items have been moved from the 5% slab to nil. These changes will be effective from 15th November 2017, as decided by GST council.

GST council decided to keep only 50 items in 28% tax bracket. Below given is complete list of 50 items which are taxed at 28%:-

list of 50 Items Retained in 28% GST Rate List

S.No	Heading	Description
1.	1703	Molasses
2.	2106 90 20	Pan masala
3.	2202 10	All goods [including aerated waters], containing added sugar or other sweetening matter or flavoured
4.	2401	Unmanufactured tobacco; tobacco refuse [other than tobacco leaves]
5.	2402	Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes
6.	2403	Other manufactured tobacco and manufactured tobacco substitutes; “homogenised” or “reconstituted” tobacco; tobacco extracts and essences [including biris]
7.	2523	Portland cement, aluminous cement, slag cement, super sulphate cement and similar hydraulic cements, whether or not coloured or in the form of clinkers
8.	3208	Paints and varnishes (including enamels and lacquers) based on synthetic polymers or chemically modified natural polymers, dispersed or dissolved in a non-aqueous medium; solutions as defined in Note 4 to this Chapter
9.	3209	Paints and varnishes (including enamels and lacquers) based on synthetic polymers or chemically modified natural polymers, dispersed or dissolved in an aqueous medium
10.	3210	Other paints and varnishes (including enamels, lacquers and distempers); prepared water pigments of a kind used for finishing leather
11.	3214	Glaziers’ putty, grafting putty, resin cements, caulking compounds and other mastics; painters’ fillings; non- refractory surfacing preparations for facades, indoor walls, floors, ceilings or the like

12.	4011	New pneumatic tyres, of rubber [other than of a kind used on/in bicycles, cycle-rickshaws and three wheeled powered cycle rickshaws;and Rear Tractor tyres; and of a kind used on aircraft]
13.	4012	Retreaded or used tyres and flaps
14.	8407	Spark-ignition reciprocating or rotary internal combustion piston engine [other than aircraft engines]
15.	8408	Compression-ignition internal combustion piston engines (diesel or semi-diesel engines)
16.	8409	Parts suitable for use solely or principally with the engines of heading 8407 or 8408
17.	8413	Pumps for dispensing fuel or lubricants of the type used in filling stations or garages [8413 11], Fuel, lubricating or cooling medium pumps for internal combustion piston engines [8413 30]
18.	8415	Air-conditioning machines, comprising a motor-driven fan and elements for changing the temperature and humidity, including those machines in which the humidity cannot be separately regulated
19.	8418	Refrigerators, freezers and other refrigerating or freezing equipment, electric or other; heat pumps other than air conditioning machines of heading 8415
20.	8422	Dish washing machines, household [8422 11 00] and other [8422 19 00]
21.	8450	Household or laundry-type washing machines, including machines which both wash and dry
22.	8483	Transmission shafts (including cam shafts and crank shafts) and cranks (excluding crankshaft for sewing machine); gear boxes and other speed changers, including torque converters; flywheels and pulleys, including pulley blocks; clutches and shaft couplings (including universal joints)
23.	8507	Electric accumulators, including separators therefor, whether or not rectangular (including square)
24.	8508	Vacuum cleaners
25.	8509	Electro-mechanical domestic appliances, with self-contained electric motor, other than vacuum cleaners of heading 8508 [other than wet grinder consisting of stone as a grinder ]
26.	8510	Shavers, hair clippers and hair-removing appliances, with self- contained electric motor
27.	8511	Electrical ignition or starting equipment of a kind used for spark- ignition or compression-ignition internal combustion engines (for example, ignition magnetos, magneto-dynamos, ignition coils, sparking plugs and glow plugs, starter motors); generators (for example, dynamos, alternators) and cut-outs of a kind used in conjunction with such engines
28.	8516	Electric instantaneous or storage water heaters and immersion heaters; electric space heating apparatus and soil heating apparatus; electrothermic hair-dressing apparatus (for example, hair dryers, hair curlers, curling tong heaters) and hand dryers; electric smoothing irons; other electro-thermic appliances of a kind used for domestic purposes; electric heating resistors, other than those of heading 8545
29.	8525	Digital cameras and video cameras recorders [other than CCTV]

