Cracking the GST Code G Getting S Simplified T Tax Agenda Getting Familiar with GST Impact on Dealers of Pesticides Fertilizers amp Agro Planning for Future Business Implementation Challenges ID: 640701
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Slide1
GST – Goods & Services Tax
Cracking the GST Code…
G – Getting
S – Simplified
T – TaxSlide2
Agenda: Getting Familiar with GST Impact on Dealers of Pesticides, Fertilizers & Agro
Planning for Future Business / Implementation Challenges
Accounting Software / IT Systems
Compliances & Assessment Procedures
Impact on Pricing Slide3
Learning Outcome:
At the end of this course, Dealers will be able to achieve the following:
Understand various concepts of Goods & Service Tax
Understand the impact of new regulation on distribution of pesticides and kind of changes needed to be done
Gain an insight on the recording and analyzing the transactions for compliance under GST especially in supply chain & distribution
Getting familiar with the technology and the flow of return filing under GST
Knowing “place of supply rules” and applicability of the same under GSTSlide4
Ready to Race:Slide5
Existing Tax Structure in IndiaSlide6
Proposed Tax Structure in IndiaSlide7
Key Taxes Subsumed
Dual GST
CST TO BE PHASED OUTSlide8
Likely GST Model
Central GST
State GST
State GST
Import
GST
State GST
IGSTSlide9
Basis of Charge:Excise is on? “Manufacture”VAT is on?
“ Sale”
GST will be on?
“Supply”Slide10
What is GST?A new law which simplifies indirect tax in India
For Crop Life Channel Partners, VAT will now become GSTSlide11
Model / Components of GSTSlide12
Operational Areas to be impacted by GST- CMA’s to play significant roleSlide13
Benefits:Single Window SchemeOfficers have powers across lawsNo GST on farmer selling farm produceMost Compliances online Slide14
Set off of GST CreditSlide15Slide16
Limits & Other DetailsRegistration over Turnover of 20 Lacs & 10 Lacs in North Eastern StatesComposite Scheme for traders, select manufacturers & restaurants up to 75 lacs
State-wise Single Return to be filed
Most items will get Input Tax Credit (ITC) to avoid Tax on Tax
Exporters to get 80 % refund in seven daysSlide17
Applicable Rates under GSTSlide18
Registration Under GSTSlide19
Likely challenges for tax payers
A new tax law – a whole lot of tax controversies
Transaction restructuring
Transaction structuring to be reviewed
Procurement pattern and trading models to be analysed – No significant difference between local and interstate under GST?
Billing patterns, local vis-à-vis inter state to be reviewed
Records/ Accounting
State-wise sales records
Credit availment and utilization records
Transition
Transition of credits
New registrations
Change in contract clauses
Review of procurement costs
Taxability of transactions spread across regimes
Treatment of tax paid inventory
Re-designing of the entire ERP
Current ERP is aligned as per the current taxes
Change in accounting
Re-defining the logics
Updating masters
Overall pricing of goods – factoring of GST credits
Change in rate of taxes
Costing / Pricing of goods
Compliance
Tax computations
New formats for invoices / records/ returns/ declarations
Validity of statutory form (Form F/Form C)
Manner of payment of taxes
New compliance dates
Documentation for movement of goodsSlide20
How to Register…!!!Slide21
Initial RegistrationSlide22
Documentation ChecklistSlide23
Other Important PointsSlide24
Migration Process of GSTSlide25
Liability to Register in GST : Every supplier shall be liable to be registered under this Act in the State from where he makes a taxable supply of goods and/or services if his aggregate turnover in a financial year
Note
:
The Aggregate Turnover shall include all supplies made by the taxable person, whether on his own account or made on behalf of all his principals.
25
Registration
Region
Aggregate Turnover
North East India + Sikkim
Rs 10
Lakhs
Rest of India
Rs 20
LakhsSlide26
Currently registered under VAT/CSTAll dealers registered with central or state tax authorities and having a valid PAN will be allotted by VAT dept/Excise/Service Tax with a provisional GST no and password.
Dealer is required to login website
https://www.gst.gov.in
using the ID and Password.
Existing Tax payers will be auto-migrated and given a 15 digit provisional PAN based GST ID with following structure.
Using the ID and Password the taxpayer can complete the migration process as per direction by system.
