Goods and Service Tax

(GST)

A Presentation by

M/s. Jay Pandey & Associates

Chartered Accountants

Present Tax structure in India

Tax Structure

Direct Tax

Income Tax

Indirect Tax

Central Tax

Excise

Service Tax

Custom (Include BVD, CVD, SCD)

State Tax

VATEntry Tax, luxury tax,

Lottery Tax, etc.

Problem in Existing Tax Laws

However, there are still problems with the system that have not been solved till date. We shall talk about these problems now.

The credit of Input VAT is available against Output VAT. In the same manner, the credit of input excise/service tax is available for set-off against output liability of excise/service tax. However, the credit of VAT is not available against excise and vice versa.

VAT is computed on a value which includes excise duty, and no CENVAT credit is allowed for it. This shows that there is a tax on tax!

Excise duty and service tax are levied by the Central Government, while the VAT is levied by the State Government, which is one of the reasons why such a cross-utilisation of credits was not allowed. However, this does not constitute a valid reason that justifies the cascading effect of taxes. For the people, it makes no difference if a tax is levied by the Centre or the State – a tax is a tax, and there is a tax on tax. The GST is introduced to combat this problem, among many others.

Present System of Indirect Taxes

Let us first understand the various indirect taxes that are presently being levied by the Central & State Governments.

The GST shall subsume all the above taxes, except the Basic Customs Duty that will continue to be charged even after the introduction of GST.

Ref Tax Levy By Nature Can Set off

Against

Convered in GST

1. Central Excise Centre Manufacture 1,2 Yes

2. Service Tax Centre Providing Services 1,2 Yes

3. Customs (BCD) Centre Import No Set off No

4. CVD under custom Centre Additional Import Duty to

compensate Excise

1,2 Yes

5. SAD under custom Centre Additional Import Duty to

compensate Sales Tax

1,2 Yes

6. CST Centre Inter-state Sales No Set off Yes

7. Vat State Sales within a state 3 Yes

1. Excise Duty, 2. Service Tax and 3. VAT

Proposed Tax Structure in India

Tax Structure

Direct Tax

Income Tax

Indirect Tax = GST (Except

customs)

Intra- state

CGST (Central)

SGST (State)

Inter State

IGST (Central)

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

Taxes to remain

BCD

EXCISE DUTY ON TABACCO

EXPORT DUTY

TOLL TAXES

ENVIRONMENT TAX

TAX ON LIQUORS AND PERTROLEUM

PRODUCTS

STAMP DUTY

PROPERTY TAXES

TAX ON ELETRICITY

Old System Vs New System

DUAL GST MODEL

We begin by stating the dual GST model and the taxes levied on each kind of transaction. See these abbreviations before we understand them-

SGST – State GST, collected by the State Govt.CGST – Central GST, collected by the Central Govt.IGST – Integrated GST, collected by the Central Govt.

It is worth mentioning here that the levy of Excise or Service Tax was not dependent on the levy of VAT/CST, as they were governed by different laws..

These are the taxes that shall be levied under the new system of GST. How this shall operate, and how can we have cross utilisation of credits can be seen in the discussion that follows –

How GST Operates?

Case 1: Sale in one state, resale in the same stateIn the example illustrated below, goods are moving from Mumbai to Pune. Since it is a sale within a state, CGST and SGST will be levied. The collection

goes to the Central Government and the State Government as pointed out in the diagram. Then the goods are resold from Pune to Nagpur. This is again a

sale within a state, so CGST and SGST will be levied. Sale price is increased so tax liability will also increase. In the case of resale, the credit of input CGST

and input SGST (Rs. 8) is claimed as shown; and the remaining taxes go to the respective governments.

HOW GST OPERATES?

Case 2: Sale in one state, resale in another state In this case, goods are moving from Indore to Bhopal. Since it is a sale within a state, CGST and SGST will be levied. The collection goes to the Central

Government and the State Government as pointed out in the diagram. Later the goods are resold from Bhopal to Lucknow (outside the state). Therefore,

IGST will be levied. Whole IGST goes to the central government.

