GST

GST ITC Rules: What is the Input Tax Credit (ITC)? A tax credit means that a manufacturer was able to diminish while paying his tax on yield.

An input tax credit allows a producer to subtract the tax he paid on the input he bought as he pays the tax on his output. He will subtract or claim credit for the tax he settled on his inputs while paying the tax on his production.

At the end of the day, an input tax credit is a tax deducted from the output tax due on account of sales.

• SGST, UTGST, CGST and IGST
• People that are Eligible for the Input Tax Credit
• Persons that are not Eligible for the Input Tax Credit
• The Amount of Time You Have To Take ITC
• Prerequisites for Taking ITC
• No Input Tax Credit is Available for the Following Cases
• ITC Subject to the Composition Levy
• Itc On Items That Have Been Misplaced Robbed, Burned, Written Off, Or Given Away As Gifts Or Free Samples
• ITC on Products or Services Rendered by a Real Estate Developer
• In the Case of a Nonresident Taxable Person, an ITC is Available
• In the Case of Food and Drinks, Outdoor Catering, Health Care
• In the Event of willful Theft
• ITC in Respect of Inputs Sent for Job Work
• The Manner of Distribution of Credit
• The Following are the Postulates
• An Explanation is given For the Purposes of this Segment
• Subject to the Terms and Limitations that May be Imposed
• Provided, However, The Credit for Capital Goods Will Be Limited By The Percentage Points Specified
• Provided, However, The Capital Goods Credit Would Be Limited By The Percentage Points Specified

SGST, UTGST, CGST and IGST

The tax levied by the state government is known as the State Goods and Services Tax or SGST. Intrastate purchases of goods and services, i.e., sales made within a jurisdiction, are subject to the SGST.

On a product or service, SGST is paid in addition to and at the same rate as CGST.

All Indian governments impose this tax. Still, it has also been introduced by two Indian union territories of Puducherry and Delhi since each of these union territories has its legislature and council.

The Central Goods and Services Tax is a government-imposed indirect tax.

It is determined to the exchange of products and ventures embraced inside the state, i.e., intrastate. The assessment gathered under the head “CGST” is payable to the central government depository.

The CGST is levied to reimburse the government for previously levied indirect taxes, for example:

1. Central Excise Duty,
2. Service Tax,
3. Duties of Customs

The UTGST or Union Territory Goods and Services Tax (UTGST) is somewhat similar to the State Goods and Services Tax. The main distinction is that the tax collection is directed to the treasury for the government of the union territories where the goods or services were ultimately used.

UGST is additionally charged at the same rates as that of CGST. Be that as it may, among UTGST or SGST, just each, in turn, will be imposed along with CGST for each case.

The Central Government levies Integrated Goods and Service Tax on all interstate supplies of goods and services. CGST, SGST, and UTGST, on the other hand, are imposed on the provision of goods or services within a jurisdiction.

The IGST has brought uniformity to the taxation of goods and services produced outside of the state. This holds for both supplies made within the state and those made outside the country.

The IGST rate will still be roughly equal to the sum of the CGST and the SGST rates.

People that are Eligible for the Input Tax Credit

Section 18(1) of the CGST Act, 2017 lists the following individuals:

• An individual who was already in business prior to the implementation of GST and who is required to register under GST (Section 18(1)(a)).
• An individual who, notwithstanding the fact that registration is not mandatory, opts for voluntary registration [Section 18(1)(b)].
• An individual who stops paying tax under the composition scheme and switches to the standard scheme [Section 18(1)(c)].
• A person whose exempt supply becomes a taxable supply [Section 18(1)(d)].

Based on either of the following tax-paying records, every registered person shall be entitled to take credit for input tax paid on any supply of goods or services used by him/her that are used or expected to be used in the course or furtherance of his/her business:

• A tax invoice has been released.
• Notice of debit
• Bill of entry
• Invoice produced on a reverse charge basis.
• Input Service Distributor issues a document for credit delivery.

It’s critical to pay attention to the phrases “used by him/her” and “in his/her business.” These terms apply to the specific licensed taxable individual in question, not the whole legal body.

As a result, ITC charged in one state must not be related to a taxable person’s company in another state, even though the taxable person is the same.

Persons that are not Eligible for the Input Tax Credit

1. Individuals that are not GST-registered
2. Those who have signed up for the composition scheme

The Amount of Time You Have To Take ITC

Section 18(1) [Section 18(2)] specifies the period for claiming an Input Tax Credit (ITC).

Following a year from the date of issue of the tax invoice relating to such supply, a registered individual is not entitled to take input tax credit under section 18(1) for any supply of goods or services or both to him.

Prerequisites for Taking ITC

1. At the time of credit, a licensed taxpayer must have a tax invoice on file.
2. The goods or services must have been received,
3. Within 180 days of the invoice date, the customer must have charged the invoice’s amount, as well as the tax, to the seller of products or services, or both.
4. The seller would have paid the tax received via tax invoice and deposited it into the government’s account.
5. The tax invoice information must also have been uploaded in the GST return by the seller.
6. A bill of entry is a paper that may be used to obtain credit while buying goods. The invoice of entry may also have an IGST-paid challan for the shipment.
7. In-service importation, the invoice, and IGST payment through table 3.1 of GSTR-3B form the basis for granting credit.
8. A credit note is a piece of paper that allows a supplier to offset his tax burden. To reverse an already taken ITC, the retailer must copy the credit note to the buyer.
9. A debit notice (also known as a supplemental invoice) is a statement that allows the buyer to claim ITC.
10. A tax invoice on which credit has been granted must be forwarded to the area where the products or services are provided.

No Input Tax Credit is Available for the Following Cases

The following elements are not qualified for ITC under section 17 (5):

GST Prohibits The Use Of Motor Cars And Other Conveyance

The ITC on motor vehicles charged would not be offset against the GST Law’s output tax obligation. In other words, you can’t get credit for your car or different mode of transportation.

Club, Health, And Wellness Centre Membership

The ITC credit will not be allowed if you have paid for a gym card, yoga lessons, or membership in a club for some sport or other activity.

Travel Opportunities Such as Leave or Home Travel Concessions for Employees

If you have booked any travel packages, you will not claim ITC on the payment of the travel package.

However, if you book a travel package for business purposes, ITC would be allowed.

Goods, Services, or a Combination of the Two that are used for Personal Use

The ITC is not eligible whether the products or facilities are used for personal use. ITC is only available where tax is charged or charged on the external delivery of goods or services, according to the law’s simple reasoning.

When contract services are provided for building a movable house

This is perhaps the most contentious aspect of ITC. Job contract providers have long been a source of contention for taxpayers and the IRS. However, the works contract issue has been settled to some degree under GST.

ITC Subject to the Composition Levy

The ITC is not applicable on products or services on which the composition dealer has paid duty.

Itc On Items That Have Been Misplaced Robbed, Burned, Written Off, Or Given Away As Gifts Or Free Samples

If the items are missing, broken, or damaged, or if they are given out as free samples, ITC would not be usable.

ITC on Products or Services Rendered by a Real Estate Developer

Goods or services (other than plant or machinery) received by a taxable individual for the building of an immovable property (other than plant or machinery) on his own account, even where those goods or services (or both) are used in the course or furtherance of operation do not have ITC.

In the Case of a Nonresident Taxable Person, an ITC is Available

ITC would not be eligible if the nonresident taxing individual purchases any products or services. If an NRTP buys any products or services, however, he will be responsible for the ITC.

Besides, the IGST Act applies to imports and exports.

In the Case of Food and Drinks, Outdoor Catering, Health Care

Food and drinks, outdoor catering, beauty treatments, dental care, and cosmetic and plastic surgery would not be eligible for the input tax credit.

However, the input tax credit is applicable whether a licensed citizen requires an internal supply of products, services, or both to make an external taxable supply of the same type of goods, services, or both, or as part of a taxable combination or blended supply.

In the Event of willful Theft

In the event of theft, the input tax credit would not be eligible.

Reversal of Input Tax Credit

Reversal of Credit under GST has the same purpose as it does under the current tax system. In layman’s terms, reversal of credit refers to the reversal of a previously taken credit.

Reversal of credit refers to credit taken out and used when the final product is taxable but is only reversed as the final product becomes excluded.

ITC for GST paid on Reverse Charge

On the tax balance charged under reverse charge on goods and services, the service purchaser will claim Input Tax Credit. The only GST ITC rule is that the goods and services be used or used to benefit the business or organization.

If the composite distributor is subject to the reverse charge mechanism, he or she would be ineligible to receive any tax credit.

The tax would be collected at the ordinary rates, not the composition rates.

ITC on Capital Goods and Reversal on its Sale

It is possible to make it advantageous; tax credit for capital goods can be paid with one payment.

If the individual has asserted depreciation under the income tax act for the GST portion, an input tax credit for the tax component of capital goods is not permitted. In other terms, an individual may demand depreciation on the tax portion or take a GST input tax credit on capital goods.

If a taxable person buys capital goods on which an ITC was claimed, the taxable person is entitled to pay GST at a higher rate from the following sources:

• I took on those capital products at a discount of 5% every quarter or half of a year from the invoice period.
• GST rate multiplied by the selling price of capital goods

When refractory bricks, molds and dies, jigs and fixtures are sold as waste, the taxable individual may be required to pay tax on the transaction value of the product.

ITC in Respect of Inputs Sent for Job Work

The ITC provisions for inputs and capital goods sent for Job Work are specified in Section 19 of the CGST Act, 2017. On inputs or capital goods sent to a job worker, the principal or the registered individual may say ITC.

Furthermore, if those inputs or capital items are sent to the job worker for job work without first being taken to the principal’s place of business, the principal will claim ITC.

As a result, in Form GST ITC-04, a principal must disclose the specifics of the goods shipped or obtained from a job working within a particular quarter.

The Manner of Distribution of Credit

The Manner distribution of credit by Input Service Distributors is governed by Section 20 of the Central Goods and Services Tax Act 2017.

The Following are the Postulates

The Input Service Distributor shall administer the central tax credit as central tax or integrated tax, and the integrated tax credit as integrated tax or central tax, by issuing a paper containing the amount of input tax credit being allocated in the Manner specified.

