Goods and Service Tax

About Author

Lakshmanan Saravanan FCA , DISA, B.com

• Gold Medallist in B.com ( Loyola College Chennai )

• A Fellow Chartered Accountant In Practise.

• Partner at LSSM & Co. Chartered Accountants.

 Table of Contents
Overview of GST.
Concept of Supply
Registration Limit & Procedure
Levy of GST on Purchases From URD
Tax Invoice Formats & Rates
Composition Levy
Input Tax Credits (ITC)
TDS under GST
Payment of Taxes
Filling of Returns / Various GST Returns
Refunds
GST Audits / Records
Penalty & Prosecution Provisions
E- Way Bill
 Overview of GST
State
Service
Excise
Tax Goods & Duty
Service Tax
Excise (GST) Entertai
Duty nment
Tax

VAT
CST
Luxury Octroi
Tax Duty

Features of GST. GST Council

1. One Nation & One Tax & One Market
2. Events are based on Concept of Supply.
3. Streamlining & Cross Utilization of Input
Tax Credits.
4. Revolutionary Invoice Matching Concept.
GST Governing Body with power to take
decision on rates, exemption, threshold
exemptions, etc with 33.33% voting power
of Union Government & 66.66% power lies
with the State Government.
 Concept of Supply

Supply includes sale, transfer, exchange, barter, license, rental,

lease and disposal. If a person undertakes either of these
transactions during the course or furtherance of business for
consideration, it will be covered under the meaning of Supply
under GST.

Supply has two important elements:

•Supply is done for a consideration

•Supply is done in course of furtherance of business
 Concept of Supply……….. Continued
• What is “NOT” a Supply?
• Any Exemption provided vide Notification of
the Council.
• Proportion of Abatement as notified by the
Council.
• Employer – Employee Services.
• Services By Courts & Tribunal
• Services of Government
(State/Central/Local Authority).
• Statutory Duty to be performed by
Government.
• Supply without Consideration.
• Disposal of Assets of Business where Input
Tax Credit has been availed.
• Supply undertaken between Related
Person.
• Import of Services from a Related Person.
• Supply of Goods – Agent Principal
Relationship.
• Business Assets utilized for personal used.
• Inter-state Stock Transfer shall be treated
as supply of Goods.
 Schedule I – Supply without Consideration

• Transfer of business assets, where ITC has been availed

• Business Assets transferred w/o consideration to third party – taxable only if ITC availed

• Gift upto Rs. 50,000 in a year to employee – not a supply

• Services by an employee to an employer in the course of employment – in the negative list (Sch. III)
• All perquisites which are part of employment contract are not supplies e.g. bonus, LTC, rent free
accommodation or car, medical reimbursement, etc.
• Gift of any goods or services beyond contractual terms – is covered under this entry e.g. Diwali gifts
or vouchers
• Litigation prone as activities like free lunch or free car or parties or foreign trips
 Registrations

For Supplier of Goods :Registration

not required upto turnover upto 40
Lacs & 20 Lacs for Special Category • Single Registration for
States including Puducherry . IGST/SGST/CGST/UGST
For Supplier of Services : per state.
Registration not required upto • Registration required in
turnover upto 20 Lacs & 20 Lacs each state from where
for Special Category States. supplies made – No
Centralized Registration.
No threshold Exemption applicable • Multiple Business
to following Items,
Verticals in a State –
• Inter-State Taxable Supply
May opt for separate
• Casual Taxable Person
• Liability to Pay Under RCM. registration for each
Business Vertical.
 Registrations

• PROOF OF CONSTITUTION OF BUSINESS

• DETAILS OF ALL BANK ACCOUNTS
• PROOF OF PRINCIPAL AND ADDITIONAL PLACE OF BUSINESS
Documents Required • DETAILS OF PARTNERS/ PARTNERS/ DIRECTORS
for Registration • DETAILS OF GOODS OR SERVICES TO BE SUPPLIED
• HSN and SAC CODE OF GOODS AND SERVICES
• PHOTOGRAPHS OF PARTNERS/ DIRECTORS/ PROPRIETOR
• ANY OTHER DOCUMENTS AS MAY BE PRESCRIBED.