Against IGST, both the input taxes are taken as credit. But we see that SGST never went to the central government, still the credit is claimed. This is the

crux of GST. Since this amounts to a loss to the Central Government, the state government compensates the central government by transferring the credit

to the central government.

.

HOW GST OPERATES?

Case 3: Sale outside the state, resale in that state In this case, goods are moving from Delhi to Jaipur. Since it is an interstate sale, IGST will be levied. The collection goes to the Central Government. Later

the goods are resold from Jaipur to Jodhpur (within the state). Therefore, CGST and SGST will be levied.

Against CGST and SGST, 50% of the IGST, that is Rs. 8 is taken as a credit. But we see that IGST never went to the state government, still the credit is

claimed against SGST. Since this amounts to a loss to the State Government, the Central government compensates the State government by transferring the

credit to the State government.

How is GST beneficial for the country? How would it help to improve the country's economy?

1. GST will reduce tax evasionThere is a very logical reason as to how GST will help in reducing tax evasion - All traders will insist on taking bills for all their purchases.

Let us understand this with an example. Suppose you are a mobile phone distributor. You are buying mobile phones from the manufacturer and selling to

wholesaler.

This is the net position after introduction of GST.

Impact of GST

As we can see, all the distributors will prefer to purchase with invoice, because it gives them a better profit margin.

This is because the distributor will get credit of all the taxes paid at the previous stage. In the present scenario, the distributor has to bear the burden of excise duty. Therefore, for him it makes more sense to simply avoid paying taxes.

However, after the introduction of GST, it will be more beneficial to purchase goods on invoice. Now, if the customer himself insists on taking the bill, we can assume that tax evasion will fall. This is the biggest advantage of GST.

Impact of GST

2. GST will give more money to under-developed statesWhy is Gujarat a very developed state in India? Why can't industries come up in backward states such as Bihar and Jharkhand?

The problem is - lack of infrastructure. Governments in Bihar cannot provide basic facilities such as electricity and water. This is because these states are

not rich. Why are these states not rich? Because the tax collections are much less compared to other states.

Take a look at the tax collections of various states in India.

Impact of GST

You can see that there is a big difference between states; and that tax collections are highest in manufacturing states.

GST will ensure that tax collections in other states also rise, because GST is a consumption based tax.

This is because, being a consumption based tax, tax collection will go to the states in which the goods are consumed, and not where they are manufactured.

Now, where are the goods consumed? Typically speaking, more consumption will take place in states where the population is higher. As a result of this, the per capita tax collection in the economy, across various states will even out

This will be another advantage to the economy of the country, because more taxes will accrue to states that have need of money; which, in turn, will get developed.

Impact of GST

3. GST will remove location bias, thereby giving support to smaller businesses

Another big advantange in GST is that it will even out the tax structures of various states. This removes a location bias. Therefore, I can set up my factory in any state of the country, without having to worry about tax differences. In any ideal scenario, taxes should not be a hindrance to my investment decision. In India, this will go away once GST in introduced. This means that even undeveloped locations can see more businesses coming up.

A small retailer in Madhya Pradesh can transfer its goods to Uttar Pradesh and purchase its goods from Rajasthan. It can also take input services from a contractor located in Bihar and pay advertising charges to an agency in Karnataka - all this, without any significant worry about taxation. Why? Because tax structure in all these states will be the same!

In conclusion, we can say that GST is one tax that can be a major break through in the Indian taxation system.

Further, the impact of varying Value Added Tax (VAT) structure in different states, customs exemptions in Special Economic Zones (SEZ), Service Tax and corporate tax make supply chain design and optimization all the more challenging.

As the tax and regulatory issues in India evolve, manufacturers and distributors must adjust their footprint and supply chainstrategies, requiring greater flexibility and awareness than in most other markets.

Set off Heads

IGST Input

IGST Output

CGST Output

CGST Input

IGST Output

CGST Output

SGST Input

IGST Output

CGST Output

Stakeholder in Business Chain

Goods

+

Services

1. Manufacturer

2. Wholesaler

3.Retailer4.Consumer

5.Government and Banks

Impact on EconomyOverall Economy

Logistics

E-Commerce

FMCG/Parmaceuticals

Service Sector

MSEM

Overall Sector

Overall Economy

Impact on LogisticsPre GST Post GST

Interstate

tax burden

Currently, each of India’s 29 states taxes goods

that move across their borders at different rates

apart from that Corporate state tax of 2% is

levied for inter-state goods transfer.

