GST - Impact, Development and Compliances

Prepared by – Nikita Lakhotia, Naimish Padhiar
Sandesh Mundra & Associates – Sandesh.mundra@smaca.in

01 GST Overview
02
03
04
Today’s Agenda
Impact on various sectors
Glimpse on GST Development
Compliances

 Sale
 Transfer
 Barter
 Exchange
Activities
Specified in
Schedule II
Activities
Specified in
Schedule I
Supply
Includes
Supply Includes:
Import of Service
for Consideration
 Licence
 Rental
 Lease
 Disposal

Supply
Excludes
Supply Excludes:
Service by employer to
employee in course of
employment
Service by Court or
Tribunal
Activities
undertaken by
CG/SG/LA
engaged as
Public
Authorities
Sale of land,
Building
Service of funeral,
burial, crematorium
or mortuary including
transportation of
deceased
Actionable Claim
other than
lottery, betting
and gambling
Functions of MP, Duties
performed at post in
constitution, Duties of
chairperson , member,
director of body
established by govt.

Input Tax Credit Mechanism
SGST
CGST IGST

Impact on
Businesses

Manufacturing Industry

Works Contract

Sector Wise Impact of GST
Sector Impact on Setting
up cost
Impact on
Operating
Cost
Power
Renewable
Coal
Petroleum
Nuclear
Negative
Indifferent
Positive

Sector Impact on Setting
up cost
Impact on
Operating
Cost
BOT Projects
(Road)
Port
Railway
Mining
Negative
Indifferent
Positive
Sector Wise Impact of GST

Mining Sector
Current Tax Scenario:-

Mining Sector
GST Regime:-
Merchant Mining –
Positive Impact
Merchant Mining Cum
Manufacturing – Neutral
Particulars
Merchant Mining
Sector
Mining Cum
Manufacturing
Sector
Tax
levied
Cenvat
credit
Available
Tax
levied
Cenvat
credit
Available
Supply of Services :-
Exploration of Mines ✔ ✔ ✔ ✔
Handling of Mines ✔ ✔ ✔ ✔
Transportation of Mines ✔ ✔ ✔ ✔
Grant for mining lease ✔ ✔ ✔ ✔
Outward supply - Intrastate ✔ ✔ ✔ ✔
Value Added Tax on outward
supply
✔ ✔ ✔ ✔
Outward supply - Interstate ✔ ✔ ✔ ✔

Textile Industry
Pre GST
Regime
Post GST
Regime

Automobile Industry

RetailersRetailers
Particulars Pre GST Regime Post GST Regime
Value of Goods 1000 1000
Add:- Excise Duty @ 12% 120 -
Cost to Retailer 1120 1000
Add:- VAT @15% 168 -
Add:- GST @18% - 180
Total Value to Retailer 1,288 1180
Net Impact 108 8.39%
Positive Impact

GST Updates
Notifications
Circulars
Press Release

CGST Notification
Supplier
Providing Taxable
Supplies covered
under RCM
Exempt from
Registration
Notification No – 05/2017
Date – 19/06/2017

CGST Notification
Notification No –
08/2017
Date – 27/06/2017
Turnover for opting for
Composition Scheme
Rs. 75 Lakhs in
Preceding F.Y.
Tax Rates for
Composition Scheme
Manufacturer – 1% of
turnover
Entry 6(b) of Schedule II
– 2.5% of turnover
Other Suppliers – 0.5%
of turnover

CGST Notification
Date – 28/06/2017
Number of
HSN digits
required on
tax invoice
Turnover
in Prev
Year upto
Rs. 1.5 Cr
Turnover in
Prev Year
more than
Rs. 5 Cr
Turnover in
Prev Year
more than Rs.
1.5 Cr but
upto Rs. 5 Cr
Not
Required
4 Digits
2 Digits