The credit can be distributed by the Input Service Distributor if the following conditions are met:

• Credit will be issued to credit recipients in exchange for a certificate containing the required information.
• The credit sum circulated does not surpass the credit amount eligible for distribution;
• The tax credit for input resources attributable to a credit receiver must be distributed exclusively to that recipient;
• The tax credit for input services attributed to more than one recipient of credit shall be divided among those recipients to whom the input service is attributed, and such allocation shall be pro-rata dependent on such recipient’s turnover in a State or turnover in Union territory during the relevant period compared to the sum of all such recipients to whom such input service is attributable and who are active in the current year during the said relevant period;
• The tax credit for input services charged attributable to all recipients of credit will be divided among them. Such allocation will be pro-rata dependent on the recipient’s turnover in a State or turnover in Union territories during the particular period according to all recipients’ turnover and operational in the same year during the relevant period.

An Explanation is given For the Purposes of this Segment

The “relevant period” will be as follows:

• the financial year before the year in which credit is to be issued, whether the beneficiaries of credit had a turnover in their States or Union territories in the previous financial year; or
• where any or more credit recipients have no turnover in their States or Union territories in the financial year prior to the year in which the credit is to be issued, the last quarter during which reports of all recipients’ turnover are available prior to the month in which credit is to be distributed;
• The term “recipient of credit” refers to a seller of products or services, or both, with the same Permanent Account Number as the Input Service Distributor.
• “turnover” refers to the value of turnover, less any duty or tax imposed under entry 84 of List I of the Seventh Schedule to the Constitution and entries 51 and 54 of List II of the same Schedule, for any registered individual dealing with the supply of goods involving tax payment as well as goods not taxable under this Act.
• ITC in special cases
• The ITC in special cases is dealt with in Section 18 of the CGST Act.

Subject to the Terms and Limitations that May be Imposed

1. an individual who applies for registration under this Act within thirty days of being liable to registration and is granted registration is entitled to an input tax credit for inputs kept in stock and inputs found in semi-finished or finished products held in stock on the day exactly before the date on which he becomes liable to pay;
2. An individual who obtains registration under section 25(3) is entitled to claim an input tax credit for inputs kept in stock and inputs found in semi-finished or finished products held in stock on the day immediately preceding the date of registration;
3. On the day immediately preceding the day on which he becomes eligible to pay tax under section 9, any enrolled individual who ceases to pay tax under section 10 is entitled to take credit for input tax paid on inputs kept in stock, inputs found in semi-finished or finished products held in stock, and on capital goods

Provided, However, The Credit for Capital Goods Will Be Limited By The Percentage Points Specified

When a registered person’s exempt supply of products or services, or both, becomes a taxable supply, the registered person is entitled to input tax credit on inputs kept in stock and inputs found in semi-finished or finished goods held in stock that are related to the exempt supply, as well as on capital goods exclusively used for such exempt supply on the day immediately preceding the date when supply becomes taxable:

xProvided, However, The Capital Goods Credit Would Be Limited By The Percentage Points Specified

After one year from the date of issue of the tax invoice relating to such supply, a registered individual is not entitled to take input tax credit under subsection regarding any supply of goods or services or both to him.

Where a registered person’s constitution changes as a result of a sale, takeover, demerger, amalgamation, lease, or conversion of the company with particular arrangements for liability transfer, in such a manner as may be prescribed, the said registered entity may pass the input tax credit that remains unused in his electronic credit ledger to such sold, combined, demerged, amalgamated, rented, or transferred company.

The registered individual shall pay a sum equal to the input tax credit taken on the said capital goods or plant and machinery, decreased by such percentage points as may be required, or the tax on the transaction value of such capital goods or plant and machinery calculated under section 15, whichever is greater.

The taxable individual may pay tax on the transaction value of certain products calculated under section 15 if refractory bricks, moulds, and dies, jigs and fixtures are supplied as scrap.

How To Correct GSTR 3B After Filing: GST refers to Goods and Services Tax charged on products sold for domestic consumption. Introduced by the Constitution Act in 2016, GST is a value-added tax, which will convert the country into one unified market. Taxpayers should file GSTR-3B every month till the 20th of the next month. GST return is a document that encompasses all the details of tax paid on purchases and sales. After filing the GST return, one becomes legally responsible to pay taxes on the income through business transactions.

Though there is less scope for mistakes, still the chances of error while calculating purchases, sales, input, and output taxes are common. Sometimes the taxpayer might miss considering the sale or some purchase. After the due date of filing returns for the next financial year, one cannot rectify the error in GSTR-3B. Check out each and every possible mistake and acknowledge how to correct GSTR-3B after filing.

Common Errors Found on GST Portal

• Error in Validation After Submission of Amendment of Non-Core Application: This error shows the mistake in the provided basic information of the taxpayer. At the time of migrating, the portal permitted only the name of the PAN holder. Now, it is confirming the other data also, which involves address and date of birth. When this error is displayed, one should verify the entire data.
• There is No Summary to Submit GSTR-1: When any invoice details under GSTR-1 have not mentioned then this error occurs. According to GST rules, taxpayers should add at least one line item with a null value. By putting in zero in all the fields, the system will not show any error and will let people file the return.
• Processing Error: While requesting transitional credit of the returns in TRAN-I form, portals show this error. While saving the details of the existing registration in TRAN-I does not come out to be the same as mentioned in the Registration or Enrolment application, then this error is displayed.
• System Error: While submitting TRAN-I through EVC, people can find system errors. This issue can be resolved by using GSTIN and DSC mode of filing while the EVC.
• Invalid GSTIN: When the customer’s GSTIN entered is wrong then this error occurs. It can be resolved by checking the correct GSTIN on the government website and entering it.
• Earlier Date Is Not Allowed for Invoice: When the date mentioned in the invoice is previous to the GST registration date, then this error occurs. The invoices should be transferred to the B2C section and the GSTIN numbers of customers should be deleted to resolve this error. It would be beneficial to recalculate the B2C summary and reupload it to the government portal.

What Issues Can Arise in GSTR-3B? How to Resolve Them?

GSTR-3B is the first Return Form presented after the implementation of GST. Introduced by CBEC, every registered taxpayer has to file this return form. It should involve a summary of information about the available input tax credit, sale and purchase, tax paid, and tax payable. There are numerous doubts raised about the mistakes while filing the GSTR-3B return. Many taxpayers want to know how to correct GSTR-3B after filing and the possible consequences due to errors made.

The situation I: Forget to include some of sales and purchase

If any person wants to amend the GSTR-3B, they can do it by filing the GSTR 1 or 2 return for the same month. For instance, if sales have been excess reported or less reported while filing GSTR-3B return, it can be corrected by filing return for outward supplies (GSTR-1). If any error occurs while providing claiming the eligible Input Tax Credit in GSTR-3B, it can be corrected while filing a return for inward details (GSTR-2).

It is not possible to revise GSTR-3B. The only option is to include them in GSTR-3B of the month in which one remembers it. However, it cannot be involved when the time period passes.

Situation II: Instead of CGST and SGST, payment of IGST is made

The cash balance of IGST payment cannot get adjusted against that for SGST and CGST. The only possible solution to resolve this problem is to claim the paid IGST refund later. However, the liability of CGST and SGST is to be paid in cash.

Situation III: Wrongly Filed Inward Details Under Reverse Charge Column and Return is Submitted

One might think of paying additional tax liability raised due to filing inward details wrongly under the reverse charge column. However, there is no need to pay any additional tax amount and know-how to correct GSTR-3B after filing. It is possible to correct the details in GSTR 1 and 2 return. After correcting these details, the additional tax liability shall be abandoned and updated automatically.

Situation IV: Forget to Claim or Claimed Less ITC in GSTR-3B

If a taxpayer forgets to claim ITC, then they can update all the details in GSTR 2. The additional ITC can be accredited to the electronic credit register after the submission of GSTR 2 and 3.

Situation V: Output Tax Becomes Less Than What Already Paid

The additional tax paid can be adjusted with the next month’s liability if the total GST liability of the registered taxpayer is less than the output tax liability stated in GSTR-3B.

Situation VI: Tax is Under Paid in GSTR-3B and Additional Tax Liability Arise After Changing GSTR-3B Details

The GST Portal will show the additional tax liability after changing the details of GSTR-3B through GSTR-1 and GSTR-2. This additional tax can be paid through an electronic cash record along with the late interest. If in case the total input tax credit claimed is wrong or less than what is claimed then it should be added to the output liability and can be paid by cash ledger.

Situation VII: Taxpayer Has Not Filed The GSTR-3B

If anyone has not filed the GSTR-3B then they can file GSTR 1, 2, and 3. After that, they can submit the form before the mentioned due dates. Once filed GSTR 1, 2, and 3 successfully along with taxes are paid, then there is no need to file the GSTR-3B.

Situation VIII: Payment for Submitted GSTR-3B Has Not Been Done

If a taxpayer has submitted the GSTR but payment is still pending then they can update and file accurate details in GSTR 1, 2, and 3.  After that, they should submit the form and then pay taxes. If late interest is imposed one should pay the same along with tax.

Is It Possible to Reset GSTR-3B?

GSTR-3B is a summary return of the total inward supplies and total outward supplies made during the month. Every business dealer registered under the GST regular scheme should file a GSTR-3B return. One should file a NIL GST return if there are no business transactions. There are no options to revise GSTR-3B; however, taxpayers can reset it.

‘Rest GSTR-3B’ announced by the GST Council enables taxpayers to change the status of submitted to ‘Yet to be Filed’. It allows the taxpayer to edit the filed details in the return. Moreover, one can use the choice to reset GSTR-3B only once. Following are the steps to Reset GSTR-3B:

• Log in at GST Portal
• Go to tab ‘Services’ and click on ‘Returns’. Now, visit Returns Dashboard
• Choose the Financial Year and Filing Period. Under Monthly Return GSTR-3B, click on the option ‘Prepare Online’
• Reset Activated GSTR-3B option
• A warning message will appear on the screen, which involves an e-liability ledger will get deleted and Input Tax Credit will get reversed.
• Success Message that shows that reset is successful will appear and the return status changes to ‘Yet to be filed’.
• After making desired changes, a taxpayer should submit it again.

Conclusion

Once filed, GSTR 1 and GSTR-3B cannot revise and there is no concept of return revision in GST. However, any mistakes that occurred can be handled carefully by referring to the points mentioned above.

Partnership Act 1932: A partnership firm is formed when two or more people join forces as partners. The Indian Partnership Act, 1932 governs this partnership firm’s laws and regulations Also, the Indian Contract Act governs the partnership in locations where the Partnership Act, 1932 is absent. In this article, let’s understand the Partnership Act 1932, its definition, scope, and different types of partnerships.

