⁠⁠⁠⁠⁠As per Sl. 3(ii) of Table in Notification 11/17, building contractors shall charge GST of 18% (9+9). As per Sl. 3(i), builders will also charge 18%. The "Value of Supply" for builders will be "Total amount" charged, less the value of land. Such value of land shall be deemed to be 1/3rd of the total amount charged. In other words, builders'effective rate is 12%. This is an alternate route to abatement. Builders can claim transitional credit u/s 140(3).

GOODS & SERVICES TAX UPDATE – 3

CENTRAL GOODS & SERVICES TAX (CGST) Some sections of CGST Act, 2017 to come into effect from 01.07.2017 Central Government vide Notification No. 09/2017-Central Tax, dt. 28-06-2017 has provided 1st July 2017 on which the following sections of CGST Act, 2017 will come into force: Section No. Description 6 Authorization of Officers of State Tax or Union Territory Tax as proper officer in certain circumstances 7-9 Levy & Collection of Tax 11 Power to grant exemption from tax 12-21 Time & Value of Supply and Input Tax Credit 31-34 Tax Invoice, Credit and Debit Notes 35-36 Accounts and Records 37-41 Details of Outward Supplies, Inward Supplies, Returns, First Return and claim of Input Tax Credit and provisional acceptance thereof 42 & 43 except proviso to respective sub-sections (9) Matching, Reversal and Reclaim of Input Tax Credit and Reduction in Output Tax Liability 44-48 Annual Return, Final Return, notice to return defaulters, Levy of Late Fee, GST practitioners 49-50 Payment of Tax, interest, penalty and other amounts and Interest on delayed payment of tax 53 Transfer of Input Tax Credit 54-58 Refunds 59-64 Assessment 65-66 Audit 67-72 Inspection, Search, Seizure and Arrest 73-84 Demands & Recovery 85-94 Liability to pay in Certain Cases 95-106 Advance Ruling 107-121 Appeals and Revision 122-138 Offences and Penalties 140-142 Transitional Provisions 143-145 Job work procedure, Presumption as to documents and admissibility of micro films, fax, printouts as documents and as evidence. 147-163 Miscellaneous Provisions 165-174 [Notification No. 09/2017-Central Tax, dt. 28-06-2017] Additional CGST Rules, 2017 notified By exercising the powers conferred by Section 164 of the CGST Act, 2017, Central Government vide Notification No. 10/2017-Central Tax, dt. 28-06-2017 has amended Central Goods and Services Tax Rules, 2017 w.e.f 1st July 2017. The Central Goods and Services Tax Rules, 2017 are amended to include: Chapter No. Rule(s) Description IV 27-35 Determination of Value of Supply V 36-45 Input Tax Credit VI 46-55 Tax Invoice, Credit and Debit Notes VII 56-58 Accounts and Records VIII 59-84 Returns IX 85-88 Payment of Tax X 89-97 Refund XI 98-102 Assessment and Audit XII 103-107 Advance Ruling XIII 108-116 Appeals and Revision XIV 117-121 Transitional Provisions XV 122-137 Anti-Profiteering XVI 138 E-way Rules The Rules and the formats provided therein are final to the effect and required to be adhered for respective purposes. [Notification No. 10/2017-Central Tax, dt. 28-06-2017] Amendment in modes of Verification of electronic documents as notified Central Government vide Notification No. 11/2017-Central Tax, dt. 28-06-2017 has w.e.f 22nd June 2017 amended Notification No. 06/2017-Central Tax, dt. 19-06-2017 to substitute Bank account based One Time Password (OTP) as an additional mode of verification with the following, for the purpose of the Rule 26: -       ii.            Electronic verification code generated through net banking login on the common portal;     iii.            