Goods & Services Tax
Know the Rates for Goods in GST
4 Things you must know about GST
1. Compliance Rating
- Compliance rating is based on discipline in filing correct returns and paying taxes On-Time.
- You will risk your compliance rating if you delay adopting technology or do not file returns On-Time or miss paying taxes On-Time.
- Your compliance rating is visible, so businesses you deal with will know your business status. Your business prospects will depend on your compliance rating.
2. Get the Competitive Edge!
- Early adoption of technology will make you a winner. It will make your Compliant & Competitive.
- You will be able to do great business with your suppliers and customers.
3. Improve your Cash Flow!
- GST regime eliminates cascading effect of tax.
- Say Goodbye to multiple taxes.
- Tax paid on offence expenses can be claimed as input credit.
- Right Technology will ensure smooth and rapid transition, improve your working capital.
4. Claim ITC on Closing Stock!
- Star preparing for GST by maintaining Invoice-wise details of your Inventory.
- Match your returns with the transactions.
When is e-way bill not required?
Ever since December 2017, when the e-way bill came back into the scheme of things under GST, businesses and transporters have been proactively equipping themselves for a smooth e-way bill implementation. Trial runs of the same started in January and a full-fledged roll-out was attempted in February, which unfortunately was deferred due to technical glitches in the portal. However, at the 26th GST Council meet, a new date for e-way implementation has been set as the 1st of April, 2018 with 1stJune, 2018 being the target date for a nation-wide roll-out completion. While businesses need to be aware about the e-way bill rules in great detail, they also need to be aware about when is e-way bill not required, which is bound to save time and effort. In this blog, we will understand all those cases, where the movement of goods does not warrant the generation of an e-way bill irrespective of the value of movement of goods, as well as the e-way bill exemption list for all goods for which e-way bill is not mandatory.
If you want to know when is EWB not required, here are the following scenarios:
- Where goods are being transported by a non-motorised conveyance
- Where goods are being transported from the customs port, airport, air cargo complex and land customs station to an Inland Container Depot (ICD) or a Container Freight Station (CFS) for clearance by customs
- Where goods are being transported under customs bond from an Inland Container Depot (ICD) or a Container Freight Station (CFS) to a customs port, airport, air cargo complex and land customs station
- Where goods are being transported under customs supervision or under customs seal
- Where goods are being transported from one customs station or port to another customs station or port
- Where goods are being transported as transit cargo from or to Nepal or Bhutan
- Where goods are being transported up to a distance of 20 KMs from the place of the business of the consignor to a weigh-bridge for weighing or from the weigh-bridge back to the place of the business of the said consignor. However, in this case, the movement of goods has to be accompanied by a delivery challan
- Where goods are being transported by rail and the consignor of goods is the Central Government, State Governments or a local authority
- Where empty cargo containers are being transported
- Where movement of goods is being caused by defence formation under the Ministry of Defence as a consignor or a consignee
- E-way bill not required, where the following goods are transported, which are goods exempted from e-way bill:
- Alcoholic liquor for human consumption
- Petroleum crude
- High speed diesel
- Motor spirit (commonly known as petrol)
- Natural gas
- Aviation turbine fuel
- Liquefied petroleum gas for supply to household and non-domestic exempted category (NDEC) customers
- Kerosene oil sold under public distribution system (PDS)
- Postal baggage transported by Department of Posts
- Natural or cultured pearls and precious or semi-precious stones
- Precious metals and metals clad with precious metal
- Jewellery, goldsmiths’ and silversmiths’ wares and other articles
- Used personal and household effects
- Coral, unworked and worked coral
- Goods, apart from de-oiled cake, which are exempt from tax under notification no. 7/2017 and notification no. 26/2017 under Central Tax, which are subject to amendment from time to time
- E-way bill not required for goods which are treated as no supply under Schedule III of the CGST Act
- Goods exempted from e-way bill under Rule 138 (14) in the respective State / Union Territory GST rules – i.e. list of 153 items exempt from e-way bill, including most items for household and daily use
Businesses and transporters will thus need to keep this e-way bill exemption list in mind, so that they are aware about when to generate, and when not to generate the e-way bill for movement of goods.
