do big webinar: introduction to gst - impact on your telecom business services

Content herein is proprietary and confidential information of Tata Teleservices Limited. Unauthorized distribution is strictly prohibited.

Introduction to GSTImpact on telecom business services

Tata Docomo Business Services




Overview

2



Content herein is proprietary and confidential information of Tata Teleservices Limited. Unauthorized distribution is strictly prohibited. 3

Overview – Basic understanding

► GST is a comprehensive value added tax on supply of goods and services

► It is a consumption based tax, which is a departure from the erstwhile regime of origin based

taxation

► A dual GST structure would be followed i.e. State and Centre to levy GST on common base

(CGST+SGST/ UTGST), in respect of all intra-state supplies of goods and services

► Integrated GST on all inter state supplies of goods and services (IGST)

► All sectors are covered with very few exceptions / exemptions




Overview – Taxes subsumed into GST

Taxes to be subsumed Taxes not to be subsumed

Central Taxes

State Taxes

► Central Excise Duty

► Additional Excise Duty

► Service Tax

► Additional Customs Duty

► Special Additional Duty of Customs

► Central Sales Tax

► Value Added Tax, Octroi, Entry Tax and Purchase Tax

► Entertainment Tax (other than tax levied by local

bodies)

► Luxury Tax

► Taxes on lottery, betting & gambling

Central Taxes

State taxes

► Basic Customs Duty and Export Duties

► Terminal taxes on goods or passengers, carried by

railway, sea or air/ taxes on railway fares and freights

► R&D Cess

► Stamp Duty, Electricity Duty

► Taxes on professions, trades, callings and

employments

► Taxes on vehicles/ goods and passengers carried by

road or on inland waterways




Overview – Need for GST

Given below is a snapshot of major indirect tax levied under the current Indirect tax regime

CompanyExcise Duty

Levied on manufacture of goods at an approximate rate of 12.5%

Customs Duty

Levied on import of goods at an approximate rate of 29.44%

Service Tax

Levied on provision of services at an approximate rate of 15%

Value Added Tax (VAT)

Levied on sale of goods within the state at 5% / 12.5% / 15%

Central Sales Tax (CST)

Levied on inter-state sale of goods at 2% (with C Form)

Entry tax/ Octroi/ Local Body Tax

Levied on entry of goods within state/ local limits (tax rate depends

on the nature of goods)

All above taxes and many other state and local levy gave rise to multiple compliances. Thus need for a

single levy arose.




Overview – Basic understanding

Ref. Procurement Current regime Under GST regime

A Imports/Clearance from FTWZ BCD + CVD + SAD; Customs cess** BCD + IGST

B Inter-State Purchases Excise + CST + Entry Tax + LBT/Octroi IGST

C Intra-State Purchases Excise + VAT CGST + SGST*

D Export Nil (Zero rated) Nil (Zero rated)

E Sale (interstate) Excise + CST IGST

F Sale (intrastate) Excise + VAT CGST + SGST*

G Import of Service Service tax IGST

H Inter-State receipt / supply of service Service tax IGST

I Intra-State receipt / supply of service Service tax CGST + SGST*

J Stock transfer interstate (under Form F) Excise duty (in case of manufactured goods)

+ VAT retention

IGST

K Stock transfer intrastate Excise duty (in case of manufactured goods) No tax in case of stock transfer within same

registration within same state




Where are we today

7




GST – Where are we today

Passage of Constitutional Amendment Bill (‘CAB’) in Rajya Sabha and Lok Sabha

Ratification of the CAB by >50% State Assemblies

Formation of GST Council

Introduction from July 2017

Finalisation of GST slab rates

(0%, 5%, 12%, 18% & 28%, cess in certain cases)

Passage of CGST, IGST, UTGST & Compensation law by Lok Sabha & Rajya Sabha

Current State

Categorisation of products into slabs and finalisation of rules

CGST, IGST, UTGST and Compensation cess Acts enacted

GST Bill gets presidents assent

State assemblies to consider and pass respective SGST Bills.

