Items Not Eligible for Input Tax Credit under GST

GST input tax credit mechanism allows persons registered under GST to set-off their GST tax liability. Since GST is a consumption based tax, the input tax credit mechanism ensures that the ultimate GST liability is passed on to the consumer. Though input tax credit can be claimed by a person registered under GST for most inputs, some types of goods and services are not eligible for input tax credit claim. In this article, we look at such goods and services, which are not eligible for input tax credit under GST.

Motor Vehicles or Conveyances

Input tax credit can be claimed for motor vehicles or conveyance only when they are used for making a further supply of such vehicles or conveyances or transportation of passengers or imparting training or for transportation of goods. Hence, expenses related to the normal use of motor vehicles for office purposes cannot be claimed as an input tax credit.

Food, Beverages and Outdoor Catering

Expenses relating to food, beverages and outdoor catering can be claimed as input tax credit only when inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply. Hence, regular taxpayers would not be eligible for claiming input tax credit on expenses relating to food, beverages and catering.

Beauty Treatment, Health Services & Cosmetic and Plastic Surgery

Beauty treatment, health services, cosmetic and plastic surgery related expenses cannot be claimed as input except when inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or as an element of a taxable composite or mixed supply.

Similarly, expenses relating to membership of a club, health and fitness centre is not eligible for input tax credit.

Life and Health Insurance

Expenses relating to rent-a-cab facilities, life or health insurance can be claimed as input tax credit only when the Government notifies it as services which are obligatory for an employer to provide to its employees under law. Else, to claim input tax credit, the inward supply must have been used for making an outward taxable supply of the same category or as part of a taxable mixed supply.

Travel Benefits for Employees

Travel benefits extended to employees on vacation such as leave or home travel concession cannot be claimed as input tax credit.

Works Contract Services

Works contract services, when supplied for construction of an immovable property (other than plant and machinery), cannot be claimed as input tax credit. However, work contract services can be claimed as an input tax credit when it is an input service for the further supply of works contract service.

Construction of Immovable Property

Goods or services received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account or even when it’s used in the course or furtherance of business cannot be claimed as input tax credit. Under GST Act, construction includes re-construction, renovation, additions or alterations or repairs.

Non-Resident Taxable Person

Goods or services received by a non-resident taxable person except on goods imported by him is not eligible for input tax credit.

Know more about GST registration for non-resident taxable person.

Personal Consumption

Goods or services used for personal consumption is not eligible for input tax credit.

Lost or Stolen or Damaged Goods

Input tax credit is not available for goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples.

Composition Supply

Goods or services or both on which tax has been paid under the Composition Scheme will not be eligible for input tax credit. Also tax paid as interest, penalty or fine will not be eligilbe for input tax credit.

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GST Input Service Distributor

The concept of GST input service distributor is relevant for businesses having GST registration and operating with more than one branch within India. Under GST, businesses with more than one branch are required to obtain GSTIN for each branch from where taxable supply is made. Further, based on the purchases of the head office or branch, input tax credit in the form of IGST or CGST and SGST would accrue to the business. In such a scenario, to ensure that input tax credit is properly distributed amongst all the branches, the GST input service distributor concept has been introduced by the Government.

What is Input Service Distributor?

Under GST, Input Service Distributor (ISD) is an office of a business which receives tax invoices for input services and distributes the available input tax credit to other branch offices of the same business.

What is the requirement for Input Service Distributor?

The concept of input service distributor would be applicable only for entities registered under GST having multiple branches. In case of a business with multiple branches, the head office may purchase certain services commonly for all branches. In such purchases, the input tax credit from the purchase would have to be distributed to various branches. In such cases, the entity can setup an input service distributor and distribute the credit of Central tax (CGST), State tax (SGST)/ Union territory tax (UTGST) or Integrated tax (IGST) to relevant branches.

Know more about GST registration for branches.

What type of input tax credit can be distributed?

An Input Service Distributor can only distribute input tax credit on common invoices pertaining to input services. Input tax credit on input goods or capital goods cannot be distributed by an Input Service Distributor.

How to distribute input tax credit?

To distribute input tax credit as an input service distributor, the following formula can be adopted:

C1 = (t1÷T) × C

Where “C” is the amount of credit to be distributed. “T1” is the turnover, of the taxpayer during the relevant period, and “T” is the aggregate of the turnover, during the relevant period, of all recipients to whom the input service is attributable.

Once the amount of input tax credit to be distributed to each branch is determined, then the Input Service Distributor should issue an Input Service Distributor invoice, clearly indicating the amount of credit distributed and that the invoice is issued only for distribution of input tax credit.

During input tax credit distribution, the input tax credit on account of IGST should be distributed as input tax credit of IGST. Similarly, input tax credit on account of CGST and SGST should be distributed as follows:

• If the input tax credit recipient is located in the same State as the Input Service Distributor, then SGST and CGST can be distributed in the same format.
• If the input tax credit recipient is located in a different State from the Input Service Distributor, then the input tax credit can be distributed as IGST.

Is registration required for Input Service Distributor?

Yes, apart from GST registration, an Input Service Distributor will have to mandatorily obtain a separate registration as Input Service Distributor by applying through form GST REG-1. There is no threshold limit or criteria for registration for an Input Service Distributor.

Is Input Service Distributor required to file GST Returns?

Yes, an Input Service Distributor must distribute the input tax credit available for distribution in the same month and file FORM GSTR-6. GSTR-6 is due on the 13th of every month. In GSTR-6, the Input Service Distributor must provide information of all ISD invoices issued. The details filed in GSTR-6 return will be made available to the respective recipients in their GSTR 2A. The recipients may include these in its GSTR-2 and take input tax credit. Input Service Distributors are not be required to file GST Annual Return.

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GST Full Form and Definition

GST stands for Goods and Services Tax. Goods and Service Tax (GST) is a type of tax introduced in India from July 2017. GST is a consumption based tax ultimately borne by the end consumer of a goods or service. Throughout the value chain, businesses and consumers pay GST on their purchases. However, if the purchase was made by a business for sale to a customer, then the business can claim input tax credit to set-off GST liability. Thus, through the use of input tax credit mechanism, the GST liability is pushed to the end-consumer.

What is the full form of GST?

The full form of GST is Goods and Services Tax. GST is applicable on purchase of goods or services in India.

Why GST is implemented?

Before the implementation of GST, there were various indirect tax systems like VAT, Service Tax, Central Excise, Luxury Tax, etc., Some of these indirect taxes like VAT and luxury tax were governed by the State Governments, while taxes like service tax or central excise were governed by the Central Government. With indirect tax being levied by various authorities, businesses had to file various returns and comply with various rules. To simplify the entire indirect tax system, GST was implemented.

Under GST, businesses and customers would have to comply only with GST regulations. Hence, compliance is easier for businesses and customers will also have clarity on the tax paid by them. Further, Government will also be able to manage and govern GST better as many of the tax departments have been consolidated and streamlined into one department under GST Act.

GST vs Income Tax

GST is a consumption based tax levied on the sale of a goods or service. Hence, GST is applicable for everyone purchasing a goods or services in India at the same rate. For example, vegetables are not taxed under GST. On the other hand, mobile phones attract 12% GST. Hence, in the purchase of vegetables, both a billionaire and poor man will not pay GST. On the other hand, on the purchase of a mobile phone, both a billionaire and poor man will pay GST at 12% rate.

Income tax is levied based on the income of a person. If a person has a taxable income of over 2.5 lakhs in India, then he or she will have to file income tax return and pay income tax. If a person does not have any income in a year, then income tax need not be paid. Thus income tax is applicable only when there is income above a certain limit fixed by the Government.

