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Topic: Goods and Services Tax
(GST) in India
M.com Level Syllabus
Presented by
Dr. Gurumurthy K H Asst. Prof. in Commerce
GFGC Magadi, Ramanagar (dt)
9448226676
1
Unit-1
Before GST The tax system in India
TAX
DIRECT TAX
imposed on person
(Paid directly to Govt.)
INCOME TAX CORPORATE TAX WEALTH& GIFT
TAX
INDIRECT TAX
Imposed on Goods & services
(paid to Govt. via third person)
Central Govt.
Central Excise Duty
Commercial Tax
Value Added Tax (VAT)
Food Tax, Service Tax
Sale tax ,Surcharge and Cesses
Entertainment Tax
Tax on betting, lotteries gambling
State Govt.
Value Added Tax (VAT),
Central Sales Tax
State cesses and surcharges
Entertainment Tax
Entry Tax (all forms) Octroi
Luxury Tax
Advertisement taxes
Purchase Tax
2
Backdrop of GST
• Before Introduction of GST, the indirect tax system in India was VAT, Sales tax, service tax central exercise, commercial tax etc imposed by both central and state Govt. i.e the multiplicity of taxes levied by the Centre and State Govt on goods and services. This has led to a complex and conflicting principles in indirect tax structure, adding to the multiple compliance and administrative costs. There is no uniformity in tax rates and structure across States. There is cascading of taxes due to tax on tax‘.
3
EVOLUTION OF GST ACT IN INDIA • Internationally,France was the first country to implement
GST in 1954. Now more than 164 countries across the world have adopted GST. Most of the countries, depending on their own socio-economic formation, have introduced National level GST or Dual GST.
• In India, the idea of moving towards the GST was first mooted by the then Union Finance Minister Shri P. Chidambaram in his Budget for 2006-07. Initially, it was proposed that GST would be introduced from 1st April, 2010. Joint Working Groups of officials having representatives of the States as well as the Centre were set up to examine various aspects of the GST and draw up reports specifically on exemptions and thresholds, taxation of services and taxation of inter-State supplies etc. the features of the Proposed GST has formed on the basis of discussion between the Centre and States
4
Introduction to GST
• The introduction of Goods and Services Tax (GST) would be a very significant step in the field of indirect tax reforms in India. By amalgamating a large number of Central and State taxes into a single tax, it would mitigate cascading or double taxation in a major way and pave the way for a common national market. From the consumer point of view, the biggest advantage would be in terms of a reduction in the overall tax burden on goods
5
The Journey to GST
1) Announcement of GST for the first time was made by the then Union Finance Minister, during budget of 2006-07 that it would introduced from 1 April 2010
1) 2006
2) First Discussion Paper was released by the Empowered Committee
2) 2009 3) Constitution (115th Amendment) Bill introduced and subsequently lapsed
3) 2011
4) The Constitution (122nd Amendment) Bill was introduced in the Lok Sabha
4) 2014
5) Aug 2016
5) The Constitution (One Hundred and First (101) Amendment) Act was enacted 7) March 2017
7) GST Council Recommends the CGST, SGST, IGST, UTGST and Compensation Cess Act
8) April 2017
8) CGST, IGST, UTGST and Compensation Cess Acts passed
10) All States except J&K passed their SGST ACT
9) May 2017
11) GST Launched
11) 1st July 2017
6) 1st GST Council Meeting
6) Sep 2016
10) 30th June 2017
9) GST Council recommends all the rules
12) SGST Act passed by J&K; CGST and IGST Ordinances promulgated to extend GST to J&K
12) 8th July 2017
True Economic Integration of India
Journey Continues…
• Notifying and amending rules
• Dealing with IT related issues
• Revision of Rates • Clarification and
communication with taxpayers
6
The Present tax system in India
TAX
DIRECT TAX
INCOME TAX
CORPORATE TAX
INDIRECT TAX
One Nation one tax
GST
7
GST ACT- 35, & Rules-159,
GST -Applicability
Whole of India Including
J&K
GST ACT
29 State SGST
7 Union territories out of-2 State legislature
–Delhi & Pondicherry SGST
-5 Union territory UTGST Act 2017 (26 Sec)
CGST ACT 2017 (174 section (III- Schedule)
IGST ACT 2017 (25 Section)
Compensation ACT 2017 (14 section)
29
2 1
1 1 1
Total 35 GST ACT 35
8
GST ACT in India(Genesis of GST in India)
• In India constitution (101st Amendment) Act 2016, which paved the way for introduction of GST.
• GST was introduced as the Constitution 122nd Amendment Bill (One Hundred and Twenty Second Amendment) Act 2017
• GST came in to force on 1st July 2017 throughout India Under dual GST Model.
• The GST is governed by GST Council and its Chairman is Union Finance Minister of India
9
Definition of GST Constitution (101st Amendment) Act, 2017
• (U/s 366(12A) Goods and services tax – “Any tax on supply of goods or service or both, except taxes on the supply of the alcoholic liquor for human consumption”
• The above definition clearly says that “GST is a single Indirect Tax through out India applicable on supply of goods or service or both. GST is a destination based tax levied at a single point at the time of consumption of goods or services by the ultimate consume”. The final consumer will thus bear only the GST charged by the last dealer in the supply chain.
10
TAX Subsumed Under GST
GST
CGST Central Excise Duty
Commercial Tax
Value Added Tax (VAT)
Food Tax, Service Tax
Sale tax ,Surcharge and Cesses
Entertainment Tax
Tax on betting, lotteries gambling
Special additional duty (SAD)
Countervailing Duty (CVD) is an additional import duty
SGST
Value Added Tax (VAT),
Central Sales Tax
State cesses and surcharges
Entertainment Tax
Entry Tax (all forms) Octroi
Luxury Tax
Advertisement taxes
Purchase Tax
IGST
Central Sale TAX
11
Tax Not subsumed under GST
• Duties and Tax-
– Basic custom duty,
– Export duty,
– Road tax,
– passenger tax,
– property tax,
– toll tax,
– stamp duties
(The existing tax system will apply)
12
Commodities kept Outside GST !
3. Five petroleum products – crude oil GST Council to decide the diesel, petrol, natural gas and ATF date from which GST will (Aviation Turbine Fuel) - be applicable
4. Tobacco- Part of GST but power to levy additional excise duty with Central Government
5. Entertainment tax levied by local bodies
-Power to tax remains with local bodies
1. Sin goods-Alcohol fit for human consumption -Power to tax remains with the State
6. Real Estate Sector- GST will not be levied on sale/purchase of immovable property
13
2. Electricity-power to tax remains with the state
Principles for subsuming all Indirect
Tax Under GST
• It Should be Indirect Tax-Primarily in the nature
of Indirect Tax either supply of goods or services
• Part of Transaction-Subsumed Indirect Tax
should be part of transaction chain which
commences with import/manufacture/production
of goods or services
• Free flow of Tax credit-Subsumed Tax should
result in free flow of tax credit in intra and inter-
state level
14
Salient features of GST… 1. GST would be applicable on “supply of goods and services”- u/s 2 (52)
Goods means every kind of movable property other than money and
securities including actionable claims, growing crops
2. It is Based on consumption Taxation-GST would be based on the
principle of destination based consumption taxation as against the present
principle of origin-based taxation.
3. It replaces Indirect Tax-GST subsumed large number of Indirect Tax
levied by Central and State Govt.
4. It would be a dual GST -with the Centre and the States Govt.
simultaneously levying it on a common base. Centre would be called
Central GST (CGST) and that to be levied by the States [including Union
territories with legislature] would be called State GST (SGST). Union
territories without legislature would levy Union territory GST (UTGST).
5. An Integrated GST (IGST) -would be levied on inter-State supply
(including stock transfers) of goods or services. The Centre would collect
this so that the credit chain is not disrupted
15
Salient features of GST…
6. Import of goods and services -would be treated as inter-state supplies and would be subject to IGST in addition to the applicable customs duties
7. Export & Supplies-All Exports and supplies to SEZs and SEZ units would be zero-rated
8. Input tax credit-Credit of CGST paid on inputs may be used only for paying CGST on the output and the credit of SGST/UTGST paid on inputs may be used only for paying SGST/UTGST
16
Advantage/Benefit of GST… For Central and State Government
1. Simple and easy to administer: Backed with a robust end-to end IT
system. GST would be simpler and easier to administer than all other
Indirect taxes.
2. Better control of leakage: GST will result in better tax compliance due
to a robust IT infrastructure(self policy system inbuilt in GST). Due to
seamless transfer of input tax credit from one stage to another in the chain
of value addition, there is an inbuilt mechanism in the design of GST that
would incentivize tax compliance by traders.
3. Higher Revenue efficiency-GST is expected to decrease the cost of
collection of tax revenues of the Govt. and will therefore, lead to better
tax collection and ensure higher revenue efficiency.
4. GST will reduce flow of Block money- money on which tax is not paid
to Govt. by under reporting their income. Through GST Credit of input
tax on each stages is available. So avoiding tax is not possible
5. One India one Market- GST will facilities Make in India by making
one India one market by removing multiple taxes
Continue 17
Advantage/Benefit of GST
For the Consumer 1. Single and transparent tax proportionate to the value of goods and
services: under GST, there would be only one tax from the manufacturer to the consumer, leading to transparency of taxes paid to the final consumer.
