GST

Need 3 Types GST: By altering the Indian Constitution, the Goods and Services Tax (GST) went into force on July 1, 2017. Unlike in the recent past, when several taxation schemes such as Central Excise, Service Tax, State VAT, etc., GST alone has one tariff with three main components: CGST, SGST, and IGST. The central Government will levy CGST, SGST, or IGST based upon if the business transaction is intrastate or interstate under the GST statute.

• What is SGST?
• What is CGST?
• What is the IGST?
• How Will GST Credits Be Adapted Between Central Government And the states?

What is SGST?

The SGST is another of the two taxes levied by each state on dealings of goods and services. The SGST, which each country’s state government imposes, substitutes all current state tax regimes, including that of Sales Tax, Entertainment Tax, VAT, Entry Tax, etc.

The State GST or SGST, on the other hand, is taxed by the state on products and/or services acquired or supplied inside the state. Therefore, it is completely controlled by the SGST Act.

The State Government can claim the earned money under SGST.

What is CGST?

The Central Goods and Services Tax or the CGST is a tax charged on goods and services transactions conducted inside a state. The Central Government implemented CGST to substitute all other Central taxes, including State Tax, CST, SAD, and so on. Valuations for goods and services subject to CGST are formulated based on current market value.

If the GST value imposed is 18 per cent, it will be evenly split into 9 per cent CGST and 9 per cent SGST.

Note: The Union Territory Goods & Services Tax (UTGST) is the functional equivalent of the State Goods and Services Tax (SGST) and is a government-imposed on the delivery of goods and/or services in India’s Union Territories (UTs).

In Union Territories, the UTGST substitutes the SGST. As a result, in Union Territories, the UTGST will be imposed in parallel to the CGST.

What is IGST?

The IGST is imposed on interstate sales of goods and services. IGST is also applied to imported goods for transmission among the different states. When goods and services are shipped from one state to another, the IGST is imposed.

The IGST Act regulates the IGST. The Central Government is in control of tax collection under the IGST. The Central Government splits the proceeds of taxation among the several states once they have been accumulated.

How Will GST Credits Be Adapted Between Central Government And the States?

• The exporter government shall pay to the Centre the SGST credit employed in the IGST settlement. As a consequence, the exporting state will receive no taxable income.
• The Centre would send the IGST credit applied in the payment of SGST to the importing Government. This pretty much ensures that the importer’s state obtains the entire balance of SGST.
• Any revenue generated by the exporting state on such commodities is hence eventually passed to the importing state. As a direct consequence, both the central Government and the importing state automatically receive their fair proportion.

Example

Consider the following example to have a better idea.

For Rs.100, a producer (Mr X) sells items to a merchant (Mr Y) in the very same state, say West Bengal. Now, Mr Y trades to a merchant (Mr Z) in Kerala for Rs.175 and Mr Y offers the commodities to the consumer (Mr J).

Considering a CGST of 9% and an SGST of 9%.

• In the first stage, when the commodity is being sold from Mr X to Mr Y, West Bengal accumulates a tax of 100*9% = Rs. 9, and the same is applicable for the central Government.
• In the second stage, when the commodity is being sold from Mr Y to Mr Z, the central Government earns a tax of 175*18%= Rs. 31.5 minus the CGST Credit of Rs. 9 and the SGST Credit of Rs. 9, which totals Rs. 13.5.
• In stage three, when the good is being sold from Mr Z to Mr J, Kerala is liable to a tax of 300*9%= Rs. 27 minus IGST Credit of Rs. 4.5, which adds up to Rs. 22.5. The central Government receives no tax since 300*9%= Rs. 27 minus the IGST Credit of Rs. 27 adds up to Null.
• After applying all taxes, West Bengal receives a tariff of Rs 9, and the governments of Kerala and the Central Government each receive a tax of Rs. 22.5.

Now,

1. The exporting state (West Bengal) would deliver to the Centre the SGST credit implemented in the IGST transaction, which is Rs. 9 (Transaction Y to Z).
2. The Centre would release to the importing State (Kerala) the IGST credit applied in settlement of SGST, which corresponds to Rs. 4.5 (Transaction Z to J).
3. As a result of the change, West Bengal government income is zero, Kerala’s revenue is twenty-seven rupees, and the Centre’s total revenue is twenty-seven rupees.

Accounts and Records GST: According to Section 35 of the CGST Act, 2017, each entity who is enrolled for GST is obligated to provide relevant data and accounts in his or her primary place of business. Additionally, any statement made in financial accounts is not to be modified or eliminated.

• Who Is Responsible for Maintaining GST Records and Accounts?
• What Books of accounts must be maintained in order to comply with GST?
• What book of accounts shall be maintained in the situation of an agent [Rule 1(11)]?
• What book of accounts must be maintained by an authorized individual carrying out a work contract [Rule 1(14)]?
• What records must the proprietor of a warehouse or godown maintain?
• What is the duration for which books of accounts and other records must be retained [Rule 1(16)]?
• Production of accounting books [Rule 1(18)]
• Accounts Maintenance Rules and the Commissioner’s power and authority
• Repercussions of Failure to Maintain Accurate Records

Who Is Responsible for Maintaining GST Records and Accounts?

The following entities are obligated to maintain records and accounts under GST:

• The owner;
• The manager of a storehouse or godown;
• Transporter;
• Taxpayer whose total annual revenue exceeds INR 2 crores in any fiscal year;

What Books of Accounts must be Maintained in Order to Comply with GST?

Every registered individual is bound to maintain the relevant records:

• Goods are produced or manufactured.
• Goods and services are supplied both within and outward (Purchase and Sales Register).
• Stock goods (Inventory Register).
• The input tax credit was received (Electronic Credit Ledger).
• Payable and paid output tax (Electronic Liability and Electronic Cash Ledger).
• Other specifics may be legally required.
• Import and export statistics for products and services.
• Records of supplies generate reverse charge payment, comprising invoicing, bills of supply, supply challenges, credit notes, debit notes, receipt vouchers, payment vouchers, refund coupons, e-way bills, and the associated documents.

Other Key Aspects that Should be Mentioned

• A person is expected to appropriately record the information of commodities that have been misplaced, stolen, damaged, cancelled off, or given as a present or freebie in its accounting books.
• If the registered person fails to consider the goods or services or both, the statutory authority shall assess the tax liability on the unaccounted-for products or services or perhaps both.
• If any paperwork, registers, or books of account attributable to a designated user are detected at any place other than those indicated in the certificate of registration, they are widely considered to be maintained by the very same designated user unless demonstrated differently.
• Where more than one business entity is explicitly mentioned in the certificate of registration, the accounts corresponding to each place of business must always be kept at these places of business.

What Book of Accounts Shall be Maintained in the Situation of an Agent [Rule 1(11)]?

An agent must additionally have the following extended information on file:

• Exact details of authorization acquired out of each principal to collect or provide goods or services favouring such principal independently.
• Specifics of goods or services rendered on account of each principal, comprising descriptions, value, and quantity (where relevant).
• Exact details of products or services provided favouring every principal, indicating description, value, and quantity (if relevant).
• Account details are forwarded to each principle.
• Taxes are collected on receipts or the allocation of goods or services on account of each principle.

What Book Of Accounts Must Be Maintained By An Authorized Individual Who Is Carrying Out A Work Contract [Rule 1(14)]?

Every registered person who carries out a works contract must also keep independent accounts for each work contract, which must illustrate:

• The contact information of the individuals on whose authority the works contract is being implemented out.
• Description, value, and quantity (where relevant) of goods or services obtained to complete the project of a contract job.
• The description, value, and quantity (where appropriate) of products or services employed in implementing the works contract.
• The specific details of the compensation received for each job contract.
• What Book Of Accounts Must Be Maintained By An Authorized Individual Who Is Carrying Out A Work Contract [Rule 1(14)]?The identities and locations of suppliers from whom he obtained goods or services.

What Records Must The Proprietor Of A Warehouse Or Godown Maintain?

According to Section 35(2) of the CGST Act, 2017, each landlord or operator of a warehouse or godown and every other area used for warehousing, and every other transporter, whether authorized or not, must maintain copies of the consigner, consignee, and other pertinent insights of the products in the procedure provided.

