Overview of Goods and Service Tax on Works Contract

By S.Ranga Swamy, B.Com., A.C.A., B.L.,

mail id: rangaswamy_singa@yahoo.co.in

Mobile: +91 88978 77900

Shortcomings of existing tax structure

Current Indirect Tax Structure & GST Components

Levy of GST

Supply

Time of Supply and Tax Invoice

Way Bill

Place of Supply & Value of Supply

Taxable Person

Registration

Filing of Monthly & Annual Returns

Input Credit and Input Credit Distribution

Maintenance of Records

Transitional Provisions

Impact of GST

Index

Shortcomings of existing tax structure

Multiple Taxes

• Excise Duty, Service Tax, VAT/CST, Entry Tax etc., being levied on the

same supply chain. Tax on Works Contract is always in dispute.

Cascading Effect

• Inconsistent levy on value addition; leads to tax on tax. Cross availability of credit absent. Example- Levy of CST or VAT on Excise Duty. Levy of Entry Tax on Excise Duty & CST.

• Setoff not available on certain taxes levied. Example- CST setoff not allowed. Service provider not eligible for setoff of SAD of Customs.

• Entry Tax setoff not allowed by some States

Double Tax on single transaction

• Levy of taxes by both Central and State Govts., on same transaction

Example- Levy of VAT & Service Tax on software package, hire charge

Fragmented Economy

• Variety of State wise VAT Laws with disparate tax rates and dissimilar tax practices divides country into separate economic areas. Ex- VAT

Rate on Cement is 14.5% in AP, 16.5% in UP, 15% in Gujarat.

• Creation of tariff and non-tariff barriers such as octroi, entry tax, check posts, etc., hinder free flow of trade throughout the country

and in turn affect growth rate.

Tax Compliance

• High compliance cost for the taxpayers in the form of number of returns,

statutory forms, payments, audits, assessments, appeals. • In view above difficulties, Government brought a single tax levy called Goods

and Services Ta which will be dual levy collected by Centre & State on supply of goods or services at each stage of supply chain starting from

manufacture or import and till the last retail level.

Present Indirect Tax Structure

Central Taxes State Taxes

Basic Customs Duty

Service Tax

VAT

Current Indirect Taxes

Addl.

Customs

Duty

(Counter

vailing

Duty)

Addl.

Excise

duties

(AED)

Entry Tax

Excise Duty

Special

Addl.

Duty

(SAD)

Medicinal

and

Toiletries

Preparation

Act

Surcharges & Cess

CST Octroi Other Taxes

Stamp Duty

Property Tax

Entertainment Tax

Lottery Tax

Luxury Tax

Excise/ VAT on liquor

Electricity Duty

Royalty/ Vehicle

Tax

Indirect Tax

Central Taxes State Taxes

Customs Duty related

Service Tax VAT

Taxes Subsumed in GST

Addl.

Customs

Duty

(Counter

vailing

Duty)

Addl.

Excise

duties

(AED)

Entry Tax

Excise Duty

Special

Addl.

Duty

(SAD)

Medicinal

and

Toiletries

Preparation

Act

Surcharges & Cess

CST Purchase

Tax Other Taxes

Octroi in lieu of Entry Tax

Lottery Tax

Entertainment Tax Luxury Tax

Goods & Service Tax

CGST (Central GST) SGST (State GST)

Excise Duty VAT

Components of GST under which Existing Taxes Subsumed

Addl.

Excise

duties

(AED)

Entry Tax

Service Tax

Medicinal

and

Toiletries

Preparation

Act

Surcharges & Cess

CST Purchase

Tax Other Taxes

Octroi in lieu of Entry Tax

Lottery Tax

Entertainment Tax

Luxury Tax

IGST (Integrated GST)

Customs Duty related

Addl.

Customs

Duty

(Counter

vailing

Duty)

Special

Addl.

Duty

(SAD)

Indirect Tax

Central Taxes State Taxes

Basic Customs

Duty

State Excise /VAT on Alcohol

Taxes Not Subsumed in GST

Excise Duty on Petro Products

5 specified Petroleum

Products namely

petroleum crude, HSD,

motor spirit(known as

petrol), natural gas,

aviation turbine fuel

Electricity Duty

Other Taxes

Octroi by local bodies

VAT on 5 Petroleum Products

Entertainment Tax levied by local

bodies

Stamp Duty,

Property Tax

Excise Duty on Tobacco

Royalty on Minerals Environmental

Taxes (Vehicle Tax)

Intra-state supply

CGST + SGST on intra-state supply (within

Telangana State )

Inter state supply

Only IGST on inter-state supply (From Telangana State to Tamilnadu State )

Imports

Exports

•Zero-rated

•No tax on export

•Full refund of ITC

(From Tamilnadu State to Outside India)

•IGST on Services

•BCD+ IGST on Goods

(From Outside India to Telangana State)

Cross Border (Outside

India)

Levy of GST

Telangana State

Tamilnadu State

Levy of GST

It is consumption based tax levy on value added at each stage across supply chain.

GST does ot diffe e tiate et ee Goods a d Se i es

Taxes are borne by the ultimate consumer of goods or services

Taxable event is Suppl of goods o se i es u de GST as agai st the a ufa tu e/ production of goods for central excise duty or provision of services for service tax or sale of

goods for VAT/CST or incorporation of materials in works contract under current tax laws.

In general Tax to be paid by Supplier. But receiver has to pay under Reverse Charge

Mechanism (RCM) when–

• Goods or services procured from unregistered dealer

• Transport services provided by GTA

• Legal Services provided by individual advocate or firm of advocates

• Services by a Director of a company

• Services supplied by the Central /State Government, Union territory or local authority to

a business entity excluding -

renting of immovable property

services by Dept of Posts by way of speed post, express parcel post, life insurance,

agency services

transport of goods or passengers.

Levy of GST

Composition Scheme –

Composition Tax Rate is 2% on Turnover for manufacturer, 5% for Restaurants and 1% for

others. Following persons can not opt scheme-

• Aggregate turnover with same PAN on all India basis exceeds Rs 75 lakhs in FY

• In interstate outward supplies

• Engaged in supply of services

• Engaged in supply of goods not leviable to tax under GST

• Manufacturer of such goods as notified

Conditions-

Permission to be obtained from Proper Officer

He shall not collect any tax from recipient on supplies made by him

Not entitled to any credit of input tax.

Pay tax on inward supply of goods or services received from un-registered persons

GST Rates (Upper cap 20% in case of CGST & SGST and 40% in case of IGST)-

5% (special), 12% (concessional), 18% (standard) & 28% (demerit) and Cess on Demerit

Items.

Levy of GST Supply to SEZ and Export of goods / services – Zero rated.

Supplier shall be allowed to export the goods/services without charging any tax, and can

avail the CGST/SGST & IGST credits paid on inputs/ input services. If he is unable to utilize

the credit then he can claim for refund of credits.

Export of Services means the supply of any service when:

a) the supplier of service is located in India.

b) The recipient of service is located outside India,

c) The place of supply of service is outside India,

d) The payment of such service has been received by the supplier of service in convertible

foreign exchange, and

e) The supplier of service and recipient of service are not merely establishments of a distinct

person in accordance with explanation 1 of Sec 8.

Explanation1: For the purposes of this Act,-

(i) an establishment of a person in India and any of his other establishments outside India, or

ii) an establishment of a person in a State or UT and any of his other establishments outside

that State or UT, shall be treated as establishments of distinct persons.

Supply

Supply includes –

all forms of supply of goods /services such as sale, transfer, barter, exchange,

license, rental, lease or disposal made or agreed to be made for a consideration in

the course or furtherance of business.

import of services for consideration. It is not necessary that import of services

should be made for furtherance of business. Import of services with consideration

for personal use also covered. Consideration includes

a. any payment whether in money or otherwise but not include any subsidy given

by Govt.

b. monetary value of any act or forbearance, whether or not voluntary for supply

of goods or services but shall not include any subsidy given by Govt.,

Provided that deposit shall not be considered as payment made unless supplier

applies deposit as consideration for supply.

Goods means every kind of movable property other than money and securities

but 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.

Supply

Matters to be treated as supply even if made without consideration(Schedule-1)

Permanent transfer/disposal of business assets where input tax credit has been

availed on such assets (Example - gift/donation of assets, destruction etc.)

Supply of goods or services between related persons or between distinct persons

in the course or furtherance of business (branch transfer, sample, promotional

exp.). Gift less than Rs 50000/- by employer to employee shall not be treated as

supply.

Supply of goods by a principal to his agent where the agent undertakes to supply

of such goods on behalf of the principal and vice versa

Importation of services from a related person or from any of his other

establishments outside India, in the course or furtherance of business

Supply

Matters to be treated as supply of goods or services (Schedule-2)

• Transfer -

Any transfer of the title in goods is a supply of goods. (Example-Sale in Transit)

Any transfer of goods or of right in goods or of undivided share in goods without

the transfer of title thereof, is a supply of services (Example- Hire-Purchase)

Any transfer of title in goods under an agreement which stipulates that property

in goods will pass at a future date upon payment of full consideration as agreed

is a supply of goods.