30.	8528	Monitors and projectors, not incorporating television reception apparatus; reception apparatus for television, whether or not incorporating radio-broadcast receiver or sound or video recording or reproducing apparatus [other than computer monitors not exceeding 20 inches and set top box for television]
31.	8701	Road tractor for semi-trailers of engine capacity exceeding 1800 CC.
32.	8702	Motor vehicles for the transport of ten or more persons, including the driver
33.	8703	Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons and racing cars [other than Cars for physically handicapped persons]
34.	8704	Motor vehicles for the transport of goods [other than Refrigerated motor vehicles]
35.	8705	Special purpose motor vehicles, other than those principally designed for the transport of persons or goods (for example, breakdown lorries, crane lorries, fire fighting vehicles, concrete-mixer lorries, road sweeper lorries, spraying lorries, mobile workshops, mobile radiological unit)
36.	8706	Chassis fitted with engines, for the motor vehicles of headings 8701 to 8705
37.	8707	Bodies (including cabs), for the motor vehicles of headings 8701 to 8705
38.	8708	Parts and accessories of the motor vehicles of headings 8701 to 8705 [other than specified parts of tractors]
39.	8709	Works trucks, self-propelled, not fitted with lifting or handling equipment, of the type used in factories, warehouses, dock areas or airports for short distance transport of goods; tractors of the type used on railway station platforms; parts of the foregoing vehicles
40.	8711	Motorcycles (including mopeds) and cycles fitted with an auxiliary motor, with or without side-cars; side-cars
41.	8714	Parts and accessories of vehicles of headings 8711 and 8713
42.	8716	Trailers and semi-trailers; other vehicles, not mechanically propelled; parts thereof [other than Self-loading or self-unloading trailers for agricultural purposes, and Hand propelled vehicles (e.g. hand carts, rickshaws and the like); animal drawn vehicles]
43.	8802	Aircrafts for personal use
44.	8903	Yachts and other vessels for pleasure or sports; rowing boats and canoes
45.	9302	Revolvers and pistols, other than those of heading 9303 or 9304
46.	9504	Video games consoles and Machines, article and accessories for billiards [9504 20 00], other games operated by coins, banknotes, i.e., casino games [9504 20 00] and others [other than board games of 9504 90 90]
47.	9614	Smoking pipes (including pipe bowls) and cigar or cigarette holders, and parts thereof
48.	9616	Scent sprays and similar toilet sprays, and mounts and heads therefor; powder-puffs and pads for the application of cosmetics or toilet preparations
49.	9804	All dutiable articles intended for personal use
50	Any Chapter	Lottery-Authorised by State Governments

 

Financial Funda

Due Date for Filing GST Return and making payment of GST

We have received many queries regarding GST Return and Payment , here in this article we will try to show a clear picture of GST Return and payment for a taxpayer (except composition supplier) registered under GST law. There are various GST Returns, which are required to be filed by different category of Taxpayer. Here we will discuss only about GST returns which are required to be filed by a normal taxpayer except Composition dealer, Tax Deductor under GST, Non-Resident and E-commerce operator . Generally, a normal taxpayer register in GST, is required to file 37 GST returns in one year i.e. three return every month GSTR-1, GSTR-2 and GSTR-3 and one annual return GSTR-9. The brief description of GST return along with due date are given below:-

1. GSTR-1 (10th of the Next month): GSTR-1 is for detail of outward supplies of taxable goods and services. Generally this return is required to filed before 10th of next month. GST was roll out on 1st July 2017, Since then due date for filing of GST return has been revised many times. (Updated due date is given in summary in the end of this article)
   
2. GSTR-2 (15th of the Next month): GSTR-2 is for detail of inward supplies of taxable goods and services. Generally this return is required to filed before 15th of next month. GST was roll out on 1st July 2017, Since then due date for filing of GST return has been revised many times. (Updated due date is given in summary in the end of this article)                                                                                                                                                                                            
3. GSTR-3 (20th of the Next month): GSTR-3 is monthly return filed along with detail of GST payment. Hence GST need to be paid before 20th of Next month. Generally this return is required to filed before 20th of next month along with detail of GST payment. GST was roll out on 1st July 2017, Since then due date for filing of GST return has been revised many times. (Updated due date is given in summary in the end of this article)          
4. GSTR-3B (20th of Next month till further notification): GSTR-3B is a simpler return that need to filed due to extension provided by government in filing other returns.  Govt. has extended the due date for filing GSTR-1, 2 &3  many times after implementation of GST. Hence introduced form 3B which is required to filed along with detail of GST payment. As per decision taken in 23rd meeting of GST council, All taxpayers are required to file monthly return in Form GSTR-3B along with payment of tax by 20^thof the succeeding month till March, 2018. (Updated due date is given in summary in the end of this article)                                                                    
5.  GSTR-9 (31st December of Next Financial year): GSTR-9 is annual return need to be filed before 31st December of next financial year.

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Due Date for Filing GST Return and making Payment Under GST: Updated with 23rd meeting of GST council held on 10th November 2017Read More »

Works Contract in GST Regime

As we all know, GST is going to be implemented w.e.f 01-07-2017, We have already explained “calculation of Service tax on Works Contract“. But w.e.f 01-07-2017, Service Tax along with other indirect taxes like Excise duty, CST, Sales Tax, CVD, SAD, Extry tax etc. are going to be  replaced by GST. We have received many queries regarding Calculation of GST on Works Contract Service.

W.e.f 01-07-2012, All services become taxable except services in negative list and exemption list. Now w.e.f 1-07-2017 i.e. Exactly Five year after works contract service was added in Partial reverse charge category Service tax is merged in GST.

Here in this blog, a short summary for calculation of GST on works contract is given.

 

What is Works Contract

Definition of Works Contract in Service Tax

As per sec.65(54)(zzzza) of Finance Act 1994,

Work Contract” means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such property.

This definition is changed in GST law,

Definition of Works Contract in GST

As per section 2(119) of CGST Act, “works contract” means a contract for building, construction, fabrication,completion, erection, installation, fitting out, improvement, modification, repair,maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract.

 

In the new definition, Works contract in only for Immovable property, So modification, repair,maintenance, renovation, alteration etc. of movable property is out of scope of Works contract.

 

Points to be noted for GST on Works Contract

“Service portion in the Execution of a Works Contract” being a part of declared services is a taxable service. And goods part in execution of work contract is liable for Sales tax. Hence upto 30-06-2017, abatement was provided in works contract for the goods involved in execution of works contract. After abatement (30%/ 40%/ 60%) balance value of works contract was liable for service tax under partial reverse charge. But under GST regime both goods and services involved in execution of works contract are taxable under same law i.e. GST law.

