GST DECODED CHAPTER WISE

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The Goods and Service Tax or GST is a taxation system where there is a single tax in the economy for goods and services. This taxation system is meant to create a single taxation system in the entire country for all goods and services.

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*CHAPTER 1 OF 19*

*REGISTRATION AND ITS REQUIREMENTS*

-It is important to note that in terms of the envisaged GST regime, registration would have to be applied individually for each State.

-Reporting and return filing would be correlated to each individual registration.

-This would further complicate and dilute the refund process as for each export transaction, there may be different refund sanctioning authorities, leading to, among other things, duplication of the entire refund processing exercise for the same transaction.

-The threshold limit for registration has been prescribed at 4 lakhs for North Eastern States on Rs 9 lakhs for others.
(This limit includes all supplies, whether on own account or on behalf of principal, except supplies in the capacity of a registered job worker, which shall be treated as supplies by the principal. The said threshold is to be computed on an all India basis)

-A person shall not be liable to registration if his aggregate turnover consists of only goods and / or services which are not liable to tax.

-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. For example one firm has textile show room; mobile phone show room; car show room in the State; then separate registrations can be obtained for each of these activities in the same State.

-A person, though not liable, may get himself registered voluntarily.

-Every person shall have a Permanent Account Number issued under the Income Tax Act, 1961, in order to be eligible for grant of registration.

-If a person, other than an Input Service Distributor, is already registered under an earlier law, it shall not be necessary for him to apply for fresh registration and he shall follow the procedure as may be prescribed in this regard.

-A causal taxable person or a non resident taxable person shall, at the time of submission of application for registration, make an advance deposit of tax of an amount equivalent to the estimated tax liability for the period for which the registration is sought. The certificate of registration issued to such class of persons shall be valid for a period of 90 days, which may be extended up to 90 days further.

-Powers have been provided for cancellation of registration, if the assessee contravenes the provisions or obtains the registration by fraudulent means. However, such cancellation may be revoked, in terms of the prescribed procedure.

-The concept of a single/centralized registration for multiple places of business has not been provided

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*CHAPTER 2 of 19*

*Levy of Tax*

The person registered under this law is liable to pay tax if his aggregate turnover in a financial year exceeds Rs. 10 lakh (north eastern states Rs. 5 lakh).

A negative list has also been prescribed for transactions and activities of Government and local authorities which shall be exempt from GST levy , like activities of issuance of passport, visa, driving license, birth certificate or death certificate etc.

IGST (Integrated GST) will be livied on interstate supply. CGST (Central GST and SCGT (State GST) will be levied on intrastate supply of goods and /or services.

Option for Composition Scheme : If turnover in a financial year does not exceed Rs. 50 lakh. Rate of tax (termed as ‘Amount’not ‘Tax’) shall not be less than 1%.

Taxable event: The taxable event under GST regime will be supply of goods or services. 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. It also includes importation of service, whether or not for a consideration. So the erstwhile taxable heads such as manufacture, sale, provision of service etc., will loose relevance

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*CHAPTER 3 OF 19*

Tax to be paid at the earliest of the following dates:

A. In case of supply of goods:
i) Date on which the goods are removed for supply to the recipient of movable goods.
ii) Date on which the goods are made available to the recipient (in case goods are not required to be moved).
iii) Date of issuing invoice by supplier, or
iv) Date of receipt of payment by supplier. Or
v) Date on which recipient shows the receipt of the goods in his books of account.

B. In case of supply of Service :
i) The date of issue of invoice or date of receipt of payment, whichever is earlier (provided invoice issued within prescribed time).
ii) Date of completion of service or earlier (if invoice not issued within prescribed time).
iii) Date on which recipient shows receipt of service in books of account (if not covered by case i and ii above).

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*Chapter 4 of 19*

*INPUT TAX CREDIT*

Every taxable person shall, subject to specified conditions, be entitled to take credit of input tax, as self-assessed, in his return and such amount shall be credited, on a provisional basis, to his electronic credit ledger to be maintained in the manner as may be prescribed.

However, a taxable person who has not furnished a valid return as per law shall not be allowed to utilize such credit till he discharges his self assessed tax liability.

The duplication of claims of input tax credit shall be communicated to the recipient and the corresponding tax value shall be added to the output tax liability of the recipient.

Verification and matching will be carried out qua the credit notes relating to an outward supply, issued by the supplier, with the corresponding reduction in the claim for input tax credit by the corresponding receiver, with similar consequences, with the exception that additions to liability, owing to any mismatches, shall be to the account of the supplier.

*TCS on online sales of goods or service:*

Every e-commerce operator engaged in facilitating the supply of any goods and/or services shall collect tax at source at the time of credit or at the time of payment whichever is earlier.

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*CHAPTER 5 of 19*

*TDS*

The Central and State Government may mandate certain, departments (viz, local authority,
Govt . agencies) to deduct tax at the rate of one percent on notified goods or services, where the
total value of such supply, under a contract, exceeds Rs. 10 lakh.
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*REFUND*

A person can claim refund of any tax and interest by making an application in that regard to the
prescribed officer of IGST/CGST/SGST.

The application can be made before the expiry of two years from the relevant date as may be
prescribed. It has been provided that the limitation of two years shall not apply where such tax or
interest or the amount has been paid under protest.

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*CHAPTER 6 of 19*

*RETURNS (E-FILING)*

Dealers shall be required to furnish following returns:

Taxable person other than composition dealer or TDS deductor under section 37 shall file monthly returns by 10th of each succeeding months giving details of outward supplies of goods and/or services during the preceding month and such details shall also be communicated to the vendors to whom such supplies were made within the time as may be prescribed.

Details of outward supplies shall include details relating to zero rated supplies, interstate supplies, return of goods received in relation to/ in pursuance of an inward supply, exports, debit notes, credit notes and supplementary invoices issued during the said tax period to be furnished on or before the 10^th day of the month succeeding the said tax period

Details of Inward supplies shall include inward supplies of services on which the tax is payable on reverse charge basis under this Act and inward supplies of goods and/or services taxable under the IGST Act, and credit or debit notes received in respect of such supplies during a tax period to be furnished on or before the 15^th  day of the month succeeding the tax period in such form and manner as may be prescribed.

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*CHAPTER 7 of 19*

*ACCOUNTS AND RECORD*

Every registered taxable person shall be required to keep and maintain at his place of business, for a period of five years from the end of financial year [including the principal place of business] a true and correct books of account including the following:

-Production or manufacture of goods
-Inward or outward supply of goods and/or services
-Stock of goods
-Input tax credit availed
-Output tax payable and paid
-Such other particulars as may be prescribed in this behalf

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*CHAPTER 8 of 19*

TO BE UPDATED SOON

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COMPILED BY: SOURAV BAGARIA