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GST on Goods Transport Agency

GST for Goods Transport Agency

Transport of goods by road is the most commonly used mode of transportation for businesses which supply goods. This transportation by road is facilitated either by a Goods Transport Agency (GTA) or common carriers such as autorickshaw or courier agencies. In this blog, we will understand what is meant by a Goods Transport Agency (GTA) and the GST rates for transportation service provided by a Goods Transport Agency. This is the first blog in the series wherein, we will understand the various tax provisions with respect to services provided by Goods Transport Agencies and the tax impact on persons taking their services.

 

GST Registration
GST registration is mandatory in India for entities having more than Rs. 20 lakhs of aggregate turnover in a year (Rs. 10 lakhs in Special Category states). However, some of the supplies provided by a goods transport agency would be liable for GST under reverse charge basis. In a reverse charge transaction, the recipient of the goods is made liable for payment of GST. Hence, while providing services, goods transport agency must be aware of the reverse charge mechanism and raise invoice accordingly.

 

What is a GTA?

As per Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017, “goods transport agency” or GTA means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called.

This means, while others might also hire out vehicles for goods transportation, only those issuing a consignment note are considered as a GTA. Thus, a consignment note is an essential condition to be considered as a GTA.

 

What are the services provided by a GTA?

The service includes not only the actual transportation of goods, but other intermediate/ancillary service provided such as-

  • Loading/unloading
  • Packing/ unpacking
  • Trans-shipment
  • Temporary warehousing etc.
  • If these services are included and not provided as independent activities, then they are also covered under GTA.

 

What will be the rate of Tax in Case of the Goods Transport Agency (GTA Services) under GST Per se?

Looking at the entry no. 3, Services of goods transport agency (GTA) in relation to transportation of goods [other than used household goods for personal use]. The rate mentioned in the rate schedule is 5% (without ITC)

Entry no. 4 of the rate schedule prescribed says that Services of goods transport agency in relation to transportation of used household goods for personal use. The rate prescribed is 5% even in this case.

Important point to highlight here is that the transporter providing any other services like “Right to use” or “Leasing” of the vehicles, he will have to review the rates separately and not take the 5% as his rate.

This means that generally the rate is 5% for the GTA under GST. The point to be highlighted is that NO ITC is available to the transporter in this case.

 

Persons Required to Pay GST on Reverse Charge
When taking the services of a goods transport agency, the following types and class of entities would be required to pay GST on reverse charge basis.

  • Factories registered under the Factory Act.
  • Societies registered under the Society Act.
  • Any co-operative society.
  • Any person who is registered under GST.
  • Any Body Corporate (Company or LLP)
  • Any partnership, if registered or not as well as AOP.

 

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Goods and services tax

Frequently Asked Questions on GST (Goods and Service Tax)

  1.  Would head offices providing centralized HR, Finance and IT functions also need to raise invoices to its branch- Yes, if the head office and branches are distinct persons as specified in section 25(4), invoice is required to be issued and GST should also be paid.
  2. Where free replacement is provided to the customers without consideration under warranty, no GST is chargeable on such replacement. In such cases goods may be sent on delivery challan as provided in rule 55 of the CGST Rule, 2017
  3. How the invoicing should be done for free goods given along with sale so that corresponding input tax credit is not required to be reversed for products under scheme?- Invoice value would include value of all goods including those supplied free. In such cases, ITC is not required to be reversed
  4. How to send demonstration equipment and instruments to customers or branch offices with in India on returnable basis? – No sale is involved- As the goods are sent on returnable basis and no transfer of title is involved, it is not a supply of goods. If some element of service is involved, the same will be a taxable supply. The goods may be sent on delivery challan without invoice as it is not a supply of goods.
  5. How to send equipment and instruments to manufacturers’ factory for repairs and calibration with in India on returnable basis? – No sale is involved.- Challan for movement of goods without supply is to be issued in terms of Rule 55 of CGST Rules.
  6. Mistakes done in GSTR Returns can be corrected in subsequent returns to be filed through amendment Table (For example Table 11 of GSTR-1). Such mistakes can be corrected till the due date for filing of the return for the month of September subsequent to end of the year or filing of the annual return, whichever is earlier.
  7. No ITC is permitted to GTA engaged in providing GTA services which are under RCM and are treated as exempted supplies in the hand of GTA. However, if GTA is also liable to pay tax under forward charge as supplier, he is not permitted to avail ITC if he is claiming the concessional rate of 5%. If ITC is claimed, the GST rate for GTA in forward charge will be 12%.
  8. The compensation to employees in the form of money is not a supply. However, fringe benefits are supply of goods or services and are liable to tax if not exempted. These are transactions in furtherance of business and even if supplied without consideration, the same are deemed supply

