Transit ion al Precaution Filing of last return under present indirect tax regime and filing of first return under GST regime Indirect Taxes Committee ICAI 1 Issue Input Tax Credit Ref ID: 562924
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Goods and Services Tax (GST)Transitional Precaution: Filing of last return under present indirect tax regime and filing of first return under GST regime
© Indirect Taxes Committee, ICAI
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Issue: Input Tax Credit (Ref: Sec 167 & 168) Precautions: make sure - all eligible credits are claimed in the last return (service tax return, excise return, state VAT return, Entry Tax return), In case of doubtful items, may be advisable to claim the credit (may not be utilized), and carry forward to GST regime,make sure that all the taxpaying documents (like invoice) are in possession, Amount of CENVAT credit carried forward in a return to be allowed as input tax credit.Unavailed cenvat credit on capital goods, not carried forward in a return, to be allowed in certain situations© Indirect Taxes Committee, ICAI2Slide3
Cont...carry out CENVAT credit audit to ensure no credit is missed out,In case of ambiguity on service tax under RCM, better to pay the same and avail credit (if eligible),there should be proper quantification of availment of credit (i.e. 50% as per present law) and Unavailed credit of capital goods which is to be availed in GST regime.if any capital goods is purchased in June’17, under present regime only 50% credit can be claimed and the balance may be claimed in July’17 and onwards (although the same financial year).© Indirect Taxes Committee, ICAI3Slide4
Sec 169: Credit in respect of inputs held in stock for the first timersApplicability© Indirect Taxes Committee, ICAI4Slide5
Sec 169 Cont...Precautions: Prepare stock statement summary as on 30.06.2017 (determining the quantum, value, involvement of eligible duties, taxes and state VAT)Make sure whether the taxpaying documents are available before claiming any credit,Such taxpaying documents should not have been issued earlier than twelve months [stock level may be maintained at minimum level],Pricing policy – such stock used / intended to be used for making taxable supplies must lead to reduction in prices to the extent of availment of benefit of ITC.© Indirect Taxes Committee, ICAI5Slide6
Sec: 170 Credit in respect of Common Inputs held in Stock for Exempted goods becoming taxableApplicability:Applies to central excise or service tax assessees who are manufacturing non-exempted & exempted goods or providing non-exempted & exempted servicesPrecautions:
Prepare stock statement summary as on 30.06.2017 in order to claim credit of eligible duties and taxes as attributable to
manufacture of exempted goods
or provision of
exempted services
.
© Indirect Taxes Committee, ICAI
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Sec 171: Credit in respect of inputs or input services during transitSec 171 ApplicableGiven the invoice/ tax paying document are recorded within 30 days of appointed day© Indirect Taxes Committee, ICAI7Slide8
Precautions:Ensure that the duty / tax in respect of the taxpaying document (i.e. against the invoice) has been deposited. A certificate may be obtained in this regard from the supplier. Ensure that the invoice is duly received and recorded in the books within 30.07.2017.Ensure that double credit is not availed - once in the earlier regime (may be when the payment is made) andagain in the GST regime (may be when the invoice is received)© Indirect Taxes Committee, ICAI8Slide9
Section 172: Credit i.r.o. inputs held in stock to a taxable person switching over from composition scheme© Indirect Taxes Committee, ICAI9Slide10
Precautions:Prepare stock statement summary as on 30.06.2017 (determining the quantum, value, involvement of eligible duties and taxes) in order to claim credit in respect of inputs attributable to manufacture of exempted goods or provision of exempted services. © Indirect Taxes Committee, ICAI10Slide11
Sec 185: Treatment of Amount recovered or refunded pursuant to Revision of ReturnsBefore filing of returnAfter filing of return Output liability –
Ensure that all sale invoices are properly and timely recorded in the books so that the same can be tallied with the last return filed for the relevant period.
On any issue, In case of ambiguity regarding taxability, may be decided to pay tax so that the customer (in case of B2B transaction) can avail the benefit of input tax credit.
Output liability
–
Review the last return with the books of accounts, if any invoice is missed, for payment of tax
Precautions
© Indirect Taxes Committee, ICAI
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Cenvat credit – Need to ensure that credit of eligible duties and taxes are availed in the last return Cenvat credit – Need to review if any credit has been missed to avail in the last return filed under the earlier regime so that the same can be availed.
Cont...
Before filing of return
After filing of return
© Indirect Taxes Committee, ICAI
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Sec 190: Credit distribution of service tax by ISDSec 190 ApplicablePrecautions: Before filing of last return of ISD under earlier law, tag the invoices which are considered for credit distribution in respect of service received till 30.06.2017. Further before filing of first return of ISD under GST regime, tag the invoices which are received after 30.06.2017 against the services received upto 30.06.2017 which were not considered under earlier law.© Indirect Taxes Committee, ICAI
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Sec 191: Provision for transfer of unutilized Cenvat Credit by taxable person having centralized registration under the earlier lawProvision: Credit shall be carried forward as per last return,Provided return must be filed within 3 months from 01.07.2017. If return revised then reduced credit shall be allowed,Credit may be transferred to any of the registered taxable person having same PAN for which centralized registration was obtained© Indirect Taxes Committee, ICAI14Slide15
Precautions:Ensure before filing of return all the eligible credit is availed in the return,If the return is required to be revised, Make sure the same is done within 3 months from 01.07.2017.Cont...© Indirect Taxes Committee, ICAI15Slide16
Issue 2: Return of exempted and duty paid goods on or after the appointed day [Ref: Sec 173 & 174]Filing of last return under old regimeFiling of return under GST regime Ensure that proper disclosure for removal / sale of exempted goods has been made in the last return[S 173].
