Sensys Technologies

Nov 062017
 

Procedure required for migrating data from GSTR 2A to GSTR 2:

There are two method of filing GSTR 2: Offline mode and online mode. Under offline mode you can down data from GSTR 2A in the portal in CSV format and convert it to excel format and check it and upload the same into the again in GSTR 2 after adding missing invoices.

Under online mode data in GSTR 2A can be assessed online in summery form shorted in the order of GSTIN of supplier. Taxpayer cannot edit the data in GSTR 2A. Any editing in data can be done by taxpayer end in GSTR 2.

Taxpayer will open the GSTR 2 and click on the button “GENRATE RETURN”. Taxpayer has to open the invoices of every supplier and after checking the correctness of data in invoice accept it. Finally after checking all the invoices he can file his return.

Issues faced while accepting data in GSTR 2:

  1. Uploaded by supplier: After opening any GST number in the summery data of any supplier two buttons are reflected at the top of the table. First one is “UPLOADED BY SUPPLIER”. This means that this table contains the data uploaded by supplier.
  1. Uploaded by taxpayer: This tag contains the invoices uploaded by taxpayer after clicking the button “ADD MISSING INVOICES”
  1. Invoices’ issued by composite supplies (sellers having turnover below 0.75 crore): Composition suppliers are not allowed to transfer GST to customers and taxpayers are eligible to claim ITC on those invoices and hence there is no such requirement to upload such supplies.

There was a press release from government for facilitating small taxpayer having turnover less than 1.5 corer to file their return on quarterly basis. However, no such notification is raised till date to implement this process. Thus, these suppliers would also file their return on quarterly basis till the process is implemented by an official notification.

  1. Suppliers’ invoice is shown in the portal but option to accept it is not activated: This is a technical error. Confirm from your counterpart supplier to file his return and enquire in the matter from GST helpline.
  1. Suppliers’ invoice is shown with status – “N”: This may be due to mistake on your supplier side being his return is submitted but not filled. Ask your supplier to file his return on immediate basis.
  1. Invoices issued under reverse charge (Table 4B of GSTR 2): In case taxpayer has issued on self for purchases made from unregistered person or for specified supplies and wants to claim ITC for the same than table 4B need to be file by taxpayer.
  1. Suppliers’ invoice is shown with incorrect value or invoice number mismatch: Open the particular invoice and make adequate alteration and save it. After saving the invoice accept it.
Oct 092017
 

Decision taken in 22nd GST Council Meeting

1. GST Council allows SMEs with turnover of up to Rs 1.5 cr to file quarterly returns instead of monthly filings.

2. Nominal 0.1% GST on exports

3. For July exports, refund cheques will be processed by October 10 and for August exports, refund cheques will be processed by October 18

4. There will be an e-wallet for each exporter and notional amount as advance refund will be given; will be initiated on 1 April 2018

5. The e-wallet credit will allow for GST, IGST, etc, while actual refund will offset this

6. The limit for turnover in compensation scheme raised from Rs 75 lakh to Rs 1 crore

7. SMEs with Rs 1 crore turnover can file quarterly returns

8. 1% tax applicable on traders under composition scheme

9. Any person providing exempted service are eligible for compensation scheme

10. Revision in GST rates:

Items

Old rates

New rates

Sliced dried mangos, khakra and chapatti

12%

5%

Unbranded Namkeen

12%

5%

Unbranded Ayurvedic Medicine

12%

5%

Stones used for flooring

Other than marble and granite

28%

18%

Stationary items

28%

18%

Diesel engine parts

28%

18%

Petrol pump parts

28%

18%

Man Made yarn

18%

12%

Job Work

12%

5%

Oct 062017
 

GST and TDS calculation under Income Tax Act

Circular no 23/2017 of CBDT:

The Central Board of Direct Taxes (the Board) had earlier issued Circular No. 112014 dated 13.01.2014 clarifying that wherever in terms of the agreement or contract between the payer and the payee, the Service Tax component comprised in the amount payable to a resident is indicated separately, tax shall be deducted at source under Chapter XVIl-B of the Income tax Aet, 1961 (the Act) on the amount paid or payable without including such Service Tax component.