• Definition of Partnership Act
• What is Partnership Act, 1962?
• Partnership Act Important Points
• Types of Partnerships
• Number of Partners in a Partnership
• Types of Partners in Partnership Firm
• Partnership Deeds
• FAQ’s on Partnership Act

Definition of Partnership Act

The Indian Partnership Act, Section 4, defines a partnership as:

Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any one of them acting for all

What is Partnership Act, 1962?

A partnership firm is formed when two or more persons join forces to run a business with the goal of making money and sharing it. The partners pool their financial resources and work together to run the company. A partnership must be created for the purpose of carrying on a lawful business, according to Section 12 of the Indian Partnership Act. Property co-ownership is not considered a partnership.

Partnership Act Important Points

The important points of the Partnership Act are explained below:

• To carry on the partnership firm’s business, the partners must come to an agreement.
• The goal of forming a partnership should be to make money and share it with the other partners. Unless otherwise indicated, profit and loss distribution might be based on the capital contribution percentage of each partner or distributed equally among all partners.
• The partnership agreement must specify that the business will be run jointly by all of them or by some of them acting on behalf of all of them. The mutual agency exists between the partners, according to Section 13 of the Partnership Act of 1932.
• In a partnership, each partner serves as both a principal and an agent for the other partners. A partner’s activities have a binding effect on the actions of all other partners.
• Unlimited Liability- The partners might be held jointly accountable for the firm’s debts. They have unlimited accountability for the firm’s obligations, which extends to their personal assets.

Types of Partnerships

On the basis of partnership terms and business scope, there are two types of partnerships.

1. Partnership on the Basis of Duration
   • Partnership at Will: A partnership at will has no set time limit for its expiration.
   • Partnership for a Fixed Period: The partners agree on a period of time for the partnership to last, after which it will end.
2. Partnership Based on the Size of the Company
   • Particular Partnership: When a partnership is formed for the purpose of completing a specific project, it expires after the project is completed.
   • General Partnership: When a partnership is created for the firm’s regular operations rather than for a specific project, it is referred to as a general partnership.

Number of Partners in a Partnership

• According to the Indian Partnership Act, the maximum number of participants in a partnership is unlimited, although a minimum of two partners is required.
• According to the Companies Act of 2013, the maximum number of participants in a partnership cannot exceed 100.
• According to Section 464 of the Companies Act, 2013, a partnership with more than 100 members is considered an illegal association.

However, the maximum number of partners for banking purposes is ten, while the maximum number of partners for other reasons is ten, according to Section 11 of the Companies Act.

Types of Partners in Partnership Firm

In a partnership firm, there are essentially six types of partners.

• Active/Managing Partner: Takes an active role in the firm’s day-to-day activities.
• Sleeping/Dormant Partner: Does not participate in the day-to-day activities of the firm but is bound by the other partners’ actions.
• Nominal Partner: Has no financial interest in the firm and is merely a partner in the name.
• Partner in profit only: He/She shares only the firm’s gains and not the losses. Any third-party liabilities are not the responsibility of such a partner.
• Minor Partner: According to the Indian Contract Act, a minor cannot be a partner in a partnership firm, but he can be entitled to the firm’s benefits with the approval of the other partners. The minor partner shares in the firm’s profits equally, but has limited accountability for the firm’s losses.
• Partner by Estoppel: A person who is not a partner of the firm but represents himself to be one to another person through his words or conduct is referred to as a partner by estoppel. Even if he is not a partner, such a person cannot deny being one afterwards.

Partnership Deeds

A partnership’s foundation is the partnership agreement. It is the basis that establishes a legal relationship between the partners in order to carry out the partnership firm’s operations. A partnership agreement can be written or oral, but it is referred to as a partnership deed when it is written. The following are some of the details contained in a partnership deed.

• The partnership firm’s name and address, as well as the business’s
• All partners’ names and addresses
• Partners’ rights, responsibilities, and obligations
• Ratio of profit and loss sharing
• Each partner makes a financial contribution.
• Interest rates on capital, loans, and drawings
• Accounts are settled in the event of the firm’s dissolution.
• In the event of a disagreement between partners, how do you resolve it?
• Partners’ salaries and commissions are due.
• Rules to follow in the event of a new partner’s admission, retirement, or death of an existing partner
• Any other provisions impacting the partners’ rights

FAQ’s on Partnership Act

Question 1.
What are the rights of partnership?

Answer:
For the business, partners share planning, decision-making, operation, and management rights and duties. This right can also be waived by partners. During the decision-making process, partners have the right to provide input and propose ideas, and these ideas can be considered by the group.

Question 2.
Why is a HUF not considered as a partnership?

Answer:
A contract/agreement for a partnership is one of the most crucial aspects of a partnership. A voluntary and contractual agreement between partners is required. A HUF is formed from statues, and all of its members are born into the organisation. As a result, these individuals cannot be considered partners under the law, therefore the HUF is not a partnership.

Question 3.
Sharing of Profit is the truest test of a partnership. True or False?

Answer:
This is a false statement. The existence of a Mutual Agency is the truest test of a partnership. There are additional situations in which profit is shared but there is no partnership. However, if there is an agency between the persons that manage a business jointly and split earnings, it will be considered a partnership.

List of Exempted Services under GST: On May 19th, 2017, the GST council meeting decided the list of exempted services under GST. The GST rates were also agreed upon. Five GST rate categories for goods and services at 0%, 5%, 12%, 18%, and 28% were approved by the council.

List of Services Exempted Under GST

1. Services provided by the local authority or the Government excludes the following services—
   • Services are provided by the Department of Posts through express parcel post, speed post, life insurance, and agency services provided to any person other than the Government.
   • Services concerning an aircraft or a vessel, inside or outside the precincts of a port or an airport.
   • Transportation of passengers or transportation of goods
   • Services other than the services which are covered under clauses (i) to (iii) above are provided to business entities.
2. Services which the RBI provides
3. Services provided by a foreign diplomatic mission located in India
4. Services related to the growth of plants and breeding of every life form of animals, except the breeding of horses, for food, fiber, fuel, raw material, or other similar products or agricultural produced using —
   • Agricultural operations are directly related to the production of any agricultural produce, including cultivation, harvesting, threshing, plant protection or testing or
   • Supply of labour for farms
   • Processes that are carried out at an agricultural farm includes tending, cutting, harvesting, drying, pruning, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging, and such like operations that do not change the essential characteristics of the agricultural production but make it sellable for the primary market;
   • Leasing or renting agro machinery or vacuous land with or without a structure incidental for its utilisation;
   • Packing, unloading, loading, warehousing, and storage of agricultural production;
   • Services for agricultural extension;
   • Services by any Agricultural Production Marketing Committee or the services provided by a commission agent to purchase or sell agricultural production;
5. Service using access to a bridge or a road on the clearance of the custom prices.
6. By an electricity distribution utility, the distribution of electricity.
7. Services using renting of residential dwelling for use as an abode.
8. Services using:
   • Extending of deposits, advances, or loans in so far as the consideration is represented by way of discount or interest (other than interest involved in credit card services)
   • Inter sale or inter purchase of foreign currency amongst banks or authorised dealers of foreign exchange.
9. Services using transportation of goods:
   • Services by road except:
     • An agency for transportation of goods or,
     • A courier agency.
   • Services by the inland canal.
10. Services that are provided to the United Nations or a stated international organisation.
    The exemption may be notified by issuing notification under section 55 of the Act of SGST/CGST.
11. Services which are provided by the workers of the Common Bio-medical Waste Treatment Facility or CBWTF to a clinical establishment by way of treatment or disposal of bio-medical waste or the processes incidental to that;
12. Services by a veterinary clinic about the health care of birds or animals.
13. Services provided by an organisation registered under section 12AA of the Income-tax Act, 1961 (43 of 1961) by charitable activities.
14. Services provided by a stated organisation regarding a religious pilgrimage aided by the Ministry of External Affairs (India), under the respective preparations;
15. Services that are provided by-
    • An arbitration council to–
      • Any individual other than a business organisation; or
      • A business organisation with a turnover up to rupees twenty lakh (ten lakh rupees in a particular category state) in the preceding financial year;
    • An individual advocate or partnership firms of advocates apart from a senior advocate, using legal services to-
      • An individual advocate or a firm of advocates providing legal services;
      • Any person other than a business organisation; or
      • A business organisation with a turnover up to rupees twenty lakh (ten lakh rupees in a particular categorised state) in the prior fiscal year; or
    • A senior advocate using legal services to-
      • Any person other than a business e; or
      • A business organisation with a turnover up to rupees twenty lakh (ten lakh rupees in a unique category state) in the prior fiscal year.
16. Services provided-
    • By an educational institution to its staff members, faculty members, and students;
    • To an educational institution, using-
      • Transportation of students, staff, and faculty;
      • Catering, comprising any system of mid-day meals, is Government-sponsored;
      • Security or house-keeping services performed in such educational institution;
      • Services relating to admission to or examination by such institution;

Provided that nothing included in clause (b) of this entry shall be implemented to an educational institution other than an organisation providing services using pre-school education and education up to higher secondary school.

17. Services provided by the IIM or Indian Institutes of Management, according to the guidelines of the Central Government, to their students, using the following educational programs, except Executive Development Programme, –
    • Full-time residential Post Graduate Programmes in Management for the Post Graduate Diploma in Management for two years, to which admissions are made based on (CAT) Common Admission Test, conducted by Indian Institute of Management;
    • Fellow Program in Management;
    • In Management, a five-year integrated program

18. Services provided to an acknowledged sports organisation by-
    • An individual as a player, umpire, team manager, coach, or referee for participation in a sporting event organised by a recognised sports organization;
    • Another recognised sports organisation;

19. Services provided by an artist using performance in the art forms of classical or folk
    • music, or
    • theatre, or
    • dance, if the percentage charged for such performance is not above rupees one lakh and fifty thousand:

Given that, an exemption will not be applied to the services that are provided by artists who are the brand ambassadors;

20. Services by way of collecting news or providing news by the United News of India or Press Trust of India or an independent journalist;
21. Services using giving on rent–
    • To a state road transport undertaking, a motor vehicle which is meant to carry above twelve tourists; or
    • To a goods transportation agency, a method of goods transportation
22. Transportation of tourists, with or without attended belongings, by:
    • Air, boarding from or stopping in an airport located in the state of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, or at Bagdogra or Tripura;
    • Non-airconditioned carriage other than radio taxi, for transportation of passengers, excluding tourism, conducted tour, a charter; or
    • Stage carriage rather than an air-conditioned stage carriage.

