Seminar on GST

GST- HERALDING A NEW ERA OF INDIRECT TAXES

Hosted by:
NATIONAL THERMAL POWER CORPORATION
LIMITED( NTPC)
Date : 20TH June,2017
Implementation : Days left for GST CA Shilpi Gupta
10 DAYS B.Com(H), M.Com,FCA
Alumni- Shri Ram College of Commerce
Author: An Insight into Goods & Service Tax
Managing Partner-Chitresh Gupta & Associates (CGA)
Flow of Presentaton

Section Particulars
1 GOODS & SERVICES TAX- CONCEPT
4 LEGAL ASPECTS OF GST
3 GST & POWER SECTOR

CGA
GOODS & SERVICES TAX
Key
Notes
Indirect Taxation in India- Current Structure
Present Indirect Tax Structure
(Four Major Constituents)

Tax
Excise Duty Service Tax Sales Tax/VAT Customs Duty
(CENVAT)

Levied By Central Central State Government Central

Government Government Government

Entry No. 84, List I, Residuary Entry Entry No. 54 of List Entry No. 83, List I,
Schedule VII of the No. 97, List I, II (State VAT) and Schedule VII, (COI)
Relevant Entry Constitution of India Schedule VII, of 92A of List I
in Constitution (COI) COI (Central Sales Tax),
Schedule VII of COI

Taxable Event Taxable Event Taxable Event Taxable Event

Taxable Event is Manufacture is is is
Provision of Sale Import & Export
Service

Rate of Median Rate- Single Rate- 15% Rates- 0%, 4%, Median Rate- 24%
Taxation 12.50% 12.5% & 20% (plus cess)
What is GST ?
 Goods and Services Tax is
- a comprehensive value added tax on supply of goods or
services or both EXCEPT
- Alcoholic liquor for human consumption
- Petroleum Crude
- Petrol
- High Speed Diesel
- Motor Spirit (petrol)
- Aviation Turbine Fuel

 Applicable on Whole of India except State of Jammu & Kashmir

 Expected to be Implemented from 1st July,2017 CGA

Proposed GST Scenario – A Snapshot

Destination based
Multipoint Levy

Administration- Applicability on All

CBEC & VAT Transactions on
Authorities Common base

Complete ITC Taxable

Set Of at all Event-
Stages Supply

GST on Stock
Dual GST- CGST &
Transfers/
SGST
Imports also
Taxes to be Subsumed in GST

Central Levies State Levies

Subsumed Subsumed
under GST under GST
• Central Excise Duty  VAT / Sales tax
• Additional Excise Duties  Entertainment tax (unless it is levied by
• The Excise Duty levied under the the local bodies)
Medicinal and Toiletries Preparatons  Luxury tax
(Excise Duties) Act 1955  Taxes on lottery, bettng and gambling
• Service Tax
 State Cesses and Surcharges in so
• Additonal Customs Duty, commonly far as they relate to supply of goods
known as Countervailing Duty (CVD) and services
• Special Additonal Duty of Customs -  Octroi and Entry Tax
4%  Purchase Tax
(SAD)
• Surcharges and Cesses levied by Centre
are also likely to be subsumed wherever
they are in the nature of taxes on goods
or services.
CGA
• Central Sales Tax to be phased out.
Taxes NOT to be Subsumed in GST

Taxes not to
be
Subsumed

 Basic Customs Duty: These are protective duties levied at the time of
Import of goods into India.
 Exports Duty: This duty is imposed at the time of export of certain
goods which are not available in India in abundance.
 Road & Passenger Tax: These are in the nature of fees and not
in the
nature of taxes on goods and services.
 Toll Tax: These are in the nature of user fees and not in the nature
of taxes on goods and services.
 Property Tax
 Stamp Duty
 Electricity Duty.
CGA
Types of Tax: Current Vs GST
Regime
Transaction Type Current Regime GST Regime
Supply within State Excise, VAT CGST & SGST

Supply within Union Excise, VAT CGST & UTGST

Territory (Uts)

Inter-state Supply Excise, CST IGST

between States or UTs

Imports to any State BCD,CVD,SAD BCD,IGST

or UTs
Exports Outside India Zero Rated Zero Rated

[Deemed Inter- State [Deemed Inter- State

Transacton ] Transacton ]

CGA
How Will GST
Work?

