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Actions for submitting GSTR-2

In our previous blog, we discussed about what is GSTR-2 and the relevance of GSTR-2A with GSTR-2. We also understood, that auto-populated details of inward supplies from GSTR-2A will be available in GSTR-2. Though the details are auto populated, you are required to prepare the return before submitting it. The preparation here refers to reconciliation of inward supplies available in GSTR-2A with the books of accounts, determining the additions, modifications and rejections which are required before submitting GSTR-2. In order to help the businesses to prepare the GSTR-2 return, the GST portal allows the following actions to be performed on the auto-populated details available in GSTR-2.
  1. Accept
  2. Add
  3. Modify
  4. Reject
  5. Pending
Let us discuss each of the above actions on GSTR-2 in detail.

1.   Accept

The auto-populated invoices which are matching with your books of account and there are no discrepancies related to invoice value, tax value and so on, you have to accept such invoices using this ‘Accept’ action.

2.   Add

The ‘Add’ action in GSTR-2 allows you to add the additional details which are required to be furnished in GSTR-2, which are not part of GSTR-2A. In GSTR-2, the details of imports, supplies attracting reverse charge that have been received by registered persons and so on are required to  be added by using the  ‘Add’ action. Also, if any of your inward supplies received from registered suppliers are not reflecting in GSTR-2A, they need to be added using the above action.

3.   Modify

The ‘Modify’ action in GSTR-2 needs to be performed if the invoice details  are incorrect. This could happen, if your supplier has made an error while uploading the invoice details in GSTR-1. You can use the ‘Modify’  action to rectify or modify the details.

4.   Reject

The ‘Reject” action needs to be performed, if any of the invoices auto-populated in GSTR-2A have  not been received by you, and need to be rejected. This occurs, if the supplier has wrongly mentioned your GSTIN but the actual recipient is different. This needs to be rejected using the above option.

5.   Pending

Consider a situation, where the date of supply of goods by your supplier and the date of receipt of goods are in two different months. Let’s say, the supplier has billed and dispatched the goods on 31st July, 2017 but you have received the goods on 3rd August, 2017. In this case, you will become eligible to claim ITC only in the month of August 2017. This is because, only when the invoice and the goods are received, will you be allowed to claim ITC On provisional basis. This then becomes your eligible (final) ITC when your supplier furnishes his return along with the payment of tax. However, your supplier is required to upload and pay the tax liabilities on the above invoice in the month of July. This invoice will be part of GSTR-2A and thus you have to mark it as ‘Pending’ for the month of July. Once an invoice is marked as ‘Pending’, it will appear in the month of August 2017, for you to accept and claim input credit in the month of August 2017. In performing any of the above actions, businesses needs to take utmost care and caution as this will have direct bearing on their ITC claim. Technology will play a key role in assisting and ensuring accurate reconciliation is carried out, thereby saving time and mitigating the risk of ITC loss. In our next blog, ‘Guide to File GSTR-2’, we will discuss about the components and details to be furnished in GSTR-2A.

What is GSTR-2 and GSTR-2A

The extension of due dates to file GSTR-1, GSTR-2 and GSTR-3 of July 2017 is a welcome move, as it provides an additional time for businesses to prepare the accurate returns for better compliance.. Now, the businesses are required to file GSTR-1 by 10th October, 2017, GSTR-2 by 31st October, 2017 and GSTR-3 by 10th November, 2017. To know more on the revised due dates, please read ‘GST Return Dates: for August and September, 2017’. As you already know, returns filed through Form GSTR-3B is just an interim return and the regular returns in GSTR-1, GSTR-2 and GSTR-3 are required to be filed by the businesses. In our previous blog ‘Guide to File GSTR-1’, we discussed about the components and details of outward supplies to be furnished in GSTR-1. In this blog, we will discuss:
  • What is GSTR-2A?
  • What is GSTR-2?
  • What is the relevance of GSTR-2A with GSTR-2?

What is GSTR-2A?

GSTR-2A is an auto-populated statement in which the visibility of all the inward supplies reported by your supplier in GSTR-1, is made available to the recipient. The details will be made available on submission of the return in the Portal. Apart from the details of GSTR-1, the details from GSTR-5 (Supplies from Non-resident Taxable person), GSTR-6 (ISD), GSTR-7 (TDS Deductor) and GSTR-8 (TCS collected by e-commerce operator) will also be auto-populated. You can either directly view the details in the GST Portal or download the GSTR-2A file and view it in the offline utility tool. Invoices / records up to 500 can be viewed online for a table / section in Form GSTR-2A. In case, if invoices are more than 500, you have to generate the GSTR-2A file and use the offline utility tool available on the portal for viewing the invoice details. To download the GSTR-2A file, login to the GST Portal a Services a Return a Prepare Offline a Download Tab a Generate File and view it in the Offline Tool. This download feature will be made available shortly.

What is GSTR-2?

The Form GSTR-2 is a statement in which a regular dealer needs to capture all the inward supplies made during the month. Broadly, all the inward supplies from registered businesses (B2B), including the supplies on which tax needs to be paid on reverse charge are required to be captured at the invoice level. In addition to inward supplies, you also need to declare the details of advances paid on supplies liable for reverse charge, and the advance amount on which tax was paid in the earlier return period but the invoice has been received in the current reporting period. The last date to submit the GSTR-2 for the month of July 2017 is 31st October, 2017. Based on the details submitted in GSTR-2, the eligible ITC will be determined and accordingly it will be credited to your e-credit ledger on a provisional basis.