Format of Prov. GST •

Reg.
 Levy of GST on purchases from URD Sec 9(4)

• On purchase of taxable goods and services from URD, buyer liable to GST on Reverse Charge
basis

• No definition of taxable goods and services.

• Illustrations: (Areas could possibly be covered)
• Purchases from suppliers falling below threshold limit
• Trader purchasing office supplies like stationery, tea, cleaning services from URD
• A company purchasing cold drinks, cigarettes or sweets from nearby shops
 Tax Invoices Format / Rates
• Single Goods / Services / Commodity shall 0 % Nil Rate Items
have Rates Prescribed in CGST / SGST & 5/6 Tier Rate
IGST. Structure Proposed for 5% Essential Items
• If the Receiver is Located within the State • CGST (20%)
12 % Standard Rate
CGST & SGST both shall be made • SGST (20%)
applicable. • IGST (40%) 18 % Standard Rate
• If the Receiver is Located in other State, • UGST (20%)
IGST shall be made applicable. 28 % Luxury Items
Addon Tax on Ultra Lux,
Proposed Format of the Tax Invoices Add. Levy % Sin & Demerits Items

For Pradeep Singhi & Associates.

 Composition Levy for Turnover < 1.50 Crores

CONDITION FOR RATE OF TAX

WHO CAN OPT WHO CANNOT OPT
• A registered taxable • Supplier of Services ELIGIBILITY • 1% of turnover in a
(State/UT) in Case of a
person whose turnover • Supplier of Exempted • The person shall not Manufacturer
in preceding financial Goods collect tax from the
year did not exceed • 2.5% of turnover in a
• Who makes inter-state recipient on supplies
INR 1.50 Crores (State/UT) in case of a
supply of goods (IGST) made by him nor he
supply of food & non-
• If the turnover in the • Supplies goods through shall be eligible for any
alcoholic liquor for
current financial year ECO. input tax credit.
human consumption.
exceeds INR 1.50 • Unless all units
Crores , the permission • 0.5% of the turnover
registered for Same (State/UT) in case of a
shall stand withdrawn PAN others suppliers.
Input Tax Credits (ITC)

CGST paid = Rs. 10

CGST @ 10%
CGST paid = Rs. 10
CGST paid = Rs. 10 (Rs. 30 – 20 (Input Tax Credit)
(Rs. 20 – 10 (Input Tax Credit)

T1 T2 T3
A B C D

SGST paid = Rs. 10

(Rs. 20 – 10 (Input Tax Credit)
CGST paid = Rs. 10
(Rs. 30 – 20 (Input Tax Credit)

SGST @ 10%
SGST paid = Rs. 10
 Tax Deduction at Source @ 1%

LIABILITY TO VALUE OF CREDIT OF TAX

DEDUCT CONTRACT DEDUCTED REFUND OF EXCESS
• A department or • Liability to deduct if • The deductee can TAX DEDUCTED
establishment of value of contract claim credit of the • Refund of excess
central or state exceeds Rs 2.5 Lakhs tax deducted in his amount or
government • Only Same State. electronic cash erroneous deduction
• Local authority • Paid by 10th of Next ledger shall be dealt with in
• Governmental Month. accordance of
agencies • For the purpose of refund provisions
• Such persons or tax deduction, the • No refund shall be
categories of value of supply shall granted where the
persons as may be be taken as amount amount deducted
notified on excluding the tax has been credited to
recommendations of amount in the the electronic cash
the GST Council invoice ledger of the
deductee
 Payment of Taxes
• Tax
ELECTRONIC • Interest
CASH • Penalty
REGISTER • Arrears
• Fees or any
LIABILITY AS other amount
AVAILABLE payable
IN CAN BE under the act
ELECTRONIC DISCHARGED IGST
LIABILITY THROUGH IGST CGST
REGISTER SGST
ELECTRONIC
CREDIT CGST CGST
REGISTER IGST
SGST
SGST
IGST
UGST
UGST
IGST