2. Relief in overall tax burden: because of efficiency gains, prevention of leakages, and input tax credit seamless flow between the manufacturer, retailer and service supplier, the overall tax burden on most commodities will come down, Hence, the final price of goods is expected to be lower which will benefit to consumers. For e.g. Impact of GST on Common man-
Current Indirect Tax regime
Indirect Tax on goods-27%-32% in general
Indirect tax on service-15% of cost of service
the Maximum rate around 47% (32+15)
GST system will reduce the tax burden on common man the maximum rate is 28% (47-28 (max GST=19%)
18
Advantage/Benefit of GST… For Business and Industries 1. Easy compliance: All tax payers services such as registrations, returns,
payments etc would be available to the taxpayers online, which would make compliance easy and transparent
2. Uniformity of tax rates and structure: GST will replace all Indirect Taxes levied by central and state Govt. and ensure that indirect tax rates and structures are common across the nation, thereby increasing certainty and easy of doing business.
3. Removal of cascading effect- Tax on tax will remove and apply single tax (GST) on supply of goods and services right from manufacturing to consumer throughout the value chain and across boundaries of State. In ensures easy for running business.
4. Improved Competitiveness- reduction in the transaction costs of doing business this would eventually lead to an improved competitiveness for the trade and industry.
5. Gain to manufacturers and exporters- subsuming all indirect taxes and complete and comprehensive set off of input goods and services would reduce the cost of locally manufactured goods and services. This will ensure better goods to be manufactured with in India are become more competitive and cheaper than imported goods, and increasing competitiveness of Indian goods and services in the international market and give boost to Indian export.
6. Better movement of goods- Removal of check post point for checking flow of goods from form one state to another state . So flowing of goods easy form state to state
continue 19
(Structure) Dual GST model/Method
Dual GST Model
On Intra-State (Transactions)
location & place of supply within a
single state)
Central GST
(CGST)
State GST (SGST)/UTGST
On Inter -State (Transactions)
location & place of supply between one
state to another state)
Integrated GST (IGST)
20
Type of GST/GST Administered in India/Dual
GST Model • Dual GST model- India will adopt dual GST Model because India is a federal
country both centre and state have been assigned the power to levy and collect taxes
through appropriate legislation. Dual GST will Therefore, keeping with the
constitutional requirement of fiscal federation. Both centre and state will
simultaneously levy GST on a common tax base .
1. On intra-state (Transactions made within a single state)
a. Central GST (CGST) - CGST would be administered by the Central Government The GST to be levied by centre supply of goods and services would be called
CGST. The input tax credit of CGST would be available for discharging the CGST
liability on the output at each stage.
b. State GST (SGST)- SGST would be administered by the State Government The
GST to be levied by state Govt. called state GST (SGST). The input tax credit of
SGST would be available for discharging the SGST liability on the output at each
stage
2. On Inter-state (one state to another state) IGST (Integrated goods and service Tax)
a. IGST will be levied and administered by centre on every Inter-state supply of goods
and services under the Article 269A (1) of constitution. GST is a consumption based
tax, therefore, taxes are paid to the state which the goods or services are consumed
not the state in which they were produced.
21
Commencement of CGST / SGST UTGST / IGST Act
Applicability Intra-State supply
Inter-State
supply
CGST SGST UTGST IGST
States of India √ √ √
Union Territories
with State Legislature √
√
√
Union Territories
without State
Legislature
√
√
√
22
GST Payment Process
• Normal GST Payment process
Supply of goods &service Price & GST Receiver of goods & services
Govt.
• Reveres GST Payment process
Supply of goods &service Price Receiver of goods & services
Govt.
23
Composition levy-Anti-profiteering measure
• In order to prevent any rise in price of commodities after goods and service tax (GST) implementation, the Centre has proposed an ‘anti-profiteering’ measure to ensure that trade and industry pass the benefits of reduction in tax rates to consumers.
• As per Model GST Law, the central government will constitute an authority or entrust the task to an existing authority to examine that the input tax credits or reduction in tax rates are passed by registered taxpayers to consumers.
• Tax evasion up to Rs2 crore a bailable offence
24
Impact & pricing Analysis in GST
• Impact Analysis-Impact Analysis with respect to Rate of Tax must be done when the rates are finalised by GST Council
• Pricing analysis-under GST most of Indirect tax are subsumed. When GST comes in force, price revision cannot be done all of a sudden.
25
Dual GST within State: Working example SGST paid RS 9 SGST paid RS 9 SGST paid RS 9 (Rs 18-Rs 9 ICT) (Rs 27-Rs 18 ICT) A B C CGST paid RS 9 CGST paid RS 9 CGST paid RS 9 (Rs 18-Rs9 ICT) (Rs 27- Rs 18 ICT)
26
Tax Invoice A Cost of Goods = Rs.100 SGST @ 9% = Rs 9
CGST @ 9% = Rs. 9
Total = Rs. 118
Final consumer
Furniture retailer
Furniture Maker
Timber Maker
CGST 9%
SGST 9%
Tax Invoice B Cost of Goods = Rs.200 SGST @ 9% = Rs 18
CGST @ 9% = Rs. 18
Total = Rs. 236
Tax Invoice C Cost of Goods = Rs.300 SGST @ 9% = Rs 27
CGST @ 9% = Rs. 27
Total = Rs. 354
IGST Model: Working example State X State Y SGST paid RS 9 State Border SGST payable 27 Less: IGST ICT 9 SGST paid 18 A B C CGST paid RS 9 IGST payable Rs 36 CGST payable RS 27 Less: CGST ICT Rs 9 less: CGST ICT Rs 0 Less :SGST ICT RS 9 IGST Rs27 IGST paid in cash 18 CGST=0
27
Tax Invoice A Cost of Goods = Rs.100 SGST @ 9% = Rs 9
CGST @ 9% = Rs. 9
Total = Rs. 118
Final consumer
Furniture retailer
Furniture Maker
Timber Maker
CGST 9% IGST 18%
SGST 9%
Tax Invoice B Cost of Goods = Rs.200 IGST @ 18% = Rs. 36
Total = Rs. 236
Tax Invoice C Cost of Goods = Rs.300 SGST @ 9% = Rs 27
CGST @ 9% = Rs. 27
Total = Rs. 354
SGST 9%
GST Council Composition
• Chairperson-Union Finance Minister
• Other member from centre-Minister of state
for Finance/Revenue
• Vice-Chairperson- One of State finance
Minister (chosen among the Members)
• Members-State Finance minister or Taxation or any other Minister nominated by each state Govt.
28
GST Council Meetings
Weightage of votes: (Voting Strength)
Central Government – 1/3rd of the total votes cast, and State Governments – 2/3rd of the total votes cast.
Other important roles of GST Council: The GST Council to be guided by the need for a harmonised structure of goods and services tax and for the development of a harmonised national market for goods and services. GST Council to devise mechanisms to adjudicate disputes arising between the Centre and States.
Quorum: One-half of the total number of Members of the Goods and Services Tax Council. All decisions by a majority of not less than three-fourths of the weighted votes of the members present and voting i.e Decision needs-75% voting
support
29
GST Council will recommend on/Functions 1. The taxes, cesses and surcharges to be subsumed under GST
2. The goods and services that may be subjected to or exempted from the GST
3. The date from which the specified petroleum products would be subject to GST
4. Model GST laws, principles of levy, apportionment of IGST and the principles that govern the place of supply
5. The threshold limit of turnover below which the goods and services may be exempted from GST
6. The rates including floor rates with bands of GST
7. Any special rate or rates for a specified period to raise additional resources during any natural calamity or disaster and
8. Special provision with respect to the North East States ,J&K, Himachal Pradesh and Uttarkhand
9. Compensation to states: Parliament may by law provide for compensation to states for revenue losses arising out of the implementation of the GST, on the GST Council‘s recommendations. This would be up to a five-year period
10. Any other matters relating to the goods and services tax, as the Council may decide.
30
Classes of Officers (CGST) – Sec 3
Principal Director General / Principal Chief Commissioner
Director General / Chief Commissioner
Principal Additional Director General / Principal Commissioner
Additional Director General / Commissioner
Additional Director / Additional Commissioner
Joint Director / Joint Commissioner
Deputy Director / Deputy Commissioner
Assistant Director / Assistant Commissioner
Such other class of officers as may be appointed*
31
Appointment of Officers – Sec 4
32
Appointment of Officers: (a) The Board has the power to appoint the officers under the
CGST Act;
(b) The Board can also delegate its power of appointment of officers to the Principal Chief Commissioner / Chief Commissioner, or Principal Commissioner / Commissioner, or Additional / Joint or Deputy / Assistant Commissioner. The appointment can be done of the subordinate officers;
(c) The State Government has the power to appoint the officers under the SGST Act;
(d) The jurisdiction of officers shall also be notified by the Government or the Board as the case may be.
Unit-2
Conceptual Definition • Goods: Section 2 (52) of the CGST Bill ―Goods
means every kind of movable property other than money and securities but includes actionable claims, growing crops, grass and other things attached to or forming part of land which are agreed to be severed before supply or under a contract of supply.
• Services: Section 2(102) of the CGST Bill ―Services means anything other than goods, money and securities but includes activity relating to the use of money or its conversion by cash or by any other mode
33
Aggregate turnover
• Aggregate Turnover in GST includes-
• The aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis)
• Export of goods and services or both
• Non-taxable supplies
• Whole exempted supply
• Nil rated supplies
• Inter state supplies of person having same permanent account computed on all India basis
– This does not include taxes charged under the following acts
• CGST (Central Goods and Services Tax)
• SGST (State Goods and Services Tax)
• IGST (Integrated Goods and Service Tax)
• Alcoholic Liquor for human consumption, Cocktails
34
The significance of Aggregate
Turnover/personal liable of Registration sec 22
• A person whose aggregate turnover from business in a financial year exceeds Rs. 40 lakhs is bound to register under GST.
