GST (Goods and Services Tax)

On July 1, 2017, GST laws were implemented, replacing a complex web of Central and State taxes. Under the Indian GST, goods and services are categorized into different tax slabs, including 5%, 12%, 18%, and 28%.

Registration is the most fundamental requirement for the identification of tax payers to ensure compliance and to obtain a unique registration number for the purpose of collecting tax on behalf of the Government and to avail ITC accrued on the inward supplies.

GST and Centre-State Financial Relations4. Currently, the fiscal powers between the Centre and the States are clearly demarcated in the Constitution with almost no overlap between the respective domains. The Centre has the powers to levy tax on the manufacture of goods (except alcoholic liquor for human consumption, opium, narcotics etc.) while the States have the powers to levy tax on the sale of goods. In the case of interstate sales, the Centre has the power to levy a tax (the Central Sales Tax) but, the tax is collected and retained entirely by the States. As for services, it is the Centre alone that is empowered to levy service tax.4.1 Introduction of the GST would require amendments in the Constitution so as to simultaneously empower the Centre and the States to levy and collect this tax. The assignment of simultaneous jurisdiction to the Centre and the States for the levy of GST would require a unique institutional mechanism that would ensure that decisions about the structure, design and operation of GST are taken jointly by the two. For it to be effective, such a mechanism also needs to have Constitutional force.

A GST Council would be constituted comprising the Union Finance Minister (who will be the Chairman of the Council), the Minister of State(Revenue) and the State Finance/Taxation Ministers to recommend on(a) the taxes, cesses and surcharges to be subsumed under GST;(b) the goods and services that may be subjected to or exempted from the GST;(c) the date from which the specified petroleum products would be subject to GST;(d) model GST laws, principles of levy, apportionment of IGST and the principles that govern the place of supply;(e) the threshold limit of turnover below which the goods and services may be exempted from GST;(f) the rates including floor rates with bands of GST;(g) any special rate or rates for a specified period to raise additional resources during any natural calamity or disaster; and(h) special provision with respect to the North-East States, J&K, Himachal Pradesh and Uttarkhand.5.1 The mechanism of GST Council would ensure some degree of harmonization on different aspects of GST between the Centre and the States as well as among States. It is being specifically provided that the GST Council, in its discharge of various functions, shall be guided by the need for a harmonized structure of GST and for the development of a harmonized national market for goods and services

Model GST Law: The Model GST Law, jointly drafted by the tax officials of the Centre and States, has been placed on the website of the Ministry of Finance for suggestions/ comments. The model CGST/SGST legislation contains 162sections spread over 25 Chapters and 4 Schedules. The draft sets out the provisions of taxable event, taxable person, time of supply, valuation of supply and input tax credit. The draft also deals with the various administrative and procedural aspects of levy, such as, registration, filing of returns, assessment, payment of tax, maintenance of accounts, refunds, audit, demands and recovery, inspection, search, seizure and arrest, offences and penalties, prosecution, appeals and revision, advance ruling and transitional provisions.9. Under the GST regime, tax is payable by the taxable person on the supply of goods and/or services. Liability to pay tax arises when the taxable person crosses the threshold exemption, i.e. Rs.10 lakhs. The CGST / SGST is payable on all intra-State supply of goods and/or services and IGST is payable on all inter-State supply of goods and/or services. Intra-State supply of goods and/or services refers to those transactions where the location of the supplier and the place of supply are in the same State. Inter-State supply of goods and/or services refers to those transactions where the location of the supplier and the place of supply are in different States. The CGST /SGST and IGST are payable at the rates specified in the Schedules to the respective Acts.10. The draft IGST law contains 33 sections divided into 11 Chapters. The draft, inter alia, sets out the rules for determination of the place of supply of7goods.Where the supply involves movement of goods, the place of supply shall be the location of goods at the time at which the movement of goods terminates for delivery to the recipient. Where the supply does not involve movement of goods, the place of supply shall be the location of such goods at the time of delivery to the recipient. Where the goods are assembled or installed at site, the place of supply shall be the place of such installation or assembly. Where the goods are supplied on board a conveyance the place of supply shall be the location at which such goods are taken on board.

Minimal interface

11.1 The physical interface between the tax payer and the tax authorities would be minimal under GST. Certain important provisions in this regard are:(i) Registration will be granted on line and shall be deemed to have been granted if no deficiency is communicated to the applicant within 3 common working days.(ii) Taxable person shall himself assess the taxes payable (self-assessment) and credit it to the account of the Government.(iii) Payment of tax shall be made electronically through internet banking. Smaller taxpayers shall be allowed to use the systems generated challan and pay tax at the bank counter.(iv) The tax payer shall furnish the details of sales and purchases electronically without any physical interface with the tax authorities.(v) Tax payers shall file, electronically, monthly returns of sales and purchases, ITC availed, tax payable, tax paid and other prescribed particulars. Composition tax payers shall file, electronically, quarterly returns. Omission/incorrect particulars can be self-rectified before the filing of annual return.(vi) Matching, reversal and reclaim of input tax credit shall be done electronically on the GSTN portal without any tax payer contact. [This would prevent, inter alia, input tax credit being taken on the basis of fake invoices or twice on the same invoice.](vii) Tax payers shall be allowed to keep and maintain accounts and other records in electronic form. Input tax credit11.2 The provisions of input tax credit have been prone to litigation. The Model GST law provides an elaborate mechanism for ailment and utilization of ITC and seeks to impart clarity so as to minimize disputes. The important provisions of the law are:9(i) Tax payer is allowed to take credit of taxes paid on inputs (input tax credit),as self-assessed, in his return.(ii) Taxpayer can take credit of taxes paid on all goods and services, other than anew in the negative list, and utilize the same for payment of output tax.(iii) Credit of taxes paid on inputs shall be allowed where the inputs are used for business purposes or making taxable supplies.(iv) Full input tax credit shall be allowed on capital goods on its receipt as against the current Central Government practice of staggering the credit in two equal instalments.(v) Unutilized input tax credit can be carried forward.(vi) The facility of distribution of input tax credit amongst group companies has been provided for.

Refund

11.3 Refund provisions have been simplified and made more taxpayer friendly. Some of the important provisions of the Model GST law are:(i) Time limit for claiming refund has been increased from one year to two years.(ii) Refund claim along with documentary evidence is to be filed online without any physical interface and the tax refund will be directly credited to the nominated bank account of the applicant.(iii) Refund shall be granted within 90 days from the date of receipt of application. Interest is payable if refund is not sanctioned within the stipulated period of 90 days.(iv)If the refund claim is less than Rs. 5 lakhs, there is no need for the claim antto furnish any documentary evidence that he has not passed on the incidence of tax to any other person. Only a self-certification to this effect would suffice.(v) Refund of input tax credit shall be allowed in case of exports or where the credit accumulation is on account of inverted duty structure (i.e. where the tax rate on output is higher than that on inputs).10(vi) In case of refund claim on account of exports, 80% of the claim shall be paid immediately on a provisional basis without verification of documentary evidence.

Demands

11.4 Keeping in mind complaints of long delays in issuance of adjudication orders, a new concept of sunset clause for tax disputes has been introduced. The important provisions in this regard are:(i) Adjudication order shall be issued within 3 years of filing of annual return in normal cases.(ii) The time limit is 5 years (of filing of annual return) in fraud/suppression cases.(iii) There are no separate time lines for issue of SCN and adjudication order, as at present under Central Laws.(iv) Provisions for settlement of cases have been made available to taxpayers at every stage, right from audit/investigation to the stage of passing of adjudication order and even thereafter.(v) Penalty is minimal if the tax short paid / non-paid is deposited along with interest at the stage of audit/investigation.(vi) The officer shall in his order set out the relevant facts and the basis of his decision.(vii) The amount of tax, interest and penalty demanded in the order shall not be in excess of the amount specified in the notice.(viii) No demand shall be confirmed on grounds other than the grounds specified in the notice.Audit11.5 The manner of conducting audit has been a sore point with the taxpayers. In the Model GST law, certain disciplines have been brought in, as enumerated below, to streamline the process of audit.

(i) It is not necessary that in all cases the tax authorities would have to visit the place of business of the taxpayer for conducting audit. The audit can even be conducted at the office of the tax authorities.(ii) Tax payer shall be informed sufficiently in advance, not less than 15working days, prior to the conduct of audit.(iii) The audit shall be carried out in a transparent manner and completed generally within a period of 3 months from the date of commencement of audit.(iv) On conclusion of audit, the proper officer shall without delay notify the taxable person of the findings, the taxable person’s rights and obligations and reasons for the findings. Penalty disciplines11.6 Another area of dissatisfaction of the taxpayers has been the propensity of the tax authorities to impose disproportionately high penalties for breaches of law which may not be that serious. In order to address this concern, certain general disciplines, as mentioned below, have been incorporated in the Model GST Law.(i) No substantial penalties shall be imposed for minor breaches of tax regulations or procedural requirements.(ii) No penalty shall be imposed in respect of any omission or mistake in documentation which is easily rectifiable and obviously made without fraudulent intent or gross negligence.(iii) Penalty shall be commensurate with the degree and severity of the breach.(iv) No penalty shall be imposed without issue of Show Cause Notice and without giving personal hearing.(v) Reasoning is to be given in the order, specifying the nature of the breach and the applicable laws or procedure.(vi) In case of voluntary disclosure of breach, the tax authorities may consider this fact as a potential mitigating factor when establishing a penalty for that person. Alternate dispute resolution mechanism1211.7 The various modes of dispute resolution like advance ruling and Settlement Commission have been continued under GST law.(i) Advance ruling can be sought in respect of more subjects than allowed at present. The subjects are: classification of goods/or services, method of valuation, rate of tax, admissibility of input tax credit, liability to pay tax, liability to take registration and whether a particular transaction amounts to asupply under GST law.(ii) The facility of appeal, which is not there under the Central law, has been provided in the Model GST Law. The applicants, if aggrieved by the advance ruling, would henceforth get the opportunity to file an appeal before the Appellate Authority for revision of the ruling.(iii) The provision of Settlement Commission has been included in IGST Law only. Transitional provisions11.8 In the Model GST law, elaborate transitional provisions have been made to enable smooth migration of tax payers from the present regime to GST. The important provisions in this regard are:(i) The existing taxpayers shall be issued a certificate of registration valid for 6months. Upon furnishing of prescribed information, registration shall be granted on a final basis.(ii) The amount of Cenvat credit / VAT carried forward in a return shall be allowed to be taken as input tax credit subject to certain conditions. Un-availed Cenvat credit on capital goods, not carried forward in a return, shall also be allowed to be taken as ITC subject to certain conditions.(iii) Credit of eligible duties and taxes in respect of inputs held in stock shall be allowed to a registered taxable person subject to fulfilment of certain conditions.(iv) Credit of eligible duties and taxes in respect of inputs held in stock shall be allowed to a taxable person switching over from the composition scheme to the normal scheme.(v) No tax is payable on the goods removed/dispatched earlier but returned tothe place of business after the introduction of GST. This is subject to the13condition that the goods are returned within a period of 6 months after the introduction of GST.(vi) Likewise, no tax shall be payable on the inputs, semi-finished goods and finished goods removed/dispatched earlier for job work or for carrying out certain processes and returned to the place of business after the introduction of GST. This is subject to the condition that the inputs / goods are returned within a period of 6 months after the introduction of GST.(vii) Pending claims shall be disposed of in accordance with the provisions of earlier law and the amount of shall be paid to the claimant in cash, subject to certain conditions.(viii) Pending claim of Cenvat credit /input tax credit shall be disposed of in accordance with the provisions of earlier law and the amount of shall be paid to the claimant in cash, subject to certain conditions.(ix) No tax shall be payable on the supply of goods and /or services made before the introduction of GST where a part of consideration for the said supply is received on or after the introduction of GST, but the full duty or tax payable on such supply has already been paid under the earlier law.(x) No tax shall be payable on the goods sent on approval basis before the introduction of GST but are rejected and returned to the seller on or after the introduction of GST if such goods are returned within 6 months from the introduction of GST