Who pays GST?

GST is a consumption based tax and the end consumer of a goods or service pays GST. However, businesses have been made responsible for the collection of GST from consumers and payment to the Government. Hence, in a sale of goods or service, in addition to the cost of the product, the business will levy a GST tax and collect the same from the customer. Once the GST tax is collected, businesses are required to file GST return every month and remit the GST tax collected before the 20th of next month.

How to calculate GST?

GST rate for goods are applicable in 7 slabs namely – 0%, 0.25%, 3%, 5%, 12%, 18% and 28%. GST rate for goods are linked to HSN code, an internationally used system for classifying goods in the course of international trade. GST Council has announced GST rates for each of the HSN codes. Hence, based on the HSN code of the goods, the GST rate can be determined. The GST rate can be multiplied by the value of goods to calculate GST.

In case of service, GST rates are applicable in 5 slabs namely – 0%, 5%, 12%, 18% and 28%. GST rate for services are linked to SAC code, a services classification system created by the Service Tax Department in India. Based on the GST rate for the service, the value of service can be multiplied to calculate GST for services.

Click here to find GST rate for all goods and services.

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GSTR1, GSTR2 and GSTR 3 Return Due Date Extended

The Government has decided to extend the due date for filing GSTR1, GSTR2 and GSTR3 return to help businesses comply with the new regulations. Prior to the announcement today, GSTR1 for July and August was due on 5th September and 16th September. GSTR2 for July and August was due on 10th and 25th September. Finally, GSTR3 for July and August were due on 15th and 30th September. However, the due dates have now been changed and taxpayers have been provided more time to comply with GST return filing. The change of dates was announced through the official twitter handle of GST on September 4th, 2017.

GIC decides to extend Date of GSTR 1, GSTR 2 and GSTR 3 for the month of July to 10th, 25th and 30th September 2017 respectively.

— GST@GoI (@askGST_GoI) September 4, 2017

Revised GSTR1, GSTR2 and GSTR3 Due Dates in September

GSTR1 return for July 2017 will be due on 10th September 2017.

GSTR2 return for July 2017 will be due on 25th September 2017.

GSTR3 return for July 2017 will be due on 30th September 2017.

Revised GSTR1, GSTR2 and GSTR3 Due Dates in October

GIC decides to extend Date of GSTR 1, GSTR 2 and GSTR 3 for the month of August to 5th, 10th and 15th October 2017 respectively.

— GST@GoI (@askGST_GoI) September 4, 2017

GSTR1 return for August 2017 will be due on 5th October 2017.

GSTR2 return for August 2017 will be due on 10th October 2017.

GSTR3 return for August 2017 will be due on 15th October 2017.

Click here to see the normal GST return due dates.

Waiver of Penalty for Not Filing GSTR3B Return

Also, through a notification dated 1st September 2017 the Government has waived the penalty for not filing GSTR-3B return. Businesses that have filed GSTR-3B return will also be allowed to correct errors while filing GSTR1, GSTR2 and GSTR3 returns. Finally, entities that had not filed GSTR-3B can file the final returns in GSTR-1, GSTR-2 and GSTR-3 and pay taxes.

How to File GST Return

You can sign up for LEDGERS GST Software to prepare and file GSTR1, GSTR2 and GSTR3 return online. LEDGERS can sync with the GST server to file GST return directly. Know more about LEDGERS GST Software.

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Filing NIL GST Return – In Less than One Minute

GST return has to be filed by everyone having GST registration irrespective of business turnover or profitability in a month. Hence, even if there were no invoices issued during a month, the taxpayer must login to the GST Portal and submit a NIL return. If NIL return is not filed, a penalty of Rs.100 per day is applicable until the filing is complete. Hence, all taxpayer having GST registration must submit NIL GST return before the deadline. The due dates for GST returns are as follows:

Is nil return required under GST?

Yes, all taxpayers having GST registration are required to file GST returns on the 10th, 15th and 20th of each month. Even if there was no business activity or transaction during a month, the taxpayer must still log in to the GST portal and file NIL GST return to avoid penalty.

Do I have to file Nil GSTR3B return?

GSTR-3B return must be filed for the months of July and August 2017 by all taxpayers having GST registration. Even those businesses that had no business or transaction during the month of July and August 2017 must file nil GSTR-3B return.

Do I have to file Nil GSTR-1 return?

Yes, nil GSTR-1 return must be filed by all regular taxpayers having GST registration even if there were no sales transaction in a month. If GSTR-1 return is not filed, a per day penalty of Rs.100 will be applicable.

Procedure for filing nil GSTR1 return.

In GSTR-1 return, the taxpayer provides information about all sales transactions in the previous month and upload invoices issued to the GSTN portal. If the taxpayer did not make any sales, then the taxpayer must still log in to the GST Portal, submit that no transactions were done, e-sign and file GSTR-1 return.

Do I have to file nil GSTR-2 return?

Yes, nil GSTR-2 return must be filed by a taxpayer even if there were no purchase transactions in a month. If GSTR-2 return is not filed, a per day penalty of Rs.100 will be applicable.

While filing GSRT-2 return, most of the information is auto-populated based on the GSTR-1 return filed by all other taxpayers. Hence, if there were no purchases, the auto-populated form of GSTR-2 would show no transaction. The taxpayer can verify GSTR-2, e-sign and submit a nil GSTR-2 return easily.

Do I have to file nil GSTR-3 return?

Yes, nil GSTR-3 return must be filed by a taxpayer even if there were no business activity in a month. If GSTR-3 return is not filed, a per day penalty of Rs.100 will be applicable. Since, most of  GSTR-3 return is auto-populated, filing of nil GSTR-3 return would be very easy. The taxpayer would have to login to the GST Portal, verify the amount of tax payable, if any, e-sign and submit the GSTR-3 return.

Procedure for Filing NIL GSTR-3B Return

A nil GSTR-3B return can be filed very easily in a matter of minutes through the GST portal directly. Hence, any person having GST registration should file nil return before the due date without fail to avoid the penalty.

Step 1: Login to GST Portal

Login to your GST account through the GST Portal. Click on Return Dashboard.

Step 2: Select the month of filing

GSTR-3B return must be filed only for the months of July and August. Hence, select July or August from the drop down and click on continue.

Step 2: Select the month of filing

GSTR-3B return must be filed only for the months of July and August. Hence, select July or August from the drop down and click on continue.

Step 3: Select prepare GSTR-3B return

Click on prepare online in the section titled Monthly Return – GSTR3B.

Step 4: Ensure that all fields are nil in the return

If all fields are nil in the GSTR3B return summary, click on save. You can save the GSTR3B returns multiple times during the preparation time to save your progress.

Step 5: Preview and Submit GSTR3B Return

Once the GSTR3B return is prepared and saved, click on Preview and Submit GSTR3B.

Step 5: Accept the return summary

Once the GSTR3B return is submitted, a window will ask for final confirmation. Click on confirm and submit to file the GSTR3B return. Once the button is clicked, the taxpayer will not be able to change any of the information submitted.

Step 6: Digitally sign the GSTR3B return

Once the GSTR3B return is submitted, click on the agree check box and digitally sign the GSTR3B return to complete the nil GST return filing.

Visit IndiaFilings or sign up for LEDGERS to prepare and file GST returns online.

