Goods and GST Bill passed, Goods and Services Tax - GST

[Ganeshan Kalyani]

Dear All,

GST Bill is passed in Rajya Sabha on 03. 08.2016.

A panel under chief economic adviser Arvind Subramanian has recommended a revenue-neutral rate of 15-15.5%, with a standard rate of 17-18% be levied on most goods and all services.

But, there has been no agreement yet on rates of various goods and services, which remains a tricky issue. According to the Bill, passed in the Lok Sabha in May 2015, the rates were to be decided by a GST council headed by the central finance minister with state finance ministers as members.

Let us wait.

Thanks.

Posts / Replies

[Ganeshan Kalyani]

Addressing the concern, government introduced some relief vide Notification No.8/2017-Central Tax (Rate) whereby the aforementioned reverse charge provision triggers only when purchases from unregistered supplier exceeds INR 5,000 in a day (total value of all such purchases in a day whether goods or services and from one supplier or multiple suppliers).

[Ganeshan Kalyani]

Post the notification, if you are registered under GST and you purchases goods and/ or services from person not registered under GST exceeding INR 5,000 in a day, then you will have to pay GST under reverse charge. However, you will get ITC of GST paid.

[Ganeshan Kalyani]

If you become liable to pay tax under reverse charge under the said scenario, you are required to do necessary compliance also i.e. raise an invoice on self, report it in return to avail ITC. What will be challenging is determination of rate and HSN of the products so purchased.

Clearly the government wants to discourage the practice of working without GST number and bring everyone under tax net

[Ganeshan Kalyani]

A proposal to refund central goods and services tax (GST) on items made in formerly excise-free zones in Himachal Pradesh, Uttarakhand and the North-East is set to be presented to cabinet. The move will benefit companies such as CiplaBSE, Dabur, Dr Reddy’s and TVS MotorBSE that invested in those areas because of the tax break.

[Ganeshan Kalyani]

The Expenditure Finance Committee (EFC) has approved the scheme, which is likely to benefit a number of automobile, fast-moving consumer goods (FMCG) and pharmaceutical companies that have invested in these zones.

[Ganeshan Kalyani]

Many companies in the cement sector have plants in such zones in the North-East. Department of Industrial Policy and Promotion, which anchors the scheme, will move the proposal for cabinet consideration.

[Ganeshan Kalyani]

Industry had expected the rollout of the scheme along with GST, but the plan wasn’t ready at the time. “It would be in place before the first payment of GST becomes due,” said a government official.

[Ganeshan Kalyani]

The Delhi government today flagged off six mobile vans that will go across city markets to raise awareness on the Goods and Services Tax (GST) and address concerns of traders regarding the new tax regime.

[Ganeshan Kalyani]

The ‘GST awareness mobile vans’ were flagged off by Finance Minister Manish Sisodia from the Delhi Secretariat here and have senior officials of the trade and taxes department on board.

[Ganeshan Kalyani]

These vans would run through different markets across the city for around 15 days and the officials would address the issues raised by traders.

[Ganeshan Kalyani]

Sisodia, who is also the deputy chief minister, said traders can also give their suggestions pertaining to the tax system which he would take up during the GST council meeting.

[Ganeshan Kalyani]

Sisodia said he would review the facility with the department’s officers after two days.

[Ganeshan Kalyani]

The Government is mindful of the concerns of tax payers, especially the small taxpayers, arising from transition to the GST regime from 1st of July, 2017.

[Ganeshan Kalyani]

With a view to ease the compliance burden of provisionally migrated small taxpayers opting to pay tax under the Composition scheme, it has been decided to extend the time limit for filing intimation for Composition levy (filing of intimation FORM GST CMP-01) up to 16th August, 2017.

[Ganeshan Kalyani]

Similarly, the taxpayers who were provisionally migrated by virtue of being registered under the existing laws, but who are no longer required to be registered under GST, the period of applying for Cancellation of Registration is being extended up to 30th September, 2017. Relevant notifications are being issued.

[Ganeshan Kalyani]

Existing taxpayers migrating under Goods and Services Tax (GST) and the ones looking to seek fresh registration under GST will be alloted a Goods and Services Tax Identification Number (GSTIN).

[Ganeshan Kalyani]

It will be a 15 digit number. Rule 3(1) of Registration Rules cares to specify what each digit of GSTIN signify:

(a) first two characters are for the State code;
(b) next ten characters for the PAN or the Tax Deduction and Collection Account Number;
(c) next two characters for the entity code (including the z field in Provisional ID); and
(d) the last digit is the checksum character (for internal use by government)

[Ganeshan Kalyani]

Under GST, a regular taxpayer needs to furnish monthly returns and one annual return. There are separate returns for a taxpayer registered under the composition scheme, nonresident taxpayer, taxpayer registered as an Input Service Distributor, a person liable to deduct or collect the tax (TDS/ TCS) and a person granted Unique Identification Number.

[Ganeshan Kalyani]

The basic features of the returns mechanism in GST include electronic filing of returns, uploading of invoice level information and auto-population of information relating to Input Tax Credit (ITC) from returns of supplier to that of recipient, invoice-level information matching and auto-reversal of Input Tax Credit in case of mismatch. The returns mechanism is designed to assist the taxpayer to file returns and avail ITC.

[Ganeshan Kalyani]

It is important to note that a taxpayer is NOT required to file all types of returns. In fact, taxpayers are required to file returns depending on the activities they undertake. The government had relaxed return filing procedure for first two months i.e. July and August 2017.

[Ganeshan Kalyani]

All the returns are to be filed online. Returns can be filed using any of the following methods:

1. GSTN portal (www.gst.gov.in )
2. Offline utilities provided by GSTN
3. GST Suvidha Providers (GSPs) – If you are already using the services of ERP providers such as Tally, SAP, Oracle etc., there is a high likelihood that these ERP providers would provide inbuilt solutions in the existing ERP systems

[Ganeshan Kalyani]

Return Filing Process

A normal taxpayer has to file the following returns:

1. GSTR-1 (For reporting outward supplies)
2. GSTR-2 (For reporting inward supplies)
3. GSTR-3 (Monthly consolidated return)
4. Annual Return

[Ganeshan Kalyani]

GSTR-1 (Statement of Outward Supplies): This return signifies the tax liability of the supplier for the supplies effected during the previous month. It needs to be filed by the 10th of every month in relation to supplies effected during the previous month. For example, a statement of all the outward supplies made during the month of July 2017 needs to be filed by 10th August, 2017.

[Ganeshan Kalyani]

GSTR-2 (Statement of Inward Supplies):This return signifies accrual of ITC (Input Tax Credit) from the inputs received during the previous month. It is auto-populated from the GSTR-1s filed by the corresponding suppliers of the Taxpayer except for a few fields like imports, and purchases from unregistered suppliers.

It needs to be filed by the 15th of every month in relation to supplies received during the previous month. For example, a statement of all the inward supplies received during the month of July 2017 needs to be filed by 15th August, 2017.

[Ganeshan Kalyani]

GSTR-3 (Monthly return): This is a consolidated return. It needs to be filed by the 20th of every month. It consolidates outward supplies, inward supplies, tax payable, ITC etc.

NOTE: Payment of GST is to be made on or before 20th of every month.