What is the relevance of GSTR-2A with GSTR-2?

Unlike Form GSTR-1, which requires businesses to upload all the details of outward supplies, GSTR-2 does not require you to declare all the details of inward supplies. Most of the details in GSTR-2 is auto-populated, based on the outward supplies declared by your suppliers in their returns. The auto-populated details of inward supplies made available in GSTR-2A, will be available in GSTR-2 also. In other words, GSTR-2A will be an exact replica of GSTR-2 containing only the details declared by your suppliers in GSTR-1. Therefore, you need not upload all the details of inward supplies, instead you need to reconcile the details of inward supplies available in GSTR-2A, with your books of accounts and accordingly figure out the additions, modifications and deletion of invoices  made available in GSTR-2A. The form GSTR-2A is not required to be filed, it is just a read-only document which provides the facility to view all the invoices uploaded by your suppliers. Therefore, any action on the details of inward supplies available in GSTR-2A, needs to be performed in GSTR-2. This is the most critical phase of filing of your return, as any omission or correction not actioned as per the statement in Form GSTR-2A with your inward supplies register, will impact your input tax credit eligibility. Now, what are the possible actions which you can perform on GSTR-2? Watch out for our next blog.

Guide to File GSTR-1

This blog post is updated with the GST Council’s decision to extend the return due dates With the filing of GSTR-3B right around the corner on 20th August, 2017, businesses are in full swing gearing up to meet the deadline. Form GSTR-3B is an interim return which needs to be filed for first 6 months: July to December, 2017 (Revised ). However, this does not mean that the businesses are not required to file GSTR-1, Form GSTR-2 and Form GSTR-3. It means, only the deadline to file GSTR-1, GSTR-2 and GSTR-3 are extended, and the businesses still need to file these return as per revised dates mentioned below:

Due date to file GSTR-1, GSTR-2 and GSTR-3

Due Dates to file GST Return
Month GSTR-1 GSTR-2 GSTR-3
July, 2017 10th October, 2017 31st October, 2017 10th November, 2017
The above dates are only for July 2017 returns. The dates for August and subsequent month’s returns will be notified at a later date. As a step towards early preparation and to ease the GSTR-1 filing, the option for creation and saving of Form GSTR-1 are available on the GST portal from 24th July, 2017.  Subsequently, as recipient of goods or services, the option to view the data uploaded by your suppliers is available in Form GSTR-2A. In this blog, we will be discussing on How to File GSTR-1. From September onwards, the due date to file GSTR-1 is 20th August, 2017. Before we start discussing on how to file GSTR-1, let us understand what is Form GSTR-1 is all about.

What is GSTR-1

Form GSTR-1 is a statement in which a regular dealer needs to capture all the outward supplies made during the month.  Broadly, all the outward supplies made to registered businesses (B2B) are required to be captured at invoice level, and supplies made to unregistered business or end consumers are required to be captured at rate-wise. However, in certain exceptional scenario, even B2C transactions are required to be captured at invoice level.

How to file GSTR-1?