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Due Date for July GST Return

The due date for July GST return has been extended again to provide more time for taxpayers and streamline the GST portal. The new due date for July GST return (GSTR1) is 10th October 2017. If the business has a turnover of more than Rs.100 crores, the due date for filing the GSTR1 return is 3rd October 2017. The GSTR2 return for July will be due on 31st October 2017 and the GSTR3 return for July will be on 10th November 2017.

The due date for August and September 2017 GST return will be notified by the GST Council at a later date. Hence, there are no deadlines currently set for the August and September 2017 GST returns.

GSTR1 return filing facility with GST portal API has been made available through LEDGERS GST Software. In case you would like to file GSTR1 return, signup for a LEDGERS GST Software account.

GSTR3B Due Date

In the GST Council Meeting held on 9th September, it has been mentioned that businesses will be required to file GSTR3B return from July to December. Hence, though the due date for filing of GSTR1, GSTR2 and GSTR3 return is being extended, the deadline for filing of GSTR3B returns on the 20th of every month is set to continue.

GSTR4 Due Date

GSTR4 return must be filed by taxpayers registered under the GST composition scheme. The due date for filing GSTR4 is 18th of October for the months of July to September. Hence, no changes have been announced for the due date of filing GSTR4 return.

However, in the GSTR4 return due on 18th September GSTR4A is not required. Hence, the GSTR4 return due on 18th October 2017 is expected to be a simpler return.

GSTR6 Due Date

GSTR6 return must be filed monthly by persons registered as an Input Service Distributor. The due date for filing GSTR6 for the month of July has been fixed at 13th October 2017.

GST Council Press Release – 9th September 2017

The changes to GST return due date were mentioned in a press release by the Government on 9th September 2017. A copy of the GST Council press release is as follows:

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How to Create GST Payment Challan?

To make GST payment, GST payment challan must first be generated from the GST portal. Once the payment challan is generated, payment can be made by internet banking, credit/debit card, NEFT or cash payment at designated banks. In this article, we look at the procedure for creating GST payment challan and making GST payment.

GST Payments Modes

GST payments can be made through the following modes:

1. Internet Banking through authorised banks;
2. Credit card or Debit card through the authorised bank;
3. National Electronic Fund Transfer or Real Time Gross Settlement from any bank; or
4. Over the Counter payment through authorised banks for deposits up to ten thousand rupees per challan per tax period, by cash, cheque or demand draft.

Banks Accepting GST Payments

The following banks have been authorised to accept GST payments on behalf of the Government. Taxpayers can generate a GST payment challan and proceed to one of the following banks for payment of GST by cash, cheque or DD.

• ALLAHABAD BANK
• ANDHRA BANK
• AXIS BANK
• BANK OF BARODA
• BANK OF INDIA
• BANK OF MAHARASHTRA
• CANARA BANK
• CENTRAL BANK OF INDIA
• CORPORATION BANK
• DENA BANK
• HDFC BANK
• ICICI BANK LIMITED
• IDBI BANK
• INDIAN BANK
• INDIAN OVERSEAS BANK
• JAMMU AND KASHMIR BANK LIMITED
• ORIENTAL BANK OF COMMERCE
• PUNJAB AND SIND BANK
• PUNJAB NATIONAL BANK
• STATE BANK OF INDIA
• SYNDICATE BANK
• UCO BANK
• UNION BANK OF INDIA
• UNITED BANK OF INDIA
• VIJAYA BANK

Procedure for Creating GST Payment Challan

You can follow the steps below to easily crate a GST payment challan. Creating a GST payment challan is the first step in making GST payment.

Step 1: Login to the GST Portal.

Sign in to your GST account on the GST portal. Click on create challan in the GST dashboard.

Step 2: Enter details of GST payment you would like to remit

In the page shown below, enter details of GST payment you would like to remit. The amount must be provided under the heads of CGST, IGST, Cess and SGST. Further, the breakup of payment made towards tax, interest, penalty, fee and others can also be mentioned.

Select the mode of payment from the payment modes option. Once all the details are mentioned, click on Generate Challan.

Step 3: Verify GST payment details

In the next screen, verify details of payment and click on make payment. In case of cash payment, a GST payment challan as shown below will be generated. The payment challan can be produced at one of the banks mentioned above to make over the counter payment.

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GST Valuation of Supplies

Goods and Service Tax (GST) is charged on the taxable value of supply of goods and services. GST is charged on the taxable value of supply at each stage of supply and input tax credit is provided for B2B purchases to avoid the cascading effect of tax. In this article, we look at the valuation of supplies under GST in detail.

GST Valuation Rules

For valuation of goods and supplies, there are two major rules specified under GST as follows:

• General Valuation Rules
• Special Valuation Rules

General Valuation Rules

General valuation rules are applicable when the supply of goods or services will be made for payment completely in money or cash. In such transactions, consideration or payment will be equivalent to the value of supply.

Consideration = Value of Supply + GST

For example, if a product is sold for Rs.18000 and it attracts 18% GST, then the consideration would be Rs.1,18,000, the value of supply would be Rs.1,00,000 and GST would be Rs.18,000.

Special Valuation Rules

Special valuation rules are applicable when the consideration received is not in money or not fully received in money. In such cases, the value of supply would be the fair value of the consideration provided less GST applicable.

Consideration = Fair market value of consideration provided – GST applicable

For example, if a product is sold for Rs.1,00,000 and it attracts 18% GST rate if the buyer provides a parcel of land with a fair market value of Rs.1,00,000, then the seller would be required to remit GST as if the consideration provided included GST. Hence, in this case, the buyer would be required to remit GST of Rs.15254.24 and the value of supply would be Rs.84745.76.

Value of Supply = Fair Value of Consideration Received / (1 + GST Rate Applicable)

Value of Supply = 1,00,000 / (1.18) = 84745.76

When Part of the Consideration is Received in Money

In a transaction wherein part of the consideration is received in money, the total consideration would be the sum of money received and the fair market value of the consideration received.

Meaning of Consideration

While calculating the value of supply, consideration received is an important element. Under GST,t anything obtained on the reciprocal basis for the supply of goods or services or jointly can be defined as consideration. Hence, consideration can be money, payment through credit card, payment in kind, bank transfer, cheque, demand draft or any other type of transfer of value. 

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GST for Goods Transport Agency

Entities operating a Goods Transport Agency have to pay special attention to GST rules and regulations. Goods Transport Agency would not only have to obtain GST registration and file GST returns, they must also generate e-way bill while transferring goods and comply with various other GST regulations. In this article, we look at the applicability of GST for Goods Transport Agency.

GST Registration

GST registration is mandatory in India for entities having more than Rs.20 lakhs of aggregate turnover in a year (Rs.10 lakhs in Special Category states). However, some of the supplies provided by a goods transport agency would be liable for GST under reverse charge basis. In a reverse charge transaction, the recipient of the goods is made liable for payment of GST. Hence, while providing services, goods transport agency must be aware of the reverse charge mechanism and raise invoice accordingly.

While calculating aggregate turnover to determine criteria for GST registration, the law mentions that “aggregate turnover” means the total value of all taxable supplies, not including the value of inward supplies on which tax is payable by a person based on reverse charge basis, exempt supplies, exports of goods or services or together and inter-state supplies of persons with the identical Permanent Account Number, to be calculated on an all-India basis but leaves out Central tax, State tax, Union territory tax, Integrated tax as well as cess.

Further, according to Notification No-5/2017 of Central Tax as reproduced below, persons engaged ONLY in providing supply wherein tax is paid on a reverse charge is exempted from GST registration.