CGA
Understanding the Working of GST

Current scenario
Outside India India – state A
India – state B

Vendor Vendor Vendor

Import of goods/ services Inter-state purchase of goods /

• Customs Duties
- BCD – cost
- CVD – available as credit
- SAD – available as credit
• Service tax – available as credit
Local purchase of goods/ services services
• Excise duty – available as credit • Excise duty – available as
• VAT – available as credit credit
• Service tax – available as credit • CST – cost
• Service tax – available as
credit

Local sale of goods Customer

Customer  Credit eligibility of Excise
duty and VAT dependent
Inter-state sale / supply of
Export of goods on operations of customer
goods
 No tax/ possible  CST – cost / VAT retention
refunds  Credit of excise may be
Customer
available to some
customers

* Inter-state stock transfer attracts VAT retention; sale in transit as well as imports exempt
from VAT/ CST
CGA
Understanding the Working of GST

Likely Scenario GST

Outside India India – state A
India – state B

Vendor Vendor Vendor

Import of Goods/ Services Inter-state purchase of goods /

- BCD – cost Local purchase of goods/ services services
- IGST A/c State A – • CGST + SGST – Should be available • IGST A/c State A – Should
Should be available as as credit be available as credit
credit

Local supply of goods Customer

• CGST + SGST – Should be
Customer available as credit
Inter-state sale / supply of
goods
Export of goods  IGST A/c state B – Should
 Input CGST / SGST / Customer be
IGST should be available as credit
available as refund

* Inter-state stock transfer, imports, sales in transit expected to attract IGST which is
creditable
GOODS & SERVICES TAX
LAW
LEGAL ASPECTS

CGA
Structure of GST Law

GST Law

Laws Procedures

CGST Rules

SGST GST Rates

IGST Exemptons

UTGST
Taxable Event - Supply
͞͞SUPPLY͟ includes––
 all forms of supply of goods or services or both such as sale, transfer,
barter, exchange, licence, rental, lease or disposal made or agreed to
be made for a consideraton by a person in the course or furtherance
of business;
 import of services for a consideration whether or not in the course
or furtherance of business;
 the actvities specified in Schedule I, made or agreed to be made
 without a consideraton; and
 the actvities to be treated as supply of goods or supply of services
as referred to in Schedule II.
Schedule I: Supply Without Consideraton

 Permanent transfer or disposal of business assets where input

tax credit has been availed on such assets.
 Supply of goods or services or both between related persons or
between distnct persons as specified in section 25, when made
in
the course or furtherance of business. ( Gifs from Employer
to employee above Rs 50000 in FY not a supply)
 Supply of goods between Principal and agent and Vice versa
 Import of services by a taxable person from a related person or
from any of his other establishments outside India, in the course
or furtherance of business.
Levy of GST

 To be levied on Supply of Goods or services or both

 On the Value Determined under Secton 15

 At the rate not exceeding 20% as may be notified by the Govt

on the recommendatons of the council.

 Collected in such manner as may be prescribed.

 RCM on goods purchased from unregistered Person

 Govt may notify certain goods or services on which

RCM is applicable
 When GST will be Levied : Time of Supply

Time of Supply of
Goods (Earliest of
Following)

Date of Issue of Invoice or

Last date on which he is Date of Receipt of
Payment
required
to issue(sec 31)
Earlier of the two
-Date on which Payment in
entered in books of
Account or
-payment credited in the
Bank accounts-

• Where the Supplier receives an amount up to Option of the Supplier

1000 Rs In excess of amount indicated in the tax Time of supply is Date of
Invoice. issue of invoice
When GST will be Levied : Time of Supply
Time of Supply of Goods in case of
RCM
(Earliest of Following)
Date immediately
Date of Receipt Date on which following 30 days from the
of Goods Payment is Date of issue of invoice by
made the supplier:
Earlier of the two
-Date on which Payment in
entered in books of
Account of the recipient
or
-payment Debited in the
Bank accounts

Where it is not possible to determine the tme of supply under above

clauses then tme of supply shall be the DATE OF ENTRY IN THE BOOKS
OF ACCOUNT OF THE RECIPIENT OF SUPPLY
When GST will be Levied : Time of Supply

If Invoice issued in
prescribed period:
Date of Issue of Invoice or Date
of Payment whichever is earlier

If Invoice is not issued in

Time of Supply of prescribed period:
services Date of provision of service
(Earliest of Following) or Date of Payment
whichever is earlier

Date on which recipient

shows the receipt of services
in his books if the above two
clauses do not apply
On What Value GST will be Levied : Value of
Supply
Value of Supply of Goods and/or Services shall be the

 the transaction value, that

 is the price actually paid or payable

 for the said supply of goods and/or services where

 the supplier and the recipient of the supply are not related
and

 the price is the sole consideration for the supply.

