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GST Council meeting – Key Takeaways

1. New rates to be applicable from 15.11.2017 prospectively after notification.
2. 178 items shifted from 28% slab to lower slabs leaving apart sin goods and cess applicable goods.
3. Restaurants to have no ITC. Rate of tax shall be 5%. Restaurants in star hotels-18% with ITC. Other hotels -5% without ITC.
4. Outdoor catering -18% with ITC.
5. Gstr-3b to continue till 31.03.2018.
6. Nil returns to become very easy.
7. Only filing of GSTR-1 in current year for all taxpayers. Below 1.5 crore- 31st dec for July to sept, Qtr3- 15.02.2018, Qtr4- 30.04.18
8. Other taxpayers file GSTR 1 for July-oct by 31st dec 2017 then from November by 10th of next month – only GSTR 1.
9. Gstr-1 to be matched with GSTR-3B.
10. Penalty on late filing, nil return- Rs. 20 per day. Others- Rs. 50 per day.
11. Composition: July-sept- ITC-05 by 31.12.2017 and GSTR-04 by 24.12.2017
12. *TRAN-01 to be filed by 31.12.2017.*
13. Composition rate of 1% for manufacturers.
14. Composition scheme for services up to Rs. 5 Lakhs in addition to supply of goods.
15. Composition limit to be increased to Rs. 1.5 crores only upon amendment of law.
16. 1% composition only on taxable and not exempt goods. Dealer dealing in exempted goods allowed to opt for composition.

Forwarded
[10/11, 20:59] ‪+91 75970 00090‬: Summary of the #GSTCouncil meeting of November 10, 2017

*Composition scheme expanded*
Threshold for Composition scheme to be increased to Rs. 1.5 Crores. Uniform tax rate of 1% applicable for both traders and manufacturers. Composition suppliers allowed services upto Rs. 5 lakh per annum for eligibility. Exempted supply not to be taxed at 1%.

*Returns*

Filing of Form GSTR 2 and GSTR 3 has been suspended for the current financial year. Only GSTR 1 is to be filed as per the below schedule.

For suppliers having turnvover below 1.5 crores,
For the period of July to Sept – 31st Dec 2017
For the period of Oct to Dec – 15th Feb 2018
For the period of Jan – Mar – 30th Apr 2018

For suppliers having turnvover more than 1.5 crores,
For the period of Jul to Oct – 31st Dec 2017
For the month of Nov – 10th Jan 2018
For the month of Dec – 10th Feb 2018
For the month of Jan – 10th Mar 2018
For the month of Feb – 10th Apr 2018
For the month of Mar – 10th May 2018

Filing of return in Form 3B to be continued till March. For small taxpayers, return to be simplified. It is not clear whether small suppliers will have to file monthly or quarterly (as proposed in the last meeting).

A committee to simplify details of GSTR 2 and GSTR 3 will be setup.

*TRAN-1 date extended *
The due date of TRAN-1 has been extended to December 31, 2017.

*Penalties reduced*
Rate of penalty for delay in filing of returns will be reduced from Rs. 200 per day to Rs. 20 per day for suppliers with nil returns. For others, penalty to be reduced to Rs. 50 per day.

*GSTR-4 extended*

Due date for return of suppliers covered in composition scheme in Form GSTR-4 has been extended to 24th December 2017.

*Changes in Rates*

1. 5% Tax on all Restaurants other than 5-Star *without ITC*

2. Rates reduced for 178 items from 28% to 18% effective Nov 15, 2017.
– Washing Machines
– Air Conditioners
– Make up
– Sanitary Items
– Marble/flooring
– Toiletries

3. Rates reduced from 28% to 12%
– Wet grinders
– Armoured fighting vehicles

4. Rates reduced from 18% to 12% for 13 items, from 5% to 0% for 6 items, from 12% to 5% – 8 items.

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How to file GST Returns in India

Every registered taxable person has to furnish outward supply details in Form GSTR-1 (GST Returns-1) by the 10th of the subsequent month. On the 11th, the visibility of inward supplies is made available to the recipient in the auto-populated GSTR-2A. The period from 11th to 15th will allow for any corrections (additions, modifications and deletion) in Form GSTR-2A and submission in Form GSTR-2 by 15th of the subsequent month.The corrections (addition, modification and deletion) by the recipient in Form GSTR-2 will be made available to supplier in Form GSTR-1A. The supplier has to accept or reject the adjustments made by the recipient. The Form GSTR-1 will be amended according to the extent of correction accepted by supplier.

On 20th, the auto-populated return GSTR-3 will be available for submission along with the payment. After the due date of filing the monthly return Form GSTR-3, the inward supplies will be matched with the outward supplies furnished by supplier, and then the final acceptance of input tax credit will be communicated in Form GST MIS-1.

Also, the mismatch input tax credit on account of excess claims or duplication claims will be communicated in Form GST MIS-1. Discrepancies not ratified will be added as output tax liability along with interest. However, within the prescribed time, if it is ratified, the recipient will be eligible to reduce this output tax liability.

