An Overview of

Goods & Services Tax

( GST)
R.S.Maheshwari
Additional Commissioner
Bhopal
 PRESENTATION PLAN
1. Introduction: GST A Game
5.Input Tax Credit
Changer

6.Registration, Returns,
2. Problems In Present Indirect
Tax Structure
7.Payment of tax, refund ,
Job work
3. Salient Features of GST
8. Transition provision

4. The Taxable event , Time &

9.Migration
place of Supply and Valuation
10.Way forward 2
3
 Multi Stage Supply Chain
Value Rs. 5000 + Taxes (Rs1000) Guj
A
Value Rs. 6000 + Taxes (Rs 200)
B
Ta
xr Value Rs. 7000 + Taxes (Rs 200)
id C
es
t he Value Rs. 8000 + Taxes (Rs200)

su D
pp
ly Value Rs. 15000 +

Multi stage VAT

R Taxes (Rs 1400)

Real
GST is destination based consumption tax Revenue

ITC utilization means less cash

Consumer
160 countries (90% )
The concept behind GST was invented by a French tax official in the 1950s
(MP)
 PRESENT INDIRECT TAXES
• Central taxes • State taxes
 Excise duty.  VAT.
 Customs duty  Entertainment Tax.
 CST.  Luxury tax.
 Additional Excise  Tax on Lottery,
Duty.
betting, gambling.
 Service tax.
 Entry tax.
 CVD
(Countervailing  Purchase tax
Duty).  State Surcharges &
 SAD (Special Cesses.
Additional Duty). 5
 Present Structure of Indirect Tax
Nature of Excise Duty Service Tax Customs Sales Entry tax/
Tax Duty Tax/VAT/ CST Entertainm
ent Tax
.

Authority Entry No. Residuary Entry No. 83, Entry No. 54 Entry No.
for levy of 84, List I, Entry No. List I, of List II 52 &62 List
Tax Schedule 97, List I, Schedule VII (VAT) and II,
VII Schedule 92A of List I Schedule
VII (CST) VII

Taxable Manufacture Provision of Import & Sale of goods Entertainm

Event Service Export ent & Entry
of Goods
 Shortcomings in the Present Indirect Tax Structure

Cascading of
taxes Varied concessions
Multiple
&
administration
exemptions

.
Narrow base
Shortcomings in Sales Vs Service dilemma
the present
structure
Interpretational issues

Multiple Compliance
Lack of requirements
transparency/ Lack of uniformity in
rules and rates
cohesion

04/29/2024 7
Taxes Proposed to be Subsumed under GST
• Central taxes • State taxes
 Excise duty.  VAT.
 Additional Excise  CST.
Duty.  Entertainment Tax.
 Service tax.
CGST  Luxury tax.
SGST
 CVD (Countervailing  Tax on Lottery,
Duty). betting, gambling.
 SAD (Special  Entry tax.
Additional Duty).  Purchase tax
 Central Cesses &  State Surcharges &
Surcharges. Cesses.
8
9
 GST : A Game Changer
 A single tax would replace multiple taxes.
 Mitigate the ill effects of cascading.
 Reduce economic distortions caused by inter-State
variations in taxes. Common national market.
 Streamline tax administration and avoid harassment of
business.

10
 Taxes not subsumed under GST

Basic Custom Duties

Excise on liquor
Property Tax
Stamp Duty
Tax on sale / consumption of
electricity
 Complications in the existing system
of taxation of inter state sales
• The Constitution (Sixth Amendment) Act, 1956

• Central Sales Tax Act 1956 :

 CST is levied by the Centre but Collected by the originating state
government.

 ITC of CST not allowed .

 Forms for accountal ( Form A to J)

 Entry Tax : –
12
The Constitution (101st Amendment)
Act, 2016
• Passed by RS & LS and ratified by the states.
Presidential assent received on 8th Sept,2016

• “goods and services tax” means

any tax on supply of goods, or services or both
except taxes on the supply of the alcoholic
liquor for human consumption.

• GST COUNCIL –Article 279A

 Article 246A & 269A to be inserted .

1) Concurrent power to levy GST on intra state supply.

2) Exclusive jurisdiction to centre to levy GST on

interstate supply.
3) IGST to be apportioned.

4) Import also considered inter state supply

5) Parliament will frame the principles for

determination of place of supply
14
 GST COUNCIL
One of India’s most powerful federal bodies that will oversee and administer the GST.

Constitution : Union FM & MoS and MoF of each State.

Weightage of votes: Centre :States = 1/3rd : 2/3rd

Quorum = 50% of total members.

Decisions by 3/4th majority .

Council to make recommendations on :

 Taxes, etc. to be subsumed in GST. Exemptions & thresholds . GST rates. Band of GST rates.
Modal GST Law & procedures 15
 GST : A Game Changer

 A single tax would replace multiple taxes.

 Set-off of prior-stage taxes would mitigate the ill effects of cascading.

 Tax burden on goods and services would decrease, benefiting common man.

 Make our products competitive in domestic and international markets.

 boost economic activity and create more jobs. The GDP would grow .

 widening of tax base, increase in trade volumes and improved tax compliance.

 Reduce economic distortions caused by inter-State variations in taxes. Common

national market.

 Streamline tax administration and avoid harassment of business.

 Compliance costs for the industry will go down

16
The Statutory Scheme of Levy
Under GST
INTRA CGST
STATE
supplies SGST
INTER
STATE IGST
Supplies
 What IGST achieves :

1 Maintain integrity of ITC

chain in interstate supplies
2 inter-state supplies taxed effectively
while keeping the regime simple
Tax is collected at Origin state but
3 transferred to the destination
state
4 Incidence of tax is same in
inter/intra state supplies
 SALIENT FEATURES OF GST
• Dual GST.
• All goods other than alcoholic liquor

• Five petroleum products to be included later.

• Tobacco and tobacco products : GST + Central Excise duty

• The exemption list would be common for the Centre

and the States.

19
 Threshold exemption under GST :

Aggregate turnover* : Rs.20 lakhs.

For NE States and Sikkim : Rs. 10 lakhs.

* To be calculated at all India level (same PAN)

inter-State supplies
Not Eligible
reverse charge

Supply by unregistered person to registered person under

reverse charge
20
 Composition Scheme
Small taxpayers with an aggregate turnover up to Rs. 50 lakhs

For all traders , select manufacturing sectors , Restaurants,

All the registered taxable persons, having the same PAN have to opt.

who makes inter-State supplies

NOT ELIGIBLE :
through an E commerce Operator

Manufacturers - 1% CGST and 1% SGST – 21

Restaurants - 2.5% each Other supplies - 0.5% each
HSN /SAC code for classification.

HSN code shall be used for classifying the goods .

• Turnover (Rs. 1.5 cr- Rs. 5 cr) : 2-digit

• Above Rs. 5 crores : 4-digit
• Export : 8-digit

• Service Accounting Code for services

22
The meaning and scope of
“Supply”
Section 3 read with three schedules
23
 Taxable Event under Various laws
LEVY TAXABLE EVENT
Excise Duty Manufacture

Service tax Provision of

Service
Sales tax Sale of goods
GST Supply
 Meaning & Scope of Supply

All forms of supply

for a Consideration

in the course or furtherance

of Business 25
 Business Includes
a) any trade, commerce, manufacture, profession, vocation or any other similar activity, whether or not it is for a
pecuniary benefit;

(b) any activity or transaction in connection with or incidental or ancillary to (a) above;

(c) any activity or transaction in the nature of (a) above, whether or not there is volume, frequency, continuity or
regularity of such transaction;
(d) supply or acquisition of goods including capital assets and services in connection with commencement or closure of
business;

(e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the
facilities or benefits to its members, as the case may be;

(f) admission, for a consideration, of persons to any premises; and

(g) services supplied by a person as the holder of an office which has been accepted by him in the course or
furtherance of his trade, profession or vocation;

(h) services provided by a race club by way of totalisator or a licence to book maker in such club;

(i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in
which they are engaged as public authorities; 26
 SCHEDULE I
ACTIVITIES TO BE TREATED AS SUPPLY EVEN IF MADE WITHOUT CONSIDERATION
1. Permanent transfer/disposal of business assets where input tax credit has been availed
on such assets.