On What Value GST will be Levied : Value of
Supply
Transaction Value shall Include
 Amount paid by Recipient in relaton to supply which was liable to be
paid by supplier
 any taxes, duties, cesses, fees and charges levied under any
statute other than the SGST/CGST/IGST
 incidental expenses, such as, commission and packing, charged by
the supplier to the recipient of a supply, including any amount
charged on or before supply of goods and/or services.
 Interest or late fee or penalty for delayed payment of any
consideraton for any supply
 Subsidies directly linked to the price (Excluding Subsidies provided by
the Central and state Goverments).
On What Value GST will be Levied : Value of
Supply
Transaction Value shall not Include
 The value of Supply shall not include any discount that is given :
(a) Before or at the tme of the supply provided such discount has been
duly recorded in the invoice issued in respect of such supply and
(b) after the supply has been effected, provided that;
(i)such discount is established in terms of an agreement entered into
at or before the tme of such supply and specifcally linked to
relevant invoices and
(ii)input tax credit has been reversed by the recipient of the supply as
is attributable to the discount on the basis of document issued by
the supplier.
Conditons for Availment of ITC

Conditions for ITC

Availment

Dealer is
in Tax charged
Goods / Dealer has
possession in respect
Services furnished
of Tax of such
have the valid
invoice or supply has
been return
other Tax been paid
received
paying
document
Conditons for Availment of ITC

 Recipient fails to pay full value along with Tax of goods and or
services within 180 days- ITC claimed will be reversed and added to
Output tax liability along with Interest.
 Can be reclaimed after payment
Utlizaton of
ITC
 Amount of electronic credit ledger – payment towards
tax payable.

 Order of utilisation for payment of tax shall be as

follows:
Input
Input Input SGST Input IGST
UTGST
CGST
Output Output Output Output
CGST SGST IGST UTGST

Output Output Output Output

IGST IGST CGST IGST
Adjusted
Against

Output
SGST

Output
UTGST
Registrato
n
under
GST
 EXISTING
 to be automatcally migrated
TAXPAYERS

 FOR NEW APPLICANT

 threshold limit (INR 20 Lakhs) for all States
except North Eastern States (INR 10 Lakhs).
Applicaton within 30 days of being liable to
register.

 OPTION OF COMPOSITION LEVY

 if aggregate Turnover is less than 75 lacs.
Not applicable if registered person undertakes
Inter- state supply.
REGISTRATION

State PA Entty Bla Check

code N code nk digit
1 2 3 4 5 6 7 8 9 10 11 13 14 15
12
Futur No
State Code 10 digit Alpha- e Clarity
as per India PAN numeric Use yet
Census 2011 number code
Invoices
under
GST
Types of Invoices
• Issued by Regd Person supplying Taxable goods or services
Tax or both
Invoice
• Issued by Regd person supplying exempted goods or
Bill of services or both
• Composition Dealer
Supply

• Issued on receipt of Advance payment with respect

Receipt to supply of Goods or services or both
Voucher

• Issued for refund of advance when no resultant supply

Refund is made
Voucher
Supplementary • When Tax invoice has been issued but Taxable value of
Tax Invoice/ Credit supply is more or less than the value as indicated in invoice
Note/ Debit Note • Where goods are returned or found to bA eStuddey bfiycCiheitnretsh
Time Limit for Issue of Invoice-
Goods
Recipient in case of
Tax Invoice for
Supply of Goods Supply under Reverse
Charge

Where Where supply Issue invoice on

supply does not the date of receipt
involves involves
movement movement of Service

Delivery of
Removal of Issue Payment
goods or making
goods for Supply
to the recipient,
them available Voucher at the tme
to recipient
of Payment o
service
Time Limit for Issue of Invoice-
Services