FAQs on GSTR-3B Return
01. If two GSTINs are there for a company, is one GSTR-3B return sufficient?
No. 2 Separate GSTR-3B are required to be filed. In other words, separate GSTR- 3B returns are to be filed for each of the GSTIN that a company has.
02. Should the invoice details be provided in GSTR-3B?
GSTR-3B is a declaration given by the company to the GST authorities. So it is enough that the consolidated input and output supply details are given in the format.
03. Is it necessary to file GSTR-3B even if you do not have either purchases or sales in a month?
Yes. Even if there are no tax details, a NIL GSTR-3B return is to be filed.
04. Will there be invoice matching in GSTR-3B return?
Since GSTR-3B is a declaration form, there will not be invoice matching.
05. Can you give the step-by- step procedure for filing GSTR-3B using Tally?
Go to Gateway of Tally > Display > Statutory Reports > GST > GSTR-3B
The report is generated in the MS-Word format. You can have it printed there.
06. What is the late fee for not filing GSTR-3B on the due date?
Late Fee for filing GSTR-3B after the due date is as follows:
* Rs. 50 per day of delay
* Rs. 20 per day of delay for taxpayers having Nil tax liability for the month.
Note: Late fee for July, August, and September has been waived. Any late fees paid will be credited back to Electronic Cash Ledger under ‘Tax’ and can be utilized to make GST payments (as per the 23rd GST Council meeting).
HSN Code under GST
What is HSN Code?
– A multipurpose international product identification tool developed by World Customs
– It has 5000 commodity groups and the products are identified by a 6 digit code.
– Used in over 200 countries and over 98% of the world trade is happening as per this.
HSN in Indian Context:
- In the relevant return forms, the tax rate will be auto populated based on the HSN codes used.
- The turnover of the previous year will be considered as the base-figure for the subsequent year’s HSN codes of 4 digits.
- Use of HSN codes is to make GST as a globally accepted tax structure.
- The GST law has to be compatible with international standards.
- The concept of HSN codes was invented outside India and same is used by various member countries.
- Each good is assigned with a 6-digit code which is unique in nature. In India, there are 2 more digits added to these 6 for further classification.
- It is mandatory for companies engaged in import and export business with an annual turnover of over Rs.1.5 crores per annum to use the 8-digit HSN Code.
- Companies who have an annual turnover of less than INR 1.5 crores, are exempt from mandatorily using the HSN Codes for their goods.
- Apart from this, such of those companies registered under Composition Scheme of GST are also exempted from using HSN Codes.
Input Credit under GST
What is Input Credit under GST?
– GST is collected by us for goods / services sold by us – Output GST
– GST is paid by us for goods / services availed by us – Input GST
Input Credit is equivalent to the value of the Input GST paid by us.
E.g., An amount of Rs.650/= has been collected by us as GST for goods supplied by us to our clients.
An amount of Rs.400/= has been paid by us as GST for goods purchased by us from our suppliers.
It is enough that we remit Rs.250/= to the Government after adjusting the Input Credit of Rs.400/=
When can one avail Input Credit under GST?
- Your company should be covered under GST Act and be registered with GST.
- Your supplier company should be covered under GST Act and be registered with GST.
- Your supplier company should have remitted the GST amount collected from you for the particular invoice raised on you. Such remittances can be either by way of cash remittance or by way of input credit availed by the supplier. In other words, every input credit claimed by you shall be matched and validated before getting adjusted.
- Your supplier has filed GST returns.
- If your input credit is higher than your output tax, the same can be carried forward or refund can be claimed by you.
