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 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

 

Aug 312017
 

General

1. I have activated my user ID but not completed part B of the application, but I received Provisional Registration Certificate, what I need to do?

Provisional Registration Certificate is issued based on activation at GST Portal, so that your business may not hamper. However, to obtain permanent Registration and GSTIN, you are required to complete all the parts of the application and file it with your DSC/ E-Signature or EVC as the case maybe. Signing of application with Digital Signature or e-signing or EVC can only be done by the authorized signatories. Final Registration Certificate will be issued after approval of the proper officer if you have submitted and electronically verified enrolment form with complete details.

2. I have wrongly mentioned additional place of business, /registration details how this can be addressed?

You can update/correct all the information related to additional place of business, bank account, or registration details given in the application through the process of amendment.

3. I have furnished incorrect jurisdiction how can I correct the same?

It will be updated by the concerned officers at the time of processing your application. Your latest updates will be visible on the dashboard.

SEZ Unit / SEZ Developer

1. I am a SEZ unit or SEZ Developer and not registered under VAT or Central Excise. How will I get registered under GST?

SEZ developers and Units are required to be identified as such in GST and required to be registered a fresh. You need to apply for a new registration as separate vertical under GST. You need to select SEZ Unit or SEZ developer in the reason for registration. You are also required to upload the necessary certificate /documents issued by Government of India in the principal place of business tab to substantiate the claim.

2. I am a SEZ unit / SEZ Developer and have taken VAT registration /Central Excise Registration. I have migrated under GST against the VAT/ Central Excise Registration. Can I get benefits of SEZ Unit/SEZ Developer under GST?

Since you have migrated as VAT/Central Excise or Service tax registrant, whereas, you need to register with the Entity of SEZ Developer or SEZ Unit. Therefore, you need to update your information through the amendment on the GST Portal. You need to select reason for registration as SEZ Unit/ SEZ developer and also required to upload necessary document issued by the Government of India in this behalf.

3. I have migrated as normal taxpayer and also have a SEZ unit which is my additional place of business. I have declared the same in the enrolment application also. What should I do under GST?

You need to apply for a new registration as separate vertical under GST for your additional place of business i.e. the SEZ unit/ SEZ Developer, because SEZ has separate registration requirement under GST. You need to select SEZ Unit or SEZ developer in the reason for registration. You are also required to upload the necessary certificate /documents issued by Government of India in the principal place of business tab to substantiate the claim.

Multiple Verticals

1. I have multiple verticals as per the GST law but only one registration is migrated in GST. When I will get my registrations for other verticals.

Multiple Business vertical in a state can be registered separately under GST. Accordingly, separate Provisional IDs have been generated and furnished for such entities based on the data provided by the States/Central Authorities. However, the business entities who have not received separate Provisional ID for different business verticals and have not yet migrated at GST Portal, may obtain registration through new Registration process, which has been started from 25th June, 2017.

2. Can I use same email, mobile and PAN combination for other verticals?

The combination of registered e-mail ID and Mobile Number of each registered business entity should be unique. You cannot use same email and mobile combination for the same PAN but different business verticals. You have to change at least one of the two.

3. Do I need to fill all information again while applying for the multiple verticals?

Yes, the details need to be filled again. Auto-population functionality for common fields against same PAN i.e. Legal Name, Constitution, Promoters and Partners details has not been enabled so far. It is advisable to fill same information for above fields for all registrations against the same PAN.

Aug 212017
 

Registration of GST Practitioner

1. Who is a GST Practitioner?

GST Practitioner is a tax professional who can prepare returns and perform other activities on the basis of the information furnished to him by a taxable person. However, the legal responsibility of such filings remains with the Taxpayer. For this purpose, GST Practitioners (GSTP) are required to be enrolled with Centre or State Authority. CA, CS, CMA, Advocates, Retired Government Officials, and Graduates are eligible to apply for registration. In addition, GSTPs can be appointed Authorized Representatives who can act on the behalf of the taxpayers and represent them before tax authorities.

2. Can I file Returns for my client if I am not registered?

It is recommended that you register as a GST Practitioner at the GST Portal.