 

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GST consultant in India

FAQ’s on levy of GST on supply of services to the co-operative society

  1. Services provided by the Central Government, State Government, Union territory or local authority to a person other than business entity, is exempted from GST. So, Property Tax, Water Tax, if collected by the RWA/Co-operative Society on behalf of the MCGM from individual flat owners, then GST is not leviable.
  2. Similarly, GST is not leviable on Non-Agricultural Tax, Electricity Charges etc, which are collected under other statutes from individual flat owners. However, if these charges are collected by the Society for generation of electricity by Society’s generator or to provide drinking water facility or any other service, then such charges collected by the society are liable to GST.
  3. Sinking fund, repairs & maintenance fund, car parking charges, Non- occupancy charges or simple interest for late payment, attract GST, as these charges are collected by the RWA/Co-operative Society for supply of services meant for its members.

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EXPORT WITHOUT PAYMENT OF IGST

Export Without Payment of IGST

Entities involved in export of goods or services having GST Registration are allowed to export goods without payment of IGST by furnishing an export bond or Letter of Undertaking (LUT) in Form GST RFD-11.

PROCEDURE FOR APPLICATION OF LETTER OF UNDERTAKING NUMBER:

According to the Central Goods and Services Tax Rules, 2017 any registered person exporting goods without payment of integrated tax is required to furnish a bond or a Letter of Undertaking (LUT) in FORM GST RFD-11. The following types of persons registered under GST will be allowed to submit a letter of undertaking and undertake export transactions.

  • Status holder as specified in the Foreign Trade Policy; or
  • Entities that have received the due foreign inward remittances amounting to a minimum of 10% of the export turnover, which should not be less than one crore rupees, in the preceding financial year, and he has not been prosecuted for any offence under the Central Goods and Services Tax Act, 2017 (12 of 2017) or under any of the existing laws in case where the amount of tax evaded exceeds two hundred and fifty lakh rupees.

Letter of Undertaking will be valid for a period of twelve months from the date of submission. If the exporter fails to comply with the conditions of the Letter of Undertaking, the privileges could be revoked and the exporter would be required to furnish a bond.

We are noting below the list of documents that the officials are usually asking at the time of submission ofLetter of Undertaking for export without payment of IGST.

  • Letter of Undertaking (on a stamp paper of Rs 100-Signed and stamped by directors/partners/proprietor)
  • GST RFD-11 (on letter head-Signed and stamped by directors/partners/proprietor)
  • Declaration of no offences under CGST Act, 2017 or any of the existing laws(on letter head-Signed and stamped by directors/partners/proprietor)
  • Foreign Inward Remittance Certificate/ Bank Realization Certificate/ Remittance Advices and EEFC Statement for preceding Financial Year
  • Bank Certificate stating that inward remittance is more than 1 crore
  • CA Certificate confirming the figures of preceding year Export Turnover and Inward Remittance
  • Copy of PAN of company/firm (Signed and stamped by directors/partners)
  • Memorandum and Articles of Association/ Partnership Deed(Signed and stamped by directors/partners)
  • Copy of Importer Exporter Code Certificate(Signed and stamped by directors/partners/proprietor)
  • Copy of Certificate of Provisional Registration in FORM GST REG – 25(Signed and stamped by directors/partners/ proprietor)
  • ID Proofs of directors/partners/proprietor (PAN and Aadhar- Self Attested)
  • Photo ID Proof of Witnesses(Self Attested)
  • Rent Agreement and NOC from owner for using the premises. (If rented)
  • Conveyance deed-If owned (Self Attested)
  • Proof of address of the premises- Utility Bill/ House Tax Receipt(Self Attested)
  • Copy of Export Invoice(Signed and stamped by directors/partners/proprietor)
  • Affidavit regarding fulfillment of conditions of Notification No. 16/2017-CT dated 07/07/2017 (on a stamp paper of Rs 100- Signed and stamped by directors/partners/proprietor)