Not applicable. Uniform taxation and no varying tax

structures would be allowed across states.

Nature of the

industry

Current interstate taxation has resulted in a

large number of unorganized players in this

industry. Resulting in fragmented industry.

With the introduction of GST, there is likely to be major

consolidation in the industry. It could see the emergence of

major large players who can span the entire logistics chain.

Logistic time Due to trade barriers such as entry taxes, local

body taxes, OCTROI and other hurdles, trucks

lie idle for 30 to 40% as per industry estimates

during their delivery schedule.

Improvement in the logistic time after phasing out the

border check posts resulting in improvement in operational

efficiency through quicker and increased number of

deliveries along with reduction in logistic cost during the

transit. As per world bank estimation Indian corporates can

save upto 30-40% of logistic costs incurred due to stoppages

at various tolls and check posts.

Cost The existing interstate taxation system has

forced the companies to create and maintain

warehouses in each state. Currently, there are

around 20-30 warehouses per company, one in

every state, in addition to this 20-30 Carry &

Forwarding agents per state making the supply

chain longer and inefficient.

GST tax will be levied on transportation of goods and full

credit will be available on interstate transactions. Logistic

costs are expected to be decreased by 1.5-2.00% of sales on

account of optimization of warehouses leading to lower

inventory costs which are set up across states to avoid paying

2% corporate sales tax and phasing out of interstate sales tax.

There is immense scope for optimization of costs.

Impact on E-CommercePost GST

Pricing

impact

The output rate of tax could be higher for the company compared to the current service tax rate.

However, the companies should have a higher credit pool than they do in the current regime, which

could reduce the prices of their services.

Place of

supply

Place of supply in case of B2C transactions would be the location of the service provider.

Place of

supply

Place of supply in case of B2B transactions would be the location of the service recipient: It will

be important to examine whether there would be rules to define inter-state service or intrastate

service. This could be important to understand additional compliance requirement for e-commerce

companies. For instance, in case it is stated that e-commerce companies would need to pay

applicable CGST + SGST in the state where the service recipient is located, it would result in e-

commerce companies taking registration in almost all the states where the service recipients (i.e.

vendors) are located.

Compliance

requirement

Currently, e-commerce companies discharge their output service tax liability through centralised

registration. Under GST, the centralised registration option may not be available. Hence, e-

commerce companies would need to as such obtain registration in each state where they have their

place of business, resulting in increased compliances.

Impact on FMCGPost GST

Pricing

impact

The 3 lakh crore Fast Moving Consumer Goods (FMCG) industry in India is one of the major contributor to the state

exchequer in excess of Rs 40,000 Crores. Major categories being food & beverage followed by household and

personal care.

GST Rate: GST standard rate at 18% would be lower in comparison to existing effective rate of >26% resulting from 12.5%

excise and VAT (at 12 to 14.5% on top of excise). However many of the agricultural processed products enjoying VAT

exemption or lower bracket (4-5%) if included under standard rate a higher tax incidence will result. Even the lower

rate of GST for merit goods at 12% will be higher than prevailing rates. Carbonated beverages are however likely to

be taxed at de-merit rate of 40% in GST

Business

Process:

The most visible impact of GST would be on the warehousing strategy of FMCG companies. Distribution costs

account from 2 to 7% of turnover for FMCG companies. Currently FMCG companies establish warehouses in each

state (with the tax consideration to avoid CST on interstate sales) and do stock transfers to them. Subsequently goods

are sold to distributors locally. The decision on warehouse is based on tax consideration rather than market proximity

or transport considerations. Under GST as local and interstate supply would be tax neutral with India emerging as

single largest common market, location of warehouses needs to be reconsidered. Savings to the tune of 1.5% of sales

is expected as a result of warehouse rejig. A level playing field would be created in favor of small startups in the

business of delivery of organic products.

