Change of Email ID and mobile nos in GSTN

 Change of Email ID and mobile nos in GSTN  GST
Jul 262018
 

Change of Email ID and mobile nos in GSTN

Significance of E-mail ID and phone number in GSTN:

E-mail ID and mobile nos. are media to communicate with GSTN instantly for different purposes. These are required for the following purposes:

  1. At the time of registration to generate TRN and GST user ID and first time login password
  2. At the time of filling GST return
  3. At the time submitting query, complaints etc
  4. At the time of cancellation
  5. To receive orders etc

Thus, e-mail ID and mobile number is required at every time while doing work with GSTN.

Change of email and mobile number of the authorized signatory by taxpayers with assistance from the jurisdictional tax officer:

Complaints are being received from taxpayers that the intermediaries who were authorized by them to apply for registration on their behalf had used their own email and mobile number during the process. They are now not sharing the user credentials with the taxpayer on whose behalf they had done the registration in the first place and the taxpayer is at their mercy.

With a view to address this difficulty of the taxpayer, a functionality to update email and mobile number of the authorized signatory is available in the GST System.

The email and mobile number can be updated by the concerned Jurisdictional tax authority of the taxpayer as per the following procedure:

  1. Taxpayer is required to approach the concerned jurisdictional Tax Officer to get the password for the GSTIN allotted to the business.
  2. Taxpayer would be required to provide valid documents to the tax officer as proof of his/her identity and to validate the business details related to his GSTIN.
  3. Tax officer will check if the said person is added as a Stakeholder or Authorized Signatory for that GSTIN in the system.
  4. Tax officer will upload necessary proof on the GST Portal in support to authenticate the activity.
  5. Tax officer will enter the new email address and mobile phone number provided by the Taxpayer.
  6. After upload of document, Tax officer will reset the password for the GSTIN in the system.
  7. Username and Temporary password reset will be communicated to the email address as entered by the Tax Officer.
  8. Taxpayer need to login on GST Portal https://www.gst.gov.in/ using the First time login link.
  9. After first time login with the Username and Temporary password that was emailed to him, system would prompt the taxpayer to change username and password. The said username and password can now be used by the taxpayer.

Non applicability of Section 44AD in certain cases

 Non applicability of Section 44AD in certain cases  GST
Jul 252018
 

Non applicability of Section 44AD in certain cases

Substituted by the Finance Act, 2016, w.e.f. 1-4-2017 [Subsection 4 of section

 44AD]:

Where an eligible assessee declares profit for any previous year in accordance with the provisions of this section and he declares profit for any of the five assessment years relevant to the previous year succeeding such previous year not in accordance with the provisions of sub-section (1), he shall not be eligible to claim the benefit of the provisions of this section for five assessment years subsequent to the assessment year relevant to the previous year in which the profit has not been declared in accordance with the provisions of sub-section (1).

Analysis of the above provision:

Provision Analysis Example
Previous year: Eligible assessee declared profit under presumptive scheme. That means in the previous year assess ascertain his profit @ 6% / 8% of gross sales as the case may be. Take current previous year as example: Previous year : 2018-19
For next five assessment years: in any such assessment year he declares profits not in accordance with this provision. After previous year, in any one out of next five years he declares his profit as per normal calculation, i.e., as per his profit and loss account. 1st AY after PY 2018-19.      is 2020-21

2nd AY after PY 2018-19.   is 2021-22

3rd AY after PY 2018-19.    is 2022-23

4th AY after PY 2018-19.    is 2023-24

5th AY after PY 2018-19.    is 2024-25

 

In any one the above assessment years he declares profit as per his profit and loss account.
Result: He shall not be eligible to claim the benefit of the provisions of this section for five subsequent assessment years Thus, the assessee under consideration shall not be eligible to claim benefit of above provision for next five assessment years from the assessment year in which he has not claim profit as per section 44AD. Let suppose he has not claim profit for AY 2023-24 as per section 44AD. Now from AY 2024-25 to 2028-29 he is not eligible for section 44AD benefit. He shall have to claim profit as per normal computation.

 

Explanatory notes to the above provision:

It has been further provided that where an eligible assessee declares profit for any previous year in accordance with the provisions of this section and he declares profit for any of the five consecutive assessment years relevant to the previous year succeeding such previous year not in accordance with the provisions of this section, he shall not be eligible to claim the benefit of the provisions of this section for five assessment years subsequent to the assessment year relevant to the previous year in which the profit has not been declared in accordance with the provisions of this section.

