What is GST?
Goods & Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on every value addition.
In simple words, Goods and Service Tax is an indirect tax levied on the supply of goods and services. GST Law has replaced many indirect tax laws that previously existed in India.
What are component of GST?
There are 3 taxes applicable under GST: CGST, SGST & IGST.
- CGST: Collected by Central Government on an Intra-State sale. (Eg: Within Delhi)
- SGST: Collected by the State Government on an Intra-State sale (Eg: Within Delhi)
- IGST: Collected by the Central Government for Inter-State sale (Eg: Delhi to Tamil Nadu)
Transaction under old/new regime will be as follows:
|Transaction||New Regime||Old Regime||Remarks|
|Sale within the State||CGST + SGST||VAT + Central Excise/Service tax||Revenue to be shared equally between Centre and State.|
|Sale to another State||IGST||Central Sales Tax + Excise/Service Tax||There will only be one type of tax (central) in case of inter-state sales. The Center will then share the IGST revenue based on the destination/consumption of goods.|
What is a GST Registration?
GST Registration is a registration with the GST authorities. Via GST Registration, a unique 15-digit Goods and Service Tax Identification Number (GSTIN) is allotted by the GST authorities In any tax system this is the most fundamental requirement for identification of the business for tax purposes or for having any compliance verification program.
What are advantages of GST Registration? Who are liable for GST Registration?
Registration under Goods and Services Tax (GST) regime will confer the following advantages to business:
- Legal recognition as the supplier of goods or services across the nation.
- Removal of cascading tax effects, composition Scheme for small business & online simpler procedure.
- Proper accounting of taxes paid on the input goods or services which can be utilized for payment of GST due on supply of goods and/or services by the business. Pass on the credit of the taxes paid on the goods and/or services supplied to purchasers or recipients.
Liability for Registration
Registration under the GST Act is mandatory if your aggregate annual PAN-based turnover exceeds INR 20,00,000 (Rupees Twenty Lakhs) however the threshold for registration is INR 10,00,000 (Rupees Ten Lakhs) if you have a place of business in Arunachal Pradesh, Assam, Himachal Pradesh, Jammu & Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, or Uttarakhand.
Further, Irrespective of the Turnover, registration is mandatory for following:
Inter-State Supplies, Agent for Registered Principal, Liable to Pay Reverse Charge, Non-resident Taxable Person, Casual Taxable Person, Input Service Distributor, TDS/TCS Deductor, E-commerce Operator & An online data access and retrieval service provider.
What are the prerequisites for registration on the GST Portal?
To apply for a new registration, you must have:
- PAN of the GST Registration Applicant
- Proof of Business Registration or Incorporation Certificate
- Identity and Address Proof of Promoters/Partners (as the case maybe) with Photograph
- Address Proof for the place of Business
- Bank Account Statement showing Name, Address & Few Transaction
- Class 2 DSC for the Authorized Signatory (Mandatory for Companies)
Note: Your mobile number should be updated with the Aadhaar authorities otherwise you cannot use E-Sign option because OTP will be sent to the number in the Aadhaar database.
Returns under GST?
Prescribed Returns under the GST act along with their due dates are as follows:
|S.No||Return Form||Particulars||Person Responsible||Due Date|
|1.||GSTR-1||Details of outward supplies of taxable goods or services or both effected||Registered Person||10th of Next Month|
|2.||GSTR-2||Details of inward supplies of taxable goods or services or both claiming input tax credit||Registered Person||After the 10th but before 15th of Next Month|
|3||GSTR-3||Monthly return on the basis of finalization of details of outward supplies and inward supplies along with the payment of amount of tax||Registered Person||20th of Next Month|
|4||GSTR-4||Quarterly Return for compounding taxable persons||Taxable Person opting for Composition Levy||18th from end of the Quarter|
|5||GSTR-5||Return for Non-Resident foreign taxable persons||Non Resident Tax Payer||20th from end of the month or within 7 days after the last day of validity of registration whichever is earlier|
|6||GSTR-6||Input Service Distributor return||Input Service Distributor||13th of Next Month|
|7||GSTR-7||Return for authorities deducting tax at source||Tax Deductor||10th of Next Month|
|8||GSTR-8||Details of supplies effected through e-commerce operator and the amount of tax collected as required under sub-section (52) of CGST Act.||E-Commerce Operator||10th of Next Month|
|9||GSTR-9||Annual Return||Registered Person||31st December of Next Financial Year|
|10||GSTR-9A||Simplified Annual return by Compounding taxable persons registered under section 10 of CGST Act.||Taxable Person whose registration has been surrendered and cancelled||31st December of Next Financial Year|
Note: Reference to 23rd GST council meet on 10th November 2017, there have been some revisions and amendments in the timelines for filing of the Returns (till 31st March 2017).