2. Supply of goods or services between related persons, or between distinct persons as

specified in section 9, when made in the course or furtherance of business.

Provided that gifts not exceeding fifty thousand rupees in value in a financial year by an
employer to an employee shall not be treated as supply of goods or services or both.

3. Supply of goods—

(a) by a principal to his agent where the agent undertakes to supply such goods on
behalf of the principal, or

(b) by an agent to his principal where the agent undertakes to receive such goods on
behalf of the principal.

4. Importation of services by a taxable person from a related person or from any of his other
27
establishments outside India, in the course or furtherance of business.
 Schedules- GST Law
SCHEDULE I
Activities to be treated as supply
even if made without consideration

SCHEDULE II Activities to be treated as supply of

goods or services

Activities or transactions which shall

SCHEDULE III
be treated neither as a Supply of
goods nor a supply of services
29
 SCHEDULE-II
ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR
SERVICES---
3 0

1. Transfer
 Transfer of the title in goods is a supply of goods
 Transfer of goods or of right in goods or of undivided share in goods without the
transfer of title is a supply of services
 Transfer of title in goods under an agreement that property in goods will pass at a
future date on payment of full consideration, is a supply of goods

2. Land and Building

 Lease, tenancy, easement, license to occupy land is a supply of services
 Lease or letting out of the building including a commercial, industrial or residential
complex for business or commerce, either wholly or partly, is a supply of services

3. Treatment or process
 Treatment or process applied to another person’s goods is a supply of services
 -----SCHEDULE-II :
ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR SERVICES-----
3 1
4. Transfer of business assets
(a) where goods forming part of the assets of a business are transferred or disposed of by
or under the directions of the person carrying on the business so as no longer to form
part of those assets, whether or not for a consideration, such transfer or disposal is a
supply of goods by the person;
(b) where, by or under the direction of a person carrying on a business, goods held or used
for the purposes of the business are put to any private use or are used, or made
available to any person for use, for any purpose other than a purpose of the business,
whether or not for a consideration, the usage or making available of such goods is a
supply of services;
(c) where any person ceases to be a taxable person, any goods forming part of the assets
of any business carried on by him shall be deemed to be supplied by him in the course
or furtherance of his business immediately before he ceases to be a taxable person,
unless—
(i) the business is transferred as a going concern to another person; or
(ii) the business is carried on by a personal representative who is deemed to be a taxable
person.
 -----SCHEDULE-II :
ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR SERVICES-----

5. Following shall be treated as supply of service

a. Renting of immovable property
b. Construction of a complex, building, civil structure or a part thereof, including a
complex or building intended for sale to a buyer, wholly or partly, except where
the entire consideration has been received after issuance of completion
certificate, where required, by the competent authority or before its first
occupation, whichever is earlier
c. Temporary transfer or permitting the use or enjoyment of any intellectual
property right
d. Development, design, programming, customization, adaptation, upgradation,
enhancement, implementation of information technology software
e. Agreeing to the obligation to refrain from an act, or to tolerate an act or a
situation, or to do an act
f. transfer of the right to use any goods for any purpose (whether or not for a
specified period) for cash, deferred payment or other valuable consideration.
 ------SCHEDULE-II :
MATTERS TO BE TREATED AS SUPPLY OF GOODS OR SERVICES.
3 3

6. Composite supply :
The following composite supplies shall be treated as a
supply of services, namely:—
(a) works contract as defined in clause (119) of section
2; and
(b) supply, by way of or as part of any service or in any
other manner whatsoever, of goods, being food or any
other article for human consumption or any drink
(other than alcoholic liquor for human consumption),
where such supply or service is for cash, deferred
payment or other valuable consideration.
 ------SCHEDULE-II :
MATTERS TO BE TREATED AS SUPPLY OF GOODS OR SERVICES.
3 4

7. Supply of Goods
The following shall be treated as supply
of goods, namely:—
Supply of goods by any unincorporated
association or body of persons to a
member thereof for cash, deferred
payment or other valuable
consideration
 SCHEDULE III :
Activities or transactions which shall be treated neither as a supply of goods
nor a supply of services

1. Services by an employee to the employer in the course of or in

relation to his employment.
2. Services by any Court or Tribunal established under any law for
the time being in force.
3. (a) The functions performed by the Members of Parliament,
Members of State Legislature, Members of Panchayats, Members
of Municipalities and Members of other local authorities;
(b) The duties performed by any person who holds any post in
pursuance of the provisions of the Constitution in that capacity; o
(c) The duties performed by any person as a Chairperson or a
Member or a Director in a body established by the Central
Government or a State Government or local authority and who is
not deemed as an employee before the commencement of this
clause. 35
 SCHEDULE III :
Activities or transactions which shall be treated neither as a supply of goods
nor a supply of services

4. Services of funeral, burial, crematorium or

mortuary including transportation of the deceased.

5. Sale of land and, subject to clause (b) of paragraph

5 of Schedule II, sale of building.

6. Actionable claims, other than lottery, betting and

gambling.

Explanation.—For the purposes of paragraph 2, the term "court" includes

District Court, High Court and Supreme Court. 36
 DEFINITION OF GOODS AND SERVICES

“Goods’’ means
 Every kind of movable property

 other than money & securities,

 Includes actionable claim, growing crops, grass and things attached to

or forming part of the land which are agreed to be severed before
supply or under a contract of supply;

“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 37 or
denomination for which a separate consideration is charged;
 Input Tax Credit (ITC)
Outward
Inward
supply
TAXABLE Supply
A PERSON C
Input tax Output tax

Seamless flow of credit

Definition of input/input services /capital goods much
wider.
Negative list. Proportionate credit
Capital goods credit in one go.
Time limit
Matching of invoices
38
 ITC NEGATIVE LIST
 Motor vehicle & Conveyance.

 Specified supply of goods or services

 Used in construction of immovable property.

 Compounding scheme (section 8).

 Used for personal consumption.

 goods lost, stolen, destroyed, written off or disposed of by way of gift

or free samples.

 any tax paid in terms of sections 67 , 89 or 90 . 39

 GOODS / SERVICES NOT ELIGIBLE FOR ITC….

(a) Motor vehicles and other conveyances except when they are
used
(i) for making the following taxable supplies, namely

(A) further supply of such vehicles or conveyances ; or

(B Transportation of passengers; or

(C) imparting training on driving, flying, navigating such vehicles or

conveyances;

40
(ii) for transportation of goods.
 GOODS / SERVICES NOT ELIGIBLE FOR ITC….

(b) supply of goods and services, namely

 food and beverages,

 outdoor catering, Except where outward taxable
 beauty treatment, supply is of same category
 health services,
 cosmetic and plastic surgery,

 membership of a club,
 health and fitness center,

 Rent a cab Except where Govt notifies services

 life insurance, obligatory under law for an emloyer
 health insurance,

 travel benefits extended to employees on vacation such as leave or home travel

concession, 41
 ….GOODS / SERVICES NOT ELIGIBLE FOR ITC....

(c) works contract services when supplied for construction of

immovable property, other than plant and machinery, except
where it is an input service for further supply of works contract
service;

(d) goods or services received by a taxable person for construction

of an immovable property on his own account, other than plant
and machinery, even when used in course or furtherance of
business;
Principal

SUB MAIN Immovable

CONTRACTOR CONTRACTOR properties
 ….GOODS / SERVICES NOT ELIGIBLE FOR ITC.......

(e) goods and/or services on which tax has been

paid under compounding scheme (section 9)

(f) goods and/or services used for personal

consumption,

(g) Goods lost, stolen, destroyed, written off or

disposed of by way of gift or free samples; and

(h) any tax paid in terms of sections 67, 89 or 90.

