A job work means processing or working on raw material or semi-finished goods supplied by a principal manufacturer to a job worker. Suppose there is a registered person Mr. A who manufactures bags and he sends his semi-manufactured bags to Mr. B, a job worker, without paying any tax on such removal for installing chains on the bags. Here Mr. A is the principal and Mr. B is the job worker. According to section 143 of the CGST Act,
- A registered person, hereinafter referred to as the principal, may send the inputs and capital goods, without paying tax on such
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A return is a document containing details of income which a taxpayer is required to file with the tax administrative authorities. This is used by tax authorities to calculate tax liability. In the GST regime, any regular business has to file two monthly returns and one annual return. This amounts to 26 returns in a year. One has to manually enter details of one monthly return – GSTR-1. The other returns GSTR 3B will get auto-populated by deriving information from GSTR-1 filed by you and your vendors. There are separate returns required to be filed by special cases such as … Read more
The Goods and Service Tax Act was introduced as a destination based tax i.e. the state in which the goods consumed have the right to collect the amount of tax so it becomes critical to decide in which state the goods have been consumed and consequently who should collect the amount of tax. For solving this issue the concept of ‘Place of Supply’ was introduced both for goods and services.
Place of Supply when there is movement of goods
||Place of Supply
|Involves movement of goods, whether by the supplier or the recipient or by any other person
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Being a destination based, transaction wise tax, Goods and Services Tax (GST) ropes in strict compliance procedures for all the taxpayers or people falling under the gamut. Since every transaction is being recorded and tracked between the source and destination, it is obligatory for the taxpayers to maintain and declare information with utmost accuracy.
To have a crystal clear movement of goods intra-state or inter-state, reduce corruption and efficient tax collection system, GST defines strict penalty rules and offenses guidelines which the taxpayers have to follow. Below listed are the offences and applicable penalties under GST Act:
- A supplier
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With the introduction and (Goods and Service tax) GST implementation, the Indian tax structure for goods and services has become much broader. Under GST, multiple taxes are admixed into one. Transition from traditional tax structure to GST needs careful exercise. Hence, it is vital to have rules ensuring smooth transition to GST in place. The 3 types of transitional provisions are:
- Input tax credit (ITC)
- Refunds and arrears
- Other cases : Job work, Input Service Distributor(ISD), Composition scheme
Input tax credit (ITC)
Various provisions are made for the smooth ITC transition under VAT, excise duty or service tax to GST. … Read more
In order to calculate and discharge a tax liability, it is important to know the date when the tax liability arises i.e. the date on which the charging event has occurred. Point of taxation under GST is the point in time when goods are deemed to have been provided and services are deemed to be rendered. The concept of point of taxation is not new, a similar concept was also there in earlier tax regime. The point of taxation enables a person to determine the tax rate, value and due date for payment of taxes.
Under GST, time of supply … Read more
Since the inception of the Goods and Service Tax in India, GST has been a matter of discussion for every layman and experts in the country. Like every coin has 2 sides, the implementation of GST in the country also has arguably many merits and demerits as compared to the earlier subsumed taxes. Moving on to the inch closer for unifying tax reforms, the holes in the implementation of the act are triggered along with some important observation of Comptroller Auditor General of India (CAG).
Observation of CAG on indirect tax collection
The CAG in the latest reports on indirect … Read more
The decisions are in line with the government’s latest budget announcements to promote electric vehicles (EVs) and to reduce carbon footprints. In this landmark, the GST council brought down the GST rate on EVs to 5 % from 12 %. The move has come as a shot in the arm for the auto industry which has been pushing for a tax boost to promote the sale of EVs. This aimed at accelerating the adoption of eco- friendly mobility solutions which will be effective from August 1, 2019. Additionally, the tax rate on chargers or charging stations for EVs has been … Read more
Introduction of Goods and Service Tax (GST) across India with effect from July 1, 2017 was a significant step in the indirect tax reforms in India. For quick and easy movement of goods across India without any hindrance, check posts across in the country has been abolished. The GST system provides a provision of e-way Bill, a document to be carried by the person who causes movement of goods in charge of conveyance, generated electronically from the common portal. The e-way bill under GST regime became applicable from April 1, 2018 for the movement of goods from one state to … Read more
GST was made applicable from July 1, 2017 to all the persons making the taxable supply of goods and services wherein the aggregate turnover in financial year exceeds the threshold limit of 40 lakhs rupees (10 lakhs in other states).
Sec 17 of CGST Act, 2017 tells us about the apportionment of credit & blocked credit under GST. A registered person shall be eligible for apportionment of credits of goods & services in the following manner:
- Input shall be restricted to the use by business partly for business and partly for others.