As any supply (sale or stock transfer) would be treated taxable under GST, it could lead to increased requirement of

working capital and cash flow getting blocked (till refund claims are settled). Thus more working capital would be

required. Many manufacturers have setup their units in areas having tax holidays or incentives (Himachal,

Uttaranchal etc.) which may not be available post GST. FMCG manufacturers using imported raw materials will have

to rethink the strategy as imports would attract IGST and make them less attractive vis-à-vis local products, although

full credit is available. FMCG distributors and retailers would also be able to setoff input credit from services

(transport, rent etc.) against their GST liability which was hitherto not possible.

Impact on Service Sector i.e. Banking Sector

Post GST

Tax Rate Services offered by banks are taxed at 14.5% currently which under GST regime are likely to become costlier at standard rate of 17-

18%. Several activities of banks are currently exempt from service tax (Ex: Fund based activities like interest payable on deposits /

savings bank accounts and loans disbursed) which would incur GST unless otherwise exclusively exempted. Several services

provided to weaker sections of society could get taxed if not exempted making the services costlier

Elimination

of cascading

effect:

Banks will also be able to set-off their GST liabilities against credit received on purchase of goods (IT infrastructure and furniture

etc.) and resultant savings could get ultimately passed onto end customer. Through the concept of ISD (Input service distribution)

the accumulated input credit could be transferred and utilized in cases of locations discharging GST liability are different from

location where inputs are received.

Business

Process:

Banks provide services to customers who are mobile not only pan-India but international as well. Ex: Credit cards issued by Bank

from central location to a customer may be swiped anywhere. With advent of net banking the address of customer in account is not

where he necessarily stays and obtains banking services (Ex: Cheque book, Loans, Statements etc.) A customer having his account in

Bengaluru may during his vacation in J&K transfer funds by mobile/net banking to somebody in Hyderabad. etermining point of

supply for services would add significantly to compliance costs. Under such circumstance a bank having presence in only 10-15 states

will have to take registration for 37 states/UT.

In case of loans availed by customers, the initial verification is done by outsourced local agencies, loan processing is done centrally,

disbursement done locally, repayment done by net banking/ECS mandate. Under such circumstance determining point of supply at

each stage is very cumbersome.

Several services by bank to a customer are centralized (Ex: Demat Account, Wealth Management services, bigger home loans etc.)

while several others are localized (Ex: Savings account, Personal loan, OD etc.). As is evident these complexities add to compliance

costs due to multiple assessments and audits. Clarity on single/multiple ISD registration for distributing inputs across multiple states

is needed.

As banks deal with a host of vendors, reversal of ITC for services availed from a blacklisted dealer or dealer who does not discharge

his GST liability would lead to increased costs and necessitate additional efforts in tracking dealer status.

Bank Head office also provides services to branches which may become taxable under GST. The IT systems of banks need to be

upgraded to meet all these requirements related to multiple registrations, determining point of supply of services, compliance needs

and Input Service distribution.

Complying with the requirements of reverse charge and partial reverse charge mechanism would add to further compliance costs.

Impact on SMESStarting business becomes easier:Currently, the Sales Tax department has various turnover slabs which require VAT registration. A business with multi-state operation in this case has to follow varied tax rules applicable to different states. This not only creates excess complication but also adds to procedural fees, due to which the price sensitive SMEs will be burdened. Uniform GST will standardize the process.

Improved SME Market Expansion :In the current system, big corporations procured goods based on SME locality in order to reduce overheads. Thus SMEs limit their customers within state as they will bear the ultimate burden of tax on interstate sales, reducing their customer base. With implementation of GST, this will be nullified as tax credit will transfer irrespective of location of buyer and seller. This allows SME segment to expand their reach across borders.

Lower logistical overheads:As GST is tax neutral it will eliminate time consuming border tax procedures and toll check posts and encourage supply of goods across borders. According to a CRISIL Analysis, the logistical cost for companies manufacturing bulk good will be reduced by around 20%. Such costs can be crucial for the survival of SMEs.

Aids SMEs dealing in sales and services:

GST will not distinguish between sales and services. This is good news for the SMEs that deal with sales and services model of business, for them the taxation is simplified and will be calculated on total.

Unified market:

GST will allow edibility in transfer of goods across states and reduce the cost of doing business, as the reform will cut down multiple taxes imposed by state and central government.