GST Rules and Regulations12. Preparation of GST Rules and Regulations is another major area of work which needs to be completed well in advance before the implementation of15GST.This is to be jointly drafted by the officials of the Central Government and State Governments. The CBEC has set up a Working Group for this purpose.(c) IT preparedness13. Putting in place a robust IT network is an absolute must for implementation of GST. A Special Purpose Vehicle called the GSTN has been set up to cater to the needs of GST. The GSTN shall provide a shared IT infrastructure and services to Central and State Governments, tax payers and other stakeholders for implementation of GST. The functions of the GSTN would, inter alia, include: (i) facilitating registration; (ii) forwarding the returns to Central and State authorities; (iii) computation and settlement of IGST; (iv)matching of tax payment details with banking network; (v) providing various MIS reports to the Central and the State Governments based on the tax payer return information; (vi) providing analysis of tax payers’ profile; and (vii)running the matching engine for matching, reversal and reclaim of input taxcredit.13.1 The GSTN is developing a common GST portal and applications for registration, payment, return and MIS/reports. The GSTN would also be integrating the common GST portal with the existing tax administration IT systems and would be building interfaces for tax payers. Further, the GSTN is developing back-end modules like assessment, audit, refund, appeal etc. for 19States and UTs (Model II States). The CBEC and Model I States (15 States) are themselves developing their GST back-end systems. Integration of GST frontend system with back-end systems will have to be completed and tested well in advance for making the transition smooth.

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Benefits of registration

Registration will confer the following advantages to a taxpayer:

• He is legally recognized as supplier of goods or services.

• He is legally authorized to collect taxes from his customers and pass on the credit of the taxes paid on the goods or services supplied to the purchasers/recipients.

• He can claim Input Tax Credit of taxes paid and can utilize the same for payment of taxes due on supply of goods or services.

• Seamless flow of Input Tax Credit from suppliers to recipients at the national level.

Registration is mandatory When Aggregate Turnover in a Financial Year exceeds Rs.20 Lakhs (Aggregate Turnover = Value of Taxable of Supplies

+ Exempt Supplies + Inter State Supplies + Exports of both Goods and Services of persons having the same PAN calculated on all India basis less tax under IGST, CGST, SGST and Cess), except for Special Category States, where the threshold limit for aggregate turnover is Rs.10 lakhs.

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Frequently Asked Questions (FAQs) on Goods and Services Tax (GST)

Q1. Will there be a Central and State GST levied on all transactions in India?

Ans. Yes, every transaction of supply in India will either be subject to:

CGST and SGST OR CGST and IGST Unless the good or service is exempt.

GST rate is 18% (i.e. 9%-CGST+ 9%-SGST ) has applied only CGST and SGST for basic services

Q2.What is ‘supply’ in terms of GST?

In GST regime, all ‘supply’ such as sale, transfer, barter, lease, import of services etc. of goods and/ or services made for a consideration will attract CGST (to be levied by Centre) and SGST (to be levied by State). As GST will be applicable on ‘supply’ the erstwhile taxable events such as ‘manufacture’, ‘sale’, ‘provision of services’ etc. will lose their relevance. Also, distinction, in GST regime, would lose its importance as both goods and services would be treated at par for taxing purposes. Effectively, trader and manufacturer will both be equal from the perspective of taxation.

Q3.How GST will impact me as a service provider?

In Pre-GST regime, a service provider was required to pay Service Tax. This amount was required to be paid to Central Government. Going forward, in GST regime, the service provider will have to pay GST on services based on ‘place of supply’. Also, registration requirement at present could be centralised, in GST it will be State-wise.

Q4. How GST is configured at the System ( ) ?

The following points have been taken into accounts :

v Taxation has to be happen based on the area where the Service is being provided

v Taxes will be paid by respective States to Tax departments

v Each state will have different Tax rates

v Union Territorials to be identified similar to states

v SEZ will not be taxable.

v Revenue Owning UNIT /BCA and Circle has to continue along with new attribute as State.

v Point of Taxation will continue at invoice level only

v Maintaining CGST and SGST separately in the systems

v As of now, Service customers bills are generating with zero invoice. Post GST, any service has to be taxed and that has to be paid by Service provider.

v Some areas with UNIT like Diu, Daman, Dadra, Nagar Havel which are covered under same circle as of now will have to be segregated as different State. It can be split into 2 UNIT s based on the requirement and State can be mapped accordingly.

v Any account should have services of a particular state only and Revenue Owning UNIT /BCA also should be from same State

Q5. What are new New Attributes visible at SYSTEM ?

ü New attribute will be created to capture/maintain state at BA level

ü Based on the Revenue owning UNIT, State field will be populated.

ü In case of multiple State mapped to single UNIT, then drop down will be given with all the states associated with the UNIT, CSR has to select the state accordingly.

ü This field will be non-editable in the system during any order/SR similar to Revenue owning UNIT.

ü This field will flow to Billing system during Billing Account creation.

Q6. Why Customer’s GSTIN Registration details are required at System ?

Ans. Customer’s GSTIN Registration details are required at System, as per GST law, so that B2B customers could avail Input Tax Credit (ITC). Following Two options made available at System for capturing Customer’s GSTIN details after implementation of configuration of GST related changes from June, 2017 and thereafter DC team has made available Details on mail id of all OFFICER of the UNIT , so that it could pursue with Customers. We have also issued SMS and Me unit ge on Invoice for submission of their GSTIN details to the CSC of UNIT or OFFICER of the UNIT , so that bulk updation could take place

Two options made available at CRM are >

a) Individual Service Request at BA level

b) Bulk updation of Customer’s GSTIN Registration details through Dockets

If customer’s GSTIN is not appearing at Invoice issued in August 2017, then details may be obtained for such GSTIN details from customers and get them updated at through Docket so that next bill due in September, 2017, it could appear the same.

If customer’s GSTIN is not appearing at Invoice issued in August 2017, due to late submission and customer is insisting upon for Printed GSTIN on Invoice, then a Docket may please be created for re-billing with Customer’s GSTIN.

Customer’s GSTIN is not appearing at Invoice issued in August 2017, means Customer will able to avail Input Tax Credit (ITC) at GST portal.

Sample Data Template to be attached to the Docket for entry of customer’s GSTIN Registration details

BILLING ACCOUNT_NUM	GSTIN	CUSTOMER_NAME	UID_NUMBER	PAN_NUMBER
1024564798	27ABUPA3650P1Z4	USHARANI PADAMCHAND AGARWAL		ABUPA3650P
1024565419	23AACCS3080R1Z1	SURAJ IMPEX INDIA PVT LTD
1024565457	23AABCT8040K1ZD	TULSI AMRIT PVT LTD
1024565551	23AAACN5987G1ZB	NYATI PHARMA PVT LTD

Configurations are are :

2) This GSTIN will be captured during new BA creation

3) Option to change this number will be given through Service Request(SR)

4) This will be updated in Billing as well at BA level

5) Validation on this number are

a) Alphanumeric

b) 15 character field

c) First 2 character should match with GST State 2 Characters(digits)

i) Customer name

6) Customer name as per the GST registration will be captured in this field

7) It is mandatory if GSTIN number is entered

8) This will flow to billing to update at BA level

i) UID Number

9) UID number is mandatory if the account type is Foreign Emabassy

10) It will be alphanumeric and no special characters allowed

11) This will be updated to Billing at BA level

i) PAN

12) PAN number will be captured at account level and below validation will be

kept

a) It has to be Alpha numeric

b) No Special characters are allowed

c) Length of the field is 10

13) This will be updated to Billing at BA level

Q7. What are Validations at SYSTEM is configured for GST ?

a) validations will be put in as follows:

i) State of BA Revenue Owning UNIT and Installation address UNIT should be same.

ii) State of all services under a BA will be same as that of BA level State(Based on Pin code in Installation address)

b) These validations has to put in below scenarios

1) New service provisioning

2) Billing account change in any modify

3) Transfer of service from one account to other account

4) Shifting of service with/without number change

5) Existing Locality & sub locality is mapped to UNIT and circle, new field called state also to be introduced. Mapping of these with state has to be done in the system

Q8. Tax Configuration at Payment SYSTEM is required ?

State wise tax percentage has configured to handle GST Tax splitting process at PMS.

Q9. Demand Note / APN Changes at System?

a) As of now Demand note is created with below charge items

i) Deposit amounts which are non-taxable and

ii) Advance rentals – Taxable entity

b) As the advance rental is taxable item, Tax calculation based on state attribute at account level/first service installation address state has to be enabled in Demand note creation as well

c) GSTIN number is which captured during account creation has to be printed in Demand note

Q10. Details of Tax Applicability ?

a) During BA creation/Service Addition/Dispute creation/Adjustment creation in billing, CPS id has to be populated as per the State Code

b) As the state wise tax rates configured, Tax will be applied billing address state wise only during bill generation. (Billing address and installation address state will be same)

11. Excess Payment Split to Revenue and Tax in System ?

a) As of now, PMS will share a flag if the payment received is excess to Outstanding against the account

b) Based on this flag , billing system will split the amount to 4 payments in case the excess payment( total payment received- outstanding amount) >1000

i) Payment against Outstanding amount

ii) Revenue component of excess payment

iii) CGST component of Excess payment

iv) SGST component of Excess payment

c) Now that state wise tax will be effective, logic has to be changed to take the tax % based on state at account level and split the amount accordingly

d) Cases where amount received against account without any invoice will also follow the same logic of splitting the amount into revenue and tax based on the state field captured at BA

Q12. Whether bill format will undergo any change due to GST implementation in System ?

a) Bill Pdf will contain below new fields

i) GST registration number of the state

ii) Customer’s GSTIN details.

iii) State from which this account is served z

iv) Tax components

v) Installation Address of customer (Supply of Services)

vi) Tax Values (CGST & SGST) separately.

