GST in India The currently implemented indirect tax system in India is complex leading to inefficient tax collection and adversely affecting GDP growth. The introduction of MODVAT, then CENVAT and now VAT was India’s progress towards achieving an efficient system of taxation. Following VAT, GST in India will likely introduce tremendous improvement to the indirect [...]

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GST Advantages for Startups and Small Businesses The Goods and Services Tax (GST) – GST Bill was passed in Lok Sabha on 6th May, 2015. The concept of GST in India has been mooted and evolved for over a decade now. With the GST Bill passing the Lok Sabha, it is now slated to be presented to the [...]

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GST Return Filing The GST implementation in India is set to happen during 2016, overhauling the entire indirect taxation regime. The proposed GST would subsume levies like excise, VAT, service tax and other local levies, making the process for starting and managing a business easy in India (Know more about GST benefits). Just like present [...]

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GST Registration Procedure GST or Goods and Service Tax is a destination based tax, levied at the time of consumption of goods or services by the ultimate consumer. GST is similar to VAT, wherein the output tax is calculated and from it, the input tax is deducted to arrive at net tax. One of the major advantages of GST is that multiple levy of tax on good and services like sales tax, entry tax, octroi, central excise duty, etc., would be clubbed under a single GST. With the GST all set to be rolled out, we look at the procedure for obtaining GST registration in India. GST Registration Requirement Any person with a taxable supply turnover over Rs.25 lakhs would be required to register for GST in India. There is also a mechanism available for voluntary GST registration to help claim input tax credit. The term person under GST law includes proprietorship, partnership firms, Hindu Undivided Family, Company, LLP, Society and any other legal entity. GST registration must be obtained within 30 days of exceeding the Rs.25 lakh turnover limit. In case of those having existing service tax or VAT registration, procedure would be announced for migrating the VAT or Service Tax registration as a GST registration. GST Registration Number It is expected that GST registration would be provided based on PAN. Another major advantage of GST implementation is that the same GST registration number can be used in all states across India. Under the current VAT regimen governed by the State Governments, a VAT dealer must obtain VAT registration in each of the State, incurring additional cost and compliance formalities. Documents Required for GST Registration The following documents would be required to obtain GST registration: For Private Limited Company Certificate of Incorporation Memorandum of Articles Articles of Association PAN of the Company List of Directors Board Resolution Identity Proof of Directors Address Proof of Directors For Limited Liability Partnership Certificate of Incorporation LLP Agreement PAN of the LLP List of Partners Identity Proof of Partners Address Proof of Partners For Proprietorship PAN of the Proprietor Address Proof of the Proprietor Online GST Registration Procedure GST registration procedure would be online through a portal maintained by the Central Government or State Government. The applicant would have to submit an online application for GST registration using Form GST-1 along with detail of the good and services to be dealt. Online payment for the registration fee would be made available and temporary GST registration number would be provided on submission of application. On submission of the application, the applicant would have to print a copy of the application, attach the documents mentioned above and courier the same to the GST department. On verification of the application, final GST certificate would be issued by the concerned officer. GST registration procedure is expected to be a completely online process, similar to the service tax registration process.

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Taxable Person – Model GST Law The Model GST Law unveiled by the Finance Ministry in June, 2016 has defined the applicability of GST in India with definition for taxable person. In this article, we review the definition for taxable person under GST law. Taxable Person means a person who carries on any business at any place in India /State of ____ and who is registered or required to be registered under Schedule III of this Act: Provided that an agriculturist shall not be considered as a taxable person. Provided further that a person who is required to be registered under paragraph 1 of Schedule III of this Act shall not be considered as a taxable person until his aggregate turnover in a financial year exceeds [Rs ten lakh] Provided further that a person who is required to be registered under paragraph 1 of Schedule III of this Act shall not be considered as a taxable person until his aggregate turnover in a financial year exceeds [Rs five lakh] [This threshold of 5 lacs will apply only if a taxable person conducts his business in any of the NE States including Sikkim.] The Central Government, a State Government or any local authority shall be regarded as a taxable person in respect of activities or transactions in which they are engaged as public authorities other than the activities or transactions as specified in Schedule IV to this Act. The following persons shall not be considered as taxable persons for the purposes of this Act: any person who provides services as an employee to his employer in the course of, or in relation to his employment, or by any other legal ties creating the relationship of employer and employee as regards working conditions, remunerations and employer’s liability; any person engaged in the business of exclusively supplying goods and/or services that are not liable to tax under this Act; any person, liable to pay tax under sub-section (3) of section 7, receiving services of value not exceeding ______ rupees in a year for personal use, other than for use in the course or furtherance of his business.