• Special Category States like North-Eastern and hilly states it is set at exceeds Rs. 10 lakhs
• Example-Ranga and Udya both are farmers and their annual turnover is Rs. 80 lakhs. As the income is agriculture-based, the turnover is exempted from GST. Unlike Udya, Ranga supplies jute bags with his crops and has separate charges for it. Turnover from the sale of bags is Rs. 4 lakhs, so this transaction is chargeable to GST. In simple words we can say, Ranga’s aggregate turnover is Rs. 2 lakhs and Udya’s is zero.
• Conclusion is Ranga is required to register under GST because his aggregate turnover exceeds the threshold limit of Rs. 40 lakhs and Udya doesn’t have to as he is exempted from doing so.
35
How the Aggregate Turnover calculated?
• Assam unit is a special category state wherein the
registration limit is Rs 10 lakhs.
• XYZ Ltd required to take registration in Assam Unit due to Aggregate turnover > 10 Lakhs
• Now, Whether for Mumbai Unit registration required ?
• Ans. Even though Aggregate Turnover is < 40 Lakhs, registration would be mandatory for Mumbai Unit by virtue of mandatory registration in Assam
36
XYZ Ltd Assam Unit (Turnover) – Rs
11 Lakh
Mumbai Unit
(Turnover) – Rs
21 Lakh
The following are the person shall have to register irrespective of the turnover
• Person making any inter-state taxable supply
• Casual taxable person
• Person required to pay under reverse charge
• Person require to deduct tax (E-commerce )
• As an agent of any other person supply G&S
• Input service distributor
• Aggregator who supply service under brand name
37
Example
Compute aggregate Turnover of m/s B’lore
Supplies to Mysore
Supplies to Pondicherry
Supply to dealer M for Export
Supply to dealer in Sweden
Supply made to a dealer in Up
Exempt supplies -Salary to empl.) (incl. non taxable supply
IGST paid
CGST Paid
SGST paid
200000
150000
250000
450000
100000
170000
20000
30000
30000
38
Solution
Solution Rs
Supplies to Mysore
Supplies to Pondicherry
Supply to dealer M for Export
Supply to dealer in Sweden
Supply to a dealer in Up
Exempt supplies –Salary to employee (incl. non taxable supply)
2,00,000
1,50,000
2,50,000
4,50,000
1,00,000
1,70,000
Aggregate Turnover 13,20,000
Note: As per GST Law IGST, CGST & SGST paid not considered while
calculating aggregate turnover as it not provided in definition of aggregate
turnover.
39
Sec 23. Person not liable to register
• Person exclusively engaged in Goods / Service
Not liable to tax, or
Wholly exempt from tax under CGST, or
Wholly exempt from tax under IGST
NIL rate of tax? Not required to take registration
Agriculturist-Only Individual / HUF •Person dealing in agricultural products? Ans. Only an agriculturist is exempt from registration requirement whom supply of produce out of cultivation of land. If supplies not linked to the cultivation of land, he will fall within provision of sec 22 and required to take registration.
40
Supply
Outward Supply Composite
supply
Principal supply
two or more goods
principal supply goods rate apply
Mixed supply
two or more goods
tax liability Higher the tax rate
Inward supply Reg. Dealer get
ITC benefit
Exempt supply Nil rate supply
Composition Scheme
Reverse supply (Reverse Charges)
Receiver of the goods pay GST
Not supplier of goods
Supplier of goods receive only Price
41
Place of Supply of ‘Goods’ S. 10(1)(a)
42
Supplier (U.P) Recipient (Punjab)
A
IGST
B
Place of Supply of ‘Goods’ S. (10)(1)(b) 43
Supplier (U.P)
Third Party (Delhi)
Recipient (Punjab)
B
A
IGST - 10(1)(b)
C
Place of Supply of ‘Goods’ S. 10(1)(b)
44
Supplier (U.P)
Third Party (UP)
Recipient (Punjab)
B
A
1
CGST / SGST
C
Supply
SUPPLY UNDER GST(us7(1(a) (b) (c) : The taxable event under GST is supply. E.g transfer, exchange, licence,
rental, lease, disposal, etc.
Out word supply-Supply of goods or services (Sales)
Inward supply- Receipt of goods or services (purchases)
45
Exempt supply…
• Exempt supply means supply of goods or service or both which attract nil rate of tax or which may be wholly exempt from tax under section 11 or section 6 of IGST and include non taxable supply
• For examples-
– Donated goods and services sold by non-profit bodies and later it sells, it can't charge GST on the sale. E.g. A car dealer gives a car to a church. The church uses the car for two years, then sells it. The sale of the car is exempt.
46
Exempt supply
• Financial services- include the following: – paying or collecting any amount of interest
– mortgages and other loans
– bank fees
– Bank interest
– securities such as stocks and shares
– providing credit under a credit contract
– exchanging currency (for example, changing US$ into NZ$)
– arranging or agreeing to do any of the above (for example, mortgage broking)
– financial options
– provision or transfer of ownership of a financial option
– deliverable future contracts
– non-deliverable contracts.
47
Exempt supply…
• Renting a residential dwelling
– GST can't be charged on the rent for a residential dwelling. A landlord can't claim any GST on dwelling expenses, such as maintenance, rates and insurance.
– If a residential dwelling is sold as part of a taxable activity, and it was rented for at least five years beforehand, the sale is an exempt supply.
48
• Composite supply (principal supply)
Consist of two or more supplies
Naturally bundled
In conjunction with each other
One of which is principal supply
Tax liability shall be rate of principal supply
Example: 1.Charger supplied along with mobile phones or
2. Machinery along with installation services
For e.g.-supply of goods (machinery) GST is applicable
12%, for insurance 18%, packing materials 9% ,the insurance
and packing material is composite supply, where, Machinery
is principal supply. So GST applicable for the total sum on
principal goods GST rate is 12 %
49
Mixed supplies
Consist of two or more supplies
Not naturally bundled
Though can be supplied independently, still supplied together
Tax liability shall be the rate applicable to the supply that
attracts highest rate of tax
Example: A gift pack comprising of chocolates, candies,
sweets and balloons
For example Price of Shampoo is Rs 100, GST is 5%. (Soap
being supply with Shampoo for Rs 40,GST on Soap is 18%)
therefore, higher GST rate of Soap @ 18% is being charged
supply of Shampoo along with Soap Rs 18 (18% of Rs 100)
50
COMPOSITION SCHEME Businesses with annual turnover up to Rs 1.5 cr. can opt for
composition scheme.
In case of North-Eastern states and Himachal Pradesh, the limit is now Rs 75 lakhs.
They need not raise any tax invoice but need to issue bill of supply.
– Turnover of all businesses with same PAN has to be added up to calculate turnover for the purpose of composition scheme.
– Who can opt for Composition Scheme- Only Manufacturers of goods, Dealers, and Restaurants (not serving alcohol) can opt for composition scheme
Tax rate-
1. The applicable GST rate are- manufacturers and Traders 1% and
2. Restaurant not serving alcohol 5%
51
COMPOSITION SCHEME
Who cannot opt for Composition Scheme
– Taxpayer supplying exempt supplies.
– Supplier of services other than restaurant related
services
– 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
52
REVERSE CHARGE
• the receiver of the service will be liable to pay GST instead of supplier. For eg. Services through an e-commerce operator -e-commerce operator supplies services then reverse charge will be applicable to the e-commerce operator Eg. Urban Clap provides services of plumbers, electricians, etc. Urban Clap is liable to pay GST and collect it from the customers instead of the service providers and the like, silk yarn, tobacco leaves, used vehicles, confiscated goods, waste, scrap & supply of raw cotton
53
When is Reverse Charge Applicable..
a) Supply from an Unregistered dealer to a Registered dealer-The registered dealer who has to pay GST under reverse charge has to do self-invoicing for the purchases made.
b) Services through an e-commerce operator -e-commerce operator supplies services then reverse charge will be applicable to the e-commerce operator
For example, Urban Clap provides services of plumbers, electricians, etc. Urban Clap is liable to pay GST and collect it from the customers instead of the registered service providers
c) Supply of certain goods and services specified by CBIC (Central Board of Indirect supply)
example of goods- cashew nut not peeled, silk yarn, tobacco leaves, used vehicles, confiscated goods, waste, scrap & supply of raw cotton
.
54
Time of Supply A. Time of Supply of Goods -the time of supply shall be
the earliest of the following dates: Non -continuous supply – the date of receipt of goods
– the date of payment*
– the date of an invoice issued 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.
For Continuous Supply: Date of issue of statement of account/receipt of
payment [31(4)] will be consider as time of supply
55
*Where payment is received in advance, the Supplier shall issue a receipt
voucher, and NOT a tax invoice
Time of Supply of Services – Sec 13(2)
56
If invoice not issued within 30 days (45 days in case of Banking, Insurance, Financial Institution or NBFC company)- Clause (b)
If both the above clauses do not apply
Date on which recipient shows the receipt of services in his books of accounts
Date of provision (completion) of service or receipt of payment, whichever is earlier
If invoice issued within prescribed time u/s 31(2) - 30 days (45 days in case of Banking, Insurance, Financial Institution or NBFC company)- Clause (a)
Date of issue of Invoice or receipt of payment(Earlier of entry in books or credit in bank account), whichever is earlier
E-way Bill
• As per GST provisions on e-way bill must be
generated by every registered person who
causes movement of goods value exceeding
fifty thousand rupees (Rs 50000) in transit.
