BTP under section 147 of CGST Act, 2017

Posted on March 8, 2018 by admin

The supplies of goods by a registered person to EOUs etc. would
be treated as deemed exports under Section 147 of the CGST Act, 2017 (hereinafter referred
to as ‘the Act’) and refund of tax paid on such supplies can be claimed either by the
recipient or supplier of such supplies. Accordingly, Notification No. 48/2017-Central Tax
dated 18.10.2017 has been issued to treat such supplies to EOU / EHTP / STP / BTP units as
deemed exports. Further, rule 89 of the CGST Rules, 2017 (hereinafter referred to as ‘the
Rules’) has been amended vide Notification No. 47/2017- Central Tax dated 18.10.2017 to
allow either the recipient or supplier of such supplies to claim refund of tax paid thereon.
2. For supplies to EOU / EHTP / STP / BTP units in terms of Notification No. 48/2017-
Central Tax dated 18.10.2017, the following procedure and safeguards are prescribed –
(i) The recipient EOU / EHTP / STP / BTP unit shall give prior intimation in a prescribed
proforma in “Form–A” (appended herewith) bearing a running serial number containing the
goods to be procured, as pre-approved by the Development Commissioner and the details of
the supplier before such deemed export supplies are made. The said intimation shall be
given to –
(a) the registered supplier;
(b) the jurisdictional GST officer in charge of such registered supplier; and
(c) its jurisdictional GST officer.
(ii) The registered supplier thereafter will supply goods under tax invoice to the recipient
EOU / EHTP / STP / BTP unit.
(iii) On receipt of such supplies, the EOU / EHTP / STP / BTP unit shall endorse the tax
invoice and send a copy of the endorsed tax invoice to –
(a) the registered supplier;
(b) the jurisdictional GST officer in charge of such registered supplier; and
(c) its jurisdictional GST officer.
(iv) The endorsed tax invoice will be considered as proof of deemed export supplies by
the registered person to EOU / EHTP / STP / BTP unit.
(v) The recipient EOU / EHTP / STP / BTP unit shall maintain records of such deemed
export supplies in digital form, based upon data elements contained in “Form-B” (appended
herewith). The software for maintenance of digital records shall incorporate the feature of
audit trail. While the data elements contained in the Form-B are mandatory, the recipient
units will be free to add or continue with any additional data fields, as per their commercial
requirements. All recipient units are required to enter data accurately and immediately upon
the goods being received in, utilized by or removed from the said unit. The digital records
should be kept updated, accurate, complete and available at the said unit at all times for
verification by the proper officer, whenever required. A digital copy of Form – B containing
transactions for the month, shall be provided to the jurisdictional GST officer, each month
(by the 10th of month) in a CD or Pen drive, as convenient to the said unit.
3. The above procedure and safeguards are in addition to the terms and conditions to be
adhered to by a EOU / EHTP / STP / BTP unit in terms of the Foreign Trade Policy, 2015-
20 and the duty exemption notification being availed by such unit.

http://www.cbec.gov.in/resources//htdocs-cbec/gst/circularno-14-gst.pdf

Scrutiny and Assessment relating to Gold-Kerala VAT 2018

Posted on March 4, 2018 by admin

Scrutiny and Assessment relating to Gold-Kerala VAT 2018

Government have set up the target of 25% revenue growth this financial year. It
is observed that the revenue work progress is slow. Time and again Government
has informed to take strategic actions to improve revenue by identifying
potential areas and completing the priority cases. The Gold sector is one of the
important areas to be examined in detail.
Random verification of assessment records relating to Gold dealers done in
some of the districts revealed that the record keeping of the cases is very poor,
statutory forms, certificates and statements as prescribed in KVAT Act and Rules
to prove the veracity of claims have not been adduced. In majority of cases
scrutiny and assessment not attempted. Wherever it is done, in many cases,
irregularities were noticed in fixing compounded tax rate, computation of tax
liability and even basic fact of eligibility for compounding. The officers have not
taken serious efforts sending the notices to collect the statutory data/records/
returns/ information etc and the cases are going time bar. This could result in
huge revenue losses to the State exchequer.
As GST is implemented, it is imperative that all pending VAT assessment
especially in areas such as Gold should be completed in time bound manner to
ensure that legitimate tax is remitted to Government.