Hence, goods transport agencies involved in purely providing services taxable on reverse charge basis need not obtain GST registration. On the other hand, any goods transport agency having to collect and remit GST must obtain registration and comply with GST regulation once the aggregate turnover crosses the threshold limit.

In addition to GST registration, all transporters and warehouses are required to be registered under GST mandatorily. Hence, its is important for all goods transport agencies to be registered and aware of GST regulations.

Persons Required to Pay GST on Reverse Charge

When taking the services of a goods transport agency, the following types and class of entities would be required to pay GST on reverse charge basis. 

• Factories registered under the Factory Act.
• Societies registered under the Society Act.
• Any co-operative society.
• Any person who is registered under GST.
• Any Body Corporate (Company or LLP)
• Any partnership, if registered or not as well as AOP.

When GST Must Be Collected by Goods Transport Agency

When a goods transport agency provides services to an individual or proprietorship firm or HUF or persons not registered under GST, the Goods Transport Agency must collect GST, if it has GST registration.

However, under GST, an exemption is provided to subsequent services provided by GTA by means of transportation of goods carriage of:

• Agriculture produce milk, salt as well as food grain together with flour.
• Pulse as well as rice
• Organic Manure
• Newspaper otherwise magazine
• Relief Material
• Defense otherwise military equipment
• Wherever gross amount charged for a single consignment transported in single carriage does not be in excess of Rs. 1,500.
• Wherever gross amount charged for all goods of single consignee does not be in excess of Rs. 750.

Visit IndiaFilings.com for GST registration.

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Input Service Distributor Registration

An Input Service Distributor is an office of persons registered under GST, where tax invoices are received for distribution of input tax credit to branches of the same business. Hence, the concept of input service distributor would be applicable only for entities having multiple branches and multiple GSTINs. Also, the GST input service distributor concept is very similar to the input service distributor concept under service tax. In this article, we look at the procedure for obtaining GST registration for an input service distributor.

Should I get Input Service Distributor registration?

Businesses having multi-branch operation or multi-state operations normally centralise the purchasing of goods or services out of one office. In such cases, to effectively set-off GST liability, the GST input tax credit accrued at the purchasing office must be distributed to the branch office, in proportion to the consumption of services.

In this scenario, the taxpayer can register the centralised purchasing office as an input service distributor. Once the purchases are made, by issuing an invoice, the input service distributor can transfer IGST, CGST and SGST input tax credit to the branches. It is important to note that only input tax credit pertaining to input services can be distributed. Input tax credit on input goods and capital goods cannot be distributed by an Input Service Distributor.

Know more about GST registration for branches.

Input Service Distributor Registration

According to the CGST Act, all Input Service Distributors must be compulsorily registered under GST. The procedure for obtaining GST registration for Input Service Distributor is similar to that of obtaining GST registration for a normal GST taxpayer.

To obtain GST registration for an input service distributor, a separate application must be submitted in the GST portal in form GST REG-01. There is no turnover limit or threshold for registering as an input service distributor. Hence, any GST payer who needs to distribute input tax credit on input services can be registered as an input service distributor.

Do you need GST Registration?Easily find out using this tool!

Input Service Distributor Return Filing

All GST taxpayers registered as an Input Service Distributor must file GSTR 6 every month before the 13th. Also, the input tax credit from the invoices received must be distributed in the same month by issuing a GST invoice in the format specifically mentioned for input service distributors.

Invoice Format for Input Service Distributors

The invoice format used by Input Service Distributors for distributing input tax credit must contain the following information:

1. Name, address and Goods and Services Tax Identification Number of the Input Service Distributor.
2. Consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or numerals or special characters.
3. Date of its issue.
4. Name, address and Goods and Services Tax Identification Number of the recipient to whom the credit is distributed.
5. Amount of the credit distributed.
6. Signature or digital signature of the Input Service Distributor or his authorised representative.

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Status of August GST Filing

The due date for filing GSTR-3B return for month of August 2017 ended on 20th September 2017. Over 22 lakh GSTR-3B returns had been filed by taxpayers until 6PM and more returns were expected to be filed until midnight. The GST Chairman said that over 80,000 GSTR-3B returns were filed by taxpayers every hour and that the GSTN network was functioning smoothly as returns were being filed by various taxpayers.

Filing Tax Return in Advance

Officials from GSTN noted that till September 16th, there were only 3.5 lakh GST returns filed. However, the number of return filing spiked to 22 lakhs in just 4 days. Hence, most taxpayers were waiting until the last minute for filing GSTR-3B returns leading to a slowdown in the GST Portal and filing system. If taxpayers can begin filing GSTR 3B return in advance before the last few days, then delays and errors can be prevented in the filing.

Status of July GST Filing

Out of the total entities registered for GST, over 47 lakh returns have been filed for July. The due date for filing of GSTR-3B return for July was earlier extended from 20th August to 25th August. However, no such extension has been provided by the GSTN for filing of August GSTR-3B return.

Next Due Date for GST Return

With the due date for August GSTR 3B return ending on September 20th, the next GST return due will be GSTR-1 for the month of July on October 10th. The Government has streamlined GSTR-1 return filing and GST invoice uploading already. Hence, its best for taxpayers to being filing GSTR-1 return for the month of July now to prevent last minute rush.

File your GST Return through IndiaFilings

You can file your GSTR-3B, GSTR-1 and GSTR-2 return using LEDGERS GST Software from IndiaFilings. In case you have questions about filing GST Returns, visit IndiaFilings.com.

File GST Return Online

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GST Audit – By Tax Authorities & Special Audit

GST has been implemented in India from 1st July 2017. Under GST, an audit of the taxpayer can be ordered by concerned authorities under various circumstances. Audit ordered under GST can be divided into two types namely Audit by Tax Authorities and Special Audit. In this article, we look at both types in detail.

Audit by Tax Authorities

Audit by Tax Authorities can be conducted under Section 65 of the CGST Act. GST Commissioner can issue a general order of a specific order, authorising officers to conduct an audit of registered persons. Once an audit is ordered, the audit would be conducted at the place of business of the registered person. Intimation of the audit is provided to the taxpayer atleast 15 days in advance in Form GST ADT-01 and the audit is to be completed within 3 months from the date of commencement of the audit. In rare cases, the GST Commissioner has the powers to extend the period by another 6 months, if required.

During an audit, the Officer conducting the audit has powers to verify books, records, returns, statements, inventory, deductions, availments of input tax credit, the rate of GST tax applied and other aspects pertaining to GST.

On completing of the audit, the Officer would submit a report to the RD along with a summary of findings during the audit in Form GST ADT-02 within 30 days.

Special Audit

Special audits are audits ordered by a GST Officer and conducted by a Chartered Accountant or CMA. GST special audit can be ordered by an assistant commissioner of the GST, when he/she suspects that the assessee has declared taxable values incorrectly or has inappropriately utilised input tax credit.

A special audit is ordered in Form GST ADT-03 and the taxpayer would normally be required to get the accounts audited after or before the commencement of any scrutiny, enquiry or investigation. The CA or CMA performing the audit will be selected by the GST Officer and the taxpayer would be required to cooperate with the Auditor for completion of the audit.

Once the audit is complete, the CA or CMA would submit the findings fo the audit in Form ADT-04. A special audit must be concluded by an auditor within 90 days. In rare cases, the due date can be extended by another 90 days by the Commissioner, based on an application made by the CA or CMA.

On conclusion of a special audit under GST, the taxpayer is provid an opportunity to be heard in respect of any material gathered in the special audit which is proposed to be used in any proceedings against the taxpayer.