 No ITC
Pre-requisite
No ITC after furnishing of the return for the month of
September following the end
Goods of financial
against year to which
an invoice are such
invoice pertains or furnishing of the relevant annual
received in lots.
Conditions
return, whichever is earlier.
prescribed for When partly for the purpose of any business and
partly for other purposes, or partly for effecting
taking ITC taxable suppliest and partly for effecting exempt
supplies

Recipient fails to pay to the supplier of

services, within a period of 6 month
(i) Invoice,(ii)
credit shall be Goods/services
restricted are
If depreciation is claimed on of
to so much tax
 ITC
ITC availed
upon
received
the input would
receipt
(iii)as
tax isof
tax belot
islast
paidadded
attributable
component. (iv) to tothe said
return is
output
taxableliability
filed supplies with interest.
or business purpose
Time limit
 Proportionate ITC
( Section 17(1) & 17(2))

Where goods and/or services are partly used for

Non - Taxabl
Business Exempt
Business e

ITC restricted to Input Tax attributable to

Business,Taxable including zero rated supply

Manner of attributable ITC to be prescribed by notification

Credit on capital goods also on proportionate basis.
• exempt supplies shall include supplies on which recipient is liable to pay tax on reverse
46
 7. Manner of determination of ITC in certain
cases and reversal thereof

ITC available for business or taxable supplies only.

If used partly, then it shall be attributed.

T1 = Input tax attributable to-- used exclusively for

purposes other than business.
T2 = exclusively exempt supplies
T3= Negative list

To be declared at Invoice level

47
 FORM GSTR-2:
Table 4. From Registered Taxable Persons including supplies
received from unregistered person in case of reverse charge

Eligibility Total Tax ITC

of ITC as
inputs/ available available
capital as ITC this month
goods /
input services
IGST CGS SGS IGST CGST SGST
/none T T
Amt Amt Amt Amt Amt Amt

48
Proportionate reversal of credit
C1 = T- (T1+T2+T3);
Common credit C2 = C1- T4;
D1 : The amount of input tax credit attributable
towards exempt supplies.
D1= (E÷F) × C2
‘E’ is the aggregate value of exempt supplies,
‘F’ is the total turnover of the registered person
during the tax period:
T4 = Input tax attributable to-- used exclusively for
taxable /business purposes. 49
 Proportionate reversal of credit
• the amount of credit attributable to non-
business purposes
D2 =5% of C2
the remainder of the common credit shall be the
eligible ITC
C3 = C2 - (D1+D2)

The amount equal to ‘D1’ and ‘D2’ shall be added

to the output tax liability of the registered person:
50
WHO IS ELIGIBLE FOR ITC ?
Only registered taxable person can take ITC

1) Every registered taxable person

2) New Registration. Section 18.

Availability of credit in
special circumstances
3) Voluntary Registration

4) Switching over to Normal scheme from composition

5) Where an exempt supply of goods or services by a registered

51
taxable person becomes a taxable supply,
 Section 18. Availability of credit in special circumstances
New Registration* Voluntary Switching over to Where an exempt
supply by a
registration normal scheme from registered taxable
composition scheme person becomes a
taxable supply

ITC of inputs held in ITC of inputs held in ITC of inputs held in ITC of inputs held in
stock* stock* stock* stock* relatable to
such exempt supply

Reduced CG credit
CG credit not CG credit not Reduced CG credit also allowed
allowed allowed also allowed
No ITC on an invoice after the expiry of one year from the date of issue of such invoice.
The ITC entitlement subject to such conditions and restrictions as may be prescribed.

* applied for registration within 30 days .

** inputs as such and inputs contained in semi-finished or finished goods 53
Cross utilization of ITC permitted

IGST

SGST CGST 55
 The order of utilization of credit of
IGST, CGST and SGST
A 1.
1. B 1. SGST
C
IGST CGST
ITC_
2. ITC_
IGST ITC_
CGST CGST
SGST
2. 2.
3. IGST IGST
SGST

56
Location of Place of
Supplier Supply Supply

Intra
Interstate supplies
state supplies
State A State B
Location of
Supplier
Place of
Supply
Including supplies to/by SEZ, Import or
Export /High sea supply of goods 57
 Location of supplier of goods
“supplier” in relation to any goods and/or services shall mean the person supplying the said
goods and/or services and shall include an agent acting as such on behalf of such supplier in
relation to the goods and/or services supplied;

“Place of business” includes

(a) a place from where the business is ordinarily carried on, and includes
(b) a warehouse, a godown or any other place where a taxable person stores his goods,
provides or receives goods and/or services; or
(c) a place where a taxable person maintains his books of account; or
(d) a place where a taxable person is engaged in business through an agent, by whatever name
called.

22. (1) Every supplier shall be liable to be registered under this Act in the State or Union
territory, other than special category States, from where he makes a taxable supply of goods
or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees:

The Location of supplier of goods is the location of the goods before

58
supply
Location of supplier of service” means

 Regular place of business;

 Sometime service provider has to go to client location or open a

temporary office

 Fixed establishment ;
sufficient degree of permanence and suitable structure in terms of human and
technical resources

 More than One :- Location of the establishment most directly

concerned.

 Usual place of residence ; 59

 Location of taking
Supply on board
involves the goods
movement of
To be prescribe
goods on reco of GST Council
Delivery on the direction of third
person
Place of supply
Supply does not involve
of Goods
movement of goods

Goods are assembled or installed at

site
Location
Principal
Location place
at the of termination
oftime
business
of
Goods of third
delivery
are
of
of
suppliedperson
goods
on board a
Location of installation/Assembly
movement for delivery to recipient
conveyance
Other supplies of goods
 Place of Supply of Services

• Services are intangible.

• POS for 12 categories of services is

determined with reference to certain
proxies.

• Specific Provision has been made for 12

services.

• Default rule for the Rest of the Services 61

 Restaurant and
Immovable catering services, Training and
personal grooming,
property related fitness, beauty performance
services, treatment, health appraisal ,
service,
Specific Provisions for 12

Admission to a
event or
Organization Transportatio
amusement park of event. n of goods.

Passenger Services on Tele

transportatio board a communication
n. conveyance services
services

Banking and Advertisemen

other Insurance t services to
financial services the Central
services, Government 62
Specific Provisions for 12 services
(1) Immovable property related services,
(2) Restaurant and catering services, personal grooming,
fitness, beauty treatment, health service,
(3) Training and performance appraisal ,
(4) Admission to a event or amusement park
(5) Organization of event.
(6) Transportation of goods.
(7) Passenger transportation.
(8) Services on board a conveyance
(9) Telecommunication services
(10) Banking and other financial services,
(11) Insurance services
(12) Advertisement services to the Government 63
 Default Rule for the Services
other than twelve Specified Services
Description Place of Supply
of Supply
Location of the Recipient
B2B
(i) Location of the recipient where
the address on record exists, and

B2C (ii) the location of the supplier of

services in other cases.

64
 Immovable property related services

• in relation to an immovable property, including services

provided by architects, interior decorators, surveyors,
engineers and other related experts etc
• grant of rights to use immovable property .
• lodging accommodation by a hotel, inn, Boat, GH.
• Function Halls etc.
• any services ancillary to the services referred

Location at which the immovable property or boat

or vessel is located or intended to be located.
Pro rata if located in more than one state. Storage & Warehousing
interior decorator supplies a corporate colour scheme/style for a
hotel chain to use in their own properties
 Performance based services:

• Restaurant and catering services,

• Personal grooming, fitness, beauty
treatment,
• Health service including cosmetic and
plastic surgery

• Location where the services are actually

performed.
home delivery of food by restaurant.
 Goods Transportation

Services by way of transportation

of goods, including by mail or
courier
B2B : Location of the Recipient;
B2C : Location at which such goods are
handed over for their transportation
Contradictory with the POPS Rule.
Truck Hiring not covered ?
 Passenger transportation

Passenger transportation service

Place where the passenger embarks
on the conveyance for a continuous
journey:
Where the right to passage is given for future use
Return journey shall be treated as a separate
Time of Supply

69
 Time of Supply of Goods
Earlier of
the
following

The date of issue of

invoice
The date of receipt of
or
the last date of issuing payment
invoice under section 28
Receipt up to Rs 1000/- in excess of the amount indicated in the tax invoice-
Optional
The supply shall be deemed to have been made to the extent it is covered by
the invoice or, as the case may be, the payment.
date on which the payment is entered in his books of accounts or the date on
which the payment is credited to his bank account, whichever is earlier.
 Time of Supply of Goods under reverse charge

Earliest of
the
following

The date of The date on 30 days from

receipt of which payment the date of
goods made invoice

Otherwise , the date of entry in the books of

account of the recipient of supply.
date on which the payment is entered in the books of accounts of the recipient
or the date on which the payment is debited in his bank account, whichever is
earlier.
 Time of Supply of services
Earlier of
the
following