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Time of Supply of Goods The Model GST Law unveiled by the Finance Ministry in June, 2016 has defined applicability of GST in India with definition for time of supply of goods. Its important to understand the concept of time of supply of goods to determine GST applicability. In this article, we review the definition for time of supply of goods under GST law. The liability to pay CGST/SGST on services shall arise at the time of supply, as determined in terms of the provisions of this section. The time of supply of services shall be:- the date of issue of invoice or the date of receipt of payment, whichever is earlier, if the invoice is issued within the prescribed period; or the date of completion of the provision of service or the date of receipt of payment, whichever is earlier, if the invoice is not issued within the prescribed period; 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 (b) do not apply. Explanation 1.- For the purposes of clauses (a) and (b), 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. Explanation 2.- For the purpose of clause (a) and (b) of sub-section (2), “the date of receipt of payment” shall be the date on which the payment is entered in the books of accounts of the supplier or the date on which the payment is credited to his bank account, whichever is earlier. In case of continuous supply of services, the time of supply shall be – where the due date of payment is ascertainable from the contract, the date on which the payment is liable to be made by the recipient of service, whether or not any invoice has been issued or any payment has been received by the supplier of service; where the due date of payment is not ascertainable from the contract, each such time when the supplier of service receives the payment, or issues an invoice, whichever is earlier; where the payment is linked to the completion of an event, the time of completion of that event; For the purposes of sub section (3) above, the Central or a State Government may on the recommendation of the Council, specify, by notification, the supply of services that shall be treated as continuous supply of services; In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earliest of the following dates, namely- the date of receipt of services, or the date on which the payment is made, or the date of receipt of invoice, or the date of debit in the books of accounts. Explanation.- For the purpose of clause (b) of sub-section (5), “the date on which the payment is made” shall be the date on which the payment is entered in the books of accounts of the recipient or the date on which the payment is debited in his bank account, whichever is earlier. In a case where the supply of services ceases under a contract before the completion of the supply, such services shall be deemed to have been provided at the time when the supply ceases. Where it is not possible to determine the time of supply of services in the manner specified in sub-sections (2), (3), (5) and (6), the time of supply shall in a case where a periodical return has to be filed, be the date on which such return is to be filed; or in any other case, be the date on which the CGST/SGST is paid.

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GST Registration – Model GST Law The Model GST Law unveiled by the Finance Ministry in June, 2016 has defined the applicability of GST in India with requirements for GST registration. In this article, we review the regulations concerning GST registration in India. For an easier guide, refer to the article on GST registration requirement. GST Registration Every person who is liable to be registered under Schedule III of this Act shall apply for registration in every such State in which he is so liable within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed: Provided that if the person, other than an Input Service Distributor, is registered under an earlier law, it shall not be necessary for him to apply for fresh registration under this section and he shall follow the procedure as may be prescribed in this behalf. Notwithstanding anything contained in sub-section (1), a person having multiple business verticals in a State may obtain a separate registration for each business vertical, subject to such conditions as may be prescribed. A person, though not liable to be registered under Schedule III, may get himself registered voluntarily, and all provisions of this Act, as are applicable to a registered taxable person, shall apply to such person. Every person shall have a Permanent Account Number issued under the Income Tax Act, 1961 (43 of 1961) in order to be eligible for grant of registration under subsection (1), (2) or (3). Notwithstanding anything contained in sub-section (4), a non-resident taxable person may be granted registration under sub-section (1) on the basis of any other document as may be prescribed. Where a person who is liable to be registered under this Act fails to obtain registration, the proper officer may, without prejudice to any action that is, or may be taken under this Act, or under any other law for the time being in force, proceed to register such person in the manner as may be prescribed. Notwithstanding anything contained in sub-section (1), any specialized agency of the United Nations Organization or any Multilateral Financial Institution and Organization notified under the United Nations (Privileges and Immunities) Act, 1947 (46 of 1947), Consulate or Embassy of foreign countries and any other person or class of persons as may be notified by the Board / Commissioner, shall obtain a Unique Identity Number, in the manner prescribed, for the purpose(s) notified, including refund of taxes on the notified supplies of goods and/or services received by them. The registration or the Unique Identity Number, shall be granted or, as the case may be, rejected after due verification in the manner and within such period as may be prescribed. The proper officer shall not reject the application for registration or the Unique Identity Number without giving a notice to show cause and without giving the person a reasonable opportunity of being heard. A certificate of registration shall be issued in the prescribed form, with effective date as may be prescribed. A registration or an Unique Identity Number shall be deemed to have been granted after the period prescribed under sub-section (7), if no deficiency has been communicated to the applicant by the proper officer within that period. Notwithstanding anything contained in sub-section (7), any rejection of application for registration or the Unique Identity Number under the CGST Act / SGST Act shall be deemed to be a rejection of application for registration under the SGST Act / CGST Act. The grant of registration or the Unique Identity Number under the CGST Act / SGST Act shall be deemed to be a grant of registration or the Unique Identity Number under the SGST/CGST Act provided that the application for registration or the Unique Identity Number has not been rejected under SGST/CGST Act within the time specified in subsection (7). The Central or a State Government may, on the recommendation of the Council, by notification, specify the category of persons who may be exempted from obtaining registration under this Act. Special provisions relating to casual taxable person and non-resident taxable person The certificate of registration issued to a casual taxable person or a non-resident taxable person shall be valid for a period of ninety days from the effective date of registration. Provided that the proper officer may, at the request of the said taxable person, extend the aforesaid period of ninety days by a further period not exceeding ninety days. Notwithstanding anything to the contrary contained in this Act, a casual taxable person or a non-resident taxable person shall, at the time of submission of application for registration under sub-section (1) of section 19, make an advance deposit of tax in an amount equivalent to the estimated tax liability of such person for the period for which the registration is sought: Provided that where any extension of time is sought under sub-section (1), such taxable person shall deposit an additional amount of tax equivalent to the estimated tax liability of such person for the period for which the extension is sought. The amount deposited under sub-section (2) shall be credited to the electronic cash ledger of such person and shall be utilized in the manner provided under section 35. Schedule III – Liability to be Registered under GST Every supplier shall be liable to be registered under this Act in the State from where he makes a taxable supply of goods and/or services if his aggregate turnover in a financial year exceeds [Rs nine lakh] Every supplier shall be liable to be registered under this Act in the State from where he makes a taxable supply of goods and/or services if his aggregate turnover in a financial year exceeds [Rs. four lakh]: [This threshold of four lakh will apply only if the taxable person conducts his business in any of the NE States including Sikkim.] Provided that the supplier shall not be liable to registration if his aggregate turnover consists of only goods and/or services which are not liable to tax under this Act. Explanation 1.- The taxable threshold shall include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals. Explanation 2.- The supply of goods, after completion of job-work, by a registered jobworker shall be treated as the supply of goods by the “principal” referred to in section 43A, and the value of such goods shall not be included in the aggregate turnover of the registered job worker. Subject to the provisions of paragraph 1, every person who, on the day immediately preceding the appointed day, is registered or holds a license under an earlier law, shall be liable to be registered under this Act with effect from the appointed day. Where a business carried on by a taxable person registered under this Act is transferred, whether on account of succession or otherwise, to another person as a going concern, the transferee, or the successor, as the case may be, shall be liable to be registered with effect from the date of such transfer or succession. Notwithstanding anything contained in paragraph 1 and 2 above, in a case of transfer pursuant to sanction of a scheme or an arrangement for amalgamation or, as the case may be, de-merger of two or more companies by an order of a High Court, the transferee shall be liable to be registered, where required, with effect from the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High Court. Notwithstanding anything contained in paragraph 1 and 2 above, the following categories of persons shall be required to be registered under this Act: persons making any inter-State taxable supply, irrespective of the threshold specified under paragraph 1; casual taxable persons, irrespective of the threshold specified under paragraph 1; persons who are required to pay tax under reverse charge, irrespective of the threshold specified under paragraph 1; non-resident taxable persons, irrespective of the threshold specified under paragraph 1; persons who are required to deduct tax under section 37; persons who supply goods and/or services on behalf of other registered taxable persons whether as an agent or otherwise, irrespective of the threshold specified under paragraph 1; input service distributor; persons who supply goods and/or services, other than branded services, through electronic commerce operator, irrespective of the threshold specified in paragraph 1; every electronic commerce operator, irrespective of the threshold specified in paragraph 1; an aggregator who supplies services under his brand name or his trade name, irrespective of the threshold specified in paragraph 1; and such other person or class of persons as may be notified by the Central Government or a State Government on the recommendations of the Council.

