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Company registration in India

New Company Registration in India

Being register as a company is always turned to be a hectic schedule while accompanying with several rules and guidelines. In India as per New Companies Act, 2013; different companies of different rules as for private limited, public limited, govt. company, semi government company, One Person Company, NGO and many more. Company law for varied companies generally varies that need to be accompanied by the owners or partners before applying with company registration.

Company Registration in India acts and laws do not only bring the status of legality but also the level of credibility and reliability in the target market. Companies with business laws are always preferred by the target audience where they expect the services with high quality ad best cost. Registered products and services are always be treated with high concern in compare of those unregister services. Thus, not only from law point of view but also from marketing and branding purpose; those company registration services have really proved to be as a bloom for all types of business houses.

 

Different types of New Company Registration/Business Incorporation

Sole Proprietorship: The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts.

Limited Liability Partnership: Partnerships when given the feature of limited liability, the LIMITED LIABILITY PARTNERSHIPS came into picture. LLP is a separate legal entity and which can be formed in India by minimum of two persons with a motive of earning profit.

Partnership: A business organization in which two or more individuals manage and operate the business. Both owners are equally and personally liable for the debts from the business. Partnerships are easy to form. There is no minimum capital requirement. Only two people are needed to incorporate the partnership.

Private Limited Company: Private Limited company is the most preferred form of business. Private company can be form by two persons. Private company is the ultimate form of business, because in this form, owners can do any type of complex business transaction as they like. For e.g. they can issue ESOPs, raise capital etc.

One Person Company: OPC can be regarded as a refined form of proprietorship. Only 1 person is required to form the OPC and enjoys all the benefits of a normal limited liability company.

Public Limited Company: Public limited Company is the biggest and the most powerful form of business in India. Public limited companies gives the trust that you are doing something big and also they have noted that the valuation of business increases by 10 to 15 times.

 

Let’s start the registration procedure: 4 Steps
Step 1: Acquire Director Identification Number(DIN)
This is the first process in registration that each director of the company should obtain their identification number. As per the amendment act 2006, acquiring a DIN  is compulsory for every director i.e. as such every existing and intending directors have to obtain their DIN. To get DIN one need to file a eForm DIN-1. The DIN-1 form is available on Official site of the ministry of corporate affairs the link is DIN-1 Form.

  • Register yourself on MCA Website first and have a login id. After filling DIN-1 Form, one should upload the filled form by clicking to eForm upload button on MCA website and should pay applicable fees.
  • After getting generated DIN one should intimate their company about DIN. The director can intimate their company about DIN  by using DIN-2 Form.
  • Then company should intimate the Registrar of Corporates(ROC) about all director’s DIN through DIN-3 Form.
  • If there is any change in DIN or need for any updation  like change of address, personal details etc, then director should intimate this change by submitting the eForm DIN-4 Form.

 

Step 2: Acquire Digital Signature Certificate(DSC):
In order to ensure the security or authenticity of documents filed electronically the information act 2000 demands a valid digital signature on the documents submitted electronically. This is the only and safest way that one can submit their documents electronically. The digital signature certificate should be acquired by only those agencies which are appointed by the controller of certification agencies (CCA). One should not use DSC given by any other agency which is not approved and it’s illegal to use others DSC as yours or the false one.
If you already have a digital signature then you can use the same, no need to apply for another. But do check for your digital signature validity, agencies issue DSC’s with one or two year validity after expiry you have to renew it.
One can acquire his/her Digital Signature certificates  from these government listed agencies like TCS, IDBRT, MTNL, SAFESCRYPT, NIC, nCODE Solutions etc. to check out their price details of these Govt approved agencies, Go to this link.

Step 3: Create a account on MCA Portal – New user registration
This is about having a registered user account on MCA Portal for filing a eForm, for online fee payment, for different transactions as registered and business user. Creating an account is totally free of cost. To register yourself on the MCA portal, click on the register link.

Step 4: Apply for the company to be registered.
This is the final major step in a registration of your company which includes incorporating company name, Registering the office address or notice of situation of office and notice for appointment of company directors, manager and secretary. And also regarding the take and pay for their qualification shares.

Want to Register Your Business Click Here

Goods and Services Tax

Key Changes in GST (22nd Meeting of GST Council)