The date of issue of

invoice
The date of receipt of
or
the last date of issuing payment
invoice under section 28
Receipt up to Rs 1000/- in excess of the amount indicated in the tax invoice-
Optional
The supply shall be deemed to have been made to the extent it is covered by
the invoice or, as the case may be, the payment.
date on which the payment is entered in his books of accounts or the date on
which the payment is credited to his bank account, whichever is earlier.
Time of Supply of Services under reverse charge

Earliest of
the
following

The date on
60 days from the
which payment
date of invoice
made
 Otherwise , the time of supply shall be the date of
entry in the books of account of the recipient of supply

Provided further that in case of ‘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.
 CHAPTER VII

TAX INVOICE,
CREDIT AND DEBIT NOTES

79
 Tax invoice for supply of goods

issue a tax invoice

before or at the time of removal of goods for supply to

the recipient or delivery of goods,

 showing the description, quantity and value of goods,

the tax charged thereon and such other particulars as
may be prescribed:
prepared in triplicate

Provided that the Central/State Government may, on the recommendation of the

Council, by notification, specify the categories of goods and/or supplies in respect
80
of which the tax invoice shall be issued within such time as may be prescribed.
 Tax invoice for supply of Services

 issue a tax invoice

 within a period of 30 days from the date of supply of service:

 showing the description, value, the tax payable thereon and

such other particulars as may be prescribed:
prepared in Duplicate
Provided that the Government may, on the recommendations of the Council, by notification
and subject to such conditions as may be mentioned therein, specify the categories of
services in respect of which––
(a) any other document issued in relation to the supply shall be deemed to be a tax invoice; or
(b) tax invoice may not be issued.

81
 Consolidated Tax invoice in certain cases
subject to the following conditions:-

(a) the recipient is not a registered person; and

(b) the recipient does not require such invoice,

shall issue a consolidated tax invoice for such

supplies at the close of each day in respect of all
such supplies.
82
 Delivery challan in lieu of invoice

8. Transportation of goods without issue of invoice

(a) supply of liquid gas,

(b) transportation of goods for job work,
(c) transportation of goods for reasons other than by
way of supply, or
(d) such other supplies as may be notified by the
Board, 83
 Bill of supply for exempt supply
instead of a tax invoice,
Issue a bill of supply
containing such particulars and
in such manner as may be
prescribed.

< Rs 200/- not necessary 84

 Receipt of advance payment

issue a receipt voucher or any other document,

Containing such particulars as may be
prescribed, evidencing receipt of such payment;

What if subsequently no supply is made

Issue a refund voucher against such payment;

85
 Under Reverse Charge Mechanism
Two kinds of reverse charge

(i) The supplier is not registered

Recipient who is a RP shall issue an invoice

on the date of receipt.

(ii) Notified supplies under reverse charge

 Recipient who is a RP shall issue a payment
voucher
 at the time of making payment to the supplier 86
 Prohibition of unauthorised
collection of tax
32. (1) A person who is not a registered person
shall not collect in respect of any supply of
goods or services or both any amount by way of
tax under this Act.

(2) No registered person shall collect tax except in

accordance with the provisions of this Act or the
rules made thereunder.

87
 Amount of tax to be indicated in
tax invoice and other documents.

where any supply is made for a consideration,

Supplier shall prominently indicate

the amount of tax

in all documents relating to assessment, tax invoice

and other like documents,
which shall form part of the price at which such
supply is made. 88
 Revised invoice by New Registrants
within one month from the date of issuance of
certificate of registration .

and in such manner as may be prescribed,

issue a revised invoice against the invoice already

issued

during the period starting from the effective date of

registration till the date of issuance of certificate of
registration to him; 89
 Credit Note Debit note
• Excess • Less tax
• Returned paid in the
• Deficient tax invoice

Declare such credit note/debit note in the return in that month

90
 Accounts and other records.
(a) production or manufacture of goods;
(b) inward and outward supply of goods or services or both;
(c) stock of goods;
(d) input tax credit availed;
(e) output tax payable and paid; and
(f) such other particulars as may be prescribed

 the accounts relating to each place of business shall be

kept at such places of business:
 may be in electronic form in such manner as may be
prescribed
 expiry of seventy two months from the due date of
furnishing of annual return
91
warehouse operator and transporter
.

irrespective of whether he is a registered

person or not,

shall maintain records of the consigner,

consignee and other relevant details of the
goods

in such manner as may be prescribed.

92
VALUATION

95
 VALUATION

The value of a supply shall be the

transaction value :

i.e the price actually paid or payable

where the supplier and the recipient
of the supply are not related and
 the price is the sole consideration for
the supply.
96
 (2) The value of supply shall include–––

(a) any taxes, duties, cesses, fees and charges levied under any law for the
time being in force other than this Act, the State Goods and Services Tax
Act, the Union Territory Goods and Services Tax Act and the Goods and
Services Tax (Compensation to States) Act, if charged separately by the
supplier;

(b) any amount that the supplier is liable to pay in relation to such supply
but which has been incurred by the recipient of the supply and not
included in the price actually paid or payable for the goods or services or
both;

(c) incidental expenses, including commission and packing, charged by the

supplier to the recipient of a supply and any amount charged for anything
done by the supplier in respect of the supply of goods or services or both
at the time of, or before delivery of goods or supply of services; 97
 (2) The value of supply shall include–––

(d) interest or late fee or penalty for delayed payment

of any consideration for any supply; and

(e) subsidies directly linked to the price excluding

subsidies provided by the Central Government and
State Governments.

Explanation.––For the purposes of this sub-section,

the amount of subsidy shall be included in the value
of supply of the supplier who receives the subsidy. 98
 (3) The value of the supply shall not include any discount which is given––

(a) before or at the time of the supply

if such discount has been duly recorded in the invoice
issued in respect of such supply; and

(b) after the supply has been effected, if—

(i) such discount is established in terms of an agreement entered into

at or before the time of such supply and specifically linked to
relevant invoices; and

(ii) input tax credit as is attributable to the discount on the basis of

document issued by the supplier has been reversed by the recipient
99
 Transaction Price not available or
notified supplies
15 (4) Where the value of the supply of goods or
services or both cannot be determined under sub-
section (1), the same shall be determined in such
manner as may be prescribed.

(5) Notwithstanding anything contained in sub-

section (1) or sub-section (4), the value of such
supplies as may be notified by the Government
on the recommendations of the Council shall be
determined in such manner as may be prescribed.
100
 Related person ---

(i) such persons are officers or directors of one another’s businesses;

(ii) such persons are legally recognised partners in business;
(iii) such persons are employer and employee;
(iv) any person directly or indirectly owns, controls or holds twenty-five per
cent or more of the outstanding voting stock or shares of both of them;
(v) one of them directly or indirectly controls the other;
(vi) both of them are directly or indirectly controlled by a third person;
(vii) together they directly or indirectly control a third person; or they are
members of the same family;
sole agent or sole distributor or sole concessionaire, howsoever
described, of the other, shall be deemed to be related

“person” also includes legal persons; 101

 Valuation Rules situations:-

1. The consideration is not wholly in

money .
2. price is not the sole consideration .
3. between distinct or related persons or
agent .
4. certain supplies like money changing
etc. 102
 GST VALUATION RULES

Rule 1. Value of supply of goods or services where the consideration is not wholly in
money.

Rule 2. Value of supply of goods or services or both between distinct or related persons,
other than through an agent .

Rule 3. Value of supply of goods made or received through an agent.

Rule 4. Value of supply of goods or services or both based on cost.

Rule 5. Residual method for determination of value of supply of goods or services or both.

Rule 6. Determination of value in respect of certain supplies.

