GST - Impact, Development and Compliances

Prepared by – Nikita Lakhotia, Naimish PadhiarSandesh Mundra & Associates – [email protected]


01 GST Overview

02

03

04

Today’s Agenda

Impact on various sectors

Glimpse on GST Development

Compliances


Sale Transfer Barter Exchange

Activities Specified in Schedule II

Activities Specified in Schedule I

SupplyIncludes

Supply Includes:

Import of Service for Consideration

Licence Rental Lease Disposal


SupplyExcludes

Supply Excludes:Service by employer to employee in course of employment

Service by Court or Tribunal

Activities undertaken by

CG/SG/LA engaged as

Public Authorities

Sale of land, Building

Service of funeral, burial, crematorium

or mortuary including transportation of

deceased

Actionable Claim other than

lottery, betting and gambling

Functions of MP, Duties performed at post in

constitution, Duties of chairperson , member,

director of body established by govt.


Input Tax Credit Mechanism

SGST

CGST IGST


Impact on Businesses


Manufacturing Industry


Works Contract


Sector Wise Impact of GST

Sector Impact on Settingup cost

Impact onOperatingCost

Power

Renewable

Coal

Petroleum

Nuclear

Negative

Indifferent

Positive


Sector Impact on Settingup cost

Impact on Operating Cost

BOT Projects (Road)Port

Railway

Mining

Negative

Indifferent

Positive

Sector Wise Impact of GST


Mining SectorCurrent Tax Scenario:-


Mining SectorGST Regime:-

Merchant Mining –Positive Impact

Merchant Mining Cum Manufacturing – Neutral

Particulars

Merchant Mining Sector

Mining Cum Manufacturing

Sector

Tax levied

Cenvatcredit

Available

Tax levied

Cenvatcredit

Available

Supply of Services :-

Exploration of Mines ✔ ✔ ✔ ✔

Handling of Mines ✔ ✔ ✔ ✔

Transportation of Mines ✔ ✔ ✔ ✔

Grant for mining lease ✔ ✔ ✔ ✔

Outward supply - Intrastate ✔ ✔ ✔ ✔

Value Added Tax on outward supply

✔ ✔ ✔ ✔

Outward supply - Interstate ✔ ✔ ✔ ✔


Textile Industry

Pre GST Regime

Post GST Regime


Automobile Industry


RetailersRetailers

Particulars Pre GST Regime Post GST Regime

Value of Goods 1000 1000

Add:- Excise Duty @ 12% 120 -

Cost to Retailer 1120 1000

Add:- VAT @15% 168 -

Add:- GST @18% - 180

Total Value to Retailer 1,288 1180

Net Impact 108 8.39%

Positive Impact


GST Updates

Notifications

Circulars

Press Release


CGST Notification

Supplier

Providing Taxable Supplies covered

under RCM

Exempt from Registration

Notification No – 05/2017Date – 19/06/2017


CGST Notification

Notification No –08/2017

Date – 27/06/2017

Turnover for opting for Composition Scheme

Rs. 75 Lakhs in Preceding F.Y.

Tax Rates for Composition Scheme

Manufacturer – 1% of turnover

Entry 6(b) of Schedule II – 2.5% of turnover

Other Suppliers – 0.5% of turnover


CGST Notification


Number of HSN digits required on tax invoice

Turnover in Prev

Year upto Rs. 1.5 Cr

Turnover in Prev Year more than

Rs. 5 Cr

Turnover in Prev Year

more than Rs. 1.5 Cr but

upto Rs. 5 Cr

Not Required

4 Digits

2 Digits


CGST NotificationInterest on

Late payment of

Tax

• 18%

Interest on wrong

availment of ITC

• 24%

Interest on withheld refunds

• 6%

Interest on Delayed Refund

• 6%

Interest on refund

arising from appeals

• 9%



CGST Notification

Categories of persons eligible for Letter of

Undertaking in place of bond

A status Holder as specified in Para 5 of Foreign Trade Policy 2015-2020

Person who has received due foreign inward remittances amounting to min of

10% of export turnover, which should not be less than Rs. 1 Cr in Preceding FY



CGST Notification (Rate)

Services by way of

Transportation of passenger by radio taxi, motor cab, maxi cab and motor

cycle

Accommodation in hotels, inns, guest houses, clubs, campsite or other

commercial places meant for residential or lodging purposes

Tax Payable by E-

Commerce Operator



CGST Notification (Rate)Notification No – 15/2017

Date – 28/06/2017

No refund of unutilized ITC will be available under Section 54(3) of CGST Act when providing services specified in Paragraph 5(b) of Schedule II to CGST Act i.e. Construction Services.