  1. In order to ease the compliance burden of SME Sectors, following amendments has been recommended:
    •  Composition Scheme will be available up to the turnover of Rs. 1 Crore. Tax Rate for Composition Scheme will remain same at present level.
    •  Person with a turnover up to 1.5 Crore will be required to furnish the quarterly return instead of monthly return. Tax will also be required to be paid on Quarterly basis. Switchover will take place from 1st October.
    •  Returns from July to September’ 2017 will still be required to be filed on monthly basis.
    •  Big Tax Payers filing monthly basis who are purchasing goods from small tax payers will require to avail credit through their GSTR 2 by filing manual feeding.
  2. E-way bill will be tried to notify upto 1st April, 2018 nation wide.
  3. Applicability of Reverse Charge on Inward Supply from unregistered person is deferred will 31st March 2018.
  4.  TDS & TCS Provisions will be effective from 1st April 2018.
  5.  Service Provider with a turnover of upto 20 Lakh will be exempted with applicability of GST on their Inter-State supply.
  6.  Refund to exporters will be granted with effect from 10th October for the month of July and with effect from 18th October for the month of August.
  7.  Future exports can be made by the merchant exporter at nominal rate of 0.1% IGST up to 31st March. Preferably by 1st April, 2018, E-wallets system will be developed for exporters.
  8.  Issues with respect to allowing composition taxpayers to make inter-state outward supply, to pay composition tax only on taxable items will be studied by group of ministers (GOM) on urgent basis.
  9.  Now suppliers having upto  20 lacs interstate supplies shall not be require to have mandatory registration .
  10.  Tax Rates of around 27 items has been revisited by fit-ment committee. Changes rates for some items are as follows:
  •  From 12 to 5: Unbranded namkeen, Unbranded ayurvedic medicines, Paper Waste,
  •  From 18 to 5: Plastic Waste, Rubber Waste,
  •  From 28 to 18: Parts of Diesel Engine, Stationary items, Stones used for flouring except marble and stone
  • From 18 to 12: Man-made Yarn
  •  Many Items of Job Work for example printing items are reduced to 5% from 12%.
  •  Rates for government construction contracts in several case where labour component is more such as irrigation projects are reduced to 5% from 12%.

 

If you have any query regarding this Click Here

GST Advisor in Delhi

Interest on Late Payment of GST

Goods and Service Tax is an ambitious tax regime applicable from 1st of July 2017 made a number of indirect taxes subsumed into it. The government has now revealed the due dates for the payment of GST. The GST payment due date for general taxpayers is 20th of October.

All the registered taxpayers are required to make the payment of their taxes on GST Portal latest by the 20th of this october for a particular tax period. Taxpayers registered under composition scheme will have to pay GST only once every quarter.

 

GST Payment Due Date

  • GST Payment due date (normal taxpayer): 20 days from the end of the tax period month.
  • GST Payment due date (composition scheme taxpayer): 18 days from the end of a tax quarter.

 

Interest Applicable on GST Late Payment
Interest at the rate of 18% per annum will be applicable for GST late payment. In case it is determined that the taxpayer misstated output tax liability in the GST return, then interest at the rate of 24% would be applicable. In addition to the interest, penalty could also be levied on the taxpayer under GST for erroneous return filing, wilful misstatement or fraud.

 

Rules and Regulations of GST Payment for Taxpayers

  • The electronic cash ledger will be credited if payment for tax, interest, penalty and fee has been made by internet banking, credit card, NEFT, RTGS. While the amount can be used for the payment of interest, tax, penalty which is remaining in the electronic cash ledger of the taxpayer.
  • A payment for GST PMT-06 form is done through challan while the challan is only valid for the time period of 15 days. When the payment is done successfully, a Challan Identification Number (CIN) is generated. If in any case the CIN is not generated than the taxpayer can file Form GST PMT-07.
  • Online payments even made after 8 pm will be credited on the same day to the taxpayer’s account. While there will be no physical challan accepted for the GST payment while the challans will be generated from the gst.gov.in only for all the payments of taxes, fees, penalty, interest.
  • For the payment of challan under the 10000 rupees limit, it can be done over the counter with cash, cheques, demand draft through authorised banks while for the payments exceeding the amount of 10000 will be collected through digital mode only

 

Interest and Penalty on late payment of GST

A person is liable to pay interest/penalty as per following conditions and rules.

  • Any payment after the due date will attract an interest at the rate of 18%.
  • If a person makes excess or undue claims of input credits or excess/undue reduction in tax liability, they will have to pay an interest at the rate of 24% on the excess claim or reduction amount.
  • The penalty of 10% of the unpaid or short paid tax or Rs. 10,000, whichever is higher, is to be levied in case of non-payment of GST even after 3 months from the originally scheduled date.
  • In case of a fraud or misstatement to escape tax, the penalty of Rs. 10,000 or 100% of the tax will be applicable.

 

Hence, it is imperative for you as a tax payer, to avoid instances of interest payment. Default in payment of tax will also have an impact on your compliance rating. Timely and accurate compliance will help you to avoid unnecessary cash outflow and achieve a good compliance score.

