GST Tip – 464

As per provisions of Rule 18 of the CGST Rules and corresponding State / Union Territory Rules, the taxpayer has to display his certificate of registration and registration number at a prominent location at the principal place of business and at every additional place of business.

As per provisions of Section 125 of the CGST Act, if the taxpayer does not display, a penalty Upto Rs 25,000 can be levied. If the penalty of Rs 15,000 is levied under central tax as a penalty then under state tax also an equivalent  amount of penalty will be levied.

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Extension of time limit for filing intimation for composition levy

Order No. 01/2017-GST

Subject: Extension of time limit for filing intimation for composition levy under subrule
(1) of rule 3 of the CGST Rules, 2017 In exercise of the powers conferred by section 168 of the Central Goods and Services Tax Act, 2017, the Board hereby extends the period for filing an intimation in FORM GST CMP-01 under sub-rule (1) of rule 3 of the Central Goods and Services Tax Rules, 2017 upto 16th August, 2017.

Source – http://www.cbec.gov.in/resources//htdocs-cbec/gst/order1-gst.pdf

 

 

GST Tip – 117

GST Tip – 117 : A non-resident taxable person is required to apply for registration at least 5 days prior the commencement of business in India in a trade show or an exhibition. The non-resident taxable person has to apply for registration filing the form “GST REG-10”.

GST Tip – 116

Under GST, a non-resident taxable person i.e a foreign person how is not having any fixed place of business in India has to obtain registration for the period of his business tenure in India, either in the capacity of principal or agent and file returns accordingly for the business transactions carried during that period i.e for inward / outward supply of goods and services and pay GST on it accordingly.

GST Tips

54 – As per the revised GST Law, while determining the turnover, supply of non-taxable goods and services is excluded, previously the same was included in determining the turnover.

53 – Composition levy under revised Model GST Law has been redefined and as per this, if the tax payer is having any interstate supplies or  supplies to e-commerce operators, he will not be eligible to be registered as a composite tax payer.

52 – In the revised Model GST Law, the definition of input has been simplified, it says “means any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business;” means any input used directly or indirectly for furtherance of business will be eligible for input tax credit. The usage of the word furtherance of business reduces litigation’s in future.

51 – As per the provisions of the revised Model GST Law, GST is not applicable or not to be levied on free goods.

50 – Input tax credit in case of telecommunication tower fixed to earth by foundation or structural support including foundation and structural support and pipelines can be taken in three equal installments spreading over a period of  three years.

49 – The definition of Captial goods has been widened and made simple, now as per the Revised MGL Captial Goods means, the value of which is capitalized in the books of accounts of the person claiming the credit and which are used or intended to be used in the course or furtherance of business; This replaces the existing definition of Captial goods as per Cenvat Credit Rules 2002 in the first draft of the Model GST Law released in June 2016.

48 – As per section 65 of the revised Model GST Law, the Comptroller and Auditor General is also empowered to call for information through its authorized representative.

47 – Service tax reversal provision is back in the revised Model GST Law, if the supplier of goods and services is not paid within three months, the input tax credit availed has to be added to the output tax liability.

46 – In the revised Model GST Law, the time limit for matching for provisional credit has been increased to three months from two months.

45 – As per the revised GST Law, the time limit for return of goods from the job worker has been increased from 180 days to one year for inputs and for capital goods from two years to three years.

44 – In the revised GST Law put in the public domain, securities have been dropped from the definition of Goods, it means on sale and purchase of securities GST will not be applicable and existing Securities Transaction Tax continues to be levied.

43 – In the revised Model GST Law, in the time of supply for the goods continuous supply of goods and supply of goods on sale or approval provisions have been dropped.

42 – In the revised draft CGST Bill, a new cause Anti Profiteering clause has been added… It mean the reduction of tax rate benefit and uninterrupted input Tax Credit benefits have to passed on. More clarity is awaited on how it works…

41 – Time of Supply under Revesre Charge for Services is earliest of the following dates, Date Of Accounting, Date of Receipt of services  or date of payment.