Thus according to Rule 58 of the CGST Rules, 2017, any individual who is obliged to hold records under Section 35(2) of the CGST Act, 2017, but is not officially registered, should therefore submit Form GST ENR-01, after that which a distinctive enrollment number is issued and notified immediately to the said person.

What is the Duration for Which Books of Accounts and Other Records must be Retained [Rule 1(16)]?

Accounts retained by the relevant authority, along with all invoices, cash receipts of supply, credit and debit notes, and shipping challans attributed to equities, deliveries, inward consumption, and outward supply, must always be continued to keep for seventy-two months from the given deadline of providing the annualized report for the year concerning to such books and accounts (as prescribed under section 36).

Where such books and paperwork are kept conventionally, they must be housed at each associated place of business indicated explicitly in the registration certificate and should be readily available through each connected place of business where such documents are kept electronically.

An individual who is a subject to an appeal, revision, or other actions before any Appellate Authority, Revisional Authority, Appellate Tribunal, or tribunal, regardless submitted by him or by the Commissioner, or who is now being thoroughly investigated for any type of offence under Chapter XIX, should keep the accounting information as well as other documentation related to the subject matter of such appeal, revisions, processes, or inquiry for one year even after the final disposition of such appeal, revision, proceedings, or investigation.

Production of Accounting Books [Rule 1(18)]

Every covered entity must present the books of accounts obligated by law to maintain under any applicable legislation upon inspection.

Accounts Maintenance Rules and the Commissioner’s Power and Authority

The Commissioner may warn a group of individuals eligible for taxation to preserve supplementary accounts or documentation for the legal purposes indicated in the notification.

If the Commissioner suspects that a particular class of taxable persons seems incapable to keep and manage accounts in compliance with the conditions of the whole section, he may, for possible justifications to be adequately documented, consider allowing such category of taxable persons to stay and maintain accounts in the prescribed manner.

Repercussions of Failure to Maintain Accurate Records

If the citizen is unable to maintain appropriate documentation for goods/services, the proper investigator must evaluate the amount of tax owed on the goods or services or both that are not taken into account, as though such person had provided these goods or services or both, and the terms mentioned in Section 73 or Section 74, as necessarily applicable, shall apply mutatis mutandis for such determination of tax owed essentially.

Meaning of Debit Note and Credit Note: A tax invoice must always be originally issued by a provider of goods or/and services. However, there might be some circumstances when an inaccuracy in providing the necessary invoice takes place and where various additional irregularities with the number or quality of products and services provided arise. The provider might simply issue a debit or credit note to fix such issues and problems, depending on the context.

• What is a debit note?
• Cases in which a debit note is issued
• What is a credit note?
• Cases in which a credit note is issued
• Debit/Credit Note in compliance with GST
• The note layout
• How Long Should a Credit/Debit Note Be Kep

What is a Debit Note?

A debit note is documentation or ticket issued by one entity to another that explicitly confirms that the other party’s bank account has been debited in the sender’s records.

Whenever there is a requirement for an increment in taxable value or a raise in GST levied in the invoice, a supplier will provide a debit note per Section 34(3). There is no defined layout for this; it could perhaps be a letter or a formalized declaration.

Nevertheless, under GST, the debit note can exclusively be provided by the supplier.

For example, a merchant, Mr X, buys products from Mr Y. Mr X soon discovers after collecting the material that the commodities contain several faulty goods worth Rs. 15,000. Mr X should now lessen the obligation in his books as payment due to creditor Mr Y. As a result of the change, Mr X sends Mr Y a debit note for Rs. 15,000, declaring that he has debited his account in his records.

Cases in which a Debit Note is Issued

• The provider has inaccurately assessed the items or services at a reduced amount than the authentic quantity.
• Instead of expressing the appropriate tax rate relevant to the products and services supplied, the supplier has claimed a lower tax rate on the invoicing.
• The quantity delivered to the recipient is larger than the amount reported on the tax invoice.
• Any other combination of circumstances that is fairly comparable.

What is a Credit Note?

A credit note is documentation or certificate issued by one party to another confirming that the other party’s account has been credited in the sender’s books.

When goods are rejected or deemed unsatisfactory or a drop in the taxable amount or GST charged in the invoice, a registered person provides a credit note under Section 34(1). The credit note is centred on an original invoice that has previously been given.

As a result, when the authorized person provides the Credit note, the supplier’s tax burden is lowered.

Cases in which a Credit Note is Issued

• The provider has wrongly evaluated the items or services at a greater value than the authentic number.
• Rather than declaring the appropriate tax rate applicable to the products or services supplied, the provider has stated a higher tax burden in the invoice.
• The volume given to the receiver is below what is specified on the tax invoice.
• The receiver is dissatisfied with the condition of the products or services provided, culminating in a partial or whole refund of the invoice amount.
• Any other circumstance that is fairly comparable.

Debit/Credit Note in Compliance with GST

The following are the reasons listed in GST returns under which a debit or credit note can be authorized:

• Return of Sales
• After-Sale Discount
• Services deficiency
• Invoice rectification
• POS change
• Finalization of Provisional Evaluation
• Other viable options

The Note Layout

Specifications about issued debit and credit notes must be reported on Form GSTR-1 for their given period. This information is provided to the beneficiary in Form GSTR-2A, which must be acknowledged and filed in Form GSTR-2.

There really is no standardized structure, although some extremely important particulars should be included in the debit or credit note, like:

• Name, and address and the supplier’s GSTIN.
• Document’s nature.
• A sequential reference number of no more than sixteen characters, in one or more series, featuring alphabets or numbers or special symbols such as hyphens and slashes, and any unique combination thereof, exclusive for a budgetary year.
• Date of issue of the corresponding note.
• If officially registered, the recipient or receiver’s address and name, and GST Identification Number or Unique Identity Number.
• When the receiver is not listed, provide the recipient’s name, address, and delivery address, as well as the name of the state and its pin code.
• The serial number and date of the accompanying tax invoice are provided.
• The worth of the taxable supply of goods or services, the tax percentage and the amount of tax charged to the beneficiary.
• The supplier’s or legally authorized representative’s signature or digital signature.

How Long Should a Credit/Debit Note Be Kept?

The credit note and debit note information must be maintained for seventy-two months well after the given deadline for completing the annual report for the year corresponding to such records and reports.

GST Bill Format: A GST Invoice is nothing but a bill or receipt which specifies the items supplied or services provided to a customer by a vendor or service provider. In other words, it specifies the total price owed to provide the services/products to the customer. Before CGST and SGST are applied, a GST invoice can be used to calculate the pricing of goods or services. The amount of taxes charged on each good or service that an individual acquires from the seller or provider is also shown on a GST invoicing bill.

The officials of the Central Board of Indirect Taxes & Customs have specified certain rules and formats of this GST Invoice and are advised to follow the same format for issuing the GST invoices. The list of GST invoicing format requirements are explained in detail below.

• GST Invoice Rules 2021-22
• What are the Requirements of GST invoices?
• GST Invoice Format Example
• When a Tax Invoice or a Bill of Supply should be Issued?
• Copy of GST Invoices for Goods Supply
• Copy of GST Invoices for Services Supply
• Revising Invoices Issued Before GST
• When Tax Invoice is not Mandatory?
• FAQ’s on GST Invoice Format and Rules

GST Invoice Rules 2021-22

To understand the specific format of a tax invoice, one must refer to Section 31 of the Central Goods and Services Tax Act of 2017. Section 31 specify the conditions or entries that such an invoice must include in order to be considered an official GST document. The invoice rules specified by the officials is applicable for both electronic and manual bills.

What are the Requirements of GST invoices?

As specified above, the officials of CBIC has specified the GST invoicing format requirements. Out of the GST Invoice rules specifications, the following 3 requirements are mandatory when he/she is issuing the GST bills.

1. An input distributor should be the one to send this invoice.
2. All additional bills/invoices.
3. Any previous revisions to the invoice generated by the supplier.