Under GST regime following point are notable for calculation of GST on works contract (as per decision taken by GST council till date 20-06-2017):-

1. Reverse charge is not applicable to Works Contract if Service provider is Registered under GST. But as per Sec. 9(4) of CGST Act, Reverse charge will be applicable in such case where Supply of taxable goods or services or both is done by a unregistered dealer  to a registered dealer. So if a works contract is executed by a person registered in GST law then Reverse charge is not applicable.
2. No further abatement in Works Contacts for calculation of Tax. The reason behind this is that earlier goods involved in execution of works contract was not taxable under service tax. Hence service tax was charged on abated value. But GST is applicable on both goods and services, hence not abatement is available.
3. No further WCT deduction against Works contact. The reason is that earlier WCT was deducted for goods involved in executed of Works contract.  Because sales tax was applicable to this part. But now GST is applicable for both part Service and Supply.
4. Value of Free issue material is not required to be included in value of invoice to arrive at taxable value. The reason is that earlier FOC material value was added to Works contract value and after that an abatement was deducted in respect of this. Now no abatement is available hence no need to add value of Free of cost material in Works contract.
5. As per GST law, the word “Supply” includes “Supply of goods” as well as “Supply of Services”. Earlier we used the word supply only in relation of goods. But now providing services is also called as Supply.

Valuation of Works contract for GST

In GST law, Valuation of works contract is not different from any other contract. Valuation is done as per GST-Valuation Rules. The summary of valuation in GST law, is given below:

For Related party:

As per Valuation Rules of GST, Consideration is not necessary for a transaction between related party being taxable. Even transaction without consideration shall also be taxable. Valuation shall be as per valuation rules. A brief of rules regarding this is given below:

• Open market value of such supply; or
• Value of supply of goods or services of like kind and quality; or
• 110% of the cost of production or manufacture or cost of acquisition of such goods or cost of provision of such services; or
• Where the recipient is eligible for full ITC, the value declared in the invoice shall be deemed to be the open market value of goods or services*

For Unrelated party:

As per Valuation Rules of GST, In case of Transaction between unrelated party, Transaction value shall be value on which GST will be applicable. Transaction value shall exclude any discount offered by service provider or goods supplier. But transaction value shall include followings:

• Any taxes, duties, levies etc. other than GST, Cess, if charged by the supplier
• Amount incurred by recipient on behalf of the supplier
• Subsidies received from sources other than Government, if such subsidy is directly linked to supply
• Incidental expenses, such as commission, packing, freight, OPEs, incurred before delivery of goods/ supply of services
• Interest/late fee/penalty for delay in payment of consideration

Rate of GST on Works Contract

Process of determination of applicable rate of GST for Works contract is same as applicable for any other composite or mixed supply (of goods or services or both) contract. As we know, In GST law composite or mixed supply of goods and services only in relation of immovable property (not for movable property) is called as works contract. But process of determination of rate is same for any contract having composite or mixed supply of goods or service or both. (Note: In GST law, Supply include supply of goods as well as supply of Services)

Composite Supply / Naturally Bundled goods or services:

A composite supply is comprised of two or more supplies (of goods or of services or of both) which are naturally bundled, generally comes together and one of which is a principal supply (intention of Supply receiver was for principal supply and other supplies are naturally bundled with it so they comes together). In the case of Composite Supply which are naturally bundled, the whole shall be treated as a supply of such principal supply and tax shall be paid according to GST rate applicable on principal supply. It means Rate of Principal supply shall be applicable for whole supply.

Mixed Supply / Artificially Bundled goods or services:

A mixed supply is comprised of two or more individual supplies (of goods or of services or of both) which are not naturally bundled but artificially bundled. In the case of mixed supply, whole supply shall be treated as supply of that particular supply which attracts the highest rate of tax.

Note: To know about HSN and SAC for works contract in SAP Click Here

Note: For any query, kindly click here and type your question.

CA Ashok Kumar

GST Concepts/Basic Features of GST

GST Law as going to be implemented in India w.e.f 01.07.2017, have following features:-

• State-wise single registration for Taxpayer:

  One PAN-One State-One Registration, it means for one PAN only one single GST Registration number for one state will be there. If a person does business in 5 states then he has to apply for registration in five states.

• GST is imposed in three categories i.e

SGST/UTGST= State /UT Goods and Service Tax.

CGST= Central Goods and Service Tax.

IGST = Integrated Goods and Service Tax.

 

        Now which tax will apply on which transaction is given below:

                              Intra state transactions:                       SGST/UTGST and CGST

                             Inter state transactions:                        IGST i.e equal to (SGST/UTGST+CGST)

• GST Council has decided various rates for GST i.e. 0%, 5%, 12%, 18% & 28%. Council has provided schedule of GST      Rates to find which rate will apply on which product. A List of exempted services and exempted goods is also provided by council separately.

