GST - Goods and Services Tax

GST - Goods and Services Tax
Demystifying GST - Goods and Services Tax

Agenda: Introduction to GST GST Highlights Registration GST Compliance
Brief inference in comparison with existing law GST Impact Preparedness for GST Technology for GST

GST Key Milestones 14th June 2016 – Draft Model GST Law on public domain 3rd Aug – Rajya Sabha passes the Bill 8th Aug – Lok Sabha passes the Bill 8th Sept – President Ascent 12th Sept – Cabinet Approval to form GST Council 16th Sept – Govt. notifies GST Council 22nd /23rd – First Council Meeting 26th/27th – Draft Rules on public Domain

Introduction to GST A significant indirect taxation revolution in our country since Independence “One Tax, One Nation, One Market” GST is outright Business Reform not just Tax Reform GST is not an incremental tax, it is an transformational Tax Reform GST is highly compliance driven Law

GST Why GST? Simple Tax Structure Eliminates Cascading Effect
Increased revenue Eliminates Cascading Effect The current indirect tax system with multiplicity of taxes - at different rates - at multiple points. This has led to several inefficiencies and limitation. One of the limitation was no cross setting of liability with central and state levied taxes which resulted in cascading effect. GST- a single unified tax across the nation aims at simplify the tax system and uniting the country economically as One Nation – One Tax. Technology Driven System

Highlights of GST Common threshold limit across the country
Continuity of tax credit across the supply chain till it reaches the consumer Elimination of tax cascading effect in the supply chain PAN Based Registration ‘on Supply’ tax liability instead of ‘Removal / Sale’

Highlights of GST Valuation method broadly as ‘Transaction Value’
Branch transfers taxable and credit eligibility Tax credit eligibility on inward supply of goods / services for Inter-state transaction No declaration forms (Form – C, F, etc…….)

Registration – Threshold Limit
Regular Dealer North East India Aggregate Turnover exceeds 9 L for Registration 10L for Payment of Tax Rest of India Aggregate Turnover exceeds 19L for Registration 20L for Payment of Tax Composition Scheme Composition Levy Aggregate Turnover does not exceeds 50L

Transition Registration
Migration Automatic Registration First provisional & then final registrations

Registration Process and Forms - Existing
Existing Dealer Registration GSTN No If details Or information is satisfactory, Registration certificate will be issued Form GST REG-21 Provisional Registration certificate Yes Form GST REG-23 Show cause notice Within 6 M Hearing on show cause notice. Successful? Existing Registered Dealer Yes No All dealers registered with central or state tax authorities will be auto migrated and allotted with a provisional certificate of registration in Form GST REG-21. Within 6 months, dealers are required to submit Form GST REG -20 in GST Portal along with information and documents as prescribed. If the information provided are complete and satisfactory, final registration certificate will be issued in Form GST REG-06, If the details submitted are not satisfactory or details are not furnished with the stipulated period, the provision registration allotted in the Form GST REG-21 will be cancelled by issuing an order in Form GST REG-22. Prior, show cause notice will be issued in Form GST REG-23 and hearing before cancelling the provisional registration. During transition, if taxable person is not required to registered under GST but was previously registered (Central and State law) has an option to cancel provisional registration issued by submitting the Form GST REG-24 Form GST REG-06 Certificate of Registration Form GST REG-22 Cancellation order of Provision Registration Form GST REG-20 Submission of details and documents

Registration Forms Registration forms for other stakeholders Form No.
Form Type Form GST REG-07 Application for Registration as Tax Deductor or Tax Collector at Source Form GST REG -08 Order of Cancellation of Application for Registration as Tax Deductor or Tax Collector at Source under Section 21 of the Form GST REG-09 Application for Allotment of Unique ID to UN Bodies/Embassies Form GST REG-10 Application for Registration for Non Resident Taxable Person.