Q12(a). Whether Digital signature on Invoice of System is mandatory in GST

:As per GST Act, Sec.31 Invoices issued to customer should contain digital signature of

Q13. Exempted category of Customers under GST:

We had configuration for exemption under Service Tax Act, to certain category of customers like Local PCO, Embassy, Foreign Diplomat, industries under SEZ etc., As per Clarification received from Tax Consultant – E&y, SEZ is falling under exempted category of customer under GST Law. In other words, only SEZ is taken at System as exempted category of customer and no GST has been levied for SEZ customer while implementation of GST at System.

Q14. Whether GST is leviable for recovery of cost price of Instruments or Equipments not recovered from customer on closure of services.

As per Clarification received from Tax Consultant – E&y, GST is leviable for recovery cost price of Instruments or Equipment not recovered from customer on closure of services.

Q15.What is HSN Code in the first place?

Harmonized System of Nomenclature, or HSN, was conceived and developed by the World Customs Organization (WCO) with the vision of classifying goods from all over the World in a systematic and logical manner. It is a six digit uniform code that classifies more than 5,000 products and is accepted worldwide. These set of defined rules is used for taxation purposes in identifying the rate of tax applicable to a product in a country. It is also used to determine the quantum of product exported or imported in and out of a country. It is a crucial feature to analyze the movement of goods across the World. It is a combination of different sections, further drilled down to chapters, which are further classified into headings and sub-headings. The resultant figure is the six-digit code.

Q15(a). Service Accounting Codes (SAC)

Similar to the International HSN Codes, India has adopted a Service Accounting Code (SAC) for all its services. GST will subsume the service tax, which covers all kinds of services at a national rate of 15%, apart from other rates in some cases. Since GST is a combination of goods and services both, an equable classification for services is also required. SAC will remain the same under the GST regime. HSN codes are internationally recognized system of codifying and classifying all the products in the World. It will make GST compliant with the international standards and ensure proper levy of taxes. HSN gives a systematic and logical way of classification, thereby reducing the chances of any misinterpretations. Further, a common structure enables governments of countries to collaborate data of purchases and sales of commodities and analyze the same. Post this analysis, they can decide on macro-economic policies relatable to important commodities.

Q16.Where a return has already been filed covering all the invoices, how can I revise the return or the invoice?

There is no concept of revision of returns under the GST regime. However, you can change the invoice through a supplementary invoice or debit or credit notes. It has to be ensured that details of such supplementary invoices have to be mentioned in the monthly returns, thereby changing the input tax credit eligibility to the recipient. The change shall automatically reflect in GSTR-2 of the recipient in the next month, thereby updating the digital cash ledger of the recipient. The original invoice has to be revised or supplemented within a period of one month from the issuance date of original invoice.

Q17. Is Credit Notes mandatory to be generated under GST law, for all Credit Adjustment ?

Internal process activities at System

1. Credit adjustment to be created only via billing complaint and existing flow of complaint creation to remain as it is.

2. All dispute adjustment posted via CRM to be created in billing system with status as “Pending” by billing integration system.

3. Accept dispute data to be logged in custom table by billing integration layer. This data to be used by custom process at billing to accept this disputes to create dispute.

4. The pending disputes will be accepted by a custom process in sequential manner. Thus one credit note request will be created which will get only credit adjustment posted against single invoice to be billed in credit note.

5. Custom process will automatically scan for all accounts where credit disputes are present in pending status and will automatically accept all disputes for one bill sequence and credit note request will be created for all these disputes at once sequentially as dispute bill sequence. For example, if 2 credits raised for Jan 2017 bill and 3 on Dec 16 bill in the month of Mar 17, then 2 credit note request will be generated, one each for credits raised on Jan 2017 and Dec 16 invoices.

In case of tariff plan change, a Proration of rental refunds will be done by calculating per day advance rental as

Rental Amount Charged/ Total Days charged =Per Day Charges

Formula for proration to be used:

Adjustment amount = L_No_Of_Days * Per Day Charges

Here L_No_Of_Days is taken Custproductcharge.Billed_To_Dat – Change_Date

,where Change Date is passed by billing integration as effective plan end date or effective service termination date.

All credit adjustment posted for disconnect credit or advance rental refunds will be posted as dispute with status as “Pending” by billing integration system. This call is made product sequence wise thus, making system flexible to post product wise dispute in case of child product termination, example LC Modem change scenario.

6. The pending disputes will be accepted by a custom process in sequential manner. Thus one credit note request will be created which will get only one eligible credit adjustment to be billed.

7. Custom process will automatically scan for all accounts where credit disputes are present in pending status and will automatically accept all disputes for one bill sequence and credit note request will be created for all these disputes at once sequentially as dispute bill sequence. For example, if 2 credits raised for Jan 2017 bill and 3 on Dec 16 bill in the month of Mar 17, then 2 credit note request will be generated, one each for credits raised on Jan 2017 and Dec 16 invoices.

Under System, every Credit Adjustment passed for adjustment of next invoice should be with bill sequence of earlier invoice, against which credit has been passed.

GST takes care of credit notes as well, just like debit notes. Credit notes have to be issued by a taxable person, where there is a shortage of products supplied and for which there is no payment to be made by the purchaser. Since it has a commercial impact, the same has to be informed or declared in GST returns in the month to which it prevails.

The credit note has to be issued based on an original invoice already issued. The original invoice will get reduced to the extent of such credit notes. In some cases, the original invoice value can become zero. Credit notes are defined in section 2(35) of the Model GST Law.

Credit notes can be issued in the following cases:

· When the supplier has charged excessive tax, where a lower rate should have been charged.

· When the Services rendered are of inferior quality or excessive charged in the invoice,

· Credit notes must also mention the details as noted above in case of debit notes. The particulars are the same in this case as well. Such credit notes must be mentioned in the returns of the following month about which the credit note has been raised. Unlike debit notes where there is no time limit for issuance, credit notes have to be declared in earlier of the following dates:

· Annual return filing date or,

· By the 30th of September, following the year to which credit notes relate to.

From the above we can analyse that the due date of filing of annual return is 31st December and where the annual return is filed after 30th September, then the credit notes have to be declared on 30th September.

Where the input tax credit and interest on such invoice is already passed on to other registered person, then such credit note shall have no effect on reduction of output tax liability.

Q18. Will GST leviable on Late fee or Surcharge and all other charges ?

Ans. Late fee/Penalty/any charges for delayed payments will now become taxable under GST. However, tax will be paid by only after collection of such charges.

Q19. What is GST? When will GST come into effect?

Ans.GST stands for Goods and Services Tax. GST will be a single destination based consumption tax that will replace existing taxes, including CENVAT, Octroi, Sales Tax, and Excise Duty, etc. Unlike the old tax structure, where the state of origin received tax revenue, in the new GST model the state in which goods and services are consumed is the state that will receive the revenue. The expected GST introduction date is July 1, 2017.

Q20. Will there be a Central and State GST levied on all transactions in India?

Ans. Yes, every transaction of supply in India will either be subject to:

CGST and SGST OR

CGST and IGST Unless the good or service is exempt.

Q21. When does ‘supply’ occur?

Ans. For services it’s the earliest of the following:

· Date the invoice is issued

· Date payment is received

· Date services are completed (where invoice is not issued within a prescribed time)

· Date recipient reflects the goods on his/her books of accounts reflects the goods on his/her books of accounts

Q. Will B2B transactions be subject to GST?

Ans. Yes, all procurement will be subject to GST but businesses will get a credit for B2B transactions. Please note that GST will have to be paid before a credit is received.

Q22. What is an Input Tax Credit?

Ans. The taxes you pay on input goods/services can be used as an Input Tax Credit (ITC) against output tax liabilities.

Q23. How can Input Tax Credits be applied?

Ans. Input tax credits can be used as follows: · CGST input tax credits can only be used to pay CGST and IGST · SGST input tax credits can only be used to pay SGST and IGST · IGST input tax credits can be used to pay CGST, SGST, and IGST

Q24. Will stock transfers subject to GST?

Ans. Yes, stock transfers between two states within the same organization will trigger GST.

Q25. Who are GST Suvidha Provider or GSP?

Ans. GSTN has developed a robust platform for taxpayers to access the GST Systems, however, that would not be the only way for interacting with the GST system as the taxpayer via his choice of third party applications, which will provide all user interfaces and convenience via desktop, mobile, other interfaces, will be able to interact with the GST system. The third party applications will connect with GST system via secure GST system APIs. All such applications are expected to be developed by third party service providers who have been given a generic name, GST Suvidha Provider or GSP.

Q26. Do i need PAN to apply for GST registration?

Ans. PAN is mandatory to apply for GST registration

Q27. Who are exempted from GST Registration?

Ans. The following shall not be required to obtain registration, and will be allotted a UIN (Unique Identification Number) instead. They can receive refund of taxes on notified supplies of goods/services received by them: · Any specialised agency of UNO (United Nations Organisation) or any multilateral financial institution and organisation notified under the United Nations Act, 1947 · Consulate or Embassy of foreign countries · Any other person notified by the Board/Commissioner · The central government or state government may, based on the recommendation of the GST council, notify exemption from registration to specific persons.

Q 28. How will the goods and services be classified under GST regime?

Ans. HSN (Harmonised System of Nomenclature) code shall be used for classifying the goods under the GST regime. Taxpayers whose turnover is above Rs. 1.5 crores but below Rs. 5 crores shall use 2 digit code and the taxpayers whose turnover is Rs. 5 crores and above shall use 4 digit code. Taxpayers whose turnover is below Rs. 1.5 crores are not required to mention HSN Code in their invoices.

Services will be classified as per the Services Accounting Code (SAC)

Q 29. What is the taxable event under GST?

Ans. Supply of goods and/or services. CGST & SGST will be levied on intra-state supplies while IGST will be levied on inter-state supplies. The charging section is section 7 (1) of CGST/SGST Act and Section 4(1) of the IGST Act

Q 30. What will be the implications in case of purchase of goods from unregistered dealers?

Ans. The receiver of goods will not be able to get ITC. Further, the recipients who are registered under composition schemes would be liable to pay tax under reverse charge.

Q31. What are composite supply and mixed supply? How are these two different from each other?

Composite supply is a supply consisting of two or more taxable supplies of goods or services or both or any combination thereof, which are bundled in natural course and are supplied in conjunction with each other in the ordinary course of business and where one of which is a principal supply. For example, when a consumer buys a television set and he also gets warranty and a maintenance contract with the TV, this supply is a composite supply. In this example, supply of TV is the principal supply, warranty and maintenance service are ancillary.

Mixed supply is combination of more than one individual supplies of goods or services or any combination thereof made in conjunction with each other for a single price, which can ordinarily be supplied separately. For example, a shopkeeper selling storage water bottles along with refrigerator. Bottles and the refrigerator can easily be priced and sold separately.

