2. Coverage Today
1. Introduction 11. Composition Scheme
2. Why Dual GST ? 12. Peculiar Features
3. Registration 13. Transitional Provisions
4. Meaning & Scope of Supply 14. Revised Model GST(Misc)
5. Timing of Supply
6. Transaction Value
7. Input Tax Credit
10. Place of Provision rules
GST Subsumes certain current Indirect taxes like Excise duty , Service Tax ,
VAT, CST etc.
Currently fiscal powers B/w center & states are demarcated in constitution.
Introduction of GST requires amendment to Constitution to simultaneously
empower center & states to collect taxes.
Constitutional amendment was passed to empower the center & states to
collect GST(Article 246A).
IGST Act passed through constitutional amendment Article 269A.
4. Why Dual GST ?
India is a federal country where center & state both collect taxes.
Both have distinct responsibilities for which they need to raise funds.
Hence Dual GST is implemented keeping in constitutional requirement.
Though IGST is a separate act it consists of only 31 sections & has similar
provisions as that of CGST,SGST.
Persons whose Aggregate turnover exceeds a threshold limit of 10 Lacks. 5
Lacks for persons of NE states.
Inter state suppliers , Persons liable under RCM, Persons required to collect
TCS or TDS, ISD, Aggregator etc. are required to be registered compulsorily .
Persons with same PAN operating in different states are required to obtain
Cancellation of registration under CGST means cancellation of registration
under the SGST also & vice versa.
There is no provision to take centralized registration.
Existing dealers who are registered shall be migrated in to GSTN & shall be
issued GSTIN & password which is provisional & finalized only after
submission of requisite documents with the time limit allowed.
However service tax assesses having centralized registration shall obtain afresh
registration in respective states of operation.
Principal manufacturer may declare Job workers place as his place of business
or job worker may obtain separate registration.
GST registration certificate can downloaded from GST common portal.
The act lays down procedure for cancellation of registration, refusal for grant
of registration etc.
7. Meaning & Scope Of Supply
Taxable event is supply of goods or service. Taxable events under earlier acts
shall be subsumed under definition of Supply.
Supply INCLUDES import of Goods or services , sale, transfer, exchange ,
lease , barter etc.
To Get taxed Supply should be firstly a Taxable supply from Taxable
person within the Taxable territory( certain transactions are taxed even if
there is no consideration).
Import of Goods is dealt by Customs Act, where in IGST shall be levied as
Additional duty of customs in addition to BCD.
Inter state self supplies are taxable because registration is state wise.
8. Time Of Supply
Needed for fixing Point Of Taxation where GST liability arises.
In case of supply of goods –
a) Date of invoice or last date prescribed for issue of invoice ; or
b)date of receipt of payment by supplier
Earliest of the above shall be treated as POT.
In case of supply of services -
a) Date of invoice or last date prescribed for issue of invoice ; or
b)date of receipt of payment by supplier
In case liability is on recipient –
Date of receipt of goods or payment date or Date immediately following 30 days
from the date of invoice
which ever is earlier.
9. In case of change in Tax rate
Provision Of Supply
Pymt Invoice POT Pymt Invoice POT
After After Earlier of the Two Prior Prior Earlier of the Two
After Prior Date Of invoice After Prior Date of Payment
Prior After Date of Pymt Prior After Date of Invoice
10. Transaction Value
GST is levied on ‘’Transaction Value ‘’ if price is sole consideration & parties are
not related. Valuation rules for IGST, CGST, SGST are one & the same.
3 Rules are notified for determining Transaction value – Residual , computed
method , comparative method .
Certain inclusions in transaction value are required under the GST which are
similar to adjustments under the old laws like Royalty etc.
CGST , SGST or IGST are levied on the same price or value unlike state vat
which was levied on value of goods inclusive of Excise.
For Inter state supply – IGST which includes components of CGST & SGST are
For Intra state supply – CGST , SGST are levied.
11. Input Tax Credit
CGST, SGST & IGST credits are available.
Credit of capital goods can also be utilized in one installment.
Conditions for availing ITC –
1. Possession of Invoice.
2. Receipt of goods.
3. Furnishing of return.
4. Tax charged on such input should be paid in cash or utilizing ITC by supplier.
No ITC credit after furnishing return for the month of sept of relevant F.Y or
annual return which ever is earlier.
Return furnished is treated invalid unless tax due is paid. Only valid return is
considered for ITC for recipient.
Input of CGST against payment of SGST & vice versa are not allowed. Input of
IGST should be utilized towards IGST, CSGT,SGST in the same order.
Where recipient fails to pay supplier Invoice amount & tax amount with 3
months from date of issue of invoice an amount of ITC availed & interest shall
be payable by recipient.
No ITC is available on certain goods like motor vehicles , insurance etc.
No ITC after 1 year from the date of invoice.
13. Example of ITC on Inter state supply
1. X of State 1 makes supply to A of state 1.
Value of Supply = 10,000
Add: CGST@8% = 800
Add: SGST@8% = 800
Total = 11,600
2. A of state 1 further makes supply to B of state 2 for Rs. 12000/- charging IGST@16%
amounting to Rs. 1920 /-.
3. A will remit IGST to Central Govt (CG) of Rs. 320/- after utilizing ITC as under.
IGST payable = 1920
less: CGST ITC = 800
less: SGST ITC = 800
4. B will avail credit of IGST of Rs. 1920 paid on his purchase & SG will remit Rs. 800/-
to CG utilized by A for paying IGST.