Electronic verification code generated on the common portal: It is important to note that where the mode of authentication of any document is through any of the aforesaid modes, such verification will be done within 2 days of furnishing the documents. [Notification No. 11/2017-Central Tax, dt. 28-06-2017] Number of HSN digits required on tax invoice notified First proviso to Rule 46 of the Central Goods and Services Tax Rules, 2017 provides that the Board may, on the recommendations of the Council, by notification, specify-         i.            the number of digits of Harmonized System of Nomenclature code for goods or services that a class of registered persons shall be required to mention, for such period as may be specified in the said notification; and       ii.            the class of registered persons that would not be required to mention the Harmonized System of Nomenclature code for goods or services, for such period as may be specified in the said notification In this regard, Central Government vide Notification No. 12/2017-Central Tax, dt. 28-06-2017 has w.e.f 1st July 2017 notified the following number of digits of Harmonized System of Nomenclature (HSN) Codes which are required to be mentioned in a tax invoice issued by a registered person having prescribed annual turnover: S. No. Annual Turnover in the preceding Financial Year Number of Digits of HSN Code Upto Rs. 1.5 crore Nil More than Rs. 1.5 crore and upto Rs. 5 crores 2 More than Rs. 5 crores 4 Similar requirement for mentioning HSN Codes in tax invoice has been prescribed under IGST Act, 2017 vide Notification No. 05/2017-Integrated Tax, dt. 28-06-2017. [Notification No. 12/2017-Central Tax, dt. 28-06-2017 & Notification No. 05/2017-Integrated Tax, dt. 28-06-2017] Interest Rates under CGST Act, 2017 prescribed Central Government vide Notification No. 13/2017-Central Tax, dt. 28-06-2017 has w.e.f 1st July 2017 prescribed the following rates of interest per annum for respective sections as follows: S. No. CGST Act, 2017 Sections Section description Rate of interest 50(1) Failure to pay tax or part thereof to the Government within period prescribed 18% 50(3) For undue or excess claim of ITC or reduction of output tax liability 24% 54(12) Interest on withheld refund 6% 56 Interest on delayed refunds 6% Proviso to 56 Interest on refund arising from order passed by Adjudicating Authority/ Appellate Authority/ Tribunal/ Court and not refunded within 60 days 9% Further, similar interest rates have been prescribed under IGST Act, 2017 vide Notification No. 06/2017-Integrated Tax, dt. 28-06-2017 with regards to section 20 of IGST Act, 2017. [Notification No. 13/2017-Central Tax, dt. 28-06-2017 & Notification No. 06/2017-Integrated Tax, dt. 28-06-2017] INTEGRATED GOODS & SERVICES TAX (IGST) Some sections of IGST Act, 2017 to come into effect from 1.07.2017 Central Government vide Notification No. 03/2017-Integrated Tax, dt. 28-06-2017 has provided 1st July 2017 as the date on which the following sections of IGST Act, 2017 will come into force: Section No. Description 4 Authorization of Officers of State Tax or Union Territory Tax as proper officer in certain circumstances 5-6 Levy & Collection of Tax 7-9 Determination of Nature of Supply 10-13 Place of Supply of Goods or Services or Both 16 Zero Rated Supply 17-19 Apportionment of Tax and Settlement of Funds 21 & 23-25 Miscellaneous [Notification No. 03/2017-Integrated Tax, dt. 28-06-2017] IGST Rules, 2017 notified. Central Government vide Notification No. 04/2017-Integrated Tax, dt. 28-06-2017 has w.e.f 22nd June 2017 notified Integrated Goods and Services Tax Rules, 2017. It has further been provided that the Central Goods and Services Tax Rules, 2017, for carrying out the provisions specified in section 20 of the Integrated Goods and Services Tax Act, 2017 will apply in relation to integrated tax as they apply in relation to central tax. [Notification No. 04/2017-Integrated Tax, dt. 28-06-2017] UNION TERRITORY GOODS & SERVICES TAX Central Government vide Notification No. 03/2017-Union Territory Tax, dt. 28-06-2017 has provided 1st July 2017 as the date on which the following sections of UTGST Act, 2017 will come into force: Section No. Description 6 Authorization of Officers of State Tax or Union Territory Tax as proper officer in certain circumstances 7-8 Levy & Collection of Tax 9-10 Payment of Tax & Transfer of ITC 11 Officers required to assist proper officers 12-13 Demands & Recovery 14-16 Advance Ruling 18-20 Transitional Provisions 23-26 Miscellaneous [Notification No. 03/2017-Union Territory Tax, dt. 28-06-2017]