Land and Building

Any lease, tenancy, easement, licence to occupy land is a supply of services

Any 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

Treatment or process

Any treatment or process hi h is ei g applied to a othe pe so s goods is a supply of services (Example-Job Work)

Supply

Matters to be treated as supply of goods or services (Schedule-2)

• Transfer of Business Assets-

Any transfer or disposal of business assets (Example - gift / donation of

assets, destruction, etc.)

Application of business assets to any private use i.e., for non-business

use (Example- use of fixed assets, office equipment, software, motor

vehicle etc.,, by employee for personal use)

Assets retained after ceases to be a taxable person (on cancellation of

GST Registration) unless the business is transferred as a going concern

to another person or the business is carried by a personal

representative who is deemed to be a taxable person.

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

member thereof for cash, deferred payment or other valuable

consideration.

Supply The following shall be treated as Supply of Service (Schedule-2)

renting of immovable property

construction of a complex, building, civil structure, except where entire consideration has

been received after issuance of completion certificate by competent authority or before

its first occupation, whichever is earlier.

temporary transfer or permitting the use or enjoyment of any intellectual property right

development, design, programming, customisation, adaptation, upgradation,

enhancement, implementation of information technology software

agreeing to refrain from an act or to tolerate an act or a situation, or to do an act.

Example: forfeiture of advance, cancellation charges of order, liquidated damages, fees

for agreeing not to compete, Demurrage charge etc.,

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

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

Activities/transactions not treated as supply (Schedule-3)

Services by an employee to the employer due to his employment.

Sale of Land or Building except sale under construction of building

“Services by way of any activity in relation to a function entrusted to a Panchayat under article 243G of the Constitution.”

Levy of GST on Works Contract

Composite Supply comprising two or more supplies, one of which is a principal

supply, shall be treated as a supply of such principal supply.

Pri ipal Supply means the supply of goods or services which constitutes the

predominant element of a composite supply and to which any other supply

forming part of that composite supply is ancillary;

Schedule-II Specifies Composite supplies as-

a) works contract

b) supply of goods, being food or any other article for human consumption or any

drink

Works Co tra t means a contract for building, construction, fabrication,

complétion, érection, installation, fitting out, improvement, modification, repair,

maintenance, renovation, alteration or commissioning of any immovable property

wherein transfer of property in goods (whether as goods or in some other form) is

involved.

The word I ova le Property is not defined under GST Law. However in terms

of Section 3(26) of the General Clauses Act, 1897 immovable property shall

include land, benefits to arise out of land and things attached to the earth or

permanently fastened to anything attached to the earth.

Levy of GST on Works Contract

Pla t a d Ma hi ery means apparatus, equipment, and machinery

fixed to earth by foundation or structural support that are used for

making outward supply of goods or services or both and includes such

foundation and structural supports but excludes—(i) land, building or

any other civil structures; (ii) telecommunication towers; and (iii)

pipelines laid outside the factory premises.

Mixed supply comprising two or more supplies shall be treated as

supply of that particular supply which attracts the highest rate of tax.

Example-

A car repair service with a set of tyres for a single consideration.

A bundle containing sweets, dry fruits, canned juice & chocolate

The following guidelines can be adopted to determine whether a supply

would be a Composite Supply or a Mixed Supply-

Description Composite

Supply

Mixed

Supply

Naturally bundled Yes No

Supplied together Yes Yes

Can be supplied separately No Yes

One is predominant supply for recipient Yes No

Othe suppl is ot ai i itself of recipient

Yes No

Each supply priced separately No No

All supplies are goods Yes Yes

All supplies are services Yes Yes

One supply is goods and other supply is

services

Yes Yes

Levy of GST on Works Contract

A principal can send inputs or capital goods for job work without

payment of tax.

Principal can bring back inputs, after completion of job work or

capital goods to any of his place of business without payment of tax.

Provision for supply of inputs (after completion of job work) and

capital goods directly from premises of job worker.

Time limit for return or clearance from job-worker premises has been

kept as 1 year for inputs and 3 years for capital goods (other than

mould sand dies, jigs and fixtures or tools).

It shall be deemed as supply if goods not returned or cleared within

the time specified.

The Principal is responsible for accountability of such goods.

Job Work

Time of Supply

Event Time of Supply

Supply of goods Earliest of:

a. Date of issue of invoice by the supplier or the last date on which

he is required to issue the invoice;

b. Date on which supplier receives the payment

Supply of services Earliest of:

a. Date of issue of invoice by the supplier or Date on which supplier

receives payment if invoice is issued

b. Date of provision of service if invoice not issued within time or

Date of receipt of payment

c. Date on which recipient shows receipt of services in books of A/Cs

Supply of goods

attracting reverse

charge

Earliest of:

a. Date of receipt of goods;

b. Date on which payment is made;

c. 30 days from the date of invoice

Supply of services

attracting reverse

charge

Earliest of:

a. Date on which payment is made;

b. 60 days from the date of invoice

Date of entry in books of A/Cs of recipient if not possible to determine as above for RCM

Time of Supply

Event Time of Supply

Time of supply of services

for Associated Enterprises

Earliest of:

a. Date of payment

b. Date of entry in the books of accounts of

recipient

Time of supply for issue

of Vouchers by whatever

name called such as

coupons

a. Date of issue of voucher if supply is

identifiable at that point or

b. Date of redemption of voucher in all other

cases

If not possible to

determine the time of

supply in the manner

specified above

a. The date of GST Return to be filed where

return is required to be filed or

b. In any other case the date of payment of tax

Tax Invoice

A tax invoice should contain the details of-

name, address and GSTIN of the supplier / recipient;

consecutive serial number, in one or multiple series, containing only alphabets/

numerals/special characters hypen or dash and slash (- and /), unique for FY

date of issue

address of delivery, name of State and its code, if recipient is unregistered

HSN (Harmonised System Nomenclature) code of goods or SAC(Service

Accounting Code) of services;

description of goods or services;

quantity in case of goods and unit or Unique Quantity Code thereof;

total value / taxable value of goods or services;

rate and amount of tax (CGST, SGST or IGST);

place of supply, name of State in case of inter-State trade or commerce;

place of delivery where the same is different from the place of supply;

whether the tax is payable on reverse charge;

I di ate the o d Revised Invoice/ Supplementary I oi e p o i e tl as the case may be with the details of the date and number of the original invoice;

signature or digital signature of the supplier or his authorized representative.

Tax Invoice

Tax Invoice Conditions

For supply

of goods

a) before or at the time of removal of goods for supply to the

recipient, where the supply involves movement of goods, or

b) in other cases delivery of goods or making available thereof to

recipient

For supply

of services

within 30 days from the date of supply of services. For this

purpose Govt., may prescribe any other document as tax invoice

or tax invoice may not be issued.

For

continuous

supply of

goods

Continuous supply of goods means a supply of goods which is

provided or agreed to be provided, continuously or on

recurrent basis, under a contract, whether or not by means of a

wire, cable, pipeline or other conduit, and for which the

supplier invoices the recipient on a regular or periodic basis.

Where successive statements of accounts or successive

payments involved, invoice shall be issued as the case may be-

a. before or at the time each such statement is issued or

b. each such payment is received.

Tax Invoice To issue

Tax Invoice

Conditions

For

continuous

supply of

Services

Continuous supply of services means supply of services provided or

agreed to be provided, continuously or on recurrent basis, under a

contract, for exceeding 3 months with periodic payment obligations

Where due date of payment is ascertainable from contract, invoice

to be issued on or before due.

Where due date of payment is not ascertainable from contract,

invoice to be issued before or at the time when supplier receives

payment

Where payment is linked to the completion of an event, invoice to

be issued on or before the date of completion of that event.

Where supply of services ceases under a contract before completion

of supply, invoice to be issued at the time when supply ceases and

such invoice to be issued to the extent of supply effected before

cessation.

Govt may notify the goods or services treating for continuous supply.

Tax Invoice

Example-

Continuou

s supply of

goods

Spencer is supplying Juice Pockets to ABB Ltd everyday as per

their indent and submitting a statement of account on every

Monday for which payment is being received within 3 days. In

this case Tax Invoice is to be raised at the time of submission of

statement of account on every Monday.

In the above case, if payment of Rs 500/- is being received on

every Monday for 4 weeks of the month and monthly bill for Rs

2800/- is raised, then invoice is to be issued on each time of

amount received and for balance Rs 800/- invoice is to be

submitted when it is due for submission.

Continuou

s supply of

services

Where due date of payment towards construction of flats in Multi storied complex is fixed to be 10th of each month in agreement then invoice is to be raised on or before the above date.

Where due date of payment is not mentioned in construction contract and payment received on 15-5-2017 then raise invoice before or on 15-5-2017

If payment to be made on completion of plinth area, 1st floor &

2nd floor then raise invoice on or before completion of each stage.

Tax Invoice

To issue

Invoice

Conditions

A bill of

supply

A bill of Supply is to be issued for supply of exempted goods /services

which does not contain tax details

Receipt Receipt Voucher is to be issued for receipt of advance payment

Payment

Voucher

Payment Voucher to be issued by a registered person to pay tax under

RCM for goods/services received by him from Un-registered person

Supply of

goods on

approval

basis

Earliest of :

a. Before or at the time when it is known that supply has taken place or

b. Six months from the date of removal

By Goods

Transport

Agency

To issue a tax invoice or any other document in lieu thereof, by

whatever name called for transportation of goods by road in a goods

carriage, containing gross weight of consignment, name of consignor

& consignee, registration number of goods carriage, details of goods

transported, details of place of origin & destination, GSTIN of person

liable for paying tax whether as consignor, consignee or GTA etc.,

Tax Invoice

For supply of goods, Invoice to be prepared in Triplicate.