- In case you have claimed input credit and do not pay for the goods / services availed by you, within 3 months from the date of invoice, such input credit will be added to your output tax liability, along with interest.
How to File Your GST Returns?
Every registered taxable person has to furnish outward supply details in Form GSTR-1 (GST Returns-1) by the 10th of the subsequent month. On the 11th, the visibility of inward supplies is made available to the recipient in the auto-populated GSTR-2A. The period from 11th to 15th will allow for any corrections (additions, modifications and deletion) in Form GSTR-2A and submission in Form GSTR-2 by 15th of the subsequent month.The corrections (addition, modification and deletion) by the recipient in Form GSTR-2 will be made available to supplier in Form GSTR-1A. The supplier has to accept or reject the adjustments made by the recipient. The Form GSTR-1 will be amended according to the extent of correction accepted by supplier.
On 20th, the auto-populated return GSTR-3 will be available for submission along with the payment. After the due date of filing the monthly return Form GSTR-3, the inward supplies will be matched with the outward supplies furnished by supplier, and then the final acceptance of input tax credit will be communicated in Form GST ITC-1.
Also, the mismatch input tax credit on account of excess claims or duplication claims will be communicated in Form GST ITC-1. Discrepancies not ratified will be added as output tax liability along with interest. However, within the prescribed time, if it is ratified, the recipient will be eligible to reduce this output tax liability.
Let us understand GST return filing process with an example.
Migration of Taxes
Moving to GST: For Registered Businesses
Tally For GST
Get the latest version of Tally.ERP 9 and get ready for e-Way Bill
Manage e-Way bills through Tally ERP 9 Release 6.4
Tally ERP 9 Release 6.4 assists in e-Way bill generation , by identifying invoices that need e-Way Bill . There is an option to export the required data in a JSON format or EXCEL offline utility tool provided by the Department. JSON File can be uploaded in the e-Way bills portal. e-Way bill is generated after uploading which can be quoted / uploaded against the invoices.
What is GST? How does it Work?
August 3rd, 2016 will be recorded as a red letter day in the history of Indian taxation due to the near unanimous passage of 122nd Constitutional Bill in Rajya Sabha, paving the way for roll-out of GST (Goods and Services Tax) in India from 1st of April 2017. Goods and Service Tax Bill has significantly evolved over the past decade and is touted as the single largest tax reform in India since independence.
It is estimated to boost GDP by 1.5 to 2%. ‘One India, One Tax’ will be the new reality with GST subsuming over ten indirect taxes and making India a common market. Apart from elimination of cascading effect, the benefits of simplified compliance, technological backing and uniform process across India will contribute significantly to ‘Ease of doing Business’. However, the success of a business will significantly depend on the ability to understand and adopt to this new reality as certain existing business practices will have to undergo changes.
Goods and Services Tax is a comprehensive tax levied on supply of goods and services across India. GST (Goods and Services Tax) is a Destination based Consumption tax, and the taxable event is Supply as against the existing taxable events of sale, manufacture or provision of service. Draft model GST law was first made public in June 2016, after which the Revised Draft Law was made public on 26th November 2016. It is high time that businesses, industry/trade bodies, professional associations and the like provide valid inputs at an early date, and ensure the final GST Law addresses all the concerns to make the transition smooth.
The indirect taxation regime in India has undergone many transformations over the past 5 to 6 decades. Introduction of MODVAT scheme in 1986, fungibility of credit between Excise and Service Tax (2004), rollout of VAT (2005 onwards) have over the years increased transparency in tax administration, reduced hassles to tax payers, and eliminated the cascading effect, thus benefitting the consumer. However, the federal structure of India has resulted in tax being administered by both Centre and State.
Lack of facility to utilize credits across these two entities has resulted in partial cascading still being left in the system. Added to this, the burden of compliance has also increased due to involvement of multiple agencies. GST precisely addresses these concerns by driving uniformity across India through a single tax and ensuring an unrestricted flow of tax credit. Conceptually, GST is similar to VAT, meaning tax will be applied only on the value addition at each point in the supply chain.