3. Are there any preconditions before I can enroll on the GST Portal as a GST Practitioner?

A GST Practitioner must fulfill the following conditions he/she can enroll on the GST Portal:

1. Applicant must have a valid PAN Card

2. Applicant must have a valid mobile number

3. Applicant must have a valid e-mail ID

4. Professional address

5. Applicant must have the prescribed documents and information on all mandatory fields as required for Enrolment

6. Applicant must fulfill the eligibility criteria of GST Practitioner.

4. What are the eligibility criteria an applicant must fulfill for becoming a GST Practitioner/enrolling on the GST Portal as a GST Practitioner?

  • Chartered Accountant holding COP
  • Chartered Accountant without COP
  • Company Secretary holding COP
  • Company Secretary without COP
  • Cost and Management Accountant holding COP
  • Cost and Management Accountant without COP
  • Advocate
  • Graduate or Postgraduate degree in Commerce
  • Graduate or Postgraduate degree in Banking
  • Graduate or Postgraduate degree in Business Administration
  • Graduate or Postgraduate degree in Business Management
  • Degree examination of any recognized Foreign University recognized by any Indian University as equivalent to degree examination
  • Retired Government Officials

5. I started to fill the Registration Application for GST Practitioner but was not able to complete it. Can I save my Registration Application?

Yes, you can save your Registration Application up to 15 days from the day your TRN was generated upon successful submission of PART- A of the Registration Application.

6. What do I do after submitting my Registration Application?

The Registration Application submitted by you will be processed by Tax Officer. Once your Registration Application is approved by the concerned Tax Official, your GSTP ID will be generated by the system along with a temporary password for first-time login and the same will be communicated to your registered e-mail address. ARN status will also be changed to ‘Approved’. Enrolment Certificate will be available at the Dashboard of the GSTP for view, print and download.

In case of rejection, Rejection Order will get generated and communicated to you. ARN status will be changed to ‘Rejected’. Intimation of Rejection will be sent to the applicant who filed the application for the enrolment of GSTP via email and SMS on his registered email address and mobile number respectively. Rejection Order will be available at the Dashboard of the GSTP for view, print and download

7. Do I need to register separately in each State and Union Territory?

Single Enrolment shall be sufficient for practicing on all India basis. No separate registrations are required for other States or Centre. However, the you are free to apply for another registration in other state if you have a Profession Address in that state.

Courtesy: https://www.gst.gov.in

Aug 072017
 

Tax applicable in case of import of goods

Meaning of goods imported into India and its status under GST:

As per section 2(10) of the IGST 2017, import of goods means bringing goods into India from a place outside India. Sub-section 2 of section 7 provides that Supply of goods imported into the territory of India, till they cross the customs frontiers of India, shall be treated to be a supply of goods in the course of inter-State trade or commerce.

Manner of levy of imported goods:

Section 5 of IGST act provides for levy and collection of IGST. Proviso to section 5 provides that integrated tax on goods imported into India shall be levied and collected in accordance with section 3 of the customs act. “Provided that the integrated tax on goods imported into India shall be levied and collected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975 on the value as determined under the said Act at the point when duties of customs are levied on the said goods under section 12 of the Customs Act, 1962.

Place of supply:

The place of supply has very significant role under GST. It clarifies the appropriate taxing government to who tax to be deposited. Section 11 of IGST act provides that the place of supply of goods,––

  1. a) imported into India shall be the location of the importer;
  2. b) exported from India shall be the location outside India.

Whether tax paid on import of goods / services is eligible for Input Tax Credit:

As per section 2(62) of CGST act – “) “”input tax”” in relation to a registered person, means the central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes— (a) the integrated goods and services tax charged on import of goods but does not include the tax paid under the composition levy.

Conclusion:

(a)   Import of goods shall be treated as inter-state sale under GST.

(b)   Such inter-state sale shall be taxed in the taxable territory of the state where importer is located.

(c)   Valuation of such goods shall be done by as per principle and rules specified in customs act.

(d)   Customs clearance shall be done only after payment of GST.

(e)   Normal GST rates would not be applicable to such goods. Tax rates schedule as applicable under customs tariff act will be applicable to calculation of GST.

(f)    Importer shall be eligible for ITC on tax paid at the time of importation if other conditions relating to claiming of ITC is fulfilled by him.