We can help you in getting the Letter of Undertaking Number issued at the earliest. Please contact  AJSH & Co LLP for further assistance.

 

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Tax adviser in India

Income tax Rectification

There has been a change in the way Income Tax Department (ITD) is processing the income tax returns (ITR) for financial year 2016-17.

This has led to Intimation u/s 143(1)(a) being issued to a lot of taxpayers with even the slightest discrepancy in their return.

How returns were processed till 2016:
Only tax details declared in your ITR were matched with the tax details available in your Form 26AS.

How returns are being processed in 2017:
Now all details declared in your ITR w.r.t. Income (gross total income, taxable income, other income like interest income, etc.) / Deductions / TDS, are being matched with the details available in your Form 16 as well. If there is any variance in details given in ITR and Form 26AS / Form 16 / Form 16A, you would get an intimation u/s 143(1)(a) of the Income Tax Act.

What to do when you get such intimation:
You are required to login to your account at ITD website and submit a response online explaining such difference within the stipulated time. In case timely response is not received, ITR will be processed without providing any further opportunities in this regard. This can lead to:
1.    Delay in refund processing
2.    Demand notice to pay tax, interest and penalty
3.    Delay in loan/visa application processing

 

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GST Clarification

Some Important Clarifications Regarding Transportation Charges In The GST Regime

Some Important Clarifications Regarding Transportation Charges In The GST Regime

1-    It is always better in the GST regime to declare the freight charges separately in the invoice as now services received from Goods Transport Agency ( GTA ) are attributable to liability of reverse charge at the rate of 5% . On these services the GTA has no liability of payment of taxes but the recipient of such services has to pay the tax at the rate of 5% on the freight charges claimed by the GTA and the recipient of such services can claim ITC of such tax paid if such person subsequently executes taxable supplies .

2-    It is quite clear that ITC can only be claimed in respect of taxable supplies or zero rated supplies . Zero rated supplies means supplies in the course of export or supplies executed to SEZ units or SEZ developers . No ITC is admissible in respect of exempted or nil rated supplies .

3-    It has already been clarified that the recipient of transportation services from GTA will have to issue a payment voucher at the time of payment of freight charges to the GTA and will have to deposit the tax on such charges when such services are received . The format of payment voucher has been envisaged in Rule 52 of the CGST Rules , 2017 ( Exactly the same rule is envisaged in SGST Rules , 2017 ) .

4-    It is pertinent to note that in the payment voucher described above the recipient has to declare the payable tax and not the paid tax which in itself clarifies that at the time of issue of payment voucher to be issued to GTA , the payment of requisite tax in respect of freight charges claimed by the GTA is not the pre-condition of such issuance of payment voucher . The requisite tax in this respect as declared in the payment voucher is to be paid when the services are received .

5-    The services from the GTA can be taken by the supplier as well as the recipient .

  • In case of the supplier taking the services from GTA for transportation of goods,  the G.R. shall be issued in the name of such supplier as consignor and the recipient shall be consignee and freight charges shall be paid by such supplier to the GTA incurring the liability of reverse charge on such freight charges at the rate of 5% .
      1. Such supplier shall mention the aforesaid freight charges  after the value of taxable goods supplied in the invoice issued and charge the requisite tax on amount which shall include the amount of the value of goods and the amount of the freight charges .

