ABOUT GST

Goods And Service Tax

Goods and Service Tax(GST) is indirect tax biggest reform for the nation and it would make India as one unified common market .GST is imposed on the sale, manufacturing and the usage of the goods and services which starts from the manufacturer to the customer. The credits of the input tax which have been paid at each level would be available in the subsequent stage of value increment thus making GST as value addition tax on each stage and ultimately final consumers will have to pay only tax charged by the last dealer in the supply chain , GST had replaced 17 indirect taxes and GST would be a destination based tax i.e. tax is paid at place of Supply.

 

Applicability

GST Applicability is decided on basis of Turnover, if a turnover is less than 20 Lakh than there is no need for GST registration, it can be done voluntarily. In case turnover is less than 75 lakh than a taxpayer may opt for composition scheme, If turnover is more than 20 Lakh than a person can register in Normal registration and in case it is more than 75 Lakh than mandatory registration is required. Below is the example of same

Turnover
  • Less Than 20 Lakh- Exempt from GST
  • Less Than 75 Lakh- Opt for Composition
  • More than 75 Lakh- Normal GST registration

Voluntarily Registration can be done irrespective of Turnover.

Rates & HSN Code

Government has notified different rates for different goods and services, basically GST is charged as 0%,5%,12%,18% and 28% and chess in some cases . Education and Healthcare are exempted from GST. Also HSN code for Goods and SAC codes for services has been issued, there are codes for every goods and services which need to be added in GST registration and also should be mentioned on each GST invoice

Rates
Click here to check GST rates on common goods
Click here to check detailed HSN codes of various goods
Click here to check detailed SAC codes of various services

Voluntarily Registration can be done irrespective of Turnover.

Taxes Replaced and Taxes In GST

GST has replaced these taxes :

    • State VAT
    • Central Sales Tax
    • Luxary Tax
    • Purchase Tax
    • Entry Tax
    • Entertainment Tax
    • Taxes on lotteries/betting/gambling
    • State Cess and Surcharges
  • Central Excise Duty
    • Duties of Excise
    • Additional Duties of Excise 
              a. Goods Of Special Importance 
              b. Textile & Textile Products
    • Additional Duties of Custom or CVD
    • Special Additional Duties of Custom or SAD
    • Service Tax
  • Cess and Surcharge

Taxes in GST:

    • Integrated Goods and Services Tax(IGST)
    • Central Goods and Services Tax(CGST)
    • State Goods and Services Tax(SGST)
    • Cess
  • Zero Rated Supply

Supply of goods or services or both can be a transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person to another person or legal entity in course of business

There are two types of Supply- Taxable and Non Taxable which would be explained further

Non Taxable Supply Can be – Exempt Supply or Out of Scope Supply( Both are excluded under GST) , Taxable Supply can be classified as per below

  • Based On Location
  • Based On Combination
  • Based On Recipient
  • Based On Tax

Based On Location:

  • Intra State- Location of Supplier and Place of Supply is in same state/Union Territory with below exception.Supply of goods to or by SEZ(Special Economic Zone), Imported Goods in India, Supplies made to tourist. Where location or place of supply Is in territorial waters place of supply will be nearest coastal area
  • Inter State Supply-Location of Supplier and Place of Supply is in different(2 or more) state/Union Territory , these are also covered in Inter State.Supply of goods to or by SEZ(Special Economic Zone), Imported Goods in India,
    Supplies made to tourist.Import Of Goods.

Based On Combination

  • Composite Supply- Taxable person is supplying goods/services which involve 2 or more taxable goods/service.
  • Mixed Supply- Two or more person prepare goods/services which is supplied for a single price.
  • Continuous Supply- In case of goods , Continuous supply under contract whether or not by means of wire, cable, pipeline or other conduit and invoice is charged on regular basis . – In case of services, continuous supply under contract for period exceeding 3 months with invoice on regular basis.

Based On Recipient

  • Inward Supply- Receipt of Goods or service or both through purchase/acquisition or other means with or without consideration.
  • Outward Supply- Supply of Goods or service or both through sale/transfer/barter/exchange or any other means as agreed with or without consideration in normal course of business

Based On Tax

  • Exempt Supply- Supply of goods or services or both which have Nil Tax or Exempted from Tax . It includes Non Taxable Supply
  • Zero Rated Supply- Supply of Goods or services or both to a SEZ developer or SEZ
  • Non Taxable Supply- Which attracts Nil Tax and similar to exempt Supply
  • Taxable Supply- Supplies on which GST is levied and paid

