Goods and Service Tax

Glossary
Acronym Details Acronym Details
GST Goods and Services Tax SAD Special Additional Duty
CGST Central Goods and Services Tax VAT Value Added Tax
SGST State Goods and Services Tax CST Central Sales Tax
IGST Integrated Goods and Services Tax SEZ Special Economic Zone
ITC Input Tax Credit EOU Export Oriented Unit
ED Excise Duty TV Transaction Value
ST Service Tax FOC Free of Cost
KKC Krishi Kalyan Cess CCR Cenvat Credit Rules
SBC Swatch Bharat Cess J/W Job Work (er)
BCD Basic Customs Duty B2B Business to Business
CVD Countervailing Duty B2C Business to Consumer
2

− Taxation on destination based consumption
principles
− Taxable event of ‘supply’ as against manufacture (excise), sales (VAT)
and services (service tax)
— Dual GST (Central GST and State GST) to apply concurrently on on intra-
state supply of goods and services
— Integrated GST (IGST) on inter-state transactions including stock transfers
— Exports and SEZ supplies zero rated; Imports subject to IGST
— Five-tier rate structure - 0%, 5%, 12%, 18% and 28%,
— Additional cess on Luxury/ Demerit goods
— Concurrent credit chain as under:
Input CGST against –
• CGST
• IGST
Input SGST against –
• SGST
• IGST
Input IGST against –
• IGST
• CGST
• SGST
CGST SGST IGST
CGST SGST
GST
Intra-State
CGST
SGST
Inter-State
IGST
(CGST+SGST)
GST Model - Basic features
3

Taxes to be subsumed in GST
CGST
Taxes on
lottery,
betting,
gamblin
g
Entry Tax &
Octroi
Entertainment
Tax (except
by local
bodies)
Purchase
Tax &
Luxury
Tax
Central
Sales
Tax
VAT
State cesses &
surcharges on
goods &
services
SGST
Note:
1) Items proposed to be kept out of the purview of GST:- i) Electricity ii) Alcoholic beverages for human consumption
2) GST on petroleum products would be levied from a notified date recommended by the GST Council
*Includes Excise duty levied under Medicinal & Toilet Preparations (Excise Duties) Act, 1955
4

Taxes not subsumed under GST
Electricity
Duty
Property TaxToll tax Export Duty
State Excise
and VAT on
alcoholic liquor
for human
consumption
Stamp Duties
Basic
Customs Duty
Environment
Tax
Tax on
entertainment and
amusement by
local bodies
5

Road Map to GST
CBEC has released a revised draft model law on Nov 26, 2016
Legal Process
Ratified by more than 50%
States and Presidential
Assent received on 8th Sep
2016
Formation of GST
Council is
completed on
12th September
&
recommendation
on GST law by
GST Council
(Nov/Dec 2016)
Passage of GST
law by Centre
and States
Notification of
GST Rules
Implementation
of GST
(July 2017)
Parallel Actions
• Feedback from Trade and
Industry
• Development of IT Infra
• Testing of IT Infra
• Registration of existing dealers
• Training of Tax Authorities
• Workshops for trade and Industry
6

Meaning of Supply
1
all forms of supply of
goods and/or services
such as sale, transfer,
barter, exchange,
license, rental, lease or
disposal made or
agreed to be made for a
consideration by a
person in the course or
furtherance of business,
2
importation of service,
whether or not for a
consideration and in
the course or
furtherance of
business,
3
• supply of
goods/services by a
taxable person to
another taxable/non
taxable person
without
consideration in
course of business
Supply/Receipt of goods by
agent on behalf of principal
would also be treated as
supply of goods between agent
and principal
7

Time of Supply – Goods
Time of supply
- goods
Forwar
d
Charge
Earlier of
Invoice
Receipt of payment
Revers
e
Charge
Earlier of
Receipt of goods
Payment made
Thirty days from the date of
invoice
Debit in books
Cash flow concern on
advance received
from customer
If not
determined by
above
8

Time of Supply – Service
Issuance of Invoice
Receipt of payment
Earlier of
Earlier of
Reverse Charge
Forward Charge
Supply between
unrelated
parties
Supply between
Associated
enterprises
Supplier of Service
located outside
India
Date of entry in books of accounts of the
recipient
Payment made
Earlier of
Payment made
Sixty days from the date of issue of
invoice by the supplier
Time of Supply not determinable as
above – Date of entry in books of
accounts of recipient
9

Value of Taxable Supply
Value of supply of goods/services = Transaction value
including:
Any taxes,
duties, cesses,
fees and
charges levied
under any
statute,
except CGST
and SGST
Any amount
which is
payable by
the supplier
and is paid by
the recipient.
Incidental
expenses,
such as
commission
and
packing, in
respect of
the supply
Interest or
late fee or
penalty
charged by
the supplier
for delayed
payment of
consideration
Subsidies
linked to
supply, except
those
provided by
Central or
State
Government
Post supply
discount if
the same is
not
established
either:
-In terms
of
agreement
-Not linked
to invoice
-Input
tax credit
not
reversed
1
0

1 2
• BCD & Cess is
cost on imports
• CVD/ SAD
is available
as credit
Domestic
Procuremen
t
– Goods
Import
of
Goods
• Intra-state : VAT/
Excise Duty are
available as
credit.
• Interstate:
CST paid is
cost
• Intra-state: CGST
& SGST – available
as credit
• Interstate: IGST –
available as credit
Key impact areas – Current & GST Regime
3
Job work Services
• No ED, provided goods
are returned back
within 180 days from
the date of sending the
inputs
• No VAT/CST on sending
the goods to job-
worker
4
• ST, and KKC
(only against
output service)
are available as
credit
• SBC is not
available as
credit
• BCD & cess is cost
on imports
• IGST is available
as credit
• Time limit for receiving the
goods from Job-worker
has been revised to:
• 1 year for inputs
• 3 years for capital
goods (except moulds &
dies, jigs & fixtures,
tools)
• CGST, SGST
and
IGST
paid on procurement
of
is
input
service
s available as
credit.
Current
Regime
GST
Regime
Procurement
- Services
Impact
1
1

5 6
7 8
Current
Regime
GST
Regime
FOC Transaction Stock Transfer
• Only ED paid on
free supplies
• No VAT/CST
is payable
• ED is paid on the stock
transfer on 110% of
the cost of
manufacture
• No VAT/CST is paid
on
the stock transfer
• FOC supply to related
persons and branches subject
to GST
• FOC supply to 3rd party
(warranty / samples etc.)
not subject to GST
• ITC not eligible for inputs
used for FOC supply (except
warranty – where position to
be taken)
• IGST to be paid on
Stock transfer
• Rules awaited for
determining the TV for
IGST discharge
Input Service
Distributor
(ISD)
• Accumulated credit
of ST and KKC is
distributed to the
various location
based on the turnover
percentage of sales
• Accumulated credit
of CGST/SGST/IGST
can
be distributed
pro- rata based on
the turnover in a
State of recipient
Exempted
sales under
Central Excise
• Excise Duty exempt on
• (i) item specific
• (ii) area specific
• (iii) customer specific
• Exemptions would be
minimal under GST (to
enable credit flow)
Impact
P
1
2

9 10
11 12
Current
Regime
GST
Regime
SEZ SalesEOU Sales
• ED is exempted
on supply to SEZ
• VAT/CST exempted
on SEZ Sales
• No ED on EOU
Sales based on CT-
3 form
• VAT/CST is
paid
• Supply to SEZ is considered
as “zero-rated supply”,
hence no GST
• ITC shall be available to
the supplier – he can either
claim refund or set off the
ITC
• Sales
to
taxable
Regime
EOU
w
ill
b
e under
G
ST
Cenvat
Reversal under
Rule 6(3) of
CCR
• Cenvat Reversal
required @ 6% of
the total
exempted value
towards exempted
sales
• Proportionate ITC
reversal applicable for
exempted output supplies
ITC on inputs
sent to J/W
• ITC allowed on inputs/capital
goods sent to J/W including sent to
J/W directly from vendor place
• ITC reversal - if not received
within time limit prescribed
• Similar provision
except for time limit to
receive back the
material increased to
1/3 years respectively
Impact
1
3