Q32. What is meant by Reverse Charge?

It means the liability to pay tax is on the recipient of supply of goods and services instead of the supplier of such goods or services in respect of notified categories of supply.

Q33. How GST returns will be filed?

For properly updating the invoices, Indian taxpayers and businesses have to file certain returns with the Government. These returns have to be mandatorily filed as any non-compliance towards the same may lead to disallowance of input tax credit, apart from attracting penalties and interests, etc. Proper filing of information and passing the same in the returns is a mandatory process for smooth flow of credit to the last recipient.

The returns have been designed so that all transactions are in sync with each other and that no transaction is left unattended between the buyer and the seller. All the data is stored in GSTN, which can be accessed by the users/taxpayers anytime online.

Depending on the type of GST registration (Regular, Composite, etc) businesses will need to file upto 37 GST returns every year.

Q34. Is GST applicable on Late fee or surcharge or cheque bounched charges, levied in bill i?

As per Section 12(6) of CGST Act, 2017 relating to Time of Supply of Goods states that time of supply to the extent it relates to an addition in the value of supply by way of interest, late fee or penalty for delayed payment of any consideration shall be the date on which the supplier receives such addition in value. This means that the tax is payable on interest received for delayed payment.

Query 2: At the time of GSTR 3B filing We entered the Outward supplies Taxable Value and Tax Values and Inwards Supply’s Tax Value. After submitted the ‘Payment of Tax’ column is shown Tax Liability as our full sales Tax value. The value is not less my Input Tax. So, what can I do in this situation?

Ans: After filling all required details in GSTR-3B, many dealers, on seeing the liability amount in column 6.1 (Payment of tax) , are shocked and think to pay the amount. But, this is unadjusted amount. We can adjusted it to particular ITC and Cash payments.

Q35.What is a GST compliant tax invoice?

A tax invoice is generally issued to charge the tax and pass on the input tax credit. A GST compliant tax invoice is a bill which will have 16 mandatory information some of which are-

Name, address and GSTIN of the supplier Invoice number
Date of issue
Name, address and GSTIN of the recipient (if registered)
HSN code or Accounting Code of services
Description of the goods/services
Quantity of goods
Value(after discount)
Rate and amount of GST

Q36. What is a debit note & a credit note?

A debit note is issued by seller when the amount payable by buyer to seller increases:

Tax invoice has a lower taxable value than the amount that should have been charged
Tax invoice has a lower tax value than the amount that should have been charged

A credit note is issued by seller when the value of invoice decreases:

Tax invoice has a higher taxable value than the amount that should have been charged
Tax invoice has a higher tax value than the amount that should have been charged
Buyer refunds the goods to the supplier
Services are found to be deficient

GST Filing - GSTR-3B, TRANS-1, TRANS-2 ₹ 5000/-

· Filing of 3B for one month

· Filing TRANS-1

· Filing TRANS-2 (applicable only for goods suppliers)

Q37. Is there any facility of setting off tax liability against the Input Tax Credit (ITC).

Under the GST regime, every time a transaction takes place, it has a dual effect as follows –

Central GST (CGST)

State GST (SGST)

Union Territory GST (UTGST)

Integrated GST (IGST)

In case of a transaction taking place within a state or union territory, it will attract a component of the CGST and SGST or CGST and UTGST respectively. In case of a transaction taking place on an interstate basis, the IGST shall be attracted. It is imperative that every business understands which tax it will be attracting on the basis of its location of both the head office and branch offices. This will help the business understand better how to set off ITC against tax liability as under the law.

ITC set off is done in the following manner –

CGST → CGST and IGST

SGST → SGST and IGST

IGST → IGST, CGST, SGST (in that order)

Point of taxation under GST is at the time of supply of goods or services or both. Liability to pay tax arises at the time of supply of goods or services or both.

It is very important to understand concept of time of supply to compute the liability of output tax.

Q38. Time of supply of Goods and tax liability

Tax liability on any supply of goods arises at the time of supply. Time of supply in case of goods should be determined as explained below.

Time of supply of goods should be earliest of:

Date of issue of invoice or date on which supplier is required to issue tax invoice
The data on which payment is received against the supply

Tax should be charged on invoice amount whether supply is actually made or not or partially made.

Date of receipt of payment will be the date on which receipt is accounted in books of accounts or date on which money is credited into bank account.

When you are liable to pay tax under reverse charge basis, the time of supply should be earliest of:

The date of the receipt of goods; or
The date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier; or
The date immediately following 30 days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier.

Provided that where it is not possible to determine the time of supply under clause (a) or clause (b) or clause (c), the time of supply shall be the date of entry in the books of account of the recipient of supply.

Eligibility to avail input tax credit

Every person who is registered under GST is allowed to take credit of input tax charged on any supply of goods or services or both if they were used for in the business.

Input tax credit will be allowed only if you have:

Tax invoice or any other document specified under act issued by supplier
Actually received the goods or services or both.

Further the supplier should have paid the tax to government either in cash or through input credit utilisation and also should have filed the return under section 39.

If you do not pay the invoice amount to supplier within 180 days then input tax credit availed should be added back to you output tax liability. This can be afterwards availed when you pay the amount to supplier.

If you have claimed input tax as part of cost for taking depreciation under Income Tax Act, then you can not avail the credit of input tax paid.

Further the input tax credit can be availed only before filing the return for the month of September after year end or filing of annual return whichever is earlier.

Q39. How many returns will one have to file as a trader or service provider?

Taxpayers will have to take into consideration the increase in tax compliances. Take example of a service tax assessee, who currently files 2 returns on an annual basis. Now, in GST regime, Service tax assessee could be required to file as many as 61 returns (5 returns per month plus 1 annual return)

Q40. Abbreviation used under GST law ?

Abbreviation	Expanded Form
AA	Appellate Authority
AAAR	Appellate Authority For Advance Ruling
AAR	Authority For Advance Ruling
APN	Advance Payment Note
ARN	Application Reference Number
B2B	Business To Business
B2C	Business To Customer
BA	Billing Account
BCA	Billing and Controlling Authority
BRC	Bank Realisation Certificate
CA	Customer Account
CBCE	Central Board Of Custom & Excise
CBDT	Central Board of Direct Taxes
CBS	Core Banking Solution
CBT	Computer Based Training
CENVAT	Central Value Added Tax
CGST	Central Goods and Service Tax
CGST	Central Goods & Services Act
CIN	Challan Identification Number
CPIN	Common Portal Identification Number
CPS	Contracted Point Of Supply
DSC	Digital Signature Code
EBN	E-way Bill Number
E-FPB	Electronic Focal Point Branch
E-Payment	Internet banking/Credit card/Debit card
Form RFD	Refund Form
GSP	GST Suvidha Provider
GST	Goods & Service Tax
GST REG	GST Registration
GSTIN	Goods & Services Tax Identification Number
GSTN	Goods and Service Tax Network
GSTR	GST Return
HSN Code	Harmonised System of Nomenclature Code
IGST	Integrated Goods & Services Act
IPC	Indian Penal Code
ISD	Input Service Distributor
ITC	Input Tax Credit
ITC Ledger	Input Tax Credit Ledger
MPS	Managed Service Provider
NEFT	National Electronic Fund Transfer
NIU	National Information Utility
OCPB	Over the Counter Payment in Branches
RCM	Reverse Charge Mechanism
RFID	Radio Frequency Identification Device
RTGS	Real Time Gross Settlement
SAC	Services Accounting Code
SCN	Show Cause Notice
SEZ	Special Economic Zone
SGST	State Goods and Service Tax
SGST	State Goods & Services Act
TCS	Tax Collected at Source
TDS	Tax Deducted at Source
TRP	Tax Return Preparer
UID	Unique Identification
UIN	Unique Identification Number
UT	Union Territorial
UTGST	Union Territory Goods & Services Act
VAT	Value Added Tax

Q41. Who is an e-commerce operator?

Section 43B(e) of the MGL defines an Electronic Commerce Operator (Operator) as every person who, directly or indirectly, owns, operates or manages an electronic platform which is engaged in facilitating the supply of any goods and/or services. Also a person providing any information or any other services incidental to or in connection with such supply of goods and services through electronic platform would be considered as an Operator. A person supplying goods/services on his own account, however, would not be considered as an Operator. For instance, Amazon and Flipkart are e-commerce Operators because they are facilitating actual suppliers to supply goods through their platform (popularly called Market place model or Fulfillment Model). However, Titan 78 supplying watches and jewels through its own website would not be considered as an e-commerce operator for the purposes of this provision. Similarly Amazon and Flipkart will not be treated as e-commerce operators in relation to those supplies which they make on their own account (popularly called inventory Model).

Q.42. What is meant by Reverse Charge?

It means the liability to pay tax is on the recipient of supply of goods and services instead of the supplier of such goods or services in respect of notified categories of supply.

Input Tax Credit (ITC) - Queries

Q.43 If a company in Maharashtra holds only one event in Delhi, will they have to register in Delhi? Will paying IGST from Maharashtra suffice?

Only if you provide any supply from Delhi you need to take registration inDelhi. Else, registration at Mumbai is

sufficient (and pay IGST on supplies made from Mumbai to Delhi)

Q.44 in composition scheme of GST, If I purchase goods from unregistered person, then GST will be paid to

Government by me or not?

Yes, you will be liable to pay tax on reverse charge basis for supplies from unregistered person.

Q.45 How would the sale and purchase of goods to and from SEZ will be treated? Will it be export / input?

Supply to SEZs is zero rated supplies and supplies by SEZs are treated as imports.

Q.46 Is SGST of Rajasthan charged by supplier on purchase from Rajasthan can be utilize for payment of SGST in

Madhya Pradesh?

SGST of one State cannot be utilized for discharging of output tax liability of another State.

Q.47 Can one State CGST be used to pay another state CGST?

The CGST and SGST Credit for a State can be utilized for payment of their respective CGST/SGST liabilities within that State for the same GSTIN only.

Q.48 In case of service supplied, should the credit be given to the state where it is billed or the state it is rendered?

Q.49 Tax will be collected in the State from which the supply is made. The supplier will collect IGST and the recipient will take IGST credit.

How will the credit / debit note from unregistered supplier be reported to GSTN and ITC claimed in the same?

Invoice customer under GST - Queries

Q.50 How to treat following transaction in GST (i) Delivered supply shortages in Transit. (ii) Customer gets lesser services than those as per Contract (iii) Service provider reduces the value of Invoice due to dispute.

The supplier may issue credit note to the customers and adjust his liability.

Q.51 How will disposal of scrap be treated in GST?

If the disposal is in the course or furtherance of business purposes, it will be considered as a supply.

Q.52 I am from MP and providing service to a customer in Maharashtra. I outsource the work to a service provider in Maharashtra, what tax i need to charge?

Generally these will be two supplies where the supplier from MP will charge IGST from the recipient in Maharashtra. Whereas, the service provider in Maharashtra will charge IGST from the recipient in MP.