Myth that SMEs would be negative Much aligned to this objective, Model GST law released by the Ministry of Finance seeks to bring each person with an aggregate

turnover of above Rs 10 lakh within the umbrella of GST. The limit has been kept even lower at Rs 5 lakh for north eastern states. This should create a level playing field for organized and unorganized sector by curbing scope of various tax evasion practices such as creation of multiple entities to enjoy high exemption thresholds.

However, the existing protectionism provided by the government to Small and Medium Enterprises (SMEs) which necessitates themto get out of their comfort zone as far as indirect tax costs and benefits are concerned. "SME manufacturers, presently exempt (if annual taxable turnover is up to Rs 1.5 crore) from paying excise duty, would be liable to pay full rate of GST. This may bring their products up for stiff competition with those of industry leaders in terms of tax costs involved. Small scale service sector is also likely to face an increase in tax rate under GST as against the present effective rate of 15 %,.

Not so simple

The availability of input tax credits should leave the increased tax incidence on services by only marginally. "Trading entities, on the other hand, should largely welcome GST as it creates a single uniform market for them across the country with improved ease of doing business.

GST would be good for the industry especially manufacturing sector. "SMEs in the service sector enjoys no exemption or concessions. Concessions are only for the SME manufacturers. The total tax incidence in every product that we manufacture in India is anything between 27 to 31%, which is supposed to come down to a 18%.

The SMEs whose turnover is up to Rs 1.5 crore were availing excise exemption, but they were subject VAT/CST/entry tax etc under the state law. It is worth mentioning that the exemption to SME does not mean that the entire Rs 1.5 crore is exempt from excise.

The inputs procured by the SMEs are excusable/taxable as it has already suffered tax. By way of Small Scale Industry (SSI) exemption, what benefit they actually get is limited to the excise duty payable only for the value addition at the SMEs end. Assuming that 30% is the value addition on the exempted turnover of Rs 1.5 crore, the actual exemption from excise duty to SME is 12.5% on Rs 45 lakhs (which is Rs 5.62 lakh in a year). Thus the so called SSI exemption is actually 0.375 % of 1.5 crore that is Rs 5.62 lakhper annum. Assuming that on Rs 1.5 crores turn over, the current taxes payable are reduced 7%, under the proposed GST regime, the saving to SMEs will be Rs 10.5 lakh as against a loss of Rs 5.62 lakh resulting in a net gain of Rs 4.88 lakhs.

"Hence, the feeling that SME is going to be negatively impacted by GST is a myth.

Impact on overall Sector

CRITICAL IMPACT ISSUES – IN DEPTH

OVERVIEW OF GST CYCLE

LEVY ON SUPPLY

OF GOODS OR SERVICES

IF INTER-STATE SUPPLY – PAY IGST

IF INTRA-STATE SUPPLY – PAY CGST AND SGST

DUE AT THE TIME OF SUPPLY

PAYBLE WITHIN THE PRESCRIBED END OF THE MONTH/QUARTER TO WHICH SUPPLLY RALATES

DEFINITION OF GOODS & SERVICE

(SEC. 2(48)) & 2(88))

GOODS

• Every kind of movable property other than actionable claim and money

• Moveable property shall not include any intangible property.

TANGIBLE

PROPERTY

• Property that can be touched or felt - Felt is experiential e.g. Goodwill

• Intangible property means any property other than tangible property

SERVICE

• Means anything other than goods

• Include intangible property and actionable claim but does not include money

LEVY OF GST IS ON SUPPLY (SEC. 3)

SUPPLY

INCUSIVE DEFINITION –

INVITE LITIGATION

MADE FOR A

CONSIDERATION

SCHEDULE – I –

MADE WITHOUT

CONSIDERATION

IMPORTATION

SUPPLY WITHOUT CONSIDERATION –

SCHEDULE - I

Temporary application of business assets to a private or non-business use

Services put to a private or non-business use

Assets retained after deregistration

Supply of goods and / or services by a taxable person to another taxable or non- taxable person in the course or furtherance of business

DEEMED SUPPLY OF GOODS & SERVICE (SCHEDULE – II)