• In case of interstate movement of goods, e-way
bill would be generated irrespective of the
value of the supply
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Who can Register and use e-way bill Portal
Who can Register
Registered Dealer
Unregistered Dealer
Transporter
58
E-way bill validity
Distance Validity
Less than 100 KMs One day
100 KM or more but less than 300 KM Three days
300 KM or more but less than 500 KM Five days
500 KM or more but less than 1000 KM Ten days
1000 KM or more Fifteen days
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GST Tax Ledger
1. E- cash Ledger- (Net GST Payable) contain information on • Tax paid,
• Tax credit and
• Tax liability
Payment of tax through online mode-
Internet banking, Credit/Debit card, NEFT and RTGS
2. E- credit Ledger –ITC on purchase (inward supply) shall be credit to e-credit ledger as per the GST return file by the assessee
3. E-Liability ledger-contains (GST Payable) out ward Supply Self assessment of GST return
Liabilities out of demand notice from GST authorities
Credit utilized against the available amount in the e-cash /e-credit ledger
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Invoice-Intra & Inter- state-under GST
Invoice-Intra state
Particular Amt.
Value of supply of goods 100000
Add: CGST @ 9%
Add: SGST @9%
9000
9000
18000
(Total GST Payable) E-liability ledger balance 118000
Invoice-Inter-state (between the state)
Particular Amt.
Value of supply of goods 100000
Add: IGST 18% 18000
E-liability ledger balance 118000
61
Tax Invoice – Sec 31
62
Registered taxable person shall issue tax invoice –for supply of goods
or services or both
Conditions
a) No invoice required if value of goods or services or both < Rs. 200
b) Composition dealers and Person supplying exempted goods or
services to issue a bill of supply instead of tax invoice
c) Issue of self invoice (payment voucher)-In case of RCM or if
goods / services are received from an unregistered person:
Registered person to issue payment voucher at the time of
making payment
d) In case of continuous supply of goods where successive
statements of accounts/ payments are involved, invoice shall be
issued before or at the time of each such statements/ payment
e) Time limit to issue invoice for services- Within 30 days from the date of supply of service
f) Insurer, Banking, Financial institution - Within 45 days
Debit /Credit Notes – Sec 34
Registered taxable person issuing Debit / Credit notes to declare its details in GST return for the month during which such notes are issued / received or in the return for any subsequent month but not later than 30th September following the end of FY of supply, or the date of filing of the relevant annual return, whichever is earlier, and the tax liability shall be adjusted in the manner specified in this Act
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Unit-3
Utilization of Input Tax Credit (ITC) ITC is credited to a registered person’s electronic credit ledger. The
person may use this to pay out put tax liability. Section 49(5)
explain the adjustment of ITC in the following manner
– ITC of IGST can be used to pay IGST, CGST and SGST/UTGST
– ITC of CGST can be used to pay CGST and IGST in that order
– ITC of SGST can be used to pay SGST and IGST in that order
– ITC of UTGST can be used to pay UTGST and IGST
• The ITC of CGST cannot be used for payment of SGST/UGTST
• The ITC of SGST/UGTST cannot be adjust to CGST
• The main restriction is
– CGST credit cannot be utilized for payment of SGST/UTGST and
– SGST/UTGST credit cannot be utilized for payment of CGST
64
65
ITC Utilization
IGST
IGST
CGST
SGST/UTGST
CGST
CGST
IGST
SGST/UTGST
SGST/UGST
IGST
ITC in case of Capital Goods Depreciation claimed on Tax component of
the cost of capital goods under IT Act
Example:
Cost of asset = Rs. 100 Tax-10%(say) = Rs. 10 Total Cost Rs. 110
ITC not Available
If Depreciation charged on Rs.100
ITC Available
If Depreciation charged on Rs.110 ITC not Available
“capital goods” means the goods, the value of which is capitalized in the books
of accounts of the person claiming the credit and which are used of intended to
be used in the course or furtherance of the business
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ITC on the Basis of use of Inputs – Sec 17
Use of input tax credit: Partly for
Taxable Supplies
ITC Availabl
e
Zero-rated Supplies
ITC Available
Non-taxable Supplies
ITC not available
Exempt Supplies
ITC not available
Nil-rated Supplies
ITC not available
67
GST Rates Multiple tiered system
Rates Indicative items
0% 50% of consumer price basket, including food grains
5% Mass consumption items likes spices and muster oils
12% Processed food
18% Soaps, oil, tooth paste, Refrigerator, smart Phone
28% White goods, cars
28%+
cess
Luxury cars, pan masala, tobacco, aerated drinks
Sale of land building and electricity kept out of the GST ambit
68
GST RATES-Four main slab 5% to 28%
Rate Classifications for Goods
(0%) 5% 12% 18% 28%
Food Grains
Cereals
Milk ,curd
Jaggery lassi
Common Salt
Vegetables
eggs ,Honey,
Unpacked
panner,
Prasad sold
at temple
Human blood
contraceptive
Sugar,Coffee
Tea,Drugs &
Medicine Edible
Oil Sweets,
Raisin
Cashew, spice
Dom.LPG
pds Kerosen
Coal,
Ag batti
Packed panner
Apparels1000)F
ootwear<500
Fruit Juices
Fertilizers
Ghee butter
Almond
Umbrella
Mobile, pickle
Processed food
,Jam, Computer
Capital Goods
Industrial
Intermediaries
Hair Oil, Soap
Toothpaste
Computer
monitor < 17 Inc
Printer, CCTV
Toiletries
smart phone
Ice-cream
Staplers
Refrigerators
White goods
car
Air Conditioner
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Rate Classifications for Services
Exempt (0%) 5% 12%-18% 28%
Education.
Healthcare.
Residential
accommodation.
Children’s
Drawing &
Colouring Books
Hotel / Lodges
with tariff below
INR 1000
Goods transport.
Rail Tickets (other
than sleeper
class).
Economy class air
tickets.
Cab aggregators.
Selling space for
advertisements in
print media.
Works contract.
Business Class air
travel.
Telecom services.
Financial services.
Restaurant
services.
Hotel / Lodges
with tariff
between INR 1000
and 5000.
Cinema tickets.
Betting.
Gambling.
Hotel / Lodges
with tariff above
INR 5000.
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Registration Procedure under GST
• Existing dealers: Existing VAT/Central excise/ Service TAX payers will not have to apply fresh for registration. but they mandatory migrate from existing system to GST if their turnover Rs 20 lakhs and more in an annum
• New Dealers: single application to be filled online for registration under GST
• Unique ID/Registration Number (GSTIN). : Each dealer to be given unique Goods and Services Tax identification number basically a 15-digit PAN based which has replaced the Tax Identification Number (TIN). It serves the purpose for centre and state
71
Said process applicable to Inter-state, Voluntary, Casual, Reverse Charge, ISD,
Registration Certificate is Issued in Form GST Reg-06
• Form GST Reg-01 • Part A (PAN, e-
Mail, Mobile Verification)
• Part B (Other details)
• Ack. Form GSTReg-02
• Submit the relevant docs
Application
Verification • Approval within 3
working days • If satisfactory
clarifications received– approval shall be given in next 7 days
• If clarifications not satisfactory- intimate the rejection in Form GST REG-05
• Deemed registration--No action taken within 3/7 working days
Approval /Rejection
17 days Process
Registration Process
Initial verification within 3 working days
Clarifications/info required –Form GST Reg-03
Applicant furnish clarifications in Form GST Reg-04 within next 7 working day
Rule-10 : Registration Certificate
73
Certificate in Form GST REG-06 with GSTIN of
15 digit on GST portal
AA OPQRS1234T 00 Z 5
29 State Code
10 digit PAN Number Entity Code
Check
sum
default
Rule 11 : Registration of Business vertical
• Any person having a Multiple business verticals in a State or Union Territory requiring separate registrations subject to following conditions:-
More than one business vertical as defined in clause (18) of section 2.
Registration of business vertical shall not be granted u/s 10 if any one of the other business verticals of the same person is paying tax u/s 9.
Supply made b/w all separately registered business verticals of same person shall issue a tax invoice among themselves for such supply.
• Separate application form GST REG-01 required for registration of each vertical.
74
The following are the person shall have to register irrespective of the turnover
• Person making any inter-state taxable supply
• Casual taxable person
• Person required to pay under reverse charge
• Person require to deduct tax (E-commerce )
• As an agent of any other person supply G&S
• Input service distributor
• Aggregator who supply service under brand name
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Return filing procedure under GST.. There would no manual filing of return.
All Mis-matched returns would be auto generated, and there would be no need for
manual interventions
2. Forms: there would be eight forms provided for inn the GST business processes for filing
returns. Most of the average taxpayers would be using only four forms for filing their
returns. These returns are- returns for supply, return for purchases, monthly return and
annual return
3. Small tax payer: small tax payer who have opted composition scheme shall have to file
return on quarterly basis.
4. On line filing: Filing of return completely on line
5. Tax paid: All taxes should be paid online by using internet banking, RTGS, NEFT , Debit
card, Credit card etc.,
6. Obligation-Obligation on certain persons including Govt. departments, local authorities
and Govt. agencies, who are recipients of supply, to deduct tax at the rate of 1% from the
payment made or credited to the supplier where total value of supply, under a contract,
exceeds two lakhs and fifty thousand rupees (Rs. 2.5 lac).
7. Refund of Tax-Refund of tax to be sought by taxpayer who has borne the incidence of
tax within two years from the relevant date.