Amendment of Registration details
Registered Dealer Amend Registration Details Form GST REG-11 Change in registration details GSTN Making change as per Form GST REG-11 Form GST REG-12 Any change of details furnished in application or changes after obtaining registration shall be submitted within 15 days from the date of such changes via Form GST REG-11. The details such as Name of business, Place of business, details of partners, Managing committee etc. required approval from officer and then, the order will be issued via Form GST REG-12 to make such changes. Other details except those required approval, shall be amended on the basis of Form GST REG-11. Any changes in business which result in change in PAN number of Tax payer , shall apply for fresh registration via Form GST REG-01 Approval by an officer For changes specified in Rule Form GSTREG-12 Order to amend details Only for changes specified in Rule

Cancellation of Registration
Registered Dealer Cancellation of Registration Form GST REG-14 Application for cancellation of registration Within 7 days GSTN Form GST REG-16 Order to cancel registration A registered taxable person seeking cancellation of registration should file Form GST REG-14 along with the details of closing stock and relevant document. Within 7 days, a notice in Form GST REG-15 will be issued to taxable person to show cause with reason to such cancellation ( in a case, cancellation is initiated by officer, taxable person should provide the reason for non-cancellation) . If the officer is satisfied that the taxable person is no longer required to registered, issue an order in Form GST REG-16 to passed with 30 days from date of receipt of application or date of show cause. The effective date will be determined by officer and may direct taxable person to pay the tax arrears, interest or penalty if any. The taxable who has taken the voluntary registration will be allowed to apply for cancellation only after completion of 1 year from date of registration. Show cause Hearing Successful? Form GST REG-15 Show Cause Notice Yes

Revocation of cancelled Registration
Revoke cancelled Registration Registered Dealer Form GST REG-17 Application to revoke registration Form GST REG-05 Rejection of revocation application Form GST-REG-04 Provide Additional Details or clarification No Within 7 working days from the date of Form GST REG-03 Within 30 days from the date of cancellation order Hearing on show cause notice. Successful? GSTN Form GST REG-19 Show cause notice No Yes Form GST REG-03 Notice seeking Additional details or Clarifications In a case of registration cancelled by officer, taxable person can apply for revocation by submitting Form GST REG REG-17 with 30 days from date of cancellation order. If the officer requires, addition details / Clarification, issues Form GST REG-3 within 3 working days. The taxable to need to respond by providing requisite details via Form GST REG-4 (within 7 working days). If the officer is satisfied, he will revoke the cancellation by issuing an order in Form GST REG-18 within 30 days from date of such application. If the officer not satisfied, he will reject the application to revoke the cancellation of registration in Form GST REG-5. Before rejecting, the taxable person will be given an opportunity to show cause via notice of Form GST REG-19 The taxable person will not be allowed to apply for revocation registration if his registration is cancelled due to non-compliance (failure to furnish return and tax payment). He will be allowed only after furnish such returns and tax dues along interest or penalty if any is paid. Details are satisfactory? Complete details are provided? Yes No Form GST REG-18 Order to revoke the registration Within 30 days from the date of Form GST REG-17 or Form GST REG-04 Within 3 working days from the date of Form GST-REG-17 Yes

Mandatory Registration
Taxable person carrying on interstate supply Casual and Non-resident Taxable Persons Businesses liable to pay tax under reverse charge Agents supplying on behalf of Taxable Person Input Service Distributor Persons responsible to deduct TDS Sellers on e-commerce platforms Aggregator supplying services under his brand name

Determination of GST charge
CGST CGST stands Central GST This is applicable on within state supply Tax collected will be shared to Central SGST SGST stands for State GST This is applicable on within state supply Tax collected will be shared to state IGST IGST stands for Integrated GST This is applicable on Interstate and Import transactions Tax collected is shared between central and state

GST CGST SGST IGST Taxes subsumed under GST VAT Purchase Tax CST ADE
CVD & SAD Excise Duty GST Entry Tax Luxury tax Service Tax Surcharge & Cess Surcharge & Cess CGST SGST IGST

Tax scenario under GST Example of Car: Existing Cost of Manufactures
4,00,000 12 % + Infrastructure cess1% 52,000 Vat 12.5% 56,500 Dealer Invoice 5,08,500 Dealer Cost (4,00, ,000) 4,52,000 10 % 45,200 Sale Price for dealer 4,97,200 62,150 Price to customer 5,59,350 GST 4,00,000 44,000 4,88,000 40,000 4,40,000 48,400 5,36,800 Saving to Consumer Amount Percentage 22,550 4%