• All work done or goods supplied upto 30-06-2017 for which invoice has also been raised upto 30-06-2017 But only payment is done after 30-06-2017 then GST will not apply on this transaction. This transaction will be taxed as per law applicable before 01-07-2017.
• A separate list of Services is provided which are under Reverse charge Mechanism. As a new list is provided for Reverse charge, Hence Reverse charge is not applicable as per old list given is service tax regime.  Hence no reverse charge in Works Contract, Rent a Cab, Supply of manpower etc. As per Sec. 9(4) of CGST Act, Reverse charge is applicable in all case where services are purchased by a Registered Dealer from an Unregistered Dealer. In case of Reverse Charge Service Receiver is liable to Pay GST in place of Service Provider (Click here for list of Services under Reverse Charge).
• A business entity with an annual turnover upto Rs. 20Lakhs (Rs. 10Lakh for special category states i.e. Arunachal Pradesh, Sikkin, Uttrakhand, Himachal Pradesh, Assam and other state of north-east) would not be required to take registration in GST regime unless he voluntarily chooses to do so to be a part of Inpur Tax Credit (ITC) Chain.
• A business entity with an annual turnover upto Rs. 50 Lakhs (Now revised to 75 Lakhs) can avail the benefit of Composition Scheme under which it has to pay lower rate of tax with minimal compliances.
• Provision has been made to grant 90% of refund within Seven days of filling of application of refund.
• Destination or Consumption based tax: GST will be the part of revenue of that state where goods are consumed or services are provided.
• No concept of free branch transfer, Earlier If a dealer has to transfer any taxable goods or services to branch located in different state then Form ‘F’ was provided to facility this transaction without any tax. But under GST regime no free branch transfer allowed. A person is required to pay GST even on branch transfer.
• No more issuance of Form ‘C’ required in GST regime.
• In GST regime, WCT is not required to be deducted under sales tax act.

 

Critical Analysis of Benefits of GST

Government is advertising benefits of GST since few months. Here in this blog we have analyzed some of the benefits of GST which are advertised by government.

 

Let’s Discuss benefits of GST, one by one:-

Simpler Tax Regime:

In place of many forms of indirect taxes only one GST will apply, Hence it may provide simpler tax regime. But due to many features of GST like No cenvat credit of CGST in SGST and vice versa, Open market value concept for valuation, new concept  of TDS against GST, State wise registration (Presently a service provider provider providing taxable services in all the state need only one registration in Service tax, but now this service provider who never deals in sale of goods but only provides taxable services needs to get registration in every state where he provide services.),  filing of various Returns etc.  It appears complicated.

Reduction in prices of goods and Services:

Due to removal of cascading effect of taxes and being allowed cenvat credit between Excise, Vat and Service tax, prices are expected to go down But this is possible only where prices are determined by cost plus method Hence actually prices will go high or remain same as businesses may book profit for the sum which is saved due to less tax. For example, if a product is priced as Rs. 13225/- (cost-9000/- Taxes-3225/- profit-1000/-) before GST. Then if taxes are reduced to Rs.2800/- then Price of product may remain same as profit of business may shift up by the difference like price is Rs. 13225/-(Cost 9000/-, taxes 2800/- Profit 1425/-). Government has made anti-profit booking rules for this, but without execution these rules are not going to serve any purpose.

Transparency in taxation system:

Due to simplification of process, there may be some transparency in taxation system, but in GST law there are so much open way (like open market value concept has replaced fair market value concept in valuation rules) given to tax authorities that they can create hurdle for any honest businessman . GST law passed in India has changed its shape and it may temper the purpose for which it is implemented. Actually this transparency is for Government, Government can easily catch the Tax Evaders. But no extra transparency for tax payer regarding utilization of money collected as tax.

Common National market:

Due to merging of State taxes in GST there may be common national market but unavailability of Cenvat credit of SGST of one state against SGST of other or CGST in the hurdle in developing Common National market. Further In GST, SGST is the part of revenue of the state where goods is consumed. For Example, If a car is manufactured in Haryana and that car is sold to a customer in Uttar Pradesh. Then SGST collected on that sale will be revenue of state of  Uttar Pradesh and this sum will root through GST Network. Hence no tax benefit for manufacturer state. Hence some state oppose GST. Hence Government proposed compensation cess for loss of revenue to states.

Uniform Prices throughout Country:

Due to same tax rates of GST in whole country there may be same prices throughout Country, But prices does not merely depends on taxes, it depends on various other factors like cost incurred to manufacture the product, availability of labors, Minimum wages of labor which is different in states, Competition level in area, Customer needs of that area etc. So prices may not be same throughout Country.

Increase in Employment Opportunity:

Due to easiness of business in India after implementation of GST, employment opportunity may increase, but GST law as appears is focused to increase revenue of Government not the industrial development. Index of Industrial Production (IIP) has a growth rate of slightly over one percent. To increase employment, Industrial development is necessary. If Government timely review its success and bring some positive changes to remove the hurdles of industrial development, then only it may be helpful in creating some employment opportunities.

Making of GST Law in india

As we all are aware that Government has decided to implement GST w.e.f 1st July 2017. I received many email asking questions about GST. I request the reader to ask their questions under “Ask free Questions” tab.

What is GST?

GST stands for Goods and Service Tax. As we know there are various types of indirect taxes like Customs, Excise duty, Sales tax/VAT/CST, Octroi/Entry tax, Service Tax etc. Some of these taxes like Sales tax/VAT/CST and Entry tax etc. are the part of revenue for State Government while others like Excise duty and Service tax etc. are the part of revenue for Central Government. With the intention of easiness of process in indirect tax regime, bringing in revolutionary changes in indirect tax system and for giving a push to industrial development in India Central Government has decided to merge various indirect taxes into one i.e. GST.

