1. GST – AN OVERVIEW & THINGS TO
KNOW
By - U.Kalpanadevi
MBA - Finance
Audit Assistant.

2. Existing Tax structure in India
Tax Structure
Direct Tax
Income Tax
Wealth Tax
Indirect Tax
Central Tax
Excise Service Tax Custome
State Tax
VAT
Entry Tax, luxury
tax, Lottery Tax,
etc.

3. Proposed Tax Structure in India
Tax Structure
Direct Tax
Income Tax
Wealth Tax
Indirect Tax =
GST (Except
customs)
Intra- state
CGST (Central) SGST (State)
Inter State
IGST (Central)

4. Subsuming of Existing Taxes
• Central Excise
• Additional duties of Custom (CVD)
• Service Tax
• Surcharges and all cesses
CGST
• VAT/sales tax
• Entertainment Tax
• Luxury Tax
• Lottery Tax
• Entry Tax
• Purchase Tax
• Stamp Duty
• Goods and passenger Tax
• Tax on vehicle
• Electricity, banking, Real state
SGST
• CST
IGST

5. Stakeholder in Business Chain
Goods
+
Services
1.
Manufacturer
2. Wholesaler
3.Retailer4.Consumer
5.Government
and Banks

6. GST Set off Chain
Manufacturer
• Input Credit of Goods+ services
• After taking set off of Input credit, pay the Output Liability on value addition
Wholesaler
• Input Credit of Goods+ services from manufacturer
• After taking set off of Input credit, pay the Output Liability on value addition
Retailer
• Input Credit of Goods+ services from wholesaler
• After taking set off of Input credit, pay the Output Liability on value addition
Consumer • Ultimate Output Liability recovered from consumer

7. Set-off methodology
• Since the Central GST and State GST are to be treated separately, in general, taxes paid against the
Central GST shall be allowed to be taken as input tax credit (ITC) for the Central GST and could be
utilized only against the payment of Central GST. The same principle will be applicable for the State
GST.
• Cross utilization of ITC between the Central GST and the State GST would, in general, be allowed.
• ADC paid on Import of goods and service would fall under the IGST and this duty would be allowed for
setoff of SGST and CGST.

8. Set off Heads
IGST Input
IGST
Output
CGST
Output
CGST Input
IGST
Output
CGST
Output
SGST Input
IGST
Output
CGST
Output

9. •Returns under GST
RETURN
FORM
PARTICULARS DUE DATE APPLICABLE FOR
GSTR1 Outward Supplies 10th of the next month Normal/ Regular Taxpayer
GSTR2 Inward Supplies 15th of the next month Normal/ Regular Taxpayer
GSTR3 Monthly return [periodic] 20th of the next month Normal/ Regular Taxpayer
GSTR4 Return by compounding tax payers 18th of the month next to the quarter Compounding Taxpayer
GSTR5
Return by non resident tax payers
[foreigners]
a) 20 days after the end of a tax period
or
b) within 7 days after expiry of
registration
whichever is earlier.
Foreign Non-Resident Taxpayer
GSTR6 Return by input service distributors 13th of the next month Input Service Distributor
GSTR7 TDS return 10th of the next month Tax Deductor
GSTR8 Annual return 31st December next FY
Normal/ Regular Taxpayer,
Compounding Taxpayer
Ledgers ITC ledger, cash ledger, tax ledger On a continuous basis
9

10. Returns Process
Upload GSTR-
1
Can include
missing
invoice upto
17th
Auto-drafted GSTR-
2A based on details
from GSTR-1 filed by
other suppliers
Generate GSTR-2
by accepting/
rejecting/
modifying details
from GSTR-2A
Add missing
purchase
invoices
Supplier to accept
modifications by
17th
General net
tax: Pay/
carried forward
in GSTR 3
10