http://keralataxes.gov.in/wp-content/uploads/2018/02/Circular-4-Gold-26th-Feb-2018.pdf

Kerala VAT Scrutiny- Guidelines for planning collection of Data

Posted on March 4, 2018March 4, 2018 by admin

Kerala VAT Scrutiny- Guidelines for planning collection of Data

The Government has given instructions to complete the back log VAT works and ensure
improved revenue performance. The Department has developed the SCRUTINY
MODULE to do the scrutiny and assessments efficiently as per the law, without any
errors.
In order to facilitate planning for collection of statutory data the following orders are
issued.
The detailed guidelines to plan data/ records/ forms, etc collection are attached in the
Annexure I.
In order to facilitate scrutiny and assessment the essential prerequisite is to update
assessment files. All the Dealers are legally bound to submit the stipulated records/
returns/ forms/ information etc. The Dealers have not yet submitted these details even
after lapse of 5 years. It is the duty of each assessing authority to ensure that statutory
requirements are fulfilled by the respective assessees by continuous follow ups and after
collection of requisite statutory documents complete the scrutiny and assessments in
time bound manner.
ORDER No 1/CT/2969/2018-C1 State GST Department dated 26 th Feb 2018

Link

http://keralataxes.gov.in/wp-content/uploads/2017/10/Proceedings-21-VAT-data-collection-guidelines.doc-26th-Feb-2018.pdf

http://keralataxes.gov.in/wp-content/uploads/2018/02/02-VAT-Stat-Form_CTD_Feb-23_Quarter-BW-1.pdf

E-Way Bill under GST-India

Posted on March 1, 2018 by admin

1.E-Way Bill under GST

E-way bill is an electronic document generated on the GST portal evidencing movement of goods. It has two Components-

Part A comprising of details of GSTIN of recipient, place of delivery (PIN Code), invoice or challan number and date, value of goods, HSN code, transport document number (Goods Receipt Number or Railway Receipt Number or Airway Bill Number or Bill of Lading Number) and reasons for transportation;

Part B comprising of transporter details (Vehicle number).

As per Rule 138 of the CGST Rules, 2017, every registered person who causes movement of goods (which may not necessarily be on account of supply) of consignment value more than Rs. 50000/- is required to furnish above mentioned information in part A of e-way bill.

The part B containing transport details helps in generation of e-way bill.

2. How to generate e-Way Bills?

A user has to register on the common portal of e-Way Bills before he can start using the services.

E-Way Bills can be generated in a number of ways. GSTN has provided following modes for generating e-Way Bills:

Online: Anyone can Login to the e-Way Bill portal as the user or sub-user as the case may be and Click on ‘Generate new’ option under the main tab ‘e-way bill’ appearing on the left-hand side of the dashboard
Via SMS: A very convenient on-the-go option for generating e-Way Bills has been introduced under GST. Use this mode at times of emergency
Use Bulk-generation offline tool to generate multiple e-Way Bills by a single upload of JSON file. This facility may be used by large corporates having plenty of consignments to be delivered

3.Who should generate the e-way bill and why?

E-way bill is to be generated by the consignor or consignee himself if the transportation is being done in own/hired conveyance or by railways by air or by Vessel.

Transporter.

If the goods are handed over to a transporter for transportation by road, E-way bill is to be generated by the Transporter. Where neither the consignor nor consignee generates the e-way bill and the value of goods is more than Rs.50,000/- it shall be the responsibility of the transporter to generate it.

principal

Further, it has been provided that where goods are sent by a principal located in one State to a job worker located in any other State, the e-way bill shall be generated by the principal irrespective of the value of the consignment.

Also, where handicraft goods are transported from one State to another by a person who has been exempted from the requirement of obtaining registration, the e-way bill shall be generated by the said person irrespective of the value of the consignment.