Time Of Supply For Goods

Liability to Pay Taxes on Goods arises on that whichever is earliest of these
    1. Date of Issue of Invoice by Supplier
    1. Last Date on which he is required to issue invoice( 21 Days Max. after goods delivered)
  1. Date on which supplier receives payment
Liability to Pay Taxes on Services arises on that whichever is earliest of these
    1. Date of Issue of Invoice by Supplier or within 30 days of providing service
    1. Date of provision of service
  1. The date on which the recipient shows the receipt of services in his books of account, in a case where the provisions of clause (a) or clause (b) do not apply.
Liability To Pay Tax On Reverse Charge
Earliest of the following dates
  1. The date of payment as per books of account of the recipient or the date, on which the payment is debited in his bank account, whichever is earlier.
  2. The date immediately following sixty days from the date of issue of invoice
  3. Where it is not possible to determine the time of supply under clause (a) or clause (b), the time of supply shall be the date of entry in the books of account of the recipient of supply.
  4. In case of supply by associated enterprises, where the supplier of service is located outside India, the time of supply shall be the date of entry in the books of account of the recipient of supply or the date of payment, whichever is earlier./span>

E-Way Bill

E-way bill under GST is an electronically generated bill which will be required for the movement of goods valuing more than 50,000. It needs to be generated from the GSTN portal through FORM GST INS-01 and it is mandatory for the movement of goods.

In case of multiple consignments, transporter needs to generate a consolidated e-way bill and in case If goods are transferred from one vehicle to another , than transporter would be required to generate a new e way bill.

The E-way bill has been postponed by the Center for now and its application will be started from October, there is a validity of E way bill once generated and it is as below:

  • If the distance is less than 100km- 1 Day
  • If the distance is 100 km or more but less than 300km- 3 Days
  • If the distance is 300 km or more but less than 500km- 5 Days
  • If the distance is 500 km or more but less than 1000km- 10 Days
  • If the distance is 1000 km or more- 15 Days

Goods on which E-way bill is not applicable 

  • Items of Mass Consumption:
    Fruits and vegetables, Jewellery, Food Grains, Meat, Bread, Curd, Books
  • Apart from these, there would be some goods which are as below:
    Currency, LPG, Kerosene, Fresh Milk, Honey, Seeds, Cereals, Flour, Betel Leaves, Raw Silk, Live Bovine Animals, Khadi, Earthen Pots, Clay Lamps, Pooja Samagri, Hearing Aid, Human Semen, Human hair, Condoms and Contraceptives

E-way bill will also not be needed in some special cases which are as follows:

  1. When Goods transported by a non-motorized conveyance like Belgadi,tonga etc.
  2. Goods are being transported from the airport, port or customs stations to an inland container depot or a container freight station for clearance by customs.

Non Resident Tax Payers

Non Resident Taxpayer are those suppliers of goods or services or both, who comes for short duration to make supplies in India without having any registered business establishments in India, also they normally import products to make local supplies. Therefore, they will be allowed to avail Input Tax Credit only on IGST paid on imports. However, other taxpayers can take credit for supplies made by them and filed in Form GSTR 5.

Registration

They are require to take registration in India through simplified form GST Reg-09, it needs to be filed 5 day before commencement of business

Returns

Non Resident Tapayer has to file return through form GSTR 5 for the period of there registration :

      • Within 7 days of expiry of registartion;or
    • Monthly on or before 20th of every month

Pure Agent

A pure agent is defined under GST as anybody who incur some cost for goods and services on behalf of service receiver and doesn’t use or intend to hold ownership of those goods and also charge service receiver exact that amount which he has incurred without adding any profit in that. Amount charged as pure agent would not be included neither in Value Of Supply nor in Aggregate Turnover.

Conditions

A pure agent has to make payments to the third party after authorization by recipient of goods or services.

Amount needs to be separately shown in invoice

Cases in which refund can be claimed

  1. Excess Tax Paid by mistake.
  2. Wrong interpretation of Supply , IGST as CGST/SGST and vice versa.
  3. Purchases made by Specialized agency with GST and refund claim filed by them later on.
  4. Tax paid on the purchase of goods which are meant for zero-rated supply (exports/ supply to SEZ unit or SEZ developer).
  5. Purchases made at higher tax rate and sold at lower tax rate.
Exceptions
  1. no refund of unutilised input tax credit in a case where goods are subjected to export duty.
  2. no refund of input tax credit shall be allowed, if the supplier avails a drawback in respect of central tax or claims refund of the integrated tax paid.
Refund Application
  1. Refund of tax/interest application can be made within 2 years.
  2. A registered person can claim refund of any unutilized ITC at the end of any tax period.
  3. The application for claiming the refund can be made at quarter end.
  4. The refund cannot be processed if the amount of the refund is less than 1,000 rupees.
Tax Refund Provisions
  1. Documents along with form needs to be filed online, there is no physical submission required.
  2. The refund shall be granted within 60 days from the date of receipt of complete application.
  3. If amount of refund is less than INR 5 lakhs, only a self-certification to this effect will have to be given, documentary evidence not required.
  4. 80% of the refund claim shall be paid immediately on a provisional basis without verification of documentary evidence in case of export claim refund.
  5. If a refund is not sanctioned within the stipulated period of 60 days, Interest is payable at the rate which is not exceeding @ 6%.