Now, the Government has brought in force a new Goods and Services Tax regime with effect from 01.07.2017 replacing, amongst others, the Service Tax which was being charged prior to this date as per the provisions of Finance Act, 1994. Therefore, there is a need to harmonize; the Circular No. 01/20 14 of the Board with the new system for taxation of services under the GST regime.

Hence therefore, wherever in terms of the agreement or contract between the payer and the payee, the component of ‘GST on services’ comprised in the amount payable to a resident is indicated separately, tax shall be deducted at source under Chapter XV Il-B of the Act on the amount paid or payable without including such ‘GST on services’ component.

Conclusion:

The amount of TDS shall be computed without grossing up for the goods and service tax (GST) component, which is also part of the bill.

What is included in GST for the purpose of deduction of TDS at source?

GST for these purposes shall include:

  1. Integrated Goods and Services Tax (IGST),
  2. Central Goods and Services Tax (CGST),
  3. State Goods and Services Tax (SGST)and
  4. Union Territory Goods and Services Tax (UTGST).

For the purpose of above circular, GST does not included cess chargeable under GST (Compensation to the States) Act which is also a part of GST chargeable under the above acts. Matter needs to be further clarified as to whether TDS shall also be deducted on the cess component or not. Practically cess shall also be excluded for the purposes of deduction of TDS.

What is the impact of above circular on the existing contract as on 01.07.2017?

Any reference to ‘service tax’ in an existing agreement or contract which was entered prior to 01.07 .2017 shall be treated as ‘GST on services’ with respect to the period from 01.07.20 17 onward till the expiry of such agreement or contract.

Example: There are several payments, such as works contracts which attract GST (at 18%) and which also attract TDS (at 10% on fees for technical services, 2%/1% on work contract) under the Income Tax (I-T) Act.

Whether TDS under GST and TDS under income tax shall be deducted separately?

As the purpose of deduction of TDS under GST and TDS under income tax act is different and hence in cases where as per terms of contract TDS under income tax and TDS under GST is deductible at the same time than both are deducted separately and accounted for in the different accounts and further deposited under separate account.

Sep 262017
 

Accounting Entries in case GST paid under Reverse Charge

Features of reverse charge mechanism of payment of tax on certain supply of services under GST:

The bulleted points of the above discussion are as below:

  • Reverse charge is a mode of collection of tax by government and not a different tax.
  • If goods and / or services are purchase from the registered taxable person – reverse charge levy can be effected only when goods and / or services traded are one of the specified items. Till date no such items are specified by central government.
  • Goods and / or services on which tax is payable under reverse charge are not exempted goods and / or services.
  • In case such goods are supplied by registered taxable person tax invoice shall be prepared by such supplier with the mentioned of the words – “TAX IS PAYABLE ON REVERSE CHARGE BASIS”
  • In case goods and / or services are supplied by unregistered person tax invoice will be generated by recipient taxable person under section 31(3)(f).
  • ITC of tax paid under RCM (reverse charge mechanism) will allowed once tax and value of supply is paid.

With the above background the accounting entry that can be passed is given below:

Accounting entry at seller end:

Whether supply is made by registered person or unregistered person –

XYZ party a/c                Dr

To Sale (under RCM) a/c

Accounting entry at purchaser end:

Mode 1 : Purchase made from registered person:

  • Tax will be paid by receiver of goods
  • Tax Invoice shall be prepared by supplier of goods / services
  • ITC will be available on tax paid
  • Payment voucher shall be prepared for every payment made

Accounting entry:

Purchase:

Purchase a/c                  Dr

Provisional ITC of CGST (under RCM)

Provisional ITC of SGST (under RCM)

To ABC Party a/c                 (For material purchase)

To CGST (under RCM)          (For CGST)

To SGST (under RCM)          (For SGST)

Availing ITC after fulfilling conditions:

ITC of CGST                  Dr

ITC of SGST                  Dr

To Provisional ITC of CGST (under RCM)

To Provisional ITC of SGST (under RCM)

Mode 1 : Purchase made from un-registered person:

  • Tax will be paid by receiver of goods
  • Tax Invoice shall be prepared by receiver of goods / services
  • No question of issuance of bill of supply as supply is not of exempted goods
  • ITC will be available on tax paid
  • Payment voucher shall be prepared for every payment made

