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Section 142(11) of CGST Act, 2017 (Service Tax/ VAT v. Goods and Services Tax ) |
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Section 142(11) of CGST Act, 2017 (Service Tax/ VAT v. Goods and Services Tax ) |
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Existing Taxation v. GST In this article, we would like to explain the concept of section 142(11) of the CGST Act, 2017. This transition provision deals with transactions which have suffered tax (Value Added Tax or Service Tax or Service Tax and VAT). (a) notwithstanding anything contained in section 12, no tax shall be payable on goods under this Act to the extent the tax was leviable on the said goods under the Value Added Tax Act of the State; (b) notwithstanding anything contained in section 13, no tax shall be payable on services under this Act to the extent the tax was leviable on the said services under Chapter V of the Finance Act, 1994; (c) where tax was paid on any supply both under the Value Added Tax Act and under Chapter V of the Finance Act, 1994, tax shall be leviable under this Act and the taxable person shall be entitled to take credit of value added tax or service tax paid under the existing law to the extent of supplies made after the appointed day and such credit shall be calculated in such manner as may be prescribed. Accordingly, this section can be divided into 3 parts, are as follows:
Example: Advance of ₹ 1,00,000/- was received on 20th June, 2017 for service to be rendered in July, 2017. The invoice for the service was raised for ₹ 1,50,000/- on 31st July, 2017. Appointed day as 1st July, 2017, GST shall be levied only on ₹ 50,000/-.
In case of works contract service, construction services and food and beverage services, etc. VAT and Service Tax, both are levied. In this case if person has paid any tax under existing taxation in respect to the supply to be made after appointed date then person will have to pay full GST under GST regime and such person can claim the credit of tax paid, i.e., VAT and Service Tax under GST. Contract entered in March, 2017 for ₹ 1,00,00,000/-. Advance received till 30th June, 2017 amounts to ₹ 10,00,000/-. VAT of ₹ 40,000/- and Service Tax of ₹ 60,000/- have been paid on the said advance. Appointed day is 1st July, 2017, GST shall be levied on ₹ 1,00,00,000/- as per Section 13 of the CGST Act. The VAT and Service Tax paid (i.e., ₹ 1,00,000/- ) shall be allowed as credit under the existing law. A person who has paid VAT and Service Tax under section 142(11) of the CGST Act, 2017., need to submit details of tax paid in Entry No.11 of Form GST TRANS-1 on or before 90 days from appointed date.
By: CASANJAY AITHAN - July 8, 2017
Discussions to this article
Agree to the above point. But cases where taxable services rendered before appointed day where service tax has been paid, and vat has not been discharged. How to treat the same. For example, in case of construction service demand raised is rupees hundred and service tax has been discharged hundred that is 4.5 and where amount received is only 50 rupees and what has been discharge earn 50 rupees. Now for the above what would be the treatment of rupees 50 received in GST regime.
Agree to the above point. But cases where taxable services rendered before appointed day where service tax has been paid, and vat has not been discharged. How to treat the same. For example, in case of construction service demand raised is rupees 100 and service tax has been discharged on ₹ 100 and amount received is only 40 rupees on which MVAT has been paid under composition. Now for the above, what would be the treatment of rupees 60 received in GST regime. Whether it will be taxable under GST or not? If yes how?
Sir, For example, 'A' is a service provider who received advance for to provide service on 01-06-2017 amounted 10,000 (actual service value is 20,000 as per contract) and he paid service tax under service tax regime on advance receipt of 10,000 (agreed to be provided also taxable on receipt basis). and 'A' provided service on 29-07-2017 and issued invoice dated 31-07-2017, as like follows: Taxable value: 20,000 Tax: 1,800 (say tax rate is 18%, 10,000*18/100) Invoice value is 21,800 'A' contention is like as follows: a) in terms of 142(11)(b) of CGST act, tax payment on advance payment is not required to be follow as per section 13 of CGST act. b) in terms of 142(11)(b) of CGST, there is no clarity on GST levy on advance receipt of 10,000 so it is going to levy under GST. Kindly clarify whether 'A' contention is correct or not ????? if not, suggest him with required legal provision.