Constitutional Validity

But some of above indirect taxes fall under State list of Schedule VII of Constitution where only state Government have power to levy taxes and some fall under Union list of Schedule VII of Constitution. Hence amendment in constitution was required for assigning concurrent powers to Centre and state to Levy GST. For this purpose Parliament of India passed Constitution (101st Amendment) Act, 2016 on 08.09.2016. After this Amendment-

• Concurrent jurisdiction for levy & collection of GST by the Centre & the States – Article 246A.
• Centre to levy & collect IGST on supplies in the course of inter-State trade or commerce including imports – Article 269A.
• Compensation for loss of revenue to States for five years on recommendation of GSTC – Clause 19.
• GST on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas & aviation turbine fuel to be levied from a later date on recommendations of GST Council.
• GST council is to be constituted by President within 60 days of this Act. Hence GST council was constituted on 12.09.2016.
• GST Council has to meet and make recommendation on various aspects of GST like GST Law, Procedures, GST Rates, Exemptions and thresholds etc.
• Members of GST Council are:

1. Union Finance Minister (Chairperson)
2. Finance Minister of Each State in India.

In India, following GST law are being passed by Central Government:-

1. THE CONSTITUTION (ONE HUNDRED AND FIRST AMENDMENT) ACT, 2016
2. THE INTEGRATED GOODS AND SERVICES TAX ACT, 2017 (IGST)
3. THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 (CGST)
4. THE GOODS AND SERVICES TAX (COMPENSATION TO STATES) ACT, 2017
5. THE UNION TERRITORY GOODS AND SERVICES TAX ACT, 2017
6. GST – Transition Rules
7. GST – Registration Rules
8. GST – Return Rules.
9. GST – Composition Scheme Rules.
10. GST – Invoice Rules.
11. GST – Payment Rules
12. GST – Input Tax Credit (ITC) Rules.
13. GST – Refund Rules.
14. GST – Valuation Rules.

In India, following GST law are being passed by respective State Government:-

The State Goods and Service Tax Act (SGST Act) for each respective State:-

• Uttar Pradesh Goods and Service Tax Act

 

Indirect taxes which are merged in GST:-

Central Levies:

• Central Excise duty
• Duties of Excise (Medicinal and Toilet Preparations)
• Additional Duties of Excise (Goods of Special Importance)
• Additional Duties of Excise (Textiles and Textile Products)
• Additional Duties of Customs (commonly known as CVD)
• Special Additional Duty of Customs (SAD)
• Service Tax

State Levies:

• State VAT
• Central Sales Tax
• Purchase Tax
• Luxury Tax
• Entry Tax/ Octroi
• Entertainment Tax
• Taxes on advertisements
• Taxes on lotteries, betting and gambling

 

 

Accounting code for payment of KKC notified by CBEC

The CBEC vide Circular No. 194/04/2016-ST dt. 26 May 2016 has notified “Accounting code for payment of KKC” by the assessees, as under:

Chapter VI of the Finance Act, 2015 is effective from 1st June, 2016, i.e. KKC is leviable on all taxable services, other than services which are fully exempt from Service Tax or services which are otherwise not liable to Service Tax under section 66B of the Finance Act, 1994, at the rate of 0.5%. Accordingly, accounting codes have also been allotted by the Office of the Controller General of Accounts for the new Minor Head “507-Krishi Kalyan Cess” and new Sub-heads, for payment of KKC, as under:

Krishi Kalyan Cess (Minor Head) : 0044-00-507

Tax Collection : 00441509

Other Receipts (Interest) : 00441510

Deduct Refunds : 00441511

Penalties : 00441512

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Things to know about Goods and Service Tax(GST)

On June 14, 2016 the Finance Ministry has released the ‘Model GST Law’. It outlines the structure of the Goods and Service Tax regime. Further, the draft of ‘Integrated GST Bill, 2016’ is also released along with such Model GST laws. It also provides the framework for levy and collection of CGST and SGST. “CGST” is the tax levied under the Central Goods and Services Tax Bill, 2016. “IGST” is the tax levied under the Integrated Goods and Services Tax Bill, 2016.

 

Key takeaways from Model GST law are given hereunder:

1) Threshold limit for registration

The dealer is required to take registration under this law if his aggregate turnover in a financial year exceeds Rs.9 lakhs. However, dealers conducting business in any North Eastern State are required to take registration if their turnover exceeds Rs.4 lakhs.

2) Place of registration

The dealer has to take registration in the State from where taxable goods or services are supplied.

3) Migration of existing taxpayers to GST

Every person already registered under extant law will be issued a certificate of registration on a provisional basis. This certificate shall be valid for period of 6 months. Such person will have to furnish the requisite information within 6 months and on furnishing of such information, final registration certificate shall be granted by the Central/State Government.

4) GST compliance rating score

Every taxable person shall be assigned a GST compliance rating score based on his record of compliance with the provisions of this Act. The GST compliance rating score shall be updated at periodic intervals and intimated to the taxable person and also placed in the public domain.

5) Levy of Tax

The person registered under this law is liable to pay tax if his aggregate turnover in a financial year exceeds Rs 10 lakhs. However, a dealer conducting business in any of the North Eastern is required to pay tax if his aggregate turnover exceeds Rs. 5 lakhs.