76
Returns under GST
77
FORM PARTICULARS DUE DATE APPLICABLE FOR
GSTR1* Outward Supplies 10th of the next month – 11th Normal Taxpayer
GSTR2* Inward Supplies 15th of the next month Normal Taxpayer
GSTR3* Monthly return [periodic] 20th of the next month Normal Taxpayer
GSTR3B*
Monthly return (Summary return)
20th of the next month Normal Taxpayer
GSTR4 Return by composition taxpayers
18th of the month next to the quarter
Composition Taxpayer
GSTR5 Return by non resident taxpayers [foreigners]
20th of the next month or within 7 days after expiry of registration, whichever is earlier
Foreign Non-Resident Taxpayer
GSTR6 Return by input service distributors [ISD]
13th of the next month Input Service Distributor
*As per Press Release dated 4 May 2018, filing of Form GSTR 2 and GSTR 3 shall continue to remain suspended. Present system of filing Forms GSTR 1 and GSTR 3B shall continue for a period of 6 months.
Returns under GST
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FORM PARTICULARS DUE DATE APPLICABLE FOR
GSTR7 TDS** 10th of the next month Tax Deductor
GSTR8 TCS** 10th of the next month E-Commerce Operator
GSTR9 Annual return 31st December of next FY Normal tax payer (other than ISD, casual taxpayer, foreigners)
GSTR9A Annual return 31st December of next FY Composition Taxpayer
GSTR9B Annual Statement of TCS 31st December of next FY E-Commerce Operator
GSTR9C
Annual return along with the copy of audited annual accounts and a reconciliation statement
31st December of next FY Normal taxpayer having turnover more than 2 crore
GSTR10 Final Return Within 3 months of the date of cancellation or date of order of cancellation, whichever is later
Persons cancelling registration
**Provisions with respect to TDS and TCS have been put on hold.
Returns Process
79
Upload GSTR 1 by 10th of next month
Auto-drafted GSTR 2A based on details from GSTR 1 filed by other suppliers
File GSTR 3B (Summary return) by 20th of next month and pay total GST liability either through cash or through ITC
GST Returns – Important Points…
80
• Presently, every registered person needs to furnish atleast GSTR1 and GSTR3B return/statement/s
• Return/statement/s can be prepared through online or offline mode
• Return/statement/s to be filed even if there is no business activity during the relevant period i.e. nil statement/return/s
• Error or omission may be rectified in subsequent return/statement/s but revision of return/statement/s is not allowed
• In GSTR 1 – B2B transactions to be reported on invoice level – GSTIN, invoice
no., invoice date, invoice value, rate of tax, taxable value, amount of tax and place of supply
– B2C transactions to be reported invoice wise only for inter-state transactions having invoice value above INR 2.5 lacs
GST Returns – Important Points
81
• HSN (Harmonized System of Nomenclature) codes to be reported for Goods and Services
• Separate Tables for Debit / Credit Notes / Input Service Distributor Credit / TDS etc.
• Common e-Return for CGST, SGST/ UTGST and IGST • Shall not be allowed to furnish a return/statement/s for a tax period if
the return/statement/s for any of the previous tax period has not been furnished by him
GSTR – 3B : Summary monthly return
Who is required to
file GSTR 3B?
Registered person other
than non resident taxable
person, ISD and
composition person
When is it required to
be filed?
20th of the following
month
Following consolidated details to be filled up:
• All types inward and outward supplies of goods/services
• Value of exempt, nil rated, non-GST supplies
• ITC available, ITC reversed and ineligible ITC
• Tax payable
• Tax paid
• Interest and
• Late fee, if any
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First, Annual and Final Return
83
First Return (Sec 40)
Every registered person, who has made outward supplies, between the date of liability to register till the end of the month* when registration is granted, has to file his first return after grant of registration
*Up to the quarter in case of composition levy
Final Return (Sec 45)
Every registered person whose registration has been cancelled shall furnish a final return within 3 months of date of cancellation or date of order of cancellation, whichever is later, in Form GSTR 10
Annual Return (Sec 44)
Every registered person to furnish annual return by 31st December of next financial year in Form GSTR 9 except: • Casual taxable person • Non-resident taxable person • Person paying TCS/TDS
Every registered person who is required to get his accounts audited shall furnish annual return along with the copy of audited annual accounts and a reconciliation statement, duly certified in Form GSTR 9C. Composition tax payers to submit GSTR – 9A
E-commerce operator
• Section 43B(e) of the Indian GST Law defines an Electronic Commerce Operator (Operator) as every person who, directly or indirectly, owns, operates or manages an electronic platform which is engaged in facilitating the supply of any goods and/or services. For example- Amazon and Flipkart are e-commerce Operators because they are facilitating actual suppliers to supply goods through their platform (popularly called Market place model or Fulfilment Model).
• The GST Law also explains that a person supplying goods/services on his own account, however, would not be considered as an Operator. For instance, However, Titan supplying watches and jewels through its own website would not be considered as an e-commerce operator for the purposes of this provision. Similarly, Amazon and Flipkart will not be treated as e-commerce operators in relation to those supplies which they make on their own account (popularly called inventory Model).
84
Job work…. • Job work means any treatment or process undertaken by a person on
goods belonging to another registered person. The ownership of the goods does not transfer to the job-worker but it rests with the principal manufacturer. The job worker is required to carry out the process specified by the principal manufacturer on the goods supplied by him. As per section 143(2) of CGST Act, the responsibility for keeping proper accounts of inputs or capital goods sent for job work lies with principal manufacture
• Job Work Procedure under GST – the principal manufacturer has to prepare a ‘ Delivery Challan’ in the
prescribed format. Challan should contain following details: • Date and number of the delivery challan
• Name, address and GSTIN of the consigner and consignee;
• HSN code (Harmonized System of Nomenclature code used for classifying the goods under the GST) description and quantity of goods and SAC code ( SAC code means Services Accounting Code under which services fall under GST are classified
• Taxable value, tax rate, tax amount- CGST, SGST, IGST, UTGST separately;
• Place of supply and signature.
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Job work (JW)
• Registered taxable person to job worker- No GST
• Turnover will be included in principal
• Exemption goods/non taxable goods (JW provision not applivable)
• Details of the challans must be reflected in Form GSTR-1. Finally, details of challans must also be filed through Form GST ITC – 04. Form GST ITC – 04 must be submitted on quarterly basis by 25th day of the month succeeding the quarter. Under form GST ITC – 04, following details are to be provide:
• Goods dispatched to job-worker;
• Goods received from job-worker;
• Goods send from one job-worker to another job-worker.
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E-way Bill for Job Work
• As per GST provisions on e-way bill must be generated by every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees even in cases where such movement is for reasons other than for supply. Hence even in case of movement of goods for job work, e-way bill must be generated. In case of interstate movement of goods, e-way bill would be generated either by the principal manufacturer or by the registered job worker irrespective of the value of the consignment
87
Return of Goods to Principal
• Return of goods to principal is a very important aspect under job work. Inputs and/or capital goods sent to a job worker are required to be returned to the principal within 1 year (in case of inputs) and 3 years (in case of capital goods) from the date of sending such goods to the job worker.
• Provision of return of goods is not applicable in case of moulds and dies, jigs and fixtures or tools supplied by the principal manufacturer to job worker. However, when such moulds and dies, jigs and fixtures or tools are disposed off as scrap by the job worker, GST would be payable by the job worker (if job worker has GST registration), otherwise GST on sale of scrap would be payable by the principal manufacturer. When input and/or capital goods are not returned within the specified time, the same is required to be disclosed in Form GSTR-1 and the principal manufacturer is liable to pay the tax along with applicable interest.
88
Unit-4 Assessment Assessment: is the process of determination of the tax liability of a
taxpayer. i.e. a way to figure out exactly how much tax should be paid.
There are different ways to determine tax liability under the GST law they
are-
Self Assessment
Provisional Assessment
Scrutiny of Returns
Assessment of Non-Filer of Returns
Assessment of unregistered persons
Summary assessment in special cases
Regular Assessment: Such assessments are made after examination of all
the relevant records/returns/documents/material and are made after hearing
him or hearing his authorized representative. This type of assessment was
the norm before self-assessment was introduced
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Types of Assessment under GST..
Assessment
By tax payer
Self Assessment
BY Tax Authorities
Provisional Assessment
Summary Assessment
Scrutiny of returns
Best Judgment
assessment
Non- filers Unregistered
persons
90
Types of Assessment under GST.. Self Assessment (sec. 59): is available to every registered taxable person to
assess the tax payable by him for any tax period and stated in the return to
be filed by him. The return is required to primarily contain inward supplies
in Form GSTR-2 and outward supplies in Form GSTR-1 of
goods/services,
Provisional Assessment (Sec 60) : The correct tax liability cannot be
determined at the time of supply. Provisional Assessment of a person would
be conducted on the request of the registered person in either of the two
circumstances:
He is unable to determine the value of the goods or services or both to
be supplied by him
He is unable to determine the rate of tax applicable on the goods or
services or both supplied by him
Scrutiny of Returns: Scrutiny of returns would be conducted to verify
correctness of information furnished in the return and inform about any
discrepancies noticed and seek explanations.
91
Types of Assessment under GST
Summary Assessment: is done when the assessing officer comes across sufficient grounds to believe any delay in showing a tax liability can harm the interest of the revenue. To protect the interest of the revenue, he can pass the summary assessment with the prior permission of the additional/joint commissioner
Best Judgement Assessment-
Assessment of non-filers of returns: If a registered taxable person does not file his return even after getting a notice, the proper officer will assess the tax liability to the best of his judgement using the available relevant material.
Assessment of unregistered persons: This assessment is done when a taxable person fails to obtain registration even though he is liable to do so. The officer will assess the tax liability of such persons to the best of his judgement. The taxable person will receive a show cause notice and an opportunity of being heard.
