GST implementation in India

 Brief overview of GST implementation in India

Features of GST Model Adopted by India
  • Concurrent Dual GST
  • Destination based Consumption Tax

 

Reason for shifting to GST
  • Remove cascading effect of double taxation
  • Allow cross ITC on Goods and services

 

Threshold Limit
  • By and large Rs. 20 Lakh
  • No Limit for Interstate sale , Composition scheme, Reverse Charge, NRI, TDS and E com. business

 

Benefits:

 

  1. Unified Market across India
  2. Remove double taxation
  3. Seamless flow of tax input Credits
  4. Complex issues such as division of works contracts resolved
  5. Increase in threshold limit for registration
  6. Clarity on valuation and ITC
  7. Tax limited to value addition
  8. Refund Mechanism for exporters

Concerns:

 

  1. Difficult to determine actual jurisdiction – Place of supply and time of supply.
  2. Increase in tax rates for service sector
  3. No Centralised Registration
  4. No Abatements
  5. Large number of Procedural and documentation compliances. 3-4 Monthly Returns and 1 Annual Return
  6. Internal transfer (within branches or units) to attract GST such as Audit and accounting functions
  7. Services by employer to employee without consideration are taxable.
  8. If no Payment to Vendor ag. Invoice – Otherwise ITC reversed with interest and penalty.
  9. Stringent penalty Provisions
  10. Matching concept – No credit until proper return filed by supplier
  11. No ITC available against Expenses on Employees:
    Food and Beverages
    Club Membership
    Rent a Cab
    Health Insurance
    Travel Benefits
  12. Interest and late payment Penalty part of Consideration for GST.
  13. Outside GST – Electricity tax, Petroleum and Alcohol.
  14. Stamp Duty to Continue

 

 

 

 

Important Concepts under GST

What is the taxable event under GST The taxable event under GST shall be the supply of goods and / or services made for consideration in the course or furtherance of business
Supply of Goods

 

 

 

 all forms of Sale, Transfer, exchange, Licence, rental, , lease for consideration and Furtherance of business

 

Taxable Supply even without consideration are taxable 

  1. Self-supplies (within units of same organisation)
  • Inter-state self-supplies such as stock transfers will be taxable as a taxable person has to take state wise registration in terms of Schedule 1(5). even if there is no consideration.

 

  • However, intra-state self-supplies are not taxable.
  1. Supply To Related or Distinct person
  • Director,
  • Employee or

 

  1. Import of Services
  • Taxable  – if from related person even without consideration or furtherance of business

 

  1. Between Principal & Agents

Work Contracts

 

Catering Services

Renting of Immovable Property

  • Covered under Supply of Services

 

 

Exempt Supplies

  • Employee to Employer
  • Court
  • MP
  • Diplomat
  • Funeral
  • Import without Consideration expect from related person

 


Time of Supply (POT)

 

 

Forward Mechanism

 

 

 

 

 

Under Reverse Charge Mechanism (RCM)Whichever is earlier

 

Date of Issue of Invoice, If Invoice is issued within prescribed period

date of completion of service

Date of receipt of payment

Date on which Supplier Receive Payment

 

Receipt of Invoice

Receipt of Services.

Debit in Books of Accounts.

Payment in bank or books of accountPlace of Supply Intra State – Location of Supplier and place of Supply SameCGST & SGST are applicableInter State (IGST) DifferentSingle Rate is applicable

 

Type of Invoices  
Tax Invoice Within 30 Days
Bill of Supply
Rate of Tax 0% Essential

5% Common

12% Std.

18% Std.

28% Luxury

 Returns

GST Returns  
GSTR-1 Outward Supply By 10thof subsequent month
GSTR-2 Inward Supply By 10th – 15th of subsequent month
GSTR-3 Monthly Return By 15-20th of subsequent month
GSTR-7 TDS Supply By 10thof subsequent month
GSTR-9 Annual Supply By 31st Dec from the end of F.Y.
Payment of GST GST PMT -4
3 Type of E-Ledgers on GST Common Portal
E Tax liability Register GST PMT -1
E Credit Register GST PMT -2
E Cash Ledger GST PMT -3
Late Fee Rs. 100/- per day max 5000

 

 

For any inquiries or questions regarding GST Contact us at info@amitarun.com or dial 9810414035 or visit our website – www.amitarun.com

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