Q.53 If address of buyer is Punjab and place of supply is same state of supplier (Rajasthan), then IGST will apply oCGST/SGST?

If the place of supply and the location of the supplier are in the same State then it will be intra-State supply and CGST / SGST will be applicable.

Q.54 Will professional tax will be abolished in Maharashtra after introducing of GST?

Professional tax is not a tax on supply of goods or services but on being in a profession. Professional tax not subsumed in GST.

Q.55 Employer provides bus service, meal coupon, free telephone at residence, gives vehicle for official and personal use, any GST?

Where the value of such supplies is in the nature of gifts, no GST will apply till value of such gifts exceeds Rs. 50000/-

in a financial year.

Q.56 Some service was provided on 25.06.2017 but Invoice will be raised on 05.07.2017. Whether we have to charge Service Tax or GST?

If Point of Tax arises after appointed date, then GST will be chargeable on such supply (Please refer POT rule).

Q.57 Will there be GST in A&N Islands as previously there was no VAT ?

Yes. For supplies within A&N, CGST plus UTGST would be leviable.

Q.58 What is a mixed supply?

Mixed Supply means two or more individual supplies of goods or services or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply. For example, a supply of package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drink and fruit juice when supplied for a single price is a mixed supply. Each of these items can be supplied separately and it is not dependent on any other. It shall not be a mixed supply if these items are supplied separately.

Q.59 Are there any activities which are treated as neither a supply of goods nor a supply of services?

Yes. Schedule-III of the model GST law lists certain activities such as (i) services by an employee to the employer in the course of or in relation to his employment, (ii) services by any Court or Tribunal established under any law, (iii) functions performed by members of Parliament, State Legislatures, members of the local authorities, Constitutional functionaries (iv) services of funeral, burial, crematorium or mortuary and (v) sale of land and (vi), actionable claims other than lottery, betting and gambling shall be treated neither a supply of goods or supply of services.

Q.59 What is meant by zero rated supply under GST?

Zero rated supply means export of goods and/or services or supply of goods and/or services to a SEZ developer or a SEZ unit.

Q.60 What is transaction value?

Transaction value refers to the price actually paid or payable for the supply of goods and or services where the supplier and the recipient are not related and price is the sole consideration for the supply. It includes any amount which the supplier is liable to pay but which has been incurred by the recipient of the supply.

Q.61 Whether post-supply discounts or incentives are to be included in the transaction value?

Yes. where the post-supply discount is established as per the agreement which is known at or before the time of supply and where such discount specifically linked to the relevant invoice and the recipient has reversed input tax credit attributable to such discount, the discount is allowed as admissible deduction under Section 15 of GST law.

Q.62 What is the value of taxable supply to be adopted for the levy of GST?

The value of taxable supply of goods and services shall ordinarily be ‘the transaction value’ which is the price paid or payable, when the parties are not related and price is the sole consideration. Section 15 of the CGST/SGST Act further elaborates various inclusions and exclusions from the ambit of transaction value. For example, the transaction value shall not include refundable deposit, discount allowed subject to certain conditions before or at the time of supply.

Time of Supply under GST - Queries

Q.63 What is time of supply?

The time of supply fixes the point when the liability to charge GST arises. It also indicates when a supply is deemed to have been made. The CGST/SGST Act provides separate time of supply for goods and services.

Q.64. When does the liability to pay GST arise in respect of supply of goods and Services?

Section12 & 13 of the CGST/SGST Act provides for time of supply of goods. The time of supply of goods shall be the earlier of the following namely,

(i) the date of issue of invoice by the supplier or the last date on which he is required under Section 28, to issue the invoice with respect to the supply : or

(ii) the date on which the supplier receives the payment with respect to the supply.

Q.65 What is the time of supply applicable with regard to addition in the value by way of interest, late fee or penalty or any delayed payment of consideration?

The time of supply with regard to an addition in value on account of interest, late fee or penalty or delayed consideration shall be the date on which the supplier receipts such additional consideration.

Q.66 What is the time of supply, where supply is completed after to change in rate of tax?

In such cases time of supply will be -

(i) where the payment is received after the change in rate of tax but the invoice has been issued prior to the change in rate of tax, the time of supply shall be the date of receipt of payment; or

(ii) where the invoice has been issued and the payment is received before the change in rate of tax, the time of supply shall be the date of receipt of payment or date of issue of invoice, whichever is earlier; or

(iii) where the invoice has been issued after the change in rate of tax but the payment is received before the change in rate of tax, the time of supply shall be the date of issue of invoice

Q.67 What is Input Service Distributor (ISD)?

ISD means an office of the supplier of goods or services or both which receives tax invoices towards receipt of input services and issues a prescribed document for the purposes of distributing the credit of central tax (CGST), State tax (SGST)/ Union territory tax (UTGST) or integrated tax (IGST) paid on the said services to a supplier of taxable goods or services or both having same PAN as that of the ISD.

Q.68 Whether SGST / UTGST credit can be distributed as IGST credit by an ISD to recipients located in different States?

Yes, an ISD can distribute SGST /UTGST credit as IGST for the recipients located in different States.

Returns Process and matching of Input Tax Credit - Queries

Q.69 What type of outward supply details are to be filed in the return?

A normal registered taxpayer has to file the outward supply details in GSTR-1 in relation to various types of supplies made in a month, namely outward supplies to registered persons, outward supplies to unregistered persons (consumers), details of Credit/Debit Notes, zero rated, exempted and non-GST supplies, exports, and advances received in relation to future supply.

Q.70 Is the scanned copy of invoices to be uploaded along with GSTR-1?

No scanned copy of invoices is to be uploaded. Only certain prescribed fields of information from invoices need to be uploaded.

Q.71 Whether all invoices will have to be uploaded?

No. It depends on whether B2B or B2C plus whether Intra-state or Inter-state supplies. For B2B supplies, all invoices, whether Intra-state or Inter- state supplies, will have to be uploaded. Why So? Because ITC will be taken by the recipients, invoice matching is required to be done.

In B2C supplies, uploading in general may not be required as the buyer will not be taking ITC. However still in order to implement the destination based principle, invoices of value more than Rs.2.5 lacs in inter-state B2C supplies will have to be uploaded. For inter-state invoices below Rs. 2.5 lacs and all intra-state invoices, state wise summary will be sufficient.

Q.72 Whether value for each transaction will have to be fed? What if no consideration?

Yes. Not only value but taxable value will also have to be fed. In some cases, both may be different.
In case there is no consideration, but it is supply by virtue of schedule 1, the taxable value will have to be worked out as prescribed and uploaded.

Q.73 Can a recipient feed information in his GSTR-2 which has been missed by the supplier?

Yes, the recipient can himself feed the invoices not uploaded by his supplier. The credit on such invoices will also be given provisionally but will be subject to matching. On matching, if the invoice is not uploaded by the supplier, both of them will be intimated. If the mismatch is rectified, provisional credit will be confirmed. But if the mismatch continues, the amount will be added to the output tax liability of the recipient in the returns for the month subsequent to the month in which such discrepancy was communicated.

Q.73 Does the taxable person have to feed anything in the GSTR-2 or everything is auto-populated from GSTR-1?

While a large part of GSTR-2 will be auto-populated, there are some details that only recipient can fill like details of imports, details of purchases from non-registered or composition suppliers and exempt/non-GST/nil GST supplies etc.

Q.74 What will be the legal position in regard to the reversed input tax credit if the supplier later realizes the mistake and feeds the information?

At any stage, but before September of the next financial year, supplier can upload the invoice and pay duty and interest on such missing invoices in his GSTR-3 of
the month in which he had earlier failed to upload the invoice. The recipient shall be eligible to reduce his output tax liability to the extent of the amount in respect of which the supplier has rectified the mis-match. The interest paid by the recipient at the time of reversal will also be refunded to the recipient by crediting the amount in corresponding head of his electronic cash ledger.

Q.75 How does a taxpayer get the credit of the tax deducted at source on his behalf? Does he need to produce TDS certificate from the deductee to get the credit?

Under GST, the deductor will be submitting the deductee wise details of all the deductions made by him in his return in Form GSTR-7 to be filed by 10th of the month next to the month in which deductions were made. The details of the deductions as uploaded by the deductor shall be auto populated in the GSTR-2 of the deductee. The taxpayer shall be required to confirm these details in his GSTR-2 to avail the credit for deductions made on his behalf. To avail this credit, he does not require to produce any certificate in physical or electronic form. The certificate will only be for record keeping of the tax payer and can be downloaded from the Common Portal.

Q.76 Is an Annual Return and a Final Return one and the same?

No. Annual Return has to be filed by every registered person paying tax as a normal taxpayer. Final Return has to be filed only by those registered persons who have applied for cancellation of registration. The Final return has to be filed within three months of the date of cancellation or the date of cancellation order.

Q.77 Is it compulsory for a taxpayer to file return by himself?

No. A registered taxpayer can also get his return filed through a Tax Return Preparer, duly approved by the Central or the State tax administration.

Q.78 Whether the amount of credit detected by the system on account of mis-match between GSTR-1 and GSTR-2 and recovered as output tax can be reclaimed?

Yes, once the mismatch is rectified by the supplier by declaring the details of the invoices or debit notes, as the case may be, in his valid return for the month/quarter in which the error had been detected. The said amount can be reclaimed by way of reducing the output tax liability during the subsequent tax period. [section 42(7)]. Similar provisions have also been made in Section 43 of the Act in respect of the credit notes issued by the supplier.

Q.79 What is the special feature of GSTR-2?

The special feature of GSTR-2 is that the details of supplies received by a recipient can be auto populated on the basis of the details furnished by the counterparty supplier in his GSTR-1.

Q.80 What is the consequence of not filing the return within the prescribed date?

A registered person who files return beyond the prescribed date will have to pay late fees of rupees one hundred for every day of delay subject to a maximum of rupees five thousand. For failure to furnish Annual returns by due date, late fee of Rs. One hundred for every day during which such failure continues subject to a maximum of an amount calculated at a quarter percent [0.25%] of his turnover in a state, will be levied.

GST Returns Calendar

Regular Business Returns

Return Form	Particulars	Interval	Due Date
GSTR-1	Details of outward supplies of taxable goods and/or services effected	Monthly	10th of the next month
GSTR-2	Details of inward supplies of taxable goods and/or services effected claiming input tax credit.	Monthly	15th of the next month
GSTR-3	Monthly return on the basis of finalization of details of outward supplies and inward supplies along with the payment of amount of tax.	Monthly	20th of the next month
GSTR-9	Annual Return	Annually	31st December of next financial year
GSTR-3B	Provisional return for the months of July and August

GSTR 3B is a simple return that businesses need to file in the first two months of GST (July and August, 2017). The government has postponed the filing of GSTR 1, 2 & 3 for July and August, 2017 in order to give businesses some time to adjust to GST.
Forms	For July 2017	For August 2017
GSTR-3B	25th August	20th September
GSTR-1	1^st-5th September	16^th-20th September
GSTR-2	6^th-10th September	21^st– 25th September
GSTR-3	11^th– 15^th September	26^th– 30^th September

There is no buyer-seller reconciliation for July & August.