Rule 7. Value of supply of services in case of pure agent

103
Rule 8. Rate of exchange of currency, other than Indian rupees, for determination of value
Rule 1 where the consideration is not wholly in money

a) Open market Value of the goods / service supplied or.

b) If OMV is not available : sum total of Money received

money equivalent of non monetary consideration .

c) In case value cannot be determined by above mentioned

methods then value of supply of like kind & quality.

d) In case the value cannot be determined on the basis of like

kind & quality
then the value as per rule 4 (Cost + 10%) & 5 (Residual
value method) in sequential manner. 104
 Rule 2 between distinct or related
person other than through agent
a) Open market Value of the goods / service supplied
or

b) If OMV not available : then value of supply of like

kind & quality.

c) Else the value as per rule 4 (Cost + 10%) & 5

(Residual value method) in sequential manner

If full ITC eligible : the Invoice value will be deemed to

105
Rule 3 supply of goods made or received through an agent

a) Open Market Value or

b) 90% of value charged by the agent of goods of
like kind & quality to unrelated customer where
goods are intended for further supply at the
option of supplier
c) In case the value cannot be determined on the
basis of above
then the value as per rule 4 (Cost + 10%) & 5
(Residual value method) in sequential manner.
106
 -Open Market Value
-like kind & quality
(a) “open market value” of a supply of goods or services or both means
the full value in money, excluding the integrated tax, central tax,
State tax, Union territory tax and the cess payable by a person in a
transaction, where the supplier and the recipient of the supply are
not related and price is the sole consideration, to obtain such supply
at the same time when the supply being valued is made.

(b) “supply of goods or services or both of like kind and quality” means
any other supply of goods or services or both made under similar
circumstances that, in respect of the characteristics, quality, quantity,
functional components, materials, and reputation of the goods or
services or both first mentioned, is the same as, or closely or
substantially resembles, that supply of goods or services or both
107
 Rule 4 : Value of supply of goods or services or both
based on cost

The value shall be 110 % of the cost of

-production or manufacture or
- acquisition of such goods or
-provision of such services.
CAS-4 for goods is extended to Trading & Services. Costing as per Cost Accounting Standards issued by
ICAI.

Rule 5 : Residual method

using reasonable means consistent with the principles and general provisions of
section 15 and these rules .

However, Supplier of service may opt for this rule bypassing the rule 4 (i.e. 108
Cost +
 Rule 6 (1) Determination of value in respect of certain
supplies –

Valuation in the specified supplies should be

under this rule over riding the Rules & Act
1. money changing
2. Air travel agent
3. Life Insurance.
4. Trading in second hand goods
5. Vouchers
6. Notified services
109
 1. Money changing ---
• For a currency, when exchanged from, or to, Indian Rupees (INR),
• value = (buying rate or the selling rate - minus RBI reference rate) *
total units of currency:

• in case the RBI reference rate not available, the value shall be 1%
of the gross amount of Indian Rupees

• : If neither of the currencies exchanged is Indian Rupee, the value

shall be equal to 1% of the lesser of the two in Rs

• A person supplying the services may exercise option to ascertain

value in terms of clause (b) for a financial year and such option shall
not be withdrawn during the remaining part of that financial year.
110
 --- 1. Money changing
(b) At the option of supplier of services, the value in relation to supply
of foreign currency, including money changing, shall be deemed to be

(i) one per cent. of the gross amount of currency exchanged for an
amount up to one lakh rupees, subject to a minimum amount of
two hundred and fifty rupees;

(ii) one thousand rupees and half of a per cent. of the gross amount of
currency exchanged for an amount exceeding one lakh rupees and up
to ten lakh rupees; and

(iii) five thousand rupees and one tenth of a per cent. of the gross
amount of currency exchanged for an amount exceeding ten lakh
rupees, subject to maximum amount of sixty thousand rupees 111
 2. Air travel agent

• shall be deemed to be an amount calculated at the

rate of five percent. of the basic fare in the case of
domestic bookings, and at the rate of ten per cent.
of the basic fare in the case of international
bookings of passage for travel by air.

• Explanation - For the purposes of this sub-rule, the

expression “basic fare” means that part of the air
fare on which commission is normally paid to the
air travel agent by the airline.
112
 3. Life Insurance
(a) the gross premium charged from a policy holder reduced by
the amount allocated for investment, or savings on behalf of
the policy holder, if such amount is intimated to the policy
holder at the time of supply of service;
(b) in case of single premium annuity policies other than (a),
ten per cent. of single premium charged from the policy holder;
or
(c) in all other cases, twenty five per cent. of the premium
charged from the policy holder in the first year and twelve and
a half per cent. of the premium charged from policy holder in
subsequent years: Provided that nothing contained in this sub-
rule shall apply where the entire premium paid by the policy
holder is only towards the risk cover in life insurance.
113
 4. Trading in second hand goods

Value of supply shall be :

 SP minus CP

 and where the value of such supply is

negative it shall be ignored.

 Condition :No ITC

114
 5. Redeemable Vouchers
• The value of a token, or a voucher, or a coupon,
or a stamp (other than postage stamp)

• which is redeemable against a supply of goods

or services or both

• shall be equal to the money value of the goods

or services or both redeemable against such
token, voucher, coupon, or stamp.
115
 Deeming value of Notified services

The value of notified taxable services

Supplied between distinct persons

without consideration

 other than those where ITC is not available

(negative list),

shall be deemed to be NIL 116

 Rule 7 : Pure agent
Concept of Pure agent in Service Tax is carried forward in
GST.

Expenditure incurred as Pure Agent shall be excluded

from value of Supply.

Explanation . - For the purposes of this rule, “pure agent” means a person who -
(a) enters into a contractual agreement with the recipient of supply to act as
his pure agent to incur expenditure or costs in the course of supply of goods
or services or both;
(b) neither intends to hold nor holds any title to the goods or services or both so
procured or provided as pure agent of the recipient of supply;
(c) does not use for his own interest such goods or services so procured; and
(d) receives only the actual amount incurred to procure such goods or services.117
 ------Pure agent
(i) the supplier acts as a pure agent of the recipient of the supply, when he makes
payment to the third party for the services procured as the contract for supply
made by third party is between third party and the recipient of supply;
(ii) the recipient of supply uses the services so procured by the supplier service
provider in his capacity as pure agent of the recipient of supply;
(iii) the recipient of supply is liable to make payment to the third party;
(iv) the recipient of supply authorises the supplier to make payment on his behalf;
(v) the recipient of supply knows that the services for which payment has been
made by the supplier shall be provided by the third party;
(vi) the payment made by the supplier on behalf of the recipient of supply has been
separately indicated in the invoice issued by the supplier to the recipient of
service;
(vii) the supplier recovers from the recipient of supply only such amount as has
been paid by him to the third party; and
(viii) the services procured by the supplier from the third party as a pure agent of the
recipient of supply are in addition to the supply he provides on his own account.
118
 Rule 8: Rate of exchange of currency, other than Indian
rupees, for determination of value

• It shall be the reference rate for that currency

• as determined by the RBI

• on the date when point of taxation arises

• in respect of such supply in terms of section 12 or, as the case

may be, section 13 of the Act
119
 Zero rated supply

supply of goods and/or

export of goods and/or services to a SEZ
services; developer or an SEZ
unit

ITC may be availed .

Either of the following options, namely:––

(a) under bond without payment of iIGST and claim refund of

unutilised ITC; or
(b) on payment of IGST and claim refund of such tax 120
 Job work under GST
• Definition /scope much wider
• Job work means undertaking any treatment or
process on goods belonging to Principal
• Principal must be a registered person .
• It would be treated as supply of service.
• Simpler valuation.
• the job worker would be required to obtain
registration if his aggregate turnover exceeds the
prescribed threshold.
• input/capital goods :1 year/3 years 121
REGISTRATION
( Schedule V & Chapter VI )

122
 Registrations and Threshold Limits under various Laws at
Present*
• Total active taxpayers as on January, 2016 under different Acts.
Taxes Number of Tax Threshold Limit
Payers

Excise 4,09,596 1.5 Cr

Service Tax 26,41,093 10 Lakh
VAT 66,59,394 Varies from Rs. 1 to 20 Lakh under
different VAT Acts of the States (Rs. 1
Lakh in Meghalaya & Rs. 20 Lakh in
Delhi)
CST Compulsory registration for inter-
State transactions

• Variation in the formats and processes for registration under various Acts and the Centre and the
States.
• Single entity needs multiple registrations under various Acts. 123
 Overview of Registration---

 Online application and online registration.

 Common registration for three Acts.

 Registration - PAN based.

 Required to be obtained for each State from where taxable

supplies are being made

 One registration for each State & facility of multiple registrations

within a State.