CGST Notification
Interest on
Late
payment of
Tax
• 18%
Interest on
wrong
availment of
ITC
• 24%
Interest on
withheld
refunds
• 6%
Interest on
Delayed
Refund
• 6%
Interest on
refund
arising from
appeals
• 9%
Date – 28/06/2017

CGST Notification
Categories of persons
eligible for Letter of
Undertaking in place of
bond
A status Holder as specified in Para 5 of
Foreign Trade Policy 2015-2020
Person who has received due foreign
inward remittances amounting to min of
10% of export turnover, which should
not be less than Rs. 1 Cr in Preceding FY
Date – 07/07/2017

CGST Notification (Rate)
Services
by way of
Transportation of passenger by radio
taxi, motor cab, maxi cab and motor
cycle
Accommodation in hotels, inns, guest
houses, clubs, campsite or other
commercial places meant for residential
or lodging purposes
Tax Payable
by E-
Commerce
Operator
Date – 28/06/2017

Date – 28/06/2017
 No refund of unutilized ITC will be available under
Section 54(3) of CGST Act when providing services
specified in Paragraph 5(b) of Schedule II to CGST Act i.e.
Construction Services.

Date – 28/06/2017
Service Provider Recipient
Goods
Transport
Agency
Service
Goods
Transport
Agency
1. Factory registered under Factories Act 1948
2. Society registered under Societies Registration Act
1860 or any other law in force
3. Co-operative societies established under any law
4. Any registered person under this Act
5. Body corporate established under any law
6. Partnership Firm including AOP
7. Casual taxable person in taxable territory
Reverse Charge

CGST Notification (Rate)…(cont) Notification No – 13/2017
Date – 28/06/2017
Legal
Consultancy
Service
Advocate /
Senior
Advocate
/ Firm of
Advocates
Any business entity located in taxable territory
Arbitral
Tribunal
Services
An Arbitral
Tribunal
Any business entity located in taxable territory
Sponsorship
Service
Any Person Body Corporate or Partnership Firm

Date – 28/06/2017
Government
Services
Central Government
/ State Government
/ Union Territory or
Local Authority
Any business entity located in taxable
territory
Director
Service
Director of Company
or Body Corporate
Company or Body Corporate located in
taxable territory
Insurance
Service
Insurance Agent Any person carrying on Insurance Business
CGST Notification (Rate)…(cont)

Date – 28/06/2017
Recovery
Agent Service
Recovery Agent Banking Company or Non-Banking
Company or NBFC
Service of
transferring or
permitting to
use copyright
Author,
Music Composer,
Photographer,
Artist,
or the like
Publisher,
Music Company,
Producer,
or the like
CGST Notification (Rate)…(cont)

• Prescribes Exemption List under CGST Act
Date – 28/06/2017

• Exemption to dealers operating under Marginal Scheme
Exemption from CGST payable on Intra-State receipt of
second hand goods from unregistered dealers
Notification No –
10/2017
Date – 28/06/2017

No deduction of TDS in case of intra-state
supplies of goods or services or both
received by a deductor u/s 51 of CGST Act
provided that deductor is not liable to
registration other than as per Section 24(vi)
Notification No –
09/2017
Date – 28/06/2017

Intra-State
supplies from
Unregistered
Person does not
exceeds Rs.
5,000/- per day
No RCM
Applicable
Notification No –
08/2017
Date – 28/06/2017

CGST Notification (Rate) Notification No –
04/2017
Date – 28/06/2017Reverse Charge
Goods Provider Recipient
Cashew Nuts, not
shelled or peeled
Agriculturist Any registered person
Bidi wrapper leaves
(tendu)
Agriculturist Any registered person
Tobacco Leaves Agriculturist Any registered person
Silk Yarn Manufacturer of silk
yarn from raw silk or
worm cocoons
Any registered person
Supply of lottery SG, UT, or any LA Lottery distributor or selling agent