Tax Invoice
for Supply of
Services

Before the After the

Provision of Provision
service of Service

Within 30
Days from the
date of service
Manner of Issue of Invoice

Goods Services
The invoice shall be prepared in The Invoices shall be prepared in
triplicate in case of supply of Goods. Duplicate in case of Supply of
Services
Sup Sup
ply Original Copy- ply Original Copy
of Original For Recipient of Original For Recipient
Goo Servi
ds - ces -
Invo Duplicate Copy- Invoi Duplicate Copy-
ice Duplicate for Transporter ce Duplicate For Supplier

Triplicate Copy- Triplicate

for Supplier
New
Concept:
E-Way Bill
 • Every Registered person who
Who Will causes movement of goods
Issue
Min Threshold • Consignment of Value Exceeding
for Rs 50000
Consignment
• in relation to a supply
When E-way • for reasons other than supply
Bill to be • due to inward supply from an unregistered
generated person

When to Issue E- • Before Commencement of

movement
way Bill • Online on GST portal in form GST INS-
How to Issue 01
Key Actionable

 Ensure E-way Bills are by the

accepted
recipient within the due period
 Information as filled in Invoice and E-way
Bill should Match

 Details of Transporter should be

correctly filled.
RETURNS
UNDER
GST
Type of Particulars of Form Due Date
Dealer Return
Regular Details of Outward GSTR-1 10th of following month
Dealer Supplies
Regular Details of Inward GSTR-2 15th of Following Month
Dealer Supplies
Regular Monthly Return GSTR-3 20th of Following Month
Dealer
Regular Annual GSTR-9, 9A 31st December following the end
Dealer Return along of FY
with
Reconciliaton
Statement
 Common E-Return for CGST, SGST &
IGST
 Person cannot file the return for the period in case he has
not
filed the return of previous period
 Due date of payment of Tax will be the due date of filing
the return
 Return filed without payment of tax – Invalid Return- ITC will
not be allowed in respect of supplies made by such person.
 Even Nil return needs to be filed
MATCHING CONCEPT ( Sec 42 read with GST Return
Rules)
Supplier of Goods / Services
Recipient
Aug 10,2017- Files details of Outward Aug 10,2017- GSTN Auto generates GSTR-
Supplies in GSTR-1 2A containing details of Inward supply

Aug 15,2017- Files GSTR-2 after making

required Modifcation, Addition &
Deletion based on the above information

Aug 17,2017- Supplier accepts or Aug 20,2017- Recipient files a

rejects the modification. GSTR-1 gets Valid return in GSTR-3.
auto amended based on acceptance .

GSTN : Matches every

Aug 20,2017- Supplier files a Valid return Outward supply with
in GSTR-3 based on the Final GSTR-1 corresponding:
after adjusting the ITC based on Final Inward Supply
GSTR-2 Additional Duty of Customs
u/s 3
For Duplication of Claim
MATCHING CONCEPT ( Sec 42 read with GST Return
Rules) Recipient
Supplier
Aug 2017: Discrepancy
Communicated in respect of
Unmatched ITC Claims in GSTR-ITC-1
Sep 10, 2017: Rectifies GSTR-1 to
the extent of the discrepancy
communicated
Sep 17, 2017: Accepts the
changes Made by Recipient
Aug 2017 :Acceptance of Matched
ITC Claim in GSTR-ITC-1
Aug 2017: Discrepancy Communicated
in respect of Unmatched ITC Claims in
GSTR-ITC-1
Aug 2017: Discrepancy Communicated
in duplication of claims of ITC in GSTR-
ITC-1
Sep 15, 2017: Rectifies GSTR-2 to the
extent of the discrepancy
communicated
Sep 20, 2017: Uploads the Valid return .
Output liability auto increased on
account of Duplicate claims.
Oct 20, 2017: If Discrepancy still persists
 New
Concept-
GST
Complian
ce
Ratng
 Every Registered Person may be assigned GST compliance
Rating
by Govt based on record of compliance

 It will be updated at periodic intervals and placed in

public domain.

 Blacklisting of dealer may result in non availment of ITC

in respect of goods or services supplied by him.