92
What is Audit
Section 2(13): “Audit” means: – the examination of records, returns and other
documents maintained or furnished by the registered person under this Act or rules made thereunder or under any other law for the time being in force to verify;
the correctness of turnover declared, taxes paid, refund claimed and input tax credit availed; and
to assess his compliance with the provisions of this Act
or the rules made thereunder.
93
Kinds of Audits under GST
94
Audit by tax authorities U/s 65
Special Audit U/s 66
Annual Audit by CA / CWA U/s 35 (5)
CAG Audit
Audit by Tax Authorities- Section 65..
Commissioner of CGST / SGST or any officer authorized;
Audit of any registered person for a particular period, at particular frequency and in particular manner;
At the place of business of registered person or in their office; Notice to registered person at least 15 working days prior to
audit [Form GST ADT-01];
Audit to be completed within 3 months from the date of commencement (can be extended further by 6 months by Commissioner);
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Audit by Tax Authorities- Section 65
The registered person should provide the auditors:
– The necessary facility to verify the books of account or other documents as he may require.
– Such information as he may require and render assistance for timely completion of the audit
Result of audit to be intimated within 30 days [Form GST ADT-02] and further action.
• The proper officer may take action under section 73 or 74 if, he detect
– tax not paid or
– short paid or
– erroneously refunded, or
– input tax credit wrongly availed or utilized
96
Special Audit- Section 66 At the Assistant Commissioner level, Prior approval of the Commissioner of
CGST / SGST;
Audit to be done by CA / Cost Accountant nominated by the Commissioner;
Nature and complexity of the case and interest of revenue to be
considered;
Opinion : Correct value not declared or ITC claimed not within normal
limits;
Direct registered person to get his records and books of accounts audited
[Form GST ADT-03];
Audit Report is to be submitted within 90 days (can be extended by
further 90 days by Assistant Commissioner);
Opportunity of hearing is to be given to registered person and further
action taken by proper officer;
The proper officer may take action under section 73 or 74 if, he detect
• tax not paid or short paid or
• erroneously refunded, or
• input tax credit wrongly availed or utilized
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Annual Audit under Section 35(5)
• According to Section 35(5) of the CGST Act: – Every registered person whose turnover during a financial
year exceeds the prescribed limit (presently two crore rupees) shall get his accounts audited by • a Chartered Accountant or • a Cost Accountant
– and shall submit a copy of the audited annual accounts – along with a reconciliation statement (in FORM GSTR-9C,
reconciling the value of supplies declared in return with audited annual financial statements)
• Contents of the audit report and other particulars to be prescribed
• Audited Report and Audited Annual Accounts to be submitted along with annual return on or before 31st December following the end of financial year.
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CAG Audit Power of Revisional Authority:
The Comptroller and Auditor-General of India shall have the
power to inspect the accounts of such Government or
authority by virtue of powers vested in it by other law.
• The Government or the authority specified by it;
• shall maintain proper record in relation to fund (for the
welfare of the consumer);
• and prepare an annual statement of accounts in such form
and manner as may be prescribed;
• in consultation with the Comptroller and Auditor-General
of India.
99
Appeals to Appellate Authority – Sec 107
100
• Section 107 provides power to appeal against any order or decision passed by adjudicating
authority -
– Within 3 months from the date of order communicated - Tax Payer
– Within 6 months from the date of order communicated - Commissioner or any of his
Subordinate Officer i.e., Department
• If sufficient cause for delay- Appellate authority may accept, subject to satisfaction- section
107(5)
• Appeals to Appellate Authority
– Pre Deposit – Full amount of admitted tax, interest, fine, fees etc. and 10% of disputed
amount
• Mode of filing
– GST APL-01 to be filed either electronically or otherwise as may be notified by the
Commissioner & a provisional acknowledgement shall be issued to the appellant
immediately – Rule 108(1)
– A final acknowledgement, indicating the appeal number shall be issued in FORM GST
APL-02 by the Appellate Authority or an officer authorized by him in this behalf-– Rule
108(3)
ADJOURMENT
– Appellate authority may grant adjournment up to three times to a party- Section 107(9)
Unit-5 GSTN & Technology What is GSTN: The Goods and Service Tax Network is a
non-profit, It is special purpose vehicle set up by central and state Govt. to lay the information technology and infrastructure for GST. It is a Non-Government private limited co. incorporated under the co. ACT 2013. GSTN support about 3 billion invoices per month and return filing for 65 to 70 lakh taxpayers. GSTN will provide taxpayers with all services – Registration to
filing taxes and maintaining all tax details
Payments & Refunds
• Structure of GSTN: Private players own 51% share in the GSTN, and the rest (49%) is owned by the government (both central and state). The authorized capital of the GSTN is Rs 10 crore of which 49% of the shares are divided equally between the Central and State governments, and the remaining is with private banks.
101
Share Holding pattern of GSTN
Central Govt.
24.5%
State Govt.
24.5%
HDFC
10%
HDFC Bank
10%
ICICI Bank
10%
LIC Housing
Finance
11%
NSE
Stragegic
Investment
Co.
10%
102
Salient Features of the GSTN
Trusted National Information Utility (NIU): providing reliable, efficient and robust IT backbone for the smooth functioning of GST in India
Handles Complex Transactions: GST is a destination based tax. The adjustment of IGST (for inter-state trade) at the government level (Centre & various states) will be extremely complex, considering the sheer volume of transactions all over India. A rapid settlement mechanism amongst the States and the Centre will be possible only when there is a strong IT infrastructure and service backbone which captures, processes and exchanges information
All Information Will Be Secure: The government will have strategic control over the GSTN, as it is necessary to keep the information of all taxpayers confidential and secure. The Central Government will have control over the composition of the Board, mechanisms of Special Resolution and Shareholders Agreement, and agreements between the GSTN and other state governments. Also, the shareholding pattern is such that the Government shareholding at 49% is far more than that of any single private institution
Expenses Will Be Shared: The user charges will be paid entirely by the Central Government and the State Governments in equal proportion (i.e. 50:50) on behalf of all users. The state share will be then apportioned to individual states, in proportion to the number of taxpayers in the state
103
Functions of GSTN
GSTN is the backbone of the Common Portal which is the interface between the taxpayers and the government. The entire process of GST is online starting from registration to the filing of returns. It has to support about 3 billion invoices per month and the subsequent return filing for 65 to 70 lakh taxpayers.
The GSTN will handle:
Invoices
Various returns
Registrations
Payments & Refunds
The comprehensive IT infrastructure for the administration of GST includes in the common GST portal are-
Services of registration, returns and payments to all taxpayers,
It provides IT Models like assessments, appeals, etc. All States, accounting authorities, RBI and banks, etc
104
GSPs
Goods and service suvidha provide (GSPs): GSP stands for GST Suvidha Provider are the special entities who have been authorized to develop a web platform (essentially an online compliance platform) to enable the taxpayer to do the GST compliances. All GST system functionalities like registration, return filing, payment of taxes, uploading of invoices will be managed by GSTN. Now, GSTN has authorised 34 companies in India to directly interact with GSTN. These companies will be called as GSPs
105
FUNCTIONALITIES OF GSP..
GST Compliance Requirement by the Taxpayer
Every tax payer requires a gateway of GSP to interact with GSTN for return filing.
In GST framework All taxpayer under GST Regime will have to provide following information at regular intervals: Invoice data upload (B2B and large value B2C)
Upload GSTR-1 (return containing supply data) which will be created based on invoice data and some other data provided by the taxpayer.
Download data on inward supplies (receipts or purchase) in the form of Draft GSTR-2 from GST Portal created by the Portal based on GSTR-1 filed by corresponding suppliers.
Do matching of purchases made and that downloaded from GST portal. Finalize the same based on his own purchase (inward supply data) and upload GSTR-2
File GSTR-3 created by GST Portal based on GSTR-1 and 2 and other info and tax paid.
Similarly there are other returns for other categories of taxpayers like casual taxpayer or composition taxpayers.
GST system will not allow to upload duplicate content
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FUNCTIONALITIES OF GSP
It will provide a functionality to taxpayer Automatic reconciliation of purchase made and entered in the
purchase register and data downloaded in the form of GSTR-2 from the GST portal.
to reconcile sales & purchase invoices and upload the reconciled invoices on GST Network (GSTN).
Consolidated view of all the clients.
Get updates on their taxpayers from GST system
Error free Record keeping - Highlighting errors on a real time basis.