Press Release
Date Particulars
15th June 2017 Lower Tax Incidences on Complex, Building, Flat
etc.
18th June 2017 Relaxation in return filing for 1st two months
15th July 2017 Applicability of GST on Legal Services
15th July 2017 Applicability of Margin Scheme on Second Hand
Goods
17th July 2017 Increase in Compensation Cess on Cigarettes
18th July 2017 Rate of tax on accommodation in hotels including
5 star hotels

Lower Tax Incidences on Complex, Building, Flats etc
The press note states that the builder who are presently under a
practice of calling the entire booking amount pre-GST on account
of increased rate is against the GST Law.
Builders are liable to pass on the benefits of lower tax burden
under the GST regime to the buyers of property by way of reduced
prices/ installments on account of reductions in credit blockages.
Therefore, builders / construction companies cannot ask
customers to pay higher tax rate on instalments to be received
after imposition of GST.

Return for first two months

GST on Legal Service
Legal services provided by advocate, senior advocate or firm of
advocates are liable for payment of GST under reverse charge by
the business entity.
The words “by way of representational services before any court,
tribunal or authority….” appear in conjunction with senior
advocate and merely describe the nature and mode of
representational services provided by a senior advocate to a
business entity.

Applicability of Margin Scheme on Second Hand Goods
Value of supply for second hand goods shall be the difference
between the selling price and the purchase price and where the
value of such supply is negative, it shall be ignored. This is known
as the margin scheme.
This press release specifies notification which exempts Central
Tax leviable on intra-State supplies of second hand goods
received by a registered person, dealing in buying and selling of
second hand goods from any supplier, who is not registered as
ITC will not be available on purchases of second hand goods.

Registration of Traders
Registered under
any of the existing
law
Migrated
Liable for registration in
GST regime
Provisional Ids issued need to be converted to
GSTIN by submitting necessary documents in 3
months (i.e. by 22nd September 2017)
Not liable for registration
in GST regime
Need to apply for cancellation in 30 days(i.e. by
22nd July, 2017)
Not-
Migrated
Liable for registration in
GST regime
Need to apply for registration within 30
days (i.e. by 22nd July, 2017)
Not registered
under any of
existing law
Liable for
registration
in GST
regime
Become liable from
01/07/2017
days (i.e. by 30thJuly, 2017)
Become liable after
01/07/2017
days from becoming liable for registration

GST on Hotels including 5 Star Hotel
GST on accommodation in hotels including 5-star hotel,
where tariff is less than Rs. 7500 for per day per unit is 18
%.

Compliances

Registration

Persons Liable for Registration
Aggregate Turnover
Exceeds Rs. 20 Lakhs
(10 Lakhs for Special
Category States)
Transferee liable to
registration if Business
Transferred as a going
concern
Registered under
Earlier law Subsumed
in GST
Amalgamation/Merger/
Demerger pursuant to
an order of High court,
tribunal

Persons Not Liable for Registration
Persons Not
Liable for
Registration
Supplying
Exempt goods or
services or both
Supplying goods
or services or
both not liable to
tax under this Act
Agriculturist, to
the extent of
supply of produce
out of cultivation
of land
Persons as may be
notified by
Government

Compulsory Registration
Person making Inter-State Taxable Supply
Casual Taxable Person making Taxable supply
Person required to pay under RCM
Person liable to pay u/s 9(5) – E-Commerce Operator
Non-Resident Taxable Person
TDS Deductors

Compulsory Registration…(Cont.)
Agent
Input Service Distributor
Supplier making supply through E-Commerce Operator
E-Commerce Operator
Supplier of Online Information and Database Access or Retrieval
Person as may be notified

Special Provisions under Registration
Casual Taxable
Person
Person who occasionally
undertakes transactions
involving supply of goods
and / or services in the
course or furtherance of
business, in a taxable
territory where he has
no fixed place of
business.
Non-Resident
Taxable Person
Person who occasionally,
undertakes transactions
involving supply of goods
and services, and who
has no fixed place of
business in India.