GSTR-1 format contains 13 tables in which the outward supplies details needs to be captured. You need not worry since all tables are not applicable for every business . Based on the nature of business and the nature of supplies effected during the month, only the relevant components of GSTR-1 are applicable, not all. Let us discuss on components of GSTR-1 format in detailed.
1. Details of GSTIN and aggregate turnover in preceding year.
form gstr1
In the above table 1, you need to capture the GSTIN allotted to you. Based on the GSTIN, table 2(a) and 2(b) would be auto-populated with details furnished during registration or enrollment. In table 3(a), you need to capture the aggregate turnover of previous financial year, and in 3(b), aggregate turnover of the last quarter (April to June, 2017) needs to be captured manually. The quarterly turnover information is not to be captured in subsequent returns, and the aggregate turnover of previous financial year would be required to be submitted by the taxpayers only in the first year. From subsequent years, it will be auto-populated.
2. Taxable outward supplies made to registered persons (including UIN-holders) other than Zero Rated supplies and Deemed Exports.
taxable-outward-supply In the above table, all B2B supplies (outward supplies made to a registered person) both inter-State and intra-State outward supplies should be captured at invoice level rate-wise details. This table has 3 sections: 4A, all the outward supplies except those attracting reverse charge and supplies made through e-commerce operator; supplies attracting reverse charge should be captured rate-wise in 4B, and those effected through e-commerce operator attracting collection of tax at source should be captured operator wise and rate-wise in 4C respectively.
3. Taxable outward inter-state supplies to un-registered persons where the invoice value is more than Rs 2.5 Lakh.
taxable-outward-inter-state-supply In above table, all inter-State B2C supplies (supplies made to unregistered dealer or end consumer), where invoice value is more than Rs. 2,50,000, you need to upload the invoice-wise and rate-wise details. Similar to table 4, you need to capture the supplies effected through e-commerce operator separately in 5B and all other interstate supplies having invoice value more than Rs. 2,50,000 to be captured in 5A. This type of supplies are referred as B2C Large.
4. Details of Zero Rate supplies and Deemed Exports
zero-rated-supply In the above table 6, the information related to exports out of India to be captured in 6A, supplies to SEZ unit or SEZ developer in 6 B, and deemed exports in 6C. The details of these supplies need to be captured at invoice-wise and rate-wise. In declaring these details, the following points needs to be taken care of:
  1. Shipping bill and its date. The details of Shipping Bill shall be furnished in 13 digits capturing port code (six digits) followed by unique reference number of shipping bill and its date. If the shipping bill details are not available at the time of filing GSTR-1, the same can be left blank and can be updated as amendment in Table 9 in the next tax period in which the details are available but before claiming any refund/rebate related to the said invoice.
  1. Any supply made by SEZ to Domestic Tariff Area (DTA), without the cover of a Bill of Entry is required to be reported by SEZ unit in GSTR-1. The supplies made by SEZ on cover of a Bill of Entry shall be reported by DTA unit in its GSTR-2 as Imports in GSTR- 2.
  1. In case of export transactions, GSTIN of recipient will not be applicable and it needs to be left blank.
  1. Export transactions effected without payment of IGST (under Bond/Letter of Undertaking (LUT)) needs to be reported as “0” under tax amount heading in Table 6A and 6B.
5. Details of taxable supplies (Net of debit notes and credit notes) to unregistered persons other than the supplies covered in table 5
taxable-supplies In the earlier table, that is, no. 5, the taxable person had declared only the interstate outward supplies made to unregistered person (B2C Large) having invoice value more than Rs. 2.5 Lakh. In the this table, that is, Table 7, you need to capture all other supplies made to unregistered person, that is, all intra-state supplies in 7A and inter-state supplies having invoice value up to Rs. 2.5 Lakh made to unregistered dealer in 7B. In Table 7A(1), you need to capture consolidated rate-wise details of all intrastate outward supplies made to unregistered persons, including the supplies made through e-commerce operator. In 7A (2), you need to show separately the details of supplies made through e-commerce operator attracting collection of tax-at-source out of gross supplies reported in 7A (1). Similarly, the details of inter-state outward supplies having invoice value up to Rs 2.5 Lakh need to be captured state-wise and rate-wise in 7B (1). In 7B (2), you need to separately show the details of supplies made through e-commerce operator attracting collection of tax-at-source out of gross supplies reported in 7B (1). Please note, all the above values should be net of debit note and credit note. If there are any debit note or credit note pertaining to above mentioned supplies, ensure to adjust such values and declare only the net taxable value and corresponding tax.
6. Details of nil rated, exempted and non GST outward supplies
nill-rated In the above Table 8, you need to capture the nil rated, exempted and Non GST outward supplies made during the period. These details needs to be categorized as intra-State supplies to registered person, and inter-State supplies to unregistered person in 8A to 8D as shown in the above table.
7. Details of debit notes, credit notes, refund vouchers issued during current period and any amendment to GSTR-1 filed for earlier tax periods in Table 4, 5 and 6.
amendments-taxable-outward-supply In the above table, you need to capture the details of debit note, credit note and refund voucher (return of advance received) issued against the supplies already reported in: • B2B supplies reported in Table 4, • B2C Large supplies reported in Table 5, • Supplies involving exports/SEZ unit or SEZ developer/deemed exports reported in Table 6. These details needs to be capture rate-wise along with the original invoice number against the debit note or credit note issued. In the first three columns, you need to mention the details of original invoice, followed by the rate-wise details of credit note/debit note/refund voucher issued during the return period. In table 9A, if shipping bill number and date was not declared in your earlier returns due to non-availability, you can furnish such details pertaining to export transactions effected during earlier return as amendments. If the export transactions are related to current month, the shipping details should be entered in Table 6. In Table 9B, rate-wise details of credit note/debit note/refund voucher issued during the return period need to be captured and in table 9C, the details of amendments made through credit note/debit note/refund voucher against the invoice/advance receipt pertaining to pervious return period. Also, any debit/credit note pertaining to invoices issued before the appointed day must also to be reported in this table.
8. Details of debit note and credit note issued to unregistered person
amendments-taxable-outward-supply-unregistered In the above table, you need to capture the consolidated rate-wise details of debit note/credit note issued against the intra-State supplies made to unregistered person and inter-State supplies having invoice value less than Rs. 2.5 Lakhs made to unregistered person in previous return period. This is an amendment to the details declared in Table 7 of earlier return. In Table 10A and 10B, you need to capture the rate-wise details of intra-State supplies and inter-State supplies respectively. Out of the value captured in table 10A and 10B, you need to separately capture the details of supplies made through e-commerce operator in 10A (1) for intra-State and 10B (1) for inter-State supplies.
9. Details of Advances Received/Advance adjusted in the current tax period or Amendment to GSTR-1 furnished in earlier tax period
consolidated-advance-recieved In the above table 11, you need to provide consolidated state-wise and rate-wise details related to advances received in the current period, and also the details of advances received in earlier period but adjusted in the current period. In Table 11A, capture the details of advance received for which the invoice has not been be issued. These details are need to be categorised into intra-State supplies in table 11A (1) and inter-State supplies in table 11A (2). You also need to include information in table 11B related to adjustment of tax paid on advance received and reported in earlier tax periods against invoices issued in the current tax period. Similar to 11A, these details are also required to be categorised into intra-State supplies in Table 11B (1) and inter-State supplies in table 11B (2). If there are any changes pertaining to details declared in table 11A to 11B in earlier return, it can be amended by furnishing the changes in Part II of Table 11. Please note, the details relating to advances received to be submitted only if the invoice has not been issued in the same tax period in which the advance was received. If the advance and invoice is issued in the same month, the details need not be captured in table 11.
10. HSN-wise summary of outward supplies
hsn-summary-outward-supplies In the above table, that is, Table 12, summary of supplies effected against a particular HSN code must be reported. It will be optional for taxpayers having annual turnover up to Rs. 1.50 Crore. However, description of goods is mandatory. It is mandatory to report HSN code at two-digit level for taxpayers having annual turnover in the preceding year above Rs. 1.5 Cr. but up to Rs. 5 Cr., and at four-digit level for taxpayers having annual turnover above Rs. 5 Cr. The fourth column UQC refers to unit quantity code and only the prescribed unit of measure (UOM) will be accepted by the portal. Therefore, irrespective of the UOM maintained by the tax payer, the quantity details need to be furnished using the prescribed UQC listed below:
List of UQC
BAG-BAGS CTN-CARTONS MTS-METRIC TON TGM-TEN GROSS
BAL-BALE DOZ-DOZENS NOS-NUMBERS THD-THOUSANDS
BDL-BUNDLES DRM-DRUMS PAC-PACKS TON-TONNES
BKL-BUCKLES GGK-GREAT GROSS PCS-PIECES TUB-TUBES
BOU-BILLION OF UNITS GMS-GRAMMES PRS-PAIRS UGS-US GALLONS
BOX-BOX GRS-GROSS QTL-QUINTAL UNT-UNITS
BTL-BOTTLES GYD-GROSS YARDS ROL-ROLLS YDS-YARDS
BUN-BUNCHES KGS-KILOGRAMS SET-SETS OTH-OTHERS
CAN-CANS KLR-KILOLITRE SQF-SQUARE FEET
CBM-CUBIC METERS KME-KILOMETRE SQM-SQUARE METERS
CCM-CUBIC CENTIMETERS MLT-MILILITRE SQY-SQUARE YARDS
CMS-CENTIMETERS MTR-METERS TBS-TABLETS
11. Documents issued during the tax period
documents-issued-tax-period In the above table, you need to capture the details of documents issued during the return, along with the starting and ending number of the document, cancelled document and net issued. To download GSTR-1 form, please click here