Some of the salient features of GST (Goods and Services Tax) are:
GST Registration threshold is Rs
9 10 Lakh for special category states*, and Rs 19 20 Lakh for Rest of India. Approximately 7-8 million businesses are likely to be registered under GST. Small dealers with turnover below Rs 50 Lakh have the option of adopting the Composition scheme and pay flat ~1 to 4% tax on turnover.
*Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand
For more details on GST registration process, please visit these-
Dual GST (Goods and Services Tax):
In consideration of the federal structure of India, Dual GST has been chosen as the apt model wherein tax would be jointly levied by both Centre and the states on supply of goods and services.
The components of Dual GST are:
- CGST: Central GST
- SGST: State GST
- IGST: Integrated GST
On intra-state transactions CGST+SGST will be applicable and on interstate transactions, IGST will be applicable.
There are likely to be 3 sets of rates as below:
- Merit Rate
- Standard Rate
- De-Merit Rate
There is also likely to be a lower rate for precious metals and zero-rate for essential goods.
The taxes which will get subsumed under GST are:
*To be included only at a later notified date
The manner of availing input tax credit for setoff of tax liability is defined as under:
Please note that CGST and SGST cannot be set off against one another.
Goods and Service Tax Network or GSTN is a Not for Profit Sec 25/Section 8 company incorporated under the public-private partnership(private companies, central and state government are the stakeholders) to roll out the IT backbone (Backend and Frontend) and portal for meeting all the e-filing requirements of GST. This would be the nodal agency which would control all the processes, forms, and also the data of all the trade that happens in the country.
The council to be formed within 60 days of getting presidential assent, would consist of 2/3rd representation of states and 1/3rd representation of Centre. The GST Council will take all decisions regarding tax rates, dispute resolution, exemptions and so on. Recommendations of the GST Council (75% votes) will be binding on the Centre and states.
Existing dealers would be auto-migrated and given a 15-digit PAN based GSTIN with following structure.
The entity code will be applicable for taxpayers having multiple business verticals within the state.
The GST (Goods and Services Tax) regime introduces the following changes:
- The GST regime requires all businesses to mandatorily file monthly returns along with the requisite quarterly or annual returns. Even businesses which now file returns quarterly or half-yearly (such as returns for service tax etc.) now need to file returns every month.
- There will now be ‘3 compliance events every month’ compared to 1 event today. This means, businesses will now need to comply with the requirements of filing Form GSTR-1, Form GSTR-2 and Form GSTR-3 (as mentioned below) as against filing 1 return today.
- The first compliance event (filing Form GSTR-1) has a due date of 10th of the subsequent month as against the deadline of 20th in the current VAT regime.
- Composition scheme will no longer be a favorable option since returns need to be filed quarterly and the details in those returns need to be filed relating to purchases, though sales would be lump sum like earlier. Another big deterrent in the scheme would be non availability of input credit to the chain below which would increase the selling price for the composite dealers. This would mean that businesses would reduce their purchases from these dealers.
Regular Dealer: Monthly filing
- Form GSTR-1: Upload all sale invoices (By 10th)
- Form GSTR-2A: Auto-populated details of inward supplies made available to the recipient on the basis of Form GSTR-1 furnished by the supplier (on 11th)
- Form GSTR-2: Addition (Claims) or modification in Form GSTR-2A should be submitted in Form GSTR-2 (on 15th)
- Form GSTR-1A: Details of outward supplies as added, corrected or deleted by the recipient in Form GSTR-2 will be made available to supplier ( On 20th)
- Form GSTR-3: Submit the auto-populated GSTR-3 by 20th
- Form GSTR-9: Annual Return – furnish the details of ITC availed and GST paid which includes local, interstate and import/exports. (31st Dec of next fiscal )
Composition Dealer: Quarterly filing
- Form GSTR-4A: Details of inward supplies made available to the recipient registered under composition scheme on the basis of Form GSTR-1 furnished by the supplier (Quarterly )
- Form GSTR-4: Furnish all outward supply of goods and services. This includes auto-populated details from Form GSTR-4A, tax payable and payment of tax (submit by 18th after quarter-end)
- Form GSTR-9A: Furnish the consolidated details of quarterly returns filed along with tax payment details (31st Dec of next fiscal).