Original Copy: For Recipient

Duplicate Copy: For Transporter

Triplicate Copy: For Supplier

For supply of services, Invoice to be prepared in Duplicate:

Original Copy: For Recipient

Duplicate Copy: For Supplier

Supply involves movement of

goods

Invoice

Date

Removal of

goods

Delivery of

Goods

Receipt of

payment

Time of

supply

Delayed issue of Invoice 26-10-17 20-10-17 26-10-17 26-10-17 20-10-17

Inter-State Stock Transfer 10-10-17 20-10-17 26-10-17 10-10-17

Advance Received but invoice

issued for full amount

30-10-17

(Rs 100/-)

10-11-17 14-11-17 30-10-17

(Rs 40/-)

20-11-17

(Rs 60/-)

30-10-17

(Rs 100/-)

Supply does not involves

movement of goods

Invoice

Date

Invoice

received on

Delivery of

Goods

Receipt of

payment

Time of

supply

Delayed issue of Invoice 30-10-17 5-11-17 26-10-17 10-11-17 26-10-17

Invoice issued prior to delivery 20-10-17 10-11-17 26-10-17 10-11-17 20-10-17

Continuous Supply of goods Invoice

Date

Removal of

goods

SOA/ Payment

Due date

Receipt of

payment

Time of

supply

1-11-17 15-10-17 &

25-10-17

5-11-17 1-11-17 1-11-17

11-12-17 8-11-17 &

30-11-17

5-12-17 11-12-17 5-12-17

8-1-18 14-12-17 &

23-12-17

5-1-18 1-1-18 1-1-18

Time of Supply - Invoice

Reverse Charge for Goods Date of

Invoice

Removal of

Goods

Receipt of

Goods

Payment

Date

Time of

Supply

General 31-10-17 31-10-17 20-11-17 30-11-17 20-11-17

Advance Paid 31-10-17 31-10-17 20-11-17 5-11-17 5-11-17

No payment made 31-10-17 30-12-17 5-1-18 30-11-17

Service based on due date Invoice

Date

Commenced

Service Date

Completion

Date

Payment

Date

Time of

Supply

Delayed issue of invoice 26-12-17 20-10-17 16-11-17 28-1-18 16-12-17

Advance Received but invoice

issued for full amount

30-10-17

(Rs 100/-)

30-10-17 30-12-17 30-10-17

(Rs 40/-)

4-12-17

(Rs 60/-)

30-10-17

(Rs 100/-)

Continuous Supply of Services Invoice

Date

Date as per

Contract

Payment

Date

Entry in

the books

Time of

supply

Due Date is 10th of next month 2-11-17 10-11-17 15-11-17 31-10-17 2-11-17

17-12-17 10-12-17 15-12-17 30-11-17 10-12-17

10-1-18 10-1-18 6-1-18 31-12-17 6-1-18

On completion of event. To

pay in 1 month from date of

completion

12-11-17 10-11-17 25-11-17 12-11-17 10-11-17

24-4-18 24-4-18 20-4-18 24-4-18 20-4-18

Time of Supply - Invoice

Reverse Charge for Services Date of

Invoice

Completion

Date

Payment Date Entry in

Books

Time of

Supply

General 31-10-17 31-10-17 20-11-17 30-11-17 20-11-17

Advance Paid 31-10-17 31-10-17 5-11-17 31-10-17 5-11-17

Delay in Payment 31-0-17 31-10-17 10-1-18 31-10-17 31-12-17

From Associated Enterprise

located in outside India

31-10-17 30-11-17 5-4-18 31-3-18 31-3-18

Service by Unregistered Person - 30-11-17 - 5-12-17 5-12-17

Time of Supply - Invoice

Way Bill for Movement of Goods

• E-Way Bill is required for movement of all goods where consignment value exceeds

Rs 50000/-, whether within State or across States. E-way bill is required even for

transport of exempted goods. Example-transport of agricultural products.

Registered person who causes movement of goods has to upload details of goods

in Part-A of Form GST INS-01. In case transported as Consignor or Consignee in his

own conveyance or hired one, the Way Bill in Form GST INS-1 is to be generated

after furnishing details in Part-B also.

In case goods are handed over to Transporter, the registered person has to upload

the details of transporter in Part-B and e-way bill will be generated by transporter.

Upon generation of e-way bill on GSTN portal, a unique e-way bill number (EBN)

shall be made available to the supplier, recipient and transporter.

If goods are transferred from one vehicle to another in the course of transit, a new

e-way bill is to be generated before such transit and further movement.

Where multiple consignments pertaining to different suppliers are to be

transported in one vehicle, the transporter is required to indicate the serial

number of e-way bills generated in respect of each such consignment. A

consolidated e-way bill in the Form GST INS-02 is to be generated by the

transporter prior to the movement of goods. Even if consignor not generated e-

way bill, Transporter shall generate it on the basis of invoice/ delivery challan.

Way Bill for Movement of Goods When details are furnished by unregistered supplier in Form GST INS-01, he shall be

informed electronically if mobile number or e-mail is available

If goods are not transported or requires changes, e-way bill may be cancelled within 24

hours of generation but cannot be cancelled if verified in transit.

Recipient if registered has to communicate his acceptance or rejection of the consignment

covered by the e-way bill. It will be deemed as accepted if not communicated within 72

hours of details available to him in portal.

Transporter shall carry Invoice or Delivery Challan and e-way bill or e-way bill no. either

physically or mapped to a Radio Frequency Identification Device (RFID) embedded on to

vehicle

On suspicion of tax evasion, a physical verification of vehicle can be carried out by an

officer after obtaining necessary approval from commissioner or an officer authorized. If

physical verification of vehicle is done at one place –within the state or in any other state,

no further physical verification will be carried out again during the transit, unless specific

information of tax evasion is made available subsequently.

After every inspection, the officer needs to record the details of the inspection of goods in

Part- A of Form GST INS-03 within 24 hrs of inspection and the final report must be

recorded in Part B of Form GST INS 03 within 3 days of inspection. If the vehicle is detained

for more than 30 minutes, the transporter has an option to complain by uploading the

details in Form GST INS 04.

Way Bill for Movement of Goods

E-way bill generated is valid for the specified period upon the distance involved

Distance Validity for

Less than 100 KM 1 Days

Between 100 KM to 300 KM 3 Days

Between 300 KM to 500 KM 5 Days

Between 500 KM to 1000 KM 10 Days

More than 1000 KM 15 Days

Place of Supply

Place of Supply is relevant in case of inter-state supply.

Inter-State Supply – Supply where the location of the supplier and the place

of supply are in different States.

Deemed Inter-State Supply-

Supply in the course of import.

Export - When the supplier is located in India and the place of supply is

outside India.

Supply to or by a SEZ developer or an SEZ unit.

Any supply in the taxable territory, not being an intra-state supply and not

covered elsewhere.

in case of Supply of goods Place of Supply

Supply involves movement of goods by any

person

Place of termination of

movement of goods for delivery

Supply is delivered by way of transfer to title

documents on directions of a third person, either

before or during movement of goods

Place of principal place of

business of such third person

Supply does not involve movement of goods Place of location of goods at the

time of delivery

Goods are assembled or installed at site Place of assembly or installation

Goods are supplied on board a conveyance, viz.

vessel, aircraft, train or motor vehicle. This

clause covers goods other than food / beverage

as food/ beverage treated as service.

Location at which goods taken on

board.

If place of supply cannot be determined as above In the manner prescribed by Govt

Performance based services

Restaurants and catering; grooming; fitness;

health service

Location of the services actually

performed.

Place of Supply

In case of Supply of Services Place of Supply

Related to immovable property;

lodging; accommodation; holding of

functions

Location of such immovable property or boat or

vessel

Telecommunication services; DTH,

cable,

broadcasting, data transfer

a) Fixed line connection – place where the same

is installed.

b) Mobile/Internet post paid connection– the

billing address of service recipient

c) Mobile/Internet prepaid connection – where

such vouchers are sold

Training and performance appraisal Location of registered service recipient;

If services provided to unregistered person then

location where services are actually performed;

Banking; financial; stock broking Location of recipient of services on the records

of supplier; If service is not linked to the

account of recipient of services, then the

location of supplier;

Advertising services to Government Location shall be the State for which

advertisement is done

Place of Supply

Supply of services Place of Supply

Insurance Location of registered service recipient; If services provided

to unregistered person then address on the records of

supplier;

Organization of events,

exhibitions, sponsorships

Location of registered service recipient; If services provided

to unregistered person then location of such event;

Admission to various

events or parks

Location of event actually held or such parks. If event held

outside India, location of recipient.