Aug 022017
 

Rounding of tax etc. under GST:

Section 170. The amount of tax, interest, penalty, fine or any other sum payable, and the amount of refund or any other sum due, under the provisions of this Act shall be rounded off to the nearest rupee and, for this purpose, where such amount contains a part of a rupee consisting of paise, then, if such part is fifty paise or more, it shall be increased to one rupee and if such part is less than fifty paise it shall be ignored.

Thus, from the above the following points may be concluded:

  • The amount of tax or interest payable shall be rounded off to nearest rupees.

Manner of rounding off:

Rounding of under GST shall done at the stage where tax is actually liable to be paid. As per section 12 / section 13 tax is payable at the time of supply which is generally at the time of issue of invoice by the supplier. The extract of the section 12 and section 13 of the act is given below:

Section 12: Time of supply of goods i.e., liability to pay tax in case of supply of goods:

(1) The liability to pay tax on goods shall arise at the time of supply, as determined in accordance with the provisions of this section.

(2) The time of supply of goods shall be the earlier of the following dates, namely:—

  1. the date of issue of invoice by the supplier or the last date on which he is required, under sub-section (1) of section 31, to issue the invoice with respect to the supply; or
  2. the date on which the supplier receives the payment with respect to the supply:

Provided that where the supplier of taxable goods receives an amount up to one thousand rupees in excess of the amount indicated in the tax invoice, the time of supply to the extent of such excess amount shall, at the option of the said supplier, be the date of issue of invoice in respect of such excess amount.

Explanation 1.––For the purposes of clauses (a) and (b), “supply” shall be deemed to have been made to the extent it is covered by the invoice or, as the case may be, the payment.

Explanation 2.––For the purposes of clause (b), “the date on which the supplier receives the payment” shall be the date on which the payment is entered in his books of account or the date on which the payment is credited to his bank account, whichever is earlier.

Section 12: Time of supply of services i.e., liability to pay tax in case of supply of services:

(1) The liability to pay tax on services shall arise at the time of supply, as determined in accordance with the provisions of this section.

(2) The time of supply of services shall be the earliest of the following dates, namely:—

  • the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under sub-section (2) of section 31 or the date of receipt of payment, whichever is earlier; or
  • the date of provision of service, if the invoice is not issued within the period prescribed under sub-section (2) of section 31 or the date of receipt of payment, whichever is earlier; or
  • the date on which the recipient shows the receipt of services in his books of account, in a case where the provisions of clause (a) or clause (b) do not apply:

Provided that where the supplier of taxable service receives an amount up to one thousand rupees in excess of the amount indicated in the tax invoice, the time of supply to the extent of such excess amount shall, at the option of the said supplier, be the date of issue of invoice relating to such excess amount.

Explanation.––For the purposes of clauses (a) and (b)––

  1. the supply shall be deemed to have been made to the extent it is covered by the invoice or, as the case may be, the payment;
  2. “the date of receipt of payment” shall be the date on which the payment is entered in the books of account of the supplier or the date on which the payment is credited to his bank account, whichever is earlier.

Conclusion:

Rounding of tax shall be done at each time when liability to pay tax arises. Under the normal circumstances liability to pay tax arises at each time when an invoices is issue to the recipient and hence at each invoice level rounding off the tax needs to done and the aggregate tax liability for a tax period (which is on monthly basis) shall be paid within 20 days after the end of the particular month.

Aug 012017
 

Manner of taxation of transportation of goods under GST

Timely and smooth transportation of goods play an important role in supply chain distribution system of any economy. Effective cost of transportation is important for pricing of a product not only from the point of view of consumer but for the economy as a whole. Effective cost of transportation has direct and immediate impact on the price of a product as well as GDP of the country. Here, we will discuss the manner and rate of taxation of transportation of goods within India.

Transportation by road:

Transportation of goods by road may be done through GTA, on public vehicle, or via courier services. Transportation of goods by road within India is NIL rated in case goods transported falls under any one of the following category:

  1. Relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap;
  2. Defence or military equipments;
  3. Newspaper or magazines registered with the Registrar of Newspapers;
  4. Railway equipments or materials except when transported through GTA;
  5. Agricultural produce;
  6. Milk, salt and food grain including flours, pulses and rice; and
  7. Organic manure.