Input Credit Adjustment
CGST - ITC IGST CGST SGST - ITC IGST SGST IGST- ITC SGST CGST IGST

Restriction of ITC set-off
Under the current model draft law, the CGST and SGST of a state cannot be adjusted with the CGST/SGST of another state. Example: A CA has a registered place of supply in Karnataka, goes to Mumbai to appear for a court case, and stays in hotel in Mumbai. The Hotel will charge intra-state GST, as it is supply of service of immovable property, though the customer’s place of supply is Karnataka, in this scenario, the CGST/SGST charged in Maharashtra cannot be set-off against the liability of CGST/SGST of Karnataka

Type of Returns (Latest 27th Sept – Rule &Format)
Regular Dealer Form Type Frequency Due Date Details to be furnished Form GSTR-1 Monthly 10th of succeeding month Details of outward supplies of taxable goods and/or services effectedd Form GSTR-2A Monthly On 11th of succeeding Month Auto-populated details of inward supplies made available to the recipient on the basis of Form GSTR-1 furnished by the supplier Form GSTR-2 Monthly 15th of succeeding month Details of inward supplies of taxable goods and/or services claiming input tax credit. Addition (Claims) or modification in Form GSTR-2A should be submitted in Form GSTR-2. Form GSTR-1A Monthly 20th of succeeding month Details of outward supplies as added, corrected or deleted by the recipient Form GSTR-3 Monthly 20th of succeeding month Monthly return on the basis of finalization of details of outward supplies and inward supplies along with the payment of amount of tax Form GSTR-3A -- Notice to a registered taxable person who fails to furnish return under section 27 and section 31 Form GSTR-9 Annually 31st Dec of next fiscal Annual Return - Furnish the details of ITC availed and GST paid which includes local, interstate and import/exports.

Composite Tax payer Return Type Frequency Due Date Details to be furnished Form GSTR-4A Quarterly -- Details of inward supplies made available to the recipient registered under composition scheme on the basis of FORM GSTR-1 furnished by the supplier Form GSTR-4 18th of succeeding month Furnish all outward supply of goods and services. This includes auto-Populated details from GSTR-1, tax payable and payment of tax. Form GSTR-9A Annual 31st Dec of next fiscal Furnish the details of quarterly filed return along with tax payment.

Input Service Distributor Return Type Frequency Due Date Details to be furnished Form GSTR-6A Monthly 11th of succeeding month Details of inward supplies made available to the ISD recipient on the basis of FORM GSTR-1 furnished by the supplier Form GSTR-6 13th of succeeding month Furnish the details of Input Credit distributed Tax Deductor Return Type Frequency Due Date Details to be furnished Form GSTR-7 Monthly 10th of succeeding month Furnish the details of TDS deducted Form GSTR-7A TDS certificate Made available for download TDS Certificate – Captures details of value on which TDS is deducted and deposit on TDS deducted into appropriate Govt. E-commerce and Service Aggregators Return Type Frequency Due Date Details to be furnished Form GSTR-8 Monthly 10th of succeeding month Details of supplies effected through e-commerce operator and the amount of tax collected

Aggregate Turnover exceeding 1 Cr. Return Type Frequency Due Date Details to be furnished Form GSTR-9B Annually Annual, 31st Dec of next fiscal’ Reconciliation Statement -audited annual accounts and a reconciliation statement, duly certified. Final return -For taxable person whose registration has been surrendered or cancelled Return Type Frequency Due Date Details to be furnished Form GSTR-10 -- Within 3 Months from date of Surrender Registration or cancellation order Furnish details inputs and Capital goods held, tax paid and payable. Form GSTR-9B : As per Section 42 ( This deals with Accounts and Records ) Sub-section 4-Every registered taxable person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and shall submit to the proper officer a copy of the audited statement of accounts, the reconciliation statement. Form GSTR- 10 : As per Section 31( which Deals with Final returns ) Every registered taxable person who applies for cancellation of registration shall furnish a final return within three months of the date of cancellation or date of cancellation order, whichever is later, in form GSTR-10 Form GSTR- 11 : Under Section 19 ( which talks about registration ) Sub section 6 says obtaining UIN ( Unique Identity Number ) for specialized agency of the United Nations Organization or any Multilateral Financial Institution and Organization notified under the United Nations (Privileges and Immunities) Act, 1947 (46 of 1947),Consulate or Embassy of foreign countries and any other person or class of persons as may be notified by the Board / Commissioner.

