A brief understanding of proposed provisions of Goods & Service Tax, 2016. It includes Dual Structure of GST, Input Credit of GST, Returns or Payments in GST, TDS/TCS in GST.

1. INSIGHTS OF GOODS
& SERVICE TAX
PART - I

2. Existing Indirect Tax
Structure
GST Indirect Tax
Structure
Taxable – Event &
Person
Time of Supply
Valuation of Supply
under GST
Proposed GST Rates
Input Tax Credit
under GST
Invoice under GST
Tax Payment under
GST
TDS/ TCS Provisions
under GST
Return under GST Migration to GST
CONTENTS
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3. Existing Indirect Tax Structure
Taxes on
Commodities
At Central Level –Duties
of Excise, Central Sales
Tax
At State Level – Excise
Duty, VAT, Entry Tax,
Octroi, Purchase Tax
Taxes on
Services
At Central Level –
Service Tax
At State Level –
Entertainment tax,
Luxury Tax
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4. Introduction of Value Added Tax (VAT) and CENVAT marked a significant step forward
in the reform of domestic trade taxes in India wherein credit of input tax was allowed
to some extent under the respective Credit Rules.
Despite the success with VAT there are certain shortcomings in the existing structure
of VAT both at central and state level.
Shortcomings
Credit not available of
certain taxes.
Tax on Tax
No uniformity in VAT norms in
different states.
Cross Utilization of credit of
VAT and CENVAT is not
allowed.
Multiplicity of taxes
Existing Indirect Tax Structure
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5. GST in India shall be dual structured with Centre & State levying tax simultaneously on common
list of goods & services except items like Petroleum products, Alcoholic Beverages & Electricity.
Indirect Tax Structure in GST
Central GST (CGST)
CGST comprises of Central Excise Duties, Additional duties of Excise, Service Tax,
Central Sales Tax, CVD, SAD, Central Surcharges & Cess.
State GST (SGST)
SGST comprises of VAT, Luxury Tax, Entertainment Tax, Purchase Tax, Entry Tax, Taxes
on Lottery, Betting & Gambling, Taxes on Advertisement, State Cess & Surcharges
Integrated GST (IGST)
IGST shall be levied on all the Inter-State Transactions & on Imports. Rate of IGST shall
be the sum of CGST & SGST. It will be administered by the Central Govt.
Dual Structure of GST in India
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6. Taxable Event & Person in GST
Having Turnover of
more than Rs.20 Lakhs
(Rs. 10 Lakhs for NE
states). Aggregate
turnover of all types of
supply in whole India.
No such exemption to
E-commerce operators
or person enters into
any Inter-state
transactions or casual
trader or service
provider.
Taxable
Person
‘Supply’ not ‘Sale’ of
Goods or Services is the
Taxable Event under GST.
It includes supplies made
with or without
consideration (Free
samples) & even for non-
business use.
Transaction between an
Agent or principal shall
be a taxable event if
agent receives or
supplies goods / services
on behalf of principal.
Taxable
Event
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7. Liability to pay GST shall arise on the receipt of payment against
supply of Goods or Services. Even advances for goods are taxable.
Time of Supply in GST
General Rule
*Recipient – Person who is liable to pay consideration for Goods / Services. If no consideration
is involved then person to whom goods or services are delivered.
*Supplier – Person supplying the goods/services and includes agent acting on behalf of supplier.
Time of Supply of
Goods
Time of Supply of
Services
Earliest of the following dates –
Date on which goods are removed by supplier;
Date of issue of Invoice or receipt of payment by supplier;
Date of receipt of goods in books of accounts of recipient.
If invoice is issued within 30 days, Date of issue of invoice or
receipt of payment whichever is earlier;
If not covered in above, Date of completion of service or
receipt of payment by supplier whichever is earlier;
If not covered in above, Date of receipt of services in books of
accounts of recipient.
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8. Consideration / Transaction Value for each supply shall be considered as Taxable Value
under GST except in following cases:
Cases where supplier or receiver are related person;
Consideration is not in terms of money;
Transaction declared is not reliable; and
Business Transaction by a pure agent, money change, insurer, air travel agent & distributor of
lottery.
Valuation of Supply under GST
Methods prescribed for valuation in such cases which shall be use in same sequence:
Comparative
Method – Value of
supply of identical
goods or service
Computed Method – Cost
of goods or provision of
service plus profit margin
in similar class of goods
or service
Residual Method –
Valuation to be done
based on principles &
provision of
Valuation Rules.
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9. Four Tier Rates have been proposed in GST for taxing goods or services of basic necessity at
lower or standard rates while tax on luxury or demerit goods shall be levied at higher rates.
Proposed GST Rates
6% 12%
18% 26% To be levied on High
end Cars, Tobacco, Pan
Masala, Aerated
Drinks, Cigarettes, etc.
Combined rate structure of CGST & SGST to be levied on different
types of goods or services:
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10. Input Tax Credit (“ITC”) shall be available on all the Goods or Services used for Business
purposes except the following:
Motor Vehicle except in case of Transportation of Passenger/ Goods or Imparting Driving skills;
Goods or Services used in Works Contract or used by employees for personal consumption;
Goods used for construction of Immovable Property;
Goods used for exempted supplies or not for business purpose;
GST paid under composition scheme.