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Advantages of GST in India The Goods and Service Tax (GST) which is to be implemented in India is one of the biggest tax reforms, expected to spur economic growth in India and boost exports. In an ideal scenario, all credits of taxes paid on purchase or receipt of inputs, input services and capital goods are allowed for set-off against the tax payable on subsequent supply of goods or services. Hence, GST is a destination based tax, levied at a single point at the time of consumption of goods or service by the ultimate consumer. In this article, we look at some of the major advantages of GST implementation in India. The Central and State Government would benefit from increase in tax collection due to the widening of tax base and coverage of taxable supply of goods / service. Multiple taxes on goods and services in existence now would be abolished or subsumed into GST, making compliance easy. As GST compliance is expected to be easier, voluntary compliance by businesses with GST is expected to increase – widening the tax base. GST would create a common market across India and reduce compliance costs. GST implementation would standardise the procedure for GST registration, GST return filing and GST payment across India. GST would improve manufacturing and distribution efficiency by removing the cascading effect of taxation. GST would reduce cost of production of goods / services and increase demand for production of goods / services. GST is expected to reduce tax litigations , thereby allowing the Entrepreneurs to focus more on business. GST is expected to reduce corruption in the system by reducing litigation, centralisation and reduction of discretionary powers with Government officials. GST would provide India with a competitive edge in international market, leading to increased exports. Increase in tax base and equality of tax treatment on goods or services is expected to increase tax revenues for the Government. GST would reduce tax administration cost, improve transparency and boost efficiency. GST is expected to help bring down the inflation and fiscal deficit in the medium term. Tax on imported goods is expected to be reduced by 5 – 10%. GST implementation is expected to make the process for obtaining tax registration easy and online. GST implementation is expected to provide a fillip to foreign direct investment in India due to improvement in ease of doing business. For more information, you can also refer to an earlier article on the advantages of GST implementation in India.

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GST Registration Requirement The Model GST Law unveiled by the Finance Ministry in June, 2016 has defined the applicability of GST in India with definition for taxable person. In this article, we review the definition for taxable person under GST law and GST registration requirement in India.   When GST Registration is Required? GST registration is required for any person or entity carrying on business at any pace in India with an aggregate turnover (goods and services) of over Rs.9 lakhs in a financial year. Persons or entities in North East states including Sikkim are required to obtain GST registration when taxable supply of goods and services exceeds Rs.4 lakhs in year.Agriculturists are not required to obtain GST registration in India.  Application for GST registration must be submitted to the concerned State government within 30 days of becoming liable to obtain GST registration. Those having existing VAT or Service Tax registration would not have to obtain fresh GST registration. Instead, separate procedures have to be followed by those having existing tax registrations to be registered under GST. The following types of persons or entities are mandatorily required to obtain GST registration irrespective of turnover: Persons making any inter-State taxable supply, irrespective of the threshold Casual taxable persons, irrespective of the threshold Persons who are required to pay tax under reverse charge, irrespective of the threshold Non-resident taxable persons, irrespective of the threshold Persons who are required to deduct tax Persons who supply goods and/or services on behalf of other registered taxable persons whether as an agent or otherwise, irrespective of the threshold Input service distributor Persons who supply goods and/or services, other than branded services, through electronic commerce operator, irrespective of the threshold Every electronic commerce operator, irrespective of the threshold Aggregator who supplies services under his brand name or his trade name, irrespective of the threshold Other person or class of persons as may be notified by the Central Government or a State Government on the recommendations of the Council.