FORM GST ITC-1 Communication of acceptance, discrepancy or duplication of input tax credit claim Form GST ITC-1A Mismatch Reports for Recipient Form GST ITC-1B Mismatch Reports for Supplier Form GST ITC-1C Mismatch Reports for E-commerce Operators ITC-1A : Mismatch as per Supplier and recipient return ( when valid return is filed by supplier ). If supplier has not filed return, all invoice will me under mismatch. Mismatch due to Duplicate Claims and credit notes. ITC -1B : Similar to ITC-1A. ITC -1C – Mistake of outward supplies made to registered dealer and other than registered dealer.

Input Credit Mechanism / Return Upload
SUPPLIER BUYER Supply of Goods/ Services TAX INVOICE Supply of Goods / Services TAX INVOICE GSTR-1 by 10th Payment of Tax on 20th Electronic Credit ledger GSTR-2 by 15th Provisional ITC FORM GST ITC-1 GSTR-1 by 10th GST Portal GSTR-2A on 11th GSTR-2A on 11th GSTR-2 by 15th GSTR-1A between 15th to 20th GSTR-1A between 15th to 20th GSTR-3 on 20th

Value of Supply of Goods / Services
The value of taxable supply of goods and / or services shall be ‘the Transaction Value’. It refers actually the price paid or payable for supply of Goods and Services Inclusions in Transaction Value Any Cost Incurred by recipient on behalf of supplier Royalties & License fees Free supplies like Buy 1 get 1 free Any Taxes other than GST Post Supply Discounts Commission and Packing charges Exclusions in Transaction Value Discount allowed and recorded in Invoice Post Supply discount mentioned in agreement and well know before supply

Accounts & Other Records
True and correct account of production or manufacture of goods, of inward or outward supply of goods and / or services, of stock of goods, of input tax credit availed, of output tax payable and paid, and such other particulars as may be prescribed in this behalf at the principal place of business. In case where there are more than one place of business as specified in the certificate of registration, the accounts relating to each place of business shall be kept at such places of business concerned Audited Accounts by practicing CA, Cost Acc., CS - TO> 1.0

Period of Retention of Accounts
Every registered taxable person shall retain them until the end of 60 months from the last of date of filing of annual return for the said year. Ex:- FY , annual return to be submitted by Dec -2018 Example FY , annual return to be submitted by Dec Books will be kept till end of Dec -2023

Refund of Tax Refund to be claimed by making an application to the proper officer of IGST/CGST/SGST before the expiry of 2 years from the relevant date Refund will be given only for ITC claim in case of Export and in case where the credit has accumulated on account of rate of tax on input being higher than the rate of tax on output. In case where the goods are exported out of India are subject to export duty, no refund can be claimed 80% refund will be within specified time 20% after due verification of documents furnished

Tax wrongfully collected & deposited
A taxable person who had paid CGST/SGST on a transaction considered by him to be an intra-state supply, but which is subsequently held to be an inter-state supply, first need to pay the liability of IGST and then claim refund of wrong tax amount paid.