You have 2 options for July 2017-

Either file TRAN-1 and claim ITC of previous regime
File TRAN-1 later but cannot claim ITC of previous regime in this GSTR-3B

A dealer opting for composition scheme :
A composition dealer will enjoy the benefits of lesser returns & compliance along with payment of taxes at nominal rates. A composition dealer will file only 2 returns:
Return Form	Particulars	Interval	Due Date
GSTR-4	Return for compounding taxable person	Quarterly	18th of the month succeeding quarter
GSTR-9A	Annual Return	Monthly	31st December of next financial year

Returns to be filed by specific registered dealers:
Return Form	Particulars	Interval	Due Date
GSTR-5	Return for Non-Resident foreign taxable person	Monthly	20th of the next month
GSTR-6	Return for Input Service Distributor	Monthly	13th of the next month
GSTR-7	Return for authorities deducting tax at source.	Monthly	10th of the next month
GSTR-8	Details of supplies effected through e-commerce operator and the amount of tax collected	Monthly	10th of the next month
GSTR-10	Final Return	Once. When registration is cancelled or surrendered	Within three months of the date of cancellation or date of cancellation order, whichever is later.
GSTR-11	Details of inward supplies to be furnished by a person having UIN and claiming refund	Monthly	28th of the month following the month for which statement is filed

Place of Supply of Goods and Service - Queries

Q.81 What is the need for the Place of Supply of Goods and Services under GST?

The basic principle of GST is that it should effectively tax the consumption of such supplies at the destination thereof or as the case may at the point of consumption. So place of supply provision determines the place i.e. taxable jurisdiction where the tax should reach. The place of supply determines whether a transaction is intra-state or inter-state. In other words, the place of Supply of Goods or services is required to determine whether a supply is subject to SGST plus CGST in a given State or union territory or else would attract IGST if it is an inter-state supply.

Q.82 Why are place of supply provisions different in respect of goods and services?

Goods being tangible do not pose any significant problems for determination of their place of consumption. Services being intangible pose problems w.r.t determination of place of supply mainly due to following factors:

The manner of delivery of service could be altered easily. For example, telecom service could change from mostly post-paid to mostly pre-paid; billing address could be changed, billers address could be changed, repair or maintenance of software could be changed from onsite to online; banking services were earlier required customer to go to the bank, now the customer could avail service from anywhere;
Service provider, service receiver and the service provided may not be ascertainable or may easily be suppressed as nothing tangible moves and there would hardly be a trail;
For supplying a service, a fixed location of service provider is not mandatory and even the service recipient may receive service while on the move. The location of billing could be changed overnight;
Sometime the same element may flow to more than one location, for example, construction or other services in respect of a railway line, a national highway or a bridge on a river which originate in one state and end in the other state. Similarly, a copy right for distribution and exhibition of film could be assigned for many states in single transaction or an advertisement or a program is broadcasted across the country at the same time. An airline may issue seasonal tickets, containing say 10 leafs which could be used for travel between any two locations in the country. The card issued by Delhi metro could be used by a person located in Noida, or Delhi or Faridabad, without the Delhi metro being able to distinguish the location or journeys at the time of receipt of payment;
Services are continuously evolving and would thus continue to pose newer challenges. For example, 15-20 years back no one could have thought of DTH, online information, online banking, online booking of tickets, internet, mobile telecommunication etc.

Q.83 What is the need to have separate rules for place of supply in respect of B2B (supplies to registered persons) and B2C (supplies to unregistered persons) transactions?

In respect of B2B transactions, the taxes paid are taken as credit by the recipient so such transactions are just pass through. GST collected on B2B supplies effectively create a liability for the government and an asset for the recipient of such supplies in as much as the recipient is entitled to use the input tax credit for payment of future taxes. For B2B transactions the location of recipient takes care in almost all situations as further credit is to be taken by recipient. The recipient usually further supplies to another customer. The supply is consumed only when a B2B transaction is further converted into B2C transaction. In respect of B2C transactions, the supply is finally consumed
and the taxes paid actually come to the government.

Q.84 What is the default presumption for place of supply in respect of B2B supply of services?

The terms used in the IGST Act are registered taxpayers and non-registered taxpayers. The presumption in case of supplies to registered person is the location of such person. Since the recipient is registered, address of recipient is always there and the same can be taken as proxy for place of supply.

Q.85 What will be the place of supply for mobile connection? Can it be the location of supplier?

For domestic supplies: The location of supplier of mobile services cannot be the place of supply as the mobile companies are providing services in multiple states and many of these services are inter-state. The consumption principle will be broken if the location of supplier is taken as place of supply and all the revenue may go to a few states where the suppliers are located.

The place of supply for mobile connection would depend on whether the connection is on postpaid or prepaid basis. In case of postpaid connections, the place of supply shall be the location of billing address of the recipient of service.
In case of pre-paid connections, the place of supply shall be the place where payment for such connection is received or such pre-paid vouchers are sold. However, if the recharge is done through internet/e-payment, the location of recipient of service on record shall be the taken as the place of service.

Assessment and Audit- Queries

Q.86 Who is the person responsible to make assessment of taxes payable under the Act?

Every person registered under the Act shall himself assess the tax payable by him for a tax period and after such assessment he shall file the return required under section 39.

What is the latest time by which final assessment is required to be made?

The final assessment order has to be passed by the proper officer within six months from the date of the communication of the order of provisional assessment. However, on sufficient cause being shown and for reasons to be recorded in writing, the above period of six months may be extended:

by the Joint / Additional Commissioner for a further period not exceeding six months, and
by the Commissioner for such further period as he may deem fit not exceeding fours.

Thus, a provisional assessment can remain provisional for a maximum of five years.

Q.87 The proper officer has to first issue a notice to the defaulting taxable person under section 46 of CGST/SGST Act requiring him to furnish the return within a period of fifteen days. If the taxable person fails to file return within the given time, the proper officer shall proceed to assess the tax liability of the return defaulter to the best of his judgement taking into account all the relevant material available with him. (Section 62).

Q.88 What is the time limit for passing assessment order under section 62 and section 63?

The time limit for passing an assessment order under section 62 (Best Judgment) or 63 (Non filers) is five years from the due date for furnishing the annual return.

Q.89 Under what circumstances can a tax officer initiate Summary Assessment?

As per section 64 of CGST/SGST Act, Summary Assessments can be initiated to protect the interest of revenue when:

the proper officer has evidence that a taxable person has incurred a liability to pay tax under the Act, and
the proper officer believes that delay in passing an assessment order will adversely affect the interest of revenue.

Such order can be passed after seeking permission from theAdditional Commissioner / Joint Commissioner.

Q.90 Who can conduct audit of taxpayers?

There are three types of audit prescribed in the GST Act(s) as explained below:

Audit by Chartered Accountant or a Cost Accountant: Every registered person whose turnover exceeds the prescribed limit, shall get his accounts audited by a chartered accountant or a cost accountant. (Section 35(5) of the CGST/SGST Act)
Audit by Department: The Commissioner or any officer of CGST or SGST or UTGST authorized by him by a general or specific order, may conduct audit of any registered person. The frequency and manner of audit will be prescribed in due course. (Section 65 of the CGST/SGST Act)
Special Audit: If at any stage of scrutiny, inquiry, investigations or any other proceedings, if department is of the opinion that the value has not been correctly declared or credit availed is not with in the normal limits, department may order special audit by chartered accountant or cost accountant, nominated by department. (Section 66 of the CGST/SGST Act)

Q.91 Whether any prior intimation is required before conducting the audit?

Yes, prior intimation is required and the taxable person should be informed at least 15 working days prior to conduct of audit.

What are the obligations of the taxable person when he receives the notice of audit?

The taxable person is required to:

facilitate the verification of accounts/records available or requisitioned by the authorities,
provide such information as the authorities may require for the conduct of the audit, and
render assistance for timely completion of the audit.

Q.92 What is the time limit to submit the audit report?

The auditor will have to submit the report within 90 days or within the further extended period of 90 days.

Q.93 Who will bear the cost of special audit?

The expenses for examination and audit including the remuneration payable to the auditor will be determined and borne by the Commissioner.

Transitional provisions under GST- Queries

Q.94 What is the time limit for issue of debit/credit note(s) for revision of prices?

The taxable person may issue the debit/credit note(s) or a supplementary invoice within 30 days of the price
revision. In case where the price is revised downwards the taxable person will be allowed to reduce his tax liability only if the recipient of the invoice or credit note has reduced his ITC corresponding to such reduction of tax liability–section 142(2).

Q.95 If any goods or services are supplied in GST, in pursuance of contract entered under existing law, which tax will be payable?

GST will be payable on such supplies– section 142(10) of the CGST Act.

Q.96 Tax on a particular supply of goods/services is leviable under the existing law. Will GST be also payable if the actual supply is made in GST regime?

No tax will be payable on such supply of goods/services under GST to the extent the tax is leviable under the existing law – section 142(11).

Q.97 What is Tax Collection at Source (TCS)?

The e-commerce operator is required to collect an amount calculated at the rate not exceeding one percent of the net value of taxable supplies made through it, where the consideration with respect to such supplies is to be collected by such operator. The amount so collected is called as Tax Collection at Source (TCS).

Q.98 What is a CPIN?

CPIN stands for Common Portal Identification Number (CPIN) given at the time of generation of challan. It is a 14-digit unique number to identify the challan. As stated above, the CPIN remains valid for a period of 15 days.

Q.99 What is TDS?

TDS stands for Tax Deducted at Source (TDS). As per section 51, this provision is meant for Government and Government undertakings and other notified entities making contractual payments where total value of such supply under a contract exceeds Rs. 2.5 Lakhs to suppliers. While making any
payments under such contracts, the concerned Government/authority shall deduct 1% of the total payment made and remit it into the appropriate GST account.

Offences and Penalties, Prosecution and Compounding

Q.100 What are the prescribed offences under CGST/SGST Act?