13 14
15 16
Current
Regime
GST
Regime
• ITC reversal
required for stock
transfer and FOC
supplies
• No ITC reversal
for warranty
supplies
Input
Reversal
under VAT
Rules
Registration
• Centralized
registration is obtained
under service tax
• Individual registration
under VAT/CST Act
for each of the state
• GST TDS and Annual Audit
Report also to be
submitted for applicable
cases
• Application for refund to
be filed within 2 years of
relevant date
• Processing of refund
within 60 days from the
date of application.
• Provisional refund @ 90% in
some cases
• Stock transfer subject to •
GST, hence ITC reversal
not required
Concept of
centralized
registration would be
discontinued
• State wise registration
is required including
sales office
Compliance
requirement
s
• 2 ST3 Returns
separately for (Non-ISD
and ISD)
• VAT/ CST/ ET Returns
for each state
• Excise Returns for each
excise registered
location• 3 GST filings per month
per state along with an
annual return have to be
filed
Refunds
(applicable on
exports/
inverted duty
structure under
GST)
• Application for refund to be
filed within 1 year of relevant
date
• Processing of refund within 90
days from the date of
application.
• Provisional refund @ 80%
in some cases
• Warranty supplies –
no change in position
• Other FOC supplies
– reversal required
Impact
1
4

Key Scenarios
in the assessable value and duty shall be paid
on the basic value and freight
-EX-Works: The pricing is based on
the transaction value. Such transaction value
shall not contain the freight charges
-VAT: Tax shall be payable at the time of
transfer of property
Sl.
No.
Current Scenario/Issue/Situation GST Implication Action Points
1
Local Sales – Third party • The supply of
goods/services in the customers
course of intra state shall be
where location of supplier and place of supply
are in the same state
JSW Plant Customer
• Transaction value shall be subject to
CGST and SGST
- Excise Duty: The excise duty is currently Section 7(1)
being discharged on removal of goods. The
duty rates are being captured at the time • CGST and SGST shall be
payable on the
of Transaction value
preparation of sales order. Essentially there
are two types of transactions: • Freight shall form part of the
transaction
- FOR basis: Wherein the freight is included value for ex-works as well as FOR
• Pay GST on Transaction Value
SAP Treatment
a. Local sales shall be determined where
supplier and place of supply in the same
state.
b. The transaction value shall include
the freight charges
a. CGST and SGST shall be levied on the
transaction value.
a. No concept of Ex-works and
FOR distinguishing the
transaction
1
5

Key Scenarios
the assessable value and duty shall be paid on the
basic value and freight
b.EX-Works: The pricing is based on
the transaction value. Such transaction value
shall not contain the freight charges
- CST: Tax shall be payable at the time of transfer
of property through inter-state movement of goods.
Further if the same is ex-works transaction, freight
shall not be included in the assessable value
for charging CST
Sl.
No.
• The supply of
goods/services in the
2 Interstate Sales – Third course of inter state
shall be where
party customers location of supplier and place of
supply are in the different state
Customer -JSW Plant
Interstate • Transaction value shall be
subject to
IGST.
- Excise Duty: The excise duty is currently bein • Freight shall form part of the
transaction
g value and there is no differentiation such
discharged on removal of goods. The duty rates are as FOR and Ex-works
being captured at the time of preparation of sales
order.
Essentially there are two
types of transactions:
a. FOR basis: Wherein the freight is included in
• Pay GST on Transaction Value
SAP Treatment
a. Interstate sales shall be determined
where supplier and place of supply are
in the different state.
a. SAP systems shall capture IGST
component at the time of preparation of
the sales order
b. As it is a unified tax system, in the place
of Excise duty and CST, IGST shall be
placed
c. SAP systems shall be modified take
into consideration the freight potion to
be
included in the transaction value
1
6

3
Key Scenarios
Sl. Current Scenario/Issue/Situation GST Implication Action Points
No.
3 Local Sales – Related Parties • Transaction value shall be accepted • Pay GST on
Transaction value determined
when the relationship has not influenced as per valuation
Rules the price.
Related
JSW Plant Party SAP Treatment
• As the relationship has not influenced the
-Rule 9 of the Central excise valuation price, GST shall be applied on the
Rules,2000 related party transaction shall be transaction
value
the normal transaction value at which these are
sold by the related person at the time of
removal to buyers.
-110% of the assessable value is being
considered as the transaction value
for transfers made to the related party
4 Interstate sales –Related Parties • Transaction value shall be accepted • Pay GST
on Transaction value determined
when the relationship has not influenced as per valuation Rules
Interstate the priceJSW Plant Related Party SAP Treatment
• As the relationship has not influenced the
-Rule 9 of the Central excise valuation Rules, price, GST shall be applied on the
2000 related party transaction shall be the transaction value
normal transaction value at which these are
sold by the related person at the time of
removal to buyers.
-Per practice 110% of the assessable value is
being considered as the transaction value for
transfers made to the related party 3
1
7

Key Scenarios
- No payment of duty is being made on the
goods which are being exported.
- Goods are being transferred to port against
ARE- 1, after receipt of bill of lading export
invoice is being raised from Mumbai.
Sl.
No.
5 Export goods from Plant to
port and subsequent export
1
JSW Plant Port
GST to
be
charge
d
2
Zero
rated
supplie
s
Exported to
Foreign customer
Transaction 1-
If plant and port is in same State –
GST shall not be charged.
If Plant and port is in different
State – IGST shall be charged.
Transaction 2-
Subsequent clearance from Port to
foreign customer – GST shall
not be charged since they are
Zero Rated supplies
• Pay GST on Transaction value
depending upon the place of supply
• For Exports: No GST since it is a
zero rated sales.
• Unutilised input tax credit can be claimed
as refund
SAP Treatment
• GST shall be calculated depending upon
the place of supply
- Local transfer- No GST
- Interstate Transfer- IGST
• SAP system should not charge GST on
exports
1
8

Key Scenarios
Stock Transfers
6
Sl.
No.
8 Local Stock Transfers – Same entity • Section 3(2) of the draft Model GST
law read with Schedule II (1) (b)
JSW Plant
Local Sale Stock transfer shall be treated as transfer
Supply. However, supplies made to the same taxable
person shall not
Excise Duty: On removal of the goods to the branches, be liable to GST. Therefore, stock
excise duty is paid transfers within state are not liable
VAT: As there is no transfer of property, taxes shall not to GST
be applicable on branch transfer
At the time of preparing stock transfer order, Applicable
taxes are determined and based on such order PPC
will undertake production. It is noteworthy that the
stock transfer orders are prepared by the branches which
have the material requirement
• GST is not required to discharge
SAP Changes:
• SAP system should not charge
GST on local transfer of goods
and which can be identified based
on GSTN number of taxable
person
9 Interstate Stock Transfers
• Section 3(2) of the draft Model
GST law read with Schedule II
(1) (b)
Interstate
JSW Plant Stock transfer shall be treated as
Supply. Therefore, interstate stock
Excise Duty: On removal of the goods to the branches, transfers are liable to GST
excise duty is paid
CST: As there is no transfer of property, taxes shall not • IGST shall be chargeable on the be
applicable on branch transfer. The inter-state stock transaction value. However,
transfer shall be exempt in the event of furnishing F- transaction value is yet to
be forms prescribed for interstate
stock
At the time of preparing stock transfer order, the
transfers
Applicable taxes are determined and based on such order
• Pay GST on interstate stock
transfer
• Ensure to take credit in all
locations
• Ensure mechanism to take credit
post actual inward of goods
at destination branch
SAP Changes:
• SAP system should charge IGST
on inter state transfer of goods
and which can be identified based
on GSTN number of taxable 3
person

37
Key Scenarios
Sl.
No.
10 Captive Consumption
As per Rule 8 of the Central Excise Valuation Rules, where
the excisable goods are not sold by the assessee but are
used for consumption by him or on his behalf in the
production or manufacture of other articles, the value shall
be one hundred ten per cent of the cost of production or
manufacture of such goods.
For the purpose of self-consumption, 110% of the assessable
value is being captured by the SAP systems
• No specific
provisions have been
made on the captive
consumption part in the
Model GST Law.
• As captive
consumption and
does not
form part
of supply definition,
captive consumption shall
not be
liable to GST
• GST is not liable on captive
consumption
SAP Changes:
• SAP system should modify not to
charge GST on
captive consumptions
11 Free Samples As per schedule II (1)(a) of the
Excise: Duty shall be paid on supply of samples. According to draft model GST law,
any
Rule 4 of Central Excise Valuation Rules, the value of the excisable transfer of the title in
goods goods shall be based on the value of such goods sold by the will be treated as a
supply of assessee for delivery at any other time nearest to the time of the goods.
removal of goods under assessment, subject, if necessary, to such
adjustment on account of the difference in the dates of delivery of No GST shall be charged since
such goods and of the excisable goods under assessment, as may there is no consideration.
Section 3
appear reasonable.
However, Input Tax credit shall
VAT: Since VAT is chargeable normally on the total sum paid or be reversed on such sample
payable to the person supplying the goods, as samples are clearances.
provided for no sum as they are free of cost, VAT liability doesn't
exist on supply of such free samples. However, free samples given
to related parties
would be subjected to GST
• Free samples supplied to related
parties is subjected to GST.
However, no requirement to reverse
ITC
• Free samples supplied to non-
related parties is not subjected to
GST. ITC should be reversed
• Input Tax credit shall be reversed on
such sample clearances.
SAP Changes:
• SAP system should not charge
GST on free samples
• Input tax credit should be
reversed to the extent of goods
2
0