Transportation of goods

including by mail or

courier

Location of registered service recipient;

If services provided to unregistered person then location of

goods being handed over for transportation;

Passenger transportation Location of registered service recipient; If services provided

to unregistered person then location where passenger

embarks on the conveyance for a continuous journey;

Services on board a

conveyance

Location of first scheduled point of departure of that conveyance

Residual Category Location is address of registered service recipient; If services

provided to unregistered person then address on the records

of supplier; Location of supplier if both of above not available

Place of Supply

If Supplier and Recipient are outside India Place of Supply

Services to the goods which are physically

to be made available to Supplier

Location of services actually performed. If

services provided from a remote location by way

of electronic means, location is where goods are

situated but it shall not be applicable to goods

which temporarily imported into India for repair

Services supplied to person/ agent which

require physical presence of receiver.

Location of the services actually performed.

Services in relation to immovable property Location of such immovable property

Services supplied for an event Place where the event is performed

Banking; financial; non banking financial,

intermediary, hiring of means of transport

other than aircraft, vessels except yatch

Location of the supplier of service

Transportation of goods other than by way

of mail or courier

Place of destination of goods

Transportation of passengers Place where passenger embarks on conveyance

Service on board a conveyance of passenger First Scheduled point of departure of conveyance

Online information, data base access,

retrieval

Location of recipient of Service

Place of Supply

Particulars Location of

supplier

Termination of

movement of delivery

Place of

supply

Movement of goods

involved

Orissa West Bengal West Bengal,

IGST

Orissa Orissa Orissa, CGST

& SGST

Supply does not involve movement of goods

Particulars Location of

supplier

Location of

recipient

Location

of goods

Place of

supply

Sale of pre-installed

DG Set

Andhra Pradesh Karnataka Karnataka Karnataka,

IGST

Moulds retained at

Job Worker Premises

after Manufacture

Andhra Pradesh Kerala Andhra

Pradesh

Andhra

Pradesh,

CGST & SGST

Dealer in Delhi

having old car at his

home town in Punjab

Delhi (But Punjab

as casual dealer

registration)

Punjab Punjab Punjab, CGST

& SGST

Place of Supply

Supply of goods assembles/ installed at site

Particulars Location of

supplier

Location of

recipient

Installation

of goods

Place of

supply

Weigh bridge

supplied & installed

ABB Delhi Bhopal Bhopal Bhopal-IGST by

ABB

Servers supplied

and installed

Andhra

Pradesh

Karnataka Andhra

Pradesh

Andhra Pradesh,

CGST &SGST

Workstations

supplied & installed

Andhra

Pradesh

Andhra

Pradesh

Kerala Kerala, IGST

Supply of goods supplied on board a conveyance

Particulars Location of

supplier

Loading of

goods

Passenger

Boards at

Place of

supply

Goods supplied in

Bus

Goa Goa Hyderabad Goa, CGST &

SGST

Pune Goa Hyderabad Goa, IGST

payable at Pune

Place of Supply

Location of supplier /

vendor of goods

Location of 3rd

Party (buyer)

Place of delivery of

goods (Client)

Place of supply

Sale in transit transaction

ABB, Bangalore KCP, Delhi PGCIL, Haryana Delhi- pay IGST by ABB

ABB, Bangalore KCP, Delhi PGCIL, Bangalore Delhi- pay IGST by ABB

ABB, Bangalore KCP, Delhi PGCIL, Delhi Delhi- pay IGST by ABB

ABB, Bangalore KCP,

Bangalore

PGCIL, Kerala Bangalore -pay

SGST&CGST by ABB

Particulars of service Supplier place Services rendered at Place of supply

ABB Ltd, Pune provides

machine repair service

Pune Delhi Delhi–pay IGST by ABB

at Pune

ABB Ltd, Pune provides

I-phone repair service

Pune Delhi to unregistered

person having address

--------DO-----

ABB Ltd, Pune provides

I-phone repair service

Pune Delhi to unregistered

person whose address

not available

Pune – pay CGST &

SGST

Hotel, Mumbai

provides food

Mumbai Mumbai Mumbai – pay CGST &

SGST

Place of Supply

Particulars – supply of services Location

of supplier

Immovable

property location

Place of supply

Architect, Plumber, Interior

Decoration, Real Estate Services

Pune Bangalore Karnataka-pay

IGST in Pune

Accommodation at club, hotel,

house boat to a customer, Mumbai

Bangalore

HO

Ernakulam Kerala- CGST &

SGST

Particulars- Admission to event Supplier Event location Place of supply

Admission to event Pune Pune Pune-SGST&CGST

Particulars Supplier Recipient Place of supply

CMA, Goa organised event in Delhi

for IFC, Registered in Delhi

If IFC is unregistered Person

Goa

Goa

Delhi

Delhi

Delhi – IGST

Goa-SGST&CGST

CMA, Goa provides training service

to ABB, Delhi Registered person

If ABB is unregistered Person

Goa

Goa

Delhi

Delhi

Delhi– pay IGST

Goa– CGST&SGST

Place of Supply

Particulars Supplier Recipient Place of supply

Kesineni Travels, Guntur provides

passenger transportation to ABB, Goa

Guntur Goa,

Registered

Goa- IGST

Kesineni Travels, Guntur provides

passenger transportation to VITS,

Chennai URD for all India tour

Guntur Chennai,

unregistered,

embarked

Chennai- IGST as first

schedule point

Flight charges by IndiGo, Goa to Iran Goa Iran Goa- CGST & SGST as

first scheduled point

Shiva, Unregistered, Goa, obtained

post paid connection from Idea, Goa.

Later he shifted to Pune, but Idea

issued invoice with Goa Address.

Goa Goa / later

shifted to

Pune but

billed on Goa

Goa- CGST & SGST

If above connection is prepaid and

got recharge voucher at Pune

Recharge at

Pune

Pune- CGST & SGST

MRF, Chennai appointed MGB

Logistics, Goa to transport goods

Chennai Goa,

Registered

Goa- pay IGST in

Tamilnadu

JM Packer, registered in Goa provides

transport service to Mr Suri who

handed over goods in Pune

Goa Pune,

unregistered

handed over

Pune-pay IGST

Place of Supply

Value of Supply

Value of

Supply

Tax to be paid on Transaction value of supply i.e., the price actually paid

or payable when:-

supplier and recipient of supply are not related and

price is sole consideration for supply.

Inclusions

• any taxes, duties, cesses, fees, charges levied under any other statute

• any amount that supplier is liable to pay but incurred by recipient

• incidental expenses including commission and packing, charged by

supplier, including any amount charged for anything done at the time

of or before delivery

• interest/late fee/penalty for delayed payment

• subsidies directly linked to price excluding subsidies provided by Govt.,

Exclusions • Discount when discount is recorded in invoice before or at the time of supply

• If discount given after supply is effected it is to be established in terms of the

agreement and ITC reversed by recipient to the extent of discount.

Valuation

Rules

If transaction value not ascertainable then determine as per Valuation Rules-

Rule 1: where consideration is not wholly in money

Rule 2: Transactions between distinct or related persons

Rule 3: Supply of goods through an agent, Rule 4: Based on cost

Rule 5: Residual method, Rule 6: Determination of value in case of certain supplies

Value of Supply

Rule 1: Where consideration is not wholly in money, the value of supply shall-

a. be the open market value of such supply

b. if open market value is not available, be the sum total of consideration in money

and any such further amount in money as is equivalent to the consideration not

in money if such amount is known at the time of supply

c. if the value of supply is not determinable under above clause (a) or clause (b),

be the value of supply of goods or services of like kind and quality

d. if value is not determinable under above clause (a) or (b) or (c), be the sum total

of consideration in money and such further amount in money that is equivalent

to consideration not in money as determined by application of rule 4 or rule 5 in

that order.

Rule 2: Value of supply of goods or services between distinct or related

persons, other than through an agent shall-

a. be the open market value of such supply

b. if open market value is not available, be the value of supply of goods or

services of like kind and quality

c. if value is not determinable under clause (a) or (b), be the value as

determined by application of rule 4 or rule 5, in that order

Provided where the recipient is eligible for full input tax credit, the value

declared in the invoice shall be deemed to be the open market value of

goods or services.

Value of Supply

Rule 3: Value of supply of goods made or received through an agent shall –

a. be the open market value of the goods or at the option of supplier, be 90% of

price charged for like kind and quality of goods by recipient to his customer

who is not related, where goods are intended for further supply by recipient

b. where the value of a supply is not determinable under clause (a), the same

shall be determined by application of rule 4 or rule 5 in that order.

Rule 4: Value of supply of goods or services based on cost

Where value of a supply of goods or services is not determinable by any of the

preceding rules, value shall be 110% of cost of production or manufacture or cost

of acquisition of such goods or cost of provision of such services.

• Rule 5: Residual method for determination of value of supply of goods or

services

Where value of supply of goods or services cannot be determined under rules 1

to 4, the same shall be determined using reasonable means consistent with the

principles and general provisions of sec 15 and these rules. Provided that in case

of supply of services, the supplier may opt for this rule, disregarding rule 4.

Value of Supply

• Rule 6: Determination of value in respect of certain supplies

1. Notwithstanding anything contained in the Act or Rules, the value for supplies given

below shall be determined in the manner provided hereinafter.