 

For assistance with GST return filing or Making GST payments, get in touch with an GST Advisor

GST adviser in India

GST Clarifications

  1. Taxpayers who have not set off their tax liability for GSTR3B for July 2017 and have only done submit of their GSTR-3B, have now been given option to edit, Submit and file their return. But those who have already offset liability would not be able to edit GSTR-3B
  2. If something wrong done in GSTR-3B than Correction can be made in next month’s return or during reconciliation between GSTR-1, 2 & 3 with GSTR-3B.
  3. GST credit can be availed on spare parts used for vehicles repairs and vehicle is a truck used for moving goods.
  4. Under Tran-1 you have to give detail of Revised ST-3 and not the original ST-3.
  5. If you have purchased goods from other state , bill date was 31.08.17 & Goods received on 05.09.2017 , then ITC should be claimed in the return for the Month of September 2017
  6. A taxpayer submitted his registration Application Within 30 days but got registration in August. Now he had purchased certain goods in Month of July. He can take the credit of those bill in the return of August Month.
  7. If you forgot some purchase bill to submit in GSTR-3B of July than you can add them in the Return of August.
  8. Composition Dealer can Import Goods on payment of BCD and IGST
  9. Service tax paid on advance received and now service is completed and while billing under GST Regime GST is Payble on (Bill Amount – Advance Recd)
  10. Input credit of Revise Return filed under VAT laws after 1st july but before filing of TRAN 1 can be claimed only through filling TRAN-1
  11. Unregistered dealer cannot make inter-state supplies except in terms of  Notification 32/17-Central Tax dated 15/09/17. The purchaser will be liable u/s 9(4) to pay GST.
  12. ITC is available under GST with respect to CSR expenses incurred by companies.
  13. Insurance/freight paid and charged separately in export invoice(with IGST), will not be treated as export of service.
  14. MRP is inclusive of all taxes. No amount of GST can be charged over and above MRP. Amount of GST, however is required to be shown separately on Tax Invoice.
  15. Even in case of over the counter sales, if the address of purchaser on Invoice is of other state than it would be treated Inter state Sale.
  16. Section 52 of CGST Act has not yet been notified. Till the section is notified all supplies made through E- commerce portal need to be shown in Part-4A of GSTR-1. These supplies are also need to be shown in Part 3.1 of GSTR-3B
  17. Amount of IGST need to be mentioned on the invoice made to SEZ.
  18. Transporter whose 100% GST liability is paid under reverse charge by receiver of service is not required to be registered under GST as Per Notification No-5/2017 of Central Tax
  19. GST paid on RCM for July on 20 Aug can be utilised against July liability.
  20. RCM is applicable on Expenses incurred by Director outside India for business Purpose if it is in the nature of supply imported into India.
  21. As per Section 51 of CGST Act, only registration of deductor has been opened. Date from which liability to deduct arises will be notified separately.
  22. No ITC can be claimed on Car purchased for business purpose.
  23. Electricity Expense is a Non GST Inward Supplies for GSTR-3B
  24. Manufacturer can take transitional ITC only on duty paying document as per Section 140(3) of CGST Act 2017
  25. If Paid IGST by Mistake instead of CGST+SGST than as per Section 19(1) of the IGST Act A Registered person shall be granted refund of the amount of integrated tax so paid in such manner and subject to such conditions as may be prescribed.
  26. ITC of IGST on import can be availed only if your GSTIN is mentioned on BOE. So if paid a broker pay the amount on behalf of company than no credit will be allowed.
  27. Custom Clearing Charges will come in form GSTR3B under the heading “All other ITC”.
  28. Bill of Supply is to be issued for Exempt Goods, Nil rated supplies and Non-GST goods and not a Invoice
  29. Advance received for export can be shown under Place of supply -Other Territory under tax bracket of 0% at Sl.11 GSTR-1
  30. An Individual renting residential dwelling to Pvt Ltd Co for residential use of director/Officer is Liable to GST
  31. Gst is not applicable on sale of used car by an individual
  32. HSN code for self invoices raised under RCM will depend upon goods / services being procured. To be shown in Table 4B of GSTR-2.
  33. GST paid to bus operator for employee transportation is available as credit because only rent-a-cab credit is blocked.
  34. Transfer of land development rights is taxable under gst. And time of supply is as per Section 13 and value as per Section 15
  35. Reduction in rate is effective from date of Notification- Like Press release dated 5-8-17 reduced GST on certain job work to 5%. Notification issued on 22-8-17. Rate reduction effective from 22-08-2017 I.e from the date of notification
  36. Claim of ITC paid on RCM basis for inward supply from unregistered dealer has to to manually declared in table-4 of GSTR-2, it will not get auto populated
  37. A trader purchased goods from SSI- excise opted out unit and such goods are in stock as on 30-6-17. Is deemed credit available in CGST Vide Trans 1. Yes, please see Rule 117(4) of CGST Rules.
  38. Advertisement Billboard located at Delhi & service provider also in delhi & service recipient at mumbai than CGST+SGST will be charged
  39. Returns under Central Excise Act will continue for non-GST goods.
  40. Mistake in GSTR-3B? can be corrected while filing GSTR-1. Mistake in GSTR-1, can be rectified only in next month’s return.

 

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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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