Ensure that proper details of the dutiable / taxable goods are maintained so that if at all such goods are returned within 6 months refund can be claimed [S 174].
Ensure no exempted goods should return after six (6) months from 01.07.2017,
If duty / tax paid goods are returned, need to ensure that no adjustment against output liability is made in the GST regime as the same will be eligible for refund only.
© Indirect Taxes Committee, ICAI
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Issue 3: Removal of inputs, semi-finished goods and finished goods for job work [Sec 175-177]Central Excise AssesseeFiling of last return under old regimeFiling of return under GST regime Ensure that all inputs due to be received within 30.06.2017, are actually received. If not, then make sure that proportionate credit is reversed and reflected in the last return.
Identify
the stock lying with job worker for less than six months.
For all consignments
received from j/w, check whether the date of dispatch was less than six months from 01.07.17 or more.
Ensure before making any supply from the premise of the job worker that the place of business of the j/w has been declared as additional place of business in case the job
worker
is unregistered.
© Indirect Taxes Committee, ICAI
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WB VAT AssesseeFiling of last return under old regimeFiling of return under GST regime Ensure whether any goods removed to job worker on or before 01.04.2017 are received back and proper records are required to maintain to establish that such goods are received back within prescribed period (90 days
in case of WBVAT) otherwise ITC may be required to be reversed.
SGST – Such goods are required to be returned with 6 months from 01.07.2017 to avoid tax on return supply from the job worker.
Cont...
© Indirect Taxes Committee, ICAI
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Issue 4: Taxability of goods/ services in certain cases [Ref: Sec 188 – 189] Point Of TaxationCentral ExciseService taxWB VATLevy is on manufacture but POT on removal
Levy is on provision of service, POT earlier of the following
Date of invoice (provided invoice issued within 30 days of completion of service),
Date of payment,
Levy is on sale
© Indirect Taxes Committee, ICAI
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Central ExciseService TaxWB VATEnsure all removals are shown in the last return i.e. removals made till 30.06.2017
Ensure all the invoices are issued in respect of completed services within 30.06.2017 and reflected in the return
Ensure service tax on the advance amount is also paid and properly reflected in the return,
Preserve proper documents specifically in respect of advance receipts to avoid demand on the same again in GST regime.
VAT is payable on sales – if any goods are simply delivered to recipient on or after 01.07.2017 against which risk and reward has already been transferred within 30.06.2017, then such sales should be disclosed in relevant return
Cont...
© Indirect Taxes Committee, ICAI
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Inward Supply of GoodsLocal
Purchase
From a RTP
CGST/SGST
Inputs
CG
None
Inter - state
Purchase
IGST
Inputs
CG
None
Inter State
Unit transfer
IGST
Inputs
CG
None
Local
Purchase/RCM
From a RTP
CGST/SGST
Inputs
CG
None
Inter State
Purchase/RCM
IGST
Inputs
CG
None
Unit transfer/RCM
IGST
© Indirect Taxes Committee, ICAI
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Inward Supply of GoodsImport
Purchase
IGST
Inputs
CG
None
W/O
Consideration
IGST
Inputs
CG
None
Local
From URP
Local
From Comp Dealer
Debit Notes
Credit Notes
Nil
Exempt
Non GST
© Indirect Taxes Committee, ICAI
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Outward Supply of GoodsLocal
Sale
CSGT/SGST
DN/CN
CGST/SGST
NIL/Ex/Non GST
Inter state
Sale
to a RTP
IGST
Inter State
Sale
to a RTP
NIL/Ex/Non GST
DN/CN
IGST
Inter State
Sale
to a consumer Inv > 2.5
IGST
NIL/Ex/Non GST
Inter State
Sale
to a consumer Inv <= 2.5
IGST
NIL/Ex/Non GST
Local
Sale
to a consumer
CGST/SGST
© Indirect Taxes Committee, ICAI
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Outward Supply of GoodsInter state
Unit transfer
IGST
NIL/Ex/Non GST
Local
Deemed Export
CSGT/SGST
No tax
Inter state
Deemed Export
IGST
No tax
Export
IGST
No tax
Local
Advance
CGST/SGST
Nil/Ex/Non GST
Inter state
Advance
IGST
Nil/ Ex / Non GST
Local
Invoice (
agst
Adv recd earlier)
CGST/SGST
Nil/Ex/Non GST
Inter state
Invoice (
agst
Adv recd earlier)
IGST
Nil/ Ex / Non GST
© Indirect Taxes Committee, ICAI
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SectionTopicPrecautionsSec 170Bifurcation of Inventory of Raw Materials/ Packaging Materials/ ConsumablesDutiable - Credit already taken
Exempted- Credit to be taken under GST
Sec
171
Stock In
Transit
Whole amount
Dutiable
&
Exempted
Stock + Invoice Received within 30 days
Do not avail double credit
Sec 172
Composition
States/Units/Products covered under Composition
SummarySlide26
Contd...Sec 175- 177Stock with Job WorkerDeclarationSec 185
Returns
Books
and Returns should tally
Sec 188 and 189
Point of Taxation
Reconcile books and return
Proper Invoicing
Proper Disclosure
Sec 190
Credit distribution
by ISD
Tag
invoices to provide proper bifurcationSlide27
For any Clarification, Please Contact
Indirect Taxes Committee of ICAI
Email:
idtc@icai.in
;
Website:
www.idtc.icai.org
© Indirect Taxes Committee, ICAI
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