A relook into GST since its implementation

[Ganeshan Kalyani]

Implementation:

Goods and Service Tax (GST) was implemented on 01.07.2017. In GST, the State taxes like Value Added Tax (VAT), Central Sales Tax (CST), Entry Tax (ET) got subsumed into State GST and it is termed as "SGST". The Central taxes like Central Excise Duty, Additional Customs Duty, Special Additional Duty got subsumed into Central GST and it is termed as "CGST". So, in case of intra-state supply of goods or services there will be 'CGST+SGST' being levied on the tax invoice. Additionally, there is an interim tax called "IGST" which is levied on inter-state supply of goods or services.

Transitional Credit:

The registered taxpayers were allowed to carry forward the taxes like Central Excise duty, VAT etc. involved in the closing stock lying at their end as on 30.06.2017 into GST regime. Since, those goods were to be sold/supplied in GST the provision enabled the taxpayer to carry forward erstwhile taxes into GST and allowed to offset against the GST payable.

Levy:

A GST is a levy on supply of taxable goods or services or both. The term supply includes sale, transfer, barter, exchange, license, rental, lease or disposal. The supply should be made or agreed to be made for a consideration (price) by a person in the course or furtherance of business.

GST Rate:

The rate of tax applicable on supply of goods are given under Notification no.1/2017-CTR dated 28.06.2017. The rate of tax applicable on supply of services are given under Notification no.11/2017-CTR dated 28.06.2017.

Transaction Value:

GST is levied on a transaction value. A transaction value means the price actually paid or payable by the buyer to the supplier. The value shall include all the taxes levied under any Act other than the GST Act. The transaction value shall exclude any discount given at the time of supply.

Exempt supplies:

GST is not levied on the exempted supplies. The list of goods and services exempted from GST are given in the Notification no.2/2017-CTR dated 28.06.2017 &  12/2017-CTR dated 28.06.2017.

Person liable to pay tax:

The GST is payable by the person making outward taxable supplies. However, some service are given under Notification no.4 & 13/2017-CTR dated 28.06.2017 on which the tax shall be paid by the recipient of supply under reverse charge basis. The recipient is deemed to be supplier and will be held accountable for the compliance under GST.

Person liable to register:

The person making taxable supply becomes liable to registration once his turnover exceed ₹ 20 /10 lacs. The application must be made within 30 days from the date the turnover exceeds the said threshold limit. A GST Certificate shall be issued online by the GST department after verifying the documents submitted by the applicant. The GST Certificate so granted to the applicant shall be displayed by him in prominent place of his principal place of business and all additional place of business.

Documents to be issued:

A person making taxable supply must issue TAX INVOICE. A person making exempt supply must issue BILL OF SUPPLY. And if a person is making taxable and exempt supply in one invoice to an unregistered person then he can issue "Invoice-cum-bill of supply". A RECEIPT VOUCHER, REFUND VOUCHER, PAYMENT VOUCHER should be issued for the supplies covered by reverse charge mechanism. If there is any increase / decrease in the value of supply then the same should be given effect through a CREDIT NOTE / DEBIT NOTE.           

Payment of Tax:

The tax so collected from the customer must be deposited into the Govt. treasury within the prescribed due date. Returns are also be filed on or before the due date prescribed into GST Portal www.gst.gov.in.

Input Tax Credit:

A registered person supplying taxable goods is entitled to take input tax credit of the tax paid on purchase of goods or services which are used in course or further of the business. However, there are certain restrictions as given u/s 17 of CGST Act, 2017 on the claim of the credit. The taxpayer has to take them into consideration while availing the credit. The scope of Input tax credit in GST has widened as there is no distinction between goods and services.

Returns:

In erstwhile tax regime the returns were mostly offline. There was various website to be visited to file return. In GST it is totally online and that to it is one single portal (www.gst.gov.in) where the taxpayers having multi-state existing can do login and file returns. However, invoice level submissions in the returns have challenged the taxpayers. With the passage of time taxpayers have designed reports in their accounting system which gives them the data in desired format. Hence, the returns are filed with ease.

Books of Accounts:

A registered person must keep and maintain books of accounts recording the goods or services supplied along with the relevant documents like tax invoices, bills of supply etc. A registered person must also keep accounts of stock in respect of goods received and supplied by him including goods lost, stolen etc.

E-Way bill:

The electronic way bill was implemented from April, 1 2018 in a staggered manner. The basic threshold below which the e-way bill is not mandatory is ₹ 50,000/-. However, some states have increased the said limit to ₹ 1,00,000/-. The purpose of introducing the e-way bill is free movement of goods across states. It also serves helps the recipient to track the goods and acknowledge the receipt of goods online.

Enquiries / Queries:

The GST departments have started enquiring the taxpayers on the data mismatch  between GST returns as the data in e-way bill systems. Example, data furnished in GSTR-3B varies the details furnished in GSTR-1. The taxpayers are responding to these queries through email. The visit to the department have minimized. The taxpayers should ensure that the notice received through email bears the Document identification Number (DIN).

Erstwhile Assessments:

VAT, Central Excise, Service Tax assessments are still going on. Along with the GST compliance, the priority must be given to complete those case. The Govt. have introduced amnesty schemes to close the old cases. Each States are also introducing amnesty schemes to clear the dues and close the case.

E-invoicing / New Return:

E-invoicing means reporting to the Govt about the billing done on real time. However, if the supply is to an unregistered person there is no need to do e-invoicing. The requirement of e-invoicing has been postponed till 30.09.2020. The time which is available due to extension can be utilized to automate the invoicing system wherever it is not done.

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