Goods and Services Tax
CA Satyananda Routray
ACS, DISA (ICAI), M Com, MBA,
Taxes
Earlier Indirect Taxes
State
Central
VAT /
Excise
Sales Tax Entertainment
duty Surcharges &
Tax (not levied
Cesses
Additional by local bodies)
Surcharge &
duties of
Cesses
excise
Central Purchase State Central
Sales
Tax
Taxes Excise duty
Taxes Tax
levied under
Service Medicinal & Taxes on
Tax Toiletries Entry lottery,
Preparation Tax betting &
Additional Act gambling
Luxury
duties of Tax
customs (CVD
& SAD)
Central & State Taxes to be subsumed in GST 15
TAXES NOT SUBSUMED IN GST
Under CST/
VAT/ ED
Cost of Projector 10,000
Add: ED @ 12% 1,200
Total 11,200
Add: CST @ 2% 224
Add: IGST @ 28% -
Total 11,424
Add: ET @ 1% 114
Total 11,538
Add: VAT @ 14.5% 1,673
CGST & SGST (28%) -
Cost Price for Customer 13,211
GST- FEATURES….
IGST levied and collected by the Centre applicable to:
o Inter-State supplies of goods / services in India
o Inter-state stock transfers of goods
o Import of goods / services
o Export of goods / services
Export of goods/services - Zero rated
Tobacco Products – under GST + Central Excise
GST would apply to all goods and services except Alcohol for human
consumption.
GST on five specified petroleum products (Crude, Petrol, Diesel, ATF &
Natural gas) would be applicable from a date to be recommended by
the GSTC.
GST : Categories / Components
Intra-State supplies of Goods CGST(Central GST)
& Services
(Within the same State)
SGST(State GST)
GST
IGST(Integrated GST)
Inter-State supplies of Goods
& Services
(Between 2 or more States)
GST : Categories / Components
• Stands for Central GST( Central Goods and Services Tax)
CGST • Applicable on supplies within the State
• Tax collected will be shared with Centre
• Covered under Central Goods and Service Tax Act 2016
• Stands for State GST ( State Goods and Services Tax)
• Applicable on supplies within the state
SGST • Tax collected will be shared with State
• Covered under State Goods and Services Tax Act 2016
• Stands for Integrated GST(Integrated Goods and Services Tax)
IGST • Applicable on interstate and import transactions
• Tax Collected is shared between Centre and State
GST – ILLUSTRATIONS
In VAT scenario (Intrastate Trade)
Mr. Cuttack sold goods Rs.1000 to Mr. Bhubaneswar
Bill value – Rs.1000
Add: VAT (14.5%) – Rs.145
value – Rs.1145
In GST scenario (Intrastate Trade)
Mr. Cuttack sold goods Rs.1000 to Mr. Bhubaneswar
Bill value – Rs.1000
Add: CGST (6%) – Rs.60
Add: SGST (6%) – Rs.60
value – Rs.1120
In CST scenario (Interstate Trade)
Mr. Cuttack sold goods Rs.1000 to Mr. Kolkata
Bill value – Rs.1000
Add: CST (2%) – Rs.20
value – Rs.1020
In IGST scenario (Interstate Trade)
Mr. Cuttack sold goods Rs.1000 to Mr. Kolkata
Bill value – Rs.1000
Add: IGST (12%) – Rs.120
value – Rs.1120
Under CST/ VAT/ Under GST
ED Value Tax
Cost of Projector 10,000 10,000 -
Add: ED @ 12% 1,200 - -
Total 11,200 10,000 -
Add: CST @ 2% 224 - -
Add: IGST @ 28% - - 2,800
Total 11,424 10,000 2,800
Add: ET @ 1% 114 - -
Total 11,538 10,000 2,800
Add: VAT @ 14.5% 1,673 - -
CGST & SGST (28%) - - 2,800
Cost Price for Customer 13,211 10,000 2,800
GST SET UP RULE
IGST Input Tax Credit should be first exhausted before using any
CGST or SGST Credit.