23. Services of life insurance business provided using annuity under the National Pension Scheme regulated by PFRDA also known as Pension Fund Regulatory and Development Authority of India under the Act of Pension Fund Regulatory And Development Authority, 2013
24. Services of life insurance business provided by the Naval, Air Force Group Insurance Funds and Army, to the Navy, Air Force, and Army, respectively, under the Central Governments Scheme of Group Insurance.
25. Services that are provided by an incubatee up to an overall turnover of rupees fifty lakh in a fiscal year subject to the following conditions, namely:-
    • The overall turnover had not surpassed fifty lakh rupees during the prior fiscal year; and
    • three years has not been passed from the date of agreeing on an incubate
26. Service by an unincorporated organisation or a non-profit entity registered under any law for the time being in force, to its members by way of recompensation or share of benefaction–
    • As a union of trade;
    • For the provision of carrying out of any activity which is exempted from the duty of GST; or
    • Up to the amount of five thousand rupees per month each member for collecting of goods or services for everyday use from a third person
27. Services that an organiser provides to an individual in respect of a business exhibit held outside India;
28. Services using animal slaughtering;
29. Services received from a service provider located in non-taxable territory by –
    • Government, a local authority, governmental authority or an individual about any purpose other than industry, commerce or any other profession or business;
    • An organisation registered under section 12AA of the Income-tax Act, 1961 (43 of 1961) to provide generous actions; or
    • An individual located in a non-taxable region; Given that the exemption will not be applied to the–
      • Database access or retrieval services and online information received by people specified in clause (a) or (b); or
      • Services using transport of goods using a vessel from a place outside of India till customs duty of consent in India received by people designated in the (c) clause;
30. Services of public libraries using publications, lending of books, magazines, or any other knowledge-enhancing material or content or item;
31. Services provided by the Employees’ State Insurance Corporation to people governed under the Act of Employees’ Insurance, 1948;
32. Services using transfer of a going concern, as an independent part of a whole part;
33. Services using public conveniences such as the provision of facilities of bathroom, washrooms, lavatories, urinal or toilets;
34. Services by Government, local authority, or a governmental authority using any activity about any gathering entrusted to a municipality under the 243 W Article of the Constitution of India.
35. Services that the Reserve Bank of India receives from outside India about foreign exchange reserves management;
36. Services provided to a foreign tourist by a tour operator about a wholly outside India tour.
37. Services using pre-conditioning, pre-cooling, ripening, waxing, retail packing, labelling of vegetables and fruits which do not alter the necessary characteristics of the said vegetables or fruits;
38. Services using admission to a museum, national park, wildlife sanctuary, tiger reserve, or zoo;
39. Services provided by the Government or a local authority to a business organisation with an overall turnover up to rupees twenty lakh (ten lakh rupees in a particular category state) in the prior fiscal year.

Explanation – For this entry, at this moment, it is clarified that the provisions of this entry should not apply to

• Services at S. No. 1 (i), (ii)and (iii); and
• Services using renting or leasing of immovable or fixed property;

40. Services provided by the Employees Provident Fund Organisation (EPFO) to people governed under the Act of Employees Provident Funds and Miscellaneous Provisions Act, 1952;
41. Services provided by the Insurance Regulatory and Development Authority of India (IRDA) to insurers under the Act of Insurance Regulatory and Development Authority of India, 1999;
42. Services provided by SEBI or Securities and Exchange Board of India set up under the Act of Securities and Exchange Board of India, 1992 by way of protecting the interests of investors in securities and encouraging the growth and development of security market;
43. Services provided by NCCD or National Centre for Cold Chain Development under the Ministry of Agriculture (India), Cooperation and Farmer’s Welfare using cold chain knowledge dissipation;
44. Services using transportation of goods by an aircraft from a place outside India up to the customs station of clearance in India.
45. Services provided by a local authority or the Government to another local authority or Government:

Given that nothing contained in this entry shall apply to services at S. No. 1 (i), (ii)and (iii) above

46. Services are provided by the Government or a local authority by issuing a driving license, death certificate, birth certificate, visa, passport.
47. Services provided by a local authority or the Government using enduring b non-performance of a contract for which b compensation in the form of penalties or liquidated damages is payable to the local authority or the Government following such agreement;
48. Services provided by the local authority or the Government using-
    • registration needed under any law for the moment in force;
    • testing, safety check, calibration, or certification correlating to the safety of consumers, workers, or the public at large, including fire license, required under any law for the time being in force;
49. Services provided by the Government or a local authority using responsibility of the right to use natural resources provided to a farmer for the growth of plants and breeding of every life form of animals, except the breeding of horses, for food, fuel, fiber, raw material or other related items;
50. Services by a local authority, or the Government or a governmental authority using any activity about any gathering entrusted to a Panchayat under article 243G of the Constitution:

it will be continued by way of notification under section 7(2) (b) of CGST/SGST Acts.

51. Services provided by the Government or a local authority by way of assignment of the right to use any natural resource where the Government or the local authority assigned such right to use before April 1st, 2016:

Given that the exemption will be applied only to service tax payable on one time charge payable, in total upfront or installments, for assignment of the right to use such natural resource;

52. Services provided by a local authority or the Government using allowing a business organisation to work as a telecom service provider or use radio frequency spectrum during the period before April 1st, 2016, on payment of license fee or spectrum user charges, as the case may be;
53. Services provided by the Government by way of deputing officers after office hours or on holidays for inspection or container stuffing or other duties to import export cargo on MOT, also known as Merchant Overtime charges.
54. Services by a procuring bank to any person about the settlement of rupees two thousand in a one-time transaction transacted through credit card, debit card, charge card, or other payment card service.

Explanation — For this entry, “procuring bank” means any financial institution, banking company, including a non-banking commercial company or any other individual, who makes the payment to another individual who accepts such cards.

55. Services of leasing or renting assets (rolling stock assets including locos, wagons, coaches) by Indian Railways Finance Corporation (IRFC) to the Indian Railways.
56. Services provided by any individual for official use of a foreign diplomatic mission or consular post in India or personal use or for the members of the family of diplomatic agents or career consular officers posted there. This exemption is available on a reciprocal based on a certificate which is issued by MEA (Protocol Division): this will be continued using notification under section 55 of the Act of CGST/SGST.
57. Taxable services, which are provided or will be provided, by TBI or Technology Business Incubator or STEP or Science and Technology Entrepreneurship Park, which is recognised by the NSTEDB of the Department of Technology and Science, India or bio-incubators which are recognised by the BIRAC, under the Department of Biotechnology, India;
58. Taxable service provided by the State Government Industrial Development Corporations to the industrial unit. Using granting extended duration lease (thirty years, or more) the industrial plots from so much of tax leviable, as is leviable on the single upfront amount known as premium, price, cost, salami, or any other name due before-mentioned lease.
59. Services provided to the Government using transportation of passengers with or without attended belongings, by air, boarding from or terminating at a provincial connectivity system airport, against contemplation in the form of VGF or viability gap funding.

Given that nothing contained in this entry will be applied on or after the expiry of a period of a year from the date of commencement of operations of the provincial connectivity system airport as notified by the Ministry of Civil Aviation

60. Services that are provided by cord blood banks using preservation of stem cells or any other service about such conservation;
61. Services using coaching or training in recreational activities relating to,-
    • Culture or arts; or
    • Sports by a charitable organisation registered under section 12AA by the Act of Income-tax, 1961;
62. Any services that are provided by-
    • The National Skill Development Corporation, also known as NSDC, which n Government the Government of India sets up;
    • A Sector Skill Council is also known as SSC, which the NSDC approves;
    • An assessment agency which the SSC or NSDC approves;
    • A training partner who the NSDC or SSC approves;
      • The National Skill Development Corporation implemented the National Skill Development Programme; or
      • The National Skill Certification and Monetary Reward Scheme started a vocational skill development course; or
      • The National Skill Development Corporation implemented many other schemes.
    • Services provided by the assessing bodies empanelled centrally by the Directorate General of Training, Ministry of Skill Development and Entrepreneurship using assessments under SDI or Skill Development Initiative.
    • Services that are provided by the training providers under Deen Dayal Upadhyaya Grameen Kaushalya Yojana, under the Ministry of Rural Development, offer vocational or skill training courses certified by the National Council for Vocational Training.
    • Services using sponsorship of sporting events organised-
      • By a national sports organisation, or its affiliated federations, where the participating teams or individuals represent any state, district, country, or zone;
      • By Paralympic Committee of India or Special Olympics Bharat,
      • Association of Indian Universities, Games Federation of India, All India Sports Council for the Deaf, Inter-University Sports Board School.
      • By Sports Board and Central Civil Services Cultural;
      • Under the Panchayat Yuva Kreeda Aur Khel Abhiyaan (PYKKA) Scheme; or
      • As part of national games, by Indian Olympic Association.