Conclusion

Broadly, details required to be captured in GSTR-1 are either invoice-wise, rate-wise, or state-wise details of outward supplies made during the month. By now, you must have got some insight about the amount of information one has to furnish in filing  GSTR-1, and also would have measured the effort and time required in doing so. For some reason, if the returns are not filed on-time, it will have an impact on the creditability of your business. Subsequently, it will also impact your customers since ITC depends on supplier compliance. It is high time to look for a software which will ease the businesses in meeting the compliance needs.

How to File GST TRAN-1: Part 6

In our series of blog posts on “How to File Form GST TRAN-1”, we have discussed about  various business scenarios in Part-1 to Part-5. In this blog, we shall discuss about the following: :
  • Applicability of Table 8 of Form GST TRAN-1
  • How to fill Table 8 of Form GST TRAN-1

Applicability of table 8 of GST TRAN-1

In the erstwhile regime of Service Tax, centralized registration was issued to Service Providers and the same registration was applicable for Pan India operations. Similarly, the concept of centralized registration was available for certain notified scenarios under Central Excise. In GST, businesses are required to be registered in every State from where outward supplies are made. Now, these businesses who had centralized registration under the earlier regime for all India operations are required to obtain multiple state-wise registrations under same PAN. In such a case, the CENVAT credit of the centralized unit is allowed to be transferred to any of the units registered in other States, under GST with the same PAN. In such scenarios, Table 8 of GST TRAN-1 is applicable and details of the CENVAT credit transferred need to be furnished. For example, A-ONE Agency, located in Bangalore, Karnataka are providing advertisement service to their clients in Karnataka and Maharashtra and have a centralized Service Tax Registration in Bangalore, Karnataka. Now, under GST, since Services are provided from Karnataka and Maharashtra, they need to separately register in both the States under the same PAN and the CENVAT credit can be transferred to Maharashtra unit, if they opt for. In such a case, the A-ONE Agency has to file Table 8 of GST TRAN-1.