Transportation of goods through GTA is NIL rated in the following cases:

  1. goods, where consideration charged for the transportation of goods on a consignment transported in a single carriage does not exceed Rs 1500/-;
  2. goods, where consideration charged for transportation of all such goods for a single consignee does not exceed Rs 750/-;

The above rule may further be examined in the below table:

Carriage Consignment notes Consideration charges Effect
Single Single <= Rs 1500 No GST
Single Single > Rs 1500 GST
Single Multiple <= Rs 750 per consignee No GST for those consignment where consideration charges is less than Rs 750
Single Multiple but all are in the name of same person <= Rs 750 per consignee GST
In all other permutation GST will be payable.

Rate of GST

Mode of transportation Rate of GST
Courier 18% with ITC
Rail – when taken part of the space in a container 5% with ITC
Rail – when whole container taken on hire 12% with ITC
GTA 5% with no ITC

Jul 312017
 

Liability to pay GST on expense

As we all know that from 1st July 2017, GST is payable on sales made by trades, manufactures etc which hitherto paying taxes under existing laws. However, do we know that GST is also payable on expense incurred by the assessee. There we are discussing the related provisions in brief:

Section 9(4) of the act, as stated below, cast a liability on the purchaser of the goods and / or service to pay the GST:

(4) The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

(Similar provisions are inserted in respective state GST laws, IGST and UTGST laws)

Thus, the liability to pay GST is twofold as explained below:

Direct liability Indirect liability
Simple to understand that in case any supplies are made the supplier is liable to pay GST and get it recovered from the purchaser. Here, an attempt is made to recover the taxes from the purchaser in case supplier is not liable to pay the GST as his turnover is below Rs 20 lacs.

Caution to business owners

From now onwards, before booking any expenditure in the profit and loss account, accountant must go through the list of expenses and find out:-

  1. Whether GST is liable to be paid on the expenses under GST law?
  2. If yes, whether GST is paid by the supplier of goods and / or services?
  3. If GST is not paid, find out the HSN code and rate of GST based on the classification criteria of the goods and / or services received and consumed by the receiver registered person?
  4. Raise invoice on himself of the taxable amount and tax value of the respective goods?
  5. Pay the tax liability on the above tax invoice?
  6. Find out whether GST is paid above is also available as input tax credit (ITC) or goods and / or services falls under section 17(5)?
  7. In case goods / services under question falls under section 17(5) input tax credit will not be available irrespective of the fact that GST is paid by supplier or receiver?

Expenses not liable to GST under reverse charge mechanism

Expenses on which GST is not payable:

  1. Salary to staff
  2. Wages to staff
  3. Salary, interest on loan, commission etc to partners of the firm
  4. Electricity expense
  5. Petrol
  6. HSD
  7. Any payment of statutory dues
  8. Expenses upto Rs 5000 per day in aggregate for supplies from all unregistered taxable person in a single day.
Jul 282017
 

Service provided before GST and not concluded

Query?

How the transactions would be viewed legally as well as by the department which have commenced provision of service in June 2017 but the invoicing and the payment for the same are spilling over to July 2017 when the GST is effective?

Legal Provision:

Under Existing tax (i.e. Service Tax) Under GST regime
“Section 66B – Charge of service tax on and after Finance Act, 2012There shall be levied a tax (hereinafter referred to as the service tax) at the rate of fourteen per cent. on the value of all services, other than those services specified in the negative list, provided or agreed to be provided in the taxable territory by one person toanother and collected in such manner as may be prescribed.

 

SECTION 67A – Date of determination of rate of tax, value of taxable service and rate of exchange:

(1) The rate of service tax, value of a taxable service and rate of exchange, if any, shall be the rate of service tax or value of a taxable service or rate of exchange, as the case may be, in force or as applicable at the time when the taxable service has been provided or agreed to be provided.

 

Explanation. — For the purposes of this section, “rate of exchange” means the rate of exchange determined in accordance with such rules as may be prescribed].

 

When tax is payable under existing law:

Under the existing service tax regime tax is payable at the point of time determined by Point of Taxation Rules 2011 which is earlier of the following events:

a)    Date of invoice, if the same is issued within 30 days of completion of service, if not, the date of completion of the service;

b)    Receipt of advance to the extent of such advance or receipt of payment

Levy – Section 9 (1)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. 