Migrating to GST
State Code
PAN
No of Tax Payer
Entity
Code
Blank
Check Digit
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
2
7
A
A
A
C
T
1
5
0
7
C
1
Z
XSlide27
Filing GST ReturnsSlide28Slide29Slide30Slide31Slide32Slide33
Various Forms Under GSTSlide34
Form Type
Frequency
Due Date
Details to be Furnished
Form GSTR-1
Monthly
10
th
of succeeding month
Furnish details of outward supplies of taxable goods and/or services affected
Form GSTR-2A
Monthly
On 11
th
of succeeding Month
Auto-populated details of inward supplies made available to the recipient on the basis of Form GSTR-1 furnished by the supplier
Form GSTR-2
Monthly
15
th
of succeeding month
Details of inward supplies of taxable goods and/or services for claiming input tax credit. Addition (Claims) or modification in Form GSTR-2A should be submitted in Form GSTR-2.
Form GSTR-1A
Monthly
20
th
of succeeding month
Details of outward supplies as added, corrected or deleted by the recipient in Form GSTR-2 will be made available to supplier
Form GSTR-3
Monthly
20
th
of succeeding month
Monthly return on the basis of finalization of details of outward supplies and inward supplies along with the payment of amount of tax
Form GST ITC-1
Monthly
—
Communication of acceptance, discrepancy or duplication of input tax credit claim
Form GSTR-3A
—
—
Notice to a registered taxable person who fails to furnish return under section 27 and section 31
Form GSTR-9
Annually
31
st
Dec of next fiscal
Annual Return – furnish the details of ITC availed and GST paid which includes local, interstate and import/exports.Slide35
Composite Tax Payer
Return Type
Frequency
Due Date
Details to be Furnished
Form GSTR-4A
Quarterly
—
Details of inward supplies made available to the recipient registered under composition scheme on the basis of Form GSTR-1 furnished by the supplier
Form GSTR-4
Quarterly
18
th
of succeeding month
Furnish all outward supply of goods and services. This includes auto-populated details from Form GSTR-4A, tax payable and payment of tax.
Form GSTR-9A
Annual
31
st
Dec of next fiscal
Furnish the consolidated details of quarterly returns filed along with tax payment details.Slide36
Aggregate T/O exceeding One Crore
Return Type
Frequency
Due Date
Details to be furnished
Form GSTR-9B
Annually
Annual, 31st Dec of next fiscal
Reconciliation Statement – audited annual accounts and a reconciliation statement, duly certified.Slide37
Invoicing Under GSTChanges in how invoices are made under GSTSlide38Slide39Slide40Slide41Slide42Slide43Slide44
Pricing Under GSTWhat happens to Pesticides/fertilizer prices under GST?Slide45
Comparison (Trade of Goods)45
Sr. No.
Particular
Intra-State
Inter-State
Present
GST
Present
GST
1.
Initial Value
121.00
120.00
121.00
120.00
2.
Centre’s Tax
11.00
12.10
11.00
12.22
3.
State (X)’s Tax
13.31
12.10
11.00
1.10
4.
State (Y)’s Tax
-
-
16.91
12.22
5.
State’s Total
13.31
12.10
27.91
13.32
6.
Total Tax paid to Govt.
24.31
24.20
38.91 –Refund Claim
25.54
7.
Non
-
Vatable
Tax borne by Business
11.00
0.00
25.00
1.10
8.
Final value
paid by Consumer
146.41
145.20
152.97
146.65Slide46
Comparison (Trade of Service)
Sr. No.
Particular
Intra-State
Inter-State
Present
GST
Present
GST
1.
Initial Value
110.00
120.00
110.00
120.00
2.
Centre’s Tax
11.00
11.00
12.10
12.10
3.
State (X)’s Tax
0.00
11.00
0.00
0.00
4.
State (Y)’s Tax
-
-
0.00
12.10
5.
State’s Total
0.00
11.00
0.00
12.10
6.
Total Tax paid to Govt.
11.00
22.00
12.10
24.20
7.
Non
-
Vatable
Tax borne by Business
0.00
0.00
0.00
0.00
8.
Final value
paid by Consumer
121.00
132.00
133.10
145.20Slide47
Existing Tax Structure Vs GST
Sale from Factory -
Warehouse – Dealer / Sale
from Factory – Dealer (pesticides
)
Under Existing Tax Structure
Amount
in
₹
Under GST Regime
Amount
in
₹
Sale
s Price
280.00
Sale
s Price
280.00
Excise Duty@12.5% on MRP
37.5
CGST @ 9%
25.2
Sub-Total
317.5
SGST @ 9%
25.2
VAT
@ 6%
19.05
Purchase Price
for Dealer
330.4
Purchase
Price for Dealer
336.55
Cost to Dealer
(GST
ITC
Rs
50.4)
280.00
Cost to Dealer
(VAT
Credit Rs19.05)
317.05
Margin
10.00
Margin
10.00
Sub Total
290.00
Sub Total
327.05
CGST @ 9%
26.1
VAT @ 6%
19.62
SGST @ 9%
26.1
Sale Price of Dealer
346.67
Sale Price of Dealer
342.2
VAT Payable by Dealer(19.62-19.05)
0.6
GST Payable
by Dealer(52.2-50.04)
1.8
Service availed
10.00
Service availed
10.00
Service Tax @15%
1.50
GST @ 18%
1.80
Dealer
Can’t avail Credit of
Rs 1.50
on Service
Dealer
Can utilized ITC of
Rs1.80 paid
on Service availedSlide48
Conditions for availing Input Tax Credit Under the GST regime, input tax credit can be availed by every registered taxable person on all inputs used or intended to be used in the course of or for furtherance of business.