4.Exceptions to e-way bill requirement

No e-way bill is required to be generated in the following cases

Transport of goods as specified in Annexure to Rule 138 of the CGST Rules, 2017
Goods being transported by a non-motorised conveyance;
goods being transported from the port, airport, air cargo complex and land customs station to an inland container depot or a container freight station for clearance by Customs;
In respect of movement of goods within such areas as are notified under rule 138(14) (d) Of the SGST Rules, 2017 of the concerned State; and
Consignment value less than Rs. 50,000/-

Transport of goods as specified in Annexure to Rule 138 of the CGST Rules, 2017

Following are exempted from e-waybill.

All items exempted under Notification Nos. 2/2017-CT (Rate) and 2/2017-IT (Rate) both dated 28-6-2017. The major among them are as follows – Fresh, Meat, Fish Chicken, Eggs, Milk, Butter Milk, Curd, Natural Honey, Fresh Fruits and Vegetables, coffee beans, wheat, rye, rice, Flour, Besan, Bread, Prasad, Salt, Bindi, Sindoor, Stamps, Judicial Papers, Printed Books, Newspapers, Bangles, Handloom, Pooja equipment, jute, khadi, national flag, raw silk.
Passenger baggage (9803)
Specified Puja samagri
Liquefied petroleum gas (LPG) for supply to household and non-domestic exempted category (NDEC) customers
Kerosene oil sold under PDS
Postal baggage transported by Department of Posts
Natural or cultured pearls and precious or semi-precious stones; precious metals and metals clad with precious metal (Chapter 71)
Jewellery, goldsmiths’ and silversmiths’ wares and other articles (Chapter 71)
Currency
Used personal and household effects
Coral unworked (0508) and worked coral (9601).

https://cbec-gst.gov.in/ewaybill-rules.html

ITC is not available under section 17(5) of CGST Act, 2017

Posted on February 27, 2018February 27, 2018 by admin

ITC is not available in some cases as mentioned in section 17(5) of CGST Act, 2017. Some of them are as follows:
a. motor vehicles and other conveyances except under specified circumstances.

b. goods and/or services provided in relation to:. Food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, except under specified circumstances;

ii. Membership of a club, health and fitness center;
iii. Rent-a-cab, life insurance, health insurance
except where it is obligatory for an employer
under any law;
iv. Travel benefits extended to employees on
vacation such as leave or home travel concession;
c. Works contract services when supplied for
construction of immovable property, other than
plant & machinery, except where it is an input service
for further supply of works contract;
d. Goods or services received by a taxable person for
construction of immovable property on his own
account, other than plant & machinery, even when
used in course or furtherance of business;
e. Goods and/or services on which tax has been paid
under composition scheme;
f. Goods and/or services used for private or personal
consumption, to the extent they are so consumed;
g. Goods lost, stolen, destroyed, written off, gifted, or
free samples;
h. Any tax paid due to short payment on account
of fraud, suppression, mis-declaration, seizure,
detention.

Link

http://www.cbec.gov.in/resources//htdocs-cbec/gst/input-tax-credit-mechanism-onlineversion-07june2017.pdf;jsessionid=1FCEFC0BD78BA4BE6A3864589C41E504.

GST Offences, Penalties and Appeals

Posted on January 9, 2018January 9, 2018 by admin

There are 21 offenses under GST. We have mentioned a few here. For the entire list of 21 offenses please go to our main article on offenses.

The major offenses under GST are:

1. Not registering under GST, even though required by law. (Read our article for the list of those who have to register mandatorily under GST)
2. Supply of any goods/services without any invoice or issuing a false invoice. Continue reading “GST Offences, Penalties and Appeals”

22nd GST Council Meeting

Posted on January 8, 2018January 9, 2018 by admin

The 22nd GST Council Meeting was held at New Delhi on the 6th of October 2017. In the meeting, various decisions and changes pertaining to GST return filing, composition scheme, GST rates have been announced. The various measures announced in the 22nd GST Council will tremendously improve ease of compliance for SMEs. In this article, we summarise the key decisions made in the 22nd GST Council Meeting. Continue reading “22nd GST Council Meeting”