Apart from these elements, a GST tax invoice must also include the particulars listed below:

• The GSTIN, as well as the name and address of the provider who is submitting the GST invoice
• Bill issued date
• A 16-digit serial number that is unique
• In the event of registered recipients, the bill should additionally include the receiving party’s name, GSTIN, and address
• All services or items provided must be described in detail, including the HSN code
• If certain taxes are eligible for a discount, the amount of the discount must be mentioned
• Amount of tax
• Valuation of invoices
• The rate at which CGST, SGST, and IGST are charged must be specified.
• The billing details and address
• Reverse charge or forward charge details
• Address and information for shipping
• The signature of the tax invoice issuer

GST Invoice Format Example

The GST invoice format example is pictured below:

When a Tax Invoice or a Bill of Supply should be Issued?

In some situations, generating a GST invoice as soon as things are dispatched or services are given can be challenging. As a result, the Indian government has established a universal time limit for suppliers to comply with it. But this time frame varies based on the type of goods supplied and they are explained below:

Tax Invoice for Normal Goods

Goods suppliers must create an invoice on or before the date of the products’ disposal. Removal of goods under Section 2 (96) of the CGST Act of 2017 can entail one of two things:

• The goods have been shipped for delivery to the intended recipient.
• The recipient or an authorised person acting on the recipient’s behalf collects goods from the provider.

Tax Invoice on Continous Supply Goods

If the invoice is for a customer with whom the supplier has a regular business relationship, those can issue a GST invoice on or before the account statement is generated or payment is received.

Tax Invoice on Services Provided

In the case of a GST invoice bill for services rendered, the bill must be issued within 30 days of the services being rendered.

GST Invoice on Bank and NBFC Services

The date for issuing a GST receipt for financial services provided by banks and other financial institutions is 45 days from the date of service provision.

Copy of GST Invoices for Goods Supply

If a GST invoice for goods supply is issued, the issuer must prepare three copies for the following parties engaged in the transaction:

• The recipient will receive the original copy.
• The duplicate copy is for personnel in charge of conveying the items from the supplier to the recipient.
• The supplier will benefit from the triplicate copy.

Copy of GST Invoices for Services Supply

Since no transporters are engaged in a service provision, issuers only need to print two copies of the GST invoice bill.

• The service recipient owns the original document.
• The provider keeps the duplicate for internal usage.

Revising Invoices Issued Before GST

Revised tax invoices can be raised against issued invoices under Rule 53 of the CGST Act, 2017. The modification of the GST invoice bill may result in a decrease or increase in the price of the products or services provided. It could also affect the CGST, SGST, and IGST rates that were previously applied to this bill.

The list of details that needs to be mentioned on revised invoices are listed below:

• ‘Revised Invoice’ should be written on the bill
• Supplier’s GSTIN, address, and name should be mentioned
• Bill issue date
• A registered recipient’s name, GSTIN/UIN, and address
• GST invoice’s date and serial number
• Shipping address and information
• Serial number that is unique and not exceeding 16 characters
• The issuer’s or authorised representative’s signature is required

When Tax Invoice is not Mandatory?

A supplier can avoid issuing a GST invoice only under the following two situations:

• The beneficiary in the transaction is unregistered.
• When the recipient declares that he or she does not require an invoice of this nature.

Please note that a supplier must meet both of these criteria in order to avoid the legal requirement of producing a GST invoice. Rather, at the conclusion of each day, the registered provider can produce a consolidated tax invoice for all such supplies.

FAQ’s on GST Invoice Format and Rules

Question1.
Is state code mandatory in GST invoices?

Answer:
Yes, both state code and state name must be mentioned on the GST invoice.

Question 2.
Are there any restrictions on the format of invoices in GST?

Answer:
The length of the GST invoice number should not exceed 16 characters, according to rule 46 of the Central Goods and Service Tax Rules, 2017, which means that the GST invoice number can only be 16 digits long.

Question 3.
What is the GST invoice serial number rules?

Answer:
The GST invoice number rules are:
a. The tax invoice must be numbered in order
b. The total number of characters in a serial number should not exceed 16
c. The serial number should be sequential and contain alphabets, digits, or special characters
d. For a financial year, the sequential serial number should be unique

GST Valuation Goods Services: GST-Goods and service tax will be one tax to subsume all taxes. It will bring in the regime of “One Nation One Tax.” There are many questions in people’s and organizations’ minds as the scheme is an entirely new form of indirect taxation. Any taxes, charges, duties, cess, and fees levied under any act, except GST. If charged separately by the supplier, then the GST Compensation Cess will be excluded. Currently, GST will be imposed on the ‘transaction value.’ Transaction value is the amount actually paid (or payable) for the supply of goods/services within unrelated parties (i.e., payment is the sole consideration).

• Valuation At Transaction Value
• Inclusions
• Exclusions
• Circumstances Where The Valuation Consideration Is Not Wholly In Money
• Valuation Of Supplies Between Related Or Distinct Persons Other Than Through An Agent
• Value Of Supply Of Goods Received Or Made Through An Agent
• Rule 4 – Valuation Based On Cost
• Rule 5 – For Determination And Residual Method Of Value Of Supply Of Goods Or Services Or Both
• Meaning of Related Persons
• Distinct Persons
• Valuation In Special Cases
• For Determination of Value: Rate of Exchange of Currency, other than Indian Rupees

Valuation At Transaction Value

If the supplier and recipient of Goods/Services are not correlated, then the price actually payable or paid is taken as the value of goods/services. The transaction value shall be received even where the recipient and supplier of supply are associated or Related Persons, provided that the relationship has not determined\affected the price.

Where goods are carried from one station of business to another place of the same business or from the principal to an agent or from an agent to the principal whether or not located in the same State, the transaction value shall be the value of such supply.

Inclusions

The value of goods/services also incorporate the following:-

any taxes, fee, duties, or cesses charged separately by the supplier other than GST itself.

commission or packing and other incidental expenses are charged separately by the supplier.

the expense charged for anything arranged by the supplier at the time of or before delivery of the goods/services. E.g. special packing or gift packing

interest, penalty or late fee charged for postponed payment

subsidies undeviatingly linked to the price excluding subsidies rendered by the State and Central governments.

Exclusions

Any discount that is provided shall not be included in the value of the supply:

• such discount shall be mention before or at the time of the supply in the invoice,
• after the supply has been effected, provided that:
  • such discount is established entered into before or at the time of such supply in terms of an agreement and associated explicitly with relevant invoices; and
  • the recipient of the supply has reversed the input tax credit as is attributable to the discount based on the record issued by the supplier.

The effect of discount provided on transaction value is summarised below-

Type of discount – Effect on transaction value

• If the discount is provided at the time of supply or before and is recorded in the invoice, it can be declared as a deduction from the transaction value.
• Suppose the discount is provided after supply but agreed upon before or at the time of supply and can be specifically linked to relevant invoices. In that case, it can be declared as a deduction from the transaction value.
• If the discount is provided after supply and not comprehended at the time of supply, it cannot be commanded as a deduction from the transaction value.

Circumstances Where The Valuation Consideration Is Not Wholly In Money

In such a circumstance, the valuation will be done at:

• Open market value
• If the open market value is unavailable, then at a ‘total of consideration in money and other consideration’s commensurate money value.
• If the value can-not be resolved with the earlier two methods, then the value of like quality and kind goods or services will be considered as the value.

Examples of circumstances where a value can-not be resolved with the above three methods:-

Where a new laptop is supplied for Rs.40000 along with the exchange of an old laptop and if the price of the new laptop without exchange is Rs.44000, the open market value of the new laptop is Rs 44000.

Where a camera is supplied for Rs.90000 along with a barter of accessories that are manufactured by the recipient and the value of the included accessories known at the time of supply is Rs.9000, but the open market value of the camera is not known, the value of the supply of camera is Rs.99000.

Valuation Of Supplies Between Related Or Distinct Persons Other Than Through An Agent

The value of the supply of services or goods or both between distinct individuals as specified in 25(5) and 25(4) or where the recipient and supplier are associated, other than where the supply is performed through an agent, shall,-

• be the value of open market of such supply;
• if the open market value is unavailable, be the value of supply of goods or services of like quality and kind;
• if the value is not measurable under clause (a) or (b), be the value as concluded by application of rule 4 or rule 5, in that order:

Provided where the beneficiary is qualified for a full input tax credit, the value claimed in the invoice shall be regarded to be the good’s or service’s open market value.