Case study:

An eligible assessee claims to be taxed on presumptive basis under section 44AD for Assessment Year 2017-18 and offers income of Rs. 8 lakh on the turnover of Rs. 1 crore. For Assessment Year 2018-19 and Assessment Year 2019-20 also he offers income in accordance with the provisions of section 44AD. However, for Assessment Year 2020-21, he offers income of Rs.4 lakh on turnover of Rs. 1 crore.

In this case since he has not offered income in accordance with the provisions of section 44AD for five consecutive assessment years, after Assessment Year 2017-18, he will not be eligible to claim the benefit of section 44AD for next five assessment years i.e. from Assessment Year 2021-22 to 2025-26.

Conclusion:

Thus, now as per above provision an assessee is bound to claim 44AD benefit for at-least 5 consecutive assessment year. If he does not do so in any one assessment year is not eligible for benefit for next five years.

Types of discounts and its role in GST

 Types of discounts and its role in GST  GST
Jul 242018
 

Types of discounts and its role in GST

Meaning of discount under GST:

Discounts means a reduction made from the gross amount or value of something: such as, a reduction made from a regular or list price offering customers a ten percent discount or buy tickets at a discount. A proportionate deduction from a debt account usually made for cash or prompt payment or a deduction made for interest in advancing money upon or purchasing a bill or note not due

There are many types of Discount: like cash discount, quality discount, quantity discount and performance discount.

If one registered dealer purchase or sale goods from another register dealer and he is giving discount on value of goods and / or services supplied then there may be different implications of such discounts based on manner of calculating it.

Role of discount while calculating GST:

Value of taxable supply – Section 15 of CGST Act: Sub – section (3) The value of the supply shall not include any discount which is given––

  1. before or at the time of the supply if such discount has been duly recorded in the invoice issued in respect of such supply; and
  2. after the supply has been effected, if—
    1. such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices; and
    2. input tax credit as is attributable to the discount on the basis of document issued by the supplier has been reversed by the recipient of the supply

Case study:

One registered garments dealers selling Shirt to their consumer for Rs.1000 and the consumer is asking for discount on that shirt. The dealer said 30% on price. The price of shirt is Rs.1000 and now he is giving discount of Rs. 300. Now the price of the shirt is going to be 700 only and the dealer will make a invoice of Rs.700 only. the discount is adjusted at the time preparing discount. And the dealer will have to pay GST and purchasing dealer is eligible to take input tax credit only on invoice amount of Rs. 700.

Comparative analysis of different types of discount:

Types of discount Cash Discount Quality Discount Quantity discount Performance Discount
Meaning This discount is given for purchases made in cash. Discount given for inferior quality of material supplied. Discount given for purchases made in large numbers. Discount given for achieving sales targets.
Abbreviation CD Rate Discount – –
Manner of adjustment in invoice Discount is shown after total value of material sold is calculated but before calculating GST. Not shown is invoice. Item rates itself is adjusted with value of discount. Shown in invoice with each items of invoice after rate per unit. Rate per unit is adjusted with this discount. Not shown in invoice as it is calculated after sale is performed.
When calculated At the time of receiving cash. Before preparing tax invoice. At the time preparing tax invoice. At the end of each performance period.
Implication on GST GST will be paid. In case Same is declared at the time of invoice preparation GST needs to be adjusted by way of debit / credit notes. GST need not to be paid. GST need not to be paid. GST will be paid. In case Same is declared at the time of invoice preparation GST needs to be adjusted by way of debit / credit notes.

 

Book of Accounts under GST

 Book of Accounts under GST  GST
Jul 232018
 

Book of Accounts under GST

Accounts and Records to be maintained under GST – Section 35 of CGST Act:

Every registered person shall keep and maintain, at his principal place of business, as mentioned in the certificate of registration, a true and correct account of—

  1. production or manufacture of goods;
  2. inward and outward supply of goods or services or both;
  3. stock of goods – containing particulars of the opening balance, receipt, supply, goods lost, stolen, destroyed, written off or disposed of by way of gift or free sample and the balance of stock including raw materials, finished goods, scrap and wastage thereof
  4. input tax credit availed;
  5. output tax payable and paid; and, i.e.,
    1. tax collected and paid
    2. input tax
    3. Register of tax invoices
    4. Delivery challan issued or received during any tax period
  6. such other particulars as may be prescribed:
    1. goods or services imported or exported or of supplies attracting payment of tax on reverse charge along with the relevant documents
    2. Invoices
    3. Bills of supplies
    4. Delivery challans
    5. Credit notes
    6. Debits notes
    7. Receipt vouchers
    8. Payment vouchers
    9. Refund vouchers
  7. Account of advances received, paid and adjustments made thereto.