Treatment of Advance Received under GST

Posted on October 12, 2017 by admin

The rules for the time of supply under GST plays a very important role in determining when to pay tax for a transaction.
The general rule for time of supply for goods is earliest of the following –
1. Date of issue of invoice
2. Date of receipt of payment/advance
3. Date on which invoice should be issued
The second point above is receipt of advance. This means that if the advance is received before the issue of invoice the time of supply would be the date of receipt of advance.
Thus taxpayer receiving advance must pay GST on the money received.
What is a taxpayer supposed when an advance is received?
A taxpayer has to take the following actions on receipt of advance:
1. Issue a Receipt Voucher:
The supplier has to issue a receipt voucher to the person paying advance. The receipt voucher will contain details like amount of advance, the rate of tax applicable, description of goods or services, etc.
2. Calculate Tax on Advance Received:
You have to calculate tax on advance and pay tax while filing the return for the month.
The advance received should be grossed up. This means that advance received is considered inclusive of GST.
When the rate of tax cannot be determined during receipt of advance GST @ 18% has to be charged.
Also if the point of sale cannot be ascertained the advance is considered as interstate supply and IGST has to be paid.
Let us understand the treatment of advance under GST using an example:
Mr. A entered into a contract of supplying goods worth Rs 10,00,000 by 20th February.
The total invoice value along with GST @ 18% is Rs 11,80,000.
He received an advance of Rs 4,00,000 on 10th January and balance payment of Rs 7,80,000 on 20th February. The invoice was also raised on 20th February.
Here is how you will calculate tax:
advance received – part 1

It is very important to note here that the taxpayer paying advance is not eligible to claim ITC on advance paid. The taxpayer can claim ITC on advance paid only on receipt of goods or services.
This means that in the above example recipient will be eligible to claim ITC on an advance in February (goods are received on 20th February).
3. Incorporate advance received in GSTR 1

Any advance received by a taxpayer for which invoice is not issued should be mentioned in Pt.11A of GSTR 1.
Details of each advance need not be given, A cumulative figure of all the advances received has to be provided.
The advance should be first segregated into Interstate and intrastate advances.
The gross figure of advances received should be mentioned under Gross Advance Received/ Adjusted.
After this, the tax payable i.e. CGST and SGST in case of intrastate and IGST in case of interstate advances should be stated.
This tax on advance is added to the tax liability of the supplier.

GST impact on the infrastructure sector

Posted on October 10, 2017 by admin

The infrastructure sector is the backbone of the Indian economy. The government has been making efforts to boost the sector through various schemes and incentives.

According to the government, total infrastructure spending is expected to be about 10% of GDP (gross domestic product) during the 12th Five-Year Plan (2012–17), up from 7.6% during the previous Plan. A total of 6,604km has been constructed out of the 15,000km target set for national highways in 2016-17, says the ministry of road transport and highways. The Airports Authority of India plans to develop city-side infrastructure at 13 regional airports, with help from private entities for building of hotels, car parks and other facilities. Significant allocations have been made to power, urban development and inland waterways sectors. The above initiatives show the firm commitment of the government to infrastructure.
Given this, the recent introduction of the goods and services tax (GST) could have significant impact in terms of spending on infrastructure.
In the pre-GST era, there was dichotomy in the applicable indirect tax regime relevant to infrastructure. While Central laws provided exemptions and concessions, state VAT (value-added tax) and entry tax laws were applicable to goods procured. In addition, the cascading effect of Central and state indirect taxes was a concern, due to a high base for levy of respective taxes and a restrictive credit mechanism. There was also litigation at the Central and state levels on classification of contracts, valuation, jurisdiction of state on inter-state works contracts and other issues.
GST being a concurrent tax on supply of goods and services is expected to bring in predictability for infrastructure projects. There are some changes that would have an impact on indirect taxation—taxability of works contracts being one. As works contracts are limited to only immovable properties, turnkey contracts which do not result in immovable property would now be treated as composite supplies. Further, valuation of goods and services in works contracts, which has typically sparked differences between Central and state indirect tax authorities, would now be put to rest with the legislation laying down unambiguously that works contracts would be regarded as supply of services. Other contracts which do not result in immovable property could be regarded as composite supplies, and depending on the principal supply, tax liability would arise either as a supply of goods or services.
While there is apprehension that a flat GST rate of 18% would lead to increased incidence on infrastructure projects, availability of input tax credits would neutralize such concerns. Thus, contractors and suppliers could look forward to a simpler and efficient tax regime.