Finalisation of GST rules and initiation of industry outreach




GST – Key government milestones before Go-Live

Activities completed Critical/ Not critical

Finalise rate schedules under GST regime ( for goods and services ) Critical

Finalise the GST rules placed in public domain Critical

Activities in process of completion Critical/ Not critical

Testing of GST network prior to GST implementation Critical

Ensuring applicability of GST in the state of Jammu and Kashmir Critical

Passing of respective SGST Bills by all the State Assembly Critical

Activities to be startedCritical/ Not

critical

Finalise area based exemption of excise / VAT/ CST currently granted Not Critical

Identify jurisdictional officers / office for GST Not Critical




GST – Key concepts

10




GST – Proposed framework

100% Compensation

IGST on interstate supplies and

imports

Minimum

exemptions

Dual-GST

Salient features

► Centre and states to levy GST on

common base (CGST & SGST)

► Potentially aligned to current VAT

exemptions

► Integrated-GST (IGST) on inter-state

supplies/import of goods and services

► 100% compensation to the states for

five years towards loss of revenue due

to GST





Notes :

► Currently no GST will be

levied on Liquor for

human consumption.

► In case of Natural Gas,

Petroleum Crude, High

Speed Diesel, Petrol,

Aviation Turbine Fuel,

GST Council would

decide the effective date

for GST levy.

*CGST, IGST and SGST/UTGST will apply to the state of Jammu & Kashmir (not as of now but after necessary ratification by the Jammu & Kashmir State Assembly)

GSTcharged

on

Scope of GST

Type & timing of tax

► Person supplying goods or services (supplier)

► Person receiving goods or services in case of certain specified supplies (recipient)

► Extends to whole of India except Jammu & Kashmir *

► India has been defined to include territorial waters, continental shelf, exclusive economic zone or any other maritime zone

► Time of supply and Place of supply ancillary aspects of GST.

► Place of supply is basis for levy of CGST + SGST / UTGST or IGST




GST – Key concepts - Registration

► Registration to be obtained in each state from where a person supplies goods and/ or services

► TTL is registered in all States and UT except Andaman & Nicobar, Daman & Diu, Dadra & Nagar Haveli and J&K

► PAN based 15-digit GSTIN for each state

Provisional ID for the state of Maharashtra

State code – numeric code as per Indian Census 2011

Entity – number of registration of an entity in one state (1-9 and then A-Z)

► Multiple registrations within a state allowed subject to:

► The separate unit can be considered as a business vertical

► ITC allowed only when goods / services supplied across the verticals

► For recovery of dues all business verticals to be considered as a single legal entity

State Code PAN Entity Code Check

digit

2 7 A A A C T 2 4 3 8 A 1 Z T





SUPPLY OF

Goods/Services

Deemed Supply

of Goods/

Services

In the course or

furtherance of

business

PLACE OF SUPPLY

By taxable person

India Outside India

Intra-State Inter-State

Export under bond or without bond

If export then

zero rated

supply, else

IGST

If import / procurement

from SEZ - IGST

► Requirement of registration in relevant

State

► Liable to CGST + respective State’s SGST*

► Requirement of registration in the origin

State

► Liable to IGST




GST – Key concepts: Place of supply

Sr No Service Type Product Offerings Place of supply (TTL Enterprise Solution)

1 Wireless Mobile voice/ data, LBS etc Billing address

2a Wireline Leased circuit like MPLS, NPLC,

DLC, ILL, L2MC etc

Each state where point have been installed

(viz. for NPLC PoS would be State of point

A and state of point B)

2b Wireline Fixed line (split between a and b) State in which fixed line has been installed

3 Supply of goods Dongles, GPS equipments etc Place where the goods are delivered

Place of supply is crucial to identify type of GST (viz IGST/ CGST & SGST) applicable to a particular service




GST – Key concepts: Time of supply

Time of supply

Within time limit

Earlier of

Issue of invoice*

Receipt of payment**

Not within time limit Earlier of

Provision of service

Receipt of payment**

Other caseReceipt of services in books of

accounts of recipient (if time of supply not determinable from above)

*Invoice needs to be issued before within 30 days of supply of service

** It shall be earlier of payment entered in books of account or the date on which the payment is credited (debited in case of reverse charge) in bank account




GST – Key concepts: Credit mechanism

Vendor activity

Customer activity

Month 1 Month 2

Vendor raises GST

invoice on

customer

Customer records

invoice and credit in

books

Vendor reports the

invoice in GSTR –

1 by 10th of next

month

Basis vendors

return credit moves

online to customers

online credit register

in GSTR-2A

Customer matches

GSTR-2A with

credit register and

makes necessary

changes

Changes made by

customer

communicated to

vendor

Changes are

provisionally

accepted and

allowed as credit in

GSTR-2

If the vendor

rejects the

changes and

also doe not

upload the

invoice in

next month,

then credit

amount is

added to

liability of

customer

along with

interest

Month 3




GST – Key Concepts – Returns

Report Name Purpose Due Date

GSTR-1 (Monthly) Outward supplies 10th of next month

GSTR-1A (Monthly) Details supplied by recipient Auto Populated

GSTR-2 (Monthly) Inward supplies 15th of next month

GSTR-2A (Monthly) Details supplied by the supplier Auto populated

GSTR-3 (Monthly) Monthly return 20th of next month

GSTR-6 (Monthly) ISD return 13th of next month

GSTR-6A (Monthly) Details furnished by the supplier to ISD recipient Auto Populated

