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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 .
    2. 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 .
    3. 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 .
    4. 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 .
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

Chartered accountant in Delhi India

Executive Summary of ICDS

ICDS (Income Computation and Disclosure Standards) are applicable for the Year ending on 31.03.2017 (Ay 2017‐18)

1. ICDS are applicable to all kinds of taxpayers (resident or non‐resident both) where taxpayers opting of mercantile system of accounting.

2. ICDS are not applicable where taxpayer is an Individual or a HUF and also not required to get accounts audited under section 44AB of Income Tax Act, 1961

3. ICDS are also applicable to the tax payers where taxpayer is computing income chargeable to tax under presumptive basis (Section 44AD, 44AE, 44ADA, 44B, 44BBA of Income Tax Act, 1961)

4. ICDS are applicable where incomes under head Profits and Gains from Business and Profession or Other Sources. 10 ICDS are issued by CBDT vide Notification No. 33, dated March 31, 2015

5. ICDS are applicable beside taxpayers are adopting Ind AS or AS to maintain their books of accounts.

6. ICDS are not applicable for computing income under MAT provisions but applicable for AMT.

7. ICDS are not applicable for maintenance of Books of Accounts or preparing of financial statements. ICDS are only applicable for computing incomes for the purpose of payment of income tax liability.

8. ICDS are not applicable where conflict is existed with Income tax Act or Rules. Henceforth Income Tax Act or Rules will prevail over ICDS

9. ICDS are applicable where conflict is existed with courts judgments and judicial precedents. Henceforth ICDS will prevail over courts judgments and judicial precedents.

10. ICDS are not applicable where sector specific provisions not contained in ICDS i.e no specified ICDS for real estate developers, BOT (Build‐Operate‐Transfer) projects and leases etc.

11. Net effect on incomes due to application of ICDS is to be disclosed in the Return of Incomes. Significant Accounting policy and specific disclosures are also required to disclose in tax audit report (Form 3CD)

12. Assessing Officer is permitted to make best Judgement assessment under section 144 of Income Tax Act, 1961 where incomes are not computed under provisions of ICDS.

13. Accounting Policies
(I) ICDS are not recognizing the concept of prudence
(II) ICDS are not allowing recognition of expected losses or mark‐to market losses unless specifically permitted by ICDS
(III) ICDS are not permitting the concept of materiality
(IV) ICDS are not permitting the changes in accounting policies without reasonable cause

14. Inventories and Investments
(I) ICDS are not permitting the use of standard cost method for computation of cost of inventories
(II) ICDS are covering the Securities held as stock‐in trade at cost or net realizable value whichever is lower
(III) ICDS are permitting to value category wise not ‘each’ individual security
(IV) ICDS are permitting to value at cost where securities not quoted or quoted irregularly.

15. Provisions, Contingent Liabilities and Contingent Assets
(I) ICDS are not permitting recognition of provisions and contingent liabilities until reasonably certain
(II) ICDS are permitting recognition of contingent assets where inflow of economic benefits are reasonably certain.

16. Construction Contracts and Revenue Recognition
(I) ICDS are not permitting accounting under Completed contract method
(II) ICDS are permitting accounting under percentage of completion method
(III) ICDS are not recognitioning of margins during early stage of contract
(IV) ICDS are not recognitioning of expected losses
(V) ICDS are permitting transitional provisions against open contracts as on March 31 2016
(VI) Cumulative revenue and cost as recognized before March 31, 2016 be considered for revenue recognition from transition date

17. Borrowing Costs
(I) ICDS are not defining any minimum period for classification of asset as qualifying asset
(II) ICDS are permitting to capitalise the borrowing costs where asset does not take substantial time to construct
(III) ICDS are not permitting the interest as borrowing cost against exchange differences as arising from foreign currency borrowings
(IV) ICDS are permitting the capitalization where active development of qualifying asset is interrupted
(V) ICDS are not permitting capitalisation of borrowing cost after asset is put to use
(VI) (a) ICDS are not permitting to capitalise the incomes from temporary deployment of unutilised borrowed funds
(b) Henceforth these incomes be taxed in year of earning
18. Effects of Changes in Foreign Exchange Rates
(I) ICDS are permitting the premium or discount be amortised over the life of contract against foreign currency option contracts and other similar contracts
(II) ICDS are permitting the exchange differences on translation of non integral foreign operations as income or expense

19. Additional Set of Books of Accounts under ICDS
(I) ICDS not requiring additional set of books of accounts
(II) ICDS are requiring to prepare additional records and reconciliations to be prepared and kept available for future purpose
20. Expected in Future
(I) ICDS are not considering the Guidance Notes & Accounting Standard Interpretations etc. as issued by ICAI which may impact the
computation of taxable incomes
(II) CBDT has made suitable modifications in Income Tax Return Forms & Form No. 3CD [Clause No. 13(f)] to determine taxable income in accordance to ICDs