CGST Notification (Rate)Notification No – 13/2017

Date – 28/06/2017

Service Provider Recipient

Goods TransportAgency Service

Goods Transport Agency

1. Factory registered under Factories Act 19482. Society registered under Societies Registration Act

1860 or any other law in force3. Co-operative societies established under any law4. Any registered person under this Act5. Body corporate established under any law6. Partnership Firm including AOP7. Casual taxable person in taxable territory

Reverse Charge


CGST Notification (Rate)…(cont) Notification No – 13/2017Date – 28/06/2017


Legal Consultancy Service

Advocate / Senior Advocate/ Firm of Advocates

Any business entity located in taxable territory

ArbitralTribunal Services

An Arbitral Tribunal

Any business entity located in taxable territory

Sponsorship Service

Any Person Body Corporate or Partnership Firm




Government Services

Central Government / State Government / Union Territory or Local Authority

Any business entity located in taxableterritory

Director Service

Director of Company or Body Corporate

Company or Body Corporate located in taxable territory

Insurance Service

Insurance Agent Any person carrying on Insurance Business

CGST Notification (Rate)…(cont)




Recovery Agent Service

Recovery Agent Banking Company or Non-Banking Company or NBFC

Service of transferring or permitting to use copyright

Author,Music Composer,Photographer,Artist,or the like

Publisher,Music Company,Producer,or the like

CGST Notification (Rate)…(cont)



• Prescribes Exemption List under CGST Act




• Exemption to dealers operating under Marginal Scheme

Exemption from CGST payable on Intra-State receipt of second hand goods from unregistered dealers


Date – 28/06/2017



No deduction of TDS in case of intra-state supplies of goods or services or both received by a deductor u/s 51 of CGST Act provided that deductor is not liable to registration other than as per Section 24(vi)


Date – 28/06/2017



Intra-State supplies from Unregistered

Person does not exceeds Rs.

5,000/- per day

No RCM Applicable


Date – 28/06/2017


CGST Notification (Rate) Notification No –04/2017

Date – 28/06/2017Reverse Charge

Goods Provider Recipient

Cashew Nuts, not shelled or peeled

Agriculturist Any registered person

Bidi wrapper leaves (tendu)

Agriculturist Any registered person

Tobacco Leaves Agriculturist Any registered person

Silk Yarn Manufacturer of silk yarn from raw silk or worm cocoons

Any registered person

Supply of lottery SG, UT, or any LA Lottery distributor or selling agent


Press Release

Date Particulars

15th June 2017 Lower Tax Incidences on Complex, Building, Flat etc.

18th June 2017 Relaxation in return filing for 1st two months

15th July 2017 Applicability of GST on Legal Services

15th July 2017 Applicability of Margin Scheme on Second Hand Goods

17th July 2017 Increase in Compensation Cess on Cigarettes

18th July 2017 Rate of tax on accommodation in hotels including 5 star hotels


Lower Tax Incidences on Complex, Building, Flats etc

The press note states that the builder who are presently under apractice of calling the entire booking amount pre-GST on accountof increased rate is against the GST Law.

Builders are liable to pass on the benefits of lower tax burdenunder the GST regime to the buyers of property by way of reducedprices/ installments on account of reductions in credit blockages.

Therefore, builders / construction companies cannot askcustomers to pay higher tax rate on instalments to be receivedafter imposition of GST.


Return for first two months


GST on Legal Service

Legal services provided by advocate, senior advocate or firm ofadvocates are liable for payment of GST under reverse charge bythe business entity.

The words “by way of representational services before any court,tribunal or authority….” appear in conjunction with senioradvocate and merely describe the nature and mode ofrepresentational services provided by a senior advocate to abusiness entity.


Applicability of Margin Scheme on Second Hand Goods

Value of supply for second hand goods shall be the differencebetween the selling price and the purchase price and where thevalue of such supply is negative, it shall be ignored. This is knownas the margin scheme.

This press release specifies notification which exempts CentralTax leviable on intra-State supplies of second hand goodsreceived by a registered person, dealing in buying and selling ofsecond hand goods from any supplier, who is not registered asITC will not be available on purchases of second hand goods.


Registration of Traders

Registered under any of the existing law

Migrated

Liable for registration in GST regime

Provisional Ids issued need to be converted to GSTIN by submitting necessary documents in 3 months (i.e. by 22nd September 2017)

Not liable for registration in GST regime

Need to apply for cancellation in 30 days(i.e. by 22nd July, 2017)

Not-Migrated


Need to apply for registration within 30 days (i.e. by 22nd July, 2017)

Not registered under any of existing law


Become liable from 01/07/2017

Need to apply for registration within 30 days (i.e. by 30thJuly, 2017)

Become liable after 01/07/2017

Need to apply for registration within 30 days from becoming liable for registration


GST on Hotels including 5 Star Hotel

GST on accommodation in hotels including 5-star hotel,where tariff is less than Rs. 7500 for per day per unit is 18%.