Provided that where more than one place of business is specified in the certificate of registration, the accounts relating to each place of business shall be kept at such places of business:

Provided further that the registered person may keep and maintain such accounts and other particulars in electronic form in such manner as may be prescribed.

Every registered person shall keep the particulars of –

  1. names and complete addresses of suppliers from whom he has received the goods or services chargeable to tax under the Act;
  2. names and complete addresses of the persons to whom he has supplied goods or services, where required under the provisions of this Chapter;
  3. the complete address of the premises where goods are stored by him, including goods stored during transit along with the particulars of the stock stored therein.

Period to retention of books of accounts – Section 36 of CGSST Act:

Every registered person required to keep and maintain books of account or other records in accordance with the provisions of sub-section (1) of section 35 shall retain them until the expiry of seventy-two months from the due date of furnishing of annual return for the year pertaining to such accounts and records.

Due date of filling annual return is 31st December next to the end of relevant assessment year. This means 9 month from the end of relevant financial year. Thus, any books of accounts shall be maintained for a total period to 81 month (9 month + 72 month = 81 month) from the end of relevant assessment year.

How many different sets of accounts be maintained:

If a registered person show two different types of business to the department then he have to prepare two different sets of books of accounts.

Advisory for Taxpayers Filing of Quarterly Returns FORM GSTR1

 Advisory for Taxpayers Filing of Quarterly Returns FORM GSTR1  Advisory for Taxpayers Filing of Quarterly Returns FORM GSTR1
Dec 212017
 

Advisory for Taxpayers Filing of Quarterly Returns FORM GSTR1

  • Taxpayers opting for quarterly filing of return will have to select the last month of the quarter from the drop down menu. However, for the month of July 2017, GSTR-1 has to be filed separately by all taxpayers, as option to file quarterly returns is applicable for returns from August 2017 onwards.
  • If a taxpayer opts to file quarterly return, and their annual turnover is less than Rs 1.5 Cr (on basis of their turnover in previous financial year or in case of new registration obtained after 1st July 2017, expected turnover for current financial year), then in such cases GSTR-1 of August, 2017 is disabled and he can file details for August and September, 2017 in GSTR 1 of September,2017 and so on.
  • Thus, taxpayers who opt for quarterly return filing will have to file GSTR-1 of the various tax periods in the following manner:
    • For July: Monthly (by choosing July from drop down menu)
    • For 2nd Quarter (August and Sept): Quarterly, by choosing Sept.
    • For 3rd Quarter (Oct-Dec): Quarterly, by choosing December
  • Taxpayer who has already filed GSTR 1 for July 2017, will not be able to revise the same. However, amendment relating to invoices and other relevant document of July 2017 can be made through amendment Table (Table 9).
  • Once taxpayer has chosen the option “Quarterly”, they cannot change this option in the remaining part of the financial year 2017-18. Thus, they will be required to file Quarterly returns and they cannot opt for Monthly filing of returns during current financial year.

Courtesy: gst.gov.in

Cancellation of GST Registration

 Cancellation of GST Registration  Cancellation of Registration
Dec 052017
 

Cancellation of GST Registration

When need for cancellation for registration in required:

  1. In case GST registration is issued by department is the process of migrating the existing registration and under GST regime assessee is not liable to get himself registered.
    1. For example, the dealer is registered under service tax being his turnover exceeding Rs 10 Lacs and his registration is migrated by the department. Now under GST regime such taxable person is not liable to get himself registered if their turnover is less than Rs 20 lacs and hence such persons are in batter position if they cancel their registration.
  2. If there is change is rate of tax of goods and service deal in by the dealer to NIL. In such cases this total turnover is exempt from GST net subsequently and liable for cancellation.
  3. If taxable person have closed his business entity and transfer is whole business ongoing basis.
  4. There is change is constitution of business resulting in change in the PAN number etc. ..

Cancellation in case of voluntarily registration:

No application for the cancellation of registration shall be considered in case of a taxable person, who has registered voluntarily, before the expiry of a period of one year from the effective date of registration. The effective date of registration is “Date of issue of certificate” mentioned in line number 9 of GST REG-06 issued at the time of registration of the firm on the GST portal.

Cases and situations for compulsory cancellation of registration:

The registration granted to a person is liable to be cancelled, if the said person,-

  1. Does not conduct any business from the declared place of business; or
  2. Issues invoice or bill without supply of goods or services in violation of the provisions of this Act, or the rules made thereunder; or
  3. Violates the provisions of section 171 of the Act or the rules made thereunder.