LIABLITY TO BE DISCHARGED ON REVERSE CHARGE BASIS WILL BE DISCHARGED THROUGH CASH REGISTER
 Filling of Returns
ANNUAL RETURN IN GSTR 9 BY 31ST
DECEMBER OF SUCCEEDING FINANCIAL YEAR

MONTHLY RETURN IN GSTR 3 OF TAX BY 20TH OF

SUCCEEDING MONTH

Final Turnover of Input Autopopulated based on GSTR-2 Final Turnover of Output Autopopulated based on GSTR 1

INWARD GSTR 2 TAXABLE GSTR 1 OUTWARD

SUPPLIER PERSON 10TH OF SUCCEEDING RECEIPIENT
15TH OF SUCCEEDING
MONTH MONTH

ANY ALTER, REJECT, MODIFY,

UNDER GSTR – 2 TO BE INTIMATED AUTOPOPULATED UNDER
UNDER GSTR –1A PART A OF GSTR-2A

INVOICE WISE DETAILS TO BE UPLOADED IN THE RETURNS UNDER GSTR-I.

CANNOT FILE GSTR-1 FROM 11TH TO 15TH OF THE SUCEEDING MONTH.
CONCEPT OF INVOICE MATCHING INTRODUCED IN THE RETURNS
 GSTN – Return Compliances

Step 4
Step 1
GSTR-1A : The details of inward 16 10
supplies added, corrected or Step 8 20
GSTR 1: Details
deleted by the recipient shall be
of Outward
made available to the supplier
supplies Step 2 GSTR 3
GSTR 2A: Auto-
Step 5 11
populated in
17 Step 3
Supplier will accept or part A of the Part B of
reject the modifications GSTR 2: On the basis of GSTR-2A of GSTR 3
above GSTR-2A, details recipients
Step 7
of inward supplies
added, corrected or 15 Make
Step 6 deleted by recipient to
17 Part A of GSTR 3
Payment
GSTR-1 will be amended be disclosed under
to the extent GSTR-2, including RCM
details 20
modifications are Part A of GSTR 3
accepted by supplier.
 Filling of Returns……. continued
OTHER RETURNS FORM DUE DATE
QUARTERLY RETURN FOR COMPOSITION LEVY GSTR -4 18TH
MONTHLY RETURN FOR NON-RESIDENT FOREIGN TAXABLE GSTR -5 20TH
PERSON
Filing GSTR-9, GSTR-9A & GSTR-9C extended till 30th June GSTR -9 to be
2019 for FY 2017-18. confirmed

RETURN FOR PERSONS DEDUCTING TAX AT SOURCE GSTR -7 10TH

OTHER FEATURES

• Annual return to be submitted along with copy of audited annual accounts and a
reconciliation statement, reconciling the values of supplies declared in the return furnished
in the year
• Filing of Nil return (Regular / Composition) also mandatory under GST
• No Returns can be filed if previous period returns pending.

• Late fee prescribed for late filing of returns

• Furnishing Details/Monthly Returns – Rs 50/day .
• Annual Returns - 100/day or 0.25% of the Annual Turnover in that State.
 GSTR-2 - INWARD SUPPLIES
GSTR - 2
 GSTR-3 - DETAILS OF MONTHLY RETURN

GSTR 3 – Monthly Return

 Refunds
Refund of Unutilized ITC
• For exempted exports including zero rated supplies
• Rate of Tax on inputs is higher than on output supplies
(Inverted Levy)
• No Refund if Duty Drawback claimed.