Compliances


Registration


Persons Liable for Registration

Aggregate Turnover Exceeds Rs. 20 Lakhs (10 Lakhs for Special

Category States)

Transferee liable to registration if Business Transferred as a going

concern

Registered under Earlier law Subsumed

in GST

Amalgamation/Merger/ Demerger pursuant to an order of High court,

tribunal


Persons Not Liable for Registration

Persons Not Liable for

Registration

Supplying Exempt goods or services or both

Supplying goods or services or

both not liable to tax under this Act

Agriculturist, to the extent of

supply of produce out of cultivation

of land

Persons as may be notified by

Government


Compulsory Registration

Person making Inter-State Taxable Supply

Casual Taxable Person making Taxable supply

Person required to pay under RCM

Person liable to pay u/s 9(5) – E-Commerce Operator

Non-Resident Taxable Person

TDS Deductors


Compulsory Registration…(Cont.)

Agent

Input Service Distributor

Supplier making supply through E-Commerce Operator

E-Commerce Operator

Supplier of Online Information and Database Access or Retrieval

Person as may be notified


Special Provisions under Registration

Casual Taxable Person

Person who occasionally undertakes transactions

involving supply of goods and / or services in the

course or furtherance of business, in a taxable

territory where he has no fixed place of

business.

Non-Resident Taxable Person

Person who occasionally, undertakes transactions

involving supply of goods and services, and who has no fixed place of

business in India.


Returns


Return Types

Return No. Particular Due Date Applicable for

GSTR-1 Outward Supplies 10th of next month Regular Taxpayer

GSTR-2 Inward Supplies 15th of next month Regular Taxpayer

GSTR-3 Monthly Return 20th of next month Regular Taxpayer

GSTR-4 Quarterly Return 18th of next quarter Composition Taxpayer

GSTR-5 Return by Non-Resident Taxpayer

20th of next month or 7 days after expiry of registration

Non-Resident Taxpayer

GSTR-5A Online Information and Database Access

20th of next month Online Information and Database Access


Return Types

Return No. Particular Due Date Applicable for

GSTR-6 Return by Input Service Distributor

13th of next month Input service Distributor

GSTR-7 TDS 10th of next month Tax Deductor

GSTR-8 TCS 10th of next month E-Commerce

GSTR-9 Annual Return 31st of next F.Y. Regular Taxpayer

GSTR-9A Annual Return 31st of next F.Y. Composition Taxpayer

GSTR-9B Annual Return 31st of next F.Y. E-Commerce

GSTR-9C Annual Return 31st of next F.Y. Aggregate Turnover > Rs. 2 Cr.


Return Process

Supplier Uploads GSTR-1

(upto 10th of next month)

Auto-drafted GSTR-2A based on details from GSTR-1 filed by suppliers

(after 10th of next month)

Generate GSTR-2 by accepting /

rejecting / modifying details

from GSTR-2A

(After 10th but upto 15th

of next month)

Add missing purchase invoices

(By Recipient)

Supplier to accept modifications

(by 17th but not before 15th )

General net tax: Pay / carried

forward in GSTR 3

(By 20th of next month)


Matching of ITC Matchings shall be done after due date of

GSTR-3

GSTIN of Supplier

Invoice or Debit Note Date

GSTIN of Recipient

Invoice or Debit Note Number

Tax Amount


Supplier / ReceiverPortal

Recipient / Supplier

In FORM GST MIS - 1

Final Acceptance and Communication thereof

Where above details are matched

Communicate the acceptance through

SupplierPortalRecipient

Rectifies and matches ITC after communication


DiscrepancyWhere ITC

claimed is not matched

Added ITC but supplier did not mention the details of supply or details mentioned are not declared by supplier

SupplierRecipient

Did not rectified the same

Added to output liability of recipient

Communicated to Recipient in FORM

GST MIS - 1

Communicated to Supplier in FORM

GST MIS - 2


Claim of ITC on same invoice more than once

ITC claimed more than

once on same invoice

Communicate to

Registered Person in form

GST MIS - 1

Through

Portal

* If not rectified within 2 months than added to output liability of recipient


Matching & Claim of Output Liability Matchings shall

be done after due date of GSTR-3

GSTIN of Supplier

Credit Note DateGSTIN of Recipient

Credit Note Number

Tax Amount


Final Acceptance of reduction in output liability and Communication thereof

Where above details are matched

Communicate the acceptance through

Supplier /

ReceiverPortal

Recipient / Supplier

In FORM GST MIS - 1

Rectifies and matches after

communication


DiscrepancyWhere ITC claimed is not matched

Output liability reduced does not match with supplier and not rectified in his return

SupplierRecipient

Did not rectified the same

Added to output liability

Communicated to Supplier in FORM GST

MIS - 1

Communicated to Recipient in FORM GST

MIS - 2


Reduction in output tax liability more than once

ITC claimed more than

once on same invoice

Communicate to

Registered Person in form

GST MIS - 1

Through

Portal


Sandesh Mundra & AssociatesChartered Accountants

www.smaca.in

304, Super Plaza, Near Prakash High School, Sandesh Press Road, Vastrapur, Ahmedabad

[email protected] 079-40032950