GSTR-9 (Annually) Annual return 31st December of subsequent FY




Impact on TTL Enterprise services

19




GST – Impact on TTL services: Customer invoice

Customer (AP)

(Tel)

Customer

(Karnataka)

Customer

(Rajasthan)

Current Scenario

TTSL

GST Scenario

Customer (AP)

(Tel)

Customer

(Karnataka)

Customer

(Rajasthan)

TTSL

Circle wise invoice to single billing address

Separate invoice for each installation state

Impact Areas Current scenario GST Scenario

Value of serviceSingle consideration can be considered for all the links installed

in multiple statesMandatory to bifurcated the consideration between each

state where links have been installed

BillingSingle Invoice can be generated for all the links provided to the

customer

Separate billing for each state(However, a consolidated statement of account can be sent to

customer at central location)

Tax Service tax is charged SGST and CGST of respective state to apply

Customer masterInvoice to contain customer GST registration number and

address of each stateInvoice to contain customer GST registration number and

address of each state




GST – Impact on TTL services: Customer invoice – Fixedline

Current Scenario

Account name Account No. Service type Installation address Billing address Taxes charged

Kotak Securities

Limited202102123 Standard Wireline Vijayawada Hyderabad Service tax

GST Scenario

Account name Account No. Service type Installation address Billing address Taxes charged

Kotak Securities

Limited202102123 Standard Wireline Vijayawada Vijayawada

CGST (AP) and

SGST (AP)

Impact Areas GST impact Customer Impact

Billing address Place of supply = AP Change in billing address from Hyderabad to Vijayawada

Customer masterUpdate customer GST registration number and

addressCustomer to provide GST details in relevant state

Tax AP SGST and CGSTCurrent service tax would be replaced with GST applicable

in respective state

Consolidated statement No impact -




GST – Impact on TTL services – Customer Invoice – NPLC

Current Scenario

Account name Point A state Point B state Revenue booking circle Billing address Taxes charged

Intas Pharmaceuticals Gujarat Assam Gujarat Ahmedabad Service tax

GST Scenario

Account name Point A state Point B state Revenue booking state Billing address Taxes charged

Intas

PharmaceuticalsGujarat Assam Gujarat Assam Ahmd Assam

CGST (Guj)

&SGST (Guj)

CGST (Assam)

&SGST (Assam)

Impact Areas GST impact Customer impact

Invoicing Separate invoice for each stateCurrent single invoice to be replaced with separate invoice

for each state where links have been installed

Customer masterUpdate customer GST registration number and

addressCustomer to provide GST details for each state

TaxCGST and SGST of each state where links are

provided

Current service tax would be replaced with GST applicable

in respective state




GST – Impact on TTL services – Customer Payments

Current Scenario

► Currently, for certain services TTL receives advance from the customers at the time of service activation

► TTL discharges service tax on advance received. A receipt is given to the customer for such advance payment.

► Advance collected are adjusted against customer invoices issued subsequently.

GST Scenario

► Any amount received in advance will trigger GST liability on TTL.

► TTL is required to issue Advance Receipt Document (ARD) to the customer for amount received in advance

► Advances received from customer account in one state can be adjusted only against subsequent invoicing only on same customer

account in the same state

► It is imperative for customer to specifically communicate payment of advance to TTL along with details of correct Account

number and GST registration number in the state relevant for such Account.

► Customer will not be able to avail credit on the basis of ARD. Credit can be availed only on the basis of subsequent invoice to be issued

by TTL.




The customer has taken DLC services between Telangana and Andhra Pradesh.

How many invoices would the customer be getting for such services in GST

regime?

24




Can TTL issue single invoice for MPLS services received in multiple states?

25




FeedbackFor more information on

GST applicable on our

services contact us on

Email: [email protected]

Call: 1800 266 1515

Request your valuable inputs at the end

of the webinar. The form will open

automatically.




Q&A session

27


Thank you

Call : 1800 266 1800

Email : [email protected]

Visit : www.tatadocomo.com/business


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