How to file table 8 of GST TRAN-1

In Table 8 of Form GST TRAN-1, you need to file the receiver-wise details as shown in the image below. For example, if you have transferred the CENVAT credit to 3 branches registered under the same PAN, you need to provide the GSTIN-wise details of the branches. details-branches In the above table, the following details need to be entered:
  • Enter the centralized registration number under the earlier regime. For example, Service Tax Registration number
  • Mention the last period for which the last return was filed and date of filing the return
  • Mention the balance CENVAT credit carried over from the last return
  • In ‘GSTIN of receivers (same PAN) of ITC of Central Tax’, mention the GSTIN of your branch to which the credit was transferred
  • Mention the Invoice or Document reference number along with date of the document through which the credit was transferred and the amount of ITC transferred.
Steps to file TRAN-1 with above details in GST portal
    • Login to GST Portal and navigate to Services -> Returns -> Transitions forms
    • Click on Table 8 of Form GST Tran-1
    • Click ‘Add details’ option available at the bottom of the page. The table details will be available as shown below:
how to file gst tran-1 You need to manually enter the details as discussed above. In case you have distributed the CENVAT credit to more than one unit registered under the same PAN, you need to provide the unit wise details. For example, you have distributed the CENVAT credit of the unit located in Bangalore, Karnataka to units located in Tamil Nadu and Maharashtra. Let’s say, the CENVAT credit available at Bangalore unit was Rs 60,000, out of which Rs 15,000 was transferred to the unit in Tamil Nadu and Rs 20,000 was transferred to the Maharashtra unit. In the above case, you need to furnish unit-wise details of CENVAT Credit transferred i.e. GSTIN—wise details of Maharashtra and Tamil Nadu. To add the GSTIN-wise details in the portal, after saving the details of CENVAT credit transferred to a unit, click ‘Add Details’ to capture the details of another unit. The amount captured in ‘ITC of CENTRAL TAX transferred’, will be credited to the e-credit ledger of the respective units. In the above example, Rs 15,000 and Rs 20,000 will be credited to the Tamil Nadu and Maharashtra units respectively. On the other side, Rs 35,000 (15,000 + 20,000) will be reduced from the unit located in Bengaluru, Karnataka. To download the Form GST TRAN-1 format, please click here.

How to File GST TRAN-1: Part 5

In our series of blog articles on “How to file Form GST TRAN-1”, we discussed the applicability and section-wise details of Table 5, 6, 7(A) and 7(B) of Form GST TRAN-1. In this article, we will discuss about:
  • Applicability of Table 7(C) and 7(D) of Form GST TRAN-1
  • How to file Table 7(C) and 7(D) of Form GST TRAN-1

Applicability of table 7(C) and 7(D) of Form GST TRAN

The Table 7(A) of Form GST TRAN-1 is applicable for businesses to claim the tax credit of VAT and Entry Tax paid in the earlier indirect tax regime. This is allowed in the following business scenarios:
  1. Businesses that have not registered under any of the earlier tax regimes, but registered under GST, and have the closing stock as on 30th June 2017, on which VAT and Entry tax has been paid.
  1. Businesses engaged in the sale of exempted goods, but the said goods are taxable under GST, and have the closing stock as on 30th June 2017, on which VAT and Entry tax has been paid.
  1. Businesses engaged in the sale of both taxable and exempted goods, but these exempted goods are taxable under GST, will be entitled to claim the tax credit of VAT and Entry Tax on closing stock held as on 30th June, 2017.
  1. Businesses that had opted for composition scheme in the earlier VAT regime, and opted to be regular dealers in GST, are allowed to claim the tax credit of VAT and Entry tax paid on closing stock held as on 30th June, 2017.
Only in the above the scenarios, and on satisfying the eligibility conditions, the businesses are required to fill Table 7(C) and 7(D) of Form GST TRAN-1.

How to file table 7(C) and 7(D) of form GST TRAN-1

The Tables 7(C) and 7(D) are similar to the Table 7(A) for claiming CEBVAT credit on closing stock.  The details are given below:
  • Table 7(C): For claiming the credit of VAT including Entry Tax on closing stock supported by invoice/document evidencing tax payment
  • Table 7(D): For claiming the credit of VAT including Entry Tax on closing stock, without any invoice/document evidencing tax payment.
Let us discuss about the Tables 7(C) and 7(D) of Form GST TRAN-1 in detail

Table 7(C) of form GST Form TRAN-1

This section is applicable for businesses that have an invoice or any other document which evidences the tax payment, such as Tax Invoice. These businesses need to capture the details of closing stock (in the form of raw-materials, semi-finished and finished goods) in the table below: table-7c You need to provide commodity-wise details along with the description, unit, closing quantity, closing value and VAT & Entry Tax paid on closing stock. In ‘Total Input tax credit claimed under earlier law’ (Column 6), you need to mention ITC of VAT already availed and this will be more relevant to the business scenario discussed above in point no. 3. In column 7 ‘Total Input tax credit related to exempt sales not claimed under earlier law’ (Column 7), specify the amount of VAT paid on purchases which were not availed owing to the sale being exempt. This will be relevant to the business scenarios discussed in point no. 3 and 4 above. Based on the above details, arrive at the total input tax credit admissible as SGST/UTGST, which you need to mention in Column 8. The following calculations can be applied to arrive at admissible ITC
  1. For business scenarios discussed in points 1 and 4 above, the total VAT and Entry tax paid will be your admissible SGST/UTGST credit
  1. For business scenarios discussed in point 2 above, the total input tax credit related to exempt sales not claimed under earlier law will be your admissible SGST/UTGST credit. This is because, if you were engaged in 100% exempt sales, the entire amount of VAT paid was not allowed to be claimed as ITC. This will be equal to VAT and entry tax paid on closing stock
  1. For business scenarios discussed in point 3 above, the VAT including Entry Tax paid minus the total ITC claimed under earlier law will be your admissible SGST/UTGST credit. This will be equal to the total input tax credit related to exempt sales not claimed under the earlier law
Please note, this section is applicable only for businesses claiming VAT Including Entry Tax on closing stock supported by invoice/document evidencing tax payment