Value Of Supply Of Goods Received Or Made Through An Agent

The agents and their principal and the value of supply of goods between shall-

be ninety per cent of the amount imposed for the supply of goods of like quality and kind, be the open market value of the goods being supplied, or at the option of the supplier, by the recipient to their customer not being a related individual, where the goods are indicated for further supply by the stated recipient.

Illustration: Where a principal supplies walnut to their agent and the agent supplies subsequent walnuts of like kind and quality and supplies at a price of Rs.10000 per quintal on the day of supply. Another independent supplier is supplying groundnuts of similar kind and quality to the said agent at the cost of Rs.9100 per quintal. The principal shall be making the value of the supply of Rs.9100 per quintal, or where he exercises the option, and the value shall be 90% of the Rs.10000, i.e. is Rs.9100 per quintal.

Under clause (a), the value of a supply is not measurable; the same shall be concluded by applying rule 5 or rule 4 in that order.

Rule 4 – Valuation Based On Cost

If the value can not be resolved by any provisions or rules stated above, then the value will be resolved under rule 4. Under rule 4, the value shall be one hundred and ten per cent of the cost of manufacture or production or cost of provision of such services or cost of acquisition of such goods.

Rule 5 – For Determination And Residual Method Of Value Of Supply Of Goods Or Services Or Both

If the value can not be resolved by any provisions or rules specified above and through rule 4, then under rule 5, the value will be defined. Under rule 5, the value shall be resolved using reasonable means uniform with the general and principles provisions of section 15 and these rules.

Granted that the supplier may opt for this rule, disregarding the rule in case of the supply of services.

Meaning of Related Persons

Individuals shall be deemed to be “related persons” if

1. such individuals are directors or officers of one another’s businesses;
2. such individuals are legally recognised partners in business;
3. such individuals are employer and employee;
4. any individual directly or indirectly owns, holds or controls twenty-five per cent or more of the outstanding shares or voting stock of both of them;
5. one of them indirectly or directly controls the other;
6. both of them are indirectly or directly controlled by a third individual;
7. together they indirectly or directly control a third individual, or they are affiliates of the same family;

The term “person” also includes legal individuals.

Individuals who are correlated in the business of one another in that one is the sole distributor or sole concessionaire or sole agent, howsoever described, of the other, shall be considered to be related.

Distinct Persons

As per the CGST Act’s Section 25(5):

An individual who is required to obtain or has obtained more than one registration, whether in one Union or State territory or more than one Union or State territory, shall be treated as distinct persons in respect of each such registration for the purposes of this Act.

Where an individual who is required to obtain or has obtained registration in a Union or State territory in respect of an establishment has an establishment in another Union or State territory, then for the purposes of this Act, such establishments shall be conducted as establishments of distinct persons.

The full value in money, excluding the central tax, integrated tax, State tax, Union territory tax and the cess payable by a person in a transaction, is what the open market value of a supply of goods or services or both means where the recipient of the supply and the supplier are not related, and to obtain the supply at the same time, the price is made the sole consideration when the supply being valued.

Any other supply of both or either goods or services are made under similar circumstances that, in respect of the characteristics, functional components, materials, quality, quantity, and reputation of the services or goods or both mentioned before, is the same as, or substantially resembles, or closely that supply of goods or services or both is what the supply of goods or services or both of like kind and quality means.

Valuation In Special Cases

Money Changer: The value in an event when currency is exchanged

From or to Indian Rupees (INR): (Selling rate or buying rate – rate for that currency referred by RBI)* Total units of currency If the quotation rate for any currency is not available, then value = 1% of Indian rupees received or provided by such a money changer.

NOT to or from Indian Rupees (INR): Value is equal to 1% of lesser of the two amounts the individual switching the money would have received by converting any of the two currencies into Indian Rupee at the reference rate on that day granted by RBI.

Life Insurance Business:

the gross premium charged is intimated to the policyholder at the time of supply of service, and such amount get reduced by the amount allocated for savings or investment on behalf of the policyholder;

• a single premium of ten per cent is accredited from the policyholder; in case of single premium annuity policies other than (a), or
• a premium charged twenty-five per cent is charged from the policyholder in the first year for all other cases, and in the subsequent years, twelve and a half per cent from the total premium being charged from the policyholder.

When the entire premium is paid by the policyholder, which contains nothing in this sub-rule, then it only applies towards the risk cover in life insurance.

The Individuals dealing in second-hand goods

The value of supply taken for the GST application is the difference between the purchase price and selling price in the state of an individual who is trading in second-hand goods. Such an amount should be ignored if the difference is negative, and no GST is obligatory on that transaction.

Only when the used goods are sold after minor processing or in the same condition and the nature of the goods is not altered after purchase, then such provision is applicable to such business. Also, if such individuals paid on such transaction, then they should not avail input tax credit.

For example – An individual ventures in second-hand cars. He purchases a car for Rs. 10,00,000. No GST is spent on it. Now for the car’s servicing and repairs, he makes an expense of Rs. 40,000 and then sold it for Rs. 12,00,000. The added Rs. 2,00,000 is the amount on which GST is obligatory.

Pure Agent

A supplier or as a pure agent of the recipient of supply incurs the expenditure or costs which shall be excluded from the value of supply if all the following conditions are satisfied, namely:-

• when the supplier executes payment to the third party on authorisation by such recipient, the supplier serves as a pure agent of the recipient of the supply.
• a separate designation should be mentioned in the invoice issued by the pure agent to the recipient of service while the payment made by the pure agent on behalf of the recipient of supply; and
• the supplies procured by the pure agent are in addition to the services they supply on their own account from the third party as a pure agent of the recipient of the supply.

Explanation:

For the objectives of this rule, “pure agent” means an individual who –

• act as an individual’s pure agent by enrolling into a contractual agreement with the recipient of supply to incur costs or expenditure in the course of supply of both or either goods or services.
• as a pure agent of the supplied recipient, neither intends to hold nor holds any title to the goods or services or both provided so or procured.
• for their own interest, does not use such goods or services so procured or supplied.
• in addition to the amount accepted for supply, the person provides on their own account and receives only the actual amount incurred to procure or supply such goods or services.

Illustration

Corporate services firm X is employed in handling the legal work concerning the incorporation of Company Y. Other than its service fees, and X also recovers registration fee and approval fee for the name of the company paid to the Registrar of the Companies from Y. The fees charged by the Company Registrar’s approval and registration of the name are compulsorily levied on Y. In the payment of those fees, X is merely acting as a pure agent. Therefore, X’s recovery of such expenses not part of the value of supply made by X to Y and is considered as a disbursement.

Option with money changer

Also, with the below-mentioned method, a money changer may execute an option to determine value. Such an alternative, once executed, can not be taken back throughout that financial year.

• for a gross amount up to one lakh rupees, one per cent of the gross amount of currency exchanged, which are subject to a minimum amount of two hundred and fifty rupees.
• for a gross amount exceeding one lakh rupees and up to ten lakh rupees; one thousand rupees and half of a per cent of the total amount of currency is exchanged and
• for an amount exceeding ten lakh rupees, of five thousand rupees and one-tenth of a per cent of the total amount of currency is exchanged subject to a maximum amount of sixty thousand rupees.

Air Travel Agent

In the case of domestic bookings, the value of services provided by the air travel agent is calculated at the rate of 5% of the basic fare and in the case of international bookings, it is determined at the rate of 10% of the basic fare.

The part of the airfare on which commission is normally paid to the air travel agent by the airline is termed as Basic fare.

Goods repossessed from a defaulting borrower

For the goal of recovery of a loan or debt from a defaulting borrower, who is not registered, the purchase value of goods repossessed shall be deemed to be the purchase price of such goods by the defaulting borrower get reduced by five percentage points for every part or quarter thereof, between the date of disposal and the date of purchase by the individual making such repossession.

The value of a token, or a coupon, or a stamp (other than a postage stamp) or a voucher which is redeemable against a supply of both or either goods or services which shall be equal to the money value of both or either of the goods or services redeemable against such token, voucher, stamp or coupon.

For Determination of Value: Rate of Exchange of Currency, other than Indian Rupees

For determination of the value of taxable services or goods or both, the rate of exchange as determined by the Reserve Bank of India shall be the applicable reference rate for that currency on the date when the point of taxation arises in respect of terms of timing of supply provisions of such supply.