Contention "A" is right. You need not to pay tax on advance amount on which you have already paid service tax. In section 142(11)(b) of the CGST Act, 2017, the term "leviable", i.e., to the extent service tax leviable. Therefore, in GST, GST is to be paid only on balance 10,000.
Sir thanks for your immediate response, as per 142(11)(b) notwithstanding anything contained in section 13, no tax shall be payable on services under this Act to the extent the tax was leviable on the said services under Chapter V of the Finance Act, 1994; sir, i requested your attention to use of word payable in 142(11)(b), the aforesaid clause given relief from payment of GST as per time of supply, but the section is silent about the levy of charging section on the same. so in my view even through 'A' discharged tax under service tax regime, again GST also levied on said amount but the payment of the same is waived by inserting section 142(11)(b). if my contetion is correct, then guide me how to issue invoice in GST regime, i.e how much taxable value, how much GST and what is the total invoice value ??????? Thanks
Value of supply - 20000 Taxable value of supply - 10000 GST -1800 Invoice value - 21800
Sir, as you said earlier, Total value of supply is 20,000 Rs, out of that 10,000 termed as taxable value, what about remaining value of supply in invoice???? how to treat it in invoice???? whether non taxable, exempted or nill rated ??????? Thanks
Sir, If any contract come under Section 142(11)(B) but by mistake we treat under section 142(11)(c) ,than can govt can charge us any penalty?
Dear Sir, I Have one Query, In Section 142 (11) (c) it was mentioned that, Every person to whom the provision of clause (c) of sub-section (11) of section 142 applies, shall within a period of ninety days of the appointed day, submit a declaration electronically in FORM GST TRAN-1 furnishing the proportion of supply on which Value Added Tax or service tax has been paid before the appointed day but the "supply is made after the appointed" day, and the Input Tax Credit admissible thereon Further As prescribed in Rule 118 118.Declaration to be made under clause (c) of sub-section (11) of section 142.-Every person to whom the provision of clause (c) of sub-section (11) of section 142 applies, shall within [the period specified in rule 117 or such further period as extended by the Commissioner, submit a declaration electronically in FORM GST TRAN-1 furnishing the "proportion of supply on which Value Added Tax or service tax has been paid before a period of ninety days of the appointed day” appointed day but the supply is made after the appointed day, and the Input Tax Credit admissible thereon." based on the above my doubt is mentioned below: Service tax Paid on Advances Before 30.06.2017 ₹ 10,00,000/- Proportion of supply made till date is ₹ 2,00,000/- (Rest of the supply will be made after filing of Trans 1 Form) The dealer is liable to Get Credit of ₹ 10,00,000/- or ₹ 2,00,000/-
Dear Mr. Samir, Government cannot charge penalty unless a case is falling under section 74 of CGST Act, 2017 i.e,. There must be fraud or intention to evade taxes etc. If you have wrongly claimed then reversed it or pay equal amount of it along with interest , if applicable.
Dear Mr. Sagar, For the purpose of applicability of section 142(11)(c) of the CGST Act, 2017, payment of Vat as well as Service Tax is must. In your case, you have paid service tax only on advances received. Therefore , your case is falling under section 142(11)(b) instead of 142(11)(c) . Accordingly, you need not to pay GST on ₹ 10,00,000.
