What is GST?
GST is an indirect tax reform which seeks to replace all the indirect taxes levied at centre and state levels. GST would replace Excise duty, Customs duty, Service tax, VAT, Sales tax etc. It is a destination based tax on consumption of goods and services. Only value addition will be taxed and burden of tax is to be borne by the final consumer. GST rolled out with effect from 01st July 2017.
Components of GST
- CGST – Central GST – IGST is levy of tax on every intra-state supply of goods or services or both by Central Government.
- UTGST – UT GST – UTGST is levy of tax on every intra-state supply of goods or services or both by Union territories.
- IGST – Integrated GST – IGST is levy of tax on every inter-state supply of goods or services or both by Central Government.
Liability to register for GST
Tax payers supplying goods/services from states of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand with an aggregate turnover in a financial year exceeding Rs.10 lakhs are liable to register for GST.
Tax payers supplying goods/services from rest of India with an aggregate turnover in a financial year exceeding Rs.20 lakhs are liable to register for GST.
Includes all taxable supplies, exempt supplies, export supplies, inter-state supplies of person having same PAN and excludes central/state/UT taxes and integrated tax and cess, if any, charged under CGST, UTGST and the IGST.
A registered taxable person whose aggregate turnover in preceding financial year did not exceed Rs. 75 lakhs (Rs. 50 lakhs in the case of states like Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh) can pay tax at the following lower rates on quarterly basis before 18th of the month succeeding the quarter during which the supplies were made:
|S. No.||Category of Registered person||Rate of Tax|
|1||In case of a manufacturers, other than manufacturers of such goods as may be notified by the Government (Ice cream, Pan Masala, Tobacco products etc.)||2% ( 1% Central tax plus 1% State tax) of the turnover|
|2||In case of supply of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration (services mentioned in Schedule II, Para 6, clause b)||5% ( 2.5% Central tax plus 2.5% SGST) of the turnover|
|3||Traders or any other supplier eligible for composition levy||1% ( 0.5% Central tax plus 0.5% State tax) of the turnover|
Composition levy will not be allowed if the taxable person:
- is engaged in supply of services except mentioned in Schedule II, Para 6, clause b (restaurant services)
- makes any inter-State outward supplies of goods
- makes any supply of goods which are not leviable to tax under GST
- makes any supply of goods through an electronic commerce operator
- is a manufacturer of goods notified by the GST council
- a casual taxable person or non-resident taxable person
- suppliers whose aggregate turnover in the preceding financial year crossed Rs. 75 lakhs
- supplier who has purchased any goods or services from unregistered supplier unless he has paid GST on such goods or services on reverse charge basis;
Composition dealer shall not
- Collect any tax from the recipient on supplies made by him
- Be entitled for Input Tax credit.
- Issue Tax Invoices
Other Features of Composition levy
- There is no need to file fresh intimation every year.
- The option to pay tax under composition levy is required to be given electronically in FORM GST CMP-02, prior to the commencement of the relevant financial year.
- A person making application for fresh registration under GST may opt for composition levy at the time of making application for registration in Part B of FORM GST REG-01.
- The option to pay tax under composition scheme will have to be exercised for all States, if registered in multiple states.
- A person paying tax under composition levy, may withdraw voluntarily from the scheme by filing a duly signed or verified application in FORM GST CMP-04.
Forms for Composition Dealer
- Intimation to pay tax u/s 10 (composition levy) for persons registered under GST – GST-CMP-02
- Intimation/Application for withdrawal from composition levy – GST-CMP-04
- Registration under GST should be taken within 30 days from the date on which a person/entity becomes liable to register.
- Casual and NRI taxable persons should apply for registration at least 5 days before commencement of business.
- Registration is required in each State/UT from where taxable supplies are made.
- A single registration is required in each State/UT.
- A person having multiple business verticals in a State/UT may be granted separate registrations subject to prescribed conditions.
- A person may apply for Voluntary Registration and all the provisions shall apply to him.
- PAN mandatory for obtaining registration except for non- residents.
- Registration can also be cancelled.