2. Value of supply of services in relation to purchase or sale of foreign currency, including

money changing, shall be determined in the following manner:-

(a). For a currency, when exchanged from, or to, Indian Rupees (INR), the value shall be

equal to the difference in the buying rate or the selling rate, as the case may be, and

the Reserve Bank of India (RBI) reference rate for that currency at that time,

multiplied by the total units of currency:

Provided that in case where the RBI reference rate for a currency is not available, the

value shall be 1% of the gross amount of Indian Rupees provided or received by the

person changing the money:

Provided further that in case where neither of the currencies exchanged is Indian

Rupee, the value shall be equal to 1% of the lesser of the two amounts the person

changing the money would have received by converting any of two currencies into

Indian Rupee on that day at the reference rate provided by RBI.

Provided also that 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.

Value of Supply

• Rule 6: Determination of value in respect of certain supplies

(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. 1% of the gross amount of currency exchanged for an amount up to Rs 1 lakh,

subject to a minimum amount of Rs 250/-

ii. Rs 1000/- and 0.5% of the gross amount of currency exchanged for an amount

exceeding Rs 1 lakh and up to Rs 10 lakhs and

iii. Rs 5000/- and 0.1% of the gross amount of currency exchanged for an amount

exceeding Rs 10 lakhs subject to maximum amount of Rs 60000/-.

3. The value of supply of services in relation to booking of tickets for travel by air

provided by an air travel agent shall be deemed to be an amount calculated

@5% of the basic fare in the case of domestic bookings and @10% 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 expressio asi fare ea s that part of the air fare on which commission is normally paid to the air travel

agent by the airline.

Value of Supply

• Rule 6: Determination of value in respect of certain supplies

(4) The value of supply of services in relation to life insurance business shall be:

(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) 10% of single premium

charged from the policy holder; or

(c) in all other cases 25% of the premium charged from the policy holder in the first

year and 12.5% 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.

(5) Where a taxable supply is provided by a person dealing in buying and selling of

second hand goods i.e., used goods as such or after such minor processing which

does not change the nature of the goods and where no input tax credit has been

availed on purchase of such goods, the value of supply shall be the difference

between the selling price and purchase price and where the value of such supply

is negative it shall be ignored.

Value of Supply

Taxable Person – GST Registration

Every supplier shall be liable to be registered in the State where his aggregate

turnover (including taxable & non taxable) exceeds

- Rs 20 lakh in a financial year and

- Rs. 10 lakhs for States Arunachal Pradesh, Assam, Manipur, Mizoram, Tripura,

Meghalaya, Nagaland, Sikkim, J&K, Himachal Pradesh & Uttarakhand.

Following persons have to obtain registration irrespective of their threshold limit

persons making any inter-state taxable supply

casual taxable persons

persons who are required to pay tax under reverse charge

e-commerce operators

non-resident taxable persons

Persons required to deduct tax at source / collect tax at source

Persons supplying goods/services on behalf of other taxable persons whether

as an agent or otherwise

input service distributor

Persons supplying online information and data base access or retrieval services

from outside India to the person in India.

Taxable Person – GST Registration

Persons not liable to registration-

Exclusive supplier of non taxable goods/services or wholly exempt from tax.

an agriculturist

Individual advocates (including senior advocates)

Individual sponsorship service providers (including players)

Suppliers who are making only those supplies on which recipient is liable to discharge

GST under RCM.

A person has to get Registration in the State within 30 days from the date he becomes

liable to do so.

There would be different taxable persons viz., normal taxpayer, taxpayer under

compounding scheme, casual dealers, non-resident supplier, input service distributor.

A person who has obtained or is required to obtain more than one registration, whether in

one State or more than one State, shall, in respect of each such registration, be treated as

distinct persons.

Registration – UIN for Certain categories of agencies

Central/State Govt., Local body, UN agency, Embassy etc. to obtain Unique Identity Number

(UIN) instead of registration

GST Registration Multiple Registrations within the same State for business verticals

A person may obtain separate registration for each of his business verticals subject

to conditions-

a) Input Tax Credit shall not be allowed across such business verticals

b) For recovery of any dues all business verticals will be considered as a single legal

entity.

Business vertical means a distinguishable component of an enterprise that is

engaged in supplying an individual product or service or a group of related

products or services and that is subject to risks and returns that are different from

those of other business verticals;

Explanation: Factors considered in determining whether products or services are

related include:

a. the nature of the products or services / production processes;

b. the type or class of customers for the products or services;

c. the methods used to distribute the products or provide the services; and

d. if applicable, nature of the regulatory environment. Ex- banking, insurance, or

public utilities.

GST Registration Multiple Registrations within the same State for business verticals

Practical issues in case of Vertical Registrations in the State for the same

company

Input Credit will not be allowed across the Verticals

Tax liability of any vertical in the State can be recovered from other Verticals

Stock Transfers from one Vertical to other Vertical within the State also will be

taxed

Books of Accounts are to be maintained Vertical wise

Returns are to be filed separately Vertical wise

GST Annual Return is to be filed Vertical wise duly audited by the Chartered

Accountant / Cost Accountant

Registration Number

To allot State wise a single PAN based 15 digit GSTIN (Goods/Services Taxpayer

Unique Identification Number) and denote State Code 2 digits, PAN code10 digits,

Entity code 1 digit (It is alpaha numeric which have 35 sequences maximum for

this 1-9 numbers and alphabets a –z), Blank code 1 digit, Check code 1 digit.

GST Registration

Filing of GST Returns

Basic Features of Return Filing

State wise common E-Return. Separate returns for different categories of tax

payers-

Normal/Regular & Casual Taxpayer (GSTR-1, 2 ,3 Monthly & GSTR-9 Annually)

Compounding Taxpayer (GSTR-4 Monthly & 9A Annually)

Foreign Non-Resident Taxpayer (GSTR-5)

Input Service Distributor (GSTR-6)

Tax Deductor (GSTR-7)

To file Monthly Returns by a normal /casual taxpayer in sequential manner with

different cut-off dates to allow auto-population of return & automated matching

of invoices

Payment of due tax is must for filing of valid return.

Returns can be submitted with short payment but shall be treated as invalid – not

taken into account for invoice matching & inter-Government fund settlement.

Next Period Return cannot be filled if earlier return is not filled.

No facility for filing of revised return but information can be revised

Filing of GST Returns Basic Features of Return Filing

Differential Tax liability to be captured through Debit Note / Credit Note/

Supplementary invoices / correction mechanism

Imposition of automatic late fee for non-filers or late filers of Return with Rs 100/-

per day subject to maximum of Rs 5,000/

Maintenance of Electronic Cash Ledger / ITC Ledger / Tax Liability Ledger

HSN Code for Goods

HSN Code (4digits) for goods will be mandatory

HSN (8 digits) for exports and imports will be mandatory

HSN Code (2-digits) for taxpayers with turnover between Rs. 1.5 Cr & Rs. 5 Cr in

preceding FY -optional in 1st Year and mandatory from 2nd Year

SAC Code for Services

Mandatory for those services for which Place of Supply Rules are dependent on nature

of services

Mandatory for exports & imports

Se i e A ou ti g Code to e p efi ed ith S fo diffe e tiati g f o HSN

Filing of GST Returns

Report To be filed by / Auto populated Content of Report Due Date

GSTR-1 By person other than compounding

tax payer and Input Service Distributor

Outward supplies By 10th of

next month

GSTR-1A Auto populated Report to Supplier

based on GSTR-2 of Receiver

Inward Supplies filed by

Receiver in GSTR-2

Available

on 16th

GSTR-2 By person other than compounding

tax payer &ISD

Inward Supplies as added,

deleted and corrected in

GSTR-2A

By 15th of

next month

GSTR-2A Auto populated inward supply details

Report for Receiver

Outward Supplies filed by

Supplier as per GSTR-1

Available

on 11th

GSTR-3 By person other than compounding

tax payer & ISD

Monthly Return By 20th of

next month

GSTR-4 Compounding tax payer Quarterly Return By 18th of

next month

of Quarter

GSTR-5 By Non – Resident Foreign Tax payer Monthly Return By 20th

GSTR- 6 By Input Service Distributor (ISD) Monthly Return By 13th

GSTR- 6A Auto populated inward supply Report

for ISD Recipient

Outward Supplies filed by

Supplier as per GSTR-1

Available

on 11th

Filing of GST Returns

Report To be filed by / Available to Content of Report Due Date

GSTR- 7 By person other than

compounding tax payer and Input

Service Distributor

Return for Tax Deducted At

Source

By 10th of

next month

GSTR-

7A

Available to Deductee TDS Certificate within 5

days of

Remittance

GSTR- 8 Statement of TCS by E-Commerce

operator

By 10th of

next month

GSTR-9 By person other than

compounding tax payer and Input

Service Distributor

Annual Return By 31st

December

GSTR-

9B

To get the accounts audited if

aggregate turnover exceeds Rs 1 cr

Audited Annual Accounts &

Reconciliation Statement

By 31st

December

GSTR-

11

Inward Supply Statement

for persons having Unique

Identification number (UIN)

Filing of GST Returns – GSTR-1 : Outward supply details

To File details of outward supplies for both goods and services by 10th of next month and

can upload on daily basis. GSTN facilitates offline preparation of GSTR-1.

Upload GSTR-1 either directly through data entry or file containing data through Apps.