40 – Time of Supply of Services is the earliest date of the following dates, date of issue of invoice or date of receipt of payment if invoice is issued within 30 days of completion of service.

39 – The time of supply for services under forward charge or regular services  will be the earliest of the following dates, date of completion of service, date of issue of the invoice within 30 days or date of completion of service or the date on which the recipient shows the receipt of services in his books of account.

38 –  If goods are removed on sale or approval basis, the time of supply shall be at the time when it becomes known that the supply has taken place or six months from the date of removal, whichever is earlier.

37 – In the case of continuous supply of goods like piped gas etc the time of supply will be the earliest date of issue of invoice or payment. In the case of issue of the statement of account, the date of expiry of the statement of account or payment date whichever is earlier.

36 – Time of supply for the reverse charge of goods is the earliest of the following dates 1. date of receipt of goods 2. the date on which payment is made, 3. date of receipt of invoice  and 4. date of debit in the books.

35 – Time of Supply for the supply of goods under forward charge is earliest of the following dates, 1. issue of tax invoice, 2. moment of goods, 3. receipt of the advance, 4. making goods available to the buyer and 5. buyer shows the goods in his books of accounts.

34 – Time of Supply for Goods is divided into three categories broadly first is regular supply or forward charge, second is reverse charge and third is miscellaneous provisions.

33 – The time of supply for goods and services is different, but the overall logic is very simple, time of supply is the earliest of all the dates of the transaction like issue of invoice, supply of goods, completion of service, receipt of money etc.,

32 – Time of Supply is the event during which the supply of goods or services takes place or deemed to take place and at this point, the tax invoice has to be issued and the tax liability has to be accounted.

31 – The officer may grant cancellation of registration within 30 days and the tax payer has to pay all the amounts due like interest, penalty etc along with the tax amount based on computation for input credit or capital goods whichever is higher and in case of capital goods based on the process defined in law.

30 – If a tax payer has to cancel registration under GST, he has to file FORM GST REG-14 and also Final Return Form GSTR-10, which shows details of input tax on closing stock, market value of the goods and tax on it.

29 – Registration Number under GST is required under the following cases irrespective of turnover, All tax payers registered under the current tax regimes  Any person who is required to pay tax under reverse charge mechanism, Any person marking interstate supplies, Casual taxable person, Non-Residential taxable person, Person needed to deduct tax under Sec 37, A person who provides goods or services on behalf of a principal has to be obtained irrespective of the threshold, Input service distributor & E-Commerce operators.

28 – Threshold limit under GST as per the GST Council is Rs 20 lacs across India expect north eastern states where it is Rs 10 Lakhs.

27 – The concept of payment of tax on  manufacture of goods, on sales, provision of service is replaced by a single tax point called “Time of Supply”  in GST.

26n – Under GST,  Unique Identifaction Number (UIN) has to be obtained by bodies registered under United Nations and foreign embassies for claiming refund of GST on their purchases.

25 – For imports SAD and CVD is replaced by IGST and importer can avail full credit of IGST.

24 – Cancellation of Registration under GST is very complicated. The taxpayer has to file an application for cancellation along with the closing stock and pay all the taxes due and file valid returns for cancellation of application to be accepted.

23 – The portal for GST registration is allowing only one GST registration per PAN, in case if anyone has multiple businesses under same PAN have to approach their concerned Jurisdictional Authority.

22 – Suo moto registration – During survey, search, inspection, enquiry if an concerned officer finds business is not registered, he can issue temporary registration number and this process is called suo moto registration under GST.

21 – A Tax Payer can have up to 35 registration numbers in the same state based on his line of business / business vertical

20 – According to Draft Registration Rules, all registered tax payers have to display their GST Registration Number i.e GSTIN on the name board in all the locations of the place of business.

19 – Under GST each and every location of business has to be registered as an additional place of business. Registration number has to be displayed in a prominent place for each place of business.