Input Tax CreditSlide49
Input Tax Credit
“
Capital goods
” means goods,
- the value of which is
capitalised
in the books of accounts
-
used or intended to be used
in the course or furtherance of
business
“
Input
” means
any goods
other than capital goods
used or intended to be used
in the course or furtherance of
business
“
Input service
” means
- any
service
used or intended to be used in the course or furtherance of business
“
Input tax
" in relation to a taxable person, means
the IGST, including that on import of goods,
CGST and SGST charged on any supply of goods or services to him
includes
the tax payable under Reverse Charge
but does not include the tax paid under
Composition Levy Slide50
List of Input Tax Credit available to Tax Payer:Every registered Taxable Person can avail Input Tax credit on below mentioned purchase of goods and services received for the furtherance of business.GST paid on Cement Purchase
GST Paid on purchase on Capital Goods
Motor Vehicle procured for transportation of Goods.
Furniture, Fixture, Computer, Printer and other office equipment.
GST Paid on various Services
Godown Rent
Telephone Bill
Internet Bill
Security Service
Manpower Service
General Insurance
Agent Commission
Any other Services availed for business
Impact of GST on retailerSlide51
Every Registered Taxable Person shall be entitled to take credit of input tax in his return and such amount shall be credited to his electronic credit ledger.The Registered Taxable Person shall utilize the Input Tax Credit as the manner explained in below mentioned table.
Utilization of Input Tax Credit
ITC
First - Set Off
Balance -
Set Off
Can not be utilized
CGST
CGST
IGST
SGST
SGST
SGST
IGST
CGST
IGST
IGST
CGST /
SGST
-Slide52
Late Fees, Interest & Penalties under GSTSlide53
Late Fees
Offence
Late Fee
A person fails to furnish details of outward or inward supplies, monthly return or final return by the due date
Rs. 100 for every day during which the failure continues, subject to a maximum of Rs. 5,000
A person fails to furnish the annual return by the due date
Rs. 100 for every day during which the failure continues, subject to a maximum of quarter percent of the person’s turnover in the state where he/she is registeredSlide54
Interest
Offence
Interest
A person liable to pay tax fails to pay the tax
Interest on the tax due will be calculated from the first day on which the tax was due to be paid
A person makes an undue or excess claim of input tax credit or undue or excess reduction in output tax liability
Interest on the undue excess claim or undue or excess reduction
A recipient of a service fails to pay to the supplier of the service the amount towards the value of the service, along with tax payable thereon, within 3 months from the date of issue of invoice by the supplier
Interest on the amount due will be added to the recipient’s liabilitySlide55
Cancellation of RegistrationThe circumstances under which a person’s registration will be cancelled are:
A regular dealer has not furnished returns for a continuous period of 6 months.
A composition dealer has not furnished returns for 3 quarters.
A person who has taken voluntary registration has not commenced business within 6 months from the date of registration.