 Submission of scanned copies of prescribed documents. 124

 ---Overview of Registration---

 Liability to be registered:
- Every person who is registered or who holds a
license under an earlier law;
- Every person whose turnover in a year exceeds the
threshold
 A person, though not liable to be registered, may take
voluntary registration
 Certain suppliers liable for registration without
threshold
 Self –serviced Amendments except for certain core
fields 125
 --Overview of Registration

 Registration within 3 working days.

 Only post registration physical verification.

 No security deposits for registration.

 No separate application for composition for new

registration.

 Provision for surrender of registration and also for suo-

moto cancellation by the tax authorities. 126
 Structure of Registration Number
(GSTIN)

State C
ode PAN Entity
Code
Blank
Check
Digit

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

• State Code as defined under the Indian Census 2011

• Entity Code: For multiple registration within a State
 Up to 9 business verticals…………...1 to 9
 From 10 to 35 business verticals ….. A to Z 127
Migration of existing assessees

 All existing taxpayers (84 lacs) will be transitioned

to GST.

 https://www.gst.gov.in/,
 Phase I : 60.5 lakh out of 84 lakh enrolled.

 Last Phase : Reopen for 15 days from June 1.

 There is no deemed enrolment under GST.

Enrollment at the GST Common Portal 128
 Process of migration of existing assessees

 Provisional Id & pasword .

 Mobile number and email address of authorised signatory
needs to be provided.

 All future correspondence from the GST portal will be sent on

this registered mobile number and email address.

 OTP would be sent to email ID and mobile number which needs

to be updated in the system.

 After this, the taxpayer would be able to login and fill the
enrolment form - information can be entered and details/
images can be uploaded to fill up the provisional registration 129
S.No Document File Max Size
. Format
1. Proof of Constitution of Business PDF or 1 MB
•In case of Partnership firm: Partnership JPEG
Deed of Partnership Firm (PDF and JPEG
format in maximum size of 1 MB)
•In case of Others: Registration Certificate
of the Business Entity

2. Photograph of Promoters/ Partners/ Karta JPEG 100 KB

of HUF
3. Proof of Appointment of Authorized PDF or 1 MB
Signatory JPEG
4. Photograph of Authorized Signatory JPEG 100 KB
5. Opening page of Bank Passbook/ PDF and 1 MB
Statement containing Bank Account JPEG
Number of < Account Number>, Address of
Branch, Address of Account holder and few
transaction details 130
131
132
133
134
RETURNS
under GST
135
 Types of Returns in GST
Format Description Due date
GSTR-1 Statement of Outward Supplies 10th of next month
GSTR-2 Statement of Inward Supplies 15th of next month
GSTR-3 Return 20th of next month
GSTR-4 Return for Compounding suppliers 18th of month in next quarter

GSTR-5 Return for Non-resident suppliers 20th of next month

GSTR-6 Return for ISD 13th of next month
GSTR-7 Return for TDS Deductors 10th of next month

GSTR-8 Return for E commerce Operator 10th of the next month

GSTR-9 ANNUAL RETURN on or before 31st December
following the end of the FY
137
 Various Types of Supply and Business Processes

1 3 8
• B2B B2C inter/intra
Taxable • Export – with/ without tax
Supply

• Exempt Supply
Non • Non GST Supply
Taxable
Supply

Other •Credit and Debit Notes

Business •Advances.
•Reverse Charge
process
 GSTR-1 :Statement of Outward Supplies
• Details of all supply made are captured
1. All B2B supplies –invoice wise.
2. B2C supplies more than Rs. 2.5 lakh (Only interstate )
3. Other supplies made to customers-state wise
4. Credit and Debit Notes – linkage to original invoice
5. Reverse Charge
6. Exports – with and without payment of tax
7. Exempt, Nil rated and Non-GST supplies
8. Tax paid on advances and adjustment of advances
9. Amendment of any of the above details filed in
previous months 139
 GSTR-2 :Statement of Inward Supplies

Significance :

• It determines the ITC eligibility.

• It is also transaction based statement.

• would be Auto populated from outward supply/ ISD/

TDS returns.

• Since it is a ITC claim made by the taxpayer, he can

change/delete/add auto populated details.
Statement of Inward Supplies:GSTR-2
 Invoices Auto-populated from GSTR-1
 Claimed – non auto-populated
 Supplies attracting reverse charge
 Import of Services
 Details of credit and debit notes :
Auto-populated/claimedISD Credit received
 TDS Credit received
 Other details of inward supplies
 From exempt/composition suppliers
 Exempt, nil rated and non-GST supplies
141
 Monthly Return-GSTR-3

• Auto-populated based on GSTR-1 and

GSTR-2
• Outward Supplies
• Inward Supplies
• Tax Liability
• Payment details
• Claim of Refund of ITC or cash ledger
142
ITC Claim : Provisional acceptance, Matching, Reversal & Reclaim
 ITC Matching Flow Chart
File GSTR-1 by 10th July Month
June

Reconcile
File GSTR-2 By 15th July 7days

File GSTR-3 by 20th July

Add in next month
Duplicates with interest
first
Cycle
Convey
Unmatched Both
Second
Cycle Supplier does not accept. Auto Supplier accepts. Shown in
reversed in Aug return with 2 month july return. One month
interest interest
Payment of Tax
under GST

145
 PAYMENT OF TAX
Chapter IX

1. Online tax payments :

internet banking , credit or debit cards or NEFT or RTGS etc

2. Bank payments are restricted to Rs. 10,000/- per

challan.

3. Challan to be generated from GSTN which will

have unique Common Portal identification no.
(CPIN). Valid for 15 days

4. Common challan for all the three taxes. 146

 Electronic Ledgers
Running electronic ledgers would be
maintained on the portal :
i. Tax Liability ledger

ii. ITC ledger

iii. Cash ledger

148
149
150
151
152
153
154
155
REFUND
SYSTEM

156
 Advantages of refund system in GST

• Refund scenarios limited.

• Total online process.
• Online verification to the extent possible.
• Refund shall be granted within 60 days.
• Immediate provisional sanction of 80% in
certain cases.
• Claimed within 2 years from the relevant
date. 157
 REFUNDS
Sec. 38
• Refund of ITC allowed in case of exports or where the
credit accumulation is on account of inverted duty
structure.

• No need to furnish evidence ( Unjust Enrichment)

if
the refund claim is less than Rs. 2 lakhs. Self-
certification would suffice.

• Communication and status check of refund

application by the dealer online.

• Minimal or no blockage of Capital 158

 Assessment & Audit
 Self –assessment of tax
 Provisional assessment- on request – to be finalized in six months .
 Provisions for assessment of non-filers, unregistered persons &
summary assessments in certain cases

Audit :
 (i) Statutory Audit for prescribed turnover (ii) Departmental Audit (Iii)
Special Audit

 Audit can be conducted at the place of business of the taxable person or

at the office of the tax authorities, after prior intimation to taxable
person
 To be completed within 3 months, extendable by period of 6 months .
 Taxpayer to be informed about findings, his rights and obligations .
159
 Demand and recovery
 Adjudication order to be issued within 3/5 years of filing of
annual return in normal cases & fraud / suppression cases
respectively .

 time lines for issue of SCN : at least 3/6 month before

adjudication order .

 Taxable person can settle at any stage, right from audit/

investigation to the stage of passing of adjudication order and
even thereafter.

 Alternate dispute resolution mechanism such as advance

ruling, Settlement Commission 160
 Adjudication & Appeals

• Additional /Joint Commissioner shall be the final Adj authority

• Commissioner / Additional Commissioner (Appeals) will be FAA.
• The second Appeal shall lie to the proposed GST Tribunals
• The National Bench or Regional Benches : to hear POS cases.
• State Bench for each state.

161
Dual Control & Cross-empowerment
• Each assessee would be assessed only by one authority.
• Taxpayers to be shared between assessment machinery

90 :10 turnover upto 1.5 crore

50: 50 above Rs 1.5 crore

Intelligence based enforcement : with both.