Table 7(D) of form GST Form TRAN-1

Those businesses that do not have tax paid invoices, need to capture the details of closing stock details (in the form of raw-materials, semi-finished and finished goods) in the table below: table-7d This section is also applicable for businesses located in those states, whichhad a single stage VAT system. Under this system, VAT was levied only at the first stage of sale by the manufacturer or the first importer. In subsequent stages when such goods were sold by wholesalers, distributors or retailers, the same was sold as tax free. In Punjab, this was applicable for certain notified goods. The claim from the above table will be in the form of Deemed Credit. It will be credited to the e-credit ledger in the GST Portal, only when such stocks are actually supplied, and tax collected is paid to the government. The following is rate of deemed credit allowed when tax paid invoices are not available.
GST Rate SGST/UTGST IGST
18% and 28% 60% 30%
5% and 12% 40% 20%
As per the table, if the GST rate applicable on the closing stock is 18% or 28%, you will get a deemed credit of 60% of SGST/UTGST, or 30% of IGST. Similarly, if it is 5% or 12%, then 40% of SGST/UTGST, or 20% of IGST will be allowed. To know more about the deemed credit and the related conditions. You need to provide the HSN-wise details along with the UoM, closing quantity, and closing value of the stock. In the ‘Tax paid’ column, you can simply mention ‘0’. This is because, firstly, the credit in the above scenarios is allowed as deemed credit, and not on the basis of the amount mentioned in the eligible duties and taxes paid field. Secondly, a business cannot arrive at the eligible duties paid on closing stock in the absence of duty details in the invoice. This is the reason to allow deemed credit. Please note, Table 7(D) is applicable only for Traders. Not Applicable to Manufacturer or Service Provider Steps to file TRAN-1 online
    • Login to GST Portal and navigate to: Services -> Returns -> Transitions forms.
    • Click Table 7 of Form GST TRAN-1.
    • Select ‘7b-Eligible Duties and taxes/VAT/ [ET]’ or ‘4d-Stock of Goods’ as applicable
    • Click ‘Add details’ option available at the bottom of the page. The details of Table 7(C) as discussed, will be available as shown in the table below:

For business scenario discussed in point no 1 and 4

tran1-online In the above section, you need to manually enter the following details:
  • In the ‘Number’ field – enter the HSN code and description of goods held in stock as on 30th June,2017
  • Mention the unit of measurement, closing quantity and closing stock value
  • Mention the VAT and Entry tax paid.
  • Select the Type of Goods – Inputs, Semi-finished goods, Finished goods
  • For business scenarios discussed in 1 and 4 above, ‘Total input tax credit claimed under earlier regime’ and ‘Total tax credit related to exempt sales not claimed in earlier regime’ will not be applicable. You need to mention ‘0’ in those fields.
  • VAT including Entry Tax paid will be the total input tax credit admissible as SGST/UTGST.

For business scenario discussed in point no 2

point-no-2
  • The ‘Total input tax credit claimed under earlier regime’ will not be relevant.
  • In ‘Total tax credit related to exempt sales not claimed in earlier regime’, mention the amount of ITC which was reversed in the earlier regime due to sales being exempt.
  • In this case, the amount entered in ‘VAT and Entry Tax paid’ will be equal to the ‘total tax credit related to exempt sales not claimed in earlier regime’
  • Total input tax credit related to exempt sales not claimed under earlier law will be your admissible SGST/UTGST credit

For business scenario discussed in point no 3

point-no-2-2
  • Mention the amount of ITC already availed in ‘Total Input Tax Credit Claimed under Earlier Regime’. The ITC already claimed should be reduced from VAT and Entry Tax paid.
  • Next, mention your total tax credit related to exempt sales not claimed in earlier regime. This will be equal to the VAT including Entry Tax paid minus the total ITC claimed under the earlier regime.
  • VAT including Entry Tax paid minus total ITC claimed under the earlier law, will be your admissible SGST/UTGST credit. This will be equal to the total input tax credit related to exempt sales not claimed under earlier law.
Table 7(D) form GST TRAN-1
    • From Table 7 of Form GST TRAN-1, select ‘Details of the inputs held in stock’ and click ‘Add details’. The details will be available as shown below:
form-tran-1 You need to enter the following details manually,
  • In ‘Number’, mention the HSN code followed by description of goods held in stock as on 30th June,2017
  • Mention the unit of measurement, closing quantity and closing stock value
  • Mention ‘0’ in VAT and Entry tax paid and the deemed credit as discussed above will be credited your e-credit ledger after the goods are supplied and relevant taxes are paid to the Government.
  • Save the details and submit.
To download the GST TRAN-1 format, click here In our upcoming blogs, we will be discussing about the remaining sections of Form GST TRAN-1.

The Best Way to File GSTR1 Returns

Introduction

The GST filing period has begun! “How do I and my tax consultant file GST returns for my business?” – is the one question that is likely to linger on top in your head, among others. This blog suggests the best method for filing returns accurately. Let us begin by making a note of the filing dates for different GST returns for the assessment month of July.
Returns period GSTR-1 GSTR-2 GSTR-3B GSTR-3
July 2017 Upto 10 Oct Upto 31 Oct 25-28 Aug Upto 10 Nov
Oct. 10 is the last date for filing your GSTR-1 returns for the month of July. If you have already glanced through the GSTR-1 form, then you might have noticed that the form has 13 tables and each table has multiple rows. It requires plenty of data and obviously plenty of time to be filled in. You don’t want to go wrong with the details. No doubt, your tax consultant will handle the task for you. Yet, unlike in the previous tax regime, your consultant is now going to seek your help to get accurate data. You have to start preparing for this by providing data in manner required by your tax consultant and which is compliant with GST. Remember that your business compliance is ultimately your responsibility.