Accounting entry:

Purchase:

Purchase a/c                  Dr

To ABC Party a/c                       (For material purchase)

 

Issue of tax invoice:

Provisional ITC of CGST (under RCM)

Provisional ITC of SGST (under RCM)

Memorandum sale a/c – crated only for the purpose of creating GST liability

To CGST (under RCM)    (For CGST)

To SGST (under RCM)    (For SGST)

To Memorandum sale a/c – crated only for the purpose of creating GST liability

 

Availing ITC after fulfilling conditions:

ITC of CGST                  Dr

ITC of SCST                   Dr

To Provisional ITC of CGST (under RCM)

To Provisional ITC of SGST (under RCM)

Sep 252017
 

GSTR 2 & 2A

Role of GSTR -2 for the registered dealer:

GSTR – 2 is a return document used by GST portal for giving Input Tax Credit in GSTR – 3 to the dealer. Hence, it is a very important document and due care should be maintained in filing this form so that we get ITC for which we are eligible correctly.

Inter – linking of GSTR 2 and GSTR 2A:

GSTR 2 and 2A are inter-link document. GSTR 2 can’t be filed without all information is captured in GSTR – 2A. In case any purchases are made from registered dealer, same will be auto populated in GSTR – 2A after due date of filing of GSTR – 1 is over. Any missing or incorrect information in GSTR – 2A may be rectified in GSTR – 2 in case of these dealers. Thus, GSTR -2 document can be filed only after due date of filing GSTR -1 is over.

Who to file GSTR -2A & 2 under section 38(1) – Details of inward supplies:

PART A – Filing of fresh return:

Every registered person, other than:

  1. An Input Service Distributor or
  2. A non-resident taxable person or
  3. Composition supplier under section 10 or
  4. A person paying tax under the provisions of section 51 (TDS deductor) or
  5. A person paying tax under the provisions of section (TCS deductor) 52,

shall verify, validate, modify or delete, if required, the details relating to outward supplies and credit or debit notes communicated in GSTR – 2A to prepare:

  • The details of his inward supplies and
  • Credit or
  • Debit notes and
  • may include therein, the details of inward supplies and credit or debit notes received by him

in respect of such supplies that have not been declared by the supplier in GSTR 1.

PART B – Rectification of return already filed:

Any registered person, who has furnished the details under sub-section (2) for any tax period and which have remained unmatched, shall, upon discovery of any error or omission therein, rectify such error or omission in the tax period during which such error or omission is noticed in such manner as may be prescribed, and shall pay the tax and interest, if any, in case there is a short payment of tax on account of such error or omission, in the return to be furnished for such tax period.

Errors or omission that can be rectified:

  1. Section 42: Discrepancy observed in the inward supply claimed by registered dealer with the corresponding details of outward supply furnished by corresponding registered person in the same tax period or earlier tax period.
  2. Duplication of ITC claimed
  3. Section 43: The details of every credit note relating to outward supply with corresponding reduction in claim for ITC by corresponding registered person.

Time limit for rectifying such errors or omission:

Provided that no rectification of error or omission in respect of the details furnished under sub-section (2) shall be allowed after furnishing of the return under section 39 for the month of September following the end of the financial year to which such details pertain, or furnishing of the relevant annual return, whichever is earlier

Form and manner of furnishing details of inward supplies:-

  1. Every registered person required to furnish the details of inward supplies of goods or services or both received during a tax period shall, on the basis of details contained in Part A, Part B and Part C of FORM GSTR-2A, prepare such details and furnish the same in FORM GSTR-2.
  2. Every registered person shall furnish the details of any mismatch electronically in FORM GSTR-2.
  3. The registered person shall specify the inward supplies in respect of which he is not eligible, either fully or partially, for input tax credit in FORM GSTR-2.
  4. The registered person shall declare the quantum of ineligible input tax credit on inward supplies which is:
    1. Relatable to non-taxable supplies or
    2. For purposes other than business and cannot be determined at the invoice level in FORM GSTR-2.
  5. The details of inward supplies of goods or services or both furnished in FORM GSTR-2 shall include the-
    1. Invoice wise details of all inter-State and intra-State supplies received from registered persons or unregistered persons;
    2. Import of goods and services made; and
    3. Debit and credit notes, if any, received from supplier
Sep 102017
 