Separate tables are given to capture the details for –

Debit/ Credit Notes or Revised Invoices

Zero rated (Export / SEZ) or Exempted or Non GST Supplies

Tax liability on receipt of advance & subsequent issuance of invoice against advance

Invoices issued for inward supplies from URD where RCM applicable

Separate fields are given in the tables to capture the data for RCM applicable, original

or revised invoice, place of supply etc.,

To file details Type of Transactions

Invoice wise i.e., Line-item level

data for multiple tax rate or

HSN/SAC in one invoice

a. For all B2B (Business to Business) suppliers

b. For inter-state B2C (Business to Consumer)

invoices exceeding Rs2.50 Lakhs

State wise summary of Aggregate

Taxable Value

a. For B2C intra-state supplies.

b. For B2C inter-state supplies below Rs 2.50 lakhs

Generate GSTR-1A which contain outward supplies as modified and filed

by client in his GSTR-2

Regularise the short /excess supply of goods through Debit /Credit

Notes to avoid mismatch with the client Return GSTR-2.

To modify GSTR-1 by accepting or rejecting additions /deletions made

by Client in GSTR-2.

Modified GSTR-1 of the supplier shall stand as accepted by him.

In case of any omission or error, the same can be rectified during next

tax period till September of next FY or filing of Annual Return whichever

is earlier paying tax with interest.

Filing of GST Returns – GSTR-1 : Outward supply details

Filing of GST Returns – GSTR-2 : Inward Supply details

GSTR-2 contain auto-populated details of inward supplies based on GSTR-1 filed by vendor

Generate GSTR-2A to view the auto populated details of inward supplies

Data may be modified (added /deleted) while filing GSTR-2 after reconciliation with GSTR-2A

Invoices may be added if not uploaded by vendor when invoice is available and received the

goods or services.

Separate tables given for submission of details of -

inputs /capital goods imported or services received from outside India.

partial ITC availed earlier, for ISD credit received, for TDS credit received

revision in price for inward supply pertaining to previous periods including post purchase

discounts received, Credit/Debit Note issued by supplier and differential value & tax impact

effecting modifications/correcting errors in returns submitted earlier but before filing of

annual return or return for September month of the following year whichever is earlier.

Nil rated, Exempted and Non GST supplies includes from compounding and URD

ITC ledger will be auto populated. To select invoice details regarding in-eligibility or eligibility of

ITC for inward supplies and the quantum available in a particular month.

Also a field given for availing ITC on capital goods over a specified period

Filing of GST Returns – GSTR-2 : Inward Supply details

Input Tax credit – Mismatch Verification Mechanism

• Details of inward supply are to be matched by Recipient with the

corresponding details of outward supply of Supplier. Discrepancies

communicated to both Supplier and Recipient.

• ITC to be confirmed only after matching of such information

• ITC available only on provisional basis for a period of 2 months until

payment of tax and filing of valid return by the supplier.

• Credit availed on unmatched invoices shall be auto-reversed in the next

to next return period (e.g. mismatched ITC for April to be auto-reversed

in return for June)

• Amount of excess credit claimed will be added into tax liability of

recipient in the succeeding month and interest to be paid from the date

of availing .

• ITC can be re-claimed after matching takes place and interest paid shall

be refunded by adding in e-Cash Ledger

Filing of GST Returns – GSTR-3 : Monthly Return

Monthly Return in GSTR-3 would be auto-populated through own GSTR-1, GSTR-2, TDS

return (GSTR-7) of deductor, GSTR-6 of ISD & own ITC / Cash/ Liability Ledgers. It contains-

Aggregate values of all B2B / B2C outward supplies

Aggregate value of all exports including deemed exports

Aggregate value of all inward supplies including from ISD and imports

Information about adjustments for earlier periods

Details of cash credit received on account of TDS

Details of all liabilities (Tax, interest, penalty, late fee, etc.)

Details of ITC availed, utilized, reversal on account of mismatch and other adjustment

Details of gross & net tax liability

Details of payment of tax and other statutory liabilities

Provision for capturing Debit Entry No. of Cash & ITC Ledger

A field for return based refund & Bank Account Number

Return can be filed both on online and offline mode. In offline mode, payment by debit to

cash/ ITC ledger can be done at an earlier date also and such debit entry no. will be verified

at the time of uploading of return. In online mode, both debiting & filing can be done

simultaneously.

Filing of GST Returns - GSTR-6 : Input Service Distribution (ISD)

Details of inward supply will be auto populated as per GSTR-1 filed by

the counterparty Supplier through GSTR-6A.

Input Service Distributor shall after adding, correcting or deleting the

inward supply details contained in GSTR-6A, furnish GSTR-6,

containing the details of tax invoices on which credit has been

received and distributed.

Includes supplies attracting reverse charge

Furnish the details of Invoices along with GSTIN of the receiver of the

credit i.e., to whom the ISD is distributing credit.

There will be separate ISD Ledger in the return that will detail the

Opening Balance of ITC (to be auto- populated on the basis of

previous return), credit for ITC services received, debit for ITC reversal

/ distributed and Closing Balance.

Filing of GST Returns – GSTR-7 : TDS Return Following agencies have to deduct TDS 1% from payment made or credited to Supplier:

a) A Department of Central / State Govt

b) Local authorities

c) Governmental agencies

d) Other notified categories

TDS to be deducted on notified goods or services where total value of supply under a

contract exceeds Rs 2.50 lakhs

TDS to be paid within 10th of next month. Delay in payment would attract late fee of

Rs.100 per day

TDS certificate to be furnished within 5 days of remittance.

Delay or failure in issue of certificate attracts late fee of rupees one hundred per day

extending upto Rs 5000/-.

TDS Return contains-

GSTIN of supplier

Invoice details

Payment details

Amount of TDS on account of CGST, SGST & IGST

Filing of GST Returns – GSTR-7 : TDS Return

No deduction shall be made if the location of supplier and the place

of supply is in a State which is different from the State of recipient.

TDS Amount is reflected in Electronic Cash Ledger of Deductee as per

GSTR-7 filed by Deductor.

Deductor /Deductee can claim refund of excess /erroneous deduction.

Section 37 stipulates TDS provisions in SGST and CGST Acts but similar

provisions are not incorporated in IGST Act. Hence we can assume

that TDS is limited to only Intra-state supplies under SGST/ CGST Act.

For the purpose of the deduction of tax specified, the value of supply

shall be taken as the amount excluding the tax indicated in the

invoice.

Filing of GST Returns – Requirements and Action Plan

Summary of Steps in Filing of GST Returns

Activity Due Date To correct by

RA Bills /Inventory Accounting, TDS Statement- by 5th

Upload GSTR-1 for Outward Supplies 10th

Upload GSTR-7 for TDS recovery details 10th

Generate GSTR-2A to find details of supplies filed by

Vendors in their GSTR-1 & 6 to prepare our GSTR-2

11th(GSTR-1)

14th (GSTR-6)

Details of TDS by Client shall be available in GSTR-2A 11th

Upload GSTR-6 for Input Service Distribution 13th

Reconciliation of Inward Supplies with GSTR-2A 15th

Upload GSTR-2 for Inward Supplies 15th

Generate GSTR-1A to find any modifications made by

our client in his GSTR-2

16th

Modify GSTR-1 after reconciliation with GSTR-1A 17th

Finalise GSTR-1 & 2 which would auto-populate GSTR-3 17th

Pay tax due amount and submit GSTR-3 20th

Filing of GST Returns – Requirements and Action Plan

Summary of Steps in Filing of GST Returns

GST Payment Process Single challan /payment for CGST, SGST, IGST and Cess

Challan to include all major heads -IGST, CGST, SGST, Cess and minor heads -Tax, Interest,

Penalty, Fee, Others

Electronically generated Challan from GST portal with unique 14-digit CPIN (Common

Portal Identification Number)

Challan once generated to be valid for 15 days

Payment through Debit/Credit Card, Internet Banking, NEFT/RTGS and at the Bank Counter

Facility to track payment

All payments will become part of Cash Ledger and can be utilized in payment of liabilities

Payment particulars challan wise will be available for download/print on GST Portal

In order to mitigate any financial hardship being suffered by a taxpayer, Commissioner has

been empowered to allow payment of taxes in instalments.

Tax and other dues are required to be discharged in the following sequence:

self-assessed tax, related to returns of the previous tax period

self-assessed tax, related to returns of the current tax period;

any other amount payable including the demand determined post issuance of show cause

notice.

Input Tax Credit Input Tax means the IGST, CGST & SGST charged by supplier on any supply of goods or

services and includes the tax payable under Reverse Charge Mechanism, but does not

include the tax paid under Composition Scheme.

Input means any goods other than capital goods used or intended to be used by a supplier

in the course or furtherance of business

Input Services means any service used or intended to be used by a supplier in the course or

furtherance of business

Capital Goods means goods, the value of which is capitalised in the books of accounts of

the person claiming the credit and which are used or intended to be used in the course or

furtherance of business

Input Tax Credit is available on taxes paid on any supply of goods/services used or intended

to be used in the course or furtherance of business be it used for manufacture or not, like

office equipment, stationery etc.