- Input shall be restricted for the taxable &
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Typically, taxes are collected by business owners on behalf of the customers, which is then paid to the government. Reverse charge is when the buyer pays the tax directly to the government. The responsibility of reverse charge can either rest completely on the buyer or in certain special cases, it can be partially / jointly borne both by the buyer and the seller.
Under Goods and Services Tax (GST) laws, a supplier of goods or services collects GST from the receivers and deposits it with the tax authorities. Reverse charge is a mechanism where the recipient of the goods or … Read more
The GST Council in its 31st meeting decided that a new GST return system will be initiated to facilitate taxpayers. Government introduced a transition plan for all the taxpayers under the goods and services tax switching to new simpler return Forms. In order to ease the transition to the new return system, a transition plan has been worked out. This mechanism allows taxpayers to try the new return filing Forms during July-September and it will become mandatory only from October. The new return mechanism will have 3 Forms – one main return Form (Form GST RET-1) and two annexures (Form … Read more
One of the forms taxpayers need to keep track of is annual returns (GSTR-9) under Goods and Services Tax (GST) system. This form is required to be filed once every year by registered taxpayers such as businesses. The due date for filing GSTR-9 for FY 2019 is set as June 30, 2019. While the Government is going to be extra vigilant to flag defaulting filers, taxpayers need to be cautious to avoid making any errors, as there is no way to amend the GSTR-9 return once filed. Below are some of the common mistakes that taxpayers can avoid while filing … Read more
India could review the goods and services tax (GST) structure to further prune the number of items in the highest slab of 28% as it attempts to stave off a slump in demand. Some states have favored a reduction in tax rates, worried that the slowdown may get entrenched, and have communicated their concern to the Centre. The first GST council meeting to be chaired by Nirmala Sitharaman may meet on June 20, 2019 ahead of the budget presentation on July 5, 2019. Below mentioned are some specific points which will be focused in the meeting:
- Automobiles are placed
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E-invoicing is a common B2B practice involving exchange of an invoice between a supplier and a buyer in an integrated electronic format. Businesses may have a number of reasons to use e-invoicing. Commercial considerations are likely to drive a company’s decision to adopt e-invoicing, as the administrative costs and processing times for issuing and processing electronic documents are typically far lower than those for traditional paper documents. The savings come not only from reducing printing and postage costs, but also from adopting integrated processes for all invoice-related tasks. Since the introduction of GST (Goods and Service Tax) in the Indian … Read more
Starting a real estate business isn’t for the faint of heart now. GST (Goods and service tax) announcements favors the developer community by making it flexible choosing between old GST rates with Input tax credit (ITC) or the new reduced GST rates of 5 % without ITC. The new tax structures for real estates solved the transition issues on ITC for the ongoing projects and provided a relief for developers. The 33rd GST council meeting recommended a much needed breather to real estate sector which is beneficial for builders / developers as well as the customers. These changes will … Read more
India could face a tax landmine with authorities beginning to question input tax credit claimed by companies in lieu of Goods and Services Tax (GST) paid by their vendors. The authorities have already started sending notices to businesses, confirming fears that scrutiny will increase in the new financial year as the government looks to plug leakages. While paying tax on any output, you can diminish the tax you have already paid on inputs and pay the balance amount referring to input tax credit (ITC). Everyone has to pay taxes on the purchase of a product / service from a registered … Read more
E-way bill refers to an electronic way bill for movement of goods to be generated on the e-way bill portal. While an e-way bill is generated, a unique e-way bill number is allocated and is available to the supplier, recipient, and the transporter. An e-way bill will be issued when there is a movement of goods in a vehicle of value for more than INR 50,000. However, in certain states the limit has been extended as decided by the state government:
- In relation to a ‘supply’
- For reasons other than ‘supply’
- Due to inward ‘supply’ from an unregistered person.
Further, … Read more
Composition scheme is an alternative, simple & hassle free compliance scheme for small taxpayers with minimal procedures. Under this scheme, a taxpayer would be required to pay tax on the turnover based on prescribed percentage as the tax rate is comparatively low than those prescribed for normal taxpayers. The threshold limit of composition scheme extended from INR 1 crore to INR 1.5 crore which shall also include 10% provision of normal taxpayer annual turnover within the composition scheme if in case the given 10% is provided as the service. The illuminating feature of this scheme is that the business or … Read more
Within last six months, the GST portal keeps rolling out new updates to help taxpayers file their returns more smoothly and effectively. Taxpayers need to be up-to-dated in order to avoid missing out on vital compliances, which in turn would prevent notices being issued to them. Below is the gist of updates rolled out for the taxpayers:
Contrasting liability declared and input tax credit claimed
A new functionality is released by the portal which will help tax filers comparing their GSTR-3B tax liabilities with the GSTR-1s that have been filed before. Along with this, users can also make comparison of … Read more