Key Scenarios
CST: In such a scenario, the supplier of the goods charges 2% to
the buyer and send such goods to the consignee. Buyer shall issue
C form to the Supplier and the supplier in order will issue E-1 to
the buyer. Consequently upon receipt of goods, the customer (to
whom goods are shipped) will issue C Form to the buyer and buyer
will charge 0% CST. In exchange of this, the supplier issues Form
E1 to the buyer in order for the buyer to claim CST exemption.
VAT: Aforesaid transactions of subsequent local sales are being
subject to VAT
Excise Duty: Excise duty is chargeable on the value charged by
the supplier
Sl.
No.
12 Bill to one party – Ship
to another party
model
JSW,
Toranagallu
Ship To
GST Invoice Bill To
XYZ, H.O, GST Invoice XYZ, B.O,
Bangalore Bangalore
Bill To
• Section 7 of IGST Law -
where the goods are delivered
by the supplier to recipient
on the directions of third
party. The place of provision of
such service shall be the
principal place of business of
the third party
• In this case, CGST and SGST
shall be payable since the
place of business of third party
is in Karnataka.
Pay GST on the transaction value
SAP Changes:
• SAP system should charge GST
based on billing address of
third party instead of shipping
address
• Input tax credit can be availed by
“ sold-to party” and
set-off against output liability
2
1

Key Scenarios
CST: In such a scenario, the supplier of the goods charges 2% to
the buyer and send such goods to the consignee. Buyer shall issue
C form to the Supplier and the supplier in order will issue E-1 to
the buyer. Consequently upon receipt of goods, the customer (to
whom goods are shipped) will issue C Form to the buyer
and buyer will charge 0% CST. In exchange of this, the supplier
issues Form E1 to the buyer in order for the buyer to claim
CST exemption.
VAT: Aforesaid transactions of subsequent local sales are being
subject to VAT
Excise Duty: Excise duty is chargeable on the value charged by
the
supplier
Sl.
No.
12
GST
In
Bill to one party – Ship to
another party model
JSW,
Toranagallu
Ship To
voice Bill To
XYZ, H.O, GST Invoice XYZ, B.O,
Chennai Bangalore
Bill To
• Section 7 of IGST Law - where
the goods are delivered by the
supplier to recipient on the
directions of third party.
The place of provision of
such service shall be the
principal place of business
of the third party
• In this case, IGST shall be
payable since the place
of business of third party is
in Tamil Nadu.
Pay GST on the transaction value
SAP Changes:
• SAP system should charge GST
based on billing address of
third party instead of shipping
address
• Input tax credit can be availed by
“ sold-to party” and
set-off against output liability
2
2

41
Key Scenarios
Sl.
No.
12 Receipt of Advances Tax shall be applicable on the
Excise: is a levy on manufacture of goods and collection is receipt of advance.
upon removal - Section 4(1) of the Central Excise Act and
Rule 4 of the Central Excise Rules. Since there is no condition Even if the invoice is not
raised, of receipt of consideration, Excise duty is liable to be paid only tax shall stand to be
payable on on removal on goods. No influence as to receipt of receipt of advance
consideration for levy of excise.
VAT: It shall be chargeable on the transfer of property from
JSW to the buyer. Hence receipt of advance doesn't play a
pivotal role in VAT
Service tax: point of taxation is explicit that service tax shall
be applicable on receipt of advance or raising of the Invoice.
Discounts
GST is required to discharge on
advances. However, credit shall
be available only when the goods
have been received
SAP Treatment
On receipt of advance irrespective
of supply of goods:
a.If received from customer
located within the state: SGST
and CGST shall be applicable
a.If received from customer
located outside the state: IGST
shall be applicable
13 Excise: No excise duty on the discount amount as per Section Section 15 (3) of MGL-
GST shall
4 of the Central Excise Act. be charged on TV but does not
include Discount that is given-
Allowed as deduction if such discount is as per the contractual - Before / at the time of
supply
agreement for sale or agreed at the time of sale. and such discount recorded in the
VAT: According to Rule 3(2)(c ) of the KVAT Rules, the invoice
discount must be shown on the face of the invoice - after supply, if
provided in
terms of agreement, with a nexus
to original invoice.
- Recipient shall
reverse the credit
as is
Discounts appearing in the invoice
shall be deducted.
It is advisable to have nexus with
the sales order.
SAP Treatment
SAP System shall deduct value of
discount from Transaction value
where nexus is available between
credit note and invoice
2
3

Key Scenarios
Sl.
No.
14 Clearance to Job-work Section 55 provides that -
Excise: If the process amounts to manufacture/deemed a. Inputs sent for job work shall be
manufacture, job worker would be liable to pay duty received back within one year;
unless principal manufacturer who has supplied him the b. Capital goods (other than Jigs,
goods for job work, under a challan - Notification No. fixtures, dies, moulds or tools), to be
214/86 dated 25.03.1986, received back within three
years;
Goods have to be returned by the job worker within a
period of 180 days. If the job worker doesn't return c. Inputs / capital goods can be supplied
within time limit, manufacturer shall reverse credit to from such job worker premises to
final such extent. However credit can be claimed back after customer upon payment of duty
within the goods are received back by the manufacturer the time limit specified above.
Service Tax: As per Section 66D(f) of the Finance
Act,1994 any process amounting to manufacture or Section 175, 176 and 177
–
production of goods is not a taxable service. According where any inputs / Semi finished goods/
to Notification no.25/2012 dt 20.06.2012, if the process finished goods removed for job work
or carried out by the job worker doesn't amount to further processing before the
appointed manufacture the same shall be exempted if the day and such goods are
returned on or manufacturer discharges appropriate duty after the appointed day,
no tax shall be
payable if returned within six months
VAT: As there is no transfer in the property of goods, from the appointed day.
VAT shall not be liable on the job work carried out Six months can be extended for a further
period of not more than two months).
If such goods are not returned even
in such extended period from the
appointed day, input tax credit shall be
liable to be recovered.
▪ It is required to add Job
worker premises as
additional place of business
in JSW registration if JSW
wants to clear the goods
from job workers premises.
SAP Treatment
• Need to make necessary
changes in SAP system to
identify goods which are not
returned within 1 year for
inputs and 3 years for
capital goods
2
4

Key Scenarios
Sl. Current Scenario/Issue/Situation
No.
GST Implication Action Points
15 Tax invoice/bill of sales/job-work/stock transfer
notes
Excise: Rule 11 of the Central Excise Rules, goods must be
removed on invoice, signed by the owner of the
factory/authorized agent.
Invoice shall be serially numbered and shall contain regn. no,
address of concerned CE Division, name of consignee,
description, classification, time and date of removal, mode of
transport and vehicle, regn. no, rate of duty, quantity and
value, of goods and duty payable thereon.
VAT: According to Section 29 of the KVAT Act, tax invoices
and bills of sale must be issued at the time of sale, marked as
original for the sale, containing the particulars prescribed.
Section 28 provides that - SAP treatment
1.Invoice must be raised at a. Ensure details(as specified) to
be the time of removal of reflected
in invoice
goods. b. Ensure to issue a tax invoice before
2.System should report in or at the time of removal of goods
for case goods removed without supply to recipient or delivery of
goods raising an invoice. or making available thereof to the
3. Further, the system also recipient.
should raise invoice on the c. Check if supply is made by
procurement of goods/ unregistered
person, in such case,
services under RCM which is taxable person shall issue invoice in
to be notified respect of goods received by him on
the date of receipt of goods/services16 Waybill requirement for dispatch of finished goods Rules and notifications are
VAT: e-Sugam is procedure set by Commercial Taxes yet to be issued in this
Department of Karnataka for all dealers who are transporting regard.
designated goods worth over Rs. 20,000 to other dealers and
upload the same in the department's website and obtain a
unique number as proof of uploading such transporting details.
The unique number thus obtained shall be produced to the
check post officer on reaching a check post. Thus a dealer/
trader before dispatching goods by a carrier, first uploads each
transaction details onto the website electronically, obtains an
acknowledgment, e-sugam for having uploaded and then uses
this e-sugam as a valid document for transportation of goods. 2
5