GOODS

• Any transfer of the title in goods is a supply of goods

• Hire purchase

• Transfer or disposal of business assets

• Disposal by a creditor/financial institution

• Closing goods on cessation of business unless business is continued

• Supply of goods by any unincorporated association or body of persons to a member thereof

SERVICE

• Transfer of right to use

• Lease of land or building

• Treatment or process on another person’s goods

• Private use of business goods/assets

• Temporary transfer or permitting the use or enjoyment of any intellectual property right

• Development, design, programming, customization, adaptation, up gradation, enhancement, implementation of information technology software

• Agreeing to the obligation to refrain from an act, or tolerate an act or a situation, or to do an act

• Supply of goods, being food or any other article for human consumption or any drink

WIDENING THE TAX BASE – REGISTRATIONS (SEC. 19 READ WITH

SCHEDULE – III)

• Threshold on all India basis

• Limit of Rs. 10/5 lakhs

Normal cases

• Persons making any inter-state taxable supply

• Persons who are required to pay tax under reverse charge

• Non-resident taxable persons

• Persons who supply goods and/or services, other than branded services, through electronic commerce operator

• Every electronic commerce operator

Mandatory registrations

LOCATION OF SUPPLIER (SEC. 2(65))

Fixed

Establishment

If provided

from more than one location,

establishment

most directly

Registered

place of

business

Place of

residence

PLACE OF SUPPLY – GOODS (SEC. 5 OF IGST ACT)

Movement of goods

• Place where movement terminates

Without movement

• Location of goods at the time of delivery

On board for conveyance

• Location where goods are taken on board

On direction of agent

• Location of agent

Others

• As per Law of Parliament

PLACE OF SUPPLY – SERVICES (SEC. 6 OF IGST ACT)

TYPE PLACE OF SUPPLY

Made to a registered person Location of such person

Made to other than a registered person Location of the recipient where the address on

record exists. If not, location of supplier

Immovable property/boat/vessel Location of such property/boat/vessel

Restaurant and other personal services like beauty

treatment

Location where the services are actually performed.

Training and performance appraisal Location where the services are actually performed.

Services on board a conveyance The first scheduled point of departure

Admission to events Place where event is actually held

Organization of events/transportation of goods &

passengers

Location of person if registered or where event is

held if not registered

Telecommunication services Place of installation, post-paid: billing address,

prepaid:

place of sale (internet banking: place of

recipient on record)

Banking & other financial services Place of recipient of service on record

TIME OF SUPPLY FOR PAYMENT OF GST – GOODS (SEC. 12)

Continuous Supply

• As per statement

• If not available earliest of date of issue of invoice or receipt of payment

Reverse Charge

• Date of receipt of goods

• Date of payment

• Date of receipt of invoice

• Date of debit;

• Whichever is earlier

Goods sent on

approval basis

• Time of supply when known

• Six months;

• Whichever is earlier

TIME OF SUPPLY FOR PAYMENT OF GST – GOODS (SEC. 12)

Date of

removal

Date of

Invoice

Receipt of

payment

Date of receipt

by recipient

WHICHEVER

OCCURS FIRST

TIME OF SUPPLY FOR PAYMENT OF GST – SERVICES (SEC. 13)

Time of Supply

Invoice issued within

prescribed time

Invoice or receipt;

whichever is earlier

Invoice not within time

Completion of service or

receipt; whichever is

earlier

Continuous supply

Due date of payment is

ascertainable or earlier of

invoice or payment

Reverse charge

Date of receipt of service,

payment, receipt of

invoice or debit in books;

whichever is earlier

GOODS AND SERVICES TAX NETWORK (SEC. 28 & 29)

Upload return after paying the Provisional credit allowed

tax otherwise considered as subsequently credit claimed by

invalid return receiver to be matched with supplier

Receiver to pay interest on mis-match from date of availment and not utilization, refund only to the extent of tax & interest paid by supplier

GSTN

SUPPLIER RECEIVER

Information Flow and Associated Entities

Common GST Portal

(Reconciliation system)

Taxpayer

State 1Portal

State 2 Portal

State N Portal

NSDL

MCA CBDT

CBEC

(Central Portal)