     

      1. Since this supply is the composite supply which includes the supply of taxable goods as well as transportation services ( indicated as freight charges in the invoice issued )  of which the supply of the goods is the principal supply thus the tax shall be charged at the rate which is applicable on the supply of such taxable goods .

     

      1. The supplier shall be entitled to the input tax credit both in respect of the tax paid regarding inputs pertaining to the goods supplied and the tax paid in respect of freight charges as liability under reverse charge .

     

    1. There should not be any confusion regarding the claim of ITC in respect of the tax paid on the basis of reverse charge in respect of services taken from the GTA by the aforesaid supplier because such services have been subsequently supplied to the recipient by such supplier by disclosing the freight charges in the invoice issued by him and subjecting this amount to the requisite tax payable on principal supply of goods in such invoice . Thus these input services have been subsequently supplied in the form of composite supply by such supplier and tax invoice has been issued accordingly .
  • In case the services of transportation is taken by the recipient from the GTA  then the G.R. shall be issued of ” Self ” in respect of the recipient and such recipient shall be liable to pay the tax in respect of such transportation charges or freight charges on the reverse charge basis . In such cases the ITC of tax paid on reverse charge basis shall be claimed by the recipient instead of the supplier of such goods .
  • In the GST regime the GTA need not to get itself registered as the services supplied by it have been put in the ambit of section 9(3) i.e. the liability on such services has been envisaged on the reverse charge basis .
  • The Government by issuing Notification No. 5/2017 Dated 19th June , 2017 has clarified that such  persons shall fall in the category of persons exempted from obtaining registration under the Act ( i.e. CGST/SGST Act, 2017 ) who are only engaged in making supplies of taxable goods or services or both , the total tax on which is liable to be paid on reverse charge basis by the recipient of such goods or services or both under sub-section (3) of section 9 of the  aforesaid Act .

 

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GST returns guide

Step by Step Guide to File GST Return-3B

GSTR-3B filling is under progress and the last date for GSTR-3B filling is 20 August 2017. Please find below the step by step guide on how to file GST Return-3B.

Step by step guide on how to file GST Return-3B
1. After login, select Return Dashboard
2. Select Financial Year 2017-18 and Month July. Click Search and Select GSTR-3B
3. Declare your liabilities and ITC claims in Section 3.1 and 4 respectively by clicking on the tiles and furnishing the required information. Transitional ITC cannot be claimed in GSTR 3B. It can be claimed only through TRANS 1 and TRANS 2.
4. Enter details of interest, if payable, in Section 5.1. Late fee will be computed by the system
5. Click on Save GSTR-3B After you save the data, Submit button will get enabled. Please note that after submit, no modification is possible. Hence ensure that details are filled correctly before clicking on Submit button.
6. On clicking Submit GSTR-3B button, System will post (debit) the self-assessed liabilities including system generated late fee in Liability Register and credit the claimed ITC into ITC ledger.
7. After this the Payment of Tax tile will be enabled, please click it and declare your payment details to pay the taxes and offset the liability.
8. Click CHECK BALANCE button to view the balance available for credit under Integrated Tax, Central Tax, State Tax and Cess. (This includes transitional credit also, if TRAN-1 and 2 are submitted). This will enable you to check the balance before making the payment for the respective minor heads. The balance is also displayed when the mouse is hovered on the applicable data entry field in payment section.
9. Please fill out the section that specifies how you wants to set-off your liabilities using a combination of Cash and ITC.