Deadline for filing GSTR 1 extended to 10th October 2017
S.No.
GSTR Form No.
Tax Period
Revised Due Date
1
GSTR-1
July 2017
10-Oct-2017
1.1
GSTR-1
(Turnover more than 100 crore)
July 2017
3-Oct-2017
2
GSTR-2
July 2017
31-Oct-2017
3
GSTR-3
July 2017
10-Nov-2017
4
GSTR-4
July-September 2017
18-Oct-2017 (no change)
5
GSTR-6
July 2017
13-Oct-2017

 

Sep 082017
 

Accounting entry in case of export & import of goods under GST

Accounting entry in case export:

Accounting entry for exports of goods is based on your choice of procedure adopted for taxation of supplies. Export supplies under GST are Zero rated. Under section 16 of the act a taxable supplier have either of the following two ways for taxing export supplies –

Option 1:

He may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilised input tax credit.

Under this mechanism exports needs to pay any tax at the time actual exports of goods and / or services and hence a simple sale entry will be made in the account.

However, what every inputs he have used for such supplies he might have pay GST on such inputs which may be claimed by him appropriate government by debiting appropriate authority accounting and crediting relevant input expense account as expenses to that extent are deducted.

Option 2:

He may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder

Under scheme would work as follows

Step 1.           Pay tax at the time of export @ relevant IGST rate as application to goods / service.

Step 2.           For paying IGST on such exports exported may utilized ITC available on inputs used for procuring / manufacturing such goods / service for exports.

Step 3.           When export is done such exporter may claim refund of export duty from appropriate government.

Accounting entries will be passed accordingly

Accounting entry in case of import of goods

Accounting treatment of tax paid on import of goods co-exists with the eligibility of importer to claim ITC on goods import by him. In case importer is eligible to claim ITC accounting treatment for the same may be given as under:

At the time of payment of IGST on import:

Advance IGST on import a/c                   Dr

To Bank a/c

 

At the time of receipt of goods in store:

Import Purchase a/c                               Dr

BCD a/c                                                Dr

Freight on import a/c                              Dr

Other import expenses a/c                      Dr

IGST on import                                      Dr

To XYZ inc party a/c

To Import expenses – advance a/c

To advance IGST on import

 

Sep 072017
 

GSTR – 1: Return of Outward supply

Why to file GSTR 1:

The need for filing GSTR 1 arises from section 37 of the CGST act and same is reproduced below:

Every registered person, other than:

  • An Input Service Distributor,
  • A non-resident taxable person and
  • A person paying tax under the provisions of section 10 or
  • A person paying tax under section 51 (Person deducting TDS) or
  • A person paying tax under section (Person collecting TCS) 52,
  • A person mentioned under section 14 of IGST act (supplier of online information and database access or retrieval services).

shall furnish, electronically, in such form and manner as may be prescribed, the details of outward supplies of goods or services or both effected during a tax period

  • on or before the 10th day of the month succeeding the said tax period and

such details shall be communicated to the recipient of the said supplies within such time and in such manner as may be prescribed:

Provided that the registered person shall not be allowed to furnish the details of outward supplies during the period from the 11th day to the 15th day of the month succeeding the tax period:

Provided further that the Commissioner may, for reasons to be recorded in writing, by notification, extend the time limit for furnishing such details for such class of taxable persons as may be specified therein. Hence, commissioner has extended the time limit for the months of July and August months

Provided also that any extension of time limit notified by the Commissioner of State tax or Commissioner of Union territory tax shall be deemed to be notified by the Commissioner

Hence, all taxable suppliers are liable to file GSTR 1 except those mentioned above including those cases where there is no sales in the relevant taxing month.