Action oriented reports for every user.
proving MIS as may be desired by the user at any point of time.
in addition to maintaining their individual business ledgers (sales ledger and purchase ledger) and other value added services around the same
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GSP Eco system
Tax payer
Registration
Challan generation
Invoice uploading
Return filing
ledger
Web portable
Mobile App
Accounting package
GSP-GST server
GST server
ERP
Customs app
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Example-Format for computing Transactional value Details Rs
Price of goods supplies (excluding GST) if price included GST should be converted in to excluding GST (price/100+GST*100) E.g 8500/118*100 =7203 Add: Charges added separately (not included in the above price) Installation and erection expenses Packing charges (primary and secondary) Special packing charges Designing and engineering charges Pre-delivery inspection charges Brought-out accessories Subsidy from NGOs Subsidy from central & state Govt. (exempted) Freight &insurance charges (including outward freight) Cost of durable and returnable container packing (exempted) Selling expenses, publicity charges, Advertising charges Loading & handling charges, Transport charges Warranty Charges Education , health care service, service export like export mission, UNO ( exempted) Less: Cash Discount Add: Advanced Discount Transactional Value Add: penalty for delay in making payment by the buyer more than 180 days Invoice price
X X X X X X E X E X X X
Xxx Xxx (xx) xxx Xxx x xx
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Calculating GST at the specified rate
Details CGST SGST IGST UTGST Total
If it is Intra State Transactions xxx xxx - - Xxx
If it is Inter-state Transactions - - Xxx xxx
If it is Transaction b/w UT Xx - - Xx xxx
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Example
• Mr. Shankar Dealer in Bangalore entered a contract with a supplier in Mysore to deliver Machine along with essential accessories. From the following determine GST Payable
• Price of Machinery (excluding GST) 60000
• Installation and erection expenses 46000
• Packing charges separately 4000
• Designing and engineering charges 55000
• Pre-delivery inspection charges 6000
• Rate of GST on Machinery 18%
• Cash Discount of Rs 25000 was allowed as per terms of contract. Since full payment was received before dispatch of machinery
• The machinery supplied along with accessories (necessary) at Rs 10000 and the rate of duty applicable to these accessories is 28%. Find the GST payable
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Solution –in this problems the principal supply is
Machinery and accessories supplied along with machinery is necessary, hence GST rate applicable is principal supply 18%
Details Rs Rs
Price of the goods (Machinery) Excluding GST Add: Installation and erection expenses
Packing charges separately
Designing and engineering charges
Pre-delivery inspection charges
Brought accessories (Necessary)
46000 4000
55000 6000
10000
600000
121000
Total Less: Cash discount Transactional Value (TV)
721000 (25000) 696000
(GST payable)- E-liability Ledger (it is intra -state supply)
CGST SGST IGST UTGST Total
T V( 696000*18/100 *1/2) 62640 62640 - - 125280
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Example
• Mr. Shankar Dealer in Delhi entered a contract with a supplier in Mysore to deliver Machine along with essential accessories. From the following determine GST Payable
• Price of Machinery (excluding GST) 60000
• Installation and erection expenses 46000
• Packing charges separately 4000
• Designing and engineering charges 55000
• Pre-delivery inspection charges 6000
• Rate of GST on Machinery 18%
• Cash Discount of Rs 25000 was allowed as per terms of contract. Since full payment was received before dispatch of machinery
• The machinery supplied along with accessories (necessary) at Rs 10000 and the rate of duty applicable to these accessories is 28%. Find the GST payable
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Solution –in this problems the principal supply is
Machinery and accessories supplied along with machinery is necessary, hence GST rate applicable is principal supply 18%
Details Rs Rs
Price of the goods (Machinery) Excluding GST Add: Installation and erection expenses
Packing charges separately
Designing and engineering charges
Pre-delivery inspection charges
Brought accessories (Necessary)
46000 4000
55000 6000
10000
600000
121000
Total Less: Cash discount Transactional Value (TV)
721000 (25000) 696000
E-liability ledger-it is inter-state supply (b/w Delhi to Mysore)
CGST SGST IGST UTGST Total
T V( 696000*18/100) - - 125280 - 125280
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Example
• Mr. Shankar Dealer in Bangalore entered a contract with a supplier in Mysore to deliver Machine along with essential accessories. From the following determine GST Payable
• Price of Machinery (excluding GST) 60000
• Installation and erection expenses 46000
• Packing charges separately 4000
• Designing and engineering charges 55000
• Pre-delivery inspection charges 6000
• Rate of GST on Machinery 18%
• Cash Discount of Rs 25000 was allowed as per terms of contract. Since full payment was received before dispatch of machinery
• The machinery supplied along with accessories (optional) at Rs 10000 and the rate of duty applicable to these accessories is 28%. Find the GST payable
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Solution –in this problems the principal supply is
Machinery and accessories supplied along with machinery is optional, hence GST rate applicable is higher the rate i. e 28%
Details Rs Rs
Price of the goods (Machinery) Excluding GST Add: Installation and erection expenses
Packing charges separately
Designing and engineering charges
Pre-delivery inspection charges
Brought accessories (Necessary)
46000 4000
55000 6000
10000
600000
121000
Total Less: Cash discount Transactional Value (TV)
721000 (25000) 696000
E-liability ledger--it is intra-state supply (b/w Delhi to Mysore)
CGST SGST IGST UTGST Total
T V( 696000*28/100*1/2) 97440 97440 - - 194880
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Example
• Mr. Shankar Dealer in Delhi entered a contract with a supplier in Mysore to deliver Machine along with essential accessories. From the following determine GST Payable
• Price of Machinery (excluding GST) 60000
• Installation and erection expenses 46000
• Packing charges separately 4000
• Designing and engineering charges 55000
• Pre-delivery inspection charges 6000
• Rate of GST on Machinery 18%
• Cash Discount of Rs 25000 was allowed as per terms of contract. Since full payment was received before dispatch of machinery
• The machinery supplied along with accessories (optional) at Rs 10000 and the rate of duty applicable to these accessories is 28%. Find the GST payable
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Solution –in this problems the principal supply is
Machinery and accessories supplied along with machinery is optional, hence GST rate applicable is higher the rate i. e 28%
Details Rs Rs
Price of the goods (Machinery) Excluding GST Add: Installation and erection expenses
Packing charges separately
Designing and engineering charges
Pre-delivery inspection charges
Brought accessories (Necessary)
46000 4000
55000 6000
10000
600000
121000
Total Less: Cash discount Transactional Value (TV)
721000 (25000) 696000
E-liability ledger--it is inter-state supply (b/w Delhi to Mysore)
CGST SGST IGST UTGST Total
T V( 696000*28/100) - - 194880 - 194880
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Example-Mr. Raja a resident of Bangalore submits the following information.
Particulars RS
Goods “A” purchased within the state ((inclusive of GST @ 5%) Goods “B” purchased within the state ((Exclusive of GST @12%) Goods “C” purchased unregistered dealer GST@ 12%) Goods “D” purchased from local market un reg. dealer GST 12 %) Goods “E” purchased within the state Composite dealer Goods “F” Imported from HP Excluding IGST 18%) Goods “G” purchased from AP (inclusive of GST 5%) Goods “H” Imported from USA including BCD (Exclusive IGST 18%) Goods “I” Imported from Thailand inclusive of BCD & GST 18%) Goods “J” purchased at zero (0) rate Goods “K” purchased Exempt from GST Goods “L” purchased SEZ ( inclusive of IGST 5%) Labour charges Transportation charges
630000 612500
60000 608000 668050
60000 63000
650000 618000
2000000 500000 210000
63950 80000
Mr. Raja sold entire stock to Mr. Prasad a resident of Mysore at a profit of 16% on the cost . Compute (1) Transaction value (2) output Tax @ 18% (3) input Tax (4) adjust ITC
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Solution- Computation Transactional Value of Mr. Raja
Particulars RS
Goods “A” purchased intra-state ((inc. of GST) (630000/105*100)
Goods “B” purchased within the state ((exclusive of GST @12%)
Goods “C” purchased unregistered dealer GST@ 12%)
Goods “D” purchased from local market un reg. dealer GST 12 %)
Goods “E” purchased within the state Composite dealer
Goods “F” Imported from HP Excluding IGST 18%)
Goods “G” purchased from AP (inc. of GST 5%) (63000/105*100)
Goods “H” Imported from USA including BCD (Exclusive IGST 18%)
Goods “I” Imported from Thailand inclusive of BCD & GST 18%)
Goods “J” purchased at zero (0) rate
Goods “K” purchased Exempt from GST
Goods “L” purchased SEZ ( inclusive of IGST 5%) (210000/105*100)
Add: Labour charges
Transportation charges
600000
612500
60000
608000
668050
60000
60000
650000
618000
2000000
500000
200000
63950
80000
Total cost
Add Profit 16% on cost (6780500*.16)
Transaction Value (TV)
6780500
1084880
7865380
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Calculation of Out Put TAX @ 18%
Details CGST SGST IGST UTGST Total
Sold entire stock to Mr. Prasad (it is Intra-state) 7865380*18/100*1/2
707884
707884
- - 1415678
(Total Tax payable)
E-liability ledger
707884 707884 1415678
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Solution- Computation Input Tax of Mr. Raja
Particulars CGST SGST IGST Total
A” intra-state inc. GST
B” intra-state excl GST
C” un reg. GST@ 12%
D” un reg. dealer 12%
E” Composite dealer
F” Imported (inter-st. ex
G” AP inter-st.(inc 5%)
H” Imp. USA including
BCD (Excl. IGST 18%)
I” Imp. Thailand incl. of
BCD & GST 18%)
J” purch. at zero (0) rate
K” purch. Exempt GST
L” purch. SEZ (incl. 5%
630000*5/105*1/2
612500*12/100*1/2
No input Tax benefit
No input Tax benefit
No input Tax benefit
60000*18/100
63000*5/105
650000*18/100
618000*18/118
Exempted
Exempted
200000*5/105
15000
36750
-
-
15000
36750
-
-
-
-
10800
3000
117000
94271
9524
30000
73500
-
10800
3000
117000
94271
9524
input tax credit
Add: opening ITC
51750 00
51750 00
234595 00
338095
00
(Total Input Tax Credit (ITC)) E-Credit ledger 51750 51750 234595 338095
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Computation of Net GST payable From cash ledger
CGST SGST ITGST Total
GST payable
Less: ITC
707884 (51750)
707884 (51750)
000 (234595)
1415768 (338095)
Payable/ surplus
Less: IGST adjusted against
CGST
656134 234595
656134 234595 (surplus) (234595)
(Net GST payable)
E-cash ledger
421539 656134 0 1077373
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Example-Mr. Raja a resident of Bangalore submits the following information.