Refund of Tax & Interest

• Application shall be filed before expiry of 2 years.
• Special category persons shall file before expiry of 6 months.
• Refund filed for tax, duty, cenvat credit or interest paid in earlier law shall be disposed of as per earlier law & if
admissible shall be paid in Cash. (Transitional Provision)

Procedure & Timings for Sanctioning Refunds

• Provide documentary evidence as prescribed
• If refund is < Rs.2 Lac, than he shall only file a declaration that incidence of tax has not been passed.
• If refund Zero rated supplies of G/S is claimed, 90% of claim shall be refunded on provisional basis.
• Officer shall issue order within 60 days of receipt of application
• Interest not exceeding 6%shall be paid if not refunded within 60 days
 Audits & Records
Turnover based Audit – Where turnover of a registered taxable
person exceeds a 1 Crore (Return Rule 21(2)) in a financial year, he
shall get his accounts audited by a Chartered Accountant or Cost
Accountant & shall submit audited annual accounts, reconciliation
statement & other documents as prescribed.
Types of Audit • Departmental Audit - Commissioner may by general or
special order undertake audit of any taxable person which shall
be conducted by tax authorities.
• Special Audit – At any proceedings, any officer having regard
to nature & complexity of the case with prior approval of
Commissioner, may get the accounts audited by a Chartered
Accountant or Cost Accountant nominated by the
Commissioner & remuneration of such audit shall be paid by
Commissioner.

• Maintain books of accounts & other records for a period of 6

Records years from the due date of filing of Annual Return for the year
pertaining to such accounts & records
 Penalty & Prosecution Provisions
Reasons other than fraud,etc (S.73)
Tax has been paid or short paid or erroneously refunded or ITC wrongly availed
By reason of fraud,etc (S.74)
TYPES OF OFFENSES
Particulars U/s 73 U/s 74
1. Supplies G/S without issue of any invoice
Maximum Penalty 10% of tax OR 100% of > Rs.5Cr.
2. Issue of invoice without supply of G/S Cognizable
Rs.10,000 WEH tax
3. Collects tax but fails to pay to the credit of Govt. & Non-
Period covered 3 yrs. 5 yrs.
4. Takes/utilizes ITC point # 2 above. Bailable.
Paid before SCN - 15% of tax
5. Collects tax in contravention of provisions but fails
After SCN but - 25% of tax
to pay to the credit of Govt.
within 30 days
6. Evades tax, wrongly avails ITC or refund
After Order issued 10% of tax OR 50% of tax
but within 30 days Rs.10,000 WEH 7. Falsifies financial records Imprisonment
8. Prevents officer in discharge of his duties upto 6 month
Amount of Evasion Imprisonment with/or Fine.
9. Tampers or destroys any evidence
> Rs. 5 Cr Upto 5 yrs. with Fine
10. Engages in services which are in contravention
Rs. 2 Cr - 5 Cr Upto 3 yrs. with Fine
11. Engages in goods liable for confiscation
Rs. 1 Cr - 2 Cr Upto 1 yr. with Fine
12. Fails to supply information under this Act
For Pradeep Singhi & Associates. 13. Attempts to commit any of the above
 What is E-way bill
• The E-way bill, short form for electronic way bill, is a
document to be generated online under GST system.
• when goods of the value of more than Rs.50,000 are shipped
inter-state or intra-state. The E-way bill must be raised
before the goods are shipped and should be include details
of the goods, their consignor, recipient or transporter.
 Advantage of E-way bill:

• Less Documentation
• Efficient Transportation
• Digital interface facilitate a faster movement of goods, improve the
turnaround time of trucks.
• E-way bill would reinforce proper invoicing and along these lines would
reduce tax avoidance.

Disadvantage of E- Way Bill :

• Most of states wants to implement their own e-way bill systems.
• Glitches in generating e-way bills.
• Not – Flexible.
 Validity of E-Way Bill
S.No Distance Validity period

One day in cases other than Over

1. Upto 100 Km.
Dimensional Cargo

One additional day in cases other

2. For every 100 Km. or part thereof
than Over Dimensional Cargo

One day in case of Over

3. Upto 20 Km.
Dimensional Cargo

One additional day in case of Over

4. For every 20 Km. or part thereof thereafter
Dimensional Cargo
 E-WAY BILL FILLING
INPUT OUTPUT
Doubt Clarifying Session
A Free Initiative to Assist in our
Endeavour for Smoother GST.
Lakshmanan Saravanan FCA , DISA , B.com
Thank You!