 

 

GST on Job Work: Under the GST, the term ‘Job Work’ is significant. Even though there is no GST on commodities delivered to the Job Worker for the purpose of job work and returned to the Principal once the Job Worker has completed the job work, the Legislature has enacted full-fledged GST laws in regard to transactions between the Principal and the Job Worker. In this article, let’s understand everything about the Impact of Goods and Services Tax Rate on Job Works.

• What is Job Work?
• Input Tax Credit on Goods Sent for Job Work
• List of Documents Required for Job Work
• Transitional Provisions on Job Work
• Job Work – Form GST TRAN-1
• GST Rates on Job Work
• FAQ’s on GST Job Work Under GST

What is Job Work?

Processing or working on raw materials or semi-finished items provided by the principal manufacturer to the job worker is referred to as job work. This is to finish a part (or) the entire process that leads to the creation or finishing of an item, or any other critical operation. For example, large shoe manufacturers (principals) send half-finished shoes (upper part) to smaller shoemakers (job employees) to finish. The workers return the shoes to the main maker.

Thus Job worked is any treatment or process performed by a person on goods owned by another registered person. The person who performs the job work is referred to as a job worker.

Note: The value of items sent by the principal will not be included in the registered job worker’s total turnover.

Input Tax Credit on Goods Sent for Job Work

The principal manufacturer will be able to deduct tax paid on items sent on job work. There are, however, some restrictions which are listed below:

Goods Can Be Sent To A Worker On The Job

• From the principal’s workplace
• Directly from the supplier of such goods’ place of supply

In both situations, ITC will be permitted.

The effective date for items shipped is determined by the location of the business:

• Date of products sent out: Sent from the principal’s place of business
• Send straight from the seller of such items’ place of supply: date of receipt by the job worker

The effective date is significant because it will aid in determining the point at which the products will be taxed if they are not returned within the prescribed time frame (see point C below)

The major manufacturer must receive the goods within the following time frame:

• 3 years for capital goods
• 1 year’s worth of input goods

If goods are not returned within the above-mentioned time frame, they will be recognised as a supply from the effective date forward, and the principal will be responsible for the tax.

List of Documents Required for Job Work

1. Accounts & Records: The principal will be responsible for keeping adequate accounts for the inputs or capital items.
2. Challans Required:
   • A challan must accompany all products sent for job work.
   • The principal will be the one to issue the challan.
   • Even for inputs or capital products sent straight to the job-worker, it will be provided.
   • In Form GSTR-1, the information of challans must be supplied.
   • Form GST ITC – 04 must also be filled out with challan information.
3. Form ITC-04: Every quarter, the principal must submit FORM GST ITC-04. He/She must include information about challans such as Goods that are delivered to a job worker, received from a job worker, or sent from one job worker to another.

Note: The following information must be included on the challan:

• The delivery challan’s date and number
• Consigner and consignee’s names, addresses, and GSTIN
• HSN code, item description, and quantity
• CGST, SGST, IGST, and UTGST each have their own taxable value, tax rate, and tax amount.
• location and signature

Transitional Provisions on Job Work

This applies to things removed for job work before the application of GST and returned on or after the implementation of GST. If the following requirements are met, no tax will be due:

• The goods must be returned to the factory within 6 months of the 1st of July (that is, by December 31, 2017). (extendable for a maximum period of 2 months).
• Form TRAN-1 is used to declare goods held by job workers.
• Only after paying the applicable taxes (Excise and VAT if before GST) can the major manufacturer sell the items under job work. GST is applicable if he sells after July 1, 2017. This law does not apply to commodities that are exported out of India within six months of the designated date (extendable by not more than 2 months).

ITC will be collected from the major manufacturer if the goods are not returned within the time frame.

Job Work – Form GST TRAN-1

Both the job worker and the principal manufacturer must file FORM GST TRAN-1, detailing the stock held by the job worker for the principal/with the job worker/by the job worker. They must state the number of inputs, semi-finished items, and final goods they had for further information, see our TRAN-1 guide.

GST Rates on Job Work

The GST rates of job work for different categories are tabulated below:

Job Work on	GST Rate
GST on Job Work for Agriculture, forestry, fishing, animal husbandry	0%
GST on Job Work for Intermediary services related to cultivation and animal rearing	0%
GST on Job Work for Printing of newspapers GST on Job Work for Textile and textile products GST on Job Work for Jewellery GST on Job Work for Printing of books (including Braille books), journals and periodicals GST on Job Work for Processing of hides, skins and leather	5%

FAQ’s on GST Job Work Under GST

Question 1.
Is GST applicable on printing?

Answer:
Yes, 12% GST applicable to Printing and Supply of Trade Advertisements.

Question 2.
What is the frequency to file ITC-04?

Answer:
ITC-04 is filed once in every quarter.

Question 3.
What is the GST rate on job work on shawls like embroidery and hand work?

Answer:
The job work rate for shawls with embroidery work is 18%.

Question 4.
What are the mandatory documents in GST when material has been sent for job work and sold to customer from job worker’s place?

Answer:
In accordance with GST provisions on e-way bill, each registered person who causes the movement, even in cases where such movement is for reasons not relevant to supply of goods with a value of more than Rs.50,000 must generate an electronic bill. Therefore, e-way bills should be generated even when goods are moved for work. In case of movement, either the principal manufacturer or the registered employee would generate an e-way bill, irrespective of the shipment value in the event of interstate movement.

How to Cancel an E-way Bill: According to rule 138 of CGST Rules, the provisions of the E-way bill is defined as a unique document furnished about the shipment of goods. Therefore, registered users must generate an E-way bill when the goods need to be moved from place to place, and the value of such goods is more than Rs. 50,000 as discussed.

• The sales of goods
• Two Parts of E-way Bills
• Reasons why an E-way bill may require cancellation
• Period to Cancel an E-way Bill
• Steps to Cancel an E-way Bill

Sales of Goods

The movement of goods for any other reasons apart from the supply.

Example: For the transfer of goods from one branch to another branch.

When a registered person purchases goods from an unregistered person and goods need to be moved. In this case, the registered recipient needs to generate the E-way bill.

Two Parts of E-way Bills

Part A: The information this part contains is invoice-level and relates to goods such as invoice date and number, GST registration number of the supplier and recipient, etc. The details mentioned above cannot be edited when the E-way bill has already been uploaded.

Part B: This part contains details relating to transporting goods such as transport document number and vehicle number in road transport. Once the E-way bill is uploaded, no rectification is possible. There is no option to delete or correct a faulty E-way bill. However, the user can cancel such an E-way bill.

Reasons Why an E-way Bill May Require Cancelling

• Due to an error in the generation of an E-way bill
• Due to non-movement of goods

Period to Cancel an E-way bill

The generator can cancel an E-way bill within the first 24 hours from its generation. However, the E-way bill cancellation is not possible once any authorized officer has verified it during the transit.

After the expiry of the time mentioned earlier, the E-way bill shall be deemed valid and cannot be cancelled by the generator. However, you can request the recipient reject such an incorrect E-way bill as the timeline for rejecting an e-way bill is 72 hours.

Steps to Cancel an E-way Bill

Step 1: To access the E-way bill, users must log in to the E-way bill system portal.

Step 2: Click on the option ‘E-way bill’ or on ‘Consolidated EWB’ and click on ‘Cancel’ from the dropdown menu to Cancel the process.

Step 3: After the cancellation is nominated, the website will display a new instruction on the user’s screen, prompting them to enter the E-way bill number.

Step 4: The user must enter the 12-digit e-way bill number and click on ‘Go’.

Step 5: The E-way bill would be displayed as soon as the bill number is entered.

Note: Users should specify the reason for the cancellation of the concerned E-way bill. It is illegal to reuse the cancelled E-way bill. Thereupon through the process of generation, the user can generate a new E-way bill.

GST on Cab and Taxi Services: In India, there are several different types of taxis. Basic cabs are available for hailing on the road (available in cities like Kolkata & Mumbai). Other cities (such as Bangalore and Hyderabad) rely solely on radio taxis such as Ola and Uber. Taxis aren’t merely four-wheeled motor vehicles on four wheels.

