GOODS AND
SERVICES TAX (GST)
It replaces Central Excise Duty/ Additional
Duties of Excise/ Excise Duty under MTPA/ CVD/ SAD/ Service Tax/ Surcharge
& Cesses / VAT/ CST/ Purchase Tax/ Entertainment Tax/ Luxury Tax/ Entry
Tax/ Taxes on Lottery.
GST Council is the apex body created by Parliament for
governance of this Act. It includes Finance Secretaries of Central as well as
various State Governments.
GST Rates varies for supply of various Goods and
Services ranging from 0%, 5%, 12%, 18% & 28%.
Old Sales Tax/ Manufacturing Tax/ Service Tax Registration
Numbers will go and new PAN based Registration Number for GST is essential,
should get either migration to the new portal or by registering for a fresh.
Structure of this number is as under:
07BBBBB0000A1ZZ
Out of which first two digits are state code (in which
Registration is taken)- '07' is for Delhi,
Next 10 digits (BBBBB0000A) are PAN number of the
assessee
and last 3 digits are serial number.
Incidence of GST is on following:
1. Supply of Goods or Services.
2. Agreed to Supply Goods or Services for
Consideration (either in cash or in kind).
3. Destination based Tax will be charged (If source
& destination are in same state, then it is Intrastate Transaction, if
source & destination are in different states, then it is Interstate
Transaction).
4. Branch Transfer/ Stock Transfer will also attract
GST.
5. Now concepts of Statutory Forms such as ‘C’ form/
‘F’ form become outdated.
GST Registration is mandatory, if Annual Turnover is
Rs. 20 Lacs or more and Rs. 10 lacs in case of Assessees located in the states
of North Eastern region including Sikkim and Himachal Pradesh, Uttarankhand,
Jammu & Kashmir. However if you are engaged in Interstate transactions,
Limit of Rs. 20 Lacs will not be applicable and you have to take Registration
in all cases.
Three types of GST are there:
1. Central Goods & Service Tax (CGST)
2. State Goods & Service Tax (SGST)
3. Integrated Goods & Service Tax (IGST)
Rates under
GST:
1. Rates of CGST & SGST shall be equal and will be
50% of the rates stipulated for those specific Goods or specific Services. e.g.
if the goods under transaction attract 18%, then CGST for them is 9% and SGST
for them is 9%.
2. In case of Local Invoice or Intrastate Invoice,
CGST and SGST both need to be charged separately and to be mentioned in the
Return accordingly.
3. Rates of IGST shall be equal to the sum of rate
under CGST and rate under SGST. Thus in above example, rate under IGST is 18%
(9 + 9).
4. In case of Central Invoice or Interstate Invoice,
IGST need to be charged and to be mentioned in the Return
accordingly.
5. Input Tax Credit shall be available for all these
three taxes viz. CGST, SGST & IGST except in some cases.
6. Earlier, in spite of 'C' or 'H' or 'F' forms, 2% tax
was a cost to the assessee. Now, since these forms are done away with, this 2%
cost is avoided, since full set-off or ITC of IGST on all Interstate
Transactions is allowed now.
7. GST will also be chargeable on Free Items or
Samples given. Thus GST needs to be paid on all items being delivered to the
customer.
Composition
Scheme:
1. It is available for all assessees dealing in goods
having Annual Turnover <= Rs. 75 Lacs.
2. Under this scheme, 2% tax is applicable for
Manufacturing Organizations, 5% tax is applicable for Restaurants/ Dhabas and
1% tax is applicable for all others.
3. No Set-off or Input Tax Credit shall be available
under this scheme.
4. This Scheme is Optional.
5. Assessee has to apply for this and then GST
Official's permission is required to opt for this.
6. If this scheme is availed, GST cannot be charged in
the Invoices raised by the Assessee.
7. If this scheme availed in one year and for next
year you intend to opt out of this scheme, you can apply to GST officials and
take permission for the same i.e. either to Opt In or Opt Out of the scheme.
8. Service Providers shall not be eligible for the
Composition Scheme.
Immovable Property is not Taxable under GST. Thus, if
the flat is booked before Completion Certificate, it is Taxable under GST,
whereas if the flat is purchased after Completion Certificate (Ready Possession
Flats), it will not be Taxable under GST.
GST is also applicable on Advance from Customers, as
and when it is received from the customer, before raising invoice for the same.
It needs to be declared in the Output GST Return (GSTR-1).
URD
Purchases (Purchases from Unregistered Dealers/ Suppliers):
If the Assessee Purchased from Unregistered Dealers,
Assessee has to ACTUALLY Pay GST on the same Purchases under Reverse Charge.
However, Assessee can take set-off or Input Tax Credit of the same.
No Revision of Return is allowed under GST.
Input Tax
Credit:
1. Assessee has to be in Possession of Tax Invoice or
Debit Note or Credit Note and Goods or Services must have been received by the
Recipient.
2. Payment has to be made to the Supplier within 180
days. If the payment is not made to the supplier within this period, the ITC
has to be reversed by the Assessee. It can later be availed, as and when actual
payment of this is made to the Supplier.
3. ITC of GST paid under Reverse Charge (GST paid on
Unregistered Purchase or on Other Specified Services under Reverse Charge) can
be availed.
GST
Rating:
1. There will be GST Compliance Rating (just like
CIBIL Credit Rating) in respect of Assessee, in consideration of timely filing
of Returns, timely GST Payments and other discipline followed by the Assessee.
2. This can be viewed by the Assessee and also by
others.
3. Thus while selecting the Supplier, his GST
Compliance Rating can be viewed beforehand.
4. It will also be viewed by Bankers, Financial
Institutions while lending money to the Assessee.
Input Tax
Credit under GST shall be used in the following manner and in the same
sequence:
ITC of CGST
shall be used
1. For payment of CGST
2. For payment of IGST
ITC of SGST
shall be used
1. For payment of SGST
2. For payment of IGST
ITC of IGST
shall be used
1. For payment of IGST
2. For payment of CGST
3. For payment of SGST
Return
Filing Due Dates:
1. 10th of Next Month- Output GST i.e. Sales Return
(including Advances received from Recipient) (GSTR-1).
2. 15th of Next Month- Input GST i.e. Purchase Return
(GSTR-2). These entries have to match with the entries made by your suppliers
in their GSTR-1.
3. 20th of Next Month- Net GST Payment i.e. Final
Return (GSTR-3). Liability of GST Payment shall be calculated by the System
itself, after filing of GSTR-1 & GSTR-2 as mentioned above.
4. 31st December of Next Financial Year- Annual Return
(GSTR-9), alongwith Audit Report. Audit is compulsory for the Assessees having
Annual Turnover of Rs. 2 Crore and more.
5. Thus during the year, total 37 Returns (12 months X
3 each month = 36 plus 1 Annual Return) are to be filed by the Assessee for
each Place of Business. If the Assessee is carrying out business at more than
one places, he has to obtain GST Registration at each of such place and has to
file 37 Returns for each of such place of business.
6. Quarterly Return instead of Monthly Return is
prescribed for Composition Dealers.
GST to be
paid under Reverse Charge in the following cases:
1. Unregistered Purchases (with Names & Addresses
of such suppliers).
2. Services such as Goods Transportation, Advocates
Fees, Sponsorship Services, Director Sitting Fees, Rent a Cab etc.
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