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Tax Invoice – Under Indian GST Under GST, the value of a supply of goods and/or services would be the price actually paid or payable for the said supply of goods and/or services. It is important for the the supplier and the recipient of the supply to be independent of each other, the price is the sole consideration for the supply and is the fair market value for such goods and/or service. Issuing Invoice A registered taxable person under GST supplying goods or service is required to issue a tax invoice at the time of supply of goods and/or service. Tax invoice under GST must mention the details of the supplier and recipient, the description, quantity and value of goods, the tax charged and any other particulars as may be required. Further, where any supply is made for a consideration, every person who is liable to pay tax for such supply is required to prominently indicate in all documents relating to assessment, tax invoice and other like documents, the amount of tax which will form part of the price at which such supply is made. After issue of invoice at the time of supply, a registered taxable person can issue a revised tax invoice against the invoice already issued. Read more about creating an invoice. Bill of Supply In case a registered taxable person is supplying non-taxable goods and/or services. then a bill of supply containing details like description and quantity of goods can be provided instead of a tax invoice. Credit Note In case a tax invoice has been issued for supply of any goods and/or services and the taxable value and/or tax charged in that tax invoice is found to exceed the taxable value and/or tax payable, then the taxable person, who has supplied such goods and/or services, can issue to the recipient a credit note before the 30th of September following the end of the financial year in which such supply was made, or the date of filing of the relevant annual return, whichever is earlier. Debit Note If a tax invoice has been issued for supply of any goods and/or services and the taxable value and/or tax charged in that tax invoice is found to be less than the taxable value and/or tax payable, then the taxable person, who has supplied such goods and/or services, can issue to the recipient a debit note. Debit note must be issued on or before the 30th of September following the end of the financial year in which such supply was made, or the date of filing of the relevant annual return, whichever is earlier. Adjustment for Credit and Debit Note A registered taxable person who issues or receives a credit or debit note in relation to a supply of goods and/or services should declare the details of such credit or debit note, in the return for the month during which such credit or debit note has been issued or received or in the return for any subsequent month but not later than September following the end of financial year in which such supply was made, or the date of filing of the relevant annual return, whichever is earlier. Based on the declaration of all credit and debit notes, the tax liability would be adjusted.

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Supply of Goods – Under Indian GST Under GST, supply includes all forms of supply of goods and/or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. In this article, we look at the applicability of GST on supply of goods. Supply of Goods The liability to pay Central GST or State GST on the goods arises at the earliest of the following dates: The date on which the goods are removed by the supplier for supply to the recipient, in a case where the goods are required to be removed or The date on which the goods are made available to the recipient, in a case where the goods are not required to be removed; or The date on which the supplier issues the invoice with respect to the supply; or The date on which the supplier receives the payment with respect to the supply; or The date on which the recipient shows the receipt of the goods in his books of account. In case of supply of goods where the goods are physically not capable of being moved like goods supplied in assembled or installed form, applicability of GST would arise on the goods being made available to the recipient or at the disposal of the recipient. Continuous Supply of Goods In case of continuous supply of goods, where successive statements of accounts or successive payments are involved, time of supply under GST would be the date of expiry of the period to which such successive statements of accounts or successive payments relate. If there are no successive statements of account, then the date of issue of the invoice (or any other document) or the date of receipt of payment, whichever is earlier, would be the time of supply. Further, in case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earliest of the following dates: The date of the receipt of goods, or The date on which the payment is made, or The date of receipt of invoice, or The date of debit in the books of accounts. The date on which the payment is made is the date on which the payment is entered in the books of accounts of the recipient or the date on which the payment is debited in his bank account, whichever is earlier. Also, if the goods (being sent or taken on approval or sale or return or similar terms) are removed before it is known whether a supply will take place, the time of supply shall be at the time when it becomes known that the supply has taken place or six months from the date of removal, whichever is earlier. In case it is not possible to determine the time of supply as above, then time of supply of goods would be the time where a periodical return has to be filed, be the date on which such return is to be filed, or the date on which the CGST/SGST is paid.

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Supply of Service – Under Indian GST Under GST, supply includes all forms of supply of goods and/or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. In this article, we look at the applicability of GST on supply of service. Supply of Service The liability to pay Central GST or State GST on services would arise at the time of supply. As per GST regulations, the time of supply of services shall be: The date of issue of invoice or the date of receipt of payment, whichever is earlier, if the invoice is issued within the prescribed period; The date of completion of the provision of service or the date of receipt of payment, whichever is earlier, if the invoice is not issued within the prescribed period; 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 (b) do not apply. Under GST, the supply would be deemed to have been made to the extent it is covered by the invoice or, as the case may be, the payment. Further, the date of receipt of payment would be the date on which the payment is entered in the books of accounts of the supplier or the date on which the payment is credited to his bank account, whichever is earlier. Continuous Supply of Service In case of continuous supply of services, the time of supply shall be: Where the due date of payment is ascertainable from the contract, the date on which the payment is liable to be made by the recipient of service, whether or not any invoice has been issued or any payment has been received by the supplier of service; Where the due date of payment is not ascertainable from the contract, each such time when the supplier of service receives the payment, or issues an invoice, whichever is earlier; Where the payment is linked to the completion of an event, the time of completion of that event; In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earliest of the following dates, namely: The date of receipt of services, or The date on which the payment is made, or The date of receipt of invoice, or The date of debit in the books of accounts. If it is not possible to determine the time of supply of services, then the time of supply would be when a periodical GST return has to be filed or the date on which the Central GST or State GST is paid.