Documents as Evidence Micro film or reproduction of the image of a document A facsimile copy of the document Printed material produced by a computer (Computer printout) Computer printout should be from the computer being used regularly to store or process information for any activity regularly carried on over the period (even if multiple computer, software are used) will be considered as one computer

Transition Provisions
Amount of CENVAT / VAT credit carried forward in a return to be allowed: - admissible under both Law Unavailed cenvat credit and VAT credit on capital goods, not carried forward in a return - admissible under both Law Manufacturers – who are not liable to be registered and engaged in the manufacture of exempted goods under the earlier law but which are liable to tax under GST Act, can avail credit of eligible duties & taxes in respect of inputs held in stock and input containing in semi-finished and finished goods. (tax invoice and other documents as prescribed)

Transition Provisions
Manufacturers – was eligible for Cenvat credit on receipt of such goods and/ or services under the earlier law but for his not being liable for registration. (tax invoice and other documents as prescribed evidencing payment of duty/tax under the earlier law) Applies for dealer under composition scheme to regular dealer under the current law. All other conditions apply.

Mandatory e-payment for amount exceeding Rs 10,000
20th of subsequent Month Mandatory e-payment for amount exceeding Rs 10,000 Online: NEFT/RTGS/IMPS Offline: Cash/ Cheque / DD etc.

Consequence of Non-compliance
Late Fee Fails to furnish returns For Monthly / Quarterly Retun - Rs.100/- per day for every day during which such failure continues subject to a maximum of Rs. 5000/- Annual Return -Rs.100/- per day for every day during which such failure continues subject to a maximum of Rs % of aggregate turnover Interest Delay in Tax Payment The rate of interest is yet to be notified Cancelation of Registration If returns are not furnished for 6 consecutive tax period for regular dealer If returns are not furnished for 3 consecutive tax period for composition dealer Fines Rs.10,000/- or an equal amount to the extent of tax evaded Imprisonment with fine up to 5 years depending on amount of tax evasion with slab ranging from 25Lakhs to 500 Lakhs

With GST What will change ?
Technology Digital B to G connect End-to-End Technology Driven System GST compliance rating Process Transaction Focused Transparency from grass-root level of business records Triangulation of suppliers and recipient records Rectification errors and omissions Reconciling returns with books Discipline On-Time submission of returns On-Time Payment Interest on disputed credits Less scope for Kacha Bill Vat only Dealers to GST Compliance to Inherited provisions of Excise and Service Tax in GST

Organizational competency / Consultancy
GST Impact Business Process Organizational competency / Consultancy Transitioning Compliance Credibility

Preparedness for GST Books of accounts/ records matching 100% with the return Educating your client on proper compliance Discipline in maintaining, recording and reconciling ‘electronic’ – Credit and Cash ledger Records to substantiate ITC eligibility on stocks / capital goods held as of last day before the appointed date Explore best technology – Adapt and Align with your professional activities Transitioning to GST

Technology for GST

Why? Technology is the key
GST is transaction based technology driven compliance B to B to G data exchange through GSTN Triangulation of Business records with GSTN

Seamless Detection, Correction and Compliance
Technology is the key Seamless Detection, Correction and Compliance Configuration Reconciling at source Recording Reconciling post reporting Triangulation with GSTN

Tally’s Technology for GST
Hero of GST Success API Application Program Interface

Tally’s Technology for GST
Tally’s Role Interface with GSTN GSP Business Solution ASP

Prevention is better than Cure
Preparation Prevention is better than Cure What can we do today? For Tomorrow’s Readiness

Highlight of Tally’s latest release
Tally.ERP 9 Release 5.4 Highlight of Tally’s latest release Simple and Quick configuration Triangulation report for ensuring 100% of books matching the report System assisted quick exceptional report and rectification Export of purchase & Sales details as per the prescribed format by a click of a button Saving of return filed for future reference

Highlight of Tally’s latest release
Tally.ERP 9 Release 5.4 Highlight of Tally’s latest release Simple and Comprehensive Integrated inventory management system- Hassel free claim of opening input tax credit under GST Tally’s Foresight of base Technology fabric to meet GST compliance requirement : Auto Bank Reconciliation feature External Confirmation (Third-party Confirmation)

Tally will give the BEST Technology for GST
Government Knows what is GOOD for the Country Tax Experts know what is BETTER for Tax payers Tally will give the BEST Technology for GST

To Know more on GST Visit our Blog blogs.tallysolutions.com

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GST - Goods and Services Tax

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