The CGST/SGST Act codifies the offences and penalties in Chapter XVI. The Act lists 21 offences in section 122, apart from the penalty prescribed under section 10 for availing compounding by a taxable person who is not eligible for it. The said offences are as follows: -

1) Making a supply without invoice or with false/ incorrect invoice;
2) Issuing an invoice without making supply;
3) Not paying tax collected for a period exceeding three months;
4) Not paying tax collected in contravention of the CGST/SGST Act for a period exceeding 3 months;
5) Non deduction or lower deduction of tax deducted at source or not depositing tax deducted at source under section 51;
6) Non collection or lower collection of or non- payment of tax collectible at source under section 52;
7) Availing/utilizing input tax credit without actual receipt of goods and/or services;
8) Fraudulently obtaining any refund;
9) Availing/distributing input tax credit by an Input Service Distributor in violation of Section 20;
10) Furnishing false information or falsification of financial records or furnishing of fake accounts/documents with intent to evade payment of tax;
11) Failure to register despite being liable to pay tax;
12) Furnishing false information regarding registration particulars either at the time of applying for registration or subsequently;
13) Obstructing or preventing any official in discharge of his duty;
14) Transporting goods without prescribed documents;
15) Suppressing turnover leading to tax evasion;
16) Failure to maintain accounts/documents in the manner specified in the Act or failure to retain accounts/documents for the period specified in the Act;
17) Failure to furnish information/documents required by an officer in terms of the Act/Rules or furnishing false information/documents during the course of any proceeding;
18) Supplying/transporting/storing any goods liable to confiscation;
19) Issuing invoice or document using GSTIN of another person;
20) Tampering/destroying any material evidence;
21) Disposing of /tampering with goods detained/seized/attached under the Act.

Telecommunication services presently attract service tax of 14% along with Swachh Bharat Cess (SBC) of 0.5% and Krishi Kalyan Cess (KKC) of 0.5%. While service tax is a pure value added tax, the above mentioned cesses are not. This is for the reason that while no ITC (input tax credit) of SBC is available, the ITC of KKC is allowed to be set off only against KKC. Therefore, both the cesses are turnover tax.

2. As against the above, the telecommunication services will attract GST of 18% in the GST regime, which is a pure value added tax because full ITC of inputs and input services used in the course or furtherance of business by the telecommunication service provider would be available.

3. Moreover, presently telecom service providers are neither eligible for credit of VAT paid on goods nor of special additional duty (SAD) paid on imported goods/equipment. However, under GST, telecom service providers would avail credit of IGST paid on domestically procured goods as also imported goods. As per some estimates, this additional input tax credit would be as much as 2% of the turnover of the telecom industry. Further, ITC of service tax paid on assignment of spectrum by the Government in 2016 is presently allowed to be availed of by the telcos over a period of 3 years. In the GST regime, the entire credit can be taken in the same year. Resultantly, the balance two-thirds credit of the previous year would be admissible in the current financial year itself. All of these would reduce the telcos liability to pay GST through cash to about 87% of what they paid in the last fiscal.

4. Thus, the telecom operators are required to re-work their costing and credits availability and re-jig their prices and ensure that the increased availability of credits is passed on to the customers by lowering their costs.

1) Which are the commodities proposed to be kept outside the purview of GST?

Article 366(12A) of the Constitution as amended by 101st Constitutional Amendment Act, 2016 defines the Goods and Services tax (GST) as a tax on supply of goods or services or both, except supply of alcoholic liquor for human consumption. So alcohol for human consumption is kept out of GST by way of definition of GST on constitution. Five petroleum products viz. petroleum crude, motor spirit (petrol), high speed diesel, natural gas and aviation turbine fuel have temporarily been kept out and GST Council shall decide the date from which they shall be included in GST. Furthermore, electricity has been kept out of GST. Tax payers with an aggregate turnover in a financial year u p t o [Rs.20 lakhs & Rs.10 Lakhs for NE and special category states] w o u l d b e e x e m p t fr o m tax. Further, a person whose aggregate turnover in the preceding financial year is less than Rs.50 Lakhs can opt for a simplified composition scheme where tax will payable at a concessional rate on the turnover in a state.

2) How will imports be taxed under GST ?

Ans. Imports of Goods and Services will be treated as inter-state supplies and IGST will be levied on import of goods and services into the country. The incidence of tax will follow the destination principle and the tax revenue incase of SGST will accrue to the State where the imported goods and services are consumed. Full and complete set-off will be available on the GST paid on import on goods and services.

3) Where is the power to levy GST derived from ?

Ans. Article 246A of the Constitution, which was introduced by the Constitution (101st amendment) Act,2016 confers concurrent powers to both, Parliament and State Legislatures to make laws with respect to GST i. central tax (CGST) and state tax (SGST) or union territory tax (UTGST).However, clause 2 of Article 246A read with Article 269Aprovides exclusive power to the Parliament to legislate with respect to inter-State trade or commerce i.e. Integrated tax (IGST).

4) Can the registered person under composition scheme claim input tax credit?

Ans. No, registered person under composition scheme is not eligible to claim input tax credit.

5) Does the GST Law empower the Government to exempt supplies from the levy of GST?

Ans. Yes. In the public interest, the Central or the State Government can exempt either wholly or partly, on the recommendations of the GST council, the supplies of goods or services or both from the levy of GST either absolutely or subject to conditions. Further the Government can exempt, under circumstances of an exceptional nature, by special order any goods or services or both. It has also been provided in the SGST Act and UTGST Act that any exemption granted under CGST Act shall be deemed to be exemption under the said Act.

6) Who are the persons liable to take a Registration under the Model GST Law?

Ans. As per Section 22 of the CGST/SGST Act 2017, every supplier (including his agent) who makes a taxable supply i.e. supply of goods and / or services which are leviable to tax under GST law, and his aggregate turn over in a financial year exceeds the threshold limit of twenty lakh rupees shall be liable to register himself in the State or the Union territory of Delhi or Puducherry from where he makes the taxable supply. In case of eleven special category states (as mentioned in Art.279A(4)(g) of the Constitution of India), this threshold limit for registration liability is ten lakh rupees. Besides, Section 24 of the Act mentions certain categories of suppliers, who shall be liable to take registration even if their aggregate turnover is below the said threshold limit of20 lakh rupees. On the other hand, as per Section 23 of the Act, an agriculturist in respect of supply of his agricultural produce; as also any person exclusively making supply of non-taxable or wholly exempted goods and/or services under GST law will not be liable for registration.

7) Which are the cases in which registration is compulsory?

Ans. As per Section 24 of the CGST/SGST Act, the following categories of persons shall be required to be registered compulsorily irrespective of the threshold limit:

1. persons making any inter-State taxable supply;

2. casual taxable persons;

3. persons who are required to pay tax under reverse charge;

4. electronic commerce operators required to pay tax under sub-section (5) of section 9;

5. non-resident taxable persons;

6. persons who are required to deduct tax undersection 51;

7. persons who supply goods and/or services on behalf of other registered taxable persons whether as an agent or otherwise;

8. Input service distributor (whether or not separately registered under the Act)

9. persons who are required to collect tax under section52;

10. every electronic commerce operator

11. every person supplying online information and database retrieval services from a place outside India toa person in India, other than a registered person; and,

12. Such other person or class of persons as may be notified by the Central Government or a State Government on the recommendations of the Council.

8) Is possession of a Permanent Account Number (PAN) mandatory for obtaining a Registration?

Ans. Yes. As per Section 25(6) of the CGST/SGST Act every person shall have a Permanent Account Number issued under the Income Tax Act,1961(43 of 1961) in order to be eligible for grant of registration. However as per the proviso to the aforesaid section 25(6), a person required to deduct tax under Section 51, may have,in lieu of a PAN, a Tax Deduction and Collection Account Number issued under the said Income Tax Act, in order to be eligible for grant of registration. Also, as per Section 25(7) PAN is not mandatory for a non-resident taxable person who may be granted registration on the basis of any other document as maybe prescribed.

9) Whether Cancellation of Registration Certificate is permissible?

Ans. Yes. Any Registration granted under this Act may be cancelled by the Proper Officer, in circumstances mentioned in Section 29 of the CGST/SGST Act. The proper officer may, either on his own motion or on an application filed, in the prescribed manner, by the registered taxable person or by his legal heirs, in case of death of such person, cancel the registration, in such manner and within such period as maybe prescribed. As per the Registration Rules, an order for cancellation is to be issued within 30 days from the date of receipt of reply to SCN (in cases where the cancellation is proposed to be carried out suo moto by the proper officer)or from the date of receipt of application for cancellation(in case where the taxable person/legal heir applies for such cancellation).

27) Can the proper Officer Cancel the Registration on his own?

Yes, in certain circumstances specified under section 21(2) of MGL, the proper officer can cancel the registration on his own. Such circumstances include not filing return for a continuous period of six months (for a normal taxable 36 person) or three months (for a compounding taxpayer), and not commencing business within six months from the date of registration. However, before cancelling the registration, the proper officer has to follow the principles of natural justice. (Section 21 (4))

28) What happens when the registration is obtained by means of wilful mis-statement, fraud or suppression of facts?

In such cases, the registration may be cancelled with retrospective effect by the proper officer. Section 21(3).

29) Is there an option to take centralized registration for services under MGL?

No. There is no such option.

30) If the taxpayer has different business verticals in one state, will he have to obtain separate registration for each such vertical in the state?

No. However the taxpayer has the option to register such separate business verticals independently in terms of Section 19(2) of MGL.

31) Who is an ISD?

ISD stands for Input Service Distributor and has been defined under Section 2 (56) of MGL. It is basically an office meant to receive tax invoices towards receipt of input services and further distribute the credit to supplier units proportionately.

32) Will ISD be required to be separately registered other than the existing taxpayer registration?

Yes. The ISD registration is for one office of the taxpayer which will be different from the normal registration.

33) Can a taxpayer have multiple ISDs?

Yes. Different offices of a taxpayer can apply for ISD registration.

34) What could be the liabilities (in so far as registration is concerned) on transfer of a business?

The transferee or the successor shall be liable to be registered with effect from such transfer or succession and he will have to obtain a fresh registration with effect from such date. (Schedule III of MGL).

35) Whether all assesses /dealers who are already registered under existing central excise/service tax/vat laws will have to obtain fresh registration?

No. GSTN shall migrate all such assesses /dealers to the GSTN network and shall issue GSTIN number and password. They will be asked to submit all requisite documents and information required for registration in a prescribed period of time. Failure to do so will result in cancellation of GSTIN number. The service tax assesses having centralized registration will have to apply afresh in the respective states wherever they have their businesses.

36) Whether the job worker will have to be compulsorily registered?

No. Section 43A of MGL does not prescribe any such condition.

37) Whether the goods will be permitted to be supplied from the place of business of a job worker?

Yes. But only in cases where the job worker is registered or the principal declares the place of business of the job worker as his additional place of business.

38) At the time of registration will the assessee have to declare all his places of business?

Yes. The principal place of business and place of business have been separately defined under section 2(78) & 2(75) of MGL respectively. The taxpayer will have to declare the principal place of business as well as the details of additional places of business in the registration form.

39) Is there any system to facilitate smaller dealers or dealers having no IT infrastructure?

In order to cater to the needs of taxpayers who are not IT savvy, following facilities shall be made available:-

Tax Return Preparer (TRP):

A taxable person may prepare his registration application /returns himself or can approach the TRP for assistance. TRP will prepare the said registration document / return in prescribed format on the basis of the information furnished to him by the taxable person. The legal responsibility of the correctness of information contained in the forms prepared by the TRP will rest with the taxable person only and the TRP shall not be liable for any errors or incorrect information.