66. Services provided using actual labour contracts of construction, commissioning, erection, installation, alteration, fitting out, repair, maintenance, renovation, or completion of a civil structure or any other original works about the beneficiary-led individual house enhancement or construction under the Pradhan Mantri Awas Yojana (PMAY);
67. Services using pure labour contracts of construction, erection, commissioning, or installation of original works of a single residential unit otherwise a part of a residential complex;
68. Services of general insurance business that are provided under the following schemes –
    • Scheme for Hut Insurance; and
    • Scheme for Cattle Insurance under Swarnajaynti Gram Swarozgar Yojna; and
    • Scheme for the Tribal Insurance; and
    • Gramin Accident Policy and Janata Personal Accident Policy; and
    • For Self-Employed Women, Group Personal Accident Policy; and
    • Weather Based Crop Insurance Scheme or the Modified National Agricultural Insurance Scheme, implemented by the Ministry of Agriculture and approved by the Government of India; and
    • Premia collected on export credit insurance; and
    • Agricultural Pump set and Failed Well Insurance; and
    • Pilot Scheme on Seed Crop Insurance; and
    • Pradhan Mantri Suraksha Bima Yojna; and
    • Jan Arogya Bima Policy; and
    • Central Sector Scheme on Cattle Insurance; and
    • Niramaya Health Insurance Scheme constituted under the provisions of the National Trust for the Welfare of People with Mental Retardation, and, Cerebral Palsy, and, Trust implements autism, and, Multiple Disabilities Act, 1999; and
    • Rashtriya Swasthya Bima Yojana; and
    • Coconut Palm Insurance Scheme; and
    • National Agricultural Insurance Scheme (Rashtriya Krishi Bima Yojana); and
    • Universal Health Insurance Scheme; or
    • Any other insurance scheme by the State Government may be notified by the Indian Government by the GSTC recommendation.
69. Services by life insurance business provided under following schemes –
    • Varishtha Pension BimaYojana; and
    • Aam Aadmi Bima Yojana (AABY); and
    • Jayashree Bima Yojana (JBY); and
    • Life micro-insurance product as approved by the Insurance Regulatory and Development Authority, having the maximum amount of cover of fifty thousand rupees; or
    • Pradhan Mantri Vaya Vandan Yojana;
    • Pradhan Mantri Jeevan JyotiBimaYojana;
    • Pradhan Mantri Jan DhanYogana; and
    • Any other insurance scheme by the State Government may be notified by the Government of India on the recommendation of GSTC.
70. Services using a collection of contributions under Atal Pension Yojana (APY).
71. Services using a collection of contributions under any pension system of the State Governments.
72. Service of transport of passengers, with or without accompanied belongings, by—
    • Railways in a class except for the—
      • An air-conditioned coach; or
    • First-class;
      • Inland waterways;
      • Metro, monorail or tramway;
      • Public transport, other than mainly used for tourism causes, in a vessel within places in India; and
      • Auto rickshaws or metered cabs (including E-rickshaws)
73. Services by an individual using-
    • Carrying out any religious ceremony; and
    • Renting of areas of a religious place which is meant for the common public, managed or owned by an organisation which is registered as a sacred or religious or charitable trust under the section of 12AA of the Income-tax Act 1961, or a trust or an institution which is registered under sub-clause (v) of clause (23C) of section 10 of the Income-tax Act: Given that nothing contained in (b) of this exemption will be applied to –
      • Renting or letting of rooms where per day charges are Rs 1000/- or more; and
      • Renting or letting of premises, community halls, Kalyan mandapam or open area, etc. where per day charges are Rs 10,000/- or more; and
      • Renting or letting shops or other spaces for business or commerce where per month charges are Rs 10,000/-or more.
74. Services by a guest house, hotel, inn, campsite or club, for lodging or residential or purposes, having declared duty of a unit of an accommodation per day is less than one thousand rupees
75. Services using transportation via rail of a vessel from one place to another in India of the goods given below –
    • Relief materials for victims of natural or artificial disasters, calamities, accidents, or mishaps;
    • Military or defence equipment;
    • Magazines or newspapers registered with the Newspaper Registrar;
    • Railway materials or equipment;
    • Agricultural product;
    • Salt, milk, and food grain including rice, flours, and pulses; and
    • Organic compost
76. Services provided by a goods transportation agency, using transportation in a carriage of goods-
    • Agricultural product;
    • Goods, where the gross amount charged for transport of all such goods for a single consignee is not more than rupees seven hundred fifty;
    • Goods, where the gross amount charged for the transportation of goods on a consignment transported in a single carriage is not more than one thousand five hundred rupees;
    • Salt, milk, and food grain including rice, flours, and pulses; and;
    • Organic compost;
    • Newspaper or magazines registered with the Newspaper Registrar;
    • Relief materials meant for victims of artificial or natural disasters, calamities, accidents, or mishap; or
    • Defense or military equipment
77. Services by the following people in respective capacities –
    • A business correspondent or the business facilitator to a banking company concerning accounts in its rural region branch;
    • The business facilitator or a business correspondent to an insurance company in a rural region;
    • Any individual as an intermediary to a business facilitator or a business correspondent for services mentioned in the clause (g); or
78. Carrying out an intermediary production method as job work about the growing of plants and breeding of all life forms of animals, except the breeding of horses, for food, fuel, fibre, raw material, or other similar agricultural products;
79. Services using packing, storage, warehousing, loading, unloading or storage of rice;
80. Services using right to admission to, –
    • Dance, circus, or theatrical performance including ballet or drama;
    • Concert, pageant, musical performance, award function or any sporting event other than a distinguished event of sporting;
    • Distinguished event of sporting;

The consideration for admission of each person is not more than 250 rupees per person in (i), (ii), and (iii) above.

81. Services provided by a local authority or the Government or a where the gross amount charged for such services is not more than 5000 rupees.

Given that nothing contained in this entry shall apply to services S. No. 1 (i), (ii)and (iii) above:

Given further that a constant supply of service, as defined in sub-section (33) of section 2 of the Act of CGST, 2017, which is provided by a local authority or the Government, the exemption will be applied only where the gross amount is charged for such service is not more than Rs. 5000/- in a fiscal year;

82. (i) Services provided by health care systems by an authorised medical practitioner, para-medics, or a clinical establishment;
    (ii) Services provided using transportation of a patient in an ambulance, apart from those specified in (i) above;
83. Services that are provided by the Goods and Services Tax Network (GSTN) to the State Governments or Union Territories for the implementation of GST
84. Pure services (excluding the contract services or other composite supplies which involve the supply of goods) that are provided to the Government, a local authority, or a governmental authority by way of any activity about any function entrusted to a Panchayat under Article 243G of the Constitution or any role assigned to a Municipality under the 243W Article of the Constitution
85. Services that are provided to the Government under any insurance scheme for which the Government pays the total premium
86. Services that are provided to the Government under any training or education program, the Government bears the total expenditure of the provided service.

GST Full Form Meaning: Any nation’s government needs funds to function, and taxation is a primary revenue stream for governments. As a consequence, the taxes collected are spent on welfare for the benefit of the general population.

Taxes are typically divided into two types:

1. direct taxes
2. indirect taxes

GST is an abbreviation for Goods and Services Tax. It was structured to substitute a range of indirect taxes collected by the Indian state and central governments. The indirect taxes structure has been modified as a consequence of this.

• What exactly is represented by “Direct Tax”?
• What exactly is represented by “Indirect Tax”?
• Why was GST implemented in India?
• What are the different indirect taxes incorporated under GST?
• What does GST mean in various languages?

What Exactly is Represented by “Direct Tax”?

An assessee’s income is liable to direct taxation (individual or company or firm or HUF or any other person).

The percentage of tax payable depends greatly on the individual’s income from multiple sources such as salary, housing rent income, bank FD interest, etc. So, the greater your income is, the higher tax you owe to the government, emphasizing that the affluent pay more tax than the underprivileged.

The following is an overview of direct taxes that are relevant in India:

• The Income Tax – Importance of Income Tax
• The Wealth Tax (Abolished and revoked later)
• The Estate Tax

What Exactly is Represented by “Indirect Tax”?

Indirect taxes are not levied directly on people’s earnings. Alternatively, it is levied on products and services purchased, influences the price or MRP of such products and services.

In sharp contrast to direct taxes, indirect taxes should be incurred by the end consumer, with rich and poor treated as equals.

There are a few indirect taxes.

The list consists of existing indirect taxes in India:

• Goods and Services Tax (GST)
• Customs duties
• Excise tax (on Petrol, diesel, natural gas, alcohol)
• Sales Tax at the State Level (relevant for certain goods only

Why was GST Implemented in India?

Originally a Value Added Tax (VAT) structure existed in place of GST, which was a bit flawed with the double taxation regime and non-integration with the service tax.

GST, which combines many Central and State levies into a single tax, has emerged as the most substantial taxation policy in the national economy since independence.

As an indirect tax, GST is also included in the purchase price of products or the service charge paid by a person.

The Products and Services Tax (GST) is a comprehensive tax scheme that extends to both goods and services.

The parallel adoption of GST at the Centre and State levels has consolidated taxes on goods and services for the specific purpose of a set-off, committed to ensuring that the compounding impact of taxes is minimized.

Pocket Guide to GST with Illustration can be found from here.

What are the Different Indirect Taxes Incorporated under GST?

The following taxes are covered in the GST slab:

• VAT
• Sales Tax
• Service Tax
• Entertainment tax
• Octroi
• CVD etc

What Does GST Mean in Various Languages?

S No	Language	GST full form in Various Languages
1	GST full form in Hindi	वस्तु एवं सेवा कर
2	GST full form in Marathi	वस्तू आणि सेवा कर
3	GST full form in Gujrati	માલ અને સેવાઓ કર
4	GST full form in Punjabi	ਗੁਡਸ ਅਤੇ ਸਰਵਿਸਿਜ਼ ਟੈਕਸ
5	GST full form in Malayalam	വസ്തുക്കളും സേവന നികുതിയും
6	GST full form in Bengali	পণ্য ও সেবা কর
7	GST full form in Kannad	ಸರಕು ಮತ್ತು ಸೇವೆಗಳ ತೆರಿಗೆ
8	GST full form in Telegu	వస్తువులు మరియు సేవ పన్ను
9	GST full form in Tamil	பொருட்கள் மற்றும் சேவைகள் வரி
10	GST full form in Sindhi	سامان ۽ خدمت ٽيڪس
11	GST full form in Urdu	سامان اور سروس ٹیکس
12	GST full form in Nepali	सामान र सेवा कर
13	GST full form in Arabic	ضريبة السلع والخدمات

 

E-way Bill GST: The GST Eway Bill was introduced on 1st April 2018. The e-Way Bill GST is an electronic document that needs to be generated before the goods are transported or shipped in excess of INR 50.000 within the state or intrastate. The transporter or the person in charge of the transport must have a physical copy of the GST electronic bill and should contain all the information such as goods, the recipient, consignor or transporter. On this page, let’s learn everything about e way bill registration and its purpose in detail.

• Who Can Generate Eway Bill Under GST?
• E Way Bill Registration Documents Required
• How To Generate Eway Bill Through Online?
• Eway Bill Registration Methods
• When Eway Bill Is Not Necessary?
• GST Eway Bill Format
• Validity of E-Way Bill GST
• FAQs on EWay Bill

Who Can Generate Eway Bill Under GST?

Before starting the transport of goods from place to place, the Eway bill must be generated. The E-Way bill GST is generated for:

• Supply of goods with regard
• Supply of goods regardless
• Supply received from a non-registered person

The supply covers the movement of goods not only due to sales but also due to any other reason such as cross-branch transfers, unregistered purchase and trade in goods. However, in some cases, an Eway bill is also generated even though the goods’ value does not exceed INR 50,000.

• Transfer of goods between states by the principal to the worker by the principal or by the registered worker.
• The transfers of handicraft products between states by a dealer are exempt from GST registration

The following people can generate the Eway Bill:

• Registered Person
• Unregistered Person
• A Transporter

However, if goods are supplied to a registered individual by an unregistered person, the beneficiary shall ensure the creation of an Eway bill. If the supplier has not produced the same, a carrier shall generate an E-way bill. For unregistered transporters, a Transporter ID will be provided on the registration portal for the Eway bill.