Know more about Audits and Certification opportunities available for CAs under GST.

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GSTR1 Return Filing FAQs

IndiaFilings has helped tens of thousands of businesses file their GST returns since the introduction of GST regime in July 2017. Over the last few months, we have received numerous questions from our customers regarding GSTR1 return filing. These questions have been summarised in this article. You can file GST return through LEDGERS GST Software.

Who should file GSTR1 return?

Under GST, all taxpayers, other than an input service distributor, a non-resident taxable person, casual taxable person and a person paying tax under the GST composition scheme are required to file GSTR1 return.

Know more about GSTR1 return filing.

How to file GSTR1 return?

GSTR1 return can be filed online in the GST portal. You can also file GSTR1 return using LEDGERS GST Software, to file GSTR1 return using LEDGERS, create an account, update details of sales made during a month and click on upload GST return to file.

What is the time limit for filing GSTR1 return?

The due date for filing GSTR1 return is usually the 10th of every month. However, for the month of July 2017, the due date for filing GSTR1 return is 10th of October. The due date for filing all other GSTR1 return is yet to be announced by the GST Council.

What information is required to be filed in GSTR1?

In GSTR1 return, the following information is filed by the taxpayer:

1. Basic details of the taxpayer with GSTIN.
2. Period to which the Return pertains.
3. Invoice level information
   1. B2B invoices
   2. B2C invoices over Rs.2.5 lakhs in value
   3. B2C invoices less than Rs.2.5 lakhs in value
   4. Export invoices
   5. Summary of Documents Issued
   6. HSN Code wise summary of sales

What is the meaning “details of outward supplies”?

Under GST, the expression “details of outward supplies” means information pertaining to sales transaction in a month like invoices issued, debit notes, credit notes and revised invoices.

Can GSTR1 return be rectified?

Yes, any registered taxable person, who has filed GSTR1 return can rectify the return if there is a discovery of any error or omission. The rectification can be filed in the tax period in which such error or omission is noticed. In case there is any short payment of tax, the payment of tax and interest can also be made during the period of discovery of error or omission.

What is the time limit for filing GST return rectification?

GST return can be rectified by a taxpayer until the month of September following the end of the financial year to which the details pertain or furnishing of the relevant annual return, whichever is earlier.

What invoices should be uploaded to GST Portal?

For all B2B supplies (whether inter-State or intra-State), invoice level details like customer GSTIN, the item-wise value of supply, amount of tax applicable, place of supply, date of invoice and invoice number should be uploaded.

For all B2C supplies (including non-registered Government entities, Consumer/person dealing in exempted/NIL rated/non-GST goods or services), the suppliers should upload invoice level details similar to B2B invoices, when the value of supply is more than Rs.2.5 lakhs.

For invoices with a value of less than Rs.2.5 lakhs, State-wise summary of supply statement should be filed. The address of the buyer has to be mandatorily reflected in every invoice having a value of Rs.50,000/- or more.

Procedure for uploading invoice to GST portal.

How to mention HSN Code in Invoice?

HSN code (4-digit) for Goods and Services Accounting Codes (SAC) for Services must be compulsorily mentioned by all taxpayers with turnover in the preceding financial year above Rs. 5 Crore (For the first year of operations of GST, self-declaration of turnover of previous financial year will be taken as the basis as all India turnover data will not be available in the first year. From the 2nd year onwards, turnover of previous financial year under GST will be used for satisfying this condition.

For taxpayers with turnover between Rs. 1.5 Crores and Rs. 5 Crores in the preceding financial year, HSN codes may be specified only at 2-digit chapter level as an optional exercise to start with. From second year of GST operations, mentioning 2-digit chapter level HSN Code will be mandatory for all taxpayers with turnover in previous financial year between Rs. 1.5 Crores and Rs. 5.0 Crores.

All taxpayers, irrespective of his turnover, can use HSN code at 6-digit or 8-digit level if desired.

To start with, compounding dealers may not be required to specify HSN at 2 digit level also.

HSN Codes at 8-digit level and Accounting Codes for services will be mandatory in case of exports and imports.

The taxpayers who have turnover below the limit of Rs. 1.5 Crore will have to mention the description of goods/service, as the case may be, wherever applicable. In order to differentiate between the HSN code and the Service Accounting Code (SAC), goods will be denoted by G and services will be denoted by S.

Click here to find HSN code and GST rate for all goods and services.

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Interest Applicable on GST Late Payment

Interest will be levied by the Government on any GST late payment made by the taxpayer. Normally, the GST liability of a taxpayer must be settled before the 20th and filing of GSTR-3 return. In case the taxpayer fails to pay the liability due on that date, interest will be levied on the late payment. In this article, we look at the rate of interest levied on GST late payment.

Order of GST Payment

Whenever a GST payment is made by a taxpayer, the electronic cash ledger is credited for the amount paid. The credit in the cash ledger is used to offset any liability in the liability ledger. If sufficient credit is not available in the cash ledger, then the payment made is applied in the following order:

1. Dues related to previous tax period will be adjusted first.
2. Dues related to current tax period will be adjusted second.
3. Any other amount payable under GST law will be adjusted finally.

Interest Applicable on GST Late Payment

Interest at the rate of 18% per annum will be applicable for GST late payment. In case it is determined that the taxpayer misstated output tax liability in the GST return, then interest at the rate of 24% would be applicable. In addition to the interest, penalty could also be levied on the taxpayer under GST for erroneous return filing, wilful misstatement or fraud.

Know more about the amount of penalty levied under GST for different types of offences.

Interest Payable on GST Refund

In case the Government is liable to pay any amount to the taxpayer due to a refund, then the following interest rate will be paid by the Government on any delayed payment.

• Interest payable on Refund in respect of Appeal – 6% per annum
• Interest Payable on delayed payment of refund – 6% per annum
• Delayed payment of interest on refund order passed by Appellate Authority or Appellate Tribunal or Court – 9% per annum

Penalty Applicable on GST Not Paid or Short Paid

Whenever STG is not paid or short paid or credit wrongly availed or utilized or erroneously refunded on account of fraud or wilful misstatement or suppression of facts, to evade tax, a notice would be issued by the Tax Officer for amount due along with interest and penalty.

The amount of interest applicable on late payment of GST has been provided below. In addition to the interest, a penalty could also be levied at the rate provided below when there is an intent to evade tax:

For assistance with GST return filing or making GST payments, get in touch with an IndiaFilings Advisor

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22nd GST Council Meeting – Summary of Decisions

The 22nd GST Council Meeting was held at New Delhi on the 6th of October 2017. In the meeting, various decisions and changes pertaining to GST return filing, composition scheme, GST rates have been announced. The various measures announced in the 22nd GST Council will tremendously improve ease of compliance for SMEs. In this article, we summarise the key decisions made in the 22nd GST Council Meeting.

GST Return Filing

All regular taxpayers registered under GST were currently required to file 4 GST returns every month namely GSTR 3B, GSTR 1, GSTR 2 and GSTR 3. Filing 4 GST returns a month and maintaining GST compliance was a major burden for small businesses that have limited resources. Hence, to reduce the compliance burden for small businesses and improve ease of doing business, a decision was taken to reduce the number of GST returns for small businesses.

GST Return Filing for SMEs

Small and medium enterprises (SMEs) with an annual aggregate turnover of less than Rs.1.5 crores will no longer be required to file GSTR 1, GSTR 2 and GSTR 3 return every month. Instead, SMEs will be allowed to file quarterly GST returns and make quarterly GST payments, whether or not enrolled under the GST composition scheme.

