GST DUNIYA. (Part -5)Aayushi Bansal
Hope you had read the previous parts of the GST Duniya series, if not, then read it from here:
Today we will discuss about the Transition Provisions in GST
Whenever a new levy or new scheme of taxation is introduced, it shall completely change the existing law with provisions of new law.Same is happening under GST where new provisions of GST complete change the provisions of Service tax,VAT,CST,Excise,etc So to cope up with that change, transitional provisions are created in new law to ensure smooth and hassle-free adoption of new scheme of taxation to safeguard interests of existing taxpayers.
Some Transitional Provisions are briefly explained hereunder:
- Every Person who was registered under VAT, Service Tax or Central Excise etc having a valid PAN has been provisionally registered.Those who yet not migrated under GST System can migrate themselves till 15th Valid PAN is necessary because GST registration is PAN based. Further particulars to be provided online to enable final registration.
- As per the Model GST law, a taxable person will be entitled to take credit of the amount of tax paid and carried forward in a return furnished under the earlier law. This credit will have to be taken in his or her electronic credit ledger, for the period before the appointed day.For purpose of taking credit, proper attention must be paid that last return before switching over to GST is made very carefully and must record all the input taxes paid under the old law so that he can avail the unavailed credit under GST regime.
- We know that under Old regime, credit of capital goods are provided 50% in the yar of purchase and balance 50% at the beginning of next financial year (except in case of SSI).Therefore, it must be noted that if 50% credit has been taken under old law 50% is remaining as balance as unavailed, then remaining 50% shall be taken under GST provision.
- As all manufacturers , traders , service providers would have stock of goods which may be in the form of raw material, work in progress or finished goods.The proof of existence of stock would be taken from running stock registers. Following are the categories of registered taxable person entitled to take credit of inputs subject to certain conditions:
- Being not liable to be registered under current law, dealing in exempted goods or services
- Providing works contract service or availing benefit of exemption notification for services
- First stage dealer or second stage dealer, registered importer
- The credit for duty/ tax paid on goods in transit can be claimed within a period of 30days with the condition that same has been recorded in the books of accounts. A statement as prescribed should be submitted. ( Section 140 (5))
- Composition scheme is going to be another critical aspect of the transition process wherein the taxpayer must keep himself updated about the implication from migration into the new regime. Such impact is expected to be huge as the limit of turnover for composition scheme under GST has been raised to Rs. 50 lakh from the current limit. Thus it can be fairly assumed that a large number of taxpayers will convert themselves from regular taxpayer to a taxpayer under the composition scheme. Similarly, vice versa of such cases is also expected wherein dealers who are under composition scheme may get transformed into regular taxpayer as the goods they are dealing into may not be exempted anymore.
- If common input services are received before implementation of GST by Input Service Distributor, then it would be available for distribution as credit under GST act even if Invoice relating to such service is received on or after implementation of GST. For e.g. let us taken 1stjuly 2017 as implementing date, then even if invoice is issued on or after 1st july,2017 it would be availbale for distribution as credit under GST act.
- Under the service tax law when one had not paid for services within 3 months, the credit was to be reversed. Ifpayment is made within 3 months of appointed date of GST such credit would be reclaimed.
- Where any duty paid Goods under the earlier law are sent 6 months prior to the appointed day i.e. introduction of GST date and are returned to any place of business on or after the aforesaid appointed day, the Registered Taxable Person(RTP) shall be eligible for refund of the duty paid under the earlier law where such goods are returned by a person, other than a RTP, to the said place of business within a period of six months from the appointed day when such goods are identifiable to the satisfaction of the proper officer. However, if the said goods are returned by a RTP, the return of goods shall be deemed to be a supply. (Section 142(1))
- Next provision is related to goods sent on job work:
If goods sent on job work on payment of duty are returned within 6 months + 2months of GST date,then no GST will be payable.
If goods sent on job work on payment of duty are not returned within above specified time, then input tax credit would have been reversed.
- The issue of supplementary invoices, debit/ credit note can be done within 30 days of the date of price revision. In case of credit note, the reversal of the credit by the receiver needs to be confirmed.
- The claims for refund of any amount of CENVAT credit, duty, tax or interest paid made and pending as well as claims made after GST date but pertaining to a period prior would be under the earlier law required to be disposed of as per the earlier law and any amount eventually accruing to him shall be paid in cash. In case of a claim being rejected (subject to appeal in the old law) the amount so rejected would lapse.
- Where a supplier has made any sale of goods in respect of which tax was required to be deducted at source under the earlier law and the supplier has also issued an invoice for the same before the appointed day, no tax is to be deducted at source under Section 46 of the CGST where payment to the said supplier is made on or after the appointed day. (Section 142(13))
Now the Next topic of this part is: GST INVOICE
Format of Invoice
Based on GST Invoice Rules (Rule 5), 2016 issued by the Central Government, two kinds of invoices can be issued under GST namely tax invoice and bill of supply.
In normal case, the GST tax invoice has to be issued by a registered dealer on or before the time when goods are removed for supply (where supply involves movement) and on or before the time when delivery is received by the recipient (where movement of goods is not involved) and In case of supply of services the invoice has to be issued issued within 30 days(45 days in case of banks and NBFCs) of supply of services.
Format of Invoice:
Subject to rule 7, a tax invoice referred to in section 31 shall be issued by the registered person containing the following particulars:-
(a) name, address and GSTIN of the supplier;
(b)date of its issue;
(c) name, address and GSTIN or UIN, if registered, of the recipient;
(d) name and address of the recipient and the address of delivery, along with the name of State and its code, if such recipient is un-registered and where the value of taxable supply is fifty thousand rupees or more;
(e)HSN code of goods or Accounting Code of services;
(f) description of goods or services;
(g) quantity in case of goods and unit or Unique Quantity Code thereof;
(h) total value of supply of goods or services or both;
(i) taxable value of supply of goods or services or both taking into account discount or abatement, if any;
(j) rate of tax (CGST,SGST,IGST);
(k) amount of tax charged in respect of taxable goods or services (central tax, State tax, integrated tax, Union territory tax or cess);
(l) place of supply along with the name of State, in case of a supply in the course of inter-State trade or commerce;
(m)address of delivery where the same is different from theplace of supply;
(n) whether thetax is payable on reverse charge basis
Here we end this part. In next part, we will learn about GST Returns and Impact of GST
So, Don’t miss it.
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