Meaning of details of outward supplies:

“details of outward supplies” shall include details of:

  1. Invoices,
  2. Debit notes,
  3. Credit notes and
  4. Revised invoices

Issued in relation to outward supplies made during any tax period

Importance of GSTR 1:

Normally every registered person required to furnished / validate following returns:

Return Forms GSTR – 1 GSTR – 1A GSTR – 2 GSTR – 2A GSTR -3
Activity recorded Outward supply Auto Drafted Inward Supply Auto Drafted GST Payment
Outcome GST liability Revise return ITC allowed Reconciled Monthly return
Basis of preparation Sales Invoice issued to recipient / consumer GSTR 2, 4 & 6 Part A, Part B and Part C of FORM GSTR-2A GSTR -1 of the corresponding suppliers from whom purchases are made GSTR 1 and GSTR 2

Thus, every other return except GSTR 1 is auto populated and needs to be validated by taxable registered person. Thus, every care must be made before filing the form as it would directly impact our taxable liability under
GSTR – 3.

When to file GSTR 1 (As extended vide notification no 29/2017):

Forms Notification number For July 2017 For August 2017 From Sep. Onwards
GSTR 1 18/2017 – Central Tax 1st to 10th September Up to 5th October 1st to 10th of next month

Classification of invoices for recording of transaction in GSTR 1:

All issued invoices during the tax period must be classified as given below for correct and complete recording of all transaction in GSTR 3:

Particulars Invoices
Classification of invoices Intra-state supply Inter-state supply Extant of details required
B2B Invoice wise and tax rate wise
Export Invoice x Invoice wise and tax rate wise
B2C large x Invoice value > Rs. 2.5 lacs Invoice wise, tax rate wise and state wise
B2C Invoice value < Rs. 2.5 lacs Consolidated

Modes of filing GSTR 1:

There are two modes of filing GSTR 1 as explained below:

  1. Online mode: The facility of filing GSTR 1 is provided on gst.gov.in online. In case where invoices in a particular month are upto 500 in number this facility can be used. However, numbers of invoices are more than 500 it is batter to prepare return in off line mode.
  2. Off line mode: You can prepare GSTR 1 offline and subsequently same can uploaded on GST portal subsequently. GSTR data can be prepared offline in any of following ways:
    1. Offline utility downloaded from GST portal.
    2. With the help of excel utility
    3. With the help of 3rd party vendor
    4. Through GSP

How to file GSTR 1:

Section Table no Details to be file
B2B 4A4B4C6B

6C

Used for entering taxable outward supplies to registered person.
B2C Large 5A5B Used for entering inter-state taxable outward supplies to unregister dealer having invoice value > Rs 2.5 lacs.
Debit / Credit Note 9A9B 9A – Debit note / Credit note issued to registered dealer.9B – Debit note / credit note issued to unregistered dealer.
Export 6A Details of export supplies.
B2C others 7 Taxable supplies net of debit note and credit notes to unregistered dealer not cover in 5A and 5B.
Nil rated, Exempted and non GST supply 8A8B8C8D Details of Nil rated, Exempted and non GST supply.
Advance received 11A(1)11A(2) Advance received during the tax period.
Adjustment of advance 11B(1)11B(2) Advance received during earlier tax period being adjusted from  supplies in current tax period.
HSN wise summery 12 HSN wise summery
Other information 13 Details of any of the following documents issued:i.        Invoices for outward suppliesii.        Invoices for inward supplies from unregistered personiii.        Revised invoices

iv.        Debit notes

v.        Credit notes

vi.        Receipt voucher

vii.        Payment voucher

viii.        Refund voucher

ix.        Delivery challan for job work

x.        Delivery challan for supply on approval

xi.        Delivery challan in case of liquid gas

xii.        Delivery challan in cases other than by way of supply

 

Sep 062017
 
Extension in date of filing GST Returns for July 17 and August 17
S.No. GSTR Form No. Activity July 2017 August 2017 Comments
1
GSTR 3B
Summary and Payment
25-08-2017
20-09-2017
The return for the month of July
17 can still be filed without attracting late fee
2
GSTR-1
Outward Supply
10-09-2017
05-10-2017
An official notification
is awaited for the announcement of these new dates, however the same has
been made public via the Twitter handle GST@GoI
3
GSTR-2
Inward Supply
25-09-2017
10-10-2017
4
GSTR-3
Summary
30-09-2017
15-10-2017
5
GSTR-6
Input Service Distributor
(ISD) Return
08-Sep-17
23-Sep-17
The dates for these returns have been notified vide notification no. 26/2017-Central Tax. However, we expect
these deadlines to move forward.

Courtesy: VERITA Knowledge Management Team