SMEs will be allowed to file quarterly GST returns starting from the October – December 2017 quarter. For now, all regular taxpayers will be required to file monthly GSTR 1, GSTR 2, GSTR 3 and GSTR 3B return for the months of July, August and September 2017. The due date for July 2017 GSTR 1 return, GSTR 2 return and GSTR 3 return has been announced. The due dates for August and September GSTR 1, GSTR 2 and GSTR 3 returns will be announced shortly.

GST Return Filing for Businesses with Over Rs.1.5 Crore Turnover

All persons having GST registration with a turnover of more than Rs.1.5 crore per year will be required to file monthly GST returns in form GSTR 1, GSTR 2 and GSTR 3. GSTR 3B will have to be filed by all taxpayers for the months of July to December 2017, irrespective of annual aggregate turnover.

GST Registration

GST registration was earlier mandatorily required for any person who undertook inter-state (selling goods or services from one state to another state) irrespective of aggregate annual turnover. In the 22nd GST Council, it has been decided to exempt service providers from this criteria. Hence, service providers will now be allowed to undertake inter-state sales of upto Rs.20 lakhs without obtaining GST registration.

It is important to note that only service providers have been provided this exception. Any person supply goods will still be required to obtain GST registration mandatorily, if they undertake inter-state sales.

Reverse Charge Mechanism Suspended

The 22nd GST Council has decided to suspend the GST reverse charge mechanism. Under reverse charge, the recipient of a service is required to pay GST on behalf of the supplier.  Sub-section (4) of section 9 of the CGST Act, 2017 pertains to GST reverse charge and is reproduced below for reference:

“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.”

Since, registered taxpayers were required to pay GST on reverse charge basis when they purchased from an unregistered person (Most times a micro or small business), many registered business stopped transacting with micro and small businesses. Hence, the GST Council has decided to suspend the reverse charge mechanism. Now, registered taxpayers can purchase from unregistered persons without having to pay GST on reverse charge basis. This measure will provide a major boost to micro, small and medium businesses.

GST on Advances Received NOT Required for SMEs

As per GST rules, whenever a taxable person receives advance, an advance receipt voucher must be issued and the GST on the advance received must be remitted to the Government. In case supply was later not provided and refund of advance was provided to the customer, then the supplier would have to claim refund. This caused tremendous difficulty for small and medium businesses.

As per the decision of 22nd GST Council, it has now been decided that taxpayers having annual aggregate turnover up to Rs. 1.5 crores will not be required to pay GST at the time of receipt of advances on account of supply of goods. The GST on such advance received will be payable only when the supply of goods is made.

Transportation of Goods by GTA

Goods Transport Agency were not extending services to unregistered persons and were in many cases requesting GSTIN for transporting goods. The GST Council in the 22nd meeting has clarified that GTAs will not need any GSTIN for providing transportation services, thereby removing the hardship faced by SMEs.

GST Composition Scheme

The GST Composition Scheme can be availed by SME taxpayers to reduce compliance and tax burden. The 22nd GST Council has decided to form a Group of Ministers (GoM) to examine measures to make the composition scheme more attractive for SMEs.

Further, entities with an aggregate turnover of upto Rs.75 lakhs were only eligible for enrolling under the GST Composition Scheme. The 22nd GST Council has decided to increase the aggregate turnover to Rs.1 crore.The aggregate turnover threshold for special category States, except Jammu & Kashmir and Uttarakhand, has also been increased to Rs. 75 lacs from Rs. 50 lacs. The turnover threshold for Jammu & Kashmir and Uttarakhand has been fixed at Rs. 1 crore.  With the increase in aggregate turnover threshold, more SMEs will now be eligible for enrolment under the GST Composition Scheme.

Due Date for Enrolling under GST Composition Scheme Extended

The due date for enrolling under the increased threshold has been made available to both migrated and new taxpayers up to 31.03.2018. Also, once a business has enrolled under the Composition Scheme, the scheme will become operational from the 1st date of the succeeding date.

Due Date of first GSTR 4 Return for Composition Scheme Dealers Extended

The due date for filing GSTR 4 return for July to September 2017 by taxpayers registered under  composition scheme has been extended to 15.11.2017. Also entities opting for composition scheme will have to now file GSTR 4 return only for that portion of the quarter from when the scheme becomes operational and can file returns as a normal taxpayer for the preceding tax period.

Implementation of TDS and TCS Provisions Postponed

TDS and TCS provisions of the GST is applicable to certain Government Department and E-Commerce Operators. To help the taxpayer ecosystem gradually absorb the changes in the indirect tax regime, the Government has decided to postpone the TDS/TCS registration and operationalisation to 31st March 2018.

E-Way Bill Implementation Postponed

As per E-Way bill rules, any transportation of goods with a value of more than Rs.50,000 would require an e-way bill. The e-way bill rules were earlier supposed to be implemented before December 2017. The GST Council has now decided to postpone the implementation of e-way bill provisions and rules to 1st January 2018. Hence, w-way bill rules will be operationalised in a staggered manner across India from 1st January 2018 to 1st April 2018.

22nd GST Council Press Release

The press release from the Government summarising the decisions of the 22nd GST Council is reproduced below for reference:

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Anti-Profiteering under GST

The Government has actively started considering a reduction of GST rates for goods and services to keep the economy on the growth path. In this context, its important for all Entrepreneurs to under anti-profiteering regulations under GST. The basis of anti-profiteering provisions in the GST rules is to ensure that any reduction in GST rate and associated input tax credit benefit is passed on to the end consumer by way of reduction in prices. In this article, we look at anti-profiteering provisions under GST in detail.

What is the meaning of anti-profiteering under GST?

Any reduction in GST rate or benefit of input tax credit should be passed on to the end consumer and not retained by the business. This is the basis of anti-profiteering provisions under GST. Under anti-profiteering provisions, its illegal for a business to not pass on benefits of GST rate benefits to the end consumer and thereby indulging in illegal profiteering.

Who regulates anti-profiteering under GST?

The Government has created the National Anti-Profiteering Authority to find and take action against taxable registered persons indulging in illegal profiteering. The National Anti-Profiteering Authority has the powers to determine the methodology and procedure for determining as to whether a taxable person is indulging in illegal profiteering.

Reporting to Anti-Profiteering Authority

Any interested party who has information to believe a taxable person in engaging in illegal profiteering from GST can refer the matter to the local screening committee. The matter will then be examined by a State level Screening Committee constituted by the State Governments consisting of officers of the State Government.

If the screening committee determines that the matter has merit, it would be forwarded with recommendations to the Standing Committee on Anti-Profiteering, which consists of Officers of both the State Government and Central Government.

If the Standing Committee is satisfied that there is evidence to show that the taxable person has engaged in illegal profiteering, then the matter will be referred to the Director General of Safeguards for a detailed investigation.

Investigation by Director General of Safeguards

All matters referred by the Standing Committee will be investigated by the Director General of Safeguards. The Director General of Safeguards will collect evidence, conduct investigation and issue notices to the interested parties. Anti-profiteering notice must contain the following details:

1. The description of the goods or services in respect of which the proceedings have been initiated.
2. Summary of the statement of facts on which the allegations are based.
3. The time limit allowed to the interested parties and other persons who may have information related to the proceedings for furnishing their reply.

Once all the information and hearings are complete, the Director General of Safeguards will provide a report of findings. Report of findings must be submitted by the Director General of Safeguards normally within 3 months or within 6 months if an extension is provided.