Key Scenarios
Sl.
No.
17 Goods return/rejection procedure
VAT: Under Rule 3(2)(d) and (e) of KVAT Act,
amounts are allowed to purchasers and all
amounts received from seller in respect of goods
returned to them by the dealer are allowed as
deductions from the total turnover in order to
determine taxable turnover - provided if goods are
returned within a period of six months from date
of delivery of goods and accounts show the date
on which the goods wer returned.
CST: Rule 8-A of CST Rules, sale price of all the
goo returned to dealer by purchaser of such goods
is allowed within a period of six months from the
date delivery of goods.
a. Issuance of Credit notes under
Section
31 is permitted in case where
goods supplied are returned.
b. Section. 173 provides that no tax
shall be payable in case goods
which were exempted under earlier
law not being earlier than six months
prior to appointed date, are returned
within six months from
e appointed date, no tax shall be
payable thereon.
c. Section 174 provides that in case
the
ds goods wherein duty was paid under earlier
law not being earlier than six months prior
of to appointed date, are returned within
six months from appointed date, such tax
paid earlier shall be claimed as refund
1.Credit note needs to be issued
on or before the month of
September following the end of
the year in which supply was
made.
1.Credit note and Debit note
shall mention corresponding
original invoice reference
SAP Treatment
changes in SAP system
with respect to issuance of
credit note/debit note
details
18
Reimbursement
Reimbursement expenses to be included in the
value to charge service tax as per the explanation
(a) to Section 67. Although, it is a litigious as to
whether sharing of costs/expenses/revenue
between group companies attracts service tax.
Section 15(2) "Value
of supply" shall include
any amount that supplier is liable to pay
in relation to such supply which has
been incurred by the recipient of the
supply and not included in the price
actually paid or payable for the goods
and/or services. Also includes incidental
expenses such as commission and
packing, charged by the supplier to the
recipient
Reimbursement expenses shall
be included in transaction
value.
SAP Treatment
Need to make necessary
changes in the system to
include reimbursement
expenses for computing GST 2
6

Key Scenarios
Sl.
No.
19 Sale of Fixed Assets The assets of a business are transferred
Section 3(5A)(a) of CCR, if capital goods on or disposed of by or under the directions
which CENVAT credit has been taken, are of the person carrying on the business so
removed after being used, the manufacturer or as no longer to
form part of those
provider of output services shall pay an amount assets, whether or not
for a
equal to the CENVAT credit taken on the said consideration, such transfer or disposal is
capital goods reduced by the percentage points a supply of goods by the person.
calculated by straight line method as specified (in
the same section) for each quarter of a year or
part thereof from the date of taking the CENVAT
credit.
JSW is required to discharge GST on
sale of fixed assets such sale of cars,
machinery, ets.
20 Trading of Goods a. GST is
based on supply of goods or/and
services.
VAT: is payable since it is a sale and "sale"
means every transfer of the property in goods by b. levy of GST
attracts if following one person to another in course of trade or
conditions satisfy as to whether : business for cash or for deferred payment of
- supply is goods/services
other valuable consideration. - supply is for consideration
-supply is made in
the course of
furtherance of business
- supply is made in the taxable territory;
- supply is made by a taxable person
- inter state supply (stock transfer) is
made.
JSW is required to discharge GST on
sale of fixed assets such sale of cars,
machinery, ets
2
7

Key Scenarios
Sl.
No.
21 Sale of Scrap – Manufacture Sale of scrap shall be considered as Supply and GST
Excise: If the scrap is generated as an outcome shall be accordingly applicable.
of process of manufacture, excise duty is being
levied on the scrap a. Local Supply of Scrap: SGST/CGSTshall
be
applicable
VAT: As there is a transfer of property, scrap
sales are liable to VAT b. Inter-state Supply: IGST shall be applicable
Pay GST on the
Transaction value.
22 Sale of Scrap– Non-Manufacture
VAT: As there is a transfer of property, scrap
sales are liable to VAT
Sale of scrap shall be considered as Supply and GST
shall be accordingly applicable.
a.Local Supply of Scrap:
SGST/CGSTshall be applicable
a. Inter-state Supply: IGST shall be applicable
Pay GST on the
Transaction value.
22 Treatment of Dharmada
Dharmada charges are currently not forming
part of the transaction value as the same is
collected for certain charitable purposes
Section 2(28) of draft MGL, Consideration includes
- any payment made or to be made,
- whether in money or otherwise, in respect of,
- in response to, or for the inducement of, the supply
of goods or services, whether by the recipient or by
any other person
- but shall not include any subsidy given by the
Central Government or a State Government;
- the monetary value of any act or forbearance,
whether or not voluntary, in respect of, in response
to, or for the inducement of, the supply of goods or
services, whether by the recipient or by any
other person but shall not include any subsidy
given by the Central Government or a State
Government:
Value of Dharmada
charges shall be included
from the transaction
value for computation of
GST
SAP Changes:
Need to make changes in the
system to include
dharmada charges in the
transaction value
2
8

Key Scenarios
Sl.
No.
23 Sale of Exempted goods
Excise: Goods shall not be subject to
excise duty and CENVAT credit per 6(3)
shall be reversed as the goods
manufactured as exempted
VAT: If goods are exempted from payment
of VAT, input tax credit against the
purchases made shall not be eligible
Section 17(2) of the MGL, input credit shall
not be available on exempted supplies
a.Value shall be established as to the
inputs utilised for the production of
exempted goods
a.Input GST credit shall not be availed
for utilisation into production/supply
of exempted goods
24 Liquidated damages
Service tax is being levied on the
damages collected and invoice too is
raised for collection of such damages
Schedule II of GST is likely to be levied, as
the consideration is received in lieu of
the supply of goods/ services
If the damages is received from a
local party: SGST & CGST
If the damages is received from
inter-state party: IGST is levied
25 Royalty charges
Service tax is being levied on the royalty
collected and invoice is raised for collection
of such royalty
Service tax is being levied on the
royalty collected and invoice is raised for
collection of such royalty
If the royalty is received from a
local party: SGST & CGST
If the royalty is received from a
interstate party: IGST is levied
26 Donation and Sponsorship
Activities carried out without any
consideration like donation are outside the
ambit of service tax. Service tax is liable to
be paid on sponsorship services, by the
recipient of such service in terms of Rule
2(1)(d)(C ) of Service Tax Rules.
Donation and charities would be outside the
GST ambit.
Sponsorship Services – whether these would
fall under reverse charge ? (Services
on which reverse charge would be applicable
is yet to be notified)
2
9

Key Scenarios
Sl.
No.
30 Applicability of GST on
security Deposit
Presently security deposits are not liable
to under indirect taxes provisions
• As per Section 2(28) deposit
whether refundable or not shall be not be
considered as payment towards supply unless
such deposit is
tax applied towards consideration for supply
• GST may not be discharged on
security deposits. However, if such
deposit is appropriated towards
consideration for supply before issuance of
invoice, GST has to be discharged against
the deposits to the extent appropriated.
a. Security deposits are not liable to
be taxed unless such amount is
appropriated towards consideration.
SAP Changes:
• No need to make any changes in
the SAP as such security deposit is
not chargeable to tax presently
31 Operational lease charges
VAT is being discharged on operational lease
charges as control and procession with lease
• Supply of goods to third party without transfer
of ownership in the same would amount
to supply of service. Hence, GST rate
as applicable to service would be applicable
on consideration received from the lessee.
Further, the time of supply of such service
would be earlier of:-
– date of issue of invoice; or
– date of receipt of payment
• GST is to be paid at the time of supply.
Further, operating lease if more than 3 months
may be treated as continuous supply of service
and the point of tax shall be earlier of:
– Issuance of invoice: Invoice to be issued
within prescribed time from the date
when the payment is liable to
be made per
contract
– Date of receipt of payment
GST invoice shall be raised based on
point of taxation
SAP Changes:
SAP system shall be modified to
charge GST based on location of lease
3
0

50
Key Scenarios
Sl.
No.
Current
Scenario/Issue/Situatio
n
GST Implication Action Points
32 Deemed Exports
Presently taxes are not liable
on deemed exports as the
goods are removed for exports
No exemption have been provided for penultimate sale or
deemed export in respect of GST
However, the exports are zero rated by way of refund
of taxes. The ultimate exporter would be eligible to
claim refund of GST paid by him to the suppliers.
Hence, It may be likely , that the supplier will have
to discharge GST / IGST on goods supplied to a third
party who will ultimately export. The ultimate exporter will
in that case be eligible to claim refund of the GST/IGST
paid to the supplier.
GST to be charged in respect of
deemed exports and exporter to claim
refund of taxes upon fulfillment of
conditions.
SAP Changes:
charge GST on deemed exports
33 Financial leasing
Service Tax is being discharged
on financial lease charges
Entry c of Sl. No.1 of Schedule II of Revised MGL reads
as follows:-
“Any transfer of title in goods under an arrangement which
stipulates that property in goods will pass at a future date
upon payment of full consideration as agreed, is a supply
of goods.”
Implication:
• The transaction would be treated as supply of goods
the customer. Hence, GST would be applicable on the
same.
• Further, the point of supply to be determined as per
Section 12 of Revised GST Law, the point of supply
of
service would be earlier of the following two events:-
• Raising of invoice; or
GST invoice shall be raised based
on point of taxation
SAP Changes:
charge GST based on point of taxation
3
1