• Coastal states jurisdiction extends to territorial waters

• CGST/ SGST Officers have been cross empowered 162
 Tax deduction at source
Govt bodies & such other persons notified
@1% each
> Rs 2.5 lacs
 pay by 10th of next month.
TDS certificate
File a return
Collection of tax at source.
E Commerce Operator
Not exceeding 1% each 163
 TRANSITIONAL PROVISIONS

MIGRATION, CREDIT Job work

Goods sent
SALES PRICE
on approval
RETURN REVISION,
basis

164
 CHAPTER XX
TRANSITIONAL PROVISIONS

139. Migration of existing taxpayers.

140. Transitional arrangements for ITC

141. Transitional provisions relating to job work.

142. Miscellaneous transitional provisions.

165
 INPUT TAX CREDIT
TRANSITION

OLD PROCEDURE
JOB WORK ETC

PROCEEDIGNGS
EXISTING LAW

166
INPUT TAX CREDIT Carry forward of c/b credit

Unavailed credit capital goods

DUTY PAID STOCK

Taxable plus Exempt earlier

GOODS /SERVICES IN TRANSIT

ISD C. REGISTRATION 167

 OLD PROCEDURES
JOB WORK .
GOODS RETURNED.
 GOODS SENT ON APPROVAL BASIS.
PRICE REVISION OLD CONTRACT
TDS deducted under VAT law.
any goods or CG belonging to the principal
are lying at the premises of the agent (SGST)
168
PROCEEDINGS UNDER EXISTING LAW
 Refund claim of CENVAT credit, duty, tax, interest filed
before / after AD .

 Refund claim filed after the AD for any duty or tax paid
under existing law in respect of the goods or services
exported before or after the appointed day,

 Refund claim of Service tax filed after AD in respect of

services not provided.

 Old return revised after the AD- results in recovery or

refund. 169
 PROCEEDINGS UNDER EXISTING LAW

Every proceeding of appeal, review or reference relating to

• CENVAT credit initiated whether before, on or after the AD

under the existing law ( Claim or recovery)

• any output duty or tax liability initiated whether before, on or

after the AD under the existing law –( recoverable/admissible)

• assessment or adjudication proceedings instituted ,whether

before, on or after the AD, under the existing law, any amount
of tax, interest, fine or penalty becomes recoverable or
refundable
170
 Section 142 (10) of the GST ACT,2017

Save as otherwise provided in this

Chapter,
 the goods or services or both supplied
on or after the appointed day
in pursuance of a contract entered
into prior to the appointed day
shall be liable to tax under the
provisions of this Act. 171
 Point of taxation of existing law
(11) (a) notwithstanding anything contained in section 12, no
tax shall be payable on goods under this Act to the extent
the tax was leviable on the said goods under the Value
Added Tax Act of the State;

(b) notwithstanding anything contained in section 13, no tax

shall be payable on services under this Act to the extent
the tax was leviable on the said services under Chapter V
of the Finance Act, 1994;

(c) Tax shall be leviable under works contract to the extent of

supply made after AD with credit entitlement 172
GST from AD. No Tax if returned within : 6 + 2 months
ITC shall be liable to be recovered as per section 142(8)(a)

JOB WORK

SEMI
INPUT FINISHED
FINISHED
Manufacturer
Manufacturer may may transfer the
transfer the goods to goods on
premises of a RP payment of tax or
export
173
 Migration of existing tax Payer
• Any person registered under any of the
existing law and

• having PAN

• Provisional registration .

• Final registration after submission of certain

documents
174
INPUT TAX CREDIT
TRANSITION

175
 CGST SGST
LEDGER LEDGER

CX duty VAT

Service Entry
tax tax
Compounding dealers under Section 10 not eligible
177
 Carry forward of CENVAT/VAT
CENVAT credit /VAT carried forward in the last return can be
taken as Credit in electronic credit ledger.

Credit shall not be allowed if

1) Input credit is not allowed under this act.

2) He has not filed in last six months all returns proceeding
C
the appointed day. G
3) Where the credit relates to goods manufactured and TS
cleared under exemption notification as are notified.

178
File GST TRAN-1 within sixty days of appointed day.
 Additional Condition for SGST
 VAT c/f credit relating to CST cases
 Provided further that so much of the said credit as is
attributable to
 any claim related to Sections 3, 5(3), 6, 6A or 8(8) of the CST,
Act,
 which is not substantiated in the manner, and within the
period, prescribed in rule 12 of the Central Sales Tax
(Registration and Turnover) Rules, 1957
 shall not be eligible to be credited to the electronic credit
ledger:

The same shall be refunded under the existing law when the said
claims are substantiated 179
 Sections of the CST Act
Statutory Particulars of the transaction
Provisions

Section 3 Inter-state sale of goods from one state to

another

Section 5(3) Penultimate sale of goods preceding the

export of those goods

Section 6 In-transit sale, sale to officer, personnel, consular or

diplomatic agent of any foreign diplomatic mission or
United Nations or a similar body

Section 6A Inter-state branch transfer, transfers between

principal and agent, job-work transactions
180
Form Description Frequency

To be obtained for every

quarter and submitted on
C Declaration by purchasing registered dealer quarterly basis
to obtain goods at concessional rate

D Form of certificate for making government Abolished from 1 4-2007.

purchases)

To be obtained for every

quarter and submitted on
E-I/E-II Certificates for sale in transit quarterly basis

F Form by branch/consignment agent Monthly, but to be submitted

for goods received on stock transfer to authorities quarterly

G Indemnity bond when C form lost When required

Upto the time of
assessment by
H Certificate of Export first assessing authority.
Not specified in rules (but
should be submitted before
I Certificate by SEZ unit assessment).
J Certificate to be issued by Upto the time of
foreign diplomatic mission or consulate in assessment by 181
India or the UN Agency first assessing authority.
 Unavailed CENVAT/VAT on capital goods
which is not carried forward

Registered Person may take such balance credit

Conditions :
if it is allowed in the existing law as well under this Act.

Specify the following in Form GST TRAN-1 :

i] ITC availed under existing law before appointed day
ii] ITC to be availed till appointed day.
182
Who were not under CX/ST earlier
 RP who was not liable to be registered under the
existing law, or
 engaged in the manufacture of exempted goods or
 provision of exempted services or
 who was providing work contract services and was
availing the benefit of notification no. 26/2012
(abatement) or
 first stage dealer or second stage dealer or
 registered importer or depot of manufacturer,

credit of eligible duties on input in stock 183

Who were not under CX/ST earlier
Credit of eligible duties on input in stock on
the appointed day
subject to the following conditions .
1) If the Input is used for taxable supply under this
Act
2) RP is entitle for input tax credit under this Act
3) RP is in possession of Invoice or other duty
payment documents
4) Such Invoices not more than twelve months old.
5) Supplier of services is not eligible for abatement
184
 Who were not under VAT earlier
A RP who was not liable to be registered under
the existing law or
engaged in the sale of exempted goods or tax free
goods, or
goods which have suffered tax at the first point of
their sale in the State and the subsequent sales of
which are not subject to tax
where the person was entitled to the credit of
input tax at the time of sale of goods,
VAT credit on input on his stock 185
 Who were not under VAT earlier
VAT credit on input on his stock on
the appointed day admissible:
subject to the following conditions .
1) If the Input is used for taxable supply under this
Act
2) RP is entitle for input tax credit under this Act
3) RP is in possession of Invoice or other duty
payment documents
4) Such Invoices were not more than twelve
months old. 186
 Explanation 1.—For the purposes of sub-sections (3), (4) and (6), the expression
“eligible duties” means––

(i) the additional duty of excise leviable under section 3 of the Additional Duties
of Excise (Goods of Special Importance) Act, 1957;
(ii) the additional duty leviable under sub-section (1) of section 3 of the Customs
Tariff Act, 1975;
(iii) the additional duty leviable under sub-section (5) of section 3 of the Customs
Tariff Act, 1975;
(iv) the additional duty of excise leviable under section 3 of the Additional
Duties of Excise (Textile and Textile Articles) Act, 1978;
(v) the duty of excise specified in the First Schedule to the Central Excise Tariff
Act, 1985;
(vi) the duty of excise specified in the Second Schedule to the Central Excise
Tariff Act, 1985; and
(vii) the National Calamity Contingent Duty leviable under section 136 of the
Finance Act, 2001;
in respect of inputs held in stock and inputs contained in semi-finished or finished
goods held in stock on the appointed day. 187
 Not in possession of documents
evidencing payment of VAT /CX duty.
 There is a Scheme for RP for six tax period
 Not available to manufacturer or supplier of service

Credit @ 40% of central/state tax applicable

Conditions.
1) Such goods were not exempt or nil rated
2) Document of procurement is available with RP
3) pass on the benefit of such credit by way of reduced prices.