Order under Anti-Profiteering Provisions

Once all the proceedings are completed and a report is obtained from the Director General of Safeguards, the Members of Committee will pass an order. An order from the Authority could mandate

1. Reduction in prices.
2. Return to the recipient, an amount equivalent to the amount not passed on by way of commensurate reduction in prices along with interest.
3. Imposition of penalty as specified under the Act.
4. Cancellation of GST registration.

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Import of Services under GST

Import of services refers to supply of a service, wherein the supplier is located outside India, the recipient is located in India, and the place of supply of service is in India. Import of services attract GST under reverse charge basis. Under GST, any person required to pay GST on reverse charge basis is mandatorily required to obtain GST registration and file GST returns, irrespective of any other criteria. Hence, its important for all persons importing services into India to be aware of regulations pertaining to import of services under GST.

Know more about GST reverse charge.

OIDAR Services

OIDAR services or Online Information and Database Access or Retrieval Services attract GST. Persons providing OIDAR services are mandatorily required to be registered under GST.

Import of services with consideration whether or not in the course or furtherance of business, will be considered as a supply. Business test is not required to be fulfilled for import of service to be considered as supply. Hence, import of service by most businesses would be taxable under GST on reverse charge basis.

In respect of import of online information and database access or retrieval services (OIDAR) by unregistered, non-taxable recipients, the supplier located outside India will be responsible for payment of taxes. Hence, the service provider outside of India will have to obtain non-resident taxable person GST registration and file monthly GSTR-5 returns.

Supply to SEZ

Supply of goods or services or both to a Special Economic Zone Developer or a SEZ unit will be treated as inter-state supply and will be subject to levy of IGST.

Import of Services by Related Entities

Import of services by a taxable person between related entities in the course or furtherance of business will be treated as supply, even if it is made without any consideration. Thus, import of some services by an Indian branch or foreign subsidiary from their parent company, in the course or furtherance of business, even without consideration, will be a supply and subject to GST.

In case of supply by a related person, where the supplier of service is located outside India, the time of supply will be the date of entry in the books of account of the recipient of supply or the date of payment, whichever is earlier.

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GSTR-3B Penalty Waived

To improve ease of compliance and to help taxpayer adopt to the new GST regime, the Government has announced waiver of penalty for GSTR-3B return. The announcement was made on 24rd October 2017 by the Hon’ble Finance Minister.

To facilitate taxpayers, late fee on filing of GSTR-3B for Aug&Sept has been waived. Late fee paid will be credited back to taxpayer ledger.

— Arun Jaitley (@arunjaitley) October 24, 2017

GSTR-3B Return

GSTR-3B return is a simplified GST return introduced by the Government to ease the GST transition. All regular taxpayers registered under GST must file GSTR-3B return every month on or before the 20th. The GSTR-3B return for August was due on September 20th and the GSTR-3B return for September was due on 20th October.

GSTR-3B Filing

Even though the Government has waived off the penalty for filing GSTR-3B return, taxpayers are still required to file the return as soon as possible. In case you have not filed GSTR-3B return for August or September, get in touch with an IndiaFilings Advisor for assistance.

File your GST Return Online

Paid Penalty for GSTR-3B Return?

In case you had earlier paid penalty and late-filed GSTR-3B return, the amount of penalty paid will automatically be credited to the electronic cash ledger. The credit in the electronic cash ledger can be used for subsequent GST payments.

Government Notification for Waiver of GSTR-3B Return Penalty

The Government notification for waiver of GSTR-3B return is reproduced below for reference:

[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)]

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs

Notification No. 50/2017 – Central Tax

New Delhi, the 24th October, 2017

G.S.R. (E):- In exercise of the powers conferred by section 128 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby waives the late fee payable under section 47 of the said Act, for all registered persons who failed to furnish the return in FORM GSTR-3B for the months of August and September, 2017 by the due date.

[F. No. 349/74/2017-GST(Pt.)]

(Dr.Sreeparvathy S.L.)
Under Secretary to the Government of India

The notification in Hindi is reproduced below for reference:

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Deadline Extended for Filing GST TRAN-1

The Government has today announced an extension of the deadline for filing GST TRAN-1. The new deadline for filing GSTR TRAN-1 is now 30th November, 2017.

FORM GST TRAN – 1 (with revision facility) extended to 30th November 2017. Suitable order will be issued shortly.

— GST@GoI (@askGST_GoI) October 26, 2017

Do I have to file GST TRAN-1?

The procedure for transferring existing input tax credit to GST for entities that had service tax or VAT or central excise registration has been provided in the Transitional Provisions rules of GST. In accordance with the provisions, everybody who has registered for GST can file GSTR TRAN-1 to avail the input tax credit. In TRAN-1 the following details must be submitted by the taxpayer for transfer of input tax credit. Form TRAN-1 must be filed online on the GST Portal.

1. The amount of tax or duty availed or utilized by way of input tax credit under each of the existing laws till the appointed day;
2. The amount of tax or duty yet to be availed or utilized by way of input tax credit under each of the existing laws till the appointed day;
3. Details of stock held on the appointed day;
4. In the case of a claim under sub-section (5) of section 140, furnish the following details, namely:
   1. The name of the supplier, serial number and date of issue of the invoice by the supplier or any document on the basis of which credit of input tax was admissible under the existing law;
   2. The description and value of the goods or services;
   3. The quantity in case of goods and the unit or unit quantity code thereof;
   4. The amount of eligible taxes and duties or, as the case may be, the value added tax [or entry tax] charged by the supplier in respect of the goods or services; and
   5. The date on which the receipt of goods or services is entered in the books of account of the recipient.

Know more about GST TRAN-1 Form

Due Date for Filing GST TRAN-1 Extended upto 30th November

GST Tran 1 must be filed in the GST Common Portal for transferring any input tax under earlier tax laws to the GST input tax.The due date for filing GST TRAN-1 has been extended upto 30th November 2017 to help taxpayers complete the necessary formalities. After the conclusion of filing of GST TRAN 1 and after confirmation, the total amount of credit in the submission of the FORM TRAN-1 will be credited to the electronic credit ledger of the taxpayer and recorded in FORM GST PMT-2.

File your GST Return Online

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23rd GST Council Meeting – GST Rate Changes for Goods

In the 23rd GST Council Meeting, GST rate reduction for various goods and services was announced. A major highlight of the 23rd GST Council Meeting was the reduction of GST rates for various goods listed under the 28% slab. The GST rates changes will tremendously reduce the tax burden on the common man and boost the economy. In this article, we look at a summary of GST rate changes announced in the 23rd GST Council Meeting held on 10th November 2017.

Want to know about other major changes announced at the 23rd GST Council Meeting?

Details of GST Return Due Date Changes announced in the 23rd GST Council Meeting

Details of GST Rate Changes for Services and Service Providers announced in the 23rd GST Council Meeting

Details of GST Composition Scheme Changes announced in the 23rd GST Council Meeting

GST Rate Reduced from 28% to 18%

For the following goods, GST rate has been reduced from 28% to 18%. After the proposed change, only 50 items will attract GST at 28% rate. Majority of the items for which GST rate was reduced from 28% to 18% are building materials, personal care items and equipments.

