Businesses must first assess whether it’s eligible to register under the most recent indirect tax regime before beginning the online GST registration process. Any individual or group engaged in commercialized business must comply with the New GST Registration and Eligibility Criteria because it enables the proprietary to discharge taxes and take advantage of input tax credit. Certain businesses must get online GST registration done. It will face severe penalties if it conducts business operations without being registered. The GST Council states that a business entity must meet a number of GST filing requirements in order to be eligible for online GST registration.

So, in this blog, we have explained what the GST eligibility criteria is and how Finaccle can help you further to file GST in an economical and convenient way.

What is meant by GST registration?

The Goods & Services Tax (GST) is an indirect tax that is paid when purchasing goods or services for consumption. It’s also a value-added tax levied on services. Additionally, companies that deliver services and sell goods must contribute fairly to the GST. GST eliminates the cascading effect of indirect taxes. In addition, it combines a number of separate central and state indirect taxes to provide more revenue for the government. Similar to that, online GST registration went into effect in April 2017 and demanded registration from all eligible enterprises.

What is the eligibility criteria under GST filing?

• Individuals registered under legislation like excise, VAT, service tax, etc. that were in place prior to the implementation of the GST
• A non-resident Indian taxpayer or a casual taxpayer
• Supplier’s agents, distributors of Input Services, and aggregators or E-commerce operators
• People who pay taxes through the GST registration reverse charge mechanism
• A business with a turnover that exceeds the 20 lakh rupee threshold. For states like Jammu and Kashmir, Himachal Pradesh, Uttarakhand, and the North Eastern Indian states, the limit is 10 lakh rupees
• Any business engaged in the supply of goods whose annual turnover exceeds Rs. 20 lakhs for states in the Special category and Rs. 40 lakhs for states in the Normal category
• Any business providing services whose annual turnover surpasses Rs. 10 lakhs for states in the Special category and Rs. 20 lakhs for states in the Normal category
• If a registered business is transferred to another party or dissolves, the transferee must take online GST registration since the date of the transfer
• A person who provides online information and database access or retrieval services from a location outside India to a person in India who is not a registered taxable person
• A person making interstate supplies and a person providing online information and database access or retrieval (OIDAR) services to a person in India who is not a registered taxable person from a location outside India

Who is considered a Casual taxable person for online GST registration?

A person without a permanent place of business, who occasionally provides goods or services in an area where GST is applicable. According to GST, this person will be regarded as a casual taxable person. Suppose, a person operates in Bangalore and provides taxable consulting services in Pune, with no place of business there. Here, the person would be regarded as a casual taxable person in Pune.

Who is considered a Non-resident taxable person for online GST registration?

If a non-resident does not have a permanent place of business in India but periodically supplies products or services in an area where GST is applicable. This person will be regarded as a non-resident taxable person under GST. Similar to the situation above, however, the non-resident does not have a place of business in India.

Who is a distributor of Input Services for GST filing?

An ‘Input Service Distributor’ is an office of the supplier of goods or services that receives tax invoices upon receipt of input services. They issue tax invoices for distributing credit of paid on the said services to branch with the same PAN. Therefore, credit can only be distributed for ‘input services’, not for input goods or capital goods.

For assessees who are not currently registered as input service distributors, this will be a new topic. The use of this facility is, however, optional.

What is the meaning of composition taxpayer?

A composition taxpayer is a person registered under the composition scheme who is exempt from having to charge customers the normal rates of GST. Instead, they can file Form CMP-08 and pay tax to the government at nominal or lower rates. For these taxpayers, specific guidelines have been established. When the GST was first implemented, only suppliers of goods with an annual turnover of up to Rs. 1.5 crore were eligible to choose the composition scheme governed by Section 10 of the CGST Act. For online GST registration, the maximum annual aggregate turnover limit must be Rs. 50 lakh.

What is the meaning of QRMP taxpayer?

A registered person who must file a GSTR-3B return and who has an aggregate turnover of up to Rs. 5 crore in the last financial year is eligible for the QRMP Scheme. The scheme allows for the quarterly filing of GSTR-1 and GSTR-3B and the monthly payment of tax using form PMT-06. Furthermore, the Invoice Furnishing Facility (IFF) can be used if B2B sales invoices need to be uploaded.