11. •GST Returns – Important Points
• Every registered taxable person to furnish returns
• Submission of return - Through online mode
• Return to be filed even if there is no business activity during the return period
• Error or omission may be rectified - No specific provision for revision prescribed
• B2B transactions proposed on invoice level – GSTIN, Invoice No. & date, Value,
Description, rate of tax and value of Tax.
• B2C invoice wise only for transaction above specified limit
• HSN Codes – Goods and Accounting Codes - Services
• Separate Tables for Debit / Credit Notes / Input Service Distributor Credit / TDS etc.
• Common e-Return for CGST, SGST & IGST
11

12. Matching, Reversal & Re-credit
Matching
Details of inward supply
furnished by a receiver to be
matched with details of output
supplies furnished by
corresponding supplier
Credit details of matching
supplies only to be accepted -
manner to be prescribed
Reversal
Details not matching resulting in
excess to be communicated to
both supplier & receiver
Details communicated but not
rectified by supplier to be added
to the output tax liability of
recipient
Duplication resulting in excess
also to be added to output tax
liability of recipient
Reclaim
Recipient entitled to reduce
output tax liability if
supplier rectifies the return
within prescribed timelines
12

13. First, Annual and Final Return
First Return
Every registered taxable
person who has made
outward supplies between
date of liability to register
to date of grant of
registration
Filed after grant of
registration
Annual Return
Every registered dealer to furnish
annual return by 31st December
except:
• ISD
• casual taxable person
• Person deducting tax
• Non-resident taxable person
Reconciliation statement to be
furnished along with the statutory
audited report and annual return
Final Return
Every registered dealer
opting for cancellation
to furnish a final return
To be furnished within 3
months from date of
cancellation or date of
cancellation order,
whichever is later
13

14. GST Return – Important Points
RECTIFICATION
Rectification allowed till
September 30 or date of filing
of annual return
NON FILLING
Cancellation of registration for
non filing of returns for 3
consecutive tax periods
BLACK LISTING OF DEALERS
Compliance rating to be
introduced. Fall below the
prescribed level would lead to
blacklisting
PENALTY- NON FILING OF RETURN
Late Fees: INR 100 per day subject to a maximum of INR 5,000
Late Fee - Annual Return INR 100 per day subject to a maximum of 0.25 % of
the aggregate turnover of the defaulter.
14

15. GST and Information Technology (IT) Interface
• Based on the legal provisions and procedure for GST, the content of
work-flow software such as ACES (Automated Central Excise &
Service Tax) would require review.
• On the IT front, there has been consensus that there will be a
common portal providing three core services (registration, returns
and payments).

16. GST Council
• GST levy will be administered by
1. Union finance minister(chairmen)
2. Union minister in charge of state revenue or
finance
3. Minister in charge of finance or taxation.
4. Any other minister(finance minister of the
state) nominated by each state govt would
constitute the council.

17. Dispute Settlement Authority(DSA)
• Dispute between state and centre will be handled
by the DSA.
• Appeal from DSA would be dealt with supreme
court.
• Example: if a state receives less revenue in
comparison with its previous one than it can
appeal this case to the DSA.

18. Importance of Article 246(A)
• There is resistance by the SG as VAT is the main source of revenue
for the SG.
• In 246(a) certain powers are allocated to the state government.
• The parliament & legislature of every state will have the power to
make law with respect to goods and service tax imposed by
union(Govt) or by the state.

19. GST Global Scenario
More than 140 countries have already introduced GST/National VAT.
France was the first country to introduce GST system in 1954.
Typically it is a single rate system but two/three rate systems are
also prevalent. Canada and Brazil alone have a dual VAT.
Standard GST rate in most countries ranges between 15-20%.

20. India's GST structure is complex, says IMF
• Report says the proposed GST structure will require the centre to
coordinate with 30 states, which is an administrative challenge.
• Even as the international monetary fund (IMF) says the proposed goods and
services tax (GST) will improve tax compliance and enhance economic
growth by 1-1.5 per cent over time, it finds the structure of the indirect tax
regime in india complex.
• “The GST design being contemplated is... Fairly complex, with a dual
administration arrangement that involves the tax authorities of both the
centre and states separately taxing a single transaction,” says the fund in a
report on India.