Time of Supply 13

(2) The time of supply of services shall be the earliest of the following dates, namely:—

a)    The date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under sub-section (2) of section 31 or the date of receipt of payment, whichever is earlier; or

b)    The date of provision of service, if the invoice is not issued within the period prescribed under sub-section (2) of section 31 or the date of receipt of payment, whichever is earlier; or

c)     The date on which the recipient shows the receipt of services in his books of account, in a case where the provisions of clause (a) or clause (b) do not apply”

 

“Section 142(10) Save as otherwise provided in this Chapter, the goods or services or both supplied on or after the appointed day in pursuance of a contract entered into prior to the appointed day shall be liable to tax under the provisions of this Act.

 

Section 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”

 Examples & conclusion:

Particulars Service Provided Invoice raised Payment received Action
Case 1 Before June 30 Before June 30 Before June 30 Pay Service Tax
Case 2 Before June 30 Before June 30 After June 30 Pay Service Tax
Case 3 Before June 30 After June 30(Invoice raised within 30 days) After June 30 Always batter to pay service tax.
Case 4 Before June 30 After June 30(Invoice is not raised within 30 days) After June 30 Pay Service Tax
Case 4 After June 30 After June 30 After June 30 Pay GST

Jul 262017
 

Whether educational institutions are also liable to get registered under GST?

Are education institute are liable to be pay GST:

Rate of GST on services as prescribed by government under Sr. No. 69 is given below: of Services Rate

Sr. No. 69

Services provided -

a)    by an educational institution to its students, faculty and staff;
b)    to an educational institution, by way of,-
i.    transportation of students, faculty and staff;
ii.    catering, including any mid-day meals scheme sponsored by the Central Government, State Government or Union territory;
iii.    security or cleaning or house-keeping services performed in such educational institution;
iv.    services relating to admission to, or conduct of examination by, such institution; upto higher secondary:

Provided that nothing contained in entry (b) shall apply to an educational institution other than an institution providing services by way of pre-school education and education up to higher secondary school or equivalent.

Nil

Thus, as per above entry educational institution are not required to pay GST on their services provided to students.

Are educational institutions are required to obtained registration under GST?

As per section 22(1) of the act – Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees.

For ascertaining the liability to obtained registration two major conditions needs to be fulfilled:

(i)    For ascertaining place of registration – from where taxable supplies are being made.
(ii)    When liable to obtained registration – when aggregate turnover in a financial year exceeds Rs 20,00,000/-.

Section 23(1)(1) states that –  The following persons shall not be liable to registration, namely:-

Any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tax Act;

Taxable supplies:

Section 2(108) Taxable Supply  means a supply of goods or services or both which is leviable to tax under this act;

 As per section 9 services provided by educational institutions are leviable to tax and hence GST shall be levied on services are provided by educational institute at the rate notified by government which is NIL as mentioned above.

Aggregate turnover:

Section 2(6) AGGREGATE TURNOVER  means the aggregate value of:(i)            Taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis),(ii)           Exempt supplies,

(iii)          Exports of goods or services or both and

(iv)          Inter-State supplies of persons having the same Permanent Account Number,

To be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess;

Section 2(47) Exempt Supply means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under section 6 of the Integrated Goods and Services Tax Act, and includes non-taxable supply;
Section 2(78) Non-taxable supply” means a supply of goods or services or both which is not leviable to tax under this Act or under the Integrated Goods and Services Tax Act;

Since, services provided by educational institutions are exempted supply which are to be included in the included turnover for ascertaining the liability to obtained registration.

Conclusion:

In view of the above discussion the position of educational institutions may be summarized as below:

  1. In case educational institution is providing only educations services than such fees are chargeable at NIL rate and such educational institutions are not liable to get themselves registered.
  2. In case educational institutions are also providing other supplies, i.e., providing books to students, providing shoes and dress etc to students then in such cases such institutions are liable to get themselves registered.

Effect of registration:

  • Fee receipts shall be issued to students in the format prescribed under GST.
  • All expenses incurred by educational institutions needs to be scrutinized to see whether any liability to pay GST exist under section 9(4) as reverse charge mechanism taxpayer.
  • Monthly returns shall be filled all such educational institutions.
  • Input tax credit may be claimed for eligible expenses
  • Refund may be claimed for unutilized input tax credit.