A negative list has also been prescribed for transactions and activities of Government and Local Authorities which shall be exempt from GST levy, like activities of issuance of passport, visa, driving license, birth certificate or death certificate, etc.

6) Taxable Event

The taxable event under GST regime will be supply of goods or services. Supply includes all forms of supply of goods and/or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration. It also includes importation of service, whether or not for a consideration.

7) Point of taxation

CGST/SGST shall be payable at the earliest of the following dates, namely:

(i) Date on which the goods are removed for supply to the recipient (in case of movable goods).

(ii) Date on which the goods are made available to the recipient (in case of immovable goods).

(iii) Date of issuing invoice by supplier; or

(iv) Date of receipt of payment by supplier; or

(v) Date on which recipient shows the receipt of the goods in his books of account.

8) TCS on online sales of goods or service

Every E-commerce operator engaged in facilitating the supply of any goods and/or services (like Amazon, Flipkart, etc.) shall collect tax at source at the time of credit or at the time of payment whichever is earlier.

9) Valuation Rules

Such Rules shall apply to the supply of goods and/or services under the IGST/CGST/SGST Bill. Some of the methods prescribed for valuation are given hereunder:

1. a) Transaction Value: As per this method the value of goods and/or services shall be the transaction value.
2. b) Transaction value of goods or services of like kind: Where value of supply cannot be determined under previous method [i.e. point a], the value shall be determined on the basis of transaction value of goods and/or services of like kind and quality supplied at or about the same time to customers.
3. c) Computed Value Method: Where value cannot be determined under previous method [i.e., point b], it shall be based on computed value which shall include cost of production, manufacture or processing of the goods or, the cost of the provision of services, the charges, if any, for design and brand and amount towards profit and general expenses.
4. d) Residual Method: Where the value cannot be determined under the computed value method, the value shall be determined using reasonable means consistent with the principles and general provisions of these Rules.

10) Utilization of credit:

Utilization of IGST: The amount of input tax credit on account of IGST available in the electronic credit ledger of dealer shall first be utilized towards payment of IGST and the amount remaining, if any, may be utilized towards the payment of CGST and SGST, in that order.

Utilization of SGST: The amount of input tax credit on account of SGST available in the electronic credit ledger shall first be utilized towards payment of SGST and the amount remaining, if any, may be utilized towards the payment of IGST.

Utilization of CGST: The amount of input tax credit on account of CGST available in the electronic credit ledger shall first be utilized towards payment of CGST and the amount remaining, if any, may be utilized towards the payment of IGST.

Note: The input tax credit on account of CGST shall not be available for payment of SGST.

11) Payment

Any tax, interest, penalty, fee, etc., shall be paid via internet banking or by using credit/debit cards or NEFT or RTGS. This amount shall be credited to the electronic cash ledger of dealer.

12) TDS

The Central or a State Government may mandate certain departments (viz, local authority, Govt. agencies) to deduct tax at the rate of one percent on notified goods or services, where the total value of such supply, under a contract, exceeds Rs 10 lakhs.

13) Refund

A person can claim refund of any tax and interest by making an application in that regard to the prescribed officer of IGST/CGST/SGST. The application can be made before the expiry of two years from the relevant date as may be prescribed. It has been provided that the limitation of two years shall not apply where such tax or interest or the amount has been paid under protest.

14) Returns

Dealers shall be required to furnish following returns

1. a) Monthly Return: Every registered taxable person shall have to e-file a monthly return for inward and outward supplies of goods and/or services, input tax credit availed, tax payable, tax paid and other particulars within 20 days after the end of such month.
2. b) Return for Composition Scheme: Dealers paying tax under composition scheme shall have to furnish a return for each quarter or part thereof, electronically within 18 days after the end of such quarter.
3. c) TDS Return: Every dealer who is required to deduct tax at source shall furnish a return electronically within 10 days after the end of month in which deduction is made.
4. d) Return for Input Service Distributor: Every Input Service Distributor shall file e-return for every calendar month or part thereof, within 13 days after the end of such month.
5. e) First Return: Every registered taxable person paying CGST/SGST on all intra-State supplies of goods and/or services shall have to furnish the first return from the date on which he became liable to registration till the end of the month in which the registration has been granted.
6. f) Annual return: Every registered taxable person shall have to furnish an annual return for every financial year electronically on or before the 31st day of December following the end of such financial year.
7. g) Final return: Every registered taxable person who applies for cancellation of registration shall have to furnish a final return within three months of the date of cancellation or date of cancellation order, whichever is later, in a prescribed form.

15) Transitional Provisions

1. Under the Model GST Law, a registered taxable person will be entitled to take credit of the amount of cenvat credit/ Value Added Tax carried forward in a return furnished by him in respect of the period ending with the day immediately preceeding the appointed day.
2. As per Model GST Law, a registered taxable person shall be entitled to take in his electronic credit ledger/credit of the unavailed cenvat credit/ unavailed input tax credit in respect of capital goods not carried forward in a return furnished by him for the period ending with the day immediately preceding the appointed day.
3. If a person registered under GST was not liable to be registered under the earlier law or if he was manufacturing exempted goods under the earlier law which are not taxable, then he will be allowed to take credit of eligible duties and taxes in respect of inputs held in stocks or semi-finished/finished goods.
4. Every claim for refund of any duty/tax and interest, if any, paid on such duty/tax or any other amount, filed by any person before the appointed day, shall be disposed of in accordance with the provisions of earlier law and any amount eventually accruing to him shall be paid in cash. However, where any claim for refund is fully or partially rejected, the amount so rejected shall lapse