Online GST registration by type of taxable person

• Within thirty days from the date on which they are required to register, every person is required to submit an application for GST registration in each state where they are liable
• Casual/non-resident taxpayers must submit their applications at least five days before they commence business
• Since the GST registration number will be based on PANs, possessing a PAN is a need for registering
• Since GST registration is State-specific, the assessee must obtain separate registrations for each State
• The assessee has the choice to acquire separate registrations in the same State for each of the ‘business verticals’
• Special GST registration provisions for non-resident taxable persons and casual taxable person
• A casual taxable person or a non-resident taxable person must make an application for registration at least five days before the start of business. Special provisions for casual and non-resident taxable persons under GST are outlined in Section 24
• A temporary registration for a term of 90 days that may be extended for an additional 90 days is available to non-resident or casual taxable persons. A person that registers under Section 24 will need to pay an advance GST deposit based on their anticipated tax liability

Conclusion

Knowing who is eligible to file for GST and what the eligibility requirements are, makes it crucial to keep your company updated with the most recent GST filing in order to avoid penalties.

Click here to contact our team at Finaccle to get GST registration in Surat or anywhere in India! Not only can you get online GST registration done but also will have our support throughout the online GST registration process. All this can be done at an affordable GST registration fees.

We also render services related to the Financial, Accounting, Legal and Taxation domain! Read our blogs to know what is GST, supply under it, how to calculate it! If you have any queries related to GST or any other topic do let us know! Share this blog and stay tuned for more!

Taxpayers who have completed online GST registration, must first understand what Negative Liability for GST Advisory is, to know how to alter the amount in statement. On April 30, 2022, GSTN, the Goods and Services Tax Network, issued an advisory to composition taxpayers regarding negative liability.

Composition taxpayers must make the quarterly payment starting with the 2019–20 financial year. They must submit Form GST CMP-08 and Form GSTR-4 for returns .

In GSTR-4, “tax payable” is determined after deduction of liability reported in GST CMP-08 is made (which is fetched in Table 5 automatically). The advisory states that taxpayers must provide their annual tax liability, calculated at the applicable tax rates, in GSTR-4.

‘0‘ is entered, if no obligation is found in Table 6 in GSTR -4. Even if the taxpayer has successfully paid liability with Form GST CMP-08, here it is assumed that taxpayer has no obligations to pay. It is shown as a negative liability item in Form GSTR-4 and treated as an additional tax payment.

What is the treatment of negative liability?

The issued Advisory to Taxpayers on Negative Liability is as follows:

Composition taxpayers may fail to complete Table 6 of Form GSTR-4 return . Amount paid by the taxpayer through Form CMP-08 goes to the credit of negative liability statement.

• Such a negative liability has currently been removed from the negative liability statement by the GSTIN system. If the taxpayer used any amount from the statement, that amount would be removed from the cash ledger.
• If the cash ledger balance goes negative, the taxpayer must deposit the money using a challan for that amount.
• The taxpayer may request a refund of the excess amount if the payment of the amount that has been credited to negative liability has been made through DRC-03, DRC-08, or GSTR-4 of the following Financial Year. In order to do this, he or she must complete Form RFD-01, a refund application.
• In relation to the debit entries, GSTIN emails the taxpayer.

The GST login website has a report called a negative liability statement. It includes a negative summary for the current quarter in Form CMP-08.

Checking the Negative Liability Statement

By submitting Form GSTR-4 of last year, at the fiscal year end negative liability statements with balance can be checked. Logging into the GST website, the taxpayer has access to the negative liability statement.

• The taxpayer should go to the GST website, select ‘Services’, and then select ‘Ledgers’
• To check the negative liability statement, the user must then select the ‘Negative Liability Statement‘ option

Way to nullify Negative Liability Adjustment

The first step in invalidating a negative liability adjustment is for the taxpayer to raise a ticket on the website for grievances or write to the relevant jurisdictional GST (Goods and Service Tax) officer as soon as they become aware of this problem.

Debit of the Negative Liability

Additional amount in the negative liability statement has been reduced. GSTN noted some taxpayers provided the liability in order to file a statement in Form GSTR-4 or GST CMP-08 of that fiscal year by using extra amount that was made available in the negative liability statement. This amount is debited in the cash ledger. However, certain exceptions do exist here!

To sum up with a few pointers :-

• When the taxpayer deposits the liability through a challan, the cash ledger balance is changed; however, when the liability is not deposited, the balance becomes negative
• In these situations, it is advised that the taxpayers deposit their former liability as quickly as possible using a challan for the same amount
• The taxpayers will receive information about the deduction via emails that may be accessed on the GST website
• By submitting Form GST RFD-01, the taxpayer may claim a refund of the same amount even if the liability has been revised to include the liability for the next year

In conclusion

For GST registration in Surat or anywhere in India, you can reach out to us at Finaccle to complete the online GST registration process. Undoubtedly ,we also provide support throughout the online GST registration process! Additionally, we also render services related to the Financial, Accounting, Legal and Taxation domain! Read our blogs to know what is GST, supply under it, how to calculate it! If you have any queries related to GST or any other topic, do let us know! Share this blog and follow us on the below mentioned platforms to know more!