  1. System checks if you have sufficient Cash/ITC balance.
  2. It also checks if the Reverse charge liabilities are set-off only through CASH.
  3. System also checks if all liabilities are set-off. Part payment is not allowed in GSTR-3B.        Hence, ensure sufficient balance in Cash and ITC Ledger to Offset liability
  4. In case of ITC utilisations, the system checks the prioritization rules viz. IGST Credit has to be first utilised for paying IGST liability and remaining for CGST liability and thereafter SGST liability; SGST credit has to be first used for paying SGST liability and then IGST liability; CGST Credit has to be first used for CGST liability and the remaining for IGST Liability; SGST credit cannot be used for paying CGST liability and CGST credit cannot be used for paying SGST liability
  5. Transition ITC, if available in ITC ledger, can be used for payment of liabilities of GSTR 3B

10. Click the OFFSET LIABILITY button to pay off the liabilities
11. Click on declaration statement
12. Select Authorized Signatory filing the Form
13. Click on File GSTR-3B button with DSC or EVC
14. Message for successful filing will appear and Acknowledgement will get generated

 

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GST Returns

Reverse charge mechanism under GST and implications of exemption upto Rs. 5000 per day

Let’s look at the critical provisions of the GST law which have enabled reverse charge mechanism :-

Compulsory Reverse Charge even if the supplier is registered –

Sec 9(3) The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

The above section primarily covers services availed from Goods Transport Agency, Lawyer, government, corporate sponsorships, director etc.

 

Reverse Charge if the supplier is unregistered –

Sec 9(4) The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

Central Government had come up with an exemption to the small miscellaneous transactions from unregistered persons.

Notification No. 8/2017- Central Tax (Rate) dt 28.06.2017 issued by Central Government has exempted intra-State supplies of goods or services or both received by a registered person from any supplier, who is not registered, from the whole of the central tax leviable thereon under sub-section (4) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017)

The said exemption shall not be applicable where the aggregate value of such supplies of goods or service or both received by a registered person from any or all the suppliers, who is or are not registered, exceeds five thousand rupees in a day.

To sum up, the supply should be intra state supply (within the state) and can be for goods as well as services or both. Moreover the supply should be received by the registered person from an unregistered dealer only and upto a daily limit of Rs. 5000/-

Example:-

Mr. X  purchased following items from unregistered dealer, all are dated 01.07.2017 as under:

1st bill – From Ram: Stationery = 2000/-
2nd bill – From Shyam: Lunch = 1000/-
3rd bill – From Madhu : Books = 3000/-

In this case, The bills of Mr. X will not get covered under this notification as aggregate value of all supplies exceeds 5000/- on a single date (01.07.2017)

Exemption would have been available if,:

1) Bill dates are different (So that it will come under 5000/- day limit, say bill date of Ram is 02.07.2017)
2) Any of the bills are 1000/- less than the mentioned value(Say Bill of Madhu is Rs 2000/-
3) If the one of the bills in the same of other person (say, one of the bill is in the name of Mr. Y)

FAQ’s

Whether these 5000 limit be availed for those cases where compulsory tax is payable in RCM basis as per section 9(3) of CGST act?

Where Compulsory tax is to be paid under the Reverse Charge Mechanism under 9(3) of CGST Act, and as per Notification N0o. 13/2017- Central Tax (Rate) dt 28.06.2017 the benefit of this limit cannot be availed. Reason being these notification cover only cases of 9(4) and not 9(3).

Mr. X purchased following items from unregistered dealer, all are dated 01.07.2017 as under:

1st bill – From Ram: Stationery = 2000/-
2nd bill – From Shyam: Lunch = 1000/-
3rd bill – From Madhu: Goods Transport Agency = 3000/-

In this case, The bills from Mr Ram and Mr Shyam will get covered under this notification as aggregate value of all supplies does not exceed 5000/- on a single date (01.07.2017). For the Third bill from Madhu Reverse charge is payable u/s 9(3) without any exemption threshold.

Whether this daily limit benefits would be available if the goods/services received from persons covered under 9(4) are blocked credits?

The benefit of daily limit would be available. Output Tax under reverse charge would be payable if it crosses the daily limit even though they are covered under blocked credits.

What if the limit crosses 5000 in a day, is GST payable over and above the value or from rupee 1?

