Tag Archives: GST consultant in Delhi India

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

 

If you have any query regarding this Click Here

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

 

If you have any query regarding this Click Here

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

 

If you have any query regarding this Click Here

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.

 

If you have any query regarding this Click Here

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

 

 If you have any query regarding this Click Here