Building Materials

• Wire, cables, insulated conductors, electrical insulators, electrical plugs, switches, sockets, fuses, relays, electrical connectors.
• Electrical boards, panels, consoles, cabinets etc for electric control or distribution.
• Particle/fibre boards and ply wood.
• Article of wood, wooden frame, paving block.
• Sanitary ware and parts thereof of all kind
• Articles of plastic, floor covering, baths, shower, sinks, washbasins, seats, sanitary ware of plastic
• Slabs of marbles and granite
• Goods of marble and granite such as tiles
• Ceramic tiles of all kinds
• Fans, pumps, compressors
• Lamp and light fitting
• Door, windows and frames of aluminium.
• Articles of plaster such as board, sheet
• Articles of cement or concrete or stone and artificial stone
• Articles of asphalt or slate
• Articles of mica
• Ceramic flooring blocks, pipes, conduit, pipe fitting Wall paper and wall covering
• Glass of all kinds and articles thereof such as mirror, safety glass, sheets, glassware

Furniture and Home Decorations

• Furniture, mattress, bedding and similar furnishing
• Miscellaneous articles such as vacuum flasks, lighters
• Trunk, suitcase, vanity cases, brief cases, travelling bags and other hand bags, cases
• Articles of cutlery, stoves, cookers and similar non electric domestic appliances
• All musical instruments and their parts
• Artificial flowers, foliage and artificial fruits
• Office or desk equipment
• Fire extinguishers and fire extinguishing charge
• Physical exercise equipment, festival and carnival equipment, swings, shooting galleries, roundabouts, gymnastic and athletic equipment

Personal Care Items

• Detergents, washing and cleaning preparations
• Liquid or cream for washing the skin
• Shampoos; Hair cream, Hair dyes (natural, herbal or synthetic) and similar other goods; henna powder or paste, not mixed with any other ingredient;
• Pre-shave, shaving or after-shave preparations, personal deodorants, bath preparations, perfumery, cosmetic or toilet preparations, room deodorisers
• Perfumes and toilet waters
• Beauty or make-up preparations
• Razor and razor blades

Electronic & Office Stationeries

• Primary cell and primary batteries
• Multi-functional printers, cartridges
• Electrical, electronic weighing machinery
• Electrical apparatus for radio and television broadcasting
• Sound recording or reproducing apparatus
• Signalling, safety or traffic control equipment for transports
• Goggles, binoculars, telescope
• Cinematographic cameras and projectors, image projector
• Microscope, specified laboratory equipment, specified scientific equipment such as for meteorology, hydrology, oceanography, geology

Clothing & Personal Items

• Wrist watches, clocks, watch movement, watch cases, straps, parts
• Article of apparel & clothing accessories of leather, guts, furskin, artificial fur and other articles such as saddlery and harness for any animal

Equipment, Firework & Industrial Items

• Fork lifts, lifting and handling equipment
• Bull dozers, excavators, loaders, road rollers
• Earth moving and levelling machinery
• Escalators, Cooling towers, pressure vessels, reactors
• Crankshaft for sewing machine, tailor’s dummies, bearing housings, gears and gearing; ball or roller screws; gaskets
• Explosive, anti-knocking preparation, fireworks
• Rubber tubes and miscellaneous articles of rubber
• Solvent, thinners, hydraulic fluids, anti-freezing preparation

Food and Food Preparations

• Cocoa butter, fat, oil powder,
• Extract, essence ad concentrates of coffee, miscellaneous food preparations
• Chocolates, Chewing gum / bubble gum
• Malt extract and food preparations of flour, groats, meal, starch or malt extract
• Waffles and wafers coated with chocolate or containing chocolate

GST Rate Reduced from 28% to 12%

For the following goods, GST rate has been reduced from 28% to 12%:

• Wet grinders consisting of stone as grinder
• Tanks and other armoured fighting vehicles

GST Rate Reduced from 18% to 12%

For the following goods, GST rate has been reduced from 18% to 12%:

• Condensed milk
• Refined sugar and sugar cubes
• Pasta
• Curry paste, mayonnaise and salad dressings, mixed condiments and mixei seasoning
• Diabetic food
• Medicinal grade oxygen
• Printing ink
• Hand bags and shopping bags of jute and cotton
• Hats (knitted or crocheted)
• Parts of specified agricultural, horticultural, forestry, harvesting or threshing machinery
• Specified parts of sewing machine
• Spectacles frames
• Furniture wholly made of bamboo or cane

GST Rate Reduced from 18% to 5%

For the following goods, GST rate has been reduced from 18% to 5%:

• Puffed rice chikki, peanut chikki, sesame chikki, revdi, tilrevdi, khaza, kazuali, groundnut sweets gatta, kuliya
• Flour of potatoes put up in unit container bearing a brand name
• Chutney powder
• Fly ash
• Sulphur recovered in refining of crude
• Fly ash aggregate with 90% or more fly ash content

GST Rate Reduced from 12% to 5%

For the following goods, GST rate has been reduced from 12% to 5%:

• Desiccated coconut
• Narrow woven fabric including cotton newar [with no refund of unutilised input tax credit] iii. Idli, dosa batter
• Finished leather, chamois and composition leather
• Coir cordage and ropes, jute twine, coir products
• Fishing net and fishing hooks
• Worn clothing
• Fly ash brick

GST Rate Reduced from 5% to 0%

For the following goods, GST rate has been reduced from 5% to 0%:

• Guar meal
• Hop cone (other than grounded, powdered or in pellet form)
• Certain dried vegetables such as sweet potatoes, maniac
• Unworked coconut shell
• Fish frozen or dried (not put up in unit container bearing a brand name)
• Khandsari sugar

Other GST Rate Changes for Goods

GST rates on aircraft engines has been changed from 28% or 18% to 5%. Also the GST rate for aircraft tyres has been changed from 28% to 5% and aircraft seats from 28% to 5%.

The GST rate on bangles of lac/shellac has also been changed from 3% GST rate to Nil.

GST Exemption for Goods Announced in the 23rd GST Council Meeting

IGST is now not applicable on imports of lifesaving medicine supplied free of cost by overseas supplier for patients, subject to certification by DGHS of Centre or State and certain other conditions .

IGST is now not applicable on imports of goods (other than motor vehicles) under a lease agreement if IGST is paid on the lease amount.

To extend IGST exemption presently applicable to skimmed milk powder or concentrated milk, when supplied to distinct person under section 25(4) for use in production of milk for distribution through dairy cooperatives to where such milk is distributed through companies registered under the Companies Act.

IGST will not be applicable on imports of specified goods by a sports person of outstanding eminence, subject to specified conditions.

GST will not be applicable on specified goods, such as scientific or technical instruments, software, prototype supplied to public funded research institution or a university or IISc, or IlTs or NIT.

More professional items can now be imported on temporary basis without GST  by accredited press persons visiting India to cover certain events, broadcasting equipments, sports items, testing equipment, under ATA carnet system. These goods are to be re-exported after the specified use is over.

Clarification of GST Rate

In addition to the above GST rate changes and exemptions, the GST Council also announced certain clarification to improve ease of doing business in India as follows:

Inter-State Transfer of Equipment

Inter-state movement of goods like rigs, tools, spares and goods on wheel like cranes, not being in the course of furtherance of supply of such goods, does not constitute a supply. This clarification gives major compliance relief to industry as there are frequent inter-state movement of such kind in the course of providing services to customers or for the purposes of getting such goods repaired or refurbished or for any self-use. Service provided using such goods would in any case attract applicable tax.

Raw Cotton Purchase

GST on supply of raw cotton by agriculturist will be liable for GST, which is to be paid by the recipient of such supply under reverse charge.

Supply of E-Waste Products

Supply of e-waste attracts 5% GST rate. Concerned notification to be amended to make it amply clear that this rate applies only to e-waste discarded as waste by the consumer or bulk consumer.

Find GST rate for all goods and services.

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