In rural and semi-urban areas, you also have transportation like bullock carts, vegetable carts, and other vehicles that are considered taxis but operate in the unorganised sector and have never paid any taxes. The radio taxis, which you hire through an app or phone, will be the most affected by the GST on cabs. In this article, let’s understand the impact of GST on Rental Vehicles such as taxies and cabs. Read on to find out more.

• What is Radio Taxi?
• Service Tax on Cab & Taxi
• Impact of GST on Cabs and Taxis
• GST on Cab & Taxi | Reverse Charge Mechanism
• How Does Reverse Charge Mechanism Work?
• Impact of GST on Cabs & Taxies – Input Tax Credit
• FAQ’s on GST Rate on Taxi Services

What is Radio Taxi?

Before understanding the impact of GST on Cab and Taxies, let’s understand what is radio taxi and how GST impact that.

The GST defines a radio taxi as a taxi, including a radio cab, that is in two-way radio communication with a central control office and can be tracked via the Global Positioning System (GPS) or the General Packet Radio Service (GPRS). Cab aggregators such as Ola and Uber fall into this category.

Service Tax on Cab & Taxi

On-site service tax with a 60% abatement is imposed on the following vehicles:

1. A contact carriage (horse carriage)
2. A radio taxi.
3. “A stage carriage” – bus

It means that service tax is levied on radio taxis and AC buses but not on regular metered taxis such as Kolkata’s yellow cabs. The effective service tax was 6%.

Impact of GST on Cabs and Taxis

The same will be applicable under GST, with radio cabs and air-conditioned buses subject to service tax. GST would not apply to metered cabs or auto rickshaws (including e-rickshaws like Ola Auto). Without the ITC, the GST rate will be 5%. On the fare charged to the passenger, Uber will collect 5% GST.

Details	Before GST Imposed	After GST Imposed
Basic Fare	500	500
Access Charges	70	70
Total Fare	570	570
Service Tax @ 6%	34.20	–
GST @ 5%	–	28.50
Total to Pay	604.50	598.50

As a result, we notice that cab fares are decreasing. Passengers received discounts and preferential prices as a result of the perks.

GST on Cab & Taxi | Reverse Charge Mechanism

Radio taxi firms are required to pay GST under reverse charge, according to the reverse charge notification. Rent-a-cab services previously used a partial reverse charge method. If the service providers (drivers) did not take advantage of the abatement, the service receivers (rent-a-cab services) were required to pay 50% under RCM. The service provider was responsible for 50% of the costs.

However, if a service provider receives an abatement, the service receiver is responsible for paying the full amount of service tax due on the abated value. The full onus is on the service recipient, i.e. Ola, to avoid such ambiguity and problems under GST.

How Does Reverse Charge Mechanism Work?

Ola Cabs hires drivers to transport passengers in their automobiles. Ola’s chauffeur/driving services are provided by drivers. Ola is the service receiver, and drivers are paid a percentage of the fare received from passengers.

For example,

A driver will be paid Rs. 100 as a portion of the fare. Ola will pay the driver Rs. 100 and make a Rs. 5 deposit with the government. Ola would collect GST on the fare after providing the service to the passenger. On a reverse charge basis, Ola pays GST on the services of its drivers.

Ola can claim the ITC on RCM taxes paid and deduct it from the output taxes owed. The reverse charge’s goal is to bring this unorganised sector under the tax net. It also shifts the cost of tax compliance from low-income individuals (drivers) to huge corporations (Ola) with sufficient resources.

Impact of GST on Cabs & Taxies – Input Tax Credit

For Service Providers

Option 1: Pay 5% and not claim ITC

They have the option of not claiming ITC for taxes paid on specific inputs. Then they only have to pay a 5% output GST. Uber, for example, will not be able to claim any ITC on the GST levied for telecom services if it pays the phone bill.
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Option 2: Pay 12% and claim ITC

If they pay 12 percent GST, cab aggregators can claim ITC for the tax paid on cab services provided on various inputs. If Uber pays output GST at 12%, it can collect GST on the phone bill in the scenario above.

For Service Receivers

If a business uses cab services, it is not eligible for an ITC. For example, If an organisation pays for cab services for employees to attend a convention, it will be unable to claim an ITC on the 5% GST on the taxi bill.

FAQ’s on GST Rate on Taxi Services

Question 1.
What is rent a cab service under GST?

Answer:
Cab services are subject to a 5% GST. Although, service providers can choose to pay GST at the lower rate of 12% and receive a full input tax credit.

Question 2.
Do taxi drivers have to pay GST?

Answer:
Yes, one will have to pay GST if he or she owns a taxi. For that one will have to register for goods and services tax if you drive a taxi (GST). However, If the taxi driver is an employee, then, he or she is not required to register for GST.

Question 3.
Can we take GST input on rent a cab?

Answer:
The ITC on cab rentals is specifically prohibited under Section 17(5) of the GST Act. As a result, every taxpayer renting a cab for a certain amount of time and paying GST on the rental charges is subject to the GST. GST paid on rental changes will not be an eligible ITC in this case.

Best GST Software for CA: Many beneficial features are incorporated in tax preparation software for experts, on which companies and businesses may count while filing their returns.

These GST software applications are simple and straightforward to directly connect with the accounting system, and information can be effectively exported to submit supplementary returns or potentially create MIS reports. Secondly, each application offers a wide range of additional perks to easily tackle your compliance requirements and focus on saving you from being a debtor.

• What is the GST?
• What is GST software?
• Cleartax GST
• OctaGST
• GST Hero
• Gen GST
• CompuGST
• Hostbooks GST Software

What is the GST?

GST stands for Goods and Services Tax. It is an indirect tax regime that has substantially substituted a few other indirect taxes in India, including excise duty, VAT, and services tax. The Goods and Services Tax Law was implemented by Parliament on March 29, 2017, and came into force on July 1, 2017.

What is GST Software?

GST accounting software, often known as GST software, is an accounting system that processes GST taxation.

A good and strong GST-compliant accounting system is a perfect match for your commercial applications.

Deeply anxious that you may have submitted factually incorrect tax returns and also that the tax department may summon you?

Luckily, GST-compliant accounting software can perform it all anyway for business.

Nearly every single corporate field has considered the consequences of GST, and many professions are also directly influenced by the new indirect tax framework.  Chartered Accountant is one of the sectors that would be significantly affected by the advent of GST.

It tackles any underlying issues that emerge as a consequence of GST filing inaccuracies and deduction claims that assure massive profits. In addition, because all financial transactions are documented on the software, GST filing is largely automated.

With more and more GST apps accessible to the public, it may be tough to carefully select reliable and consistent software. We’ve identified the best ones to make your job a lot easier.

ClearTax GST

The ClearTax headquarters are in Bangalore, India.

ClearTax GST Software is a GST tool for small businesses and accountancy firms that are hosted in the cloud system. The programme behaves as a platform, enabling an end-to-end GST administration workable solution for all of your business transactions. In addition, it encompasses a series of support services, such as a reconciling system, invoicing, vendor compliance, a verification engine, and many others.

The programme supports strong information security monitoring by encrypting data both at the origin and in transit. Additionally, it currently employs SSL and other industry-standard cryptographic communication formats, committed to ensuring strong protection.

If you are having problems with the programme, you may contact them for assistance and support. This programme allows the user to set several GTINs.

Features

• Taxpayers can apply the application to acquire GSTR-3B versus one and GSTR-3B vs 2A statistics for regulatory compliance.
• ClearTax GST billing software can also be used to effortlessly transfer purchase and sales figures from Tally ERP to the GSTN website.
• ClearTax GST offers comprehensive security protocols with 128-bit SSL encryption.
• You may implement this application to implement audit trails and closely monitor your inventory on a routine basis.
• You may produce an E-way bill in the format of a JSON file and submit it automatically to the portal.

Octa GST

Octa GST is an offline return filling and reconciling application that is simple and clear, and easy to implement for all kinds of businesses and tax experts. GSTR-1, GSTR-3B, GSTR-4, and GSTR-9 returns may very well be obtained using Octa GST. A high-performance JSON to Excel converter is built-in.