Key Actionable : Maintain the requisite Compliance Score by

Dealer
Significant Legal Impact
Services between different Branches of the company even without
Consideration will be Treated as Supply

Advance received from Customers will be liable to

GST.

Interest / Late Fee/ Penalty for Delayed Payment of any consideration for
Supply
will attract GST

 Declaraton Forms will be phased

out
- Completon of pendency

CGA
Transitional Credit- Taxable Goods
Current Regime
Appointed
Date
Cenvat Credit as appearing in the
return for the period Available as credit in
immediately preceding appointed CGST
date

ITC in VAT & Entry Tax (where

available as credit) as appearing Available as credit in
in the return for the period SGST
immediately preceding appointed
date furnished within 90 days
Credit equivalent to differential
Non availability of Form C, F, H in tax will not be eligible to be
case of CST basis which carried forward
concessional or no duty charged
by dealer Once the above Forms are
received, additional tax charged
will be refunded as per method
prescribed.
Transitional Credit- Taxable Goods
Current Regime
Appointed
Date
Unavailed Cenvat Credit on
Capital Goods not carried Available as credit in
forward in the return CGST

Unavailed ITC of VAT on Capital

goods not carried forward in Available as credit in
the return SGST

No Credit Admissible if not allowed under Earlier Law

Power Sector In India
 India fourth
among largest
producers and consumers of
energy
 Indian Power sector is one of the
most diversified sector in
the world.

 12th Five-Year Plan

estimates total domestic energy
production to reach 669.6
Million Tonnes of Oil Equivalent
(MTOE) by 2016– 17 and 844
MTOE by 2021–22.

 Between April 2000 and

March 2016, the industry
attracted US$
10.48 billion IN FDI
Power Sector In India- Major Players

Distribution
Power Grid Tata
Generaton

NTPC Transmissio
NHPC Corporaton Power
THDC BRPL
Other
n

NLC
Gencos
&
Power – Current Indirect Taxaton Structure
 Coal

 Domestic – ST paid on Royalty on Coal extracted from Mines,

Clean Energy Cess @ Rs 400/ tonne on coal

 Imported Coal – BCD @ 2% + CVD

 Water- Water Cess

 Natural Gas

 Various Exemptons on Capital Items / Power Projects

Power – Legislatve Status Today and in GST
Regime
 Article 246 of the Constitution of India empowers Center & States
with
the powers of Legislaton

 Three Lists in the 7th Schedule of the Constituton of India - Union

List, State Lists & Concurrent List lists the areas of Governance

 Entry no 53 of State List- Taxes on Consumpton or Sale of Electricity

 Entry no 54 of the State List- . Taxes on the sale or purchase of

goods other than newspapers, subject to the provisions of entry 92A of
List I

 Constitutional 101st Amendment Act ,2017 has not made

any
amendment in Entry no 53- Power not subsumed in GST
Impact on Sale of Electricity

 Since Electricity is Outside the Ambit of GST

 ED will Contnue to be levied

 NoITC on Inputs procurement for generaton

of power

 Will Increase the delivered cost of Electricity

Impact on Services Rendered by NTPC

 At Present the company is engaged in providing

various output services such as Training,
Consultancy, Supervision & Development services

 Also engaged in Export of Services

 Tax rate from 15% to 18%

 Bills to be raised for the work done tll June 30,2017

Impact on Coal Procurement
 Current Levies on Coal

 Excise @ 6%

 CST @2%/ Applicable VAT

 Stowing Excise Duty @10/MT

 Clean Energy Cess @ 400/ MT

 Entry Tax

 GST Regime ( As per GST Council meetng 14th

May,2017)
Other Significant Impact

 Inter- Transfe of Material/ Capital Goods will

r
Unit

 attract GST NTPC allows various exemptons on

Currently
Excise Duty on Imports- Not to be contnued

 Supply Of Fly Ash even Free of Cost attracted

Excise.
Now Free Supply to Unrelated party will not attract GST

 Change in Tax Clauses of Various Agreements

speciallly
Other Significant Impact

 Diversion of Coal Rakes from One NTOC unit to

other- No Tax Implicatons . Now GST will be charged

 Reconciliaton of Inter-unit Balances

 Issue of Form C tll June 30,2017

 Updation of IT System

 Compliances Increased in terms of Registraton ,

Returns,
Invoices
CGA