For more details on GST Returns visit these blog posts –
- Mandatory e-payment for amount > Rs 10,000
- Online: NEFT/RTGS/IMPS
- Offline: Cash/Cheque/DD/NEFT/RTGS etc.
- Challan is auto-populated, and can be downloaded
Refund process will be automated and wherever applicable
80% 90% refund will be granted provisionally when applied without scrutiny.
Major Impact Areas
Principal areas of impact for business will be:
- Adoption of Technology is imperative: As all the processes will be online, and return filing is of granular nature (invoice-wise), the taxpayer will have to adopt suitable technology to ensure efficiency and effectiveness. Unlike earlier, paper filing will not be an option.
- Access to Pan-India market: Intra-state and interstate trades would become tax neutral, and the whole of India will open up as a market for both sourcing vendors and customers customers without hassles of compliance.
- Cash flow planning: Input tax credit on purchase will be provided only provisionally during return filing, and will be confirmed only after corresponding sale has been uploaded and after the liability is discharged by supplier. Hence, cash flows WILL get impacted in case of mismatch. As any supply would be taxable, branch transfers would result in tax liability leading to cash blockage. GST will also be applicable on advances received and reverse charge is extended to goods as well. Businesses will need to rethink how to effectively do business and structure deals.
- Easier Compliance: GST requires businesses to provide granular level of data (invoice-wise), that needs to be reported with HSN codes. The good news is that compliance is going to get easier with GST replacing most of the prevalent indirect taxes and with the support of technology. With GST, the government has shifted its burden of following up with vendors who have not uploaded their returns by cutting out the input credit.
- Branch / Supply chain re-engineering: Businesses having multi-state presence due to tax considerations (to avail concessional CST rate) need to re-plan their warehouse and branch networks and locate them nearer to markets rather than state-wise.
- Pricing strategy: Due to elimination of cascading effect, prices of products are likely to come down. Hence, businesses need to re-align to the new realities in procurement and sale.
- Re-negotiate contracts: Work contracts and other multi-year supply deals have to be renegotiated to absorb GST rates. As tax would be payable on advance, such conditions need a relook.
With the passage of the 122nd constitutional Amendment Bill in Rajya Sabha, the immediate next steps are:
- As this is a constitutional amendment, a minimum of 15 state assemblies also need to ratify the bill.
- Presidential assent to the bill and formation of GST council within the next 60 days from date of obtaining assent, is required.
- Passing of CGST and IGST Bills (probably as Money Bill) in winter session of parliament and of SGST Bill in 29 state assemblies.
- Rollout of GST Network by January 2017.
The tasks look daunting, yet achievable.
What next for all of us?
With 1st of April 2017 being the likely date for launch of GST (Goods and Services Tax), the taxpayer needs to take several preparatory steps in this direction. The transition will be the key for having a clean opening balance to start with.
- Input tax credit (in returns/inputs/capital goods) from current regime(CENVAT, VAT) will be carried forward to GST(CGST, SGST). Hence, it is imperative to keep the books updated. It helps companies during assessment as only at that time the number will get picked up and if trail/clarity is not available businesses will go through a lot of financial and non-financial pain.
- All the accounting and party masters in ERP need to be kept updated with statutory details filled-in, such that transition to GST is smooth.
As always, Tally has been the pioneer in assisting businesses with understanding and adopting statutory changes. The greatly simplified solution in Tally.ERP 9 will ensure quick migration and easy handling of statutory requirements of GST.