18 – Three basic requirements for obtaining registration under GST are, PAN Number, e-mail id and mobile number. PAN will be validated online for information with CBDT Servers, Mobile number is required for sending OTP (one-time password) and email id for verification through a separate OTP

17 – For existing tax payers under Central Excise, VAT or Service Tax the data will be migrated and the tax payer will be given 6 months for furnish all the required information.

16 – Registration Number under GST is called GSTIN and it is 15 digit number,the  first two digits are for the state code, next 10 digits PAN, 13th digit is for business vertical, 14th digit is blank and 15th digit is check digit.

15 – Under GST there is no concept of a manufacturer, first stage dealer,registered dealer, service provider etc., anyone who registers under GST is called a tax payer.

14 – Under GST all tax payers have to file single return for the state and the central taxes (SGST, CGST & IGST)

13 – In India we have adopted dual GST i.e the Central Government and the State Government will be levying and collecting taxes due to constitutional provisions in our constitution.

12 – GST is a destination based tax i.e taxes will go to the state where the goods are consumed.

11 – Under GST there is no concept of Tax on Tax like VAT computed on item price + Excise duties

10 – Under GST there is uninterrupted input tax credit in the supply chain process i.e input tax credit can be taken in each and every stage

9 – GST Is applicable to whole of India including Jammu and Kashmir

8 – Under GST, Goods and Services share the same taxes

7 – Integrated Goods and Service Tax (IGST) will replace Central Sales Tax for all inter-state transactions under GST

6 – Taxes which are not subsumed  under SGST are Stamp Duty, Electricity Duty,Vehicle Tax, Royalty, State taxes on petroleum and alcoholic products and Entertainment Duty levied by local bodies.

5 – State Goods and Service Tax (SGST) – taxes merged with SGST are Value Added Tax, Entry Tax, Purchase Tax, Luxury Tax,Entertainment Tax,Octroi, Various Surcharges & Cess

4 – Taxes which are not subsumed under CGST are Basic Customs Duty, other import duties, excise duties on petroleum products and tobacco products

3 –  Central Goods and Service Tax (CGST) to replace Central Excise, Service Tax, Additional Excise Duty, Special Additional Customs Duty (SAD), Countervailing Duty (CVD) along with various cesss and surcharges

2 – There are three taxes under GST ; Central Goods & Service Tax (CGST), State Goods & Service Tax (SGST), Integrated Goods and Service Tax (IGST).

1 – under GST, there is only one registration number per state called GSTIN – Goods and Service Tax Identification Number

Demystifying Job Work Under Model GST Law

In normal course of business, when a manufacturing unit is not able to meet it is supply on account of machine line balancing or specific operation being not capable of being performed in the factory or unexpected demand for the product in the market, normally outsources the same to external vendor for getting the processing completed at his premises. This process is called sub-contracting or job work in the tax parlance.

Sub-Section 62 of Section 2 defines Job work as “job work” means undertaking any treatment or process by a person on goods belonging to another registered taxable person and the expression “job worker” shall be construed accordingly;

Goods and Service Tax is levied on the supply of goods and services and transfer of material from factory to the subcontractor’s premises amounts to supply. Till the Model GST Law was made available to the public domain there was a debate going on that is Job work or subcontracting is allowed under GST and to make the industry happy, the Model GST Law has provision for the Job-work under Section 43 A thereby providing lot of relief to the trade and industry. Supplies to job work are specifically excluded as supply in Schedule 1 of the Model GST Law. (for details on supply refer to the blog Demystifying Time of Supply of Goods under Model Law)

Though Job-work provisions are given in the section 43A, there is some change to the existing process of job-work under the Central Excise. As per the Model GST Law, the tax payer I,e the principal is required to obtain a special order from the GST Commissioner for permitting him to send the goods for job work under specific conditions for supply of material without payment of taxes for further processing by the job worker.

The modalities of the form to be used and the process of receiving and sending is not clear now and we need to wait for the relevant notifications once the GST Act is passed.