(Credit : CA Vinay Mittal)

• History of Service Tax Rates

History of Service Tax Rates since 01-07-1994 till date…

From	TO	Rate	EC on ST	SHEC on ST	SBC on Service Value	KKC on Service Value	Effective Rate
01-07-1994	13-05-2003	5%	0	0	0	0	5%
14-05-2003	09-09-2004	8%	0	0	0		8%
10-09-2004	17-04-2006	10%	2%	0	0		10.20%
18-04-2006	10-05-2007	12%	2%	0	0		12.24%
11-05-2007	23-02-2009	12%	2%	1%	0		12.36%
24-02-2009	31-03-2012	10%	2%	1%	0		10.30%
01-04-2012	31-05-2015	12%	2%	1%	0		12.36%
01-06-2015	14-11-2015	14%	0	0	0	0	14%
15-11-2015	31-05-2016	14%	0	0	0.5%	0	14.5%
01-06-2016	Till date	14%	0	0	0.5%	0.5%	15%

 

• How to find which rate will apply

Rule 4 of the POT Rules: Determination of Point of Taxation in case of change of effective rate of tax:

Now let us understand the provisions of Rule 4 of POT Rules with the help of the following table:

/Clause			Sub-clause	Condition	Point of taxation
(a)				When the taxable service has been provided before the change in the effective rate of tax:
			(i)	When invoice is raised after date of change of effective rate of tax and payment is also received after date of change of effective rate of tax.	date of invoice or the date of receipt of payment whichever is earlier.
			(ii)	When invoice is raised before date of change of effective rate of tax but payment is received after date of change of effective rate of tax	date of invoice
			(iii)	When invoice is raised after date of change of effective rate of tax but payment is received before date of change of effective rate of tax.	date of receipt of payment
(b)				When the service has been provided after the change of effective rate of tax:
			(i)	When invoice is raised before date of change of effective rate of tax but payment is received after date of change of effective rate of tax.	date of receipt of payment
			(ii)	When invoice is raised before date of change of effective rate of tax and payment is also received before date of change of effective rate of tax	date of invoice or the date of receipt of payment whichever is earlier.
			(iii)	When invoice is raised after date of change of effective rate of tax but payment is received before date of change of effective rate of tax	date of invoice

Rule 7: Point of taxation when service tax is payable under reverse charge mechanism:

When service receiver is liable to pay service tax under RCM, the point of taxation shall be the date when the payment is made. There is one condition in this rule that the payment should be made within three months (w.e.f 01-10-2014 previously it was six months) of date of invoice. Provided that where the payment is not made within a period of three months of the date of invoice, the point of taxation shall be the date immediately following the said period of three months.

 

Krishi Kalyan Cess (KKC) @ 0.5% introduced (from 1st June 2016)

It is the time to face new cess named as Krishi Kalyan Cess (KKC) @0.5% on the value of all taxable services as introduced by Budget 2016 w.e.f 1st June 2016. Many of us have some questions about introduction of this new cess. In this short blogs we covered almost all such questions.

About Krishi Kalyan Cess(KKC):

A cess is a tax which is to be utilized for a specific purpose for which it is collected like education cess for promoting education, Swatch Bharat cess for cleanness and similarly Krishi kalyan Cess for improving agriculture. Hence Krishi Kalyan cess is introduced to finance and promote the initiative to improve agriculture in our country which is much needed due to increasing food requirement in a highly populated country like India.

Krishi Kalyan Cess is levied on what:

Krishi Kalyan Cess is levied on value of all taxable services, Hence Effective Rate of Service tax would be 15% from 1st June 2016:

Service Tax               : 14%+

Swatch Bharat Cess: 0.5%

Krishi Kalyan Cess  : 0.5%

Effect of Krishi Kalyan Cess on Pocket of Common man :

After introduction of Krishi Kalyan Cess all services would become costlier like Rent payment, Travel, Advertisement, Internet bill, Construction etc. Hence more money outflow from the pocket of common man and less savings. Service tax is an indirect tax hence all burden of increased tax would be passed on to ultimate consumer. Due to increase in rate of Service tax cost of manufacturer would increase, which will lead the price hike of their product or services.

Krishi kalyan Cess on Services Provided Before 1st June 2016:

As per rule 4 of Point of Taxation Rules, 2011 : Determination of Point of taxation in case of change in effective rate of tax:

If any service has been provided before introduction of Krishi Kalyan Cess i.e. 1st June 2016, but payment is made on or after 1st June 2016 against an invoice raised after 1st June 2016, Then Krishi kalyan cess would be applicable. But if invoice was also raised before 1st June and only payment is made on or after 1st June 2016, then Krishi kalyan cess would not be applicable. This can be understood with the help of following data:

Case	Service Provided	Invoice Raised	Payment made	KKC will apply or not
Case 1	Before	Before	Before	NO
Case 2	Before	Before	After	NO
Case 3	Before	After	After	YES
Case 4	After	After	After	YES
Case 5	After	Before	Before	NO
Case 6	After	After	Before	YES

 

Before : Before 1st June 2016

After : On or after 1st June 2016

To simplify,  there are three criteria Service, Invoice and Payment, out of these three the side in which two falls rate of that side would be applicable.