Steps to file GST returns

Previously, you were used to filling up and sending over an MS Excel template file provided by your tax consultant. In case you were using the Tally software, you sent along the Tally data file.The only difference in the GST regime is that you will now be using the standard MS Excel template provided by the tax department for entering business data. Knowing that GST rules are new and frequent notifications continue to be issued by the tax department to sharpen the rules, you need the comfort of doubly ensuring the accuracy of your business data. At Tally, we think that you must adapt the below described steps for accurate filing. Step 1: Enter data in the prescribed MS Excel template format (or any other file format supported by your software) and verify the same thoroughly before sending to your consultant. Step 2: Let your tax consultant cross-check the data and approve before uploading on the GSTN portal. The advantage of following these steps is that you get to establish a double-checking process to avoid erroneous filing and get better control and overview of your business data. After few months, both you and your tax consultant with get acquainted with the process. Once you are confident, you can start uploading invoices and returns data directly from your software to the GSTN portal. Below are three example situations in which the above method will turn out to be really useful. Situation/Example 1 As you know, tax liability has to adjusted in the books for all advance payments which are received. Typically, the sales personnel record advances received and sales on a daily basis. However, the task of adjusting the books is carried out by the Finance Controller/Accountant and not the Sales team. This activity is done at the end of the month, by verifying that tax liability is calculated only for those advances against which there were no sales during the month. The Finance Controller/Accountant also make corrections that might have occurred in the data-entry process before adjusting the books and preparing data for returns. In the GST regime, the best way to manage your tax compliance data is by finalizing all liability records and books when nearing the end of the month. This will give you full control to ensure adequate verification of data, only after which you could send it to the tax consultant. Situation/Example 2 In the GST regime, purchases from unregistered dealers worth more than INR 5,000/day are liable for reverse charges. Your accountant will need time to verify the correctness of the liabilities accrued from reverse charges and amend any errors. Remember that if the reverse charges are not adjusted/verified fully, you may incur a wrong liability which will negatively impact the cash flow. The best way to manage this is by finalizing liability records and books before nearing the month-end. You/your tax consultant gets to review the data as a consolidated chunk for the month before sending it to the tax consultant. Pick a date before the month ends, sit together with your staff to review the data at one go and then submit the same to the tax consultant. This way you will be able to assess the information in its entirely for the month and make corrections once for all. This practice will enable you to get control of your business information and more confidence towards becoming GST compliant. Situation/Example 3 One of the important aspects in the GST regime is ‘invoice-matching’. It is quite natural, that just as you are taking time to adjust to the GST regime, your buyers too are undergoing a similar experience. It is possible that your buyers might make data-entry errors as well and request you to modify those to ensure invoice-matching. Finalize all your invoice-matching tasks before the end of every month and give your buyers the confidence that you are open for mutually agreeable modifications. This will enhance your business relationships.

Conclusion

We strongly recommend that you adopt the above mentioned process as part of your returns filing activity. Once you and your consultant have become comfortable with the GST procedures, it will be time for us to rollout an upgraded version of our software. In addition to uploading invoices and returns data directly from Tally to GSTN, you will also enjoy unmatched compliance, convenience and new possibilities that come with connected devices. GST has not only changed the way you do business, but also the process of filing returns. We are all at the start of the new tax regime. It takes time to get acquainted with the new GST processes. We are with you in this journey and will help you file returns in the best possible manner. Please do share your thoughts.

GST E-way Bill Format

We introduced and explained in details the provisions of E-Way bill under GST. In this blog, we will take you through the  E-way Bill format in GST. Under GST, all registered persons who intend to initiate the movement of goods of value exceeding Rs. 50,000 should generate an e-Way Bill.  The E-Way Bill needs to be generated in Form GST EWB-01 in the GSTN portal.  The GST E-way bill format is categorized into 2 parts – PART-A and PART-B as shown below. gst e-way bill format

PART-A of GST E-Way Bill Format

The Part A of E-Way Bill in Form EWB-01 aims to collect the details of consignment, usually the invoice details. Accordingly, the following details need to be captured.
  • GSTIN of Recipient: Mention the GSTIN number of the recipient.
  • Place of Delivery: Here you must mention the Pincode of the place where goods are delivered.
  • Invoice or Challan Number: Mention the Invoice or Challan number against which the goods are supplied.
  • Value of Goods: Mention the consignment value of goods.
  • HSN Code: Enter the HSN code of goods which are transported. If your turnover is up to Rs. 5 crores, you need to mention the first 2 digits of HSN code. If it is more than Rs. 5 crores, 4 digits of HSN code are required.
  • Reason for Transportation: The reason for transportation is pre-defined and you need to select the most appropriate option from the list. The pre-defined list contains the following options as shown in the table below.
Code Description
1` Supply
2 Export or Import
3 Job Work
4 SKD or CKD
5 Recipient not known
6 Line Sales
7 Sales Return
8 Exhibition or fairs
9 For own use
0 Others
  • Transport Document Number: This indicates either one of the Goods Receipt Number, Railway Receipt Number, Airway Bill Number or Bill of Lading Number.