If the value of taxable supplies exceeds Rs5000 per day for all suppliers, then GST would be payable on the Total value of the supplies received from unregistered persons.

 

Is this limit applicable to all supplies?

The limit is applicable to only taxable supply of goods or services or both. Exempt supplies are out of the preview of this notification.

Mr. X purchased following items from unregistered dealer, all are dated 01.07.2017 as under:

1st bill – From Ram: Stationery = 2000/-
2nd bill – From Shyam: Hotel Room = 1000/-
3rd bill – From Madhu: Books = 3000/-

In this case, the bills of Mr. X will not get covered under this notification as aggregate value of all supplies does not exceed 5000/- on a single date (01.07.2017) as the supplies from Shyam for Hotel room booking are exempt under Entry 14 of the exemption notification (12/2017).
What if the supplies are procured from Interstate supply from unregistered?

Benefit of this notification is available only for Intra State Purchase. If any transactions are done on an interstate basis the same are covered under the forward charge and in any case the reverse charge provisions are not applicable.

Goods and services both inclusive 5000 or separate?

Yes, the benefit is inclusive for all goods or services or both.

What rate GST should be payable then?

GST should be payable as per the schedules rate of the product/service.

What if procured from Composition persons?

Since Composition persons are registered person, reverse charge is not applicable on such supplies.

Can credit be availed for these taxes paid and on what basis, any invoice issue requirement?

Credits can be availed on payment of GST in cash. A consolidated monthly tax invoice can be raised if supplies are received from a single vendor. The Invoice shall be raised on the date of receipt of goods or services or both. Also a payment voucher needs to be issued on the date of making any advance payment as the time of supply is invoice of payment whichever is earlier.

 

We have compiled the daily expenses which would be liable to GST if procured from unregistered supplier as below:-

Nature of Expenses GST Rate GST IMPACT/ OTHER REMARKS /Supplies from UR (RCM Applicable)

No GST / NIL GST or EXEMPTED :-

1 Electricity Charges 0% Out of GST

2 Water Charges 0% Out of GST

3 Bank Interest 0% Out of GST

4 Professional Tax 0% Tax levied by local body / other association out of GST

5 License renewal like Pollution, Factories & Boilers & Local Bodies 0% Tax levied by local body / other association out of GST

6 Building or Property Tax 0% Tax levied by local body / other association out of GST

7 Rent Deposits 0% If adjusted with rent or forfeited – GST applicable

8 Other Deposits 0% If adjusted with other expenses or forfeited – GST applicable

9 Petrol Expense 0% Petrol & Diesel out of GST

10 Salary 0% Out of GST

11 Staff Amenities 0% Out of GST if in lieu of salary.

12 Gifts to Staff 0% Gifts by employer of value above Rs. 50000/- shall be liable to GST as outward supply.

13 Staff Mediclaim Contribution 0% Out of GST if in lieu of salary

14 Allowance & incentive to employees 0% Out of GST if in lieu of salary

15 Stamp & Registration Fees 0% If only a pure agent service – ensure GL balance Nil

16 Provision for Doubtful Debts 0% No credit / deduction shall be allowed

17 Bad Debts Written Off 0% No credit / deduction shall be allowed

18 Warranty Labour Charges 0% If there is no supply element & no consideration

19 Donation 0% If there is no supply element & no consideration

20 Labour Welfare Fund Contribution 0% Out of GST

21 Staff Medical Expenses 0% Employee service without any margin

22 Fine & Penalties by Government 0% Out of GST

23 Discounts – shown in bill 0% GST applicable is after all discount
– if shown in the bill

24 Free Gifts, Gold Coin to Customers 0%

25 Interest on Service Tax/ TDS 0%

26 Interest on Vehicle Loan 0%

27 Interest Others 0%

28 Local Conveyance 0%

29 Transportation Charges – Non GTA / Trucks 0%

GST Applicable & No ITC :-

28 Food Expense 12% / No ITC

29 Travel claims – Radio Taxi (Rent-a-cab) 5% No ITC

30 Transportation Charges – GTA 5% No ITC

31 Club & Membership fees 18% No ITC

32 Life Insurance Exps for Employees 18% No ITC

33 Work Contract Services – Construction of Building 18% No ITC if not supplied for outward works contract services

GST Applicable / RCM supply of URD :-

34 Advertisement Charges 18%

35 Advertisement in Magazine, 18%

36 Advertisement in Media 18%

37 Discounts – after issue of invoice (Post supply discount) GST Impact Credit note has to be issued, liability will be reduced to extent of GST on discount.