GST - Features
Input Tax Credit (ITC) of
IGST for IGST, CGST & SGST in that order
CGST for IGST & CGST in that order
SGST for IGST & SGST in that order
GST credit
[In case of Intrastate Purchase & Intrastate Sales]
Where Mr. Cuttack sold goods to Mr. Bhubaneswar
Output GST – Rs.120
CGST – Rs. 60
SGST – Rs. 60
[Input Value – Rs.800]
Less : Input GST – Rs.96
CGST – Rs. 48
SGST – Rs. 48
Net tax liability of Mr. Cuttack – Rs.24
CGST – Rs. 12
SGST – Rs. 12
GST credit
[In case of Interstate Purchase & Intrastate Sales]
Where Mr. Cuttack sold goods to Mr. Bhubaneswar
Input value – Rs.800
Input IGST – Rs. 96
Net tax liability of Mr. Cuttack - Rs. 24
CGST = Rs. 60 – Rs. 60 = Rs. 0
SGST = Rs.60 – Rs 36 = Rs. 24
Rs. 96 – Rs. 60
LEVY AND COLLECTION (SECTION 9)
• Supply of petroleum crude, high speed diesel, motor spirit, natural
gas and aviation turbine fuel to be levied at a later date.
• Specified categories of supply of goods or services or both would be
under reverse charge.
• Supply of taxable goods or services or both by an un-registered person to
a registered person shall be under reverse charge basis on the recipient.
• E-Commerce operator is liable to pay GST on specified categories of
services, supplied through it.
Registration - Law & Process
• Legally recognized as supplier
• To claim Input Tax Credit
Why reg ?
– Except in case of composition scheme
• Collection of Tax
– Except in case of composition scheme
• Taxable person means a person who is:-
– Registered or
– Liable to be registered under section 22 or 24
• Every supplier shall be liable to register
• In the state or union territory other than special
Taxable
category states
Person • From where he makes taxable supply
• Aggregate value exceeds 20L
• In case special category states – 10L
(85) “place of business” includes––
(a) a place from where the business is ordinarily
carried on, and includes a warehouse, a godown or
any other place where a taxable person stores his
goods, supplies or receives goods or services or both;
Place of
or
business (b) a place where a taxable person maintains his
books of account; or
(c) a place where a taxable person is engaged in
business through an agent, by whatever name called
- Every person – reg under earlier law – on appointed
day – liable to reg under GST through migration
- In case of transfer or successor – reg – w.e.f date of
such transfer or successor
Sec 22
- Amalgamation or demerger – HC order – transferee
liable to reg – w.e.f ROC issue a certificate of
incorporation giving effect of HC order.
• Aggregate value of all:
– Taxable supplies;
– Exempt supplies;
– Export of goods and/or services;
– Inter-state supplies of a person having the same
Aggregate PAN, to be computed on all India basis; and
Turnover – Excludes taxes, if any (CGST,SGST,UTGST or IGST)
Should include supplies made on behalf of his
principals.
Supplies made by Job Worker – treated as supply in
the hands of principal.
Illustration
A manufacturer has five factories in Maharashtra and
sale office in 3 states (including Maharashtra). It also
has centralized service tax registration at Maharashtra.
What would be difference in registration requirements
Illus. under GST?
Total Present Registration: 5 (excise) + 3 (VAT) + 1
(Service Tax) = 9
Registration under GST: 3 (in 3 states) {In each state,
registration would be with both CG and SG. But only
one registration number and certificate would be
issued for each state)
As per section 23:
Person engaged exclusively in supply of
goods/services
Not liable to tax; or
Wholly exempt from tax under this act or IGST
act;
No Reg.
an agriculturist, to the extent of supply of produce out
of cultivation of land;
Govt. on recommendation of council – specify category
of person exempt from obtaining reg.
As per section 24:
persons making any inter-State taxable supply
persons who are required to pay tax under reverse charge
non-resident taxable persons making taxable supply
Agent
Person supplying services/goods through e-commerce
Compulso E-commerce operator
ry Reg. OIDARS from outside India to person in India, other than
a registered person
Every person liable to reg. – apply in every such state or
union territory in which he is liable – within 30 days
from the date he becomes liable to registration.
Every person who makes a supply from the territorial
waters of India - shall obtain registration in the coastal
State or Union territory – nearest point of appropriate
base line.
Single registration for each state/UT.
Procedure Multiple Biz vertical – may grant separate registration
for each biz vertical.
2 branches in single state – single registration
Each branch is having different business segment –
can opt for – two different registration.
Each such registration – treated as distinct person.
SEZ – compulsorily separate biz vertical
• “business vertical” means a distinguishable component
of an enterprise that is engaged in the supply of
individual goods or services or a group of related goods
or services which is subject to risks and returns that are
different from those of the other business verticals.