Can department cancel registration of the taxable person in case NIL return being filed or no return is filed during certain tax period:

The answer is no. Because filing NIL return or non filing of return does not mean that registered person is not conducting any business at the declared place. The term conduct of business is not limited to mere purchase and/or sale of goods and/or services. It includes wide range of activities from planning, organizing, directing or controlling, strategy making etc for the business. Thus, filing of NIL return or no return alone can not cause cancellation of registration.

How to apply for cancellation:

A registered person,

  • other than a person to whom a registration has been granted under rule 12 or
  • a person to whom a Unique Identity Number (UIN) has been granted under rule 17,

Seeking cancellation of his registration shall electronically submit an application in FORM GST REG-16.

Such person shall include therein:

  • The details of inputs held in stock or
  • inputs contained in semi-finished or finished goods held in stock and
  • The stock of capital goods held in stock on the date from which the cancellation of registration is sought,
  • liability on the above stock
  • The details of the payment, if any, made against such liability and

Further he may furnish, along with the application, relevant documents in support thereof, at the common portal within a period of thirty days of the occurrence of the event warranting the cancellation, either directly or through a Facilitation Centre notified by the Commissioner.

Process of cancellation:

Where a person who has submitted an application for cancellation of his registration is no longer liable to be registered or his registration is liable to be cancelled, the proper officer shall issue an order in FORM GST REG-19, within a period of thirty days from the date of application cancel the registration,

Such cancellation of registration shall be with effect from a date to be determined by proper officer and he may notify the taxable person, directing him to pay arrears of any tax, interest or penalty including the amount liable to be paid under sub-section (5) of section 29.

GST Implication of second hand and used cars etc

 GST Implication of second hand and used cars etc  GST Implication of second hand and used cars
Nov 302017
 

GST Implication of second hand and used cars etc

Chargeability of GST: [Section 9]

There shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both,

  • Except on the supply of alcoholic liquor for human consumption,

On the value determined under section 15 and at such rates, not exceeding twenty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person.

Thus, before liability to pay GST arises two conditions must be satisfied:

  • Transaction under consideration must be a supply under GST law
  • The transaction must be entered by a taxable person.

Meaning of supply:

As per section 7 of the act, supply includes:

  1. All forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business;
  2. Import of services for a consideration whether or not in the course or furtherance of business;
  3. The activities specified in Schedule I, made or agreed to be made without a consideration; and
  4. The activities to be treated as supply of goods or supply of services as referred to in Schedule II.

In general the term supply means – “The total amount of a goods or service that is available to be purchased at any set period of time” Thus, in contrast to sale the term supply does to require actual delivery of goods or services to the purchaser.

As regards to sale or disposal of old assets there are specific mention of this in the act as mention below:

Schedule No Clause Details
I: Activities To Be Treated As Supply Even If Made Without Consideration 1 Permanent transfer or disposal of business assets where input tax credit has been availed on such assets
II: Activities To Be Treated As Supply Of Goods Or Supply Of Services 4 Transfer of business assets

a)    Where goods forming part of the assets of a business are transferred or disposed of by or under the directions of the person carrying on the business so as no longer to form part of those assets, whether or not for a consideration, such transfer or disposal is a supply of goods by the person;

b)    Where, by or under the direction of a person carrying on a business, goods held or used for the purposes of the business are put to any private use or

c)     Are used, or made available to any person for use, for any purpose other than a purpose of the business, whether or not for a consideration, the usage or making available of such goods is a supply of services;

d)    Where any person ceases to be a taxable person, any goods forming part of the assets of any business carried on by him shall be deemed to be supplied by him in the course or furtherance of his business immediately before he ceases to be a taxable person, unless— (i) the business is transferred as a going concern to another person; or (ii) the business is carried on by a personal representative who is deemed to be a taxable person.

 Query:

One of my client is in the business of manufacture and trading of goods. He wants to sell his truck, brought in the erstwhile VAT regime now. Also, he wants to sell his car, used for the purpose of transportation of employees.

 My query is will there be any GST implication on the same and if so what will be the rate of GST?

Solution:

GST would be payable on the both of the above transaction if the seller is otherwise a taxable person under the act.

The regular rate (as applicable on the car) will apply. There is no special rate prescribed for sale of second hand cars.

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

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

Decision taken in 22nd GST Council Meeting

 Decision taken in 22nd GST Council Meeting  Decision taken in 22nd GST Council Meeting
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%

GST and TDS calculation under income tax act

 GST and TDS calculation under income tax act  GST and TDS calculation under Income Tax Act
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.

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