E Way Bill Registration Documents Required

An e-Way bill can be registered either through an SMS facility or through the official website. However, before applying for GST e-Way Bill, one will have to keep the following documents handy to generate the E-Way bill:

• Invoice/Supply Bill / Challan concerning goods shipment
• Road Transport: ID or number of transporters
• Rail, Air or Ship transport: Transport ID, Document date and document transport number

How To Generate Eway Bill Through Online?

Follow the steps as listed below to generate the E-Way Bill online:

• Step 1: Visit the official website of E-WayBill System – Click Here
• Step 2: Click on the tab “Registration” and select “e-way Bill Registration” from the drop-down menu.

• Step 3: Enter your “GSTIN” number.
• Step 4: Enter the Captcha Code as displayed on the screen.
• Step 5: Click on the “Go” button.
• Step 6: The user will then be forwarded to the registration form of the e-Way Bill. The registration form will look like the following image.

• Step 7: This information will be automatically repleted with the name, trade name, address, mail identification and mobile number of the applicant.
• Step 8: If you have changed the details or if they are incorrect, click on the GST Common Portal Update button to pull the latest GST Common Portal data.
• Step 9: Click on “Send OTP” to receive the OTP.
• Step 10: Enter the OTP and click “Verify OTP” to validate it.
• Step 11: Next, enter the user ID or Username to operate this system’s account. The username should be unique. It should contain approximately 8 to 15 alphanumeric characters and special characters.
• Step 12: The system validates the entered values when a request has been submitted for registration.
• Step 13: Now the password and username with the e-Way Bill System are also created and registered.

Now one can use this registered username and password for operating the E-Way Bill.

Eway Bill Registration Methods

Other ways to register for E-Way Bill are:

Basics GST: The full form of GST is Goods and Services Tax. It is an indirect tax that has substituted many of India’s indirect taxes, including excise duties, VAT, services tax, etc. On 29 March 2017, the Goods and Services Tax Act was adopted in Parliament and entered into force on 1 July 2017.

The Goods and Service Tax (GST) is in other words charged for the provision of products and services. In India, the Goods and Services Tax Law is a full, multi-stage destination tax, which is charged on every added value. For the whole country, the GST is one national indirect tax law. In this article, let’s learn everything about h3the basics of GST in detail.

• Who Does GST Apply To?
• Who is Exempt From GST?
• GST Registration
• Components of GST
• Calculation of GST
• GST Rates
• Advantages of GST
• New Compliances Under GST
• FAQ’s on Basics of GST

Who Does GST Apply To?

The GST is applicable for individuals who fall under the following categories:

• Every person that provides goods and/or valuable services in a financial year exceeding Rs 20 lakhs. For certain special category countries, the limit is Rs 10 lakhs.
• If the turnover exceeds Rs 20 lakhs, GST must be paid
• Any person who supplies goods and/or services taxable across states
• Each operator of e-commerce
• Anyone who provides goods or services through e-commerce operators other than branded services
• Aggregators that provide services with their own brand name
• Taxable Non-Resident
• Distributor of Input Service
• A person providing services such as online information, database access and recovery services from outside India to the person in India.
• Reverse charge person who has to pay income tax
• The person on behalf of another taxable person who supplies the goods such as agents.

Who is Exempt From GST?

• If the annual turnover is less than 20 Lakhs, then they are exempt from GST.
• For some special category states, if the annual turnover is less than 10 Lakhs, then they are exempt from GST.
• For farmers, GST does not apply. Which means farmers are exempt from GST.
• GST does not apply to any person engaged exclusively in the supply of non-taxable or fully exempt goods and/or services under this Act.

GST Registration

Under the GST regime, companies whose turnover is greater than Rs. 40 lakhs are subject to registration as ordinary taxable individuals. Whereas for the North East and Hills state, the threshold limit is 10 Lakhs. This registration process is known as the GST registration process.

Registration under GST is compulsory for certain companies. If the organisation does business without GST registration, it is a GST offence and heavy penalties apply. It normally takes 2-6 business days for GST registration.

Components of GST

Under this GST system, three taxes apply and they are CGST, SGST & IGST.

1. CGST: The tax charged for intra-state sales by the Central Government (e.g., a transaction happening within Maharashtra)
2. SGST: It is the intra-state sale tax collected by the state government (e.g., a transaction happening within Maharashtra)
3. IGST: Tax collection for inter-state sales by the Central Government (e.g., Maharashtra to Tamil Nadu)

In most cases, under the new system, the tax structure is the following:

Type of Transaction	Type of GST Applicable	Example
Intra-state (i.e. sale within the same state)	CGST + SGST	A Tamil Nadu dealer is going to sell to another Tamil Nadu dealer. The GST rate is 18%, which means that the CGST rate is 9% and the SGST rate is 9%.
Inter-state (i.e sale outside state)	IGST	A dealer is selling to a dealer from Tamil Nadu to Andhra Pradesh. The rate of GST is 5%, so 5% of IGST applies.

Calculation of GST

In order to calculate the GST, you will have to simply multiply the Taxable amount by the GST rate to compute GST. If CGST and SGST/UTGST are used, the CGST and SGST amounts are equal to half of the total GST payment.

GST = GST Rate X Taxable Amount 

If you have an amount that already includes GST, you can use the formula below to compute the GST-free value.

GST Amount Excluded = GST Amount Included/(1+ GST Rate/100)

GST Rates

The GST council has classified roughly 1300 items and 500 services into four tax brackets: 5%, 12%, 18%, and 28%. This is in addition to the 3% tax on gold and the 0.25% special rate on rough precious and semi-precious stones under the GST.

GST Rates	Products
0%	Milk Kajal Eggs Educations Services Curd Health Services Lassi Children’s Drawing & Colouring Books Unpacked Foodgrains Unbranded Atta Unpacked Paneer Unbranded Maida Gur Besan Unbranded Natural Honey Prasad Fresh Vegetables Palmyra Jaggery Salt Phool Bhari Jhadoo
5%	Sugar Packed Paneer Tea Coal Edible Oils Raisin Domestic LPG Roasted Coffee Beans PDS Kerosene Skimmed Milk Powder Cashew Nuts Footwear (< Rs.500) Milk Food for Babies Apparels (< Rs.1000) Fabric Coir Mats, Matting & Floor Covering Spices Agarbatti Coal Mishti/Mithai (Indian Sweets) Life-saving drugs Coffee (except instant)
12%	Butter Computers Ghee Processed food Almonds Mobiles Fruit Juice Preparations of Vegetables, Fruits, Nuts or other parts of Plants including Pickle Murabba, Chutney, Jam, Jelly Packed Coconut Water Umbrella
18%	Hair Oil Capital goods Toothpaste Industrial Intermediaries Soap Ice-cream Pasta Toiletries Corn Flakes Computers Soups Printers
28%	Small cars (+1% or 3% cess) High-end motorcycles (+15% cess) Consumer durables such as AC and fridge Beedis are NOT included here Luxury & sin items like BMWs, cigarettes and aerated drinks (+15% cess)

Advantages of GST

The cascading effect of GST on the sale of goods and services has mainly been removed. Cascading effect removal has affected goods costs. The cost of goods decreases because the GST regime eliminates taxation. Moreover, GST is driven mainly by technology. An online GST portal that accelerates processes is necessary for all activities such as registration, return file, reimbursement and reply to notices.

The main benefits of GST are:

• Indirect single tax for India as a whole
• Credit for input taxes paid in a different country can be taken.
• Easy goods transfer from state to state

New Compliances Under GST

The GST system introduced several new systems alongside the online filing of GST returns.

E-Way Bills

By introducing the “E-way bills,” GST introduced a centralised system of travel documents. Under the E-way billing system, producers, traders and carriers can produce e-way bills for goods transported easily on a common portal from the place of origin to their destination. This system has also reduced the time of the checkpoints and helps to reduce tax evasion, benefitting tax authorities.

E-Invoicing

E-invoicing enables invoice interoperability and helps to reduce errors in data input. It aims to pass the invoice data directly on the GST website and e-way account portal from the IRP. This eliminates the manual information input requirement when submitting GSTR-1 and also assists with the generation of e-way bills.

FAQ’s on Basics of GST

Question 1.
What are the 3 types of GST?

Answer:
There are total 4 types of GST and they are:
1. SGST: State Goods and Services Tax
2. CGST: Central Goods and Services Tax
3. IGST: Integrated Goods and Services Tax
4. UGST: Union Territory Goods and Services Tax

Question 2.
How GST has helped in price reduction?

Answer:
The GST has helped in reducing the Central and State Indirect tax, which in turn helped in the price reduction.

Question 3.
What is a ‘Person’ in GST?

Answer:
Anyone who operates a company at any place in India and who is registered or must be registered in conformity with GST Act shall be a ‘taxable person’ under GST. Everybody, including trade and commerce, engaged in economic activity is treated as a person in GST.

GST Composition Scheme for Service Providers: The government has implemented a compositional scheme to help small taxpayers and reduce the burden of compliance. A compositional dealer is required to keep fewer accounts/books and not to file monthly returns. Previously, only the suppliers of goods had access to the scheme.

However, it was announced at the 32nd GST Council that the scheme will now also be available to service providers. The scheme is available from 1 April 2019 for service providers. In this article, let’s understand everything about the composition scheme for service providers under GST notification.

Composition Scheme for Service Provider

The taxpayers who offer services of aggregate annual turnover up to Rs. 50 lakh are entitled to pay tax nominally by the composition scheme for service providers. The following service provider can opt for a composition scheme under GST:

• Service provider only
• Goods and services suppliers which means that those suppliers who were not eligible for the composition scheme earlier are now eligible

GST Composition Scheme Rules for Service Provider

The rules for service providers under the GST composition scheme are given below:

• In the previous financial year, the service provider must have had a turnover of less than Rs. 50 lakh.
• The supplier should not supply goods that are not taxable.
• The supplier should not be involved in the production of interstate supplies.
• The supplier should not deliver via an e-commerce provider.
• The supplier should not be a taxable individual or a taxable non-resident.
• Instead of a tax invoice, the supplier must issue a letter of supply. The supplier shall mention the word “taxable individual composition” on the supply bill.
• It is impossible for the supplier to charge and collect customer tax.
• The input tax credit cannot be claimed by the supplier.
• For reverse charge supplies, the supplier shall pay regular tax.
• The provider cannot supply ice cream or other manufactured whether or not it contains cocoa, bread masala and tobacco.