ITC shall be available to receiver only when the supplier has actually paid GST on such
supply either in cash or by credit. Final credit shall be allowed through following process:
Input Tax Credit in GST
Provisional Credit will
be available based on
the return of output
filed by supplier.
Credit entries shall be
matched with the
return of inputs filed
by receiver.
Final Credit shall be
available to receiver for
the entries matched in
both the returns.
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11. Input Tax Credit in GST
IGST
Credit
IGST
Output
CGST
Output
SGST
Output
CGST
Credit
CGST
Output
IGST
Output
SGST
Credit
SGST
Output
IGST
Output
ITC on any tax invoice can be availed within one year from the date of such invoice.
However, no ITC shall be available after filing of annual return for the financial year (FY) in
which invoice was issued or filling of return for September month of next FY.
Utilization of CGST, SGST & IGST shall be allowable in following manner:
No cross
utilization of
CGST & SGST
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12. Invoices under GST
Details of certain prescribed fields of invoices including HSN Code for Goods, Accounting
Code for Services and Taxable Value of Goods or Services needs to be uploaded in Form
GSTR-1 but no scan copies to be uploaded.
Invoice shall be alpha-numeric & should be unique for each year.
Invoice for service to be issued within 30 days of supply.
Invoices to be uploaded electronically on common portal:
• All invoices, either inter-state or intra-state, shall be
uploaded on the portal.
• ITC will be available only when invoices are matched.
B2B
Transactions
• All the invoices having value of more than Rs.2.5 Lakhs in
inter-state supply shall be uploaded
• For all other invoices, state wise summary is sufficient.
B2C
Transactions
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13. Payment of GST
Payments under GST regime shall be made through Electronic Tax Liability Register either by
debiting Electronic Credit Ledger or by Electronic Cash Ledger maintained on the Common
Portal.
Any amount deducted or collected by way of TDS/TCS shall be credited to the Electronic
Cash Ledger of the concerned person which can be adjusted for payment of liability.
Liability of pay GST may be debited or credited in the Electronic Tax Liability to give
effect the order passed in an appeal, grant or rejection of refund etc.
Internet Banking from authorized
bank or Credit/Debit Card
NEFT / RTGS from
any bank
Cash/Chq/DD up to
Rs.10000 per challan per
month
GST shall be paid via tax challan in Form PMT-4 to be generated from common
portal which shall be valid for 15 days. Ways to make GST payment:
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14. TDS / TCS Provisions in GST
Provisions TDS TCS
Applicability Value of Supply more than Rs.10
Lakhs. Govt. will specify the class of
person required to deduct TDS.
E-Commerce
Operators only
Rate 1% To be specified
Deduction /
Collection
At the time of Credit or Payment At the time of Credit
or Payment
Payment By 10th of following month of
deduction
To be specified
Every deductor or collector of Tax shall file a return of TDS / TCS respectively and shall issue
certificate to the deductee and the same will be treated as tax paid by such deductee.
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15. All the returns of GST shall be filed electronically through a common portal of GST.
All registered assessee shall file monthly GST Returns by 20th of the following month except
suppliers following composition scheme who shall file return quarterly.
Annual return of GST shall also be filed by all the registered assessee by 31st December.
GST Returns
Step by Step process to file a monthly return
Step – 1
Furnish details of
each Outward
Supplies which
shall be reflected
in the return of
each registered
receiver.
Step – 2
Receiver can
modify the details
submitted by
each supplier &
such supplier may
accept or reject
the changes
Step – 3
Furnish details of
all Inward Supplies
which shall be
matched with the
details of Step-2.
Also specify credit
which is not
eligible.
Step – 4
Adjust final Input
Credit, TDS, TCS &
pay the balance
liability. Return
shall be generated
based on the info
submitted in
previous steps.
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16. The migration process of all the registered dealers, service providers or manufacturers have
begun already in phase manner.
State VAT department is providing provisional ID & password to all its registered dealers
through which dealer can register itself on common GST portal. Every existing user shall
have to provide following details:
Basic details of the assessee including PAN, VAT / Service Tax registration / Company or Firm
registration. (Attach proof of constitution);
Details of Promoters/Directors & Authorized Signatory of the assessee (Attach photo & proof of
authorized signatory);
Details of Principal or Additional Place of Business;
Details of Goods or Services supplied; and
Bank Account Details & attach first page of bank statement.
The application for migration can be submitted through DSC (mandatory for Company or
LLP) or E-Sign (Based on Aadhar No.) of authorized signatory or without DSC.
Migration of Registered Assessee to GST
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17. PREPARED BY:-
CA ASHISH GUPTA
D-57-58, Ist Floor, Amar Colony,
Lajpat Nagar-IV, New Delhi
(M) +91-9891670570
(E) info@ashishca.com
(W) www.ashishca.com
Disclaimer: This presentation is provided purely for your
information and knowledge. Information provided in this
presentation do not purport or should not be treated as
legal opinion in the fact specific situations that may effect
you and your business.