5. Further B supplies to C of the state 2 as under
Value of supply = 14,400
Add: CGST @8% = 1,152
Add: SGST@8% = 1,152
Computation of CGST & SGST payable by C
CGST payable = 1,152
Less : ITC of IGST = 1,152 (utilized from IGST Credit Rs.1920)
Payable CGST = Nil
SGST payable = 1,152
Less : ITC of IGST = 768 ( 1,920 – 1,152)
Payable SGST = 384
Payment not later than last date fixed for filing return.
In some cases recipient or in some cases third party like E-Commerce operator/
Govt Dept is liable to pay under RCM.
Payment can be made through Credit ledger (only Tax amount)or Cash ledger.
There are 3 types of E ledgers i.e. tax liability ledger reflects Total tax liability
after netting off ITC, Cash ledger reflects all deposits made in cash ,TDS/TCS
& ITC as self assessed in return will be reflected in ITC ledger.
TDS @1% shall be made by Govt authorities/undertakings while making
contractual payments above 5 lacks to suppliers.
Similarly E commerce operators are require to deduct TDS in certain cases.
A supplier who crosses aggregate turnover of 9 lacks is liable registration but
becomes taxable persons only on crossing 10 lacks.
Liability to file return arises when taxable turnover crosses 10 lacks. Apart from
these E commerce operators, TDS deductors, Inter state suppliers are compulsorily
required to file returns.
Types of Returns
1. GSTR 1 – Outward suppliers to registered/un registered persons. To be filed
with in 10th of succeeding month.
2. GSTR 2 – Supplies received. Auto populated from GSTR -1 of Supplier.
Certain purchases which are omitted by supplier in GSTR 1 can be filled by recipient.
To be filed with in 15th of succeeding month.
Last date for finalizing Supply & receipt details in GSTR 1 & 2 is 17th of next month.
If invoices as per GSTR 2 do not match with GSTR 1 of counter part credit is to
be reversed if not rectified within time limit.
Supplier can upload invoices maximum within September of next F.y.
3. GSTR 3 - Auto populated From GSTR 1 & 2. Due date 20th of next month
4. GSTR 4 – Person opting for composition scheme. Quarterly return.
5. GSTR 6 – Input service distributor. To be filed within 13th of succeeding
6. GSTR 7 – TDS deductors. To be filed within 10th of succeeding month.
A total of 27 types of returns have been prescribed under GST.
18. Place Of Provision Rules
GST is destination based taxation system so place of provision of service is
important to decide applicability of CGST & SGST or IGST .
For Goods requiring movement POP is Place of recipient with some exceptions.
For Services POP could be -
1. Place of recipient of service ( Default rule )
2. Place of provider of service ( In case Place of recipient is N/A )
3. Place of consumption of service. ( Immovable property services )
4. Place of person who derives benefit from service.
19. Composition Scheme
Small taxpayers with a aggregate turnover of 50 lacks in previous F.Y eligible to
opt for composition scheme.
No ITC shall be available & not eligible to levy output tax.
Tax shall be payable @ not less than 2.5% in case of manufacturer & 1% in any
other case on turnover for the respective F.Y without ITC.
Tax payers paying under reverse charge or making inter state supplies are not
eligible for composition scheme.
Payment on Quarterly basis.
Return on or before 18 th after the end of quarter.
Schedule I – Matters to treated as supply even if there is no consideration.
Schedule II – Matters to be treated as supply of goods or services.(declared
services & deemed sale.)
Schedule III – Certain activities which shall not be treated as supply of goods or
service.( Negative list)
Schedule IV – Certain activities by CG,SG, Local authorities not treated as
supply of goods or service. ( As appearing in negative list & mega exemption
Schedule V – Persons liable for registration.
21. Peculiar features
Real time uploading of invoices & modifying at later point of time before final
Retention of records for a period of 6 months from due date of filing annual
GSTN provides separate User ID’s & passwords for professional to enable them
to work on behalf of their clients if so authorized.
A manufacturer enjoying SSI exemption earlier will now have to get registered.
Similarly Vat trader having turnover below exemption limit will now have to get
registered if operates through E -Commerce operator.
22. Transitional Provisions
Cenvat / ITC from earlier laws can be carried forward in to GST regime.
Person paying tax under composition scheme earlier & taxable under GST can take
credit on inputs in stock on that date. Similarly taxable person under earlier law
having ITC & opting for composition scheme under GST will need to reverse ITC on
stock held on that date.
Pending appeals ,revisions & refunds under earlier laws will be dealt therein.
Service / supply is made under earlier law but if part of consideration is received
under GST regime then no tax is payable if Liability is discharged.
Goods sent on approval to be received back within 6 months (+ 2 months) from
appointed date or else are liable for GST.
23. • Definition of Taxable Person is revised.
• Limit of registration for taxable person increased from 9 lacks to 20 lacks. However
for N E states, J & K , H.P & Uttarakhand limit is increased from 4 lacks to 10 lacks.
• A new special category of states ( To be notified) are added for whom limit for
registration shall be 10 lacks.
• Value of non taxable supplies removed from definition of Aggregate turnover.
• Definition of capital assets is deleted from Revised GST.
• Definition of Capital Goods is revised to mean all those capital goods the value of
which are capitalized in books of accounts.
• First stage & second stage dealer is defined under revised GST.
• Definition of Goods revised to exclude Securities.