What Is The Rate Of Service Tax Under The Composition Scheme?

Compliance with the composition scheme by service providers: The taxpayer should only file one annual declaration with a quarterly tax payment (along with a simple declaration). The rate of service tax under the composition scheme is explained below:

Business Type	CGST	SGST	Total GST
Manufacturers and Traders of Goods	0.5%	0.5%	1%
Restaurants	2.5%	2.5%	5%
Service Providers	3%	3%	6%

The value of the provision of exempted services in order to calculate the aggregate annual turnover shall not be taken into account in the continuation of deposits, loans or advancements where the revenue is represented by interest or discount.

Registration Under Composition Scheme for Service Providers

Any service provider (or mixed supplier) who registers for GST for the first time may select an option to pay tax under the composition scheme in Part B of FORM GST REG-01, which will be deemed an intimation to pay tax under the composition scheme. Any notification of a place of business opting for the composition scheme in any State or Union territory is assumed to be a notification for all other places of business registered on the same PAN.

Disadvantages of GST Composition Scheme for Service Providers

The disadvantages of GST Composition schemes for service providers are given below:

• The input tax credit is not available.
• Taxes cannot be charged or collected from customers. As a result, under the plan, a taxpayer is personally liable.
• Exports and interstate transactions are not permitted.

When Can We Opt for GST Composition Scheme?

If someone wants to use the composition scheme, they must do it before the beginning of the financial year. To choose a composition scheme, fill out Form CMP-02. It is not possible to choose a composition scheme in the middle of a financial year. A person who has previously been selected for the scheme is not compelled to do so each year.

GST Returns To Be Filed

For each quarter, the individuals registered under this scheme must file CMP-08. Also, GSTR-4 must be filed for each financial year under GST Returns.

FAQ’s on GST Composition Scheme For Service Providers

Question 1.
Which service provider can opt for a composition scheme under GST?

Answer:
Registered taxpayers who offer services or supply commodities and services may both opt for GST component schemes with aggregate sales of up to 50 Lakhs.

Question 2.
What is the GST limit for service providers?

Answer:
The GST limit for the service provider who falls under normal category states is Rs.20 Lakhs and whereas for Services providers who fall under non-normal category states, the GST limit is Rs. 10 Lakhs.

Question 3.
What is GST composition scheme turnover limit 2020-21?

Answer:
The officials of CBIC has increased the composition scheme turnover limit from Rs 1.0 Crore to Rs. 1.5 Crores. Thus any taxpayer whose turnover is less than Rs. 1.5 crore may opt for the composition scheme of GST.

Invoice Terms and Conditions: When you buy a service from a company, you are required to read and sign a document called the “Terms and Conditions.” The usage of the service between the customer and the seller is governed by this written piece of information, which is an important part of the agreement between the buyer and the seller. It has been accepted by law since it demonstrates the service’s dos and don’ts.

A document called “terms and conditions” provides information about the service and accurately explains the company’s rules. Some of the terms and conditions included in any invoice are payment policies, return policies, disclaimer policies, opt-out policies, and so on. On this page let’s learn everything about Invoice Terms and Conditions for Indian businesses in detail.

• What Terms And Conditions Should Be On An Invoice?
• Invoice Terms And Conditions Template India
• Sale Terms and Conditions
• Payment Type Terms and Conditions
• Advance Payment Terms and Conditions
• Warranty Terms and Conditions
• Return/Replacement Policy Terms And Conditions
• Late Payment Terms And Conditions
• Errors And Omissions Excepted
• FAQ’s on Retail Invoice Terms and Conditions India

What Terms And Conditions Should Be On An Invoice?

The terms and conditions for Indian business vary from frim to frim. However, any invoice which has terms and conditions should be devised as follows:

• Use of basic, uncomplicated, and polite language.
• Including all of the firm’s and client’s important details.
• Complete product or service information, including taxes and discounts.
• The invoice number or reference number.
• It’s important to mention the payment method.

Invoice Terms And Conditions Template India

Few GST invoice terms and conditions which needs to be included in Indian business are explained below:

1. Sale Terms and Conditions
2. Payment Type Terms and Conditions
3. Advance Payment Terms and Conditions
4. Warranty Terms and Conditions
5. Return/Replacement Policy Terms And Conditions
6. Late Payment Terms And Conditions
7. Errors And Omissions Excepted

Sale Terms and Conditions

Any possibility of misunderstanding or conflict between the parties will be avoided by clearly defining the terms of sale. As a result, it is critical to include terms of sale such as cost, quantity, single unit cost, delivery date or time of service, and payment method or credit, if applicable.

This is especially important when dealing with cross-border transactions. Mentioning the “liability” of international taxes, tariffs, or any other legislation facilitates the payment procedure.

Payment Type Terms and Conditions

The service provider expects payment right after the goods or service is delivered. It’s also known as “Cash on Delivery” (COD) or “Payable on Receipt” (POR). The transaction or delivery is considered cancelled or invalid if the terms are not followed. It is critical to mention this term or condition, as the client may become displeased if it is not.

Advance Payment Terms and Conditions

It is one of the most common payment terms, in which the service provider requests payment in full or in part before delivering the goods or service. This is common in the service industry and is used to avoid non-payment after the sale. It is common practice to avoid incurring out-of-pocket costs in order to complete a project.

It should be included if handled by the business firm, and likewise, the customer should keep an eye out for such things listed on the contract.

When a client is given credit, there are terms for advance payment. It’s referred to as “Net 7” or “Net 30,” which means pay the balance owed within seven or thirty days of the sales bill’s date. The word informs the client of “when the payment is due.”

However, if the “term Net 7 or Net 30” is not clear to the customer, it can cause confusion. It is therefore recommended to represent in a simple way such as please make the payment within 7 days from Invoice date or so.

The following are some of the abbreviations used in payment terms and conditions:

1% 10 Net 30: If payment is received within 10 days, the customer will receive a 1% discount.
After 10 days, full payment is required, and the overall due date is 30 days from the invoice date.

• CIA: Cash in Advance
• COD: Cash on Delivery
• Contra Payment: Customer payments are deducted from supplies purchased by the customer.
• Net 10: Payment due in 10 days from invoice date
• Net 30: Payment due in 30 days from invoice date
• Net 60: Payment due in 60 days from invoice date
• Net 7: Payment due in 7 days from invoice date
• Net 90: Payment due in 90 days from invoice date
• PIA: Payment in Advance

Warranty Terms and Conditions

The warranty terms of the goods or service must be clearly stated on the invoice, as well as the number of days after which the guarantee will no longer be valid. It should also state when the warranty is no longer valid and make it clear that a warranty does not entail a product return. The invoice must include the warranty terms and conditions. The following are some common warranty terms and conditions in Indian business:

• Warranty Period
• The person who provides the warranty.
• The warranty is either provided by the seller or by the original manufacturer.
• Information on how to contact us. If a third party should be contacted, provide their contact information.
  For example, in the electronics industry, the warranty is provided by the firm, and the company’s service centre should be called rather than the real vendor.
• Is there a warrant on the premises or not? For example, if the goods are fixed, such as house fittings such as a refrigerator, the service person will come to the location or the person will have to deliver it to the service centre should be mentioned on Invoice terms and conditions.

Return/Replacement Policy Terms And Conditions

Any small business, especially one that sells goods, must have a return policy. The popularity of your product or service will be determined by the number of returns or refund policies. Simultaneously, you can protect yourself from false claims and demands.

These terms will also help you avoid potential losses from returns or refunds. The terms and conditions on an invoice must include points such as:

• All products returned for refund/replacement or extended on credit must be returned in “saleable” condition with original packaging, according to some sample terms and conditions that can be incorporated into your retail invoice.
• Restocking charges applied on return or replacement
• If received damaged goods or items, what actions to be taken.
• Number of days within which the product will be replaced

Late Payment Terms And Conditions

To improve the relationship between the supplier and the buyer, it is important to educate the client about late payments and the consequences that follow. It’s always good to include the terms and conditions related to late payment such as:

• Reminding customer about the due date
• Financial losses you’ve incurred due to the late payment
• Payment time

Errors And Omissions Excepted

Errors and omissions excepted (E&OE) is a term used to limit legal liability for potentially incorrect or insufficient information provided in a contractual related document like a quotation or specification. It means that if an error or omission in the invoice is discovered later, it can be corrected with appropriate modifications.

FAQ’s on Retail Invoice Terms and Conditions India

Question 1.
Do invoices have terms and conditions?

Answer:
Yes, the Invoice must have terms and conditions.

Question 2.
What is the difference between terms and conditions?

Answer:
The difference between terms and conditions are: a term is a directive in the Purchase and Sale Agreement that describes the contract’s contents and a condition is a clause that must be waived or met by a certain date for the Agreement to take effect.

Question 3.
Write any 5 sample terms and conditions for invoices in Indian business?

Answer:
The 5 commonly used terms and conditions in invoices are:
1. Sale terms
2. Warranty-related Terms & conditions
3. Return & replacement related terms & condition
4. Payment Related Terms & Conditions
5. Delivery Related Terms & Conditions

GST on Freelancers: The Goods and Services Tax (GST) has impacted every area of India’s economy, whether it is a large company or a small or medium-sized business. Yes, freelancers are included under GST. however, they may or may not be required to pay GST.

Even if you are exempt from GST as a freelancer, it is important to understand how GST works because, if your business grows, you will be required to register under GST. In this article, let’s understand everything about Freelancers under GST in detail.

• What is Freelancer Under GST?
• GST Registration for Freelancers
• What is OIDAR Services under GST?
• Should Freelancer Register as a Composite Dealer?
• GST Rates on Freelancers
• What are the Invoicing Rules for Freelancers?
• Can Freelancer Claim the Input Tax Credit?
• Freelancers – Documents Required for GST Registration
• GST Returns for Freelancers
• Freelancers – Penalty for Late Filing GST Returns
• FAQs on GST on Freelancers

What is Freelancer Under GST?

A freelancer is someone who is not hired by anyone and is paid on a contract basis by a variety of clients to work on various short and long-term projects. To summarize, a freelancer is a type of service provider who does not have an employer-employee connection, and the GST laws for service providers will apply to freelancers as well.