Particulars RS
Goods “A” Sold within the state (GST @ 5%) Goods “B” Sold within the state (GST @12%) Goods “C” Sold unregistered dealer GST@ 12%) Goods “D” Sold to local market un reg. dealer GST 12 %) Goods “E” Sold within the state Composite dealer @ 12% Goods “F” Exported to UK GST 18%) Goods “G” sold to AP ( GST 5%) Goods “H” Exported to USA (Exclusive IGST 18%) Goods “I” Exported to Thailand GST 18%) Goods “J” Sold to Tumakur at zero (0) rate Goods “K” Sold Exempt GST to shivamogga Goods “L” Sold to SEZ in Balagavi ( IGST 5% if it is sold to Mysore)
600000 612500
60000 600000 668000
60000 60000
650000 618000
2000000 500000 210000
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Solution- Computation of Out put Tax of Mr. Raja
Particulars CGST SGST IGST Total
A” intra-state GST 5%
B” intra-state GST 12%
C” un reg. GST@ 12%
D” un reg. dealer 12%
E” Composite dealer 12%
F” Exported
G” AP inter-state GST5%
H” Exported . USA 18%)
I” Exp. Thailand 18%
J” Sold at zero (0) rate
K” Sold Exempt GST
L” Sold to SEZ
600000*5/100*1/2
612500*12/100*1/2
60000*12/100/1/2
600000*12/100/1/2
680000*12/100/1/2
Exempted
60000*5/100
Exempted
Exempted
Exempted
Exempted
Exempted
15000
36750
3600
36000
40800
-
15000
36750
3600
36000
40800
-
-
-
-
3000
30000
73500
7200
72000
81600
3000
(Total out put Tax) E-liability ledger 132150 132150 3000 267300
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Examples- on output tax (net GST payable)
Ashoka Hotel Group of companies provided the following services with the state of Kerala from its various establishments. Compute the amount of GST payable for the month of March 2018
• Supply of food or drinks in restaurant not having facility in air conditioning facilities @ 12% GST Rs 3000
• Supply of food or drinks in restaurant having licence to serve liquor @ 18% GST Rs 90000
• Supply of food or drink in outdoor catering @ 18% GST Rs 150000
• Renting of hotel rooms @ 18% GST Rs 225000
• Supply of food and drinks in air conditioning restaurant in 5 star or above GST @285 Rs 150000
• Gift to office staff Rs 20000
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Solution- Output tax payable Details Nature
supply Value & Cal. CGST SGST IG
ST
UT
GST Total
Supply of food or drinks Restaurant not having AC
Intra-state
30000*12/100*1/2 1800 1800 - - 3600
Supply of food or drinks Restaurant serve liquor
Intra-state
90000*18/100*1/2
8100 8100 - - 16200
Supply of food or drinks outdoor catering
Intra-state
150000*18/100*1/2 13500 13500 - - 27000
Renting of hotel Rooms Intra-state
225000*18/100*1/2 20250 20250 - - 40500
Supply of food or drinks Restaurant 5* & above
Intra-state
150000*28/100*1/2 21000 21000 - - 42000
Total out put tax payable E-liability ledger
64650 64650 - - 129300
Note: Gift up to Rs 50000 to an employee is exempted from payment of GST input purchases (inward supply) from SEZ will be treated as import and taxed as IGST out put sale (outward supply) to SEZ is treated as export is exempted from GST Capital goods life is 5 years for adjusting ITC (5 year *12month=60 months) For Eg. Cost of Machine Rs 200000 excluding tax purchased from Chennai GST 12% (IGST) sol: GST=200000*12/100*1/60= ITC Rs 400 for that Month
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Example • Mr. X supplies of goods pay GST under regular manner. He has not eligible
for exempt supply. The following outward supply for the tax period are-
– Intra-state supply of goods Rs 8,00,000
– Inter-state supply of goods Rs 3,00,000
The purchase made by him during the tax period are-
• Intra-state purchase of goods Rs 3,00,000
• Intra-State purchase of goods Rs 50,000
Mr. X has the ITC at the beginning of the period
CGST-Rs 30000
SGST- Rs 30000
IGST Rs 70000
Tax Rate CGST-9% SGST -9% IGST -18%
Compute ITC Adjustment and net tax payable
128
1.Computation out put Tax
Particular Value of (Rs) CGST 9% SGST 9% ITGST 18% Total Tax
Intra-state supply of goods 800000 72000 72000 0 144000
Inter-state supply of goods 300000 0 0 54000 54000
E-liability ledger 72000 72000 54000 198000
2. Computation of Total ITC available
CGST 9% SGST 9% ITGST 18% Total
Opening ITC
Add: ITC on Intra-State purchase Rs 300000
ITC on Inter-state purchase Rs 50000
30000 27000
0
30000 27000
0
70000 0
9000
130000 54000
9000
E-credit ledger 57000 57000 79000 193000
3. Computation of GST payable From cash ledger
CGST 9% SGST 9% ITGST 18% Total
GST payable
Less: ITC
72000 CGST (57000)
72000 SGST(57000)
54000 ITGST (79000)
Payable/ surplus
Less: IGST adjusted against CGST
15000 (pay) 15000 (IGST)
15000 (Pay) 10000 (IGST)
(25000-15000)
25000 (surplus) 25000 (CGST15000
& SGST 10000)
E-cash ledger 0 5000 0 5000
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EXAMPLE -1 Tax System(Before& After GST) on Goods
• A wholesale dealers of Karnataka, purchased goods from Manufacturers, for Rs 100000 Central sales tax 2.5%, VAT 14% and adding profit margin of Rs 10000 and then distributed to retailers. The retailers adding profit margin of Rs 20000, VAT14%. find out the price of the product to fetch in the hands of consumer.
• In case of GST assume the rate applicable is 18% find the input tax credit system
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Before GST Purchased good from whole seller at Add: Central Sales Tax 2.5% (100000*2.5/100) Effective Purchase price Add: Wholesaler Margin Selling price before tax to whole seller Add: VAT 14% (14/100*112500) price at which product distributed to retailer Add: retailer profit margin Selling price before tax Add: VAT 14% (.14*148250) Sales Cascading amount of tax paid ( central sales tax included whole seller and retailer 2500+2500 *.14)
Rs 100000 2500
102500 10000
112500 15750
128250 20000
148250 20755
169005
700
Unnecessarily paying tax on tax i.e 14 % central sales tax All this eventually increase the price of the product
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After GST INPUT TAX CREDIT MACHANISM
Manufacturers Whole sellers Retailers
Sales Purchases Value Added (sales –purchased) CGST (9%) SGST (9%) Tax on Sales Tax on purchases (input tax adj) Tax to be paid (Tax on sales-Tax on purchases)
100000 0
100000
9000 9000
18000 0
18000
110000 100000
10000
9900 9900
19800 18000
1800
130000 110000
20000
11700 11700 23400 19800
3600
Tax on sales means out put tax of the manufacturer, becomes a input tax (purchases) to the whole seller, the tax on sale of whole seller (out put tax), it becomes the input tax (purchase tax) to the retailer Under GST the product become cheaper by Rs ( 169005-153400) 15605 to consumer
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GST Invoice
Manufacturer
• Sales 100000
• + CGST 9000
• + SGST 9000
• Sales 118000
• (at Final price)
Whole seller
• Sales 110000
• + CGST 9900
• + SGST 9900
• Sales 129800
• (at Final price)
Retailer
• Sales 130000
• + CGST11700
• + SGST 11700
• Sales 153400
• (at Final price)
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EXAMPLE-2
• A manufacturer (Mumbai) sells goods to
wholesale for Rs 100000. whole seller (Mumbai) supply the goods to retailer(Karnataka) of by adding the mark-up of Rs 10000 to retailers. The retailers adding profit margin of Rs 20000 and sell to final consumer. Assume GST rate is 18%. Find the Input tax credit system
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Calculation of GST & IGST on supply of goods & Input Tax Credit
Manufacturers Mumbai
Whole sellers Mumbai
Retailers Karnataka
Sales Purchases Value Added (sales –purchased) (a) IGST (18%) (b)CGST (9% on sales) (c) SGST (9% on sales) Tax on Sales Tax on purchases (input tax adj) Tax to be paid in cash (Tax on sales-Tax on purchases)
100000 0
100000 ------- 9000 9000
18000 0
18000
110000 100000
10000 19800 -------- --------
(IGST)19800 18000
(IGST)1800
130000 110000
20000 -------- 11700 11700 23400 19800
3600
Sales price of manufacturer became purchase price of whole seller, similarly the sales of whole seller became the purchases price of retailer. And so on.
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GST Invoice
Manufacturer
• Sales 100000
• + CGST 9000
• + SGST 9000
• Sales 118000
• (at Final price)
Whole seller
• Sales 110000
• + IGST 19800
• Sales 129800
• (at Final price)
Retailer
• Sales 130000
• + CGST11700
• + SGST 11700
• Sales 153400
• (at Final price)
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Adjustment of Input credit Tax & GST Payable in cash
GST PAYABLE Manufacturers (Mumbai)
(sales to whole seller)
Whole seller (Mumbai)
(sales to Retailer)
Retailer (Karnataka)
(sale cons.)
a) CGST 9% sales 9000 0 11700
b) SGST 9% sales 9000 0 11700
c) IGST 18% sales (18/100*110000) 0 19800 0
TOTAL (a+b+c) 18000 19800 23400
Less: Input tax credit (tax on pur) 0 18000 19800
IGST adjustment (set off) I 0 0 0
CGST adjustment (set off)II 0 0 11700
SGST (set off) III 0 0 8100
(19800-11700)
Net Payable in cash
(Total- Input Tax Credit)
E-cash Ledger
18000
CGST = 9000
SGST= 9000
IGST=1800 SGST=3600 CGST= 0
137
Thank you
138