21. GST : Proposed Key Features
Dual GST : central GST & state GST
Destination based state GST
Uniform classification
Uniform forms – returns, challans ( in electronic
mode)
No cascading of central and state taxes
Cross credit between centre and state not allowed
Tax levied from production to consumption

22. GST : Global Perspective
• It has been a part of the tax landscape in Europe for the past 50 years.
• It is fast becoming the preferred form of indirect tax in the Asia-pacific
region.
• While countries such as Singapore and new Zealand tax virtually
everything at a single rate, Indonesia has five positive rates, a zero rate
and over 30 categories of exemptions.
• In china, GST applies only to goods and the provision of repairs,
replacement and processing services.
• It is only recoverable on goods used in the production process, and GST
on fixed assets is not recoverable.
• There is a separate business tax in the form of vat.

23. GST : Global Perspective
• Goods and services tax in brazil
• Brazil was the first country to adopt GST system.
• Brazil has adopted a dual GST where the tax is
levied by both the central and the provincial
governments.
• GST rate is 20 %.

24. GST- CAN WE ADOPT IT
• An information network allowing GST Council to cross-check
payment information should be developed.
• What is needed is an IT system like the Tax Information Network
(TIN), where the TDS or the vat credit is recorded in a central database.
• Paper bills and fraud to be largely eliminated.

25. THINGS TO KNOW ABOUT GST BEFORE
ENTERING

26. * No Second sales i.e., Tax on every sale
* Return should be filed online only
* Within state – Rs.20L exempted.
* Return should be filed 3 times a month. [10th, 15th & 20th
respectively]
* Aggregated turnover = Taxable goods + Exempted goods +
Zero rated goods + Export goods
* i) SGST – State Goods and Services Tax
ii) CGST – Central Goods and Services Tax
iii) IGST – Integrated Goods and Service Tax [ SGST + CGST ]
automated mechanism to monitor the “Inter state
sales & supply of goods and services.

27. * The person who purchases or sells taxable goods should file
his return duely/within the due date. Otherwise ITC cant be
claimed & the other party will also get affected.
* Tax rate should be mentioned separately in invoice. Invoices
should not contain words like Inclusive of tax etc., [While
calculating tax freight charges and packing charges need not
be included]
* 3 copies of invoices are to be maintained i.e., buyer,
transporter & seller.

28. - get reference no from concerned authorities & raise supplementary
invoice after that goods can be send through the transporter.
- original invoice no should be included in supplementary invoice
- reference no to be included in original invoice.
* Can take ITC for capital goods but depreciation cannt be claimed in IT
return
* Traders can pay less tax under “Composite Scheme”
- Should get permission within 30 days from the commencement
of the act.
-Traders with aggregated turnover of Rs.50L are eligible.
- But cannot able to take ITC for the transactions made

29. - People who buys & sells are eligible i.e., Manufacturers are not eligible.
- Traders under Composite Scheme can file quarterly.[ 3 months once ]
- Composite traders cannot make sell/ purchase outside the state.
- Traders under this scheme can trade only taxable goods. Restricted to
trade non taxable/ exempted goods.
- Taxable goods which are announced by GST Council.
- If they trade non taxable/ exempted goods & the cost of a product
exceedsRs.100/- as per Sec.28 (3b) in addition to invoice another bill has to be
produced.

30. * For Casual traders, upto Rs.20L exempted. If trading includes
taxable goods then tax has to be paid for all goods.
* No registration fees to get registered under GST. Whereas people
doing JOB WORK need not register.
* Manufacturers giving job work should be given proper order and in
proper format. If it is not submitted back in 180days, they penalty
will be levied considering it as sales.
* If registration is not made within due date then ITC cannot be
claimed on stock.

31. * If the bill amount exceeds Rs. 5L in an invoice, then 1% TDS has to
be deducted and to be paid within 10th of next month.
* While paying tax, GST a/c codes should be mentioned.
- CGST : Tax0001001
- SGST : Tax0003001
- IGST : Tax0002001
* For the sale of taxable goods outside the state, tax has to be paid to
the concerned state( where he does business) and return should be
filled in concerned form monthly.