GST Registration for Freelancers

Not all, but those freelancers falling under the following categories will have to register for GST as a freelancer:

• When the turnover exceeds Rs. 20 Lakh
• When the turnover reaches Rs. 10 lakhs which is applicable only for North-east states of India
• For services covered by OIDAR (Online Information and Database Access and Retrieval)
• In the case of service exports, any inter-state supply of goods/services necessitates GST registration. Under the IGST Act, export of services is referred to as “zero-rated supplies” and qualifies as an “inter-state supply

Note: The northeastern states under GST are listed below:

1. Arunachal Pradesh
2. Assam
3. Himachal Pradesh
4. Jammu & Kashmir
5. Manipur
6. Meghalaya
7. Mizoram
8. Nagaland
9. Sikkim
10. Tripura
11. Uttarakhand

What is OIDAR Services under GST?

OIDAR services are defined as follows under the GST Act:

• Internet advertising
• Cloud service provisioning
• Internet distribution of e-books, music, movies, software, and other intangibles
• Providing data or information in the electronic form to anyone via a computer network, whether it be for retrieval or otherwise
• Online gaming services

Should Freelancer Register as a Composite Dealer?

Any service provider is not permitted to use the composition system under the GST Act’s provisions.

A restaurant service provider, on the other hand, is an exception to this rule. As a result, a freelancer cannot choose the composition scheme.

GST Rates on Freelancers

Depending on the type of service provided, freelancers are subject to GST rates of 0%, 5%, 12%, 18%, and 28%. If there isn’t a fixed rate for the service you’re providing, you’ll have to charge your customers 18% GST. For the following services, the GST rate is 18%:

1. Accounting/Bookkeeping services
2. Customer care services
3. Data entry services
4. Designing services
5. Domain and hosting services
6. Language translation services
7. Management/Consultancy services
8. Marketing services
9. Software/App Development services
10. Technical services
11. Voice over services

What are the Invoicing Rules for Freelancers?

A freelancer’s invoices should be GST-compliant. The invoice should include all relevant information, such as the service provider’s and recipient’s GSTINs, the SAC of services, the date, and the amount of the service delivered and so on.

Can Freelancer Claim the Input Tax Credit?

With an input tax credit (ITC), you can deduct the tax you already paid on purchases from the GST you pay on your sales. According to GST regulations, all regular taxpayers who are registered for GST can use ITC to reduce their GST payments.

Similarly, a freelancer who is registered can use the taxes paid on services that he has used to provide any service.

For example, for a wedding session, a freelance photographer charges Rs 2,50,000 and a printing service charges Rs 50,000. Refer to the following table for details.

Details	Rupees
Photography Services Provided	Rs. 2,50,000
GST on O/P Services (18%)	Rs. 45,000
Total Amount	Rs. 2,95,000
Staffing Charges Paid	Rs.50,000
GST on Service Received (18%)	Rs. 9,000
Total Payment	Rs. 59,000

NET Amount of GST Payable by the Photographer: The net GST payable in this case will be as follows:

GST to be paid on O/P Services	Rs. 45,000
GST already paid on Service Received (Input Tax)	Rs. 9000
NET GST Payable	Rs. 36,000

Freelancers – Documents Required for GST Registration

The list of documents required for GST Registration is given below:

• Passport size photograph
• Identity and address proof: a copy of your PAN and Aadhaar card
• A recent bank statement or a cancelled cheque
• Electronic signature of the registrar
• Electricity/Telephone/LPG Bill
• The agreement for the rental of office space
• Certificate of no objection

GST Returns for Freelancers

If a freelancer is registered as a normal taxable person, he will be required to file 25 GST returns each year which includes two monthly returns and one yearly return.

The officials of GST can easily trace a freelancer who doesn’t register and collect GST. Because if the TDS is deducted from an individuals payment (by the person making payment to him) or through payments in his bank accounts, the department will still be notified of his turnover. It’s difficult to avoid the gaze of the law because all banks accounts are linked to Aadhar and PAN numbers.

Freelancers – Penalty for Late Filing GST Returns

The officials of GST will also impose a penalty for the individuals who late file the GST returns. The penalty for late filing the GST returns are given below:

• An Rs.200 late fee will be charged.
• There will also be an annual interest rate of 18%. The taxpayer will determine this based on the amount of tax to be paid.
• If the tax is not paid, a minimum penalty of Rs.10,000 would be imposed.
• The highest penalty for unpaid tax is 10% of the tax full amount.

Freelancers Claiming GST Refund

If you export services, the GST law allows you to receive a GST refund into your bank account for the following reasons:

• GST charged and paid to the government at the time of export of services on the input services/goods utilised to provide such export of service.

The following are the most important requirements for claiming GST refunds:

• The FIRC is charged for proving the export of services.
• The reimbursement request must be submitted within 24 months of the month in which the services were exported.

FAQs on GST on Freelancers

Question 1.
Do freelancers need to pay GST?

Answer:
Yes, those freelancers, whose threshold limit is exceeding Rs. 20 Lakhs will have to pay 18% of GST on income earned from the freelanced services.

Question 2.
Do individual consultants need GST?

Answer:
Yes, the individual consultants will be needed to register for GST as a service provider if the suppliers annual turnover exceeds Rs.20 lakh (not applicable for the North-Eastern States) or if the suppliers turnover exceeds Rs.10 lakh if they belong to North-Eastern states.

Question 3.
What is the GST exemption limit for freelancers?

Answer:
The exemption limit has been increased to INR 40 lakhs per year in the recent declaration by the Finance Ministry. When freelancers earn more than INR 40 lakhs per year, they must register for GST. The exemption for north-eastern and hilly states has been increased to INR 20 lakhs.

Time of Taxation GST: The point at which goods or services are regarded to have been supplied is referred to as the point of taxation. We can determine the tax rate, value, and due dates for payment of taxes at the point of taxation. The point of taxation, i.e., the requirement to pay CGST / SGST, will emerge for goods and services under GST at the time of supply as determined. Time of supply for products and time of supply for services are treated separately. In this article, let’s understand everything about the Time of taxation under GST. Read on to find out more.

• What is Time of Supply in GST?
• How Time of Supply is Determined?
• Time of Supply Under Reverse Charge
• Time of Supply for Vouchers
• When Time of Supply Cannot Be Determined
• FAQ’s on Time of Supply of Goods under GST

What is Time of Supply in GST?

The point in time when goods/services are considered supplied is referred to as the time of supply. Knowing the ‘time’ assists the seller in determining the tax payment due date. At the time of supply, CGST/SGST or IGST must be paid. Goods and services each have their own foundation for determining when they will be delivered.

Note: Section 148 of the CGST Act of 2017 confers powers on the Government to notify certain classes of registered persons and the special procedures to be followed, including the GST registration, returns, payment of taxes or administration of these people (on the recommendation of the GST Council).

How Time of Supply is Determined?

The earliest of the following dates shall determine the time of supply of goods:

• the date of invoice issuance (or the last day by which invoice should have been issuance)
  OR
• the date of payment receipt -whichever is earlier.

If the supplier receives an amount in excess of the invoice amount of up to Rs. 1000, the time of supply for the extra amount is the date of invoice issue (at the option of the supplier). Here for (a), the supply is presumed to have been made to the extent that the invoice or payment covers it (as the case may be).

Whereas for (b), the date of receipt of payment shall be the earlier of:

1. the date on which he entered the payment in his books;
2. the date on which he entered the payment in his books;
3. the date on which he entered the payment in his books;
4. the date on which he or when the payment is credited to his bank account.

Let’s now understand the time of supply with an example:

Example:

• (a) invoice date: 28 June 2021
• (b) payment date: 10 June 2021
• (c) date when supplier entered payment in books: 11 July 2021.

Therefore, the deadline for supply is 28 June 2021.

Time of Supply Under Reverse Charge

The recipient of goods/services, rather than the seller, are responsible for paying the tax. The time of supply in the case of reverse charge should be the earliest of the following dates:

• (a) the date of receipt of goods
  OR
• (b) the date of payment
  OR
• (c) the date immediately succeeding THIRTY days from the date of the supplier’s invoice issuing (60 days for services)

If the time of provision under (a), (b), or (c) cannot be determined, the time of supply should be the date of entry in the recipient’s books of account.

The date of payment shall be the earlier of:

• (a) The date on which the recipient recorded the payment in his books; or
• (b) The date on which the recipient entered the payment in his books.
  OR
• (b) the date on which his bank account is debited for the payment.

Time of Supply Under Reverse Charge Example

Now let’s understand time of supply under reverse charge with an example:

• (a) Date of receipt of goods: May 15, 2021
• (b) Date of payment: July 15, 2021
• (c) Date of invoice: June 1, 2021
• (d) Date of entry in receiver’s books: May 18, 2021

15th May 2021 is the deadline for products delivery. If the time of supply under (a), (b), or (c) could not be identified for some reason, the date of entrance would be the 18th of May 2021.

Time of Supply for Vouchers

If the supply of vouchers can be established at that point, the time of supply is

• (a) the date of issuing of the voucher
  OR
• (b) the date of redemption of the voucher in all other situations

When Time of Supply Cannot Be Determined

If the above provisions cannot be used to determine the time of supply, it will be

• (a) the date on which a periodic return must be filed or
• (b) the date on which the CGST/SGST is paid, in any case.

The tax collection event in the GST regime will be the earliest of the dates listed above. The different events that trigger the tax levy, such as issuing an invoice/making a payment in the case of a provision of goods/services or the completion of an event in the case of a supply of service, confirm that the government wants to collect tax as soon as possible. The ‘time’ of supply is determined by a number of factors.

As a result, monitoring and reconciling revenue based on financials and GST will be difficult for enterprises.

FAQ’s on Time of Supply of Goods under GST

Question 1.
What is the time limit for issue of invoice under GST for goods?

Answer:
An invoice must be generated before or after the supply of services. However, if the invoice is produced after the service has been provided, it must be done within the required time frame of 30 days from the date of service supply, according to invoicing guidelines.

Question 2.
What is the time of supply of service for the supply of taxable services up to Rs 1000 in excess of the amount indicated in the taxable invoice?

Answer:
If a taxable service provider gets an amount up to Rs. 1000 in excess of the invoice amount, the time of supply for the extra amount is the date of invoice issue (at the option of the supplier).

Question 3.
What is time of supply of goods in case of forward charge?

Answer:
A forward charge is a tax levy that the provider is required to collect and remit to the credit of the federal or state government. The advance charge mechanism is used to levy and collect tax on most transactions under the present tax framework (also called Direct Charge).

Question 4.
What is the point of taxation under GST for services?

Answer:
The point at which goods or services are regarded to have been rendered is referred to as the point of taxation. The point of taxation allows us to calculate the tax rate, value, and payment deadlines.