GST mechanism in brief , RCM ,

2. For any query you may email at mitra.gautom@gmail.com
visit my you tube channel
https://www.youtube.com/watch?v=RD1Wv1Kw2cM ,
http://accountsappliedtaxmagic.blogspot.in/ 9732365187
Finalization of accounts
accounting tricks , practical application of tax , how to save tax , basic concept of
accounts and practical application thereof
E-filing of return -ITR , TDS , GST
Calculation of MPBF(Maximum Permissiable Bank Finance), Preparing CMA Data
Managing accounts , How to use excel for managing data , Be a tally expert

3. We will discuss about some important aspects of GST with some example for better understanding :
Any existing taxpayer is rquired to get registered with GST even if turnover is less than 20 lacs. If you have business in
different states and aggregate turnover considering all states is more than 20 lacs than you are required to get registered with
GST
• HSN (Harmonized System of Nomenclature) code and SAC (Service Accounting Code) will be used to identify goods and
services. Though HSN code is not applicable for small taxpayers having turnover =< 1.5 crore . HSN code consists of 8 to 9
digits out of which first 6 digits are same all over the world . It is an universal code being used by many countries for
classifynig goods .
• If annual turnover > 1.5 crore and < 5 crore in preceding financial year than you need to state HSN code to
be mentioned in Tax Invoice and annual turnover > 5 crore you need to state 4 digits of HSN code in Tax Invoice
• TAX INVOICE is must for B2B transaction
• In GST return HSN code will be used for B2C transaction .
• You need not mention HSN / SAC code for every types of goods and services .

4. REVERSE CHARGE IN GST
for furtherance of business or in course
of business example

5. REVERSE CHARGE IN GST IS APPLICABLE IF THE FOLLOWING CONDITIONS ARE SATISFIED :
1) Supply of taxable goods
2) Supply must be for furtherence of business
3) Supplier must be engaged in business
4) As per Rule 46 RCM in GST is applicable if aggregate value of supplies exceeds Rs.5000/- in a day.
5) You may generate a consolidated Tax Invoice at the end of month taking all transactions > Rs.5000/- per day
with unregistered dealers . RCM is not applicable on trasaction =< Rs.5000/- per day
6) In case of GTA service (Goods Transport Agaency ) service receiver will pay GST @ 5% (No ITC) /@ 18% (with
ITC)irrespevtive of whether or not turnover is less than or more than 20 lacs . So under Sec.24 compulsory
registration is must .
If you are a businessman and have shown expenditure for taking tea , coffe and purchase of stationery items in
P/L A/c RCM is applicable on such transactions.

6. E-Way Bill is required if goods having value exceeding Rs.50000/- is transferred from one place to another place
whether or not GST is applicable on such goods
• Information must be furnished prior to movement of goods
• E-Way Bill shall be generated by registered person who causes movement of goods . In this case information like
value of goods , Delivery Challan No/Tax Invoice No. etc. will be furnished in PART A of GST INS 01 and similarly
vehicle no. , name of tarnsporter etc. will be furnished by transporter or buyer or supplier in PART B of GST INS 01.
• For multi consignments you need to generate E-Way Bill for each consignment and finally a consolidated E-Way Bill
is to be generated .
• Validity of E-Way Bill depends upon distance between place of supply and place of delivery . For an example
100 Km. - Validity for 1 day . You will have to cancel E-Way Bill within this valid period , if required.
• EBN ( Unique E-Way Bill Number) will be generated and it is to carried by transporter as reference number.
• RFID is a softawre to be used for generating code for goods carriage .
• Delivery Challan may be issued with E-Way Bill in the following cases : a) Supply of goods for stock transfer b)
Supply of goods for job work

7. In the following case GST is to be charged in Tax Invoice :
A (pen manufacturer ) B (plastic manufacturer)
In the same state goods supplied by B
from one location to another location
AAA and B both have same PAN but different GST No.

8. • As per Sec.15(2) basic value of invoice will include
any
• Bill of supply for unregistered supplier
• Tax Invoice must for B2B transactions.
• Daily consolidated invoice for supply of goods <Rs.200 to unregistered dealer

9. lLetLeLet's take an example : Mr. A went to a shop to purchase a new laptop
exchanging his old laptop at Rs.10000/- . Price of new laptop was Rs. 50000/-
excluding tax . Now Mr. A had to pay Rs. 40000/- plus GST . Computation of
invoice value :
New Laptop Rs. 50000
Add: CGST @9% 4500
SGST @9% 4500
________________________________
Total 59000
Less : Exchange price 10000
_____________________________
Amount payable 49000

10. lAn employee of X Ltd. vistited a client's office located in Gujarat for business
promotion . He stayed in hotel and paid Rs.118000 towards room rent . X Ltd. is
located in West Bengal.
ITC balance as per books of accounts of X ltd.
CGST SGST IGST
10000 0 0
Hotel bill as per place of supply 9000 9000 0
Output Tax ( X Ltd.) 5000 5000
Now here is a question is X Ltd. entitled to adjust output SGST of W.B. with input
SGST of Gujarat? . Because it is said in GST law that SGST of one state can't be
adjusted with SGST of other state. In this case X Ltd. is allowed to pay output
SGST from SGST of Gujarat since SGST of W.B. is not available .

11. l
Government
RauRail
RaVessel
55% with ITC
ExExemption : up to Rs. 1500 ( Single carriage)
up to Rs.750 (Single consignment)
Tax rate on any unspecified service is 18%
with ITC
If a vehicle is given to GTA on rent no tax is
applicable .
100% tax (5% on TOG) shall be paid by
service receiver under RCM . No ITC can be
claimed

12. tTHANKS
THANK YOU FOR WATCHING
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