Format Of Various GST Forms:-

Types of GST Returns to be filed by normal taxpayers

GSTR-1

The taxpayer records all his outward supplies of goods and services in details in this form. This has to be mandatorily done by the 10th of the next month. This will form the basis of all future flow and match for credit reconciliations. GSTR-1 is a detailed form containing 13 different heads. The critical headings are:

  • GSTIN of the Taxable Person – Auto populated result
  • Name – Auto populated result
  • Gross Turnover in Last Financial Year – This has to be filed only once. From next year onwards, this field will be auto populated
  • The Period for which the return is being filed – Month & Year shall be available as a drop down for selection
  • Taxable outward supplies – Here, IGST shall be filled only in the case of inter-state movement whereas CGST and SGST shall be filled in case of intra-state movement. Moreover, details of any exempted sales or sale at nil rate of tax shall also be mentioned here
  • Outward Supplies to end customer, where the value exceeds Rs. 2.5 lakhs – Other than mentioned, all such supplies are optional in nature
  • Any other supplies not covered in above 2 sections
  • Debit Notes or Credit Notes Details
  • Amendments to the details of any outward supplies of previous periods – This does not covers any changes by way of debit/credit notes
  • Exempted, Nil-Rated and Non-GST Supplies – This is a Non-GST section. When the details of exempted sales or nil-rated sales have already been mentioned anywhere above, then only Non-GST shall be filled up here
  • Export Sales
  • Tax Liability arising out of advance receipts
  • Tax Paid.

GSTR-2A

It is available on the 11th of the next month for the recipients to see and validate the information therein. Recipients have time between 11th – 15th of the next month to change any information, delete or add, based on their books of accounts.

GSTR-2

This form is the culmination of all inward supplies of goods and services as approved by the recipient of the services. The due date is 15th of the next month. It is auto-populated with the details of GSTR-2A. GSTR-2 shall include the following heads:

  • GSTIN of the Taxable Person – Auto populated result
  • Name – Auto populated result
  • The Period for which the return is being filed – Month & Year shall be available as a drop down for selection
  • Details of all inward supplies – Auto populated with the details of GSTR-1. The taxable person can make any further addition or changes to the invoice here
  • Changes to the inward supplies made for any previous period
  • Import of Goods – Imports are treated as Inter-state supply and IGST shall be applicable on the same
  • Import of Goods in earlier periods
  • Services received from a person outside India (Import of Services)
  • Import of Services in earlier periods
  • Debit notes or Credit notes Details
  • Amendments made to Debit or Credit notes of previous periods
  • Inward supplies emanating from Unregistered persons
  • Credits received from an Input Service Distributor – Auto populated from details of GSTR-6
  • TDS credit from specified persons – Auto populated from details of GSTR-7
  • TCS credit from E-Commerce operators – Auto populated from details of GSTR-8
  • Input Tax Credit remaining to be taken against an invoice, from which initially a partial invoice was taken
  • Reverse Charge tax liability
  • Amendment to such reverse charge tax liability
  • Tax Paid
  • Input Tax Credit Reversals – A dropdown containing reasons for such reversals shall be made available
  • Amendments to such Input Tax Credit Reversals

GSTR-1A

The form shall be auto-populated after filing of GSTR-2 on the 15th of the next month, having all the correct or changed information. The supplier shall have the choice to accept or reject the changes made by the recipient. Following such acceptance, the GSTR-1 shall be revised to such extent.

GSTR-3

This form is auto prepared by 20th of the next month. It will have the details of all outward as well as inward supplies of goods and services as furnished in GSTR-1 and GSTR-2. After considering both the details, GSTN will determine your input tax credit availability or the amount of tax payable.

It will have the following details:

  • GSTIN of the Taxable Person – Auto populated result
  • Name – Auto populated result
  • Address of the person – Auto populated result
  • The Period for which the return is being filed – Month & Year shall be available as a drop down for selection
  • Total turnover
  1. Export Turnover
  2. Taxable Turnover
  3. Non-GST Turnover
  4. Nil Rated or Exempted Turnover
  5. Total Turnover (Sum of 1-4)
  • Details of outward supplies
  1. Inter-state supply to end customers
  2. Intra-state supply to end customers
  3. Inter-state supply to registered persons
  4. Intra-state supply to registered persons
  5. Exports
  6. Amendments to Sales Invoices, Debit Notes and Credit Notes
  7. Tax liability on such outward supplies
  • Details of inward supplies
  1. Inter-State received
  2. Intra-State received
  3. Imports
  4. Amendments to Purchase invoices, Debit Notes and Credit Notes
  5. Tax liability on such inward supplies
  6. Reversals of Input Tax Credit
  • Total tax liability for the period
  • TDS received for the period
  • TCS received for the period
  • ITC for the period

Apart from the above details, a Part B has to be filed containing the details of,

  • Any taxes, interests, penalties or fees paid during the period
  • Any refunds claimed during the period w.r.t. cash ledger

GSTR-9

This is the annual return, which the taxpayer has to file by 31st December of the coming financial year. It is nothing but the accumulation of all 12 monthly GSTR-3 of the taxpayer. It would also include the amount of tax paid during the year, including details of exports or imports.

Apart from the above forms, the Government shall serve those taxpayers who fail to furnish the returns on time, notice in Form GSTR-3A.

After the GSTR-3 is fully accepted for the month, then final input tax credit shall be communicated through form GST ITC-1. The details of ITC-1 has to be confirmed in due time to get the credit for that month. If the same is not done in due time, then it will disallow the credit for the month and will be computed as a tax liability for the month instead.