Key Scenarios
Sl. Current GST Implication Action Points
No. Scenario/Issue/Situation
34 Entry tax on petroleum products Section 164- Entry Tax Act is repealed. Hence, Entry Tax Entry tax shall be repealed as per
may not be levied on petroleum goods i.e., petroleum RMGL. Hence, Entry Tax may not be
crude, high speed diesel, motor spirit (commonly known as levied on petroleum goodsEntry tax is liable on petroleum petrol), natural gas, aviation turbine fuel
goods SAP Changes:
As JSW is passing manual entry with
regard to entry, no need to make
any changes in the SAP system
35 Credit on inputs lost • ITC shall not be available on goods lost, stolen, No credit shall be availed on goods
destroyed, written off or disposed of by way of gift or free lost, stolen, destroyed and written off
samples. or disposed of
Credits shall not be available on
goods which lost before put to use • No limit has been defined in the MGL for permissible loss.
for manufacture
3
2

Key Scenarios
Sl.
No.
36 Procedure for availing credit - a. As per section 16(2) of the RMGL, credit
Inputs has to be availed
upon:
- possession of tax paying document.
VAT: Input tax credit shall be availed on the goods - ensure receipt of goods /
service.
which are purchased during month and preceding five - Tax has been discharged to
the
tax periods subject to restrictions provided under appropriate
government
Karnataka VAT Act, 2003 - Return has been furnished under section
CST: Input tax credit of CST paid on goods purchased
34
shall not be available as credit b. Input tax credit shall be availed on
all Excise Duty: Excise duty paid on inputs and capital goods including capital goods, which
are goods shall be eligible as credit subject to condition used in the course or
furtherance of that said goods are received by the manufacturer business. The list of input
services and
Service Tax: Service tax paid on input services shall goods which are not eligible for credit
is
be eligible as credit subject to conditions specified listed in Annexure
1
under service tax provisions.
c. Compare every input invoice with the
Input tax credit register to ensure input tax
credit has been availed within the time limit
of one year.
d. Identify ineligible inputs that restricted.
1.Input tax credit should be
availed upon receipt of
goods and invoice copy .
1.It is advisable to hold
payment to the extent of tax
amount till supplier reports his
sales in the return.
SAP Treatment
changes in SAP system with
respect to details of
requirement for availing
input tax credit
• SAP system shall identify
and sent e-mail to supplier
where input tax credits are
not matching
3
3

Key Scenarios
Sl.
No.
37 Procurements from unregistered On the basis of combined reading Section 8
dealers read with Section 28 (3)(d) of the model GST
law, notified goods are purchased from
Input Tax Credit of Excise Duty & Service Tax is unregistered dealers are liable to tax under
not available if the goods are procured from reverse charge mechanism.
unregistered dealers
The person procuring the goods/ services
from unregistered dealers shall issue a tax
In the event of VAT credit, the tax has to be paid in invoice
cash by the person procuring the goods and then can
be taken as credit
1. The payment related o
procurements from unregistered
dealers needs to be separately
mapped (distinct from output
tax on outward supplies) in
order to ensure availment of
input tax credit
SAP Treatment
• System should raise an
invoice upon procurement of
goods from an unregistered
dealer and report as tax
payable.
38 Issue of debit notes
Supplementary invoice is issued in place of the
debit note. Relevant excise duty and VAT/CST is
charged on the face of invoice
As per sec 31 of RGML, in case of invoice
value of goods is less than the taxable value,
debit note/ supplementary invoice needs to
be issued along with the requisite taxes
Debit note/ supplementary invoice shall
also include the original invoice reference,
value and the relevant tax amount
SAP Treatment
• Create Debit note/
supplementary invoice as and
when there is a price
difference / Purchase returns.
• Debit notes/ supplementary
invoice shall be raised on
unique serial number and shall
correlate with the original
invoice.
3
4

Key Scenarios
Sl.
No.
39 Goods Sent on Job work
The goods being sent for the purpose of job work
are removed through excise challan/ payment of
excise duty
Section 55(3) of the CGST/SGST
act:
a.Inputs sent for job work shall be received
back within one year;
a.In case of Capital goods (other than Jigs,
fixtures, dies, moulds or tools), the same shall
be received back within three years;
a.Inputs / capital goods can be supplied from
such job worker premises to final
customer upon payment of duty within the
time limit specified above.
SAP Treatment
• System shall track the
report to the Tax division
about non receipt
of
goods beyond
the
time
limit
of 1
year/ 3 years as specified
• Reverses ITC
inputs/captital goods not
received within 1 year/ 3
years
40 Import of services
Service tax is being discharged under reverse
charge for import of services and subsequently
credit is being availed in terms of CENVAT
Credit Rules, 2004
Import of services are considered as inter
state supplies and is subjected to IGST as per
section 3 (3) of IGST Act
SAP Treatment
• Where the address of the
supplier on record is other
than India, IGST shall be
applied and transferred to
IGST payable account
3
5

Key Scenarios
Sl.
No.
41 Purchase Order
Currently PO is capturing the excise duty, CST is
based on the inter-state purchases, VAT is being
charged on the intra-state purchases
In addition to the details mentioned in the
PO, the following details also needs to be
incorporated –
1. HSN number for goods
2. SAC for services
2. Type of taxes - CGST and SGST or IGST
3. GSTIN number of Recipient and supplier
4. Address of delivery and Invoice address.
5. GST Compliance rating of the supplier
Purchase terms shall explicitly condition that
payment shall be released to the vendor
once sales made to JSW are being reported
in the GST returns to be filed by the vendor
Incorporate the following fields
in Purchase order –
1. HSN number for goods
2. SAC for services
3. Type of taxes - CGST
and SGST or IGST
4. GSTIN number of Recipient
and supplier
5. Address of delivery and
Invoice address.
6. GST Compliance rating of the
supplier
42 Reversal of CENVAT Credit
Currently input tax credit is being reversed for
the purpose of provision created in the books of
accounts at the end of the month and is being
availed back per Rule 3(5)(b) of the CCR,2004
As per section 17(4)(g) of the RMGL input
tax credit is liable to be reversed if the goods
are lost, stolen, written-off or destroyed
System shall reverse the credit
only in the event of:
a. Written off and not
provisioning
b. Goods lost
c. Goods stolen
d. Goods destroyed
SAP Treatment
• CGST and SGST credit shall be
reversed to the proportion of
the write-off, goods
lost/stolen/destroyed 3
6

Key Scenarios
Sl.
No.
48
Ineligible Credits
Credit on the following services are not being
availed presently-
1.Rent a Cab services
1. Health Insurance policies
1.Expenditure incurred for Employees' personal
use / consumption
List of ineligible credits is listed out in
Annexure 1
SGST /CGST/ IGST credit shall
be availed on the eligible
items
49 Cross charges of expenses
Service tax is being discharged under reverse
charge mechanism for cross charge of expenses t
the overseas related entities and subsequently
credit is being availed
On reading of Schedule I with Section 10 of the
RGML, it is inferred that, cross charges between
related parties would be construed as supply
o and subjected to GST
IGST shall be paid under reverse
charge at the time when expenses
are booked related to cross charges
between related entities
3
7

GST Impact on benefits provided to employees
• The term supply is very wide and covers certain activities that are supplied even without consideration
• As per Section 3 read with Schedule I, it is deemed that, supply of service even if made with/ without consideration would be considered
as supply
• 'Schedule I' clearly provides that any supply of goods or services between related persons as specified in Section 10 when made in
the course of business would be considered as supply
• The term 'Related persons' inter-alia includes employer and employee
• It is also to be noted that 'Schedule III (Activities not considered as supply of goods/ service)' covers only those services which
are provided by employee to employer in the course of employment and not vice versa
• Implications summarized below:
Consideration paid to employees forming part of CTC:
• Services by an employee to the employer in the course of or in relation to his employment would NOT be subjected to GST
• Hence recovery of amounts such as club membership, Insurance-Employees's Parents, Transportation, Sodexo etc. forming part of CTC
would not be subjected to GST
Consideration paid to employees not forming part of CTC:
• Benefits provided by employer to employee not forming part of CTC may be considered as supply and subject to GST
• Hence JSW may closely analyse facilities provided to employees such as Consultant fees paid post retirement of employees, Recovery of
amounts from employees in relation to notice period etc. for applicability of GST liability
3
8