38 Annual Maintenance Charges 18%

39 Bank Charges – Service charges recovered 18%

40 Broker Fee & Charges 18%

41 Call Centre Expense 18%

42 Customer Schemes by MSIL 18%

43 Construction Work 18% GST amount – no ITC – for immovable property (Building)

44 Consumables Paint material & Other Consumables 28%

45 Customer Welfare expense 18% Food charges – No ITC

46 Contract Labour Expense 18%

47 Extended Warranty Cancellation Charges 18%

48 Free Service Camp Expense 18% If any third party bill comes

49 House Keeping Charges 18%

50 Insurance Charges 18%

51 Legal charges to advocate 18% Advocate raise bill without GST component – RCM to us

52 Loading & unloading Charges 18%

53 Local Conveyance 5% / 12%

54 Mediclaim Policy Premium Contribution A/ c 18%

55 Mobile Allowance 18% Pure Agent Service / If margin then GST applicable

56 Other Training Expense 18%

57 Postage and Courier Charges 18% Subject to certain exemptions

58 Printing & Stationery(Flex Printing, Broad Printing, Notice Printing) 18%

59 Rates and Taxes Actuals Depends on case to case basis

60 Recruitment Expenses 18%

61 Rent Paid 18%

62 Rent Paid for Mess (Employees) 18%

63 Repair and Maintenance – Building / Electrical / P& M / Others 18%

64 RTO Expenses 18% or 28%

65 Sales Promotion – Others / SSI / Display 18%

66 Sponsorship services 18% Reverse Charge to Service Receiver – ITC can be availed

67 Security Charges 18%

68 Staff Recruitment 18%

69 Staff Training Expenses 18%

70 Staff Uniform Expenses 18% If a third party bill comes

71 Stationery Expenses 18%

72 Subscription & periodicals 18%

73 Telephone Charges 18%

74 Transportation Charges – GTA 5%

75 Travelling Expenses Interstate 5%/18% Services from Tour operators / Agencies

76 Travelling Expenses International 28%

Note: The above expense heads are for illustrative purpose only. The applicability of GST on a particular expense has to be checked on case to case basis.

 

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GST consultant in India

Points to remember for filing GST Returns

The first return of GST is here and is due for filing is 20th of August, 2017.

Points to remember for filing the first GST Return GSTR-3B.