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  Centralised Registration in Central Excise for Jewellery     In order to make more inclusive the taxation process and progress towards Goods and Services Tax in the year 2017, the Finance Minister Arun Jaitley has planned a levy of excise duty at the rate of 1% devoid of input tax credit and 12.5 % with input tax credit on articles of jewellery exclusive of silver jewellery, other than studded with diamonds/other precious stones. Nevertheless, a jewellery manufacturer will be appropriate for exemption from excise duty on first clearances up to Rs. 6 crore for the duration of a financial year, if his total domestic clearance during the preceding financial year was found to be lesser than Rs.12 crore. There is some conflict amongst the jewellers against the new proposal offered. In a proposal to calm down jewellers with Single/Centralised Registration in Central Excise for Jewellery, the CBEC promised zero physical interfaces with tax officials, trouble free registration etc. The Government has also determined to comprise a subcommittee of the High level committee to learn the issues in this regard. It has further been asserted that the move is intended at including gold jewellery within the tax net in the process of Centralised Registration, in preparation of the goods and service tax regime (GST) and monitoring of black money were the only elements of the reason. Whether particulars of all the premises (including that of job work) required to be given in the application for Centralised registration in Central Excise for Jewellery? Manufacturer choosing centralised registration is made essential to supply details of all the premises where manufacturing activities are performed. Nevertheless, details of job worker premise are not necessary to be given. Is Centralised registration allowed when the assessee has numerous manufacturing units? A notification allowing for a voluntary centralized central excise registration for Jewellery manufacturers with central billing or accounting system is being issued under the Rule 9(2) of the Central Excise Rules created in the year 2002.  The manufacturer having a centralised billing or accounting system could choose registering only the factory or premises or office, from where such centralised billing or accounting is completed and where the accounts/records mentioning receipts of raw materials and finished excisable goods produced or received back from job workers are retained. In the occurrence of a Manufacturer obtaining centralised registration at his showroom, is it deemed essential to bring the goods to the showroom from the workshops on the basis of excise invoice? The workshops are locations of manufacture i.e. factory. The showroom i.e. centralised registered place is the single place of removal. Consequently, the goods should shift from the place of manufacture (workshop) to place of registration (showroom) on the basis of excise invoice. The invoice shall be increased from registered premise and transferred to workshop to go along with the goods during the process of physical movement. What is the alternative to centralized registration? Manufacturer may acquire separate registration for each and every of his workshops (factories) as an alternative to obtaining centralised registration. Which option is better, that of centralised registration or separate registration? It is dependent upon the business model being pursued by the manufacturer. In a broad spectrum, it could be recommended to make one of the workshops at the nodal workshop where all the records are maintained. This could not insist on the requirement to take the process of registration at showroom which may be utilised completely for trading of goods received from the workshops along with goods bought from others for the purpose of trading. The showroom may be registered as Input Service Distributor to give out the credits on the input services to the workshops.