The principal can send the goods to the job worker from his registered premises and then after processing of the goods at the job workers place, the principal can do any of the following

  1. Request for return of goods to his original premises
  2. Or any of his registered premises
  3. Send the goods from the job workers place to further processing to another job worker
  4. Supply the goods directly from the job worker’s premises on payment of taxes within in India
  5. Export the goods directly from the job worker’s premises without payment of tax

In case if the goods are to be exported or sold in the domestic market, the job worker has to be registered as an additional place of business of the principal, which is not there in the existing provisions of the Central Excise. The same is not required if the job worker is already registered under GST as per provisions of Section 19. (Refer to blog on Demystifying Registration under Model GST Law)

The goods to be processed can be sent directly from the principals registered premises or ask his supplier to ship the goods directly to the job worker’s premises.

Section 43 A of the Model GST Law does not specify the days under which the goods have to be returned back to the principal’s place but section 150 and 151 under transitional provisions specifies the same as 6 months and Section 16A specifies if the goods are brought back within 180 days eligible for input tax credit. A clarification is required on the period as 180 days or 6 months, if this Is not clarified then there will be two-yard sticks on return of goods from the job worker

  1. For claiming input tax credit within 180 days
  2. For payment of duties if the goods are not brought back in 6 months.

Section 150 of the Model GST Law, describes the process for the inputs removed for job work and returned on or after the appointed day. The inputs sent on job work prior the appointed day (the date on which the GST is rolled out) within 6 months, then no taxes are to be paid. In case if the same are returned after 6 months, the jurisdictional commissioner can grant  an additional period of 2 months if he is satisfied with the reasons for the delay. In case if such permission is not granted or being returned after a further extension of 2 months, taxes have to be paid under GST.  The principal or the manufacturer has to pay the taxes.

The above process is applicable only if the principal or manufacturer maintains a proper record of the inputs lying in the premises of the job worker as on the appointed date in the format prescribed by the tax authorities.

Section 150 of the Model GST Law, describes  the process for the semi-finished goods   removed for job work and returned on or after the appointed day. The semi-finished goods   sent on job work prior the appointed day (day on which the GST is rolled out) within 6 months, then no taxes are to be paid. In case if the same are returned after 6 months, the jurisdictional commissioner can grant an additional period of 2 months if he is satisfied with the reasons for the delay. In case if such permission is not granted or being returned after  further extension of 2 months, taxes have to be paid under GST.  The principal or the manufacturer has to pay the taxes.

The manufacturer or principal can ship the goods directly from the job worker’s premises to any other registered tax payer on payment of duties or export the same without payment of duties.

The above process is applicable only if the principal or manufacturer maintains a proper record of the semi-finished goods   lying in the premises of the job worker as on the appointed date in the format prescribed by the tax authorities.

We need to have further information on the job work under GST

  1. The format of the letter to be sent the commissioner for requesting permission for job work.
  2. The format of the document under which the goods can be shipped without payment of taxes.
  3. The format of the document under which the goods can be sent directly from the supplier to job worker.
  4. Clarity on the time period under which the goods have to be returned back from job worker – 180 days or 6 months.
  5. The format for declaring the goods laying at the job worker as on appointed date.
  6. Applicability of Section 61 of the Model GST Law for the moment of goods from tax payers location to job workers location.

There are some changes that need to be adopted by the tax payers going forward under GST for job work.

  1. If the job worker is not a registered taxable person, then his address is also to be included in the place of business of the taxpayer in his registration application. This needs to be updated from time to time as the goods can be sent to different job workers based on the business requirements.
  2. Reverse charge will be applicable on the charges paid to the job worker  if the job worker is not a registered tax payer.
  3. In case of goods not returned within 180 days from the job worker, before payment of duty proper care has to be taken to identify if the goods sent are before the rollout of GST, if yes, then 180 days should be considered from the rollout date and not from the actual date on which the goods are sent to the job worker.

Any views or opinions represented above are personal and belong solely to the author and do not represent those of people, institutions or organizations that the owner may or may not be associated with in professional or personal capacity unless explicitly stated. Any views or opinions are not intended to malign any religion, ethnic group, club, organization, company, or individual.