Banks and RBI

Send Challan

Upload Challan Details

File Returns

CGST and IGST Returns

SGST and IGST Return

Returns under GSTRETURN (Sec. 27 &

30)

DUE DATE FORM

Outward Supplies 10th of next month GSTR -1

Inward Supplies 15th of next month GSTR-2

Summary return for all

taxable persons

except specified herein

under

20th of next month GSTR-3

Composition Person 18th of next month following end of quarter GSTR-4

Periodic return by non-

resident foreign Taxpayer

Last day of registration Last day of registration

Input Service Distributor 13th of next month GSTR-6

Tax Deductor 10th of next month GSTR-7

Annual Return 31st December following F.Y. GSTR-8

Final return 3 months from date of cancellation or order of

cancellation whichever is later (to include all

transactions from last return to date of

cancellation)

VALUATION – INCLUSIONS (SEC. 14)

• Payment made for the inducement of, the supply of goods and/or services

• The monetary value of any act or forbearance

• Deposit, whether refundable or not be considered unless appliedConsideration

• Not included in the price

• The value of such goods and/or services as are supplied directly or indirectly by the recipient of the supply free of charge or at reduced cost

• Royalties and license fees

Incurred by recipient

• Shall include all taxes other than SGST or the CGST or the IGSTTaxes

• Commission and packing

• Any amount charged for anything done by the supplier in respect of the supply of goods and/or services at the time of, or before delivery of the goods or, as the case may be, Incidental expenses supply of the services

Incidental expenses

• Which is linked to supplySubsidies

VALUATION – INCLUSIONS (SEC. 14)

• All reimbursement shall be includedReimbursement

• Allowed only if it is in the course of normal trade practice and has been duly recorded in the invoice. Discount before Time

of in the invoice supply

• Allowed only if such post-supply discount is established as per the agreement and is known at or before the time of supply

• Specifically linked to relevant invoices

Discount after Time of

supply

• Transaction Value

• Value by Comparison

• Computed Value Method

• Residual Method

• Rejection of declared value

GST Valuation Rules,

2016

TRANSITIONAL PROVISIONS – MIGRATION (SEC. 142)

Issuance of provisional RC

Validity of 6 months or as extended

Furnish information as prescribed

Provisional RC cancelled if information not submitted in given time. Penal consequences Final RC to be issued if full information is submitted

Final RC to be issued if full information is submitted

TRANSITIONAL PROVISIONS – UNUTILIZED CREDIT (SEC. 143,

144, 145 & 146)

• Amount as per return ending immediately preceding appointed day to be eligible as CGST/SGST

Existing CENVAT & ITC

balance

• Eligible as CGST

Un-availed CENVAT on Capital goods

• Credit eligible on inputs held in stock or contained in semi-finished or finished goods

• Not allowed for purchases older than one year

First time registration

TRANSITIONAL PROVISIONS – RETURN OF GOODS (SEC.

148 & 150)

Exempted goods under earlier

Law/Job-work

Returned within six months to any place of business

No tax payable by the supplier

Retuned after six months to any

place of business

Tax payable is liable under GST

TRANSITIONAL PROVISIONS – SUBSEQUENT REVISIONS

(SEC. 153)

Tax to be paid under GST

and debit note to be issued

within 30 days of revision

Upward

adjustment

Downward

adjustment

HOW WE CAN HELP

GST

LITIGATION

COMPLIANCE

ERP SYSTEMSUPPORT

TRANSITIONALSHIFTDEVISING

NEWBUSINESS

MODEL

TRAINING THE

EMPLOYEES

IMPACTASSESSME

NT

PREPARING SOP

GOVERNMENT

Increase Revenue

Check Evasion

Evenly Distribution amount State

INDUSTRY

Easy compliance

Simplification

Single Control

Thanking YouCa. Hetal Pandya

Partner

M/s Jay Pandey & Associates

Head office : Shop no. 2, 1st Floor, Mum sub shop keeper premises chs society ltd, c

opp. Chetna college, beside mordern hair saloon, bandra east,

mumbai – 51

Branch office : Green Irish, E- Block, Ghatlodiya, Ahemdabad – 3861000, Gujarat

Email: info@jpaca.in

Mobile: 9833044912/9920996558