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How to Get GST Registration Online? The much anticipated GST is set to be rolled out next year, tremendously improving the ease of doing business in India for millions and millions of SMEs in India. By abolishing or subsuming multiple taxes into a single system, tax compliance complexities would be reduced and the number of tax payers would increase substantially. In this article, we look at the procedure for obtaining GST registration online in India. GST Registration Eligibility Entities who buy or sell goods, provide services or both are required to obtain GST registration. An entity without GST registration cannot collect GST from customers or claim input tax credit of GST paid. Further, GST registration is mandatory once a dealer crosses the minimum threshold or he starts a new business having plans to exceed the prescribed threshold. GST Turnover Criteria The Goods & Services Tax (GST) Council has announced that businesses in the Northeastern and hill states with annual turnover below Rs.10 lakh would not require GST registration, while the threshold for GST registration exemption in rest of India would be an annual turnover of Rs.20 lakh. Eligible entities must file GST registration application within 30 days from the date of the dealer‟s liability for obtaining GST registration. Note: any person or entity not liable to obtain GST registration can also voluntarily obtain GST registration for taking input credit.  Documents Required for GST Registration As per the GST rules, all entities applying for GST registration must have a valid PAN card. In addition to the PAN of the entity, the following information and documents would be required: Promoter Information In case of Proprietorship: Details of Owner/Proprietor In case of Partnership: Details of all Managing/ Authorized Partners (personal details of all partners but photos of only ten partners including that of Managing Partner is to be submitted) In case of Companies registered under Companies Act: Managing Director and whole time directors In case of HUF: Details of Karta of HUF In case of Trust: Details of Managing Trustee In case of Association of Persons: Details of Members of Managing Committee(personal details of all members but photos of only ten members including that of Chairman is to be submitted) In case of Local Authority: Details of CEO or equivalent In case of Statutory Body: Details of CEO or equivalent In case of others: Details of person responsible for day to day affairs of the business Business Registration  Documents In case of Companies or LLPs, the GST network would strive for online verification of Company Identification Number (CIN) from MCA21 portal. Partnership Deed should be submitted in case of Partnership Firm. Registration Certificate in case of other entities like Society, Trust etc. which are not captured in PAN. PAN in the name of the Promoter case of Proprietorship firms. Business Address Proof In case of Own premises – any document in support of the ownership of the premises like Latest Tax Paid Receipt or Municipal Khata copy or Electricity Bill copy In case of Rented or Leased premises – a copy of the valid Rent / Lease Agreement with any document in support of the ownership of the premises of the Lessor like Latest Tax Paid Receipt or Municipal Khata copy or Electricity Bill copy In case of premises obtained from others, other than by way of Lease or Rent – a copy of the Consent Letter with any document in support of the ownership of the premises of the Consenter like Municipal Khata copy or Electricity Bill copy Customer ID or account ID of the owner of the property in the record of electricity providing company, wherever available should be sought for address verification Bank Account Details Opening page of the Bank Passbook held in the name of the Proprietor / Business Concern – containing the Account No., Name of the Account Holder, MICR and IFS Codes and Branch details. Authorisation Letter Letter of Authorisation or copy of Resolution of the Managing Committee or Board of Directors to that effect empowering the person to apply for GST registration. Photograph Proprietary Concern – Proprietor Partnership Firm / LLP – Managing/ Authorized Partners (personal details of all partners is to be submitted but photos of only ten partners including that of Managing Partner is to be submitted) HUF – Karta Company – Managing Director or the Authorised Person Trust – Managing Trustee Association of Person or Body of Individual –Members of Managing Committee (personal details of all members is to be submitted but photos of only ten members including that of Chairman is to be submitted) Local Body – CEO or his equivalent Statutory Body – CEO or his equivalent Others – Person in Charge Online GST Registration Application Procedure The GST portal during the GST registration application process would complete preliminary verification or validation of PAN information with the CBDT portal, Aadhaar validation with UIDAI and CIN verification with the MCA portal. On completion of the application form, the tax payer would need to digitally sign the GST registration application using a class II digital signature or print and send a signed copy of the summary extract to the GST central processing center. After receiving the digitally signed document or signed copy document,  the GST registration application form is sent to the concerned State authorities (based on the location of the applicant) for processing. On receipt of application in their respective system, the Centre / State authorities would forward the application to jurisdictional officers who examines the uploaded application documents and respond back to the common portal within 3 common working days. If the information and the uploaded documents are found in order, the State and the Central authorities would approve the application and communicate the approval to the common portal within 3 common working days. The portal will then automatically generate the Registration Certificate for the GST registration applicant. To know more about obtaining a GST registration in India, contact an IndiaFilings Business Advisor.

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Decoding the GST Registration Number The transition to GST Registration has started in India, with existing VAT and service tax registration holders being allotted GST Registration number to harmonise the two major indirect tax codes. In this article, we look at the meaning behind a GST registration number. GST Registration Number GST Registration number is a 15 digit identification that is allotted each taxpayer based on PAN and State of the applicant. In a GST registration number, the first two digits represents the State Code, followed by the next 10 digits representing the PAN of the applicant, one digit representing entity code, one digit is left blank and the last digit is a check digit.  State Code in GST Number The first two digits representing the state code are as per the 2011 Indian Census. Hence, the state code in the GST registration number represent the following states: 01 – Jammu & Kashmir 02 – Himachal Pradesh 03 – Punjab 04 – Chandigarh 05 – Uttranchal 06 – Haryana 07 – Delhi 08 – Rajasthan 09 – Uttar Pradesh 10 – Bihar 11 – Sikkim 12 – Arunachal Pradesh 13 – Nagaland 14 – Manipur 15 – Mizoram 16 – Tripura 17 – Meghalaya 18 – Assam 19 – West Bengal 20 – Jharkhand 21 – Orissa 22 – Chhattisgarh 23 – Madhya Pradesh 24 – Gujarat 25 – Daman & Diu 26 – Dadra & Nagar Haveli 27 – Maharashtra 28 – Andhra Pradesh 29 – Karnataka 30 – Goa 31 – Lakshdweep 32 – Kerala 33 – Tamil Nadu 34 – Pondicherry 35 – Andaman & Nicobar Islands PAN in GST Digits 3 – 12 represent the PAN of the entity, so that there is a connection between the GST and the PAN database. Entity Code 13th digit is alpha-numeric (1-9 and then A-Z) and is assigned based on the number of registrations a legal entity (having the same PAN) has within one State. For example, a legal entity with single registration within a State would have number 1 as 13th digit of the GSTIN. If the same legal entity goes for a second registration for a second business vertical in the same State, the 13th digit of GSTIN assigned to this second entity would be 2. Hence, a legal entity can register upto 35 business verticals within a State. Last Digits of GSTIN Of the last two digits of the GSTIN, the first digit is kept blank for future use and the last digit is used as a check digit. Know more about the procedure for obtaining GST registration online.