32. * Every registered taxable person whose aggregated turnover during
the Financial year exceeds Rs. 1Cr, shall get his accounts audited and
he shall furnish a copy of audited annual a/c’s and a reconcilation
statement duly certifieed in Form GSTR-9B electronically through a
common portal.
* If a sale is made to a unregistered dealer, then the full address,
delivery point, place, state etc., should be mentioned in the bill.
* While raising bill to other states, tax rate should be mentioned
under IGST & for within the state CGST + SGST.

33. * GST tax payer can claim ITC from the transporter invoice [ While
delivering goods the transporter makes payment for the transport for
that ITC can be claimed ]
* In a month only Rs.10000/- can be paid as tax by cash, cheque or
DD. If the tax amount exceeds then internet banking, credit card,
debit card, RTGS & NEFT to be made. If payment madde by RTGS then
form along with the challan has to be given to bank for payment.

34. * If a sesrvice is being made in the name of “JOB WORK” serrvice and from
that place if goods are being send to a unregistered job worker, then full
address should be mentioned in the registration certificate.
* If a Job work is given to a unregistered job worker & if he sells the waste
then he has to pay the tax.
* If diffference in invoice arised due to the purchaser then as per GST,
Credit note should be given & it should be shown by both the parties in the
Sales tax return.
* If registered taxable person gets advance then detaills about that should
be given in receipt voucher.

35. * If taxable goods (raw materials) is not used by the purchaser & if he
wants to return itback then it should be given in 6 months. -> ITC reverse
should be done.
* Without PAN a trader cannot trade outside the state.
* If turnover is Rs.1.5Cr, then HSN code need not be mentioned in the
invoice. If turnover is within Rs.5Cr, then first two digit HSN code hould
be mentioned in the invoice.
* If the value of in the transport vehicle exceeds Rs.50000/- then the
concerned authority has the right to ask documents for each and every
product in the vehicle.

36. * If the tax rate is calculated wrongly then in order to rectify that either
credit note / debit note should be given.
* The traders who have taken GST number & get any advance for the sale
of goods then receipt voucher has to be given and it should be mentioned
in the return as per Section - 33
* In the first return of GST, the ITC is taken provisionally. If there is any
difference in the previous return and the present one then the procedure
has to be followed as per Section – 36
* As per GST act, after filling the annual return the book of accounts has to
be maintained till 60 months from the day of filling.

37. * The authorities have the right to audit the godown and verify the stock
and other documents with a notice period of 15 days.
* If there is excess stock than the stock shown in a/c’s , the authorities have
the right to cease the sttock.
* Any person violates GST is punishable with a max. Of Rs.25000/- as per
section 85.
* If the goods are caught by the authorities without proper documents then
100% penalty and tax has to be paid or tax amount & 50% of goods value
has to be paid as per Section – 89

38. * There is no penalty for minor mistakes or entries wrong in the return.
Max Rs.5000/- the return can be corrected without any penalty as per
Section 86.
* In a bill if the commissionerr feels that the price is low then he has the
right to give the a/c’s to another Chartered Accountant and gets accounted
as per Section 68 and for this the trader has to bear the charges/expenses.
* Raw material suppliers, manufacturers and suppliers should fill the
respective form in proper way and within right time to claim ITC as per
Section – 64

39. * If any of the partner relieves from the partnership firm then within
30 days letter has to be given to the commissioner.
* If there is any change in partner in a partnership firm,then to
inform new registration has to be taken. After getting the original
registration certificate, for the previous invoices revised invoices has
to be given to the parties as per Section 28.
* If a trader receives order/summon via email then it is treated as
registered post as per Section 159.

40. •Knowing more about GST
• We all will pay GST on every product or service we buy/ consume
• All indirect taxes levied by the states and the centre will be merged
into one GST, we would exactly know how much tax we pay
which at present is difficult to understand.
• The sellers or service providers collect the tax from their customer.
• Before depositing the same to the exchequer, they deduct the tax
they have already paid.
• The success of GST would rest upon efficiency, equity and
Simplicity.

41. THANK YOU