GST Calculated Online Using Various Tax Slabs

Searching for the best method to calculate GST under the numerous slabs? Read this blog!

Since GST has been introduced, it has been left to the consumer to calculate the overall cost of the transaction and pay GST through the online GST registration process. The broad, tier-based Goods and Services Tax (GST) system combines a number of indirect taxes. Think going out to eat on a limited budget and being unaware of the whole cost until the bill is delivered. Certainly, it can lead to stress which is unnecessary, hence the GST calculator could be useful here. You may learn more about GST, how to calculate it and pay it with the help of this article.

What is GST all about?

GST was first approved by the parliament on March 29, 2017, and it became effective on July 1 of the same year. The CGST, SGST, and IGST are the three components that make up the Goods and Services Tax (GST). Online GST registration process helps in its payment.

All that is necessary to calculate the GST tax payable (i.e. the information and documents) are transferred to a trustworthy online GST tax calculator. The calculator determines it and then pays by online GST registration. Moreover, the user interfaces are specifically designed to meet the requirements of parties such as distributors, retailers, and manufacturers. Each of these versions offer a selection of several input options:-

• For buyer – GST rate, product price
• For manufacturers – GST rate, cost, profit margin
• For wholesalers and retailers – GST rate, items, total cost of the items

Final price includes total tax and a breakdown into CGST and SGST/IGST.

What are the reasons for using the Online GST Calculator?

Here are a few benefits of using an online GST calculator.

• Firstly, it is simple and easy to use, and it provides quick results
• Secondly, using an online calculator reduces the chances of making a mistake
• Thirdly, taxpayers can calculate the different amounts for CGST, SGST, and IGST, in contrast to the GST tax computation formula with accuracy
• Lastly, for the product of your choice, you can estimate the retail price

How to use the Online GST Calculator?

Tax calculation is a simple task for online GST calculators. Firstly, be aware of GST rates that apply to various categories of goods and services.

The GST rates will be 5%, 12%, 18%, and 28% as per applicability. After determining cost of purchase, follow these steps :-

Step 1

Enter total cost of the goods or services

Step 2

Determine the appropriate GST rate for your product or service category

Use a HSN or SAC code for accuracy

Step 3

Click on “Calculate”

Here’s a simple explanation to understand the tax description.

The various GST tax heads are:

• CGST   –  Central Goods and Services Tax charged and collected by central government
• UTGST- Union Territory Goods and Services Tax imposed by Union Territory government
• SGST  – State governments are in charge of imposing and collecting State Goods and Services Tax for transactions within a state
• IGST   – Central Government collects Integrated Goods and Services Tax for interstate purchases

By using an online GST calculator you can know the breakdown of tax and pay it by online GST registration.

Isn’t this the clarity that every taxpayer wants to see?

How is GST calculated?

Following is the mathematical method to calculate GST in case you want to separately verify the results this web tool generates.

Now, two scenarios are possible.

Given the net price, and after computing the GST-inclusive pricing:

First calculate the GST amount (A)

A = (P x r) / 100

Goods and Services Tax rate – r

Base or Total net price – P

Total or gross price G is

G = P + A

You can determine the pre-tax price using the following formula as long as you have the GST-inclusive pricing:

First determine entire GST amount A using gross price G

A = G – [G x {100 / (100 + r)}]

As a result, the Base or Total net price is as follows :-

P = G – A

A tax invoice for the CGST, SGST, and IGST will not be available to you. To obtain this information, you will need to use a GST calculator online.

Conclusion

In conclusion, an online GST calculator can not only prove to be helpful but also save money for you! Hope this article helped you! Get in touch with the experts at Finaccle providing services in the financial, taxation, accounting and legal domain right away to learn everything there is to know about GST, online GST registration process and much more!

GSTR-1: What is it?

You must file GSTR-1 with the utmost care because it serves as the basis for all future GST forms and online GST registration in general. It tracks the supply of goods outwardly.

You must submit it on a monthly or occasionally quarterly basis so that you can keep track of your business. Any person involved in the delivery of products must therefore specify the supply’s terms and the recipients. By doing this, the information filed in GSTR-1 will automatically fill the returns for the inward supply.

Who should submit it?