Ineligible Credits under GST Annexure - 1
Sl.
No.
Input Credit Restricted items Detailed description
1 Motor vehicles and
other conveyances
This is ineligible except below:
• When used for making further supply of such vehicles or conveyances, or transportation of
passengers, or imparting training on driving, flying, navigating such vehicles or conveyances.
• When used for transportation of goods.
2 Supply of certain
goods and
services
Namely:
• food and beverages, outdoor catering, beauty treatment, health services, cosmetic
and plastic surgery except when it is used by a registered taxable person for making an
outward taxable supply of the same category of goods or services.
• Membership of a club, health and fitness centre.
• Rent-a-Cab, Employee Life Insurance and Employee Health Insurance are generally
ineligible, however the same is eligible for availment of ITC to the extent the same is
mandatory facility as per law.
• Travel benefits extended to employees on vacation such as leave or home travel concession.
3 Works Contract services When supplied for construction of immovable property, other than plant and machinery, except
when it is used for furtherance of business
4 Goods and services received for
construction of
immovable property on their own
Goods or services received by a taxable person for construction of an immovable property on
his own account, other than plant and machinery, even when used in course of business.
5 Others • Goods and/or services on which tax has been paid under section 9 or used for
personal consumption.
• Goods lost, stolen, destroyed, written off or disposed by way of gift or free samples
• Any tax paid in terms of sections 67, 89 or 90 of RGML.
3
9

Transitional provisions
Sl.
No.
Particulars Summary of Provision Action Points
1 Migration -
Provision
not
Automatic
(Section 166)
• Provisional registration valid for 6 months
• Above to be regularized within
6 months, else registration gets
cancelled
• Enroll with GSTN
• Filter out vendors not enrolled with GSTN and
consider discontinuing procurement from such person
• For this revisit the inventory policy to maximize
the GST benefit
2 Carry forward
of Input Credit
(Section 167)
• Allowed only if taxes on procurement are eligible for
credit under both pre-GST and GST scenario
• Ensure error free closing balance of pre-GST ITC
• Re-consider disputed ITC – to charge off or continue -
interest exposure even if not utilised
3 Unavailed credits of
Capital Goods
(Section 168)
• Can be availed post GST (subject to its eligibility-Pre
GST)
• Ensure error free closing balance of pre-GST ITC
• Take balance ITC post GST roll out
4 Input Credit on
Stock
(Section 169)
• Available for manufacturer/Excise Regd. dealer
• Eligibility of VAT dealers not registered under Excise –
clarity awaited
• Explore possibility of excise registration – since no
clarity on credit carry forward for VAT dealers
5 Purchased Goods
in Transit:
(Section 171)
• Pre GST credit available if recorded within 30 days of
GST roll out date
• Prescribed statement shall be furnished
• Separately track procurement invoices /
payment details pertaining to pre-GST
• Ensure to get Invoice and avail credit within 30 days
4
0

Transitional provisions (contd…)
Sl.
No.
Particulars Summary of Provision Action Points
6 Price revision
w.r.t. Pre GST sales
(Section 178)
• Upward revision - GST applicable
• Downward revision - GST liability deductible
• Recipient to reduces corresponding input credit
•Ensure the time limit to avoid any monetary losses
(supplementary invoice/debit/credit note to be issued
within 30 days of price revision)
• In case of price reduction ensure customer also
reverses the corresponding ITC
7 Existing Litigation
(Section 183)
• Would be assessed as per the provisions of the earlier
law
• Identify whether issues are recurring or non-recurring
• If recurring worth to revisit the position taken in
the light of the proposed law
8 Periodic
supply/progressiv
e supply
(Section 187)
• GST applicable to the extent of supplies made
after GST rollout date
• Identify and track installment
supplies/periodic supplies stretching over both
pre GST and GST regime
9 ST credit reversed
pre GST for non
payment to vendor:
(Section 197)
• Time limit of 3 months from GST roll out date
to make vendor payment and reclaim credit
• Ensure that payments are made with in 3 months in
current regime also
• In case missed ensure that payment is made within 3
months and ITC is availed
10 Open Purchase
Orders
- • Take inventory of all open purchase orders
• Segregate those Purchase Orders against which
goods have been dispatched (but in transit)
• Cancel/Migrate other purchase orders with new
tax types
4
1

Impact on contingent liabilities- Recurring Issues under GST
Impact on contingent liabilities- Non-recurring Issues
Issue Present Scenario GST Scenario Impact
COREX Gas Department has contended that COREX gas was
classifiable under chapter heading 2811.90 as
"Carbon Monoxide“. However JSW contends
that such gas shall form under Chapter 2705
The goods shall be governed by the HSN classification
under GST. If the relevant Chapter heading
continues, litigation shall exist.
Cost
Structural’ s cleared by JSSL JSW had removed the goods under Notification No.
67/1995 C.E. to JSSL without payment of duty.
Department contended that as final structures
were non-excisable, exemption notification can’t
be applied
If JSW Steels subsequently capitalizes such structures
in the books of accounts, the same can be considered
as capital goods. However, if it relates to construction of
immovable proper, credit would not eligible
Cost
Excise Duty on
Incentives
Department has contended that VAT refund is
an additional consideration which was not added
to the transaction value
Value of Supply shall not include the subsidies
provided by the Central and State
Government
Positive
Clearance of HR
Coils to Vasind, Tarapur
JSW was removing to the associated
enterprises at 110% of the assessable value.
However, department contends that nearest
sales price shall apply
As in the revised draft law, Valuation rules have
not been prescribed, there is lack of clarity
Positive
Reversal of input tax credit
on provision for slow
moving/non moving goods
CENVAT credit to be reversed, if the input/
capital goods has been provisionally written-off
partially or fully in the books of accounts
Credit shall not be available w.r.t goods written off in
the books of accounts
Positive
4
2

Impact on contingent liabilities- Non- recurring issues
Credit reversal on supplies
to SEZ
Reversal of Excise duty for material
cleared to SEZ
developer/contractor
● Supply of goods and/or services to a SEZ developer
or an SEZ unit is considered as a ‘Zero rated
supply’.
● Credit of input tax can be availed for making zero-
rated supplies.
Positive
Credit on power plant goods Department contends that credit can’t be
availed by JSW Steels as the goods are
installed at JSW Energy Ltd.
Goods can be termed as Capital goods if the same is
capitalized in the books of accounts
Positive
Credit on Structural
Material’s
Credit on structural materials and
pipelines is a litigious issue in light of the
larger bench decision of Vandana Global.
Credit is allowed on ‘Plant and Machinery’ which
means apparatus, equipment, machinery,
pipelines etc. and includes goods in the nature of
structural support, used for making outward
supply.
Positive
Credit on welding electrodes As the welding electrodes are used for
the purpose of repair and maintenance,
credit on the same can’t be availed
Unlike excise provision, wherein the CENVAT credit
can be taken on usage of input for manufacture of
goods. Input GST credit can be availed if used in
“the course or furtherance of business”
Positive
4
3