With Octa GST, you can easily and quickly preview and evaluate your tax return. Once confirmed, merely produce the return file and submit it to the GSTN portal directly.

Features

• It offers monthly summarized analysis of GSTR-1, GSTR-2A, and GSTR-3B, as well as a monthly comparison study of GSTR-3B versus GSTR-1 and GSTR-3B vs GSTR-2A.
• This programme may also be used offline to adequately prepare tax returns.
• It facilitates data import from distinct sources and generates the return data from the sales/purchase transactions system automatically.
• With this application, you can conveniently verify invoices between months and balance accounts. Inconsistencies may be directly detected in this approach.

GST Hero

GST Hero will computerize your GST compliances, effectively permitting you to optimize your job productivity and save time. In addition, your data is safe and protected through this application, and GSTR-1, GSTR-3B, and other reports may be finalized instantaneously.

Features

• It offers the flexibility of using a GST Suvidha Provider (GSP) who GSTN has licensed.
• Using this, Chartered Accountants and Tax Consultants can submit GST for each of their clientele using a single piece of software.
• It facilitates an infinite number of user registration.
• Mobile applications for iOS and Android are readily available from any point in the globe using any platform such as a desktop, laptop, tablet, or mobile phone.
• There is no necessity for a server or its maintenance cost.
• For improved performance, auto data backup and disaster recovery are offered.
• SSL-secured login to guarantee secure and safe GST filing.
• It supports Auto Error Detection and Advance Receipts.

Gen GST

The Gen GST (Billing, Returns Filing, and E-Waybill) application is also OS independent, effectively permitting it to run instantaneously on a desktop pc.

For the GSTR-3B form, Gen GST supports multiple unique traits such as late charge estimation, interest analysis, reconciliation with ITC-ledger, and interest report, as well as many other required components for tax filing, e-billing, and e-registration.

The company has introduced a number of GST software modules that potentially authorize speedier and efficient GST tax filing and billing, all via the use of the software. In addition, GST return submission is accessed digitally, and payouts are acknowledged via Online Banking, Credit or debit card, so competent security measures have been taken.

Features

• It is platform and OS neutral, which essentially indicates it operates well on Linux, Windows, Android, Mac, and other operating systems.
• It is readily available in both online and offline formats.
• GSTR 7 data e-filing with an offset with EVC/DSC, upload files from Excel, JSON, and other files, as well as balance with any other application, is possible.
• GSTR 9C audit form e-filing is obtainable instantaneously through DSC/EVC, as well as the ability to import/export data from Excel, JSON, and other sources.
• GSTR 9 Annual return submission with a mouse click from GSTR 1, 3B, and 2A.
• When importing data, preexisting statistics is evaluated, and this programme returns a discrepancy issue notification.
• With a single click, you may acquire all of the return data from the GSTN portal.
• Very easy to download the bulk status of GSTR-1, 3B, and four return filing data.

CompuGST

This programme enables automatic completion of registering documents at the GST site, as well as an insightful overview for different job monitoring such as overdue returns, taxes, so on and so forth. Through, this all returns may be generated in offline mode.

Coordination with your accounting system to help mitigate anomalies across filed data and accounting data/Creation of push files for fully automated amending in your accounting package is readily available.

Features

• Automatically get appropriate and necessary GSTR for invoice/data contrast.
• On information gathered from a counterparty’s GSTR, an immediate act of Accept/Reject, etc., is implemented.
• Artificial intelligence is deployed to authenticate data and manage similarities and anomalies.
• GSTR-3B and GSTR-1 comparative analysis.
• GSTR-2A vs GSTR-3B comparative analysis.
• GSTR-2A vs. GSTR-2A Contrast.
• Tax obligation is assessed.
• Keeping track of the liability, credit, and money transactions.
• ITC assessment.
• Modification of ITC, TDS, TCS, payments, reversal, and so on is fully automated.

Hostbooks GST Software

HostBooks GST software boasts an impressive GST Billing and Return Filing user experience. It is a cloud-based software program that will facilitate the execution of all GST compliance requirements.

They want to cut down conformity duration, which will culminate in a cost reduction of approximately half.

You can start reducing your increased workload by filing GSTR-1, GSTR-1A, GSTR-3B, GSTR-4, and GSTR-9 electronically with HostBooks GST return filing computer program.

Features

• It includes inconsistency, automated data correction, and regular updates on taxable income, which facilitates the minimization of errors and mistakes while completing total returns.
• Invoice can be accomplished in conformity with industry guidelines, and statements can be issued in compliance with government regulations. This computer software may also help you to maintain a record of your stock and develop detailed design analytics.
• They save up your time to focus on your key business functions by resolving GST tax complex calculations.
• The application also permits you to print or email bills according to your business needs.

GST Registration Document Checklist: GST Registration is a method through which any taxpayer registers themselves under the title of Goods and Tax Services. This process is advantageous to any subscriber in several ways.

Any individual involved in the selling, buying or production of items among several states without a threshold limit and gross turnover crossing the margin of Rs 20 lakhs should register for GST.

• The method of Registration
• GST Registration Number
• Documents needed for the Registration Process
• Documents required to complete Registration
• Offences and Penalty
• Benefits under GST

Method of Registration

• Step 1: Through the online GST Portal, individuals can register themselves for GST by filling in the necessary details under the ‘New Registration’ option.
• Step 2: After selecting ‘Proceed’, an OTP will be sent to the person’s email and/or mobile number, which needs to be entered.
• Step 3: On the following page, the individual must upload all the documents crucial to the Registration one by one, after which, in the ‘Verification’ Page, the EVC, OTP and DSC need to be submitted.
• Step 4: Once done, the Application Reference Number will be sent to the subscriber, and the process will be completed.

GST Registration Number

The GST Registration Number, also called GSTIN, is a distinct 15-digit identification number allocated to every taxpayer.

Documents Needed for Registration Process

Individuals

• Owner’s PAN Card
• Owner’s Aadhaar Card
• Owner’s Passport Sized Photo (max size of 100kb in jpeg)
• Details of Owner’s Bank Account
• Address Proof

Partnership Firms

• Original PAN Card of the Firm
• Original PAN Cards for all members
• Replica of the Deed
• All members Passport Sized Photo (max size of 100kb in jpeg)
• All members’ Address Proof
• Aadhaar Card of the Authorised Signatory
• Details of Bank Account
• Office Registration Proof

LLP

• All Partners’ PAN Card
• Original PAN of LLP
• Replica of LLP Registration Certificate
• Replica of Board Resolution
• The authorised Digital Signature Certificate
• All partners’ Address Proof
• All Partners’ Aadhar Card
• All Partners’ Passport Sized Photo (max size of 100kb in jpeg)
• Aadhaar Card of Designated Partner
• Details of Bank Account
• Address Proof of the Office

The name provided on Aadhar Card and other supporting documents should be matching. For example, if there is any discrepancy in the supporting documents such as Aadhar Card, then they can apply name correction in Aadhar card and get the name updated.

HUF

• Original PAN of HUF
• PAN and Aadhaar of
• Owner’s Passport Sized Photo (max size 100kb in jpeg)
• Appointment of Authorised Signatory Proof (inclusive of photo and Authorisation)
• Details of Bank Account
• Address Proof of the Office

Society/Club or Trust

• Original PAN of Society/Club /Trust
• Original Registration Certificate
• PAN and Aadhaar Cards of Authorised Signatory
• Board Resolution/ Other proof of appointment of Authorised Signatory
• Proof of Registered Office (inclusive of the water bill, electricity bill, etc.)
• Details of Bank Account
• Partner’s Passport Sized Photo (max size 100kb in jpeg)

Company

• Original PAN of Company
• Certificate of incorporation by MCA
• Articles of Association
• PAN and Aadhaar Cards of Authorised Signatory (must be an Indian)
• PAN and Address Proof of all Company Directors
• Passport Sized Photos of all members (max size 100kb in jpeg)
• Board Resolution/ Other proofs (max size 100kb, pdf format)
• Details of Bank Account
• Office Address Proof

A GST Practitioner

• Address Proof of location
• Proof of Qualification Certificate (Degree)
• Replica of Pension Certificate (in the case of retired officials)
• Passport Sized Photo (max size 100kb in jpeg)