For project owners, the new legislation may not lead to a conducive future. Credit restrictions on works contracts resulting in an immovable property coupled with increase in GST rates could increase cost outlay. Already, exemptions and concessions to infrastructure have been completely withdrawn. This could also lead to increased working capital requirements. Project cost could rise due to increased burden of indirect taxes.

Power is an important component of infrastructure. Electricity being outside the purview of GST, power generation companies would continue to have indirect taxes as a significant cost factor. Further, an increase in rate of services and withdrawal of exemptions and concessions for power projects is expected to have an impact on power companies.

Similarly, withdrawal of exemptions for road, water supply and sewerage projects sponsored by government and local authorities is expected to increase government spend. However, availability of higher pool of input tax credit in the hands of the contractors could help neutralize such increases. So introduction of GST seems to be a mixed bag for the infra sector—predictability and efficiency being the key advantages, while non-inclusion of sub-sectors, higher rate and certain restrictions are negatives.
On direct taxes, the government intends to bring down the corporate tax rate in a phased manner and correspondingly phase out profit-linked tax incentives.
While most such tax incentives are phased out from 1 April, the industry is yet to witness an impactful reduction. So far, the reduction in the base corporate tax rate from 30% to 25% is for companies with revenue up to Rs50 crore in financial year 2015-16. Infrastructure requires considerable investment and it is likely that it may not be the beneficiary of reduced corporate tax rate. Also, as gestation is high, it is unlikely to generate enough profit in the initial years to absorb compulsory depreciation charge under the Income Tax Act. Consequently, there could be incidence of minimum alternate tax (MAT) of approximately 18.5%, on the book profit.
Industry has been demanding withdrawal of MAT, and the finance minister had acknowledged this demand, although there has been no relief so far. The only respite has been to allow set-off of MAT paid against future tax liability for 15 years as against 10 years. The intent and willingness of the current government to go the extra mile for overall growth, has been well received. With time, industry expects more clarity in GST and a reduction in corporate tax rate to make up for withdrawal of direct tax incentives. These measures will propel much-needed growth for India’s infrastructure.
Government has revised the GST rate from 18% to 12% on contracts to Govt vide notification CBEC No 20/2017 dt 22.08.2017.This rate is applicable for own going and new contracts.
1.Construction of building 18% (9+9)
2.Composite supply of works contractWorks contract 18% (9+9)
3.Do–to Govt/Local authority/authority 12% (6+6)
Link
Notification No. 20/2017-Central Tax (Rate), the 22nd August, 2017

22nd GST Council Meeting

Posted on October 9, 2017 by admin

GST Return Filing

All regular taxpayers registered under GST were currently required to file 4 GST returns every month namely GSTR 3B, GSTR 1, GSTR 2 and GSTR 3. Filing 4 GST returns a month and maintaining GST compliance was a major burden for small businesses that have limited resources. Hence, to reduce the compliance burden for small businesses and improve ease of doing business, a decision was taken to reduce the number of GST returns for small businesses.

GST Return Filing for SMEs

Small and medium enterprises (SMEs) with an annual aggregate turnover of less than Rs.1.5 crores will no longer be required to file GSTR 1, GSTR 2 and GSTR 3 return every month. Instead, SMEs will be allowed to file quarterly GST returns and make quarterly GST payments, whether or not enrolled under the GST composition scheme.
SMEs will be allowed to file quarterly GST returns starting from the October – December 2017 quarter. For now, all regular taxpayers will be required to file monthly GSTR 1, GSTR 2, GSTR 3 and GSTR 3B return for the months of July, August and September 2017. The due date for July 2017 GSTR 1 return, GSTR 2 return and GSTR 3 return has been announced. The due dates for August and September GSTR 1, GSTR 2 and GSTR 3 returns will be announced shortly.

GST Return Filing for Businesses with Over Rs.1.5 Crore Turnover

All persons having GST registration with a turnover of more than Rs.1.5 crore per year will be required to file monthly GST returns in form GSTR 1, GSTR 2 and GSTR 3. GSTR 3B will have to be filed by all taxpayers for the months of July to December 2017, irrespective of annual aggregate turnover.