1.In which type of sale (Intrastate/Interstate) JSW will get maximum benefit in GST Regime? Considering strategic location of their depots?
Answer: On a wholesome perspective, Interstate supply shall fetch more advantage as currently JSW Steel is taking such uncreditable CST as
cost to the NSR. However, in future there shall be seamless flow of credit and to such extent NSR shall stand to be increased.
2. Does Company required to maintain HSN codes for goods as well as services?
Answer: It is essential to identify the HSN Codes for each of the products and services as product details along with HSN code are required to be
uploaded at the time of filing returns.
3.Whether CGST, SGST/IGST is applicable on Freight charges? There are different processes in JSW, as per incoterms so what is the impact on
freight?
Answer: Freight is subject to GST. Hence such freight shall be included in the transaction value for the purpose of calculating SGST/CGST (in
case of local sale) and IGST (in case of Inter-State Sale)
4. As in GST regime there is benefit of Tax is transferred from Ship to party to Bill to Party, any strong reason for this change?
Answer: Currently there is no availability of credit for the CST transaction where the “Bill to Ship to” model is prominent and exemption is
granted on such transactions in the means of E-1 and E-2 forms issued. However the “Bill to party” concept was introduced in light of the
consumption state getting the portion of tax and as well the Billing party to avail the benefit of credit. Further such credit availed by the
Billing party can be passed on to their Customer, thereby making seamless flow of credit.
5.In current Regime Excise number range need to be declared with Excise Authorities at the beginning of the year, in GST regime does JSW has
to declare GST number range with GST authorities?
Answer: The procedure is yet to be prescribed by the GST authorities.
6.JSW has 8 plants/Depots in Maharashtra for Steel and Coated business (Belong to different company codes-Diff legal entities) so in GST
regime can they go for State wise single GST registration number? Or they have to apply Legal entity wise GST registration number? What
if the depot is common for steel and coated?
Answer: They have to apply Legal entity wise GST registration number. Further, the common depot shall be considered as Additional place
of business in the JSW Steel and JSW Coated registration
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7.Format for uploading returns on E Sugam portal in GST regime required?
Answer: All the returns are required to be uploaded in GST portal.
8.At Dolvi plant ED is calculated and charged on 110% 0f Basic price to get Benefit of VAT, so going forward will Dolvi plant get VAT benefit in
GST regime?
Answer: The rules are yet to be prescribed with regards to valuation of goods
9. Will C form and F Form continue in GST regime? Is there any new forms introduced by Govt of India?
Answer: There will be no role of forms for availing exemptions/concessions in the GST regime.
10.Currently JSW is printing invoice on preprinted stationary across different plants with different formats, in GST regime JSW is planning to
have same GST invoice across all plants, so is Format of GST invoice is fixed (if yes then pls share copy) across India?
Answer: Invoice shall be maintained as prescribed under the GST provisions. Copy of the invoice is attached as Annexure..
11. Currently there is concept of Non-excisable plants, will same concept continue and have plants without GST registration numbers? Post GST
can depots become manufacturing unit by default.
Answer: Irrespective of the depots and plants, the Supply shall determine the applicability of GST.
12.If one plant of JSW is sending goods to another plant having same GST number for job work, so will JSW get benefit of not paying GST as
both plants have same GST registration numbers?
Answer: The Job work treatment shall equally remain same, wherein against a challan goods are removed to the Job worker premises. However
it must be noted that the Job worker premises shall be mentioned as additional place of business in the plant registration.
13. Currently JSW is maintaining RG1 and RG23D registers, going forward, how many Registers they have to maintain?
Answer: Under the GST regime JSW needs to maintain the following
registers: Sales Register
Purchase Register
Debit Note Register
Credit Note Register
Stock transfer
register GST credit
register
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14. In current scenario JSW is sending goods to their depots with min Base price(LSP) and ED was calculated on that with RG23D register, and
goods were sold from depot with reference of excise invoice from plant, going forward in GST regime will same GST value to be applied on sale
from depot? Also if my Sale price from Depot is more than sale price of manufacturing plant so what will happen to differential amount of GST?
Answer: We are awaiting the valuation rules for confirmation on the transaction.
15What will happen to Balances for RG1/RG23D registers?
Answer: Credit balances shall be transitioned to GST. Excise duty/ Service tax credit shall be moved to CGST credit and VAT credit shall move
to SGST credit.
16.Currently at JSW Export Port yard is created and stock is transferred from MFG plant to Port yard with Zero ED and commercial invoice is
generated from stock yard when actual shipment happens, going forward if I am sending stock from Vijaynagar to Port yard in Maharashtra,
JSW has to pay IGST and take credit, but Export turnover of JSW is 20% of their total sale, so to get refund is complex process and lot of
revenue is blocked at Govt, so is there any workaround to save GST in case of this scenario?
Answer: It is advisable to generate Export invoice directly from manufacturing plant, in case of transferring goods from Mfg. plant to Stock
yard will attract GST, refund of same can be taken by manufacturing plant.
17. Whether Deemed export will attract CGST, SGST and later when sale happen from Deemed export customer, refund can be taken, so will
same continue for mega exemption/CT1/CT2/CT3/E45? as SEZ customers will be treated as zero Tax.
Answer: SEZ sale will be zero tax(GST) whereas, Deemed export sale will be with GST, as JSW cannot take refund in this case but
Deemed export customer can take credit so JSW can negotiate on Price when they sell to Deemed Export customer.
18.At JSW there is a scenario where Goods are sold to Customer in Delhi from Vijaynagar plant, due to some reasons return happens to Delhi
depot, is there any legal issues in returning goods to Delhi depot? i.e., Going forward ship to party will be Delhi depot and GST partner will be
Vijaynagar to nullify GST. Sale on ED pre GST and return on IGST?
Answer: As per section 174 of the model GST law, if the goods are issued through payment of duty as per the current indirect tax laws and
are subsequently (after GST) returned by registered dealer, it shall be considered as Supply by such registered dealer and liable to GST. So
the registered dealer returning the goods to Delhi Depot shall treat the “transaction of return” as Supply.
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19.What will happen to old orders with ED with 16% charged on customers and return happens after 1st july with 14% GST, what will happen
to differential amount of tax?
Answer: The Customer would have availed credit @ 16%, on returning the registered dealer shall charge 14% on the transaction and JSW
can accordingly avail the credit
20. Can JSW claim refund for GST for Rebate (discount given to customer after sale) on Credit notes?
Answer: No process of claiming refund. The differential portion of tax shall be adjusted in the credit note
21. Does entity wise GST registration or state wise are required?
Answer: JSW shall take entity wise state GST registration as the CGST, SGST and IGST credits can only be set-off within the specific state
22. How to handle opening stock at depots? Open ED and VAT credits?
Answer: All the ED and VAT credit on the opening stock shall be accordingly navigated to CGST, SGST and IGST credits
23. What will be impact of GST on ARE1, ARE2, ARE3 and SEZ as compared to current setup.
Answer: Forms similar to the Current indirect taxation system to be introduced for the supply’s made to SEZ unit
24. Stock transfer process of materials between two plants/Port/Yard/Depot of same company code (same legal entity) in same state.
Answer: Sender of the goods shall not charge GST since the supply is made within the state and to the same legal entity
25. Stock transfer process of materials between two plants/Port/Yard/Depot of same company code (same legal entity) in same state.
Answer: Sender of the goods shall not charge GST since the supply is made within the state and to the same legal entity
26. Stock transfer process of materials between two plants/Port/Yard/Depot of different company code (diff. legal entity) in same state
Answer: Sender of the goods shall charge CGST and SGST since the supply is made to different entity
27. Stock transfer process of materials between two plants/Port/Yard/Depot of same company code (same legal entity) in different state
Answer - Sender of the goods shall charge IGST even though the supply is being made to the same legal entity but different State.
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35. There are Excisable (ED, VAT, CST, TCS) and Non Excisable scrap (VAT, CST, TCS), what is the impact of GST on Scrap Sale.
Answer - Under GST regime, applicable CGST & SGST or IGST will be applicable on scrap sales irrespective of manufactured or
non- manufactured. However, TCS will be continued to be charged as per Direct Tax provisions.
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28.Stock transfer process of materials between two plants/Port/Yard/Depot of different company code (diff. legal entity) in different states
Answer - Sender of the goods shall charge IGST since goods are being supplied to different State irrespective of legal entity
29. Salem-Sales tax differed for 12 yrs, now paid by Salem to Govt of TN will same continue after GST
Answer- JSW have to pay taxes (under deferral scheme) even after implementation of GST since they have availed benefit under existing
tax regime.
30.Dolvi-AS JSW has 2-3 vendors in Maharashtra so Additional place of Business will all 3 business places to be created? with 3 plant codes
Answer- In case JSW plants intend to send materials for job-work to the vendors (Job-worker), then they shall add the vendors' premises
as additional place of business in their respective plant's registration if the vendors have not obtained GST registration separately.
30. Dolvi-Sold to party is changed after reaching stock at Port? How to handle this scenario in GST
Answer- JSW shall charge IGST if the goods are being transferred to port. Applicable IGST/ CGST and SGST shall be payable if goods are
sold from port. If the Port is exporting goods, no tax shall be payable.
32.Will Ports have to be registered under same registration as plant in that state? if port is in different state then what will happen to its
registration?
Answer- Ports also should be added as additional place of business if they have registration in the same state. If ports are located in different