21. Disclosure under ICDS
(I) For Each Class of Provision
(a) Brief description of nature of obligation
(b) Carrying amount of provision at beginning and end of period
(c) Additional provisions made in previous year and increase in existing provisions
(d) Amount used against provisions
(e) Amount of provisions reversed during previous year
(f) Amount of expected reimbursement against provisions
(II) For Each Class of Asset
(a) Brief description of nature of asset & related incomes
(b) Carrying amount of asset at beginning and end of previous year
(c) Additional amount of asset & related incomes recognized during the year
(d) Amount of asset and related incomes reversed during previous year

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.

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.
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.
GST consultant in delhi india

Executive Summary of GST Transition Provisions

1. ‘Carry forward’ of Input Tax Credit (ITC) as available on appointed day (i.e 1stJuly, 2017)

(I) Every registered person under GST is eligible to claim ITC against CENVAT credit carried forwarded in return pertaining for the period immediately preceeding appointed day(i.e on 30th June 2017) subject to satisfication of certain prescribed conditions:

  • That amount of credit is admissible as ITC under GST also
  • That all Returns for preceeding 6 months were filed under existing laws and alsoadmissible credit is reflected in last returns filed (i.e as on 30th June 2017)

 

(II) Electronic application in FORM GST TRAN‐1 is to be submitted within 90 days (earlier 60 days) from the appointed day. The Commissioner is also empowered to extend period notexceeding 90 days (totaling to 180 (90+90) days) . Thereafter credit should be reflected in electronic credit ledger of the registered person under GST.

 

  1. ‘Credit against Inputs’ as carried in inventory on appointed day

(I) Taxes and duties on inputs of goods as carried in raw material / semi‐finished / finished goods for manufacture of exempted goods under the existing law is also eligible for credit by eligible person subject to satisfaction of certain prescribed conditions :‐

 

    • That eligible person was not liable to be registered under the existing law or
    • That eligible person was engaged in manufacture of exempted goods or provision of exempted services or
    • That eligible person was providing works contract service and was availing the benefit of notification or
    • That eligible person was first stage dealer or second stage dealer or registered importer or depot of manufacturer

 

(II) Conditions to claim credit of inputs against stock as held on appointed day

      • That taxpayer should be registered under GST
      • That amount of credit is admissible as ITC under GST
      • That inputs of goods to be used for making taxable supplies under GST
      • That registered person is in possession of invoices / other prescribed documents evidencing payment of tax or duty
      • That invoices were issued within 12 months prior to appointed day
      • That supplier of services is not eligible for any abatement under Central GST (CGST)
      • That credit is claimed in FORM GST TRAN‐1 shall specify separately the details of stockheld on the appointed day up to 6 tax periods from the appointed date indicating thedetails of supplies effected during each tax period

 

(III) Claim for credit of taxes paid on stock can be made for all aforesaid situations subject toavailability of duty paying documents, in case the duty paying documents are notavailable, deemed credit of 60% of CGST paid if the goods attract a CGST rate of 9% ormore, in other cases, deemed credit is 40% of CGST paid.

 

(IV) In cases when Integrated GST (IGST) is paid on sale of such goods, deemed credit would be available at the rate of 30% of IGST paid, if the IGST rate is 18% or above and 20% ofIGST paid in other cases for claiming deemed credit, the goods should be subjected toexcise duty or additional customs duty (in lieu of excise).

 

(V) Registered person is required to receive credit transfer document from manufacturer where value is more than INR 25,000/‐ and also product bears the brand name ofmanufacturer and goods are serially numbered by inventory management systems (e.g. vehicle chassis or fridge etc) to claim full credit of the excise duty paid.

 

  1. Credit of eligible duties and taxes ‘already’ paid under ‘existing’ act bysupplier against supply of inputs of goods or input of services ‘after’appointed day under GST

(I) Registered person is entitled to claim credit of eligible duties and taxes on inputs of Goods or input of services as received on or after the appointed day where duty or tax ‘already’paid by the supplier under the existing law subject to satisfication of certain conditions:

  • That invoice or any other duty or taxpaying document of same was recorded in books of accounts within a period of 30 days from the appointed day (may be extended further for30 days by Commissioner);
  • That registered person has furnished a statement as prescribed for credit.

 

  1. Material removed for Job Work or other processes

(I) Raw material, semi‐finished or finished goods was sent for job work under ‘existing’ law and also still lying with job worker on appointed day, job worker need not to pay GST onits return to principal where goods are returned within 6 months or extended period of 2months from appointed day.