Asked by Mr. VAMSI KRISHNA For example, 'A' is a service provider who received advance for to provide service on 01-06-2017 amounted 10,000 (actual service value is 20,000 as per contract) and he paid service tax under service tax regime on advance receipt of 10,000 (agreed to be provided also taxable on receipt basis). and 'A' provided service on 29-07-2017 and issued invoice dated 31-07-2017, as like follows: Taxable value: 20,000 Tax: 1,800 (say tax rate is 18%, 10,000*18/100) Invoice value is 21,800 =============================================== Replied by CASANJAY AITHAN Value of supply - 20000 Taxable value of supply - 10000 GST -1800 Invoice value - 21800 ====================== Urgent Support Required. Sir, as you said earlier, Total value of supply is 20,000 Rs, out of that 10,000 termed as taxable value, what about remaining value of supply in invoice???? how to treat it in invoice???? whether non taxable, exempted or nill rated ??????? How to reflect the same in GSTR-1 & GSTR-3B Can you kindly reply as I am facing the same problem. My company have lot of members and they have paid in advance for 4-5 years in service tax regime. So how I issue invoice in GST regime as we have not issued Invoice at Service tax regime but have deposited Service tax to the Govt.?? Thanks Vineet Jhabak ===========================
Dear Sir, As per your below article:
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Section 142(11) of CGST Act, 2017 (Service Tax/ VAT v. Goods and Services Tax )
In this article, we would like to explain the concept of section 142(11) of the CGST Act, 2017. This transition provision deals with transactions which have suffered tax (Value Added Tax or Service Tax or Service Tax and VAT). (a) notwithstanding anything contained in section 12, no tax shall be payable on goods under this Act to the extent the tax was leviable on the said goods under the Value Added Tax Act of the State; (b) notwithstanding anything contained in section 13, no tax shall be payable on services under this Act to the extent the tax was leviable on the said services under Chapter V of the Finance Act, 1994; (c) where tax was paid on any supply both under the Value Added Tax Act and under Chapter V of the Finance Act, 1994, tax shall be leviable under this Act and the taxable person shall be entitled to take credit of value added tax or service tax paid under the existing law to the extent of supplies made after the appointed day and such credit shall be calculated in such manner as may be prescribed. Accordingly, this section can be divided into 3 parts, are as follows:
Example: Advance of ₹ 1,00,000/- was received on 20th June, 2017 for service to be rendered in July, 2017. The invoice for the service was raised for ₹ 1,50,000/- on 31st July, 2017. Appointed day as 1st July, 2017, GST shall be levied only on ₹ 50,000/-.
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I like to have your guidance for below example: First case: Advance recd in ST Regime CAPEXIL is my company name and is a service provider who received advance for five year (2016-17, 2017-18,2018-19, 2019-20, 2020-21) from x member amounting to ₹ 50,000 (Annual fee is ₹ 10000) + Service tax 14 % on April 2016 and on that CAPEXIL paid service tax under service tax regime on advance receipt of 50,000 and Capexil providing services each year starting from first date of financial year. Now how invoice to be issued in GST regime?? Is the below one is correct? Invoice dated 01-04-2018 Taxable value: 10,000 Tax: Nil Invoice value is 10,000 Where to reflect the same in GSTR-1 & GSTR-3B What will be the accounting entry?? 1/4/16 Bank ............. 50000+GST 7500 To Party.............50000+ GST 7500 1/4/16 Party......................GST 7500 To GST..........................GST 7500 1/4/17 Party .......................10000 To Income 17-18....................10000 1/4/18 Party .......................10000 To Income 18-19....................10000 1/4/19 Party .......................10000 To Income 19-20....................10000 1/4/20 Party .......................10000 To Income 20-21....................10000 In this case how I will issue Invoice for all years?? ================================================== ******************========================== Second case: Advance recd in GST Regime Say if the same amount is received as an advance for five years on 1st Jan, 2018 for FY 18-19 then Now how invoice to be issued in GST regime?? Is the below one is correct? Invoice dated 01-04-2018 Taxable value: 10,000 Tax: 1800 Invoice value is 11,800 Where to reflect the same in GSTR-1 & GSTR-3BIs the below one is correct? Have shown advance in January under 11A(1), 11A(2) - Tax Liability (Advances Received) Now in April will show in : What will be the accounting entry in Tally?? Is the below one is correct? 1/1/18 Bank ............. 50000+GST 9000 To Party.............50000+ GST 9000 1/1/18 Party......................GST 9000 To GST..........................GST 9000 1/4/18 Party .......................11800 To Income 18-19....................10000 To GST....................................1800 1/4/18 GST...........................1800 To Party........................1800 (Reverse entry to book above invoice entry so that Invoice can be raised from tally and not manually) Best Regards, Vineet Jhabak
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