state where they doesn’t have registration, GST registration should be taken for such port alone to claim input credit and applying for refund.
33.Stock transfer process of materials between two plants/Port/Yard/Depot of same company code (same legal entity) in same state. Can Port
or Yard go for same reg. no as plant in same state to save GST for export? (i.e. Stock moving from Dolvi(MH) to JNPT (MH) port by STO
process) Will Ports has to be registered under same registration as plant in that state? if port is in different state then what will happen to its
registration?
Answer- - Yes. Ports have to obtain registration under GST as additional place of business in the respective state where plant is located. In
case the port is located in other states where plant does not exist, separate registration shall require to be obtained by ports in such state.
34. Should JSW take GST registration for Ports?
Answer- - Yes. Ports have to obtain registration under GST as additional place of business in the respective state where plant is located. In
case the port is located in other states where plant does not exist, separate registration shall require to be obtained by ports in such state.
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36.What is the impact on EXIM?
Answer- Under GST regime, Exports are zero rated supplies, hence GST shall not be charged. In case of imports, instead of CVD and
SAD portion, IGST shall be charged.
37.Will LSP logic continue in GST? Mfg-> Depot with Price 2k(Tax INR200) but Depot ->Customer with 4K(Tax INR400) so Govt will loose tax on
difference on 2k for long time(until sale happens) so LSP concept- Highest price from Sale from Depot will be copied to pricing of MFG Sale.)-
This concept is introduced by excise authorities to have LSP price or by paying differential ED.
Answer- As of now, provisions are yet to be issued with respect to LSP. However, it is expected that the LSP concept may continue with
respect to Branch transfers, Job work, related party transactions etc.
38. GST impact on process where MFG Plant->Jobworker1->Jobworker2->Customer.
Answer- - Manufacturer can send inputs to job-worker for further job-work purpose without payment of duty. Further the said goods can be
sent to another job-worker. In such case, either the manufacturer shall treat the initial transaction (with jobworker1) as supply and pay GST
accordingly. Alternatively (Ignoring the logistics issue), Manufacturer can remove goods on job work basis and receive back from Jobworker2
and subsequently clear the goods to the final customer upon final payment of taxes.
39.Third party delivery process:- Sold to party=X,Ship to Party=Y(Taxes on Ship to party), Bill to party =X, physical Delivery=Z, what is the
impact of GST on this process?
Answer- - In this case, GST shall be based on the place where the party to whom the billing is located, irrespective of goods being
delivered within/outside State. In the above example, if 'X' and 'JSW' is situated within Karnataka, CGST and SGST shall be charged. If 'X'
is located outside Karnataka, IGST shall be charged
40.What will happen to Waybill? Road permit for few states? JSW need to upload the form in e-Sugam portal and download it and send it with
shipment.?
Answer- It is yet to be notified about the Waybill procedure In the GST regime.
41Details required for Form for shipment in GST regime (to be uploaded with customer PO, downloaded from portal and to be sent with truck)
Answer – It is yet to be notified about the Waybill procedure In the GST regime.
42. STO-Material sent from Vijaynagar to Maharashtra Plant with 18% GST, when returns happen to Vijaynagar will again 18% GST applicable
or GST to be reversed? How to reverse GST?
Answer - The differential portion of tax shall be adjusted in the credit note. Maharashtra plant shall reverse the credit by considering the
transaction as outward supply and Vijaynagar plant can take input tax credit in the month of receipt. 4
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43.Will TCS applicable for scrap after GST? There are few manufactured scrap for which ED is not applicable? Will GST is also not applicable in
GST regime?
Answer – TCS will be continued even in GST regime as it pertains to Direct Tax provisions. There will be no distinction between
manufactured and non-manufactured scrap, GST shall be applicable on all the scrap.
44.Treatment of samples- Will GST applicable (within state/outside state) currently Customer code is created as JSW plant and later
Outstanding is knocked off, will same process will continue?
Answer – Since Samples are issued free of cost, GST shall not be charged. However, JSW shall reverse input tax credit from its input credit
register on such samples. It is unlike to the pre-GST regime as there would be charging of excise duty under Central Excise.
45.Return from Customer- with Ref to invoice (ED12%) and Returns will have 18% GST? How to take credit of 6%? Can Credit for returns be
taken from Govt?
Answer – As per Section 174 of Model GST law, when the goods are returned by Registered taxable person, such return shall be treated as
Supply. If the goods are returned by other than Registered taxable person, refund shall be available to JSW of the tax paid on the intial
sale.
46. If Sale is done (CGST, SGST) and Return from Customer to Depot(IGST) within state and depot outside state impact in GST? How to
handle
this?
Answer – Local and Inter-state is separately dealt with below:
Local transaction: If JSW has made local sales to a customer, CGST and SGST must have been charged on the invoice. Subsequently, if
the customer has returned the goods to depot located outside the state (as such location is comparatively nearer), JSW shall issue:
Credit note with CGST and SGST
GST invoice to the inter-state depot with IGST
Inter-state transaction:If JSW has made inter-state sales to a customer, IGST must have been charged on the invoice. Subsequently, if the
customer has returned the goods to depot located within the state (as such location is comparatively nearer), JSW shall issue:
Credit note with IGST
GST invoice to the inter-state depot with IGST
47. Rebate Process:- As Credit note is given to customer post Invoice, will it attract GST?
Answer – No process of claiming refund. The differential portion of tax shall be adjusted in the credit note. However, original invoice
reference needs to be given in the said credit note.
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48.Debit note:- As Debit note is given to customer post Invoice, will it attract GST?
Answer – Yes. JSW shall charge GST on Debit note being raised for increase in price/additional consideration charged.
49.Sale is done from JSW plant with ED, Post 1st July if Debit note to be generated, will it be with GST 18%? What will happen to difference in
ED and GST?
Answer – Yes. JSW shall charge GST at the rate prevailing at the time of issuance of Debit note. There will be no effect on Excise duty as the
customer would have already availed CENVAT credit and JSW would have paid Excise duty under Excise
provisions. In respect of GST paid on Debit note, customer can avail input tax credit.
50. JSW is job-worker for some vendor, so material is sent from JSW to Vendor via Sales Route so will it attract GST?
Answer – Yes. JSW shall charge GST on such job work charges carried out on materials supplied by vendor.
51. Internal Consumption (Duty Free or with Payment of Duty)/Captive Consumption: - here only Excise posting is done, will it attract GST?
Answer – No. GST is not applicable on captive consumption as it is not Supply.
52. Will Gas Sale attract GST? Currently no ED is charged and VAT/CST is applicable?
Answer – Yes. GST is applicable on Sale of Gas. However, sale of power is outside the GST ambit.
53. For Nitrogen Gas trading is done with no VAT/CST, will it attract GST?
Answer – Yes. GST is applicable on Sale of Nitrogen Gas.
54. Material went out of Plant and got damaged before reaching the customer? How to Setoff GST?
Answer – For sake of clarity, the transaction is broken into following:
Damage of Free samples: In the case of free supply, input tax credit to the extent of such free supply shall be reversed by JSW
Damage w.r.t Ex-works Supply: In case of damage to the goods during transportation, as Supply has concluded at the factory gate,
such Supply will be subject to GST.
Damage w.r.t FOR Supply: In case of damage to the goods during transportation, as Supply is concluded at customer’s destination,
such Supply will not be subject to GST. However the input tax credit needs to be reversed
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55. Can Subcontractor have GST Registration no?
Answer - The Job worker premises shall be mentioned as additional place of business in the JSW registration if job-worker has not
obtained registration separately.
56. Material coming back from Subcontractor to plant and material got damaged?
Answer - With respect to inputs removed out for job work and suffer damage resulting in not being used in the course of business, JSW
shall reverse input tax credit availed on such inputs.
57. Material is at job-work? What will happen to it? After 1st July?
Answer - Where any inputs received in a factory had been removed as such or removed after being partially processed to a job worker for
further process in accordance with earlier law prior to the appointed day and such inputs, are returned to the said factory on or after the
appointed day, no tax shall be payable if such inputs, after completion of the job work or otherwise, are returned to the said factory within
six months from the appointed day.
- If such inputs are not returned within a period of 6 months or the extended period, as the case may be, from the appointed day the input
tax credit shall be liable to be recovered in terms of section 184.
Further, the manufacturer and the job-worker declare the details of the goods held in stock by the job worker on behalf of the manufacturer
on the appointed day in such form and manner and within such time as may be prescribed.
58. How previous challans gets closed?
Answer – Upon receipt of goods sent for job work purpose, the challans get closed.
59. Diversion of Export material to domestic
Answer – JSW shall Export goods within the time limit (as may be notified in the notification / provision) to consider as zero rated supply. In
case, the goods are not exported but diverted to supply within India, GST shall be charged depending upon the Interstate or Intrastate
supply.
60. Back to town process for export-Will GST invoice required for this process when material is coming to plant from Port?
Answer –If ports are located outside State, Ports shall charge IGST on return. Input tax credit on such return can be availed by Plant.
61. Salem-IS GST applicable on Discounts (Credit Notes)? Post invoices? With ref and without Ref?
Answer – The differential portion of tax shall be adjusted in the credit note. However, original invoice reference needs to be given. GST shall
be
also be reversed in such credit notes.
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If you have any QUERRIES
feel free to call: Achyut Joshi
7066033444
Achyut.joshi@jsw.in
Thank you
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3

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