Persons not required to Register
- A person engaged exclusively in business of supplying goods/services which are non-taxable or exempt under CGST or IGST act
- An agriculturist
Mandatory registration is required in following cases irrespective of the turnover
- Persons making Inter-state taxable supplies
- Casual taxable person making taxable supplies
- Persons required to pay tax under Reverse charge
- E-commerce operator supplying specified services on Intra-state basis and who are required to pay tax u/s 9(5) on those specified services
- NRI taxable person making taxable supplies
- Persons deducting GST related TDS u/s 51
- Agents or other persons supplying taxable goods/services on behalf of others
- Input service distributor
- Persons supplying goods/services etc. (except specified services u/s 9(5)) through e-commerce operator collecting tax (TCS) u/s 52
- Every e-commerce operator
- Every person supplying online info and database access or retrieval services from abroad to an unregistered person in India
- Any other notified person
Forms for Registration
- Application for Registration under GST – GST-REG-01
- Registration Certificate issued – GST-REG-06
- Application for Amendment in Particulars– GST-REG-14
- Order of Amendment of existing registration – GST-REG-15
- Application for Cancellation of Registration – GST-REG-16
- Order for Cancellation of Registration – GST-REG-19
- Application for Enrolment of existing Taxpayer – GST-REG-26
- Provisional Registration Certificate to existing taxpayer – GST-REG-25
|Category of Taxable person||Frequency of Return||Manual/Electronic||Time period||Return Form||Info to be furnished in the Return|
|Registered Taxable Person||Monthly||Electronic||on or before 20th of the following month||GSTR – 3||return on the basis of finalization of details of outward supplies and inward supplies along with the payment of amount of tax|
|Composition dealer||Quarterly||Electronic||on or before 18th of the end of the quarter||GSTR – 4||inward supplies, tax payable, tax paid etc.|
|Registered taxable person who is a TDS deductor||Monthly||Electronic||on or before 10th of the following month||GSTR – 7|
|Registered taxable person who is an Input Service Provider||Monthly||Electronic||on or before 13th of the following month||GSTR – 6|
|Registered non-resident person||Monthly||Electronic||on or before 20th of the following month or within 7 days after the last day of the validity period of registration whichever is earlier||GSTR – 5|
|E-commerce||Monthly||Electronic||on or before 10th of the following month||GSTR – 8||Details of supplies effected through e-commerce operator and the amount of tax collected on supplies|
|Govt. Departments and UN bodies||Monthly||Electronic||on or before 28th of the following month||GSTR -11||Details of inward supplies to be furnished by a person having UIN|
Every Registered taxable person needs to File Annual Return for each financial year, electronically, on or before 31st Dec of the following year.
Forms for Annual Return
- Form GSTR – 9 for registered taxable person
- Form GSTR – 9A for composition dealer
- Form GSTR – 9B for Electronic commerce operator
- Form GSTR – 9C (Reconciliation statement along with audited annual accounts- if aggregate turnover exceeds Rs. 2 crores).
The following are not required to file Annual return
- Input Service Distributor
- TDS Deductor
- Casual taxable person
- E-commerce operator
- Govt. Departments and UN bodies
Every Registered taxable person whose registration has been cancelled and who is required to file a return as normal registered taxable person shall file the GST return within 3 months from cancellation in Form GSTR – 10
Mode of filing returns
A Registered taxable person can file returns through:
- Common portal online
- Offline Utility – after downloading auto populated details and uploading on Common portal
- Tax Return Preparers (TRP)
- GST Service Providers (GSP)
Late fee for delayed returns
A Registered taxable person who fails to furnish details of outward/inward supplies or returns by the due date shall be liable to pay late fee of one hundred rupees for every day during which such failure continues subject to a maximum of five thousand rupees.
Penalty for non registration
A taxable person who is liable to be registered under this Act but fails to obtain registration shall be liable to pay a penalty of Rs 10,000 or an amount equivalent to the tax evaded, whichever is higher.
Payment of Tax
- Deposit made towards tax, interest, penalty, fee etc. through internet banking, credit/debit cards, NEFT, RTG etc. shall be credited to electronic cash ledger.
- The amount available in electronic cash ledger may be used for making any payment towards tax, interest, penalty, fees etc.
- The input tax credit as self-assessed in the return of a taxable person shall be credited to his electronic credit ledger which may be used for payment of output tax.
- The balance in the cash or credit ledger after payment of tax, interest, penalty, fee etc. may be refunded
Accounts and Records
Every registered taxable person shall keep and maintain at his principal place of business as mentioned in the certificate of registration, a true and correct account of the following -
- production or manufacture of goods
- inward and outward supply of goods or services or both
- stock of goods
- input tax credit availed
- output tax payable and paid
- any other prescribed particulars
There are three types of audits prescribed:
1. Audit by CA or CMA, if turnover exceeds Rs. 2 crores.
2. Audit by Department – The Commissioner or any officer of CGST or SGST or UTGST authorized by him, may conduct audit of any registered person.
3. Special Audit - If at any stage of scrutiny, inquiry, investigations or any other proceedings, if department is of the opinion that the value has not been correctly declared or credit availed is not with in the normal limits, department may order special audit by chartered accountant or cost accountant, nominated by department.
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