Every registered dealer must submit GSTR 1 irrespective of the sales and transactions for a specific month. Exceptions are listed below:-

• Input service distributor (ISD) who receives payments for services used by branches
• Company registered for GST under composition scheme
• Provider of online data, database access, or information retrieval services
• If you import products and services from outside India or are in charge of running a business on behalf of a non-resident Indian
• Taxpayer liable for deducting tax at source (TDS) or collecting tax at source (TCS)

How to submit it?

The steps for it by online GST registration are :-

• Log into GSTN portal using user ID and password provided
• Search for “services”
• Select “returns”
• On “returns dashboard”, choose month and year you want to file for
• After seeing returns for the given time period, click GSTR 1
• You can file your returns electronically or upload them
• You have the option of adding invoices or uploading them
• Check the details and the accuracy
• Select “Submit”
• After entered data has been verified, click “file GSTR 1”
• E-sign the form or digitally sign it
• When a pop-up is displayed on the screen, click “yes” to confirm the filling of the GST return
• Watch for generation of Acknowledgement Reference Number (ARN)

Filing of it

There are 13 separate fields on GSTR-1 that you must complete for online GST registration which are as follows :-

• Pre-filled answer for the GSTIN of the individual who submitted the return
• Name that was automatically filled in as the return filer
• Closing balance will be automatically auto-populated, when previous financial year’s total turnover is entered
• Information about taxable outgoing supplies made to a registered individual
• On transaction exceeding Rs. 2.5 lakh, information on interstate outbound supply to a final customer
• Supplies that are zero-rated and deemed exports (to EOUS and SEZS)
• Total aggregation of all outgoing supplies for the month, up to Rs. 2.5 lakh via e-commerce companies
• Details of exempted, non-GST, and zero supply items while completing the online GST registration
• Any necessary corrections or modifications to outbound supplies from prior tax periods, including debit/credit notes and refund vouchers
• Information about external supplies listed using HSN codes
• Taxes owed on the received advance payment
• Taxes paid for prior accounting periods or periods
• For the period for which GSTR 1 is being filed :- Invoices, revised invoices, credit notes, debit notes, and other documents issued

What is required to file it?

In order to file GSTR-1, you require :-

• Actual and legal Goods and Services Tax Identification Number (GSTIN)
• User ID and password for login in portal
• Valid Digital signature certificate (DSC), unless you are able to electronically sign, using supplier class
• Aadhaar card if you plan to e-sign
• Access to cellphone number listed on your Aadhaar card

Are there penalties for filing it late?

GSTR-1 has a deadline for submission through online GST registration which is the tenth of the following month. This only applies to companies with a turnover of more than Rs. 1.5 crore. Otherwise submit the return quarterly by the final day of the relevant period.

The penalty costs 50 rupees or 20 rupees per day, the latter is applicable if you fail to file because you have no returns to do so.

What to bear in mind while filing?

• Double check GSTIN and HSN codes entered
• Identify whether it’s an intrastate or interstate transaction
• GSTR-1 is a requirement for online GST registration but you are exempt from paying taxes until you file GSTR-3B
• Upload invoices periodically throughout the month to prevent bulk submissions
• Digital signature certificate(DSC) must be provided by businesses like LLPS and FLLPs
• Suppliers including proprietors, partnership businesses and others can electronically sign it
• SGST charged will be in accordance with the new state if point of supply has relocated and is now located in a different state
• Use third-party software to submit it quickly

Conclusion

Knowing about GSTR-1 will make it easier for you to comply with GST regulations and complete the online GST registration process easily. Reach out to our team at Finaccle today who will assist you on how to take advantage of the system and increase savings!

How to update bank details on GST Portal:

Consequence of Not furnishing bank details:

Government may suspend or cancel your GST Registration if bank details are furnished within time limit prescribed above.

FAQs:

1. Is it mandatory to furnish current account details on GST portal?

Ans: No, you can furnish details of Saving bank or Cash credit account also on GST portal. The portal itself gives option of uploading saving bank account details or cash credit account details.

2. If I fail to furnish details within 45 days, will I receive notice for the same or directly my GST number will be cancelled?

Ans: You will receive show cause notice from department for not furnishing bank account details. If you fail to reply the SCN, the department will cancel your registration. But meanwhile, department may suspend your GST number so that you will not be able to generate e-way bill, file returns etc.

3. Can I upload bank account details while applying for GST number?

Ans: Yes, while filing your application for GST registration you can furnish your bank account details. It is not mandatory that you will have to furnish details only after getting GST Registration.

4. Do I need to upload any document on GST portal for updating bank details?