TDS Registration

Deduction of Tax at Source

• Original PAN and TAN number of subscribers
• Passport Sized Photo of Authorised Signatory (max size 100kb in jpeg)
• Passport Sized Photo of disbursing and drawing officer (max size 100kb in jpeg)
• Appointment proof of Authorised Signatory
• Tax Deductor’s Address Proof

TCS Registration

Collecting Tax at Source (for e-commerce operators)

• Original PAN of subscriber
• Passport Sized Photo (max size 100kb in jpeg)
• Appointment proof of Authorised Signatory
• Tax Collector’s Address Proof

Non-resident OIDAR Service Provider 

Online service providers who do are not located within India

• Passport Sized Photo of Authorised Signatory (max size 100kb in jpeg)
• Appointment proof of Authorised Signatory
• Details of Indian Bank Account(s)
• Non-resident online services Proof (clearance certificate, license, certificate of incorporation by the Government or original country)

Non-resident Taxable Individual (NRTP)

Non-residents seldom undertaking the taxable supply of certain goods or services within India

• Passport Sized Photo Proof of Indian Authorised Signatory (max size 100kb in jpeg)
• Scanned copy of NRTP and Visa details (for individuals)
• Unique number for identification of country by the Government (for Businesses outside India)
• Details of Bank Account
• Address Proof of the person

Casual Taxable Individual

Non-registered domestic individuals seldom undertaking the taxable supply of certain goods or services within India

• Passport Sized Photo Proof for appointment of Indian Authorised Signatory (max size 100kb in jpeg)
• Constitution of Business Proof
• Details of Bank Account
• Address Proof of the taxable person

Embassy or UN Bodies

Procurement of Unique Identification Number to claim refunds of taxes levied on goods or services

• Passport Sized Photo of Authorised Signatory (max size 100kb in jpeg)
• Appointment proof of Authorised Signatory
• Details of Bank Account in India

Documents Needed to Register Property

In the Case of Self-owned Properties:

1. Replica of Electricity Bill
2. Replica of Landline Bill
3. Replica of Municipal copy
4. Replica of Landline Bill
5. Replica of Property Tax Receipt

In the Case of Leased Properties:

1. Replica of Rent or Lease Agreement
2. Replica of NOC or No Objection Certificate from the Owner

In the Case of Shared Property or Consent Agreement:

1. Replica of Consent Letter from the Owner
2. Replica of NOC or No Objection Certificate from the Owner

Offenses and Penalty

Offenses

• Issuing a False invoice while supplying goods/services
• Submitting False information during Registration (including financial papers to evade taxes).
• Using GSTIN of a different Taxpayer
• Suppressing Sales to Avoid Taxes
• Obtaining Fraud Refunds

Penalty

If any of these offenses mentioned above are committed, a penalty under GST must be paid.

In the case of taxes avoided by faulty means, the offender has to clear a penalty ranging up to 100% of the tax evaded.

Benefits Under GST

• Higher threshold for registering
• The simple and easy online procedure
• The number of compliances is minor
• Defined strategy for E-commerce operators
• Increased efficiency of logistics
• Disorganized regulation of sectors under GST

Zero Rated Supply: In economics, zero-rated supply refers to the list of the items subject to a 0 percent VAT tax on the item’s input supplies. The term ‘zero-rated supply’ applies to the list of items that would be taxed under the category of value-added systems and services tax. To understand better about Zero Rated Supply, this article presents you with a compilation of the basics that will help you through your business.

• What is Zero Rated Supply?
• Detailed Account on Zero Rated Supply
• List of Zero-Rated Supply
• Zero Rated vs Exempt Supply
• Refund of Zero Rated Supplies in Goods and Services Tax
• Provisional Refund

What is Zero Rated Supply?

Goods and Service Taxes are not applicable in India for exported goods. Hence, all the exported supplies of a taxpayer that are registered under Good and Service Tax (GST) would be classified as a zero-rated supply.

According to IGST Act, Section 16, zero-rated supply is defined as any of the following supplies of goods or services that fall under the following category:

• Export of services or goods or both
• Supply of services or goods or both to a Special Economic Zone developer
• Supply of services or goods or both to a Special Economic Zone unit

Detailed Account on Zero Rated Supply

Zero Rated Supply is something beyond tax.  As per section 2(47) of the CGST Act of 2017, a supply is deemed to be exempted, when the supply attracts nil. rate of duty.

This is applicable even when the supply is also specifically exempted by a notification or kept out of the purview of tax and falls as a non-GST supply.

However, when the supply is exempted from the tax payment, it does not necessarily mean that GST is not included or applicable in the tax price.

The input services and goods that are used for providing such services or goods already hold a tax and therefore such GST is termed as costs to the supplier and is included in the final pricing.

The tax law does not allow the utilization of credit cards on input services or input goods that are used for the supply of such exempted services or goods.

Therefore, a separate concept of zero-rate supply introduced allows the utilization of the input of all services and goods. However, the relevant provisions fall under Section 16(1) of the IGST Act, 2017.

List of Zero-Rated Supply

Here is a list of provisions that fall under Section 16(1) of the IGST Act, 2017-

• Agricultural products such as chilled and fresh vegetables, paddy, and certain provisionally preserved vegetables
• Essential food provisions such as oils, salt, flour, and others.
• Livestock and livestock supplies or poultry which includes live animals and unprocessed meat
• Poultry eggs
• Kinds of fishes such as live, fresh, frozen and even dried
• The First 200 units of electricity fall under provisions for domestic use
• Water also falls provisions for domestic uses
• Goods supplied to chosen locations from Malaysia (places like Labuan, Langkawi and Tioman)
• Exported goods
• Exported services also fall under provision; for example, architecture services in connection with land outside Malaysia
• Services in Malaysia fall under provisions; for example, towage, pilotage, or salvage services
• International services also fall under provisional goods; for example, transport of goods or passengers from a location in Malaysia to a location situated outside Malaysia

Zero Rated vs Exempt Supply

Supplies and exports to SEZ units or developers are assorted as zero-rated supply. Contrary to this, nil or exempt supplies are those supplied with a zero percent GST rate.

Exempted supply defines the supply of any services or goods or even both which attracts a nil rate of tax. The goods may be wholly exempt from tax under section 11 of the CGST Act or section 6 of the IGST Act. Exempted goods include the non-taxable supply.

The following points enlisted area applies only to the exempted supply-

• GST is not applicable on the outward exempted supplies
• The input tax credit of inputs services and inputs that are incorporated in providing exempted supply is deemed to be not available. This means that no input tax credit is applicable on exempted supplies
• If a person has registered to supply exempted goods or services or even both, they are expected to issue a ‘bill of supply instead of a tax invoice for the goods or services.

Exempted supplies hold no tax on the outward exempted supplies. However, the input supplies used for making exempt supplies will be taxed even though they fall under exempted supply goods. Whereas for zero supply goods no tax is applicable on the outward supplies; Here, even the input supplies are also tax-free.

Refund of Zero Rated Supplies in Goods and Services Tax

Refunds are accessible for the suppliers making Zero-rated supplies. The applicable refunds are for the input tax paid on the services and goods. These goods are Zero-rated supplies inclusive of the non-taxable and exempt supplies.

For example, An exporter supplies leather loafers to Dubai and uses soles in the production of such loafers. Here, the exporter has an option of claiming the Input tax credit of GST that was paid while purchasing the soles.

There are two options that every supplier or dealer can use to claim the refunds of zero-rated goods:

• The first option is that the dealer can export under Letter of Undertaking (LUT) or Bond and claim a refund of the gathered Input credit of tax
• The second option is that the dealer can pay IGST while making the supplies and claim a refund of the same

Provisional Refund

Exporters and suppliers are entitled to about 90 per cent refund on a providential basis claimed on account of zero-rated supply of goods or services or both made by the registered person.

A provisional refund is granted within seven days of the refund claim undertaken by the registered person. The provisional refund amount is credited to the claimant’s bank account directly.

However, there is a condition that comes attached to provisional refunds: The provisional refund is denied if the applicant has been prosecuted for any offence that falls under the GST law or any earlier law within the past five years.

The amount evaded in such prosecution shall be more than Rs. 2.5 Crores and the dealer will be exempted.