Part-B of GST E-way Bill Format

In Part B of Form EWB-01, the vehicle number in which goods are transported needs to be mentioned. This will be filed by the transporter in the common portal. The question that now arises is, who is responsible for generating the E-Way Bill? Transporter, supplier or the recipient? Watch out our next blog for the answer and detailed explanation to this question.

Services on Which E-commerce Operator Has to Pay Tax

We had learnt that certain services will be notified by the GST Council, on supply of which, the tax is liable to be paid by the e-commerce operator and not the person supplying the service. These services on which an e-commerce operator has to pay tax have now been notified by the GST Council. These are:
  1. Transport of passengers by a radio-taxi, motor cab, maxi cab and motor cycle
Example: Certain cab aggregators like Ola Cabs, Uber, etc. act as a platform where cab drivers can register and provide transportation service. On supply of the transportation service by cab drivers, the operator will be liable to pay tax, and not the cab driver.
  1. Accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, except where the supplier is liable for registration.
Example: Accommodation aggregators like Oyo Rooms, Airbnb, etc. partner with hotels, guest houses, etc. to provide standardized accommodation and services to customers. In these cases, if the hotel is liable for registration, such as a hotel chain whose turnover crosses the threshold limit, then the hotel has to pay the tax on the accommodation service provided. However, if the hotel is not liable for registration, then the operator has to pay the tax on the service. Note: Many e-commerce operators who provide the above services might not even have a physical presence in the State where the transport or accommodation service is provided. Their operations could be entirely through a mobile application or website. However, this cannot be a reason to not pay the tax that arises on account of the provision of these services. The Law clearly states that if an operator providing the above services does not have a physical presence in a State, any person representing the operator for any purpose will be liable to pay the tax. Further, if the e-commerce operator does not have a representative in the State, then it should appoint a person in the State for the purpose of paying tax. As an e-commerce operator, it is important to note the tax liability that arises on account of the supply of transportation or accommodation services and ensure that appropriate measures for compliance are taken.

Interest on Late Tax Payment under GST

Under GST, interest is liable to be paid when there is a delay in payment. Provisions have been made for interest to be paid, when there is a lapse by the tax payer as well as by the Department. In this blog, let us understand the scenarios where interest is applicable.

Interest on late payment of tax by tax payer

The two scenarios where a tax payer will be liable to pay interest are:
  1. Delayed payment of tax
  2. Input tax credit has been claimed in excess or where it was not eligible to be claimed/ Tax liability has been shown to be less than the actual

Interest rates

Scenario Interest rate per annum
Delayed payment of tax 18%
ITC claimed in excess or incorrectly/ excess reduction in output tax liability 24%

Interest to be paid by the department

The three scenarios where the Department is liable to pay interest on delayed payment to a tax payer are
  1. Refund of tax has been withheld from a person on account of an appeal or proceeding but which is later found to be eligible to be paid
  2. Refund of tax has not been given to a person within 60 days from the date of receipt of application for refund
  3. Refund ordered by an adjudicating authority or Appellate Authority or Appellate Tribunal or court has not been paid to a person within 60 days from the date of receipt of application for refund.

Interest rates

Scenario Interest rate per annum
Refund has been withheld 6%
Refund has not been paid within 60 days 6%
Refund rising from an order by an adjudicating authority or Appellate Authority or Appellate Tribunal or court has not been paid within 60 days 9%
Hence, it is imperative for you as a tax payer, to avoid instances of interest payment. Default in payment of tax will also have an impact on your compliance rating. Timely and accurate compliance will help you to avoid unnecessary cash outflow and achieve a good compliance score.

Gifts to Employees under GST

It is a common business practice to give gifts to employees, especially on the occasion of festivals like Diwali, New Year, etc. In addition, companies provide various perquisites to employees, such as housing, laptops, conveyance, health insurance, etc. In the previous indirect tax regime, these gifts were not taxable under VAT or Service Tax. Let us understand the treatment of gifts to employees under GST.

What are gifts?

Gifts have not been defined in the GST Law. However, the Finance Ministry has issued a notification which states that a gift is given without any consideration in return, is voluntary and is made occasionally. It cannot be demanded as a matter of right and an employee cannot move a court of Law for obtaining a gift.

Gifts to employees under GST

No input tax credit
An employer cannot avail input tax credit on goods given as gift to employees under GST.
Gifts of value more than Rs. 50,000 in a year are taxable
Gifts to employees, that exceed Rs. 50,000 in value in a financial year, are taxable under GST. Example: Radha Electronics gifts mobiles worth Rs. 55,000 to senior employees on Diwali in the year 2017. This will be treated as a supply under GST and Radha Electronics is liable to pay GST @ 12% (Rate applicable to mobile phones) of Rs. 55,000, which is Rs. 6,600, on each mobile phone given as gift.
Gifts which are part of employment contract are not taxable
Gifts which are part of the employment contract between an employer and employee are not taxable under GST. Hence, perquisites such as free housing, gift vouchers, conveyance, membership of clubs, health and fitness centre, etc. which are usually part of the employment contract will not be taxable under GST.

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