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(GOODS AND SERVICES TAX)

WHAT IS GST?
 It is comprehensive tax which is levied on SUPPLY of

goods and services across India.

 It is regarded as Destination Based Consumption Tax


PAST TAX STRUCTURE
COMPLEXITIES OF PAST INDIRECT TAXATION
SYSTEM
TAXES SUBSUMED UNDER GST
GST EXCLUDES
 Alcohol for Human Consumption

 Petroleum Products

 Electricity

 Stamp Duty, Customs Duty


GST Worldwide
 In most countries of the world, a single VAT exist which covers both goods and

services

 All sectors are taxed with very few exceptions/exemptions

 Full taxcredits on inputs - 100% set off

 Canada and Brazil alone have a dual VAT

 India is adopting the GST model of Canada


BENEFITS FROM
GST IMPLEMENTATION
Benefits to the industry:

 Improvement in tax policies will lead to healthy competition in trade


business.

 It will lead to neutral tax and a common market.

 Hidden costs in the business chain will be filtered.


BENEFITS FROM
GST IMPLEMENTATION
Benefits to consumer:

 Overall tax burden will reduce.

 Consumer will have a clear view of what he or she is paying


for.
BENEFITS FROM
GST IMPLEMENTATION
Benefit to the Central and State Government:

 Major indirect taxes are being replaced by GST, making the tax
mechanism simpler.

 GST will make better tax compilation.

 Seamless transfer of input tax credit.


GST REGISTRATION
Who should register?

 Any business whose turnover in a financial year exceeds


rupees twenty lakhs( 10 lakhs in case of north-eastern
states)
 Input Service Distributor
 E-commerce operator
 Casual taxable person
 Non resident taxable person
COMPONENTS OF GST
SUPPLY
As per Section 2(92), SUPPLY includes:
 Sale
 Transfer
 Barter
 Exchange
 Rental lease
 License
MIXED SUPPLY
 Two or more individual supplies of goods or services, or
any combination, made together with each other by a
taxable person for a single price.

 Each of these items can be supplied separately and is not


dependent on other.

 It will not be considered as mixed supply, if these items are


supplied separately.
MIXED SUPPLY
Example: We have a package consisting of canned
food, sweets, chocolates and aerated drinks. If the
package is supplied for a single price is a
MIXED SUPPLY
Assuming that canned food attracts the highest rate of
tax, canned foods will be treated as principle supply
COMPOSITE SUPPLY
 Supply of two or more goods or services together
AND
 They should be naturally bundled and supplied
together in the ordinary course of business.

 One of them is a principle supply


COMPOSITE SUPPLY
Illustration: When goods are packed and transported
along with insurance, the supply of goods,
packing materials, transport and insurance is a
Composite Supply.
COMPOSITION LEVY
Composition scheme introduced when turnover is below
INR 15 million as under:

• Manufacturer and Traders – 0.5% CGST and 0.5% SGST


• Restaurants - 2.5% CGST and 2.5% SGST
ASPECTS OF SUPPLY

Time of Supply

Place of Supply

Value of Supply
TIME OF SUPPLY
The time of supply shall be:
 The date of issuing invoice OR
 The last day on which the invoice should have been
issued OR
 The date of receipt of payment

whichever is EARLIER
TIME OF SUPPLY
The date of receipt of payment will be:
 The date on which the entry is made in the books of
accounts OR
 The date on which the payment is credited in the bank
account

whichever is EARLIER
TIME OF SUPPLY
For example,
a)Date of invoice- 16th May, 2018
b)Date of receipt of payment -11th July, 2018
c) Date when the supplier recorded receipts in the
books- 12th July, 2018
Therefore, Time of Supply will be 16th May, 2018
TIME OF SUPPLY UNDER
REVERSE CHARGE MECHANISM.
In case of reverse charge, time of supply will be:
a)Date of receipt of goods OR
b) Date of Payment OR
c) The date immediately after 30 days from the date of
issue of invoice by the supplier
whichever is earlier.
TIME OF SUPPLY UNDER
REVERSE CHARGE MECHANISM
The date of payment under reverse charge mechanism are:

a)The date on which the recipient entered the payment in his books.

OR

b) The date on which the payment is debited from his bank account.

whichever is earlier.
PLACE OF SUPPLY
PLACE OF SUPPLY
INTRA STATE SUPPLY

Location of Intra-state
Location of
Supplier Supply &
Recipient
“Karnataka” subject to
“Karnataka”
SGST,CGST

INTER STATE SUPPLY

Location of Inter-state
Place of
Supplier Supply &
Supply is
“Rajasthan” subject to
“Punjab”
IGST
VALUE OF SUPPLY
Value of supply includes:
 Any taxes, duties, cess, etc. except GST
 Incidental expenses, such as: packing, commission
 Subsidies linked to supply except Government subsidy
 Interest, late fee, penalty for delayed payment
 Amount paid by the recipient, liable to be paid by the
supplier.
VALUE OF SUPPLY
DISCOUNT
The treatment of discount is different under GST regime.

 If the discount is given before or at the time of supply, it


will be allowed as deduction.

 If the discount is given after the supply, it will be allowed


as deduction only after certain conditions are satisfied.
INPUT TAX CREDIT
Input tax credit is available to:
 manufacturer
 Supplier
 E-commerce operator
 Any person registered under GST
INPUT TAX CREDIT
How to claim ITC under GST regime?
 We must have a tax invoice or a debit note issued by a
registered supplier.
 We should have received the goods/services
 The tax charged on our purchases has been deposited
to the government by the supplier.
 Supplier has filed the necessary GST returns
INPUT TAX CREDIT MECHANISM
UTILISATION OF CREDIT
ALLOWED FOR PAYMENT ORDER OF PAYMENT PAYMENT
TAX TYPE OF BELOW SETTLEMENT SETTLEMENT NOT
ALLOWED FOR

CGST CGST & IGST 1. CGST SGST/UTGST


2. IGST
SGST SGST & IGST 1. SGST CGST
2. IGST
UTGST UTGST & IGST 1. UTGST CGST
2. IGST
IGST IGST/CGST/ 1. IGST
SGST/UTGST 2. CGST
3. SGST
4. UTGST
INPUT TAX CREDIT
 Input tax credit is not allowed on goods and services
for personal use
 Input tax credit is allowed on capital goods
 Input tax credit cannot be taken on purchase invoices,
which are more than one year old.
 Input tax credit can be availed on both goods and
services.
COMPLIANCE PROVISIONS
Serial No. Name Purpose Due Date
10th of the next month
1. GSTR 1 Outward Supplies
2. GSTR 2 Inward Supplies 15th of the next month
3. GSTR 3 Monthly Return 20th of the next month
4. GSTR 4 Composition dealer 18th of the month succeeding quarter
5. GSTR 5 Return for non-resident foreign taxable 20th of the next month
person
6. GSTR 6 Return for Input Service Distributor 13th of the next month

7. GSTR 7 Return for authorities deducting tax at 10th of the next month
source
8. GSTR 8 Supplies effected through e-commerce 10th of the next month
operator
9. GSTR 9 Annual Return 31st December of next financial year
10 GSTR 10 Final Return Within three months of the date of
cancellation or date of cancellation
order, whichever is later
Accounts
In Class In Exam

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