  1.  It is Mandatory to file GSTR-3B and there is no exemption from filing GSTR-3B even if no business is carried in the month of July’2017. NIL GSTR-3B is also to be filed mandatorily.
  2.  GSTR-3B is the provisional return for the month of July’2017. Therefore all dealers who are required to file monthly returns under the GST Regime are required to file GSTR-3B. Composition dealers are required to file quarterly returns therefore dealers who have opted for composition scheme are not required to file GSTR-3B.
  3.  GSTR-3B is not the final return for the month of July’2017 this is only a provisional return. GSTR-1, GSTR-2, GSTR-3 for July’2017 are still required to be filed.
  4.  GSTR-3B cannot be revised. Any revision in the figures for July’2017 has to be done through GSTR-1, 2 and 3 to be filed later on.
  5.  Any taxes due for July’2017 have to be paid before filing GSTR-3B.
  6.  If there is any change in the figures at the time of filing forms GSTR-1,2 & 3 and if there is excess tax payable then the same will have to be paid with interest before filing GSTR-3 due in September.
  7.  If your input credits are more than your output in GSTR-3B then you need not pay any taxes before filing this return. However, it is to be noted that no refund can be claimed in form GSTR-3B and excess credit will be credited to the ITC Ledger.
  8.  The transitional credits available from the previous VAT/Service Tax/Excise regimes will not be available for credit and use in GSTR-3B. Any such credits have to be shown by filing form TRAN-1 and will be available for use only after filing TRAN-1.
  9.  GSTR-3B is a simplified return where only total figures of purchases, sales input tax credits and payments are to be entered. Individual entries for each sale invoice are not to be entered in this return.
  10.  GSTR-3B is to be filed from the period from which the registration is taken by the supplier. Therefore, if you have taken registration in the month of August’2017 the option for filing GSTR-3B for July’2017 will not be available and the no GSTR-3B is to be filed for July’2017.
  11.  GSTR-3B is to be filed through online mode on the GST Portal gst.gov.in
  12.  Following details are to be shown in the return GSTR-3B.
    1. GSTIN number of Registered Person
    2. Legal name of Registered Person
    3. Summary of Outward Supply & Inward Supply under Reverse Charge
    4. Bifurcation of Inter-state outward supplies as follows:
      • a) To unregistered Person
      • b) To Composite taxable Person
      • c) To UIN Holders
    5. Summary of eligible ITC available and the ITC to be reversed and ITC which is ineligible bifurcated into IGST, CGST & SGST/UTSGT and Cess
    6. Summary of Exempted, Nil rated and Non GST inward supplies
      • Interest and late fees payable
    7. Details of payment of tax, which includes Category wise tax payable, ITC availed , TDS credit and Tax paid in cash along with interest and late fees (Though it is not applicable for initial 2 return)
    8. Summary of tax category wise TDS/TCS credit
  13.  Remember the order for set-off eligible ITC. ITC of IGST, CGST and SGST must be set-off from themselves (intra-head) first before being set-off inter-head. Remember that GST and SGST cannot be set-off against each other.
  14.  Any amounts to be paid on reverse charges have also be shown and paid in GSTR-3B also. Please remember that amount payable under reverse charges will not be available to be paid by utilising input credit. Amount payable on reverse charges will have to paid by cash.
  15. GSTR-3B can be submitted through digital signatures or Electronic verification code except for Companies where it has to be filed by digital signatures.

 

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Chartered accountant in Delhi India

Reverse Charge Under GST

Points Related To Reverse Charge Under GST as Per FAQ Issued

  1. There are two type of reverse charge scenarios provided in law. First is dependent on the nature of supply and/or nature of supplier. This scenario is covered by section 9 (3) of the CGST/ SGST (UTGST) Act and section 5 (3) of the IGST Act. Second scenario is covered by section 9 (4) of the CGST/SGST (UTGST) Act and section 5 (4) of the IGST Act where taxable supplies by any unregistered person to a registered person is covered.
  2. Any amount payable under reverse charge shall be paid by debiting the electronic cash ledger. In other words, reverse charge liability cannot be discharged by using input tax credit. However, after discharging reverse charge liability, credit of the same can be taken by the recipient, if he is otherwise eligible.
  3. As per section 31 of the CGST Act, 2017 read with Rule 46 of the CGST Rules, 2017, every tax invoice has to mention whether the tax in respect of supply in the invoice is payable on reverse charge. Similarly, this also needs to be mentioned in receipt voucher as well as refund voucher, if tax is payable on reverse charge.
  4. A person who is required to pay tax under reverse charge has to compulsorily register under GST and the threshold limit of Rs. 20 lakhs (Rs. 10 lakhs for special category states except J & K) is not applicable to him.
  5. Invoice level information in respect of all supplies attracting reverse charge, rate wise, are to be furnished separately in the table 4B of GSTR-1.
  6. Advance paid for reverse charge supplies is also leviable to GST. The person making advance payment has to pay tax on reverse charge basis.

 

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