Is an advocate or firm of advocate liable to obtain GST Registration?
As per Notification No. 12/2017 (Central Tax- Rate) dated 28th June 2017, the following services of advocates are exempted:
- Services by firm of advocates / an individual advocate other than a senior advocate, by way of legal services to:
- an advocate or partnership firm of advocates providing legal services;
- any person other than a business entity; or
- a business entity with an aggregate turnover up to twenty lakh rupees in the preceding financial year
- Services by a senior advocate by way of legal services to:
- any person other than a business entity; or
- a business entity with an aggregate turnover up to twenty lakh rupees in the preceding financial year.
In Cases other than covered above, where exemption does not apply, GST Registration is required.
Does Rental Income attracts GST?
GST is leviable only if aggregate turnover is more than 20 lakhs. (Rs.10 lacs in 11 special category States). For computing aggregate supplies turnover of all supplies made by you would be added.
What are the Salient Features of Export in GST?
The export of goods or services is considered as a zero-rated supply. Under GST, exporters are required to pay Integrated GST on exports and then claim refunds.
However, Govt. has give options to the Regular Exporters to furnish a Letter of Undertaking/ Bonds (as the case may be) and they will be entitled to export goods and services without the payment of GST.
Refunds may be claimed for the Input Tax Credit (Eligible) in the prescribed manner as stated in the law.
How is ITC Set off/ Utilised?
Under the GST regime, availment of input tax credit has been simplified to avoid the cascading deficiencies which were existing under the former regime.
The input tax credit will be set off as follows:
|Credit Of||To Be Utilized First For Payment Of||Maybe Utilized Further For Payment Of|
|IGST||IGST||CGST, then SGST/UTGST|
Conditions to claim Input Tax Credit under GST?
Input Tax in relation to a taxable person, means the Goods and Service Tax charged on any supply of goods and/or services to him which are used or are intended to be used, during furtherance of the business.
A registered person will be eligible to claim Input Tax Credit (ITC) on fulfillment of the following conditions:
- Possession of a tax invoice or debit note or document evidencing payment
- Receipt of goods and/or services
- Goods delivered by supplier to other person on the direction of registered person against a document of transfer of title of goods
- Furnishing of a return
- Where goods are received in lots or installments ITC will be allowed to be availed when the last lot or installment is received.
- Failure to the supplier towards supply of goods and/or services within 180 days from the date of invoice, ITC already claimed will be added to output tax liability and interest to paid on such tax involved. On payment to supplier, ITC will be again allowed to be claimed
- No ITC will be allowed if depreciation have been claimed on tax component of a capital good
- If invoice or debit note is received after:
- the due date of filing return for September of next financial year or
- filing annual return (whichever is later).
Case Based FAQ’s – GST
If a company in Maharashtra holds only one event in Delhi, will they have to register in Delhi? Will paying IGST from Maharashtra suffice?
If you provide any supply from Delhi you need to take registration in Delhi. Else, registration at Mumbai is sufficient (and pay IGST on supplies made from Mumbai to Delhi)
Is SGST of Rajasthan charged by supplier on purchase from Rajasthan can be utilize for payment of SGST in Madhya Pradesh?
SGST of one State cannot be utilized for discharging of output tax liability of another State.
How one can use SGST credit for the payment of IGST on another state?
SGST Credit can be used for payment of IGST liability under the same GSTIN only
Can one State CGST be used to pay another state CGST?
The CGST and SGST Credit for a State can be utilized for payment of their respective CGST/SGST liabilities within that State for the same GSTIN only.
In case of service supplied, should the credit be given to the state where it is billed or the state it is rendered?
Tax will be collected in the State from which the supply is made. The supplier will collect IGST and the recipient will take IGST credit.
How will the credit/debit note from unregistered supplier be reported to GSTN and ITC claimed in the same?
Like invoice, credit/debit notes on behalf of unregistered person will be given by registered person only. Further, GSTR2 provides for reporting of same by the recipient.
A shop sells taxable & exempt products to the same person (B2C), is it required to issue tax invoice and bill of supply separately?
In such a case the person can issue one tax invoice for the taxable invoice and also declare exempted supply in the same invoice.
Do registered dealers have to record Aadhaar/PAN while selling goods to unregistered dealers?
There is no requirement to take Aadhaar / PAN details of the customer under the GST Act.
All expenses like freight / transport / packing which are charged in Sales Invoice are taxable in GST? How to charge in bill?
All expenses will have to be included in the value and invoice needs to be issued accordingly. Please refer to Section 15 of CGST Act and Invoice Rules.
How to treat following transaction in GST (i) Delivered supply shortages in Transit.
(ii) Customer gets less quantity and pays less.
The supplier may issue credit note to the customers and adjust his liability.