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Advantages of GST in India The Goods and Service Tax (GST) which is to be implemented in India is one of the biggest tax reforms, expected to spur economic growth in India and boost exports. In an ideal scenario, all credits of taxes paid on purchase or receipt of inputs, input services and capital goods are allowed for set-off against the tax payable on subsequent supply of goods or services. Hence, GST is a destination based tax, levied at a single point at the time of consumption of goods or service by the ultimate consumer. In this article, we look at some of the major advantages of GST implementation in India. The Central and State Government would benefit from increase in tax collection due to the widening of tax base and coverage of taxable supply of goods / service. Multiple taxes on goods and services in existence now would be abolished or subsumed into GST, making compliance easy. As GST compliance is expected to be easier, voluntary compliance by businesses with GST is expected to increase – widening the tax base. GST would create a common market across India and reduce compliance costs. GST implementation would standardise the procedure for GST registration, GST return filing and GST payment across India. GST would improve manufacturing and distribution efficiency by removing the cascading effect of taxation. GST would reduce cost of production of goods / services and increase demand for production of goods / services. GST is expected to reduce tax litigations , thereby allowing the Entrepreneurs to focus more on business. GST is expected to reduce corruption in the system by reducing litigation, centralisation and reduction of discretionary powers with Government officials. GST would provide India with a competitive edge in international market, leading to increased exports. Increase in tax base and equality of tax treatment on goods or services is expected to increase tax revenues for the Government. GST would reduce tax administration cost, improve transparency and boost efficiency. GST is expected to help bring down the inflation and fiscal deficit in the medium term. Tax on imported goods is expected to be reduced by 5 – 10%. GST implementation is expected to make the process for obtaining tax registration easy and online. GST implementation is expected to provide a fillip to foreign direct investment in India due to improvement in ease of doing business. For more information, you can also refer to an earlier article on the advantages of GST implementation in India.

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GST Registration Requirement The Model GST Law unveiled by the Finance Ministry in June, 2016 has defined the applicability of GST in India with definition for taxable person. In this article, we review the definition for taxable person under GST law and GST registration requirement in India.   When GST Registration is Required? GST registration is required for any person or entity carrying on business at any pace in India with an aggregate turnover (goods and services) of over Rs.9 lakhs in a financial year. Persons or entities in North East states including Sikkim are required to obtain GST registration when taxable supply of goods and services exceeds Rs.4 lakhs in year.Agriculturists are not required to obtain GST registration in India.  Application for GST registration must be submitted to the concerned State government within 30 days of becoming liable to obtain GST registration. Those having existing VAT or Service Tax registration would not have to obtain fresh GST registration. Instead, separate procedures have to be followed by those having existing tax registrations to be registered under GST. The following types of persons or entities are mandatorily required to obtain GST registration irrespective of turnover: Persons making any inter-State taxable supply, irrespective of the threshold Casual taxable persons, irrespective of the threshold Persons who are required to pay tax under reverse charge, irrespective of the threshold Non-resident taxable persons, irrespective of the threshold Persons who are required to deduct tax Persons who supply goods and/or services on behalf of other registered taxable persons whether as an agent or otherwise, irrespective of the threshold Input service distributor Persons who supply goods and/or services, other than branded services, through electronic commerce operator, irrespective of the threshold Every electronic commerce operator, irrespective of the threshold Aggregator who supplies services under his brand name or his trade name, irrespective of the threshold Other person or class of persons as may be notified by the Central Government or a State Government on the recommendations of the Council.

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GST Accounting and Compliance GST rollout will not be just a simple introduction of a new tax. GST implementation will have deep and far reaching consequences on the operations of a business – requiring a total overhaul of the business, finance, financial reporting and accounting systems.  As management teams start evaluating these changes, they will also require factoring in changes in financial reporting as well as indirect tax accounting. In this article, we look at some of the major GST accounting and compliance changes expected on GST rollout in India. Annual Revenue There might be changes to the methodology for computing annual on implementation of GST. revenue. Under IND AS, excise duty is incorporated in revenue, since it is a production-based tax. Sales tax and VAT is not incorporated in revenue, since it is levied at the time of sales. GST is considered a destination-based tax, which is levied at the point of supply. Hence, GST would not be presented as a part of revenue. As currently excise duty is incorporated in revenue, there might be some volatility in the reported revenue number – even though from an economic viewpoint no important change in operations has happened. Tax Credit GST could bring significant benefits to organizations by way of tax credit. Currently, organizations do not get tax credit for indirect taxes like luxury tax, Octroi, Entry tax or CST. On transition to GST, since these taxes will be subsumed into GST, organizations maybe eligible for tax credit. Hence, transition to GST will necessitate companies to reconfigure their inventory valuation or asset capitalization or expense recording rules in their accounting system to guarantee tax credits are accounted and utilized. GST Registration and Filing Transition to GST will require migrating existing service tax, VAT and central excise registrations to GST registration. The process for migration of existing tax registrations to GST has already begun. Hence, accounting professionals and personnel need to be aware of the GST implementation timeline in each of the state and ensure they are GST ready. Further, GST payments and return filings are expected to be state wise.  Hence, organizations must devise an appropriate system in place, make necessary changes to the accounting system and plan for well-timed state-wise reconciliations of periodic GST filings in various states, with the amount recorded in the books of accounts. Companies, which comprise excise as a part of sales for their internal reporting or MIS, may have to redesign the MIS post-GST transition and reflect on the consequent impact.   Maintaining Account A key area that would require major changes on implementation of GST is the Chart of Accounts (COA) used for maintaining book of accounts. Currently, there are quite a few indirect taxes and many tax-related general ledger (GL) codes in the the chart of Accounts utilized for financial reporting. In a GST regime, the new COA will depend on the category of business, rules related to availing of credit and place of supply etc. Nevertheless, under GST, the necessary tax codes would reduce and make accounting simpler, going forward.  Transitioning to GST  Organizations both big and small must plan well in advance for GST implementation. GST implementation by the Government will have major impact on various areas like accounting process, financial statement preparation, GST compliance filing and more. Further, GST implementation could also result in potential write off of tax credits accumulated in particular states and not probable to be set off.  Hence, its best to engage an expert for understanding the impact on GST implementation on the business and being taking steps to make the change process easier.