Explanation - For the purposes of this clause, factors that
Biz should be considered in determining whether goods or
services are related include -
Vertical
the nature of the products or services
the nature of the production processes
the type or class of customers for the products or
services
the methods used to distribute the products or
provide the services
Voluntary Registration
A person,
though not liable to be registered under Act,
may get himself registered voluntarily, and
Voluntary all provisions of this Act, as are applicable to a
Reg.
registered taxable person, shall apply to such person.
This option may be feasible if the person is undertaking
B2B transaction – wherein ITC can be passed on.
• During the course of any survey, inspection, search,
enquiry of any other proceeding under the Act
• Proper officer finds that a person liable to registration
under the Act has failed to apply
• Such officer may register the said person on a
temporary basis and issue an order in Form GST REG-
Suo Moto 13
Reg • Within 90 days file an application in Form GSTREG1 or
Appeal to be filed against such order.
• In case of appeal – applicable to be filed in GST REG-01
within 30 days, if the appellate authority upheld the
liability to register.
Unique Identification under GST Regime
Goods and Service Tax Identification Number (GSTIN)
First 2 digits – State Code as per Indian Census 2011
Next 10 digits – PAN (TAN in case of TDS & TCS) Mandatory to
display GST
GSTIN 13th digit – Entity Code (Alpha – Numeric & supports
Certificate at
any entity having 35 business verticals) POB and
mention GSTIN
14th digit – Blank for future purpose (Provisional id is in name board
issued with letter Z)
15th digit – Check Digit
TIN for Casual Taxable Person and NRI to deposit tax in
advance
UIN for Special Entities
Display of registration certificate:
At his principal place of business; and
At every additional place of business
Display
Provision Display of GSTIN number:
In the name board exhibited at the entry of
principal place of business; and
At every additional place of business
Assessee who is required to get registered under GST,
when not registered within prescribed time limit, would
invite a penal consequence of Rs. 10,000/- or the amount
of tax evaded /non deducted / passed on whichever is
higher.
Penalty
PO may undertake best judgement assessment.
COMPOSITION LEVY (SECTION 10)
A Registered person whose aggregate turnover in the preceding FY did not
exceed Rs. 100 Lakhs.
All the registered taxable person under the same PAN should be under
composition .
Cannot collect tax from the recipient on supplies made.
No credit of input tax .
Rates under Composition:
Category of Registered Persons Rate of Tax
Manufacturers, other than as notified by Government. 2%
Suppliers making supplies referred to in clause (b) of 5%
paragraph 6 of Schedule II, i.e. restaurant supplies.
Any other supplier. 1%
Small Service Provider 6%
COMPOSITION LEVY (SECTION 10)
CONDITIONS FOR COMPOSITION LEVY
Not a supplier of services other than supplies referred to in clause (b) of
paragraph 6 of Schedule II (restaurant);
Not engaged in making supply of exempted goods under GST;
Not making any inter-State outward supplies of goods;
Not making any supply of goods through an electronic commerce operator;
Not a manufacturer of goods as may be notified.
PREREQUISITE FOR GST REGISTRATION
1. Incorporation Certificate
2. Articles of Assocition
3. Memorandum of Association
4. KYC (PAN and one address proof) of the KMP and Authorised
Person
5. Rent Agreement
6. Utility Bill
7. Bank Statement
8. List of proposed Supplies
UNDERSTANDING THE BUSINESS BEFORE
GST REGISTRATION
1. Annual Turnover/ Expected Annual Turnover
2. Nature of Business
3. Nature of Supplies
4. Determining the HSN Code of the supplies
5. Profit Margin
6. Duration of Business
Applicability OF GST on NPO
1. No GST applicable for Charitable and religious activities
2. If indulged in some taxable supplies. GST shall be applicable on
such Supplies only
TAX INVOICE
• Registered person supplying exempted goods/services or paying tax
under the composition scheme to issue a bill of supply.
• Registered person to issue Receipt Voucher on receipt of advance
payment with respect to any supply of goods/services.
• Various particulars to be contained in invoice are given in Invoice
Rules. (Like HSN or Accounting Code, quantity, rate of tax, value of
supply, place of supply, date of issue, etc.)
• Manner of issuing invoice:
In case of goods- In
In case of services- In
TRIPLICATE:
DUPLICATE:
Original for recipient,
Original for recipient,
Duplicate for transporter,
Duplicate for supplier.
Triplicate for supplier.