GST Registration

GST registration was earlier mandatorily required for any person who undertook inter-state (selling goods or services from one state to another state) irrespective of aggregate annual turnover. In the 22nd GST Council, it has been decided to exempt service providers from this criteria. Hence, service providers will now be allowed to undertake inter-state sales of upto Rs.20 lakhs without obtaining GST registration.
It is important to note that only service providers have been provided this exception. Any person supply goods will still be required to obtain GST registration mandatorily, if they undertake inter-state sales.

Reverse Charge Mechanism Suspended

The 22nd GST Council has decided to suspend the GST reverse charge mechanism. Under reverse charge, the recipient of a service is required to pay GST on behalf of the supplier. Sub-section (4) of section 9 of the CGST Act, 2017 pertains to GST reverse charge and is reproduced below for reference:

“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.”

Since, registered taxpayers were required to pay GST on reverse charge basis when they purchased from an unregistered person (Most times a micro or small business), many registered business stopped transacting with micro and small businesses. Hence, the GST Council has decided to suspend the reverse charge mechanism. Now, registered taxpayers can purchase from unregistered persons without having to pay GST on reverse charge basis. This measure will provide a major boost to micro, small and medium businesses.

GST on Advances Received NOT Required for SMEs

As per GST rules, whenever a taxable person receives advance, an advance receipt voucher must be issued and the GST on the advance received must be remitted to the Government. In case supply was later not provided and refund of advance was provided to the customer, then the supplier would have to claim refund. This caused tremendous difficulty for small and medium businesses.
As per the decision of 22nd GST Council, it has now been decided that taxpayers having annual aggregate turnover up to Rs. 1.5 crores will not be required to pay GST at the time of receipt of advances on account of supply of goods. The GST on such advance received will be payable only when the supply of goods is made.

Transportation of Goods by GTA

Goods Transport Agency were not extending services to unregistered persons and were in many cases requesting GSTIN for transporting goods. The GST Council in the 22nd meeting has clarified that GTAs will not need any GSTIN for providing transportation services, thereby removing the hardship faced by SMEs.

GST Composition Scheme

The GST Composition Scheme can be availed by SME taxpayers to reduce compliance and tax burden. The 22nd GST Council has decided to form a Group of Ministers (GoM) to examine measures to make the composition scheme more attractive for SMEs.
Further, entities with an aggregate turnover of upto Rs.75 lakhs were only eligible for enrolling under the GST Composition Scheme. The 22nd GST Council has decided to increase the aggregate turnover to Rs.1 crore.The aggregate turnover threshold for special category States, except Jammu & Kashmir and Uttarakhand, has also been increased to Rs. 75 lacs from Rs. 50 lacs. The turnover threshold for Jammu & Kashmir and Uttarakhand has been fixed at Rs. 1 crore. With the increase in aggregate turnover threshold, more SMEs will now be eligible for enrolment under the GST Composition Scheme.

Due Date for Enrolling under GST Composition Scheme Extended

The due date for enrolling under the increased threshold has been made available to both migrated and new taxpayers up to 31.03.2018. Also, once a business has enrolled under the Composition Scheme, the scheme will become operational from the 1st date of the succeeding date.

Due Date of first GSTR 4 Return for Composition Scheme Dealers Extended

The due date for filing GSTR 4 return for July to September 2017 by taxpayers registered under composition scheme has been extended to 15.11.2017. Also entities opting for composition scheme will have to now file GSTR 4 return only for that portion of the quarter from when the scheme becomes operational and can file returns as a normal taxpayer for the preceding tax period.

Implementation of TDS and TCS Provisions Postponed

TDS and TCS provisions of the GST is applicable to certain Government Department and E-Commerce Operators. To help the taxpayer ecosystem gradually absorb the changes in the indirect tax regime, the Government has decided to postpone the TDS/TCS registration and operationalisation to 31st March 2018.

E-Way Bill Implementation Postponed

As per E-Way bill rules, any transportation of goods with a value of more than Rs.50,000 would require an e-way bill. The e-way bill rules were earlier supposed to be implemented before December 2017. The GST Council has now decided to postpone the implementation of e-way bill provisions and rules to 1st January 2018. Hence, w-way bill rules will be operationalised in a staggered manner across India from 1st January 2018 to 1st April 2018.