Registration has been obtained by fraud, willful misstatement or suppression of facts.Slide56
Penalties
Offence
Interest
If a person:
Supplies goods and/or services without issuing an invoice or issues an incorrect or false invoice
Issues an invoice without supply of goods and/or services
Collects tax but fails to pay the same to the Government beyond a period of 3 months from the date on which the payment becomes due
Who is an e-commerce operator fails to collect tax or collects lesser than the amount required to be collected or fails to pay the tax to the Government
Takes input tax credit without actual receipt of goods and/or services either fully or partially
Obtains refund of tax by fraud
Falsifies or substitutes financial records or produces fake accounts and/or documents or furnishes a false return
Liable to be registered, but fails to obtain registration
Furnishes false information with regard to registration
Transports taxable goods without documents
Suppresses turnover leading to evasion of tax
Fails to maintain books of accounts and documents
Issues an invoice or document by using the identification number of another person
Rs. 10,000 or an amount equivalent to the tax evadedSlide57
Penalties
A person who aids or abets any of the offences listed above
Penalty may extend to Rs. 25,000
Any offence for which a penalty is not separately provided under the law
Penalty may extend to Rs. 25,000Slide58
Penalties
Offence
Imprisonment
Commits or abets the following:
Obstructing or preventing any officer in the discharge of his duties
Tampering with or destroying any evidence or documents
Failing to supply any information required of him under the law or supplying false information
6 months imprisonment with fine
Tax evaded or input tax credit wrongly availed or refund wrongly taken of an amount exceeding Rs. 50 Lakhs, but not exceeding Rs. 1 Crore
Imprisonment which may extend to 1 year with fine
Tax evaded or input tax credit wrongly availed or refund wrongly taken of an amount exceeding Rs. 100 Lakhs, but not exceeding Rs. 2.5 Crores
Non-bailable imprisonment which may extend to 3 years with fine
Tax evaded or input tax credit wrongly availed or refund wrongly taken of an amount exceeding Rs. 2.5 Crores
Non-bailable imprisonment which may extend to 5 years with fineSlide59
Every registered taxable persons shall keep and maintain a true and correct account of,Inward supply of Goods or Service
Outward Supply of Goods or Service
Stock of Goods
Input Tax Credit availed
Output Tax Payable and Paid
The Registered Taxable person may keep and maintain such accounts in the electronic form.
Every registered taxable person required to keep and maintain books of account or other records shall retain them until the expiry of 60 months from the due date of Annual Return for the year such records pertaining.
59
Accounts and RecordsSlide60
Possible risk for Unregistered Retailer
Possible Risk
Company Uploads Outward Supply
Dealer Uploads Outward Supply Correctly
Unregistered Retailer doesn’t upload
Registered Retailer correctly upload his Inward Supply
The Supply Chain breaks at Unregistered retailer
GSTN can easily track the purchases made by Unregistered retailer.
Govt
officials may impose huge penalty incase if they found that the retailer is liable to register but not registered.Slide61
Electronic Ledgers
Register type
Type
of Form
Description
Electronic Tax liability Register
GST PMT – 1
All liabilities of a taxable person shall be recorded
and maintained.
Any liability under GST Act will be recorded by debiting the electronic tax liability register.
Register shall be credited on discharge of or reduction in liability due to any other reason.
Electronic Credit Register
GST PMT – 2
It
shall be credited on availment of Input tax credit or re-credited in case of rejection of refund claim.
Credit shall be debited when the credit is utilized to discharge tax liability or the refund of unutilized credit.
Electronic Cash Register
GST PMT
– 3
It will be credited once amount is deposited
in it.
Amount credited shall be utilized for payment of tax, interest, penalty, fee or any other payment.
Identification for
each
Payment transaction
A UIN
shall be generated at the Common Portal for each debit or credit to the electronic cash or credit ledger.
The UIN relating to discharge of any liability shall be
indicated in the corresponding entry in the electronic tax liability register.Slide62
Electronic Registers under GST
Electronic Liability Register – Ambuja Cement
Vendor Name
GSTN
No
Inv No
Inv
Base Amt
SGST
CGST
Goyal
Co
27AAACT6578C1XZ
1001
20000
2000
2000
Ramji
Builder
27ABCDE1507C1XZ
1002
10000
1000
1000
Total
Liability
3000
3000
Electronic Credit Register – Ambuja Cement
Vendor Name
GSTN
No
Inv No
Inv
Base Amt
SGST
CGST
Jindal
Steel
27JHGFR1234C1XZ
1111
15000
1500
1500
Ramji
Builder
27IUUTR1507D1XZ
2001
11000
1100
1100
Total
Input Tax Credit available
2600
2600
Electronic Cash Register– Ambuja Cement
Date of Deposit / Utilization
Mode of Payment
SGST
CGST
20/05/2017
ICICI Bank /RTGS
400
400
20/05/2017
-400
-400
Available Balance
0
0Slide63
Accounting SoftwareHandwritten Accounts will no longer work
Accounts have to be maintained on a Computer
You can choose any accounting software of your choice
A Part / Full Time Accountant to be hired
Anti Virus / Back Up to be taken at regular intervalsSlide64
Web Resourceshttp://tutorial.gst.gov.in/userguide/#t=View_FAQs_and_Help_Documents.htm
www.gst.gov.in
http://tutorial.gst.gov.in/faq/#t=I_am_unable_to_access_the_GST_Common_Portal_available_at_www.gst.gov.in._How_can_I_access_the_site_.htm
http://www.cbec.gov.in/htdocs-cbec/gst/gst-training
http://www.indiancementreview.com/News.aspx?nid=V4y4rKnrO22Ny54Js1mTlA==#sthash.iam2ocAc.dpbsSlide65
Thank You…!!!