Returns to be filed by Composition Tax Payers

GSTR-4A

Similar to the GSTR-2A above, GSTR-4A is generated quarterly for composition scheme taxpayers. It has the details of the inward supplies as reported by suppliers in GSTR-1.

GSTR-4

With the auto-populated details of GSTR-4A, the taxpayer can furnish all his outward supplies here. The due date is 18th of the following month and has to be filed quarterly. It also contains the details of tax payable and payment of tax.

GSTR-9A

This is the annual return for all composition tax payers. It has to filed by 31st December of the coming financial year and includes all the quarterly returns filed by the composition tax payer.

Returns to be filed by Foreign Non-Resident Taxpayer

GSTR-5

This is a detailed form containing the particulars of outward supplies, imports, tax paid, input tax availed and remaining stock. This has to be filed monthly within 20th of the next month or if the registration is given up, then within 7 days of such surrender or expiry of registration.

Returns to be filed by an Input Service Distributor

GSTR-6A

This form will be generated by 11th of next month after the suppliers have filed their GSTR-1 on 10th of the next month. It will be auto-populated with the details of inward supplier made to them. It has to be filed on a monthly basis by the ISD.

GSTR-6

Once the details are confirmed or corrected by the ISD, then GSTR-6 will be generated. It has to be filed by the ISD by 13th of the next month. This is also a monthly filing.

Returns to be filed by a Tax Deductor

GSTR-7

Details of the tax deductions made during the month has to be furnished here. The due date is 10th of the next month.

GSTR-7A

This is a TDS certificate, which is auto-generated upon filing the GSTR-7 by the tax Deductor. It will be available for the assessees to download and keep record of. It will contain details of the tax deducted and the total amount of payment made.

Return to be filed by an E-Commerce Portal

GSTR-8

This return shall contain all the supplies made by the E-Commerce seller and the amount of tax collected as well. It has to be filed by 10th of the next month.

For those assessees whose annual turnover exceeds INR 1 Crore, then a reconciliation statement in Form GSTR-9B has to be filed by 31st December of the next fiscal year. It has to be filed annually and is basically an audited annual accounts, duly certified by competent authority.

Where the assessee is a Government body or a United Nations Body, then a monthly Form GSTR-11 has to be filed by 28thof the next month. These bodies have a UIN (Unique Identification Number) and hence will be required to furnish the details of inward supplies.

Where a taxable person’s registration has been surrendered or cancelled, then a final return in Form GSTR-10 has to be filed within 3 months of such cancellation or registration. It will declare the input tax credit and capital goods held by the taxpayer, tax payable and paid at such time.

The Government has automated all the forms together by bringing the same details on a real time basis in front of the taxpayers. The step, which is of paramount importance, is Step No. 1, i.e. FORM GSTR-1. It will form the basis of all further activities.

Any shortcomings or short filings of information in the details provided by the suppliers can be rectified, changed or deleted by the recipients in ample period of time. It is a seamless process that matches all information together to get the final credit figures and tax payable, if any.

The payment challans are also a very crucial part of all the filing process. Without them, it is not possible to clear tax payments and dues in due course of time and also claim credit.

  1. PMT-1: An online tax liability register arising out of return or non-return related liabilities of the taxpayer.
  2. PMT-2: Credit balance online as in GSTN
  3. PMT-2A: Re-credit addition to the GSTN balance of a taxpayer
  4. PMT-3: Online cash ledger

Note: The above forms are maintained free of cost by the GSTN for each taxpayer. It can be accessed anytime through a User ID and Password, 24X7.

  1. PMT-4: Challan for payment of GST
  2. PMT-5: Payment register for unregistered taxpayers
  3. PMT-6: Application for claiming missing credit

Where it is found that there is an excess credit available in the account of a taxpayer, then the taxpayer has an option to claim refund of such excess credit within prescribed time. The refund application forms are different for the State and Central Governments.

There are 10 forms prescribed for the Central Government, out of which only 5 are applicable for the State application. The main form is RFD-01 where the application for refund is made.

GSTR 3B Return

In order to ease the burden on tax payers, tax authorities have introduced a simple return form called as GSTR 3B. This has to be used only for the december . Every registered tax payer (Except for composition scheme) needs to file a separate GSTR 3B for each GSTIN they have.

This is more like a self-declaration return and the tax payer is not required to provide invoice level information in this form. Only total values for each field have to be provided.

Due date for filing GSTR 3B return for July was 20th of the relavent month.

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GST Provisions Relating To Government

Registration:

Liability for Registration in Government departments/  Local Authority-

  1. If a person makes supply of goods or services or both more than 20 lakh in a financial year then he is liable for registration under GST Act.
  2. Persons who are required to deduct tax at source (TDS) whether or not separately registered under GST Act are compulsorily  liable for registration under GST Act.