 

(II) Principal is required to file an application in FORM GST TRAN‐1, specifying the stock or capital goods held by him as principal at place/places of the business or agents/branchseparately agent‐wise and branch‐wise.

 

(III) However if goods are not returned within abovementioned period, the ITC be recovered as arrear of tax under GST and also amount so recovered shall not be admissible as ITC.

 

  1. Duty paid goods ‘returned’ to place of business ‘after’ the appointment day Condition I: Goods be returned ‘within’ 6 months or such extended period from the appointed day

Supplier of the duty paid goods is entitled to get refund of excise duty paid by him underthe ‘existing’ law on removal of goods subject to satisfication of certain conditions.

  • That duty paid on goods were delivered under ‘existing’ law within 6 months prior to theappointed day
  • That goods are returned by non registered person
  • That such goods are identifiable to satisfaction of GST authorities

However if such goods are returned by registered person, then the return of goodsshall be deemed to be a supply.

 

Condition II: Goods are returned ‘after’ 6 months or such extended period from the appointed day

  • That goods are returned by registered person, then he will be liable to GST on suchsupply.
  • That goods are returned by non registered person, then recipient will be liable topay GST under reverse charge mechanism (RCM)

 

  1. Issue of supplementary invoice, debit note or credit note when price under ‘existing’ contract is revised For ‘upward’ revision

(I) Registered Person is permitted to issue supplementary invoice or debit note within 30 days from the date of revision in prices of contract entered into before appointed day.

(II) It’s deemed to be supply in the month in which supplementary invoice / debit note is issued accordingly disclosure in return and payment of tax to be made.

 

For ‘downward’ revision

(I) Registered person is permitted to issue a credit note within 30 days from the date of revision in price of contract entered before appointed day

(II) Accordingly supplier of goods is permitted to reduce tax liability and to reverse, if anyinput credit.

 

  1. Refund Claim

(I) Claim for refund of CENVAT credit, duty, tax, interest or any amount paid under theexisting law is permitted in accordance with provision of existing law.

(II) Refund if allowed is to be paid in cash

(III) Recovery against wrong credit under existing law is to be deal as per the provision of GST.

 

  1. Treatment of long term contract
  • If Contract as entered prior to GST introduction, the goods or services or both as supplied after introduction of GST be liable to tax under the GST.

 

  1. Taxability on supply of goods sent on ‘approval’ basis

(I) GST not payable against goods sent on approval basis, returned to supplier due torejection or non approval by buyer within 6 months or extended period of 2 months.

(II) GST be paid by buyer where goods ‘returned’ after 6 or 8 months as case may be

(III) GST be paid by supplier where not ‘returned’ after 6 or 8 months as case may be

 

 

payroll-outsourcing

Payroll Outsourcing – An Ultimate Guide

A payroll is a financial record of salaries paid to an employee as wages, bonus or deduction. It is given for the work done during a particular period of time.

Payroll processing involves tedious routine work. Outsourcing this process allows you to focus on growing your business. Save cost, focus on core tasks and enable growth without manpower and infrastructure restrictions. We offer highly efficient payroll services. Partnering with us reduces costs and increases profits. We offer a convenient and reliable payroll process. Payroll is one of the most important responsibilities of the employer and his company. Our company helps you manage your payroll process in a manner that would maximize salary pay-outs and minimize per employee cost to company.

Importance of Payroll Outsourcing for the Business

Every businessman may not be a good accountant, thus it is not possible for them to give their best in the field of payroll. Whereas, the payroll companies have the most expertise staffs who deals with critical payroll jobs in their daily life. They have the complete expertise in the area of payroll thus provides an error free payroll service and that is also in the most efficient time.

It safeguards the company from the responsibility of paying salary to their employees in the correct time and the correct amount too along with calculating and filling of different taxes. This helps to avoid dissatisfaction among the staffs and doesn’t attract any kind of fines.

 

Some of the reasons for this are:

 

  • Team is headed by group of Chartered Accountants which means all the statutory laws are taken care.
  • Cost savings for the company on outsourcing payroll processing are extremely significant and can go upto 50% at times.
  • Reductions and cost effectiveness can be achieved.
  • Productivity is improved, as service quality provided is excellent and this frees the company from non-income generating tasks.
  • Latest technology and software for payroll processing are used.
  • Indian payroll processing service providers have a very highly specialized and expansive knowledge base in finance and accounting which would be of help to businesses globally.
  • These service providers are fluent in English and extremely competent and efficient.
  • Where India and the USA are concerned, the time difference is also favourable, thus work completion is faster.

 

Selecting the best Payroll Outsourcing Companies is also a critical job as the payroll of a company is directly involved with the profitability and the growth of the business. So, it is always suggested to only trust the professionals for the payroll outsourcing.