Returns

Return Types
Return No. Particular Due Date Applicable for
GSTR-1 Outward Supplies 10th of next month Regular Taxpayer
GSTR-2 Inward Supplies 15th of next month Regular Taxpayer
GSTR-3 Monthly Return 20th of next month Regular Taxpayer
GSTR-4 Quarterly Return 18th of next quarter Composition
Taxpayer
GSTR-5 Return by Non-
Resident Taxpayer
20th of next month or 7
days after expiry of
registration
Non-Resident
Taxpayer
GSTR-5A Online Information
and Database
Access
20th of next month Online Information
and Database
Access

Return Types
Return No. Particular Due Date Applicable for
GSTR-6 Return by Input
Service Distributor
13th of next month Input service
Distributor
GSTR-7 TDS 10th of next month Tax Deductor
GSTR-8 TCS 10th of next month E-Commerce
GSTR-9 Annual Return 31st of next F.Y. Regular Taxpayer
GSTR-9A Annual Return 31st of next F.Y. Composition Taxpayer
GSTR-9B Annual Return 31st of next F.Y. E-Commerce
GSTR-9C Annual Return 31st of next F.Y. Aggregate Turnover >
Rs. 2 Cr.

Return Process
Supplier Uploads
GSTR-1
(upto 10th of next
month)
Auto-drafted
GSTR-2A based on
details from GSTR-
1 filed by suppliers
(after 10th of next
month)
Generate GSTR-2
by accepting /
rejecting /
modifying details
from GSTR-2A
(After 10th but upto 15th
of next month)
Add missing
purchase invoices
(By Recipient)
Supplier to accept
modifications
(by 17th but not before
15th )
General net tax:
Pay / carried
forward in GSTR 3
(By 20th of next month)

Matching of ITC Matchings shall
be done after
due date of
GSTR-3
GSTIN of
Supplier
Invoice or Debit
Note Date
GSTIN of
Recipient
Invoice or Debit
Note Number
Tax Amount

Supplier /
ReceiverPortal
Recipient /
Supplier
In FORM
GST MIS - 1
Final Acceptance and Communication thereof
Where above details are matched
Communicate the
acceptance through
SupplierPortal
Recipient
Rectifies and
matches ITC after
communication

Discrepancy
Where ITC
claimed is not
matched
Added ITC but
supplier did not
mention the
details of supply
or details
mentioned are
not declared by
supplier
Supplier
Recipient
Did not
rectified
the same
Added to output
liability of
recipient
Communicated to
Recipient in FORM
GST MIS - 1
Communicated to
Supplier in FORM
GST MIS - 2

Claim of ITC on same invoice more than once
ITC claimed
more than
once on same
invoice
Communicate to
Registered
Person in form
GST MIS - 1
Through
Portal
* If not rectified within 2 months than added to output liability of recipient

Matching & Claim of
Output Liability Matchings shall
be done after due
date of GSTR-3
GSTIN of Supplier
Credit Note Date
GSTIN of
Recipient
Credit Note
Number
Tax Amount

Final Acceptance of reduction in output liability and
Communication thereof
Where above details are matched
Communicate the
acceptance through
Supplier
/
Receiver
Portal
Recipient
/ Supplier
In FORM
GST MIS - 1
Rectifies and
matches after
communication

Discrepancy
Where ITC claimed is not matched
Output liability reduced
does not match with
supplier and not rectified
in his return
Supplier
Recipient
Did not
rectified the
same
Added to output
liability
Communicated to
Supplier in FORM GST
MIS - 1
Communicated to
Recipient in FORM GST
MIS - 2

Reduction in output tax liability more than once
ITC claimed
more than
once on same
invoice
Communicate to
Registered
Person in form
GST MIS - 1
Through
Portal

Sandesh Mundra & Associates
Chartered Accountants
www.smaca.in
304, Super Plaza, Near Prakash High School,
Sandesh Press Road, Vastrapur, Ahmedabad
sandesh.mundra@smaca.in 079-40032950

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