GST Get Set Go!!!

Finalize your books of accounts for 31stMarch 2017.

Prepare detailed working of the Closing stock for the date 31st March 2017 and for the period April 2017 to June 2017.

Allocate stock into inputs, semi-finished goods and finished goods in terms of quantity and value.

Correct pending mismatch reports.

If necessary, revise returns filed for correcting the mismatch data.

Ensure filing of all the returns for the period Jan 2017 to June 2017.

Return for the period ending with 30thJune 2017 should not be revised.

Ensure collection of all the C Forms / F Forms / H Forms and I Forms.

Obtain GSTN of your suppliers and buyers. Also inform your GSTN to the suppliers and buyers.

Make chart of HSN codes and GST rates applicable on supply of goods and services.

If GST rate is higher than the present tax rate then old stock should be disposed off immediately.

If GST rate is lower that the present tax rate then maintain proper details of the stock in hand.

Credit of State tax (VAT or Entry Tax) will be carry forward as SGST and credit of Central tax (Excise or Service Tax) will be carry forward as CGST.

Declaration for claiming input tax credit needs to be submitted within 90 days of the appointed day i.e. till 28th September 2017.

Provisional ID number is GSTIN (Goods and Service Tax Identification Number)



Special points to ponder for traders availing of credit of Excise duty

Prepare detailed calculation of stock with identification of the same with the relevant invoices.

In case of availability of Excise duty paying document, identify the stock to the relevant excise invoices.

In absence of Excise duty paying document either obtain Credit transfer document form the manufacturer or avail of 60%/40% credit of central tax paid thereon.

Stock older than one year (purchased before 1st July 2016) from the appointed date should be separately identified.

Stock older than one year (purchased before 1st July 2016) should be dispose off immediately.

Stock should be cleared within six months from the appointed day to avail credit i.e. till 31st December 2017.



GST Implementation and post GST preparation

Train the staff and take assistance of your consultant in GST implementation and preparation of details.

Maintenance of separate details for Tax Invoice, Debit Note, Credit Note, Receipt Voucher, Refund Voucher and Bill of Supply for GST purpose. These documents can be different from the invoices, challan and debit/credit notes maintained for accounting purpose.

On every intra-state transaction CGST and SGST shall be charged together. On every inter-state transaction IGST shall be charged.

Ensure timely receipt of stock and invoices related to it and timely compilation of all the buying and selling.

Timely filing of returns –

Return Form

Details

Due date

GSTR – 1

Monthly Outward Supply details / Details of sale of goods/ Details of service provided

By 10th of the next month

GSTR – 2

Monthly Inward Supply details / Details of purchases/Details of services received

By 15th of the next month

GSTR – 3

Monthly return

By 20th of the next month

GSTR – 4

Quarterly Return to be filed by the composition dealers

By 18th of the next month.

Delay in filing of return calls for late filing fees of ₹ 100 per day in CGST Act and ₹ 100 per day in SGST Act till the filing of return subject to a maximum of ₹ 5000.

Filing of return mandatorily required payment of tax.

Do not deal with the buyers or suppliers who are not complying with the provisions of GST.

Advances received will also be chargeable to tax.

Manner of utilization of credit.

Input Tax Credit

Order of Utilization of Credit

CGST

First towards CGST

Balance towards IGST

SGST

First towards SGST

Balance towards IGST

IGST

First towards IGST

Then towards CGST

Balance towards SGST



CGST stands for Central Goods and service Tax, SGST stands for state Goods and Service Tax and IGST stands for Integrated Goods and Service Tax

GST Update 3

It replaces
1. VAT (State as well as Central)
2. Excise Duty
3. Octroi / Entry Tax / LBT

However, following taxes will continue
1. Customs Duty
2. Professional Tax
3. Stamp Duty
4. Motor Vehicle Tax
5. Electricity Duty
6. VAT on Petroleum Products

GST Council is the apex body created by Parliament for governance of this Act.  It includes Finance Secretaries of Central as well as various State Governments

GST Rates - 5%, 12%, 18% & 28%
GST Exempt goods / services - 0%

Old VAT / Excise TIN will go and new PAN based Registration Number for GST is essential.  Structure of this number is as under:
27AAAAA0000Azzi   
Out of which first two digits are state code (in which Registration is taken) - '27' is for Maharashtra
Next 10 digits (AAAAA0000A) are PAN number of the assessee
and last 3 digits are serial number

Incidence of GST is on following :
1. Supply of Goods / Services
2. Agreed to Supply Goods / Services for Consideration (either in cash or kind)
3. 'Destination based' Tax is charged (If source  & destination are in same state, it is Transaction within state, if Source & Destination are in different states, then it is Interstate Transaction)
4. Branch Transfer / Stock Transfer will attract GST

GST Registration is MANDATORY if Annual Turnover is Rs.20 Lacs or above.

Three types of GST are there :
1. Central Goods & Service Tax (CGST)
2. State Goods & Service Tax (SGST)
3. Integrated Goods & Service Tax (IGST)

Rates under GST
1.Rates of  CGST & SGST shall be equal and will be 50% of the rates stipulated for thos specific Goods or specific Services.  e.g. if the goods under transaction attract 18%, then CGST for them is 9% and SGST for them is 9%. 

2.In case of Local Invoice or Within State Invoice, CGST and SGST both need to be charged SEPARATELY and to be mentioned in the Return accordingly.

3.Rates of IGST are equal to sum of rate under CGST and rate under SGST.  Thus in above example, rate under IGST is 18%  (9 + 9).

4.Tax Credit (or set-off, as was said in earlier days), shall be available for all these three taxes viz. CGST, SGST & IGST.

5.Earlier, in spite of 'C' or 'H' or 'F' forms, 2% Tax was a cost to the assessee.  now since these forms are done away with, this 2% cost is avoided, since full set-off or ITC of all Interstate Transactions is allowed now.