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GST Migration Procedure Goods and Services tax (GST) that is often known as a historic reform is now around the corner. After president Pranab Mukherjee gave his agreement on September 8, 2016, the Government is firing on all cylinders to put into practice GST by April 1, 2017.  Nevertheless, the gexecution will be little early for the existing tax payers. The existing taxpayers will have to register themselves under the GST very soon. Parliament’s approval to GST will boost GDP. The article reports the eligibility for GST Migration Procedure, process for enrolment under GST Portal and important points related to GST Migration. Eligibility for GST Migration Procedure Existing taxpayers are legally responsible to register under GST system portal. An existing taxpayer is an entity registered with every of the authorities; Central Excise Service Tax State sales tax or VAT (except for exclusive liquor dealers) Entry tax Luxury Tax Entertainment tax Additional enrolment here means validating the data of current taxpayers and filing up the remaining key fields. Process for enrolment under GST System Portal Paperless procedure: The complete system of enrolment will be paperless; consequently, no hard copies will be entertained by the department. Additionally, all the aforementioned registered taxpayers will need to visit the GST system portal. Further, it is compulsory for every person to register if the annual turnover is greater than Rs 20 lakh which is the GST exemption limit for registration. Obtain Provisional ID Prior to visiting the GST system portal to being the migration procedure, you must have the provisional ID and password given to you by your related state authorities. In case you do not have a provisional ID, you can contact the ward officer for the same.  Online GST Registration If you possess a provisional ID and password, you can complete the GST migration procedure with the following additional information: Valid email address Valid mobile number Bank account number IFSC code Documents Required for GST Migration and Registration You must submit the following documents for GST migration Proof of constitution of business In case of partnership deed – partnership deed In case of LLP – Certificate of Incorporation and Partnership Deed In case of Company – Certificate of Incorporation Passport photo of the Promoters or Partners Proof of appointment of authorized signatory Photograph of authorized signatory  Opening page of passbook or statement with the following information: Bank account number Branch Address Address of account holder Few transaction details GST Migration Acknolodgement Number After submitting the form on the GST portal with all the information and documents, an acknowledgement number is generated. The acknolodgement number must be saved for all future correspondences. Current Status of GST Migration The Commercial Taxes Department of each State have fixed a due date for GST migration and have began the validation of PAN data of the dealers and communicated the provisional ID and password for GST migration. Traders in some of the States who have enrolled themselves with the portal have been given a GSTN number. (Know the meaning of GSTN Number) The Commercial Taxes Department will soon be enabling Aadhaar based e-signature to digitally sign documents on the GST portal. After the launch of the GST portal, the Department has organized special camps at major locations for GST registration and migration. 

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Online Process for GST Enrolment Existing Taxpayers of VAT, Service Tax, and Central Excise can enroll themselves on the GST portal. In this article, we look at the online process for GST enrolment.  GST Pre-Registration GST pre-migration has started for about 65 Lakhs VAT registration holders, 20 lakhs service tax registration holders and around 3 lakhs central excise tax registration holders. The combined 85 to 90 lakh existing tax payers are expected to migrate to the GST system before rollout of the GST and beginning of process for new GST registrations. Further, provisional identification number have been provided for all existing VAT, service tax and central excise registration holders to complete the migration to GST.  GST Registration – Authorized Signatory To complete the GST registration formalities, a primary authorised signatory must be designated by the business. Te primary authorized signatory is the person who is mainly responsible to perform action on the GST System Portal on behalf of the taxpayer. All communication from the GST Portal related to taxpayer will be sent to the authorised signatory.    How to Enrol on GST Portal The following steps can be followed to obtain GST registration: Step 1: Obtain Provision ID To enrol on GST portal, existing VAT or service tax registration holders must first obtain a provisional ID provided from the tax department. Provisional ID is provided to all holders of VAT or service tax who have TIN numbers with validated PAN data. The details of provision ID is made available through the particular State VAT departments VAT portal or ACES portal for service tax registration holders. Step 2: Generate GST User ID & Password Once the provisional ID is available along with the temporary password, current assessee’s can access the GST portal and generate a new GST user id and password. While obtaining the new GST user id and password, the applicant must also provide the latest email ID and mobile number. Step 3: Email and Mobile Verification A one-time password (OTP) is sent to the applicant on the stated email ID and mobile number. After OTP verification, the applicant is allowed to create new login ID (username) and password for logging into the GST portal in future. To finish the process, the applicant must provide additional information to generate credentials which can be utilized for regaining the account access in the event of loss of password. Step 4: Furnish Business Information After the username and password is setup, the applicant must submit various details about the business like business details, details of partner or promoters, details of authorized signatory, principal place of business and additional place of business, goods and services, bank account, verification of details, etc. The required information along with documents can be uploaded to the GST portal. The application then must be signed electronically by the authorized person utilizing a class 2 digital signature. On successful submission, exclusive application reference number (ARN) will be generated and the equivalent will be intimated on registered email ID and mobile number. Step 5: GST Allotment On processing of the application, GSTIN is allotted to the applicant. GSTIN is a 15 digit Number, of which first two digit will be State Code, next 10 digit shall be PAN, 13th digit will be entity code in the event of more than one registration in the single state, the 14th digit will be maintained blank for future usage and 15th digit will be a check digit. (Know more about Decoding GSTIN).

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