As per section 29 of the CGST Act at the time of cancellation of registration, the taxpayer has to reduce the input tax credit claimed at rate of 5% per quarter on the capital goods, plant, and machinery.
My third book on GST, ‘GOOD AND SIMPLE TAX – GST FOR YOU” is now available at https://notionpress.com/read/good-and-simple-tax-gst-for-you
The Goods and Service Tax rolled out in India on 1st July 2017 subsuming a plethora of taxes into a single tax and enabling input tax credit at every stage of the supply chain, thereby making the products and services cheaper to the end consumer. The rollout of GST also improves the ease of doing business in India.
The way the business is carried out in India is undergoing a major change as the terms of manufacture, purchase, sale, and service is replaced with a single word called “Supply.” The author covers all these topics like Supply, Place of Supply, Time of Supply and Valuation with easy to understand examples so that the trade and industry can benefit at large from the same and change their business practices accordingly.
“GOOD AND SIMPLE TAX – GST FOR YOU” is a written in layman’s language and it explains the complex GST requirements in a simple and lucid language with examples.
- – CS Vasudeva Rao Devaki, DV Rao and Associates
Kindle version and e-book will be released shortly
In subsection A of Section 4 of GSTR – 3B, input tax credit availed during the month has to be shown separately for all the taxes for import of goods, import of services, inward supplies from ISD, inward supplies which attract reverse charge along with any other sources from where ITC is claimed that is for the inward supplies of goods and services together.
GST is rolled out from 1st of July 2017 and the trade and industry is able to adapt to the same with some teething troubles. Though all the issues are not resolved some of them are still and it takes some time to get resolved. One month has passed after the rollout of GST and now it is the time for filing of returns. The same is updated through a press release by CBEC on 18th June 2017 – http://www.cbec.gov.in/resources//htdocs-cbec/press-release/press-note-on-return-filing.pdf
As there is a delay in filing of the returns, a new form is known as GSTR – 3B has been introduced and it has to be filed by 20th of Aug 2017. The format is released by the Government. It is basically a summary of the return for the month of July 2017 for determining the net tax liability to be paid. This statement looks simple but the challenge is on a careful review of the format it is clear that there is no provision for the opening balance of the input tax credit as of 30th June 2017. The reason is the GST Tran-1 form has to be filed within 90 days from the appointed date i.e 1st of July 2017. As a result of the closing balance of the Input Tax Credit will not be available for the taxpayers to use the same for payment of taxes for the month of July 2017.
This will have a huge impact on the cash flows as the tax payers have to pay in cash without using the available input tax credit and it is going to impact the MSME sector a lot especially for taxpayers who were not eligible to take registration under Central Excise in the erstwhile regime now they have to pay CGST.
The portal for the GST i.e GST.gov.in is not having the option of filing of the GSTR – 3B as on date, that means the taxpayers have to wait for some more time for filing of the return. This time lag should be utilized by the taxpayers for renegotiating with their customer to receive the payments or at least for the tax amount. Alternatively, they have to look out for additional cash flow either through additional funding or increase their CC limits or another means. The same is likely to continue for the next month also.
Managing of the working capital is one area and another is ensuring that the data required for the return filing is also in place. GSTR – 3B is an interim return and the actual returns for GST have to be filed by 10th of September i.e, GSTR – 1 by 5th September 2017 and GSTR – 2 by 10th September 2017.
As per Transition Rules, an unregistered person claiming input tax credit of Central Excise on the opening stock as on the appointed day, have to file monthly return known as FORM GST TRAN 2 with details of the outwards supplies made for the tax period.
As per Transition Rules, input tax credit of 60% is allowed if the tax rate is above 9% and in other cases 40% of the central tax on the goods laying in stock dealers how are not registered under Central Excise as on the appointed date.
As per the Transitional Rules, every taxpayer opting to take input tax credit under Section 140 of CGST Act is required to file FORM GST TRAN-1 within 90 days from the appointed date. The same can be extended for another 90 days by the commissioner on recommendations of the GST Council.