Submit statement of supply of such goods in each of six tax period.

Stocks stored should be easily identifiable 188

 Taxable as well as exempted activities
earlier but now taxable
Such RP is also entitled to

 Cenvat credit/VAT in respect of input , semi-

finished and finished goods in stock.

 attributable to such exempted goods or

services

Same conditions apply 189

 Input /input services in transit
• Received on or after the appointed day but the duty or
tax paid earlier
 RP may take credit of eligible duties and taxes

 the invoice has been recorded in the books within 30

days from the appointed day.

 Extendable by 30 days by Commissioner

 furnish a statement
ISD can also distribute such credit 190
tax at fixed rate or paying fixed amount in lieu
of tax payable under the existing law
 Earlier under Composition Scheme
 RP is entitled to the credit on his input stock, semi
finished and finished stock on the appointed date .
 subject to the following conditions;
1) Such Input stock used for taxable supply under this Act.
2) RP is not covered under section 10 of this Act.
3) RP is eligible for ITC under this Act.
4) RP is in possession of such Invoice or other duty
payment documents.
5) Such Invoices are not more than twelve months old on
appointed day 191
 Centralised Registration
 can take credit of the amount of CENVAT carry
forward in return furnished under the existing
law .

 If the original / revised return under the existing

law has been filed within three months .

 such credit may be transferred to any of the

registered persons having the same PAN for
which the centralised registration was obtained.
192
Reclaim the reversed Input Service credit

 Cenvat reversed on account of non

payment within three months.

Can be reclaimed

 If payment made in 3 months

from the AD. 193
 Transition provision for Job work
inputs removed before appointed
Semi finished
Finished goods day but returned after

• no tax shall be payable if such goods are received within six months .
• Period extendable by two months by Commissioner.
• Otherwise the ITC shall be recovered .
• No tax shall be payable in above cases , if such goods are declared by
manufacturer and job worker as prescribed.

• File declaration of stock in GST TRAN-1 detail of stock including

capital goods specifying stock held as principal, agent or branch 194
 Goods returned

Removed Before returned within

Appointed day
6 months 6 months

• Returned by a unregistered person : Refund

• Returned by a registered person : return of

goods shall be treated as supply of goods
195
 Goods sent on approval basis

Removed Before returned within

Appointed day
6 months 6 months

• No tax is payable by the returner.

• Commissioner may extend the period by 2 month.
• If returned after that, tax is payable if taxable
under GST ( by the returner)
• If not returned , tax is payable by the person who
sent the goods on approval basis. SGST 196
 TDS deduction
 Where a supplier has made any sale of goods

 TDS required under VAT Act and

 Invoice issued before the appointed day,

 where payment made on or after appointed day.

 no TDS under GST.

197
 Price revision
• Contract entered before appointed day
Upward price revision
• RP here will issue supplementary invoice or debit notes
within 30 days from the date of revision.
• Such revision shall be treated as supply under this Act.
Downward Revision
• RP may issue credit note within 30 days from such revision
and
• credit note shall be deemed to have been issued in respect
of outward supply made under this Act.
• RP will reduce his tax liability for such credit note 198
 Any claim for refund of CENVAT credit
under the existing law
 filed by RP before or after the appointed date
 shall be disposed under the existing law
 to be paid in cash
 If rejected , the credit shall lapse.
 no refund of CENVAT if carry forwarded.
 Same in respect of any proceeding of appeal, review
or reference for cenvat credit or output liability
under the exiting law
 In case of any demand , the same shall be recovered
as arrear of tax under this Act. 199
 RETURN
REVISED

RECOVERY REFUND
IF REVISED IN TIME
RECOVERED AS
IN CASH
ARREARS OF TAX 200
E-WAY BILL

201
Section 68 :Inspection of goods in movement.

(1) The Government may require the person in charge of a

conveyance carrying any consignment of goods of value exceeding
such amount as may be specified to carry with him such
documents and such devices as may be prescribed.

(2) The details of documents required to be carried under sub-section

(1) shall be validated in such manner as may be prescribed.

(3) Where any conveyance referred to in sub-section (1) is intercepted

by the proper officer at any place, he may require the person in
charge of the said conveyance to produce the documents
prescribed under the said sub-section and devices for verification,
and the said person shall be liable to produce the documents and
devices and also allow the inspection of goods 202
Draft Electronic Way Bill Rules
Rule 1. Information to be furnished prior to commencement
of movement of goods and generation of e-way bill

Documents and devices to be carried by a person-in-

charge of a conveyance
Rule 2.
Verification of documents and conveyances
Rule 3.
Inspection and verification of goods
Rule 4.
Facility for uploading information regarding
detention of vehicle
Rule 5. 203
 Furnishing of Information to generate e- way bill
• Before commencement of movement of goods
In relation to a ‘supply .Other than a supply. inward ‘supply’
from an unregistered person.
• Where consignment value > Rs. 50,000.
• FORM GST INS-01 Part A Part B
Goods Carriage
• Who will generate
TRANSPORTER

SUPPLIER RECIPIENT
204
 Period of validity
• 1 day to 15 days - 100KM to 1000 KM

• Unique E-Way bill Number (EBN)

• Generation and cancellation through SMS.

• Communication of details of E-Way bill to recipient, if

he is registered . 72 hours

• Transfer of goods from one conveyance to another

during transit- a new e-way bill 205
 Transportation of multiple
consignments in one conveyance .
• Consolidated e-way bill in FORM GST INS-2

• FORM GST INS-1

Cancellation of E-Way Bill

• within 24 hours of its generation.

• Can’t be cancelled if verified in transit 206

 Documents & Devices to be carried by a
person In Charge of Conveyance.
a) The invoice or bill of supply or delivery challan, as the
case may be; and

b) A copy of e-way bill: either physically or mapped to

embedded RFID

Embedded RFID with conveyance necessary for certain

transporters

Invoice Reference Number in lieu of the tax invoice

Upload tax invoice in FORM GST INV-1 207
 Verification of documents and conveyance
 Proper officer to intercept and verify the e way bill .
 RFID reader would be installed.

Inspection and verification of goods in transit

 Only with permission from Commissioner
 Physical verification only once
 Summary Report within 24 hours of inspection- Part A
of FORM GST INS-03.
 Final Report shall within 3 days of inspection- Part B of
FORM GST INS-03.

• Detention of Vehicle : exceeding 30 minutes

• The transporter may upload the said information in FORM GST INS-04. 208
 Summary of various FORMS
prescribed in e way bill rule
GST INS – 01 Information relating to movement of
- goods in Part A and part B

GST INS – 02 Consolidated e-way bill information

-

GST INS – 03 Summary report of Inspection in part A

- and final report in part B

Information by transporter on
GST INS – 04 common portal of any detention of
- conveyance exceeding 30 minutes 209
GSTN
210
 GST Network (GSTN)
 Incorporated on 28.03.2013 as Section 25 private limited company with authorized equity
of Rs. 10 crore .

 Strategic control to remain with Government.


 Equity Holders
• Central Government - 24.5%
• EC and all States together - 24.5%
• Financial Institutions – 51%

 GSTN would provide three front end services, namely registration, payment and return to
taxpayers.

 It will also assist some States with the development of back end modules.

 GSTN has already appointed M/s Infosys as Managed Service Provider at a total project
cost of around Rs 1380 crores for a period of five years.
211
 60 per cent of the software development has been completed;.
 WAY FORWARD….
 Constitution (101st ) Amendment Act,2016.

 GST Council held 13 meetings so far.

 CGST/IGST/UTGST ACTS passed by Parliament .

 SGST Act also passed by many states

 Out of nine sets of rules, five are finally approved

and four are tentatively approved.

 14th meet on May 18-19 in Srinagar 212

 WAY FORWARD….
 Fitment of goods & services in four slabs.

 Establishment and upgradation of IT framework.

 Training of Officials and Trade & Industry

 GST outreach programme.

 Reorganization of field formations 213

214
Company
LOGO It is time…………

Thank you…….
[email protected]
8989743422
215