Facilitation Centre (FC):

He shall be responsible for the digitization and / or uploading of the forms and documents including summary sheet duly signed by the Authorized Signatory and given to it by the taxable person. After uploading the data on common portal using the ID and Password of FC, a print-out of acknowledgement will be taken and signed by the FC and handed over to the taxable person for his records. The FC will scan and upload the summary sheet duly signed by the Authorized Signatory.

40) Is there any facility for digital signature in the GSTN registration?

Taxpayers would have the option to sign the submitted application using valid digital signatures (if the applicant is required to obtain DSC under any other prevalent law then he will have to submit his registration application using the same). For those who do not have a Digital signature, alternative mechanisms will be provided in the GST Rules on Registration.

41) What will be the time limit for the decision on the online application?

If the information and the uploaded documents are found in order, the State and the Central authorities shall approve the application and communicate the approval to the common portal within three common working days. The portal will then automatically generate the Registration Certificate.

In case no deficiency is communicated to the applicant by both the tax authorities within three common working days, the registration shall be deemed to have been granted [section 19(9) of MGL] and the portal will automatically generate the Registration Certificate.

40) Is there any facility for digital signature in the GSTN registration?

41) What will be the time limit for the decision on the online application?

42) What will be the time of response by the applicant if any query is raised in the online application?

If during the process of verification, one of the tax authorities raises some query or notices some error, the same shall be communicated to the applicant and to the other tax authority through the GST Common Portal within 3 common working days. The applicant will reply to the query / rectify the error / answer the query within a period informed by the concerned tax authorities (Normally this period would be seven days).

On receipt of additional document or clarification, the relevant tax authority will respond within seven common working days.

43) What is the process of refusal of registration?

In case registration is refused, the applicant will be informed about the reasons for such refusal through a speaking order. The applicant shall have the right to appeal against the decision of the Authority. As per sub-section (10) of section 19 of MGL, any rejection of application for registration by one authority (i.e. under the CGST Act / SGST Act) shall be deemed to be a rejection of application for registration by the other tax authority (i.e. under the SGST Act / CGST Act).

44) Will there be any communication related to the application disposal?

The applicant shall be informed of the fact of grant or rejection of his registration application through an e-mail and SMS by the GST common portal. Jurisdictional details would be intimated to the applicant at this stage.

45) Can the registration certificate be downloaded from the GSTN portal?

In case registration is granted, applicant can download the Registration Certificate from the GST common portal.

GST Impact: Will GST benefit Telecom Sector?

Touted as India’s most transformative tax reform in decades, the goods and services Tax (GST) has the potential to add as many as 2 percentage points to the GDP, while also improving the ease of doing business. When implemented, GST is expected to usher in a harmonised national market of goods and services, and lead to a simplified, assessee-friendly tax administration system. However, there are sector-specific issues arising from aspects of the model GST law that are required to be addressed by the government before the introduction of the final law.

Telecom is one of the most basic and critical infrastructure services and has a massive outreach to more than a billion subscribers across geographical boundaries. Telecom faces several issues under the current indirect tax regime and, therefore, the sector has high hopes from the proposed GST regime. However, the model GST law does not appear to bring an end to the issues being faced by the telecom sector.

Compliance: Under the GST regime, states get the power to levy tax on services also and, therefore, requiring a service provider to take state-wise GST registration instead of a centralised service tax registration under the current regime. The multiple state-wise registration would tremendously increase efforts and cost of compliance for telecom companies (telcos). In fact, telcos would be required to file at least three returns on a monthly basis per registration (i.e. state-wise registration) under GST, unlike single centralised registration on a pan-India basis and merely 2-3 returns per year under the current indirect tax regime.

Exclusion of petroleum products: Another major impact on the telecom sector is on account of deferment of applicability of GST on petroleum products. The telecom sector has to maintain round the clock uninterrupted supply of services, which necessitates the use of power generators. Given that the applicability of GST on petroleum products has been deferred, the same would continue to attract central excise duties and states sale taxes. This would result in massive cascading impact on the telecom sector.

Non-alignment of circles with states: The telecom sector is regulated by the Telecom Regulatory Authority of India (Trai) and various licences required to provide telecom services are granted by the Department of Telecommunications (DoT). Telcos are required to obtain circle-wise licences from DoT for providing some telecom services such as mobile telephony. Whereas for services like national long distance (NLD) services and international long distance (ILD) services, licences are obtained on a pan-India basis. Circle-wise licences are not aligned with the geographical boundaries of states and one circle may cover multiple states. For instance, the Delhi NCR circle covers the local areas served by Delhi, Ghaziabad, Faridabad, Noida and Gurgaon telephone exchanges, i.e., covers Delhi and parts of Haryana and Uttar Pradesh. Currently, telcos maintain circle-wise accounting to account for circle-wise revenue for payment of licence fee. Whereas, under the GST regime, the accounting would be required to be maintained state-wise.

Further, there exist various disparities between telecom regulations (governed by Trai) and GST provisions. For instance, in case of roaming recharges for prepaid mobile telecommunication services, subscriber of one circle (i.e. home circle) buys recharge in the roaming circle. As per place of supply provisions under the model GST law, the place of supply would be the roaming circle. Whereas as per the regulatory requirement, such charges are required to be accounted in the home circle. Also, as mentioned earlier, certain circles comprise of multiple states (like Delhi NCR) and also certain cities of the same state fall under different circles (like Mumbai and Maharashtra and Goa). In such scenarios, certain intra-circle supplies as per regulatory requirement would be considered as inter-state supplies under GST and vice-versa. These disparities between telecom regulations and GST provisions would lead to complexities in accounting and these complexities would further increase if GST rates across states vary.

Self-supplies such as intra-circle termination and intra-circle roaming services for the same operator, especially in case of multi-state circles, may become taxable under GST. Currently, telcos do not have any mechanism to track intra-circle termination and roaming supplies. Thus, this would also increase complexities for telcos under the GST regime, including the valuation of such self-supplies.

So, due to variance in regulatory requirements and GST provisions including non-alignment of circle areas, undertaking compliance and reconciliation would be massive and complex task for telcos.

The above mentioned issues and complexities would necessitate telcos to make massive technological changes in the IT and accounting systems to maintain state-wise accounting.

The model GST law provided a specific place of supply for telecom services; however, the same entails various complexities.

In case of B2B supplies of leased circuit services (NPLC, IPLC, etc) and fixed line services (being the place where the leased circuit/telecommunication line is installed), it would be difficult to apportion the value of such services where lump-sum consideration is charged for multiple state locations.

For prepayment services where payment is made through recharge vouchers or e-top ups (other than e-payment), place of supply is the location where prepayment is received or recharge vouchers are sold. Prepaid vouchers, etc, are sold by telcos through a distribution channel consisting of a large number of distributors and retailers. Given the distribution chain involved in the sale of recharge vouchers, the location where prepayment is received for recharge vouchers could be different from the location where such recharge voucher is sold. For instance, the telco received R45 as a consideration (prepayment) at its head office in Delhi for a voucher having MRP R50 from a distributor located in Noida. In this case, it is not clear how to determine the place of supply as prepayment is received in Delhi, but the voucher is sold to a distributor in Noida. Accordingly, this could result in ambiguity with regard to value of supply and tax liability for the distribution chain.

Monday, June 5, 2023

GST-1

Frequently Asked Questions (FAQs) on Goods and Services Tax (GST)

Q17. Is Credit Notes mandatory to be generated under GST law, for all Credit Adjustment ?

Internal process activities at System

Q35.What is a GST compliant tax invoice?

Q36. What is a debit note & a credit note?

GST Filing - GSTR-3B, TRANS-1, TRANS-2 ₹ 5000/-

Q.42. What is meant by Reverse Charge?

Input Tax Credit (ITC) - Queries

Invoice customer under GST - Queries

Q.58 What is a mixed supply?

Q.59 Are there any activities which are treated as neither a supply of goods nor a supply of services?

Q.59 What is meant by zero rated supply under GST?

Q.60 What is transaction value?

Q.61 Whether post-supply discounts or incentives are to be included in the transaction value?

Q.62 What is the value of taxable supply to be adopted for the levy of GST?

Time of Supply under GST - Queries

Q.63 What is time of supply?

Q.66 What is the time of supply, where supply is completed after to change in rate of tax?

Q.67 What is Input Service Distributor (ISD)?

Q.68 Whether SGST / UTGST credit can be distributed as IGST credit by an ISD to recipients located in different States?

Returns Process and matching of Input Tax Credit - Queries

Q.69 What type of outward supply details are to be filed in the return?

Q.70 Is the scanned copy of invoices to be uploaded along with GSTR-1?

Q.71 Whether all invoices will have to be uploaded?

Q.72 Whether value for each transaction will have to be fed? What if no consideration?

Q.73 Can a recipient feed information in his GSTR-2 which has been missed by the supplier?

Q.73 Does the taxable person have to feed anything in the GSTR-2 or everything is auto-populated from GSTR-1?

Q.74 What will be the legal position in regard to the reversed input tax credit if the supplier later realizes the mistake and feeds the information?

Q.75 How does a taxpayer get the credit of the tax deducted at source on his behalf? Does he need to produce TDS certificate from the deductee to get the credit?

Q.76 Is an Annual Return and a Final Return one and the same?

Q.77 Is it compulsory for a taxpayer to file return by himself?

Q.78 Whether the amount of credit detected by the system on account of mis-match between GSTR-1 and GSTR-2 and recovered as output tax can be reclaimed?

Q.79 What is the special feature of GSTR-2?

Q.80 What is the consequence of not filing the return within the prescribed date?

GST Returns Calendar

Place of Supply of Goods and Service - Queries

Q.81 What is the need for the Place of Supply of Goods and Services under GST?

Q.82 Why are place of supply provisions different in respect of goods and services?

Q.83 What is the need to have separate rules for place of supply in respect of B2B (supplies to registered persons) and B2C (supplies to unregistered persons) transactions?

Q.84 What is the default presumption for place of supply in respect of B2B supply of services?

Q.85 What will be the place of supply for mobile connection? Can it be the location of supplier?

Assessment and Audit- Queries

Q.86 Who is the person responsible to make assessment of taxes payable under the Act?

What is the latest time by which final assessment is required to be made?

Q.88 What is the time limit for passing assessment order under section 62 and section 63?

Q.89 Under what circumstances can a tax officer initiate Summary Assessment?

Q.90 Who can conduct audit of taxpayers?

Q.91 Whether any prior intimation is required before conducting the audit?

What are the obligations of the taxable person when he receives the notice of audit?

Q.92 What is the time limit to submit the audit report?

Q.93 Who will bear the cost of special audit?

Transitional provisions under GST- Queries

Q.94 What is the time limit for issue of debit/credit note(s) for revision of prices?

Offences and Penalties, Prosecution and Compounding

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