 

Information/ Documents required for registration under GST Act :

  1. Application in Form GST REG-01 in case mention at S.NO.-1 and in Form GST REG-07 in case mention at S.NO.-2.
  2. PAN/TAN as the case may be, E-mail, Mobile number
  3. Authority letter- an officer authorized in this behalf
  4. Digital signature of the authorized signatory
  5. Photograph of CEO/ person incharge / authorized signatory
  6. Proof of constitution
  7. Proof of principal place of business : electricity bill/ rent receipt or rent deed in case of rental premises
  8. Bank A/C NUMBER- copy of first page of bank a/c, cancelled cheque ( no bank a/c is required for Government department)
  9. Address of principle place of business with PIN code
  10. Details of DDO/ person responsible for deducting tax/collecting tax/ authorized signatory – name, fathers name, DOB, photo, mobile, e-mail, designation, PAN, Aadhar number, residential address etc

IN GST ACT DEFINITION OF A PERSON  INCLUDES  :`

  • Central Government or a State Government
  • A local authority
  • Any corporation established by or under any Central Act, State Act or Provincial Act or a Government company
  • A co-operative society registered under any law

DEFINITION OF A LOCAL AUTHORITY IN GST ACT :

  • A Panchayat
  • A Municipality
  • A Municipal committee , a Zila parisahd, a District board, any other authority entitled to, entitled by the Central Government or any State Government with the control of a municipal or local fund
  • A Cantonment Board
  • A Regional Council or a District Council constituted under the sixth schedule to the Constitution
  • A Development Board
  • A Regional Council constituted under article 371A of the Constitution

 

RETURN/ DEDUCTION OF TAX/PAYMENT OF TAX :

I n case of tax deduction at source-

  1. Deduct tax @ 1% from payment made to suppliers of notified goods/ services where total value of such supply under contract exceeds Rs. 2.5 lakh
  2. Tax need to deposit TDS before 10th of succeeding month in challan PMT-06 generated through portal . In case late payment of tax deducted the interest shall be liable @18% per annum.
  3. Certificate to be issued within 5 days of crediting the amount then a late fee Rs 100/ per day in RGST and Rs 100/ per day in CGST shall be leviable subject to maximum of 5000/ rupees.
  4. filling of Return within 10 days after each of such month then a late fee Rs 100/ per day in RGST and Rs 100/ per day in CGST shall be leviable.
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Frequently Asked Questions- Form GSTR-1

  1. What is GSTR-1?

GSTR-1 is a monthly Statement of Outward Supplies to be furnished by all normal and casual registered taxpayers making outward supplies of goods and services or both and contains details of outward supplies of goods and services.

  1. Who is required to file the GSTR-1?

Every registered taxable person, other than an input service distributor/compounding taxpayer/TDS Deductor/TCS Collector is required to file GSTR-1, the details of outward supplies of goods and/or services during a tax period, electronically on the GST Portal.

  1. Is GSTR-1 filing mandatory?

GSTR-1 needs to be filed even if there is no business activity (Nil Return) in the tax period.

  1. What are the available modes of preparing GSTR-1?

GSTR-1 can be prepared using the following modes through:

  1. Online entry on the GST Portal
  2. Uploading of invoice and other GSTR-1 data using Returns Offline Tool
  3. Using third party application of Application Software Provider (ASPs) through GST Suvidha Providers (GSPs)
  4. What details have to be furnished in GSTR-1?

The following details of a tax period have to be furnished in GSTR-1:

  1. Invoice level details of supplies to registered persons including those having UIN
  2. Invoice level details of Inter- state supplies of invoice value greater than equal to INR 2,50,000 to unregistered persons (consumers)
  3. Details of Credit/Debit Notes issued by the supplier against invoices
  4. Details of export of goods and services including deemed exports (SEZ)
  5. Summarised state level details of supplies to unregistered persons (consumers)
  6. Summary Details of Advances received in relation to future supply and their adjustment
  7. Details of any amendments effected to the reported information for either of the above categories.
  8. Nil- rated, exempted, and non-GST supplies
  9. HSN/SAC wise summary of outward supplies
  10. Which type of registered taxpayers are not required to file the GSTR-1?

The following taxpayers are not required to file GSTR-1:

  • Taxpayers under the Composition Scheme (Return to be filled by them in GSTR 4)
  • Non-resident foreign tax payers (Return to be filled by them in GSTR 5)
  • Online information database and access retrieval service provider (Return to be filled by them in GSTR 5A)
  • Input Service Distributors (ISD) (Return to be filled by them in GSTR-6)
  • Tax Deducted at Source (TDS) deductors (Return to be filled by them in GSTR 7)
  • E-commerce operators deducting TCS (Return to be filled by them in GSTR 8)
  1. What are the pre-requisites for filing GSTR-1?

Pre-requisites for filing GSTR-1 are:

  1. The taxpayer should be a registered taxpayer and should have an active GSTIN during the tax period for which GSTR-1 has to be furnished.
  2. The taxpayer should have valid login credentials (i.e., User ID and password) to login into GST Portal.
  3. The taxpayer should have an active and non-expired/ revoked digital signature (DSC), in case the digital signature is mandatory
  4. In case a taxpayer wants to use E-Sign, they must have a valid Aadhar number with access to the mobile number and e-mail id registered with Aadhar authority (UIDAI) as OTP will only be sent on the registered mobile number and e-mail id. In case the taxpayer has changed the mobile number and e-mail id, they must first update the same with UIDAI. For cancelled GSTINs, the taxpayers will have an option to file GSTR-1 for the period up to the date of cancellation.
  5. In case taxpayer wants to use EVC, they must have access to the registered mobile number of the Primary Authorized Signatory
  6. For which class of Taxpayers is DSC mandatory for filing returns?

DSC is mandatory in case of all Public & Private Limited Companies, Limited Liability Partnerships (LLPs), and Foreign Limited Liability Partnerships (FLLPs).