6.There will be GST chargeable on FREE Items such as Medical Samples, Buy 1 get 1 Free etc.  Valuation of such Free Items will have to be made, at par with sale of these items.  Thus if your are giving 1 free for purchase of 10,  You will have to Invoice for 11, levy GST and then you may give credit for the basic value of 1 being Free Item.  Thus GST needs to be paid on all items, being delivered to the customer.

7.Invoice is allowed to be cancelled ONLY by way of issuing Credit Note and that too within a period of 6 months from the date of such invoice.

Composite Scheme
1.It is available for all assessees having Turnover < Rs.75 lacs
2.Under this scheme, 2.5% tax is applicable for Manufacturing Companies and 1% tax is applicable for all others.
3.No Set-off or Tax Credit shall be available under this scheme.
4.This is optional
5.Assessee has to apply for this and then GST Official's permission is required to opt for this.
6.If this scheme is availed, GST cannot be charged in the Invoices raised by the Assessee.
7. If this is availed in one year and for next year you intend to do away with this, you can apply to GST officials and take permission for the same i.e. either to Opt-in or Opt-out of the scheme.

Immovable Property is NOT Taxable under GST.
Thus, if the flat is booked before Completion Certificate, it is TAXABLE under GST, 
whereas, if the flat is purchased after Completion Certificate (Ready-possession flat), it is NOT Taxable under GST

GST is applicable on Advance from Customer, as and when it is received from the customer, before raising invoice for the same.  It needs to be declared in the Output GST Return (GSTR-1)

URD Purchases (Purchases from Unregistered Dealers / Suppliers)
If the Assessee has purchases from Unregistered Dealers, Assessee has to ACTUALLY pay GST on the same Reverse Charges).  Assessee can take set-off (credit) of the same in next month.

No Revised Return is allowed under GST

Input Tax Credit (ITC)  (similar to set-off under old system)
1.Assessee has to be in possession of Tax Invoice, or Debit Note or Credit Note.
2.Payment has to be made to the Supplier within 180 days.   If the payment is not made to the supplier within this period the ITC has to be reversed by the Assessee.  It can later be availed, as and when actual payment of this is made to the Supplier.
3. ITC for Reverse charges (GST paid on URD purchase or other specific services), can be availed in the next month, of the month of their actual payment.

GST Rating
1.There will be GST Rating (just like CIBIL  Credit Ratings) in respect of Assessee, in consideration of timely filing of Returns, timely GST payment and other discipline followed by the Assessee. 
2.This can be viewed by the Assessee, as also by others.   
3.Thus while selecting the Supplier, his GST Rating can be viewed beforehand. 
4.It will also be viewed by bankers, financial institutions while lending money to the Assessee.

Set-off (ITC) under GST
1.ITC under GST shall be available under GST in following order.
CGST - 1.CGST
             2.SGST
             3.IGST

SGST -  1.SGST
             2.CGST
             3.IGST

IGST -   1.IGST
              2.CGST
              3.SGST

RETURN Filing Due Dates
1. 10th of Next Month - Output GST (including Advance from Suppliers) i.e. Sale Return (GSTR-1)
2. 11th to 15th  - system will be closed / blocked for any entry, but entries can be viewed during this period, including Entries of your suppliers.  View Supplier's sales entries, and ensure if they match with your purchase entries in your books.
3. 17th of Next Month - Input GST i.e. Purchase Return (GSTR-2)  These entries HAVE TO MATCH with the entries made by your suppliers in their Sales Return.
4. 21st if Next Month - Monthly Return in GSTR-3, alongwith payment.  Liability of Payment shall be calculated by the System itself, after filing of GSTR-1 & 2 as mentioned above.
5. 31st December of Next Financial Year - Annual Return (GSTR-9), alongwith Audit Report.  Audit is compulsory for Assessees having Turnover of Rs.1 Crore and more.
6.Thus during the year, total 37 Returns (12months X 3 each month = 36 plus 1 Annual) are to be filed by Assessee, for each of Place of Business.  If the Assessee is caarying out business at more than one places, he has to obtain GST Registration at each of such place and has to file 37 Returns for each of such place of business.

Reverse Charges - GST to be paid on Self-Invoicing
1. URD Purchases (with Names & Addresses of such suppliers)
2. Services such as a. Goods Transport,  b. Advocates Fees,  c. Sponsorship, d. Rent a Cab.

TRANSITION PROVISIONS (For the period of switching over from present Tax System to GST)
1. Transit-1 Return to be filed within 90 days.  Set-off or ITC for these items shall be pending till this is filed.
2. June 29 - Reverse Charges to be paid