Proportionate credits allowed if goods/services are used partly for-

business and non-business purposes

taxable and non-taxable supplies.

pla t a d a hi e ea s appa atus, e uip e t, a d a hi e fi ed to ea th foundation or structural support that are used for making outward supply of goods or

services or both and includes such foundation and structural supports but excludes—(i)

land, building or any other civil structures; (ii) telecommunication towers; and (iii) pipelines

laid outside the factory premises.

Input Tax Credit

Possession of tax invoice / debit note / supplementary invoice

Payment made to Supplier within 180 days by Receiver

Has received goods and/or services

Recipient

has

furnished

the Return

Conditions for Entitlement of Input Tax Credit

Tax paid by

supplier

If recipient fails to pay within

180 days from the date of issue

of invoice, the ITC amount

availed by the recipient shall be

added to his output tax liability

along with interest thereon

Exclusions from Input Tax Credit

Motor Vehicles (subject to exceptions)

For Immovable Property

Exceptions-

- Used for further supply

- Passengers transportation

- Imparting Training

- Transportation of goods

-for Personal / Private Use –

-food/ beverages, outdoor catering, beauty treatment, health services, cosmetic/plastic surgery

-Rent a cab, life/health insurance unless obligatory

-club membership, fitness centre, travel benefit on employee vacation

a. Works Contract

b.Goods or Services for construction of own property for other than Plant & Machinery. Telecommunication Tower & Pipeline laid outside factory are not P&M

Negative List of Inputs / Services

Good / Services

goods lost, destroyed, stolen, written off or disposed as gift, free samples

For immovable property

Input Tax Credit

CGST IGST

Allowed against output CGST and IGST

Allowed against output SGST and IGST

Allowed against output

GST in the order of –

1. IGST

2. CGST

3. SGST

Offset of Input Tax Credit

SGST

Not allowed against SGST

Not allowed against CGST

Matching, Reversal & Reclaim of Input Tax Credit

Matched Not matched

Accepted

RO-Tax Person has to inform to Material Dept., / Supplier

Inward Supply Return: GSTR-2

Reverse ITC if not matched in 2 months time and take steps for recovery from Supplier

Claiming input credit on provisional basis

Material Dept., has to take up with Supplier and ensure for matching

If Corrective action required on part of Receiver

If corrective action required on part of Supplier

RO-Tax Person has to take action and ensure for matching

Input Tax Credit

Input Tax Credit on Capital Goods

ITC on capital goods can be availed in one instalment.

No ITC on tax component of the cost of capital goods, if depreciation is claimed

on tax component under the Income Tax Act, 1961.

If capital goods are supplied after availing of ITC, then tax is to be paid equal to

ITC taken on the said capital goods as reduced by the percentage points as may be

specified in this behalf or the tax on the transaction value of such capital goods,

whichever is higher.

In case of change in the Constitution of Business

In case of change in the constitution of business on account of sale, merger,

demerger, amalgamation, lease or transfer of the business, the unutilized ITC shall

be allowed to transfer to the said transferee.

Input Tax Credit

Input Tax Credit on Job Work

Principal is eligible to take input tax credit on inputs / capital goods sent

to a job-worker for job-work.

ITC available even if inputs /capital goods are directly sent to a job worker

for job-work without their being first brought to his place of business.

Inputs to be received back after completion of job or supplied from place

of job worker within 1 year and capital goods within 3 years– Otherwise

liability of tax along with interest.

Input credit – Time limit for claim of credit

• Time limit for claim of credit is 1 year from the date of invoice. In case of

any omission or error, the same can be rectified during next tax period till

September of next FY or filing of Annual Return whichever is earlier.

Effectively, for the purchases made post September month in a FY, the

time period for claiming credit is curtailed.

Maintenance of Records

To keep and maintain the following records at the principal place of Business

mentioned in the Registration Certificate-

Inward Supply of goods / services

Outward supply of goods / services

Stock of goods

Input Tax Credit availed

Output Tax payable and paid

Production or Manufacture of goods

Relevant documents including invoices, delivery challans, credit/debit notes,

receipt vouchers, payment vouchers, e-way bills,

A separate Account of Advances received, paid and adjustments

Works contractor has to keep records each contract wise

Details of Client

Details of suppliers

Details of goods or services received

Details of goods or services utilized

Details of payments received

Maintenance of Records Any entry in accounts and documents shall not be erased, effaced or overwritten

and all incorrect entries shall be scored out under attestation and thereafter

correct entry shall be recorded. Where registers and documents are maintained

electronically a log of every entry edited or deleted shall be maintained

The records under these rules may be maintained in electronic form and the

record so maintained shall be authenticated by means of a digital signature.

Electronic back up of records are to be maintained and to be preserved in such

manner that in the event of any accident or natural causes, the data can be

restored within reasonable period of time.

To provide on demand an account of the audit trial and inter-linkages including

source document whether on paper or electronic and the financial accounts,

record layout, data dictionary and explanation for codes used and total number of

records in each field along with sample copies of documents.

Records to be retained for a period of 6 years from the due date of filing of

Annual return.

In case of any pending proceedings, records to be retained for a period of 1 year

after the final disposal of proceedings or the period of 6 years, whichever is later.

Transitional Issues

• Closing balance of VAT input credit as per earlier law to be carried forward. This amount will be reduced if pending E-1 Forms and Client C-Forms not submitted.

VAT Input Credit Carried Forward

• Cenvat credit under Service Tax Law as on 30-6-2017 can be transferred to the relevant States

Cenvat credit Carried Forward

• GST is not payable if the supply of service has already been completed before the appointed date and tax has already been paid under earlier law

Periodic Supply of Services

• Contracts are to be reviewed with reference to tax clauses and claim differential cost on account of GST

Review of Contracts

Registration •Provisional registration certificate for person holding

registration certificate under earlier law

Transitional Issues

Cenvat credit under Service Tax Law as on 30-6-2017 can be transferred to the relevant States

Input Service Distribution

• Invoices upto 30-6-2017 are to be accounted as VAT ITC /

Service Tax Credit pertaining to those invoices cannot be

claimed under GST Law.

• If material is in transit as on 30-6-2017 and received in GST

period, MRN to be raised by 30-7-2017 to avail input credit

Material in Transit

• E-1 Sale transactions are to completed by 30-6-2017 and should not be in transit beyond on above date . E-1 Sales

Input Credit on Closing Stocks

•Excise Duty credit can be availed on stocks in Sites where Service Tax Exempted or paid under notification 26/12

•VAT input credit can be availed on stocks where VAT Exempted or Composition Scheme opted.

• RA Bills prior to 30-6-2017 to be raised for work done

• If RA bills raised prior to 30-6-2017 are short certified, the refund is to be claimed under old law only.

Short Certification of Bills

Transitional Provisions

Carry forward of tax credits : Eligible to carry forward tax credits as per

the last return under earlier law subject to condition that Cenvat / VAT

credit is eligible under GST law. Any increase in ITC due to revised invoice,

the same is to be claimed as refund under earlier law and can not be

claimed under GST. To transfer VAT/Entry Tax Credit to SGST and Cenvat

credit to CGST.

Un-availed credit including those on capital goods: Eligible but un-availed

credit including those on Capital Goods will be allowed subject to certain

conditions.

Progressive or periodic supply of goods or services: No tax shall be

payable on supply of goods/services made after appointed day if

consideration received and tax paid already under earlier law.

Point of Taxation arise under earlier law: Tax in respect of taxable

services shall be payable under earlier law to the extent the point of

taxation in respect of such services arose prior to GST period.

Transitional Provisions

Inputs or input Services in transit as on appointed date of GST:

Eligible for credit of Excise Duty, CVD/SAD, VAT, Entry Tax if goods/services

received after 1-7-17

Duty/ tax is paid before the appointed day

Invoice / other document is recorded within 30 days i.e., 30-7-2017 in the

books of accounts

A statement showing details of name of supplier, invoice no & date,

description of goods / service, quantity, value, tax amount is to be

furnished.

The statement will be audited by GST Department and in case of any

variance the tax will be recovered with interest and penalties.

Transitional Provisions

Registered person entitled to take credit of Excise Duty, CVD/SAD, VAT/Entry Tax on

inputs held in Stock & inputs contained in semi-finished goods or WIP/finished goods

In case of exempted goods or services or providing construction service availing

abatement benefit vide notification no. 26/12 dt 20-6-12 under Service Tax Law,

entitled to take Excise Duty Credit by way of CGST

In case VAT Exempted or VAT Composition Scheme opted under VAT Law, entitled

to take VAT / Entry Tax input credit by way of SGST.

In case of exempted goods or duty paid goods returned to the place of business

after the applicability of GST

In case of inputs, semi-finished goods and finished goods removed for job work

and returned after applicability of GST

Conditions for allowing ITC

Inputs are used for making taxable supplies in GST period

Inputs are eligible for availing credit under GST law

In possession of valid invoice issued not earlier than 12 months from appointed

date of GST

Application in GST TRAN-1 is to be submitted within 90 days of appointed date

Transitional Provisions Distribution of Credit by Input Service Distributor

If invoice is received before the appointed date of GST, he can distribute Cenvat

under old law and carry forward it as CGST. If invoice is received after the appointed

date of GST, he can distribute Cenvat under CGST or IGST depending on supply.

Treatment of branch transfers:

Under earlier VAT law ITC is to be reversed partly on stock transfers and such

reversed ITC will not be allowed to claim under SGST.