Krishi Kalyan Cess in Services under RCM (Reverse Charge Mechanism):

Krishi kalyan cess would also be applicable on services under Reverse Charge or Partial Reverse Charge. In case of Reverse charge or Partial Reverse Charge Service receiver is liable to pay his portion of KKC along with Service tax. In case of abatement or composite work like Works contract, KKC with Service tax @ 15% would be calculated on value of services after abatement or value of works contact X 40% or 70% as applicable.

For more detail of Service tax on Works Contact Click here

Cenvat Credit of Krishi Kalyan Cess:

Unlike SBC, Input Credit of  Krishi Kalyan cess would be allowed to be taken and this can only be utilized for payment of Krishi kalyan cess on output service. We know that input credit on  Swatch Bharat Cess is not allowed.

Other Important Points about Krishi Kalyan Cess:

Some other important points which needs to be noted about Krishi Kalyan Cess:

1. Service provider would be required to mention Krishi kalyan Cess like SBC separately in his invoice.
2. Legal provision of Krishi Kalyan Cess can be found in Finance Bill 2016(Chapter VI clause 158).
3. Krishi kalyan Cess is different from Krishi Kalyan Surcharge which is levied @ 7.5% on undisclosed income as per scheme announced in Union budget 2016.
4. The proceeds of Krishi kalyan cess would first be credited to the Consolidated fund of India and Central govt. after due appropriation made by Parliament, utilize this sum for purpose as specified.
5. All other provision of Finance Act 1994 along with rules made there-under like interest , penalty, refund etc would also apply to KKC as these apply in case of  Service tax.

If you like it, please comment and share on social media to spread financial awareness.

CA Ashok Kumar

We have received many queries regarding Calculation of Service tax on Works Contract Service. Here in this blog, a short summary for service tax on works contract is given:

W.e.f 01-07-2012, All services are taxable except services in negative list and exemption list. To remove doubt a list of declared service is given which are taxable services. In the list of declared services, there is a service of “Service portion in the Execution of a Works Contract“. Hence in case of works contract, Service tax is levied only on service portion.

SR=Service Receiver, SP= Service provider, WC= Works Contract, SR-RC= Service tax Reverse charge

What is Works Contract for the purpose of Service tax?:

Works contract means a contract to do a work(service) but wherein some transfer of property from SP to SR, is also involved. But such property (goods) needs to be taxable as sale of goods. In short,

A contract for Service and Supply both is a works contract.

Note: A contract is works contract or not, it should be decided on the basis of contract and not on the basis of individual invoice.

How to Calculate Service Tax on Works Contract?

A works contract is under Partial Reverse Charge for Service tax, 50% of service tax payable by SP and 50% by SR.But Reverse charge is not applicable where service provider is a company. In case of company, 100% of service tax is payable by SP after claiming ST in his invoice.

A step by step procedure for calculation of Service tax on Works contact is given below:

(A) If Service provider is a Company: (NO ST-RC)

1.   If Supply and service portion of work value (Running Bill) is separable then service provider will raise a invoice by adding service tax only on service portion. Service receiver will pay the bill value to service provider and service receiver need not pay any service tax under Reverse charge Mechanism.

ST=Service portion X  15%

2.  If Supply and service portion of work value(Running Bill) is not separable then

• First you need to calculate the value of Free of cost(FOC)material if any issued by SR to SP excluding sales tax if any.
• Add FOC value in work done value.
• Then find the applicable percentage to arrive at service value:

Original Work like new construction, erection etc. : 40%

Other work like repair and maintenance etc.          : 70%

Service Tax payable by SP: (work done value + FOC value) * applicable percentage*15%

• SP will raise an invoice adding above value of ST in his invoice. SR will make payment of invoice only and SR is not liable to pay anything under RCM.

 

(B) If Service provider is not a Company: (ST-RC-50%)

1.   If Supply and service portion of work done value is separable then service provider will raise a invoice by adding 50% of service tax only on service portion. SR will pay the bill value to service provider and service receiver is also required to pay balance 50% of service tax under RCM to ST authorities.

ST Payable by SP=Service portion X  15% X 50% (this part is paid by SR to SP against invoice)

ST payable by SR = Service portion X 15% X 50% (this part is paid by SR to ST authorities)

2.  If Supply and service portion of work done value is not separable then

• First you need to calculate the value of Free of cost(FOC)material if any issued by service receiver to service provider excluding sales tax if any.
• Add FOC value in work done value.
• Then find the applicable percentage to arrive at service value:

Original Work like new construction, erection etc. : 40%

Other work like repair and maintenance etc.          : 70%

Service Tax payable by SP: (work done value + FOC value) * applicable percentage*15%*50%

Service Tax payable by SR: (work done value + FOC value) * applicable percentage*15%*50%

• SP will raise an invoice adding above value of ST in his invoice. SR will make payment of invoice  and SR is also liable to pay his portion of ST under RCM to ST authorities.

Note:

1. Service tax rate is taken as 14% + 0.5% SBC + 0.5% Krishi Kalyan Cess (from 01-06-2016)
2. Cenvat Credit can not be utilized for payment of ST-RC. But Cenvat credit can be taken for sum paid under ST-RC because ST-RC is an input tax not output tax.
3. Cenvat Credit of SBC in not available.
4. But Cenvat Credit of KK Cess paid on input service is available for payment of KK Cess on output service.

(Click Here for Works contract in GST Regime)