Composition Scheme is a simple scheme under Goods & Service Tax (GST) for taxpayers. Small taxpayers can get rid of tedious GST formalities and pay GST at a fixed rate of turnover. This scheme can be opted by any taxpayer whose turnover is less than INR 1.5 crore. Initially, the composition had a limit of INR 1 crore i.e. only business with an annual turnover of less than INR 1 crore could opt for registration under composition scheme. The GST composition scheme turnover limit for north eastern states and hill states such as Sikkim and Himachal Pradesh were kept at … Read more
Tax Deducted at Source is one of the ways of government to collect and secure payment of tax based on fixed percentages on the amount payable by the receiver on goods / services. According to section 51 of the CGST Act, following are the persons who are liable to deduct TDS under GST:
- Department or establishment of Central Government or State Government
- Local Authority
- Governmental Agencies
- Category of persons as may be notified by the government on the recommendation of the GST Council
In addition to the aforementioned persons, the government via notification no. 50/2018 dated 13th September, 2018, added … Read more
In this era of globalization, trade is not just restricted to local markets. Rather the approach has been shifted from domestic to each corner of the world. To make India an export-oriented country, the concerned authorities are trying their best by introducing schemes, granting subsidies, licenses, and by making the export-related processes easier than ever. One of such requirement to extend your business globally is to have IEC- Import Export Code.
Who all are required to obtain IEC registration?
Every person who wants to lead off its import/export business in the country is required to obtain the Import Export Code … Read more
In any tax regime, registration is considered as the most vital requirement in identification of the taxpayers and ensuring tax compliance. Under the GST regime, a number of categories of persons have to register themselves mandatorily under the Act which include:
- A business firm having annual turnover for INR 40 lakhs or more whereas the annual turnover limit is INR 20 lakhs or more in case of special states*
- A business firm already registered under the previous regime
- Casual taxable person
- Taxable person under reverse charge mechanism
- E-commerce operators and suppliers operating though an e-commerce operator
- Inter-state supplier of goods
CBIC has issued Notification No. 56/2019–Central Tax dated 14th November, 2019 and has simplified Annual Return GSTR-9 & GST Audit GSTR-9C vide Central Goods and Services Tax (Seventh Amendment) Rules, 2019.
It notifies various changes in Form GSTR-9C to give effect to its applicability for F.Y 2017-18 and 2018-19. This notification provides substantial relief by making various mandatory fields ‘optional’ for the F.Y 2017-18 and F.Y. 2018-19.
Some significant fields which are made optional in GSTR 9C are listed below:
|Reference||Particulars before change||Particulars after change|
|FORM GSTR-9C, in Paragraph 4-Table 5B||Unbilled revenue which was recorded in|
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
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
|Supply||Place of Supply|
|Involves movement of goods, whether by the supplier or the recipient or by any other person||Location|
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
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 &
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
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