Goods sent on approval basis returned:

If goods sent under earlier law are returned within 6 months/ extended period of

appointed day of GST law then no tax shall be payable.

If rejected goods returned after the above period Tax is payable by the person

returning the goods

If rejected goods not returned after the above period Tax is payable by the person

who sent the goods on approval basis

Supplementary invoices, debit / credit notes for price revision

If price is revised upwards after appointed day of GST law then GST is payable on such

invoices as outward supply.

Transitional Provisions

Stock with Job worker:

• ITC available on stock with job worker subject to the conditions-

Removal/ Dispatch to the job worker prior to the appointed day

Returned within 6 months from the appointed day/ extended period (not

more than 2 months)

Manufacturer & Job Worker both declare the details of Inputs/ Semi finished/

Finished Goods held in stock by the Job Worker on the appointed date

• If the said goods are not returned within 6 months or the extended period, as

the case maybe, from the appointed day the ITC shall be liable to be recovered.

Refund or Recovery

Refund Pending or accruing from appeal etc., shall be generally paid in Cash as

per the provisions of earlier law

Tax Refund or payable due to revised return filed in GST period for the returns

pertaining to earlier law, the same will be dealt under earlier law only

Recovery resulting from proceedings under the earlier law shall be recovered as

an arrear under GST Law

Transitional Provisions Tax paid on goods /capital goods lying with agents: ITC to be allowed to the

Agent subject to the conditions-

Agent is registered under GST

Principal & Agent both declare the details of stock of Goods lying with the

agent immediately preceding the appointed day

Invoices were issued not earlier than 12 months prior to the appointed day

Principal has either reversed or not availed of the ITC in respect of such goods

Return of goods

Goods were removed/sold within 6 months prior to the appointed day

Returned within 6 months from the appointed day

Proper Officer can satisfactorily identify the goods

No Tax is payable by the person returning the Goods which were Earlier

exempted but taxable under GST

Return of goods is a deemed supply if Duty/Tax paid on such goods under the

earlier law. Taxable Person receiving such goods within 6 months entitled to

refund of duty/tax paid earlier at the time of removal/sale.

GST Impact GST Impact

Activity Existing Taxes Under GST

Import of goods ► Customs duty (BCD, CVD and

SAD) + Entry tax

► BCD + IGST

Inter-state supply of goods ► Excise duty + CST + Entry tax ► IGST

Intra-state supply of goods ► Excise duty + VAT ► CGST + SGST

Import of Service ► Service tax ► IGST

Inter-state supply of

service

► Service tax ► IGST

Intra-state supply of

service

► Service tax ► CGST + SGST

Manufacture ► Excise duty ► No duty

Inter State Stock transfer ► NIL ► IGST

Exports ► Duty Free ► Zero rated

GST Impact Existing Tax Rates

Current Taxes Taxable Event Rates

Customs Duty Import of goods from

outside India

BCD – 7.5% or 10%

ACD – 12.5%

Cess – 3%

SAD- 4%

Peak rate 29.44%%. Capital goods generally attract

duty at peak rate of 26.69%. Exact rates depend on

nature of goods and end use

Excise Duty Manufacture of

goods in India

Peak rate is 12.5%. Exact rate depends upon

nature of goods and end use

Service Tax Provision of services

15%

VAT Sale of goods within

the state

Varies from State to State; generally ranges

between 5% -15%

CST Inter-state sale of

goods

Rate is equal to VAT rate of displacing State – else

2% against Form C

Entry tax/

Octroi

Entry of goods into a

local area for

consumption/ sale

Varies from State to State ranging between 1% -

14%

Tax Concessions for Infrastructure Industry under Existing Laws

Service Tax

Service Tax Exemption presently available to the following

Projects-

Road Projects; Tunnels, Bridges

Services rendered to Government Departments and Local

Bodies towards Sewerage Boards, Municipalities;

Works executed for Irrigation Departments (Irrigation Works);

JUNNURM projects;

Individual houses for personal use Ex. Low Cost Housing

Schemes

Central excise

Central Excise Exemption available to Water Supply

Projects/Sewerage Projects;

ADB / World Bank funded Projects

Sales Tax

Transaction structuring- High Sea sale, In-transit Sale, Interstate

Sale

Stock Transfers without tax

The above exemptions / concessions are not available under GST

New GST Rates Vs Old Rates Major Construction Materials GST Rate % Present Tax % (VAT–AP)

Cement 28 27

Iron & Steel 18 17.5

Sand, Aggregates, Bricks 5 5

Bitumen 18 17.5

Hardware, Mechanical Spares / Tools 18 17.5

Renewable Energy Devices 5 5

Pipes 18 17.5

Electrical switches, capacitors 18 27

Towers, Transformers, DG Sets 18 17.5

Motors 18 17.5

Flooring / Sanitary Materials, Paints, Wooden Materials 28 27

Insulated wire, cable 28 17.5

Railway Construction materials 18 17.5

Air conditioning machine 28 27

Dumper, loader, forklift truck, lift, bulldozer, shovel, conveyors 28 27

Electrical signalling, safety, traffic control equipment-railway, road 28 27

Electrical apparatus for exceeding 1000 volts

Not exceeding 1000 volts

18

28

17.5

27

New GST Rates Vs Old Rates

Services

Major Construction Services GST Rate % Present Tax Rate %

Works Contract 18% Service Tax: 6%

AP VAT: 5%/ 14.5%

Construction of flats without considering land value 18% Service Tax: 15% on

30% i.e., 4.5%

AP VAT: 1.25%

Transport services 5% 4.5%

Hire charges

Same rate as

applicable to goods

Service Tax: 15%

General rate to other services 18% 15%

Exemptions under GST

Toll charges of Road / Bridge

Pure labor service to single residential unit otherwise than as a part of residential complex

Pure labor service to construction of house under Pradhan Mantri Awas Yojana

Renting of residential dwelling

Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to Government, a local authority or a Governmental authority by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution or to any function entrusted to a Municipality under Article 243W of the Constitution

Particulars Under Existing Laws Under GST

Cost of Production of Cement per bag 150 150

Add: Profit Margin 7.50 7.50

Ex-Factory Price before Excise Duty 157.50 157.50

Add: Excise Duty @12.5% on Rs 210/- i.e., 70% of MRP (after

abatement of 30%) i.e., Rs 26.25 + 6.25 i.e., Rs 125/- for 20 bags

32.50

Ex-Factory Price 190.00 157.50

Add: Freight 30.00 30.00

Value before Taxes 220.00 187.50

Add: VAT 14.5% (Under Existing Laws) / GST 28% 33.35 55.86

Total value to Dealer 263.35 255.36

Less: Input Tax Credit 33.35 55.86

Cost of goods to Dealer 220.00 187.50

Add: Profit Margin 15% 33.00 28.12

Total Value 262.00 227.43

Add: VAT 14.5% (Under Existing Laws) / GST 28% 38.00 63.68

Total Price to final Consumer 300.00 291.11

Decrease in Price 8.89

GST Impact – Cement Price

Particulars Under Existing Laws Under GST

Cost of Production of Cement per bag 150 150

Add: Profit Margin 7.50 7.50

Ex-Factory Price before Excise Duty 157.50 157.50

Add: Excise Duty @12.5% on Rs 210/- i.e., 70% of MRP (after

abatement of 30%) i.e., Rs 26.25 + 6.25 i.e., Rs 125/- for 20 bags

32.50

Ex-Factory Price 190.00 157.50

Add: Freight 30.00 30.00

Value before Taxes 220.00 187.50

Add: VAT 14.5% (Under Existing Laws) / GST 28% 31.90 52.50

Total Value to Dealer 251.90 240.00

Add: OH & Profit Margin 15% of Dealer 37.78 36.00

Sale Price of Dealer to Consumer before Taxes 289.68 276.00

Add: VAT 14.5% (Under Existing Laws) / GST 28% 42.00 77.28

Less: Input Credit passed on to Consumer -31.90 -52.50

Sale Price to Consumer 299.78 300.78

Increase in Price 1.00

GST Impact – Cement Price

GST Impact on Stock Transfers

Particulars

Working capital required on

Stock Transfer of goods

At present laws As per GST

Value of Goods 1000 1000

Excise @ 12.5% for manufacturer to

transfer to Stock Point

125 -

GST @ 18% on Transfer - 180

CST / VAT on Transfer - -

Stock transfer value for manufacturer 1125 1180

Increase in working capital in case of

manufacturer

55

Stock transfer value for service provider 1000 1180

Increase in working capital in case of

service provider

180

IGST – IMPORT - GOODS Existing System Rs Proposed System Rs

Assessable value 100 Assessable value 100

BCD 10% 10 BCD 10% 10

Value 110 Value 110

CVD 12.5% 13.75 IGST (assumed @ 18%) 19.8

Education cess on CVD Nil

Customs Duty for cess 23.75

Customs Education Cess 3% 0.72

Value for SAD 124.46

SAD @ 4% 4.97

Total Duty 29.44 Total Duty 29.80

Cenvat Credit –CVD + SAD 18.72 IGST Credit 19.80

Net Duty for manufacturer 10.72 Net Duty 10.00

Net Duty for Service provider as SAD

credit not availble

15.69 10.00

Impact of GST on Import