  1. By when do I need to file the GSTR-1 for a given tax period? OR What is the due date for filing the GSTR-1?

For normal taxpayers due date to file GSTR-1 for a given tax period is 10th day of the succeeding month and small taxpayers with turnover up to 1.5 crore are required to file GSTR-1 quarterly.

  1. How should the value of turnover to be in entered in the mandatory field on the landing page of GSTR-1?

The turnover value in Table 3 of GSTR-1 has to be entered manually for the first year as the information is not available with the GST system. From the second year of implementation of GST, the system will auto-calculate the turnover based on all the annual returns filed for all the GSTINs associated with a given PAN (PAN-based turnover). However, the turnover value will be editable and you will have the option to amend it.

  1. What does the ‘Total Invoice Value’ column indicate in GSTR-1?

The ‘Total Invoice Value’ column in GSTR-1 is for the invoice value inclusive of taxes.

  1. Will there be any validation on relationship between Invoice value and Taxable Value?

Taxable value is the value as per the provisions of GST law. There will be no validation that the invoice value is equivalent to taxable value plus the tax amount.

  1. Can I enter details of Goods and Services in the same invoice?

Yes, you can enter details of Goods and Services in the same invoices.

  1. What are B2B Supplies?

B2B Supply refers to supply transactions between registered taxable entities/persons (Business-to-Business supplies).

  1. What is meant by B2C Supplies?

B2C Supply refers to supply transactions between a Registered Supplier and an Unregistered Buyer (Business-to-Consumer).

  1. What are Debit Notes?

A Debit Note is a document issued against an invoice in cases where the original invoice was issued at a value lower than the actual value of goods and/or services provided. It can also be issued in case of post supply price negotiations. The difference amount is accounted for in the form of a Debit note

  1. What are Credit Notes?

Credit Note is a document issued against an invoice in cases where invoice was issued at a value higher than the actual value of goods and/or services provided or the invoice value is reduced due to post supply negotiations. This may also happen when the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient.

  1. When are Debit Notes to be reported in the return?

Debit Notes are to be reported in the return of the month in which they are issued by the supplier.

  1. When are Credit Notes to be reported in the return?

Credit Notes are to be reported in the return of the month in which they are issued but not later than the return of the September month following the end of the financial year in which such supply was made, or the date of furnishing of the relevant annual return, whichever is earlier.

  1. Does a tax payer need to report the credit notes and debit notes of supplies to consumer separately?

No. In case of supplies to consumers are to be reported in a consolidated manner (intra-state supplies to consumer and inter-state supplies of invoice value less than INR 2.5 lakhs), the credit/debit notes are not required to be reported separately. Such supplies have to be reported in a consolidated manner net off the values of credit and debit notes.

  1. In case of Receipt of advance by the Supplier from a Receiver, is the supplier liable to pay tax on such an advance amount?

Yes, Supplier is liable to pay tax on advances received from Receivers for the supply of goods and services and report the consolidated advance received details in month in which payment is received. The amount of advances to be reported in GSTR-1 is net off the amount for which invoices have already been issued and the value reported in the same return in other sections.

  1. How is the tax paid on advance payments adjusted against the invoice(s) issued in the subsequent tax period(s)?

The taxpayer has to declare the advance that has to be adjusted in the tax period in which advance is received. Subsequently when invoice is issued,then taxpayer can

adjust the tax liability of the invoice issued of that tax period, in the GSTR-1 of that period. This can be shown in the advance adjustment table of GSTR-1.

  1. Whether purchases from unregistered person, which are subject to reverse charge, for which the recipient issues a tax invoice, is required to be reported ?

All the purchases from unregistered person, which are subject to reverse charge, for which the recipients issues a tax invoice are to be reported in GSTR-2 (and not in GSTR-1).

  1. Do I need to upload the invoice(s) details at the time of filing GSTR-1?  

Taxpayers can upload invoice details any time during the tax period and not just at the time of filing of GSTR-1. For example, let’s take September 2017 as the tax period – the tax payer can upload invoices from 1st September to 10th October and after 15th October in case of late filing of GSTR-1.

  1. Until when can changes be made to the uploaded invoice details?

Taxpayers can modify/delete invoices any number of times till they submit the GSTR-1 of that particular tax period. The uploaded invoice details are in a draft version, and can be changed irrespective of due date until the GSTR-1 is submitted.

  1. What is the due date for the payment of monthly tax liabilities for normal taxpayers?

A normal taxpayer is required to discharge their return related liability at the time of filing of GSTR-3. The current due date for filing GSTR-3 is 20th of the succeeding month.

 

 

 

 

 

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Input Tax Credit Under GST

What is input tax?

Input tax in relation to a taxable person, means the (IGST and CGST) in respect of CGST Act and (IGST and SGST) in respect of SGST Act, Charged to him on any supply of goods and/or services which are used, or are intended to be used, in the course or furtherance of his business. Under the IGST Act, input tax is defined as IGST, CGST or SGST charged on any supply of goods and / or services.

Can GST paid on reverse charge be considered as input tax?

Yes. The credit can be availed if such goods and/or services are used, or are intended to be used, in the course or furtherance of his business.

Does input tax includes tax (CGST/ IGST/SGST) paid on input goods, input services and/ or capital goods?

Yes. It may be noted that credit of tax paid on capital goods also is permitted to be availed in one installment.

What is the ITC entitlement of a person who has applied for registration under the Act within thirty days from the date on which he becomes liable to registration and has been granted such registration?

He shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date from which he becomes liable to pay tax under the provisions of this Act. It may be noted that the credit on pre-registration stock would not be admissible if the registration has not been obtained within a period of 30 days from the date on which he becomes liable to registration.

What is the eligibility of input tax credit on inputs in stock for a person who obtains voluntary registration?

As per section 16(2A) of MGL, the person who obtains voluntary registration is entitled to take the input tax credit of input tax on inputs in stock, inputs in semi finished goods and finished goods in stock, held on the day immediately preceding the date of registration.

Where goods and/or services received by a taxable person are used for effecting both taxable and non-taxable supplies, whether the input tax credit is available to the registered taxable person?

The input tax credit of goods and / or service attributable to only taxable supplies can be taken by registered taxable person. It is important to note that credit on capital goods also would now be permitted on proportionate basis.

What would be input tax eligibility in case where the goods and/or services supplied by a registered taxable person become absolutely exempt?

The registered taxable person who supplies goods and / or services which become absolutely exempt, has to pay an amount equivalent to the input tax credit in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date of such exemption. It has also been provided that after payment of the amount on such goods, the balance, if any available in electronic credit ledger would lapse.

A dealer paying tax on composition basis crosses the composition threshold and becomes a regular taxable person. Can he avail ITC and if so from what date?

He can avail ITC in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date from which he becomes liable to pay tax.

Whether the principal is eligible to avail input tax credit of inputs sent to job worker for job work?

Yes, the principal is eligible to avail the input tax credit on inputs sent to job worker for job work.

What is the time period within which the inputs sent for job work has to be received back by the principal?

180 days.

Whether principal has to reverse the input tax credit on inputs which have not been received back from the job worker within 180 days?

Yes, the principal has to reverse the credit along with interest on inputs which have not been received back from job worker within 180 days but he can reclaim the credit on receipt of inputs.

What is the time period within which the capital goods sent for job work has to be received back by the principal?

Two years.

What is the liability of the principal if the capital goods sent to job worker have not been received within 2 years from the date of being sent?

Principal has to pay an amount equal to credit taken on such capital goods along with interest. But he can reclaim the credit on receipt of inputs.

Where the registered taxable person has claimed depreciation on the tax component of the cost of capital goods under the provisions of the Income Tax Act, 1961, will ITC be allowed in such cases?

The input tax credit shall not be allowed on the said tax component.

What are the conditions necessary for obtaining ITC?

Following four conditions are stipulated:

(a) The registered taxable person should be in possession of taxpaying document issued by a supplier;

(b) The taxable person must have received the goods and / or services;

(c) The tax charged on such supply has been actually paid to the government either in cash or through utilization of input tax credit; and

(d) The taxable person should have furnished the retur

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Appointment of Resident Director in India

Section 149 (3) of the Companies Act, 2013 has provided for residence of a director in India as a compulsory i.e. every company shall have at least one director who has stayed in India for a total period of not less than 182 days in the previous calendar year.

So if you are Incorporating a new company that has all the Director who are not Indian Resident, you need to hire one Indian Resident Director.

Fastlegal provides Professional Resident Director appointment services for foreign subsidiary companies setting  up Business in India to fulfil the requirements of provisions of Companies Act, 2013

If you need any help email us at mail@fastlegal.in

 

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Things You Must Know About Limited Liability Partnership (LLP)

Limited Liability Partnership (LLP) being the new form of Business Structure in India,  Here are the things you should  know about LLP



  1. Separate Legal Entity and Body Corporate:   LLP has its own Name, Own Structure, Own Style, It is different from its partners, can sue or be sued in its name.
  2. Decision Makers: Minimum number of two Designated Partners are required all the time in LLP, who takes decisions in the day-to-day working of LLP, DP’s are responsible for compliance with statutory laws applicable to LLP.
  3. Capital Contribution: LLP can have any number of Partners, Partners contribute in the capital of the LLP and share profits and losses of LLP at an agreed ratio.
  4. Flexible: LLP structure is flexible in its nature, LLP agreement is its charter document, Business of LLP is run out in accordance with LLP agreement, partners agree to an agreement that how the business of LLP will be carried out.
  5. Easy Compliance: You Don’t need to give any disclosures, do not need to issue or allot shares, have an audit of account till certain limit, have statutory registers, have deadlines for meetings, take approvals for Change in name, registered office and much more.


  6. Less Tax: Distribution of Profits to partners attracts no taxes, if you distribute profits in a company it will attract Dividend Distribution Tax, Income arising to Partners as a profit shared is also exempt.
  7. Limited Liability: Liability of partners is limited to their agreed contribution, in bad times it saves you from your personal property.
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Disqualification for Appointment of Director under Companies Act, 2013

The Company being a separate legal entity acts through its Directors and for the purpose of appointment of Director Indian Companies Act, 2013 provides that any Individual can be appointed as Director of the Company if he does not possess the disqualification mentioned under the provisions of Companies Act, 2013


Disqualifications for the appointment of Director:

(1) A person shall not be eligible for appointment as a director of a company, if–

(a) he is of unsound mind and stands so declared by a competent court;

(b) he is an undischarged insolvent;

(c) he has applied to be adjudicated as an insolvent and his application is pending;

(d) he has been convicted by a court of any offence, whether involving moral turpitude or otherwise, and sentenced in respect thereof to imprisonment for not less than six months and a period of five years has not elapsed from the date of expiry of the sentence:

Provided that if a person has been convicted of any offence and sentenced in respect thereof to imprisonment for a period of seven years or more, he shall not be eligible to be appointed as a director in any company;

(e) an order disqualifying him for appointment as a director has been passed by a court or Tribunal and the order is in force;

(f) he has not paid any calls in respect of any shares of the company held by him, whether alone or jointly with others, and six months have elapsed from the last day fixed for the payment of the call;

(g) he has been convicted of the offence dealing with related party transactions under section 188 at any time during the last preceding five years; or

(h) he has not complied with sub-section (3) of section 152.

(2) No person who is or has been a director of a company which–

(a) has not filed financial statements or annual returns for any continuous period of three financial years; or

(b) has failed to repay the deposits accepted by it or pay interest thereon or to redeem any debentures on the due date or pay interest due thereon or pay any dividend declared and such failure to pay or redeem continues for one year or more,

shall be eligible to be re-appointed as a director of that company or appointed in other company for a period of five years from the date on which the said company fails to do so.

(3) A private company may by its articles provide for any disqualifications for appointment as a director in addition to those specified in sub-sections (1) and (2):

Provided that the disqualifications referred to in clauses (d), (e) and (g) of sub-section (1) shall not take effect–

(i) for thirty days from the date of conviction or order of disqualification;

(ii) where an appeal or petition is preferred within thirty days as aforesaid against the conviction resulting in sentence or order, until expiry of seven days from the date on which such appeal or petition is disposed off; or

(iii) where any further appeal or petition is preferred against order or sentence within seven days, until such further appeal or petition is disposed off.

Further Rule 14(1) of Companies ( Appointment & Qualification of Directors ) Rules 2014 says that every Director of the Company Shall inform to the Company concerned about his disqualification under Sub section 2 of section 164, in form DIR 8.

Further Sub Rule 2 provides that where company fails to file the financial statements or annual returns, or fails to repay any deposit, interest, dividend, or fails to redeem its debentures, the company shall immediately file form DIR 9 to ROC furnishing the names and addresses of all the directors of the company during the financial year.

Further where company fails to file the form DIR 9 within 30 days of the failure that would attract disqualification under sub section 2 of section 164, officers of the company specified in clause (60) of Section 2 of the Act shall be the officers in default.

Application of Removal of Disqualification of Directors shall be made in DIR 10.

 

 

FORM ‘DIR-10’

FORM OF APPLICATION FOR REMOVAL OF DISQUALIFICATION OF DIRECTORS

[Pursuant to Section 164(2) read with rule 14(5) of Companies (Appointment and Qualification of Directors) Rules, 2014]

Registration No. of Company ______________

Nominal Capital Rs._____________

Paid-up Capital Rs. _____________

Name of Company__________________________

Address of its Registered Office____________________

 

Grounds under which director(s) are disqualified ____________________

 

Date of disqualification ________________

 

Details of the application _______________________________

Signature

Designation*

Dated this _________ day of _________

 

*State whether Director, Managing Director, Manager or Secretary

 

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Do you Require GST Registration ? Everything you need to Know about GST Registration in India

GST Registration Liability Based On Turnover Of The Business:

As per Section 22 of CGST ACT, 2017 Every Person shall be liable for registration under this Act in the State or Union Territory, other than special category states, from where he makes a taxable supply of goods or services or both if his aggregate turnover in a financial year exceeds twenty lakh rupess:

Person making a taxable supply of goods or services or both in from a special category states shall be liable for registration if his aggregate turnover in a financial year exceeds ten lakh rupees.

Special Category States Under GST:

” Special Category States ” shall mean the States as specified in sub-clause (g) of clause (4) of article 279A of the Constitution currently following  states falls under this category:

Arunachal Pradesh,  Assam,  Jammu & Kashmir,  Manipur,  Meghalaya,  Mizoram,  Nagaland,  Sikkim,  Tripura,  Himachal Pradesh, & Uttarakhand.

Mandatory Registration Under GST:

Following persons shall be required to be registered under this Act compulsorily, irrespective of turnover limits provided above:

  • Persons making any inter-state taxable supply; any person supplying goods or services to persons outside the state in which he is carrying on business shall be liable for registration irrespective of his turnover.
  • Casual taxable person making taxable supply; Person who does not have fix place of business in the state where he is supplying goods or services occasionally, For example person who is supplying services on work contract basis for a specific project in that state where he does not have fix place of business.
  • Persons who is required to pay tax under reverse charge; Persons who are required to pay tax under reverse charge under GST, For Example Taxable services provided or agreed to be provided by any person who is located in a non-taxable territory and received by any person located in the taxable territory in this case recipient of service is liable to pay tax under reverse charge.
  • persons who are required to deduct tax under section 51, whether or not separately registered under this Act; As per section 51 of CGST Act,2017 the Government may mandate: (a) a department or establishment of the Central Government or State Government; or (b) local authority; or (c) Governmental agencies; or (d) such persons or category of persons as may be notified by the Government on the recommendations of the Council to deduct tax at the rate of one percent from the payment made to the supplier where total value of such supply under a contract exceeds two lakh and fifty thousand rupees, so the persons, department or agency mandated by government under section 51 shall be liable for registration under GST.
  • Input Service Distributor, whether or not separately registered under this Act; input service distributor means an office of the supplier of goods or services or both which receives tax invoices issued under section 31 towards the receipt of input services and issues a prescribed document for the purposes of distributing the credit of central tax, State tax, integrated tax or Union territory tax paid on the said services to a supplier of taxable goods or services or both having the same Permanent Account Number as that of the said office.
  • Persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise; any person supplying goods or services on behalf of some other taxable person and it shall include an agent, broker, dealer etc.
  • Persons registered under existing laws; Persons registered under existing laws i.e. Service Tax, Excise & Vat Laws of respective state are required to be registered under GST, even if they are not liable for registration under GST u/s 22 & 24 in this case these dealers may apply for cancellation of registration after migration to GST.
  • Every electronic commerce operator; “electronic commerce operator” means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce.
  • Every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered person.
  • Persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52.



Persons NOT Liable For Registration Under GST:

As per section 23 of CGST Act, 2017 following persons shall not be liable for registration;

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

(b) An agriculturist, to the extent of supply of produce out of cultivation of land.

Frequently Asked Questions On GST Registration:

1. Can I Get Voluntary Registration Under GST, Even If I Am Not Liable For Registration Under The Provisions Of The GST Law?

Yes,  any person who wishes to take advantage of Input Tax Credit i.e. tax paid by him on his purchases may get themselves registered under GST after registration all provisions of GST Law shall apply to them like other registered dealers, For Example, they have to collect tax and file returns etc.

2. Can I Cancel My Voluntary Registration?

Yes, but it can be cancelled after 1 year from date of registration.

3. Do I Need To Have Separate Registration For Different Branches In Same State?

No, a single registration is sufficient for a state, you may add multiple branches

4. Do I Need To Take Separate Registration For Each State In Which I Am Making A Taxable Supply Of Service Or Goods Or Both?

Yes, separate GST registration is required for each state from where a taxable person is making supply of any goods or services or both.

5. Do I Need To Pay Tax For Transfer Of Goods To My Branch In Another State?

Yes, You need to pay tax on supply of goods to branch in another state that is Integrated Goods & Service Tax and you may claim Input Tax Credit of the IGST paid when these goods are sold in that state.

6. Do I Need To Visit GST Office For Getting My Entity Registered Under GST?

No, GST Registration is online process you need to feel some information online on GSTN Portal and upload required documents and you will receive your registration certificate online without visiting GST office.

7. Is There Any Govt. Fee For GST Registration?

No, Govt. is not charging any fee for GST Registration.

8. Do I Have To File Returns Even If I Am Not Carrying On Any Business For Some Time After Getting My Entity Registered?

Yes, return filling is mandatory you may file nil returns in this case.

9. Can I Amend My GST Registration?

Yes, you may amend your registration details any time subject to the approval of the concerned authority.


GST Registration Process At Fastlegal:

You may use Fastlegal online GST registration services at Rs. 2299/- , for which you just need to fill the form given below and upload required documents with the link provided in the form. Our experts will apply your registration on the day payment is received and you will get GST registration Certificate in 3-5 working days. You may talk to our experts if you have any doubts before apply for GST registration.

Document/information required for applying for GST Registration:

  1. Mobile number of the applicant
  2. Email address of the applicant
  3. Pan card of Proprietor/Partners/Designated Partners/Directors as the case may be.
  4. Bank Statement/canceled claque.
  5. Electricity Bill/Telephone Bill/Rent agreement and consent if the business premises are rented.
  6. Aadhar Card/Voters’ ID/Driving License of Proprietor/Partners/Designated Partners/Directors as the case may be.
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Transfer of Shares in Private Limited Company

Transfer of Shares in Private Limited Company is not freely transferable but there are restrictions on transfer, shares of Private Limited Company can be transferred in accordance with the provisions of Companies Act, 2013

Shares are transferred by the person is the shareholder of the Company to another person but he must give a letter to Private Limited Company of which he wishes to transfer shares mentioning that He wants to transfer a certain number of shares of the company as the shareholders of Private Limited company cannot freely transfer shares to anyone. The Company will intimate the same to all the existing shareholders of the company. Once the No Objection Letter or Consent to purchase is received the share transfer deed in form SH-4 is to be executed between Transferor and  Transferee and the consideration for the transfer of shares to be paid by the transferee to the transferor.

The Executed SH-4 along with Original Share Certificate and Copy of Identity Proof (PAN) is sent to Company for Registration of Transfer of Shares by Company and Company shall make  approve the transfer of shares if all the formalities regarding share transfer are complete in all respect and after which company will make necessary entries in the register of members of the company.


Stamp Duty on Transfer of Shares: The Share Transfer Stamps are to affixed of the value of 0.25%  for consideration of transfer on  SH-4 (Instrument of Transfer ) and are required to be crossed.

Let us understand with an Example:  If you want to Transfer shares of Rs. 2 Lakhs for total consideration than you have affix share Transfer of Rs. 200000*0.25% = Rs. 500

Stamp Duty on Shares held in Demat Form: No Stamp is required to paid if Shares of Private Company are held in Demat Form.

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