1. APPLICABILITY ISSUES & SOLUTIONS FOR MANUFACTURER,
TRADER, JOB WORKER, WORKS CONTRACTOR, SERVICE PROVIDERS.
Presentation by CA. Vinay Bhushan
vinay@taxpertpro.com || 09769134554

2. Job Worker
 Definition;
 Taxability under GST Regime;
 Transitional Provisions for Job
Workers;
 Declaration to be filed in
Transitional period;
 Present vs. GST Regime for Job
Work

3. Job Worker
What is Job Work?
“Job work” means any treatment or process undertaken by a person on goods belonging to
another registered person
Taxability of Job
Worker under GST
Goods Sent to Job worker are not taxable. However goods shall be
bought back within 1 year & Capital goods within 3 years. If goods are
not brought back, it will be considered as supply & GST is leviable
Transitional
Provisions
If the goods are sent to Job Worker in Present Regime & bought back
in GST regime within 6 months & Declaration has been filed by Job
worker & principal in Form GST TRAN 1 within 90 days of 1st Jul, 2017.
GST will not be attracted on such job work.
Input Tax Credit
Principal shall be eligible to take credit of goods sent on Job work, If
the goods are received back within 1 year of being sent to job work;
If the goods are not returned it shall be treated as goods supplied on
the day when the said inputs were sent out.

4. Declaration to filed by Job Worker & Principal in Form GST TRAN 1
Transitional Provisions

5. Job Worker- Present vs. GST Regime
Present Regime GST Regime
A. Goods Sent to Job Worker
Not Taxable Not Taxable
B. Period of bringing Inputs after Job Work
Six Month from date of Transfer One Year from date of Transfer
C. Period of bringing Capital Goods after Job Work
Three years Three years
D. Reversal of Input Tax Credit in case Inputs/Capital not returned within specified
period
If the Inputs/Capitals Goods are not
received within Six Months/ Three years
(Recredit at the time of receipt of goods)
No Reversal of Input Tax Credit is
required. However, on the date of supply
of Inputs/capitals goods it is deemed as
supply of goods and Tax shall be payable
along with Interest.
E. Transition Provision
Not applicable No Tax is payable if goods are returned
back within 6 months.

6. Manufacturer
 Definition;
 Basic Concept;
 Transitional Provisions for
manufacturer;
 Composition Scheme.

7. Manufacturer
“Manufacture” means processing of raw material or inputs in any manner that results in
emergence of a new product having a distinct name, character and use
Excise Regime GST Regime
A. Registration
Manufacturer was to be registered under
Central Excise Act, 1944.
Manufacturer has to get registered under
GST Act, 2017
B. Taxable Event
Manufacture was the Taxable Event in
Excise
Supply is the taxable event in GST
C. Liability to discharge Tax
Removal of goods from Factory place was
the Point of Taxation for Excise
Time of Supply is the point of Taxation in
GST
D. Limit for Registration
A person having turnover more than Rs.
1.5 crore was liable to be registered in
Excise.
A person having taxable supplies
more than Rs. 20 lakhs is liable to be
registered in GST
Excise Vs. GST

8. Excise Regime GST Regime
E. Area Based Exemptions
In Excise regime area based exemptions
were available.
In GST regime area based exemptions are
not available.
F. Levy of Tax
Excise Duty was levied on manufacture,
CVD was levied on imports
SGST & CGST or IGST will be levied as per
location of supplier & Place of supply.
G. Credit of Tax levied by Manufacturer
Trader cannot take credit of Excise levied
by Manufacturer
Trader can take credit of GST levied by
manufacturer.
Manufacturer
Excise Vs. GST

9. • A registered person, (excluding composition scheme), shall be entitled to take credit of the
amount of CENVAT credit carried forward in the last return (Excise Returns), furnished by him
under the existing law ( Excise Law) in such manner as may be prescribed (Subject to following
conditions) Sec 140(1)
• Manufacturer/ provider of exempted as well as taxable goods & services even can take credit of
amount of CENVAT credit carried forward in the last return. Sec 140(4)(a)
Credit shall be
admissible GST aw.
Shall furnish all the
returns preceding
previous 6 months
Credit shall not be
relating to goods
manufactured &
cleared under
exemption.
A registered person, (excluding composition scheme dealer), shall be entitled to take credit of
the unavailed CENVAT credit in respect of Capital Goods, not carried forward in a last return
(50% in 1st year -50% in next year), furnished by him, for the period ending 30th June, 2017.
However credit shall be admissible under GST as well as in existing regime.
CENVAT Credit & Transitional Provisions [Sec 140(1) & Sec 140(4)(a)]

10. GSTR TRAN 1 Format- To Carry forward Excise Credit in GST Regime
Sections Discussed in previous
slide
Manner of Carry forward of Credit in return filed under existing laws

11. • Aggregate turnover less than 75 lakhs in the preceding financial year .
Applicable to:
• Service provider
• Persons making Inter-State Outward Supply
• Persons making any supply of goods through e-commerce who is
required to collect TCS
Not applicable to:
• Manufactures (other than specified goods) @ 2%
• Restaurants and outdoor caterers @ 5%
• Any other eligible supplier @ 1%
Rate of levy
• Composition Levy person cannot take ITC of GST paid on Inputs & also
he cannot charge GST on his invoice.
• This person has to file quarterly return in form GSTR 4.
Do’s and Don'ts
Composition Levy

12. Works Contractor
 Definition;
 Present vs. GST in
Works Contract;
 Continuous Supply of
Services;
 Transitional Benefits
for Works contractor.

13. 1. Works Contract Service is defined as contract for building, construction, fabrication,
completion, erection, installation, fitting out, improvement, modification, repair,
maintenance, renovation, alteration or commissioning
2. of any IMMOVABLE PROPERTY wherein transfer of property in goods (whether as goods or in
some other form) is involved in the execution of such contract.
Works Contractor
Definition of Works Contract in GST
Place of Supply of Service of Works Contractor Services;
1. Place of Supply of Services for Works contract Services i.e. Construction of Immovable
property will be location of immovable property.
2. Services provided by experts such as interior decorators, designer, engineers, etc will also be
location of Immovable property or where the immovable property is intended to be
located.

14. Present Regime GST Regime
A. Legal Provisions
Works Contract is taxable under Service Tax
as well as under Sales Tax in Present Regime
Only GST will be leviable on Works Contract.
B. Rate of Tax
Service Tax :
In case of Original Works- Service Tax @ 15%
on 40% of Taxable Value of Service
In case of Repairs & Maintenance Services-
Service Tax @ 15% on 70% of Taxable Value of
Service
VAT : Rate Maharashtra for composition dealer
is @ 8% (However differs from State to State)
GST will be chargeable @ 18%.
C. Input Tax Credit
CENVAT Credit is eligible as ITC in case of
Works Contract Services, if used in
furtherance of business.
Input Tax Credit of VAT is allowed @ 64% of
ITC in MVAT (However it differs from State to
State.)
Input Tax Credit shall be available if used in
further provision of Works Contract.
WORKS CONTRACT UNDER PRESENT & GST REGIMEWorks Contract Present Vs GST

15. Present Regime GST Regime
D. Partition of Service & Goods
In case of Original Works 40% is considered
as Service portion.
In case of Repairs & Maintenance, 70% is
considered as Service portion.
In GST it is considered as Supply of Services
as per Schedule II of CGST Act, 2017.
Works Contract Present Vs GST

16. Aspects to be considered
Location of Supplier
(Registered Place of Business)
Place of Supply
(Location of Immovable Property)
Same State
Different State
CGST-9%
SGST-9%
Intra-State
Supply
Inter-State Supply
IGST-18%
Determination of Place of GST component to be levied in case of Works Contract
Most of the Works Contract will be Intrastate Supply of Services

17. 1. Continuous Supply of Services means a supply of services which is provided, or agreed to
be provided, continuously or on recurrent basis, under a contract, for a period exceeding
three months with periodic payment obligations.
2. Time of Supply of Continuous Services: When to issue the invoice under continuous
supply
To be Issued on or before the due date of
payment;
Due date of payment is not
ascertainable
The payment is linked to the
completion of an event
To be Issued before or at the time when the
supplier of service receives the payment;
To be issued on or before the date of
completion of that event
Continuous Supply of Services
When Due date of Payment is
ascertainable

18. Not liable to be
registered in
existing Regime
Manufacturer of
Exempted Goods
or provider of
Exempted Services
Providing Works
Contract
Service-
Notification
26/2012 ST
1st Stage dealer
or a 2nd Stage
Dealer, or
registered
importer or a
depot of a
manufacturer,
Eligible to take credit of ITC on Stock
 Inputs or goods are used or intended to be used for making taxable supplies.
 Person is eligible for ITC on such inputs under GST;
 Person is in possession of invoice or other prescribed documents evidencing payment of
duty under the existing law in respect of such inputs;
 If person do not possess any documents evidencing payment of duty credit shall be allowed
@ 60% of Central Tax payable on such goods/inputs.
 Manufacturer/ provider of exempted as well as taxable goods & services even can take
credit of ITC on Stock as on 30th June, 2017
CENVAT Credit on ITC on Stock in Hand as on 30th June, 2017

19. GSTR TRAN 1 Format- To Carry forward CENVAT Credit on Stock

20. Service Providers in GST
 What is Service in GST?
 Time of Supply of
Services.
 Place of Supply of
Services.
 Reverse Charge
mechanism.
 Export of Services

21. “Services” means anything other than goods, money and securities but includes activities
relating to the use of money or its conversion by cash or by any other mode, from one
form, currency or denomination, to another form, currency or denomination for which a
separate consideration is charged;
Service Providers
What is a Service?
Service Tax Regime GST Regime
A. Registration
Service provider has to be registered
under Finance Act, 1994
Service provider has to be registered
under GST Act, 2017
B. Taxable Event
Provision of Service was the Taxable
event in Service
Supply is the taxable event in GST
C. Liability to discharge Tax
Point of Taxation Rules, 2011 are
applicable to determine the point at
which ST liability is to be discharged.
Time of Supply is the point of Taxation in
GST
Let us classify the differences in Service Tax & GST Regime.

22. Service Tax Regime GST Regime
D. Composition Scheme
Composition scheme was available for
specified service such as Air Travel Agent,
Lottery Agents
Service provider is not entitled for
Composition scheme in GST, (Except
Restaurants & food suppliers barring
some conditions)
E. Limit for Registration
Limit for Registration was Rs. 10 lakhs Limit for Registration is Rs. 20 lakhs
F. Taxability of Works Contract
Service Tax @ 15% was chargeable on
40% (Original) or @ 70%
(R & M) was chargeable on Works
Contract.
Works Contract will be considered as
Supply of Services in GST Regime
G. Abatements in Reverse Charge
There were abatements on certain
Services under reverse charge
There are no such abatements in GST
regime for any Services.
Service Providers Present Vs. GST

23. Rationale behind Reverse
Charge Mechanism
RCM Compliances
 Payment under reverse charge mechanism can
only be made out of electronic cash ledger.
 Registration is mandatory for the persons who are
liable to pay under reverse charge mechanism.
 Turnover of Rs. 20,00,000/- or Rs. 10,00,000 shall
not apply.
 Recipient has to issue self invoice.
 Large Number of Assessees with small payment of
Taxes (RCM Applicable for purchase from URD)
 Difficulty in collection of Tax (URD)
General points to be noted
 Services specified by GST council & Purchase from
Un-registered dealer will attract payment under
liability of recipient to pay under RCM.
 Self invoice need to be generated for Purchase
from Un-registered person
 Import of Services will attract RCM
REVERSE CHARGE MECHANISM IN GST

24. Sr. No. Category of Service
Present Regime
(taxability under RCM)
GST Regime (taxability
under RCM)
1 Works Contract (R&M) Taxable Not taxable
2
Works Contract (Original
Works)
Taxable Not taxable
3 Manpower Taxable Not taxable
4
Rent-a-cab Scheme
operator (Abated Value )
Taxable Not taxable
5
Rent-a-cab Scheme
operator (Non Abated
Value )
Taxable Not taxable
9
Radio taxi or Passenger
Transport Services
provided through
electronic commerce
operator
Not Applicable
Taxable ( to be paid by e-
commerce operator)
SERVICES TAXABLITY UNDER RCM PRESENT VS. GST REGIME (MAJOR SERVICES)

25. 2. GST has laid down the following conditions to be fulfilled so as to be treated as Export of
Service:
 The supplier of service is located in India;
 The recipient of service is located outside India;
 The place of supply of service is outside India;
 The payment for such service has been received by the supplier of service in convertible foreign
exchange; and
 The supplier of service and the recipient of service are not merely establishments of a distinct
person in accordance with Explanation 1 in section 8.
EXPORT OF SERVICES
1. Exports are treated as “Zero Rated Supply” in GST

26. PLACE OF SUPPLY OF SERVICES
Banking and other financial
services, including stock broking
Location of the service recipient
Insurance Services
Location of the Recipient of Services. For unregistered
persons, location of the recipient of services on the
records of the supplier.
Training and performance appraisal Location of the Recipient of Services
General Rule Location of the Recipient of Services
Services in relation to immovable
property
Place where such property is located or intended to be
located
Services relating to restaurant,
catering, health, fitness, beauty
treatment
Place where the services are actually performed
Where location of supplier and recipient is in India (Major)

27. Services in relation to a banking
company, or a financial institution,
or a NBFC, to account holders
Location of the Supplier of Services.
Hiring of means of transport,
including yachts excluding aircrafts
and vessels, up to one month
Location of the Supplier of services
General Rule
Location of the Recipient of Services. Whennot available
in the ordinary course of business, then the location of
the supplier
Services in relation to immovable
property
Place where such property is located or intended to be
located
Services requiring the physical
presence of the recipient or the
person acting on his behalf
Place where the services are actually performed
Where location of supplier and recipient is outside India (Major)
Intermediary Service Location of the Supplier of Services.
PLACE OF SUPPLY OF SERVICES

28. Traders in GST
1. Who is trader?
2. Place of Supply of
goods for traders
3. Transitional benefits in
GST.
4. Invoicing &
Composition dealers
5. GST Impact on Branch
Transfers

29. TRADERS
1. Trading is buying the goods & selling it as it is. He neither produces nor renders any
services.
2. The category of persons who mainly trade are retailers in local market, wholesalers,
consignee agents and so on.
What is a Trading?
Place of Supply for Trading Activity
1. The place of supply provision determines whether a transaction is intra-state or inter-state
and also determine the place i.e. taxable jurisdiction where the tax should reach;
Import/export will be treated as inter-state supply
2. Where the supply involves movement of goods, whether by the supplier or the recipient or
by any other person, the place of supply of such goods shall be the location of the goods at
the time at which the movement of goods terminates for delivery to the recipient;

30. TRANSITIONAL BENEFITS FOR TRADERS
1. Since the traders were not liable to be registered under Excise, However when they
purchase from the manufacturer Excise is levied on it, prohibiting the trader to take credit of
Excise on the goods procured.
2. However, In GST Regime, the traders will be eligible to get credit of GST paid on
procurement from manufacturers.
3. Thus, the tax paid goods lying in (Excise) stock of trader are eligible for credit carry forward
in GST regime, after filing GST TRAN 1 in the following format. (Section 140(3))

31. INVOICING FOR RETAILERS & COMPOSITION SCHEME DEALERS
1. A registered person may not issue a tax invoice if the value of the goods or services or both
supplied is less than Rs. 200; generally the small traders i.e. Retailers sell below Rs. 200;
2. In current regime, almost retailers are enthusiastic in registering in composition scheme
(barring certain conditions) so as to simplify the accounting & tax payment procedures;
3. Rate for composition dealer is 1% in GST subject to turnover limit of Rs. 75 lakhs in
preceding financial year and other specified conditions;
4. Person registered as composition dealer has to issue Bill of Supply rather than the Tax
invoice as applicable for other registered persons.
5. Composition dealer has to file Quarterly return by 18th of following month of end of the
quarter.
6. Cost of purchase will significantly go down as the excise which was becoming cost to them
will be eligible as credit in GST thereby lowering the prices.

32. Present
Regime
GST
Regime
Intrastate Transaction
Stock/Branch Transfer
Not Taxable Not Taxable
Present
Regime
GST
Regime
Interstate Transaction
Not Taxable
(Against Form F)
Taxable
(IGST)
Impact:
 Increase in Working Capital
 However, branch receiving the supply is eligible to claim 100% Input Tax Credit.
Impact of GST on Stock Transfers

33. Thanks
CA. Vinay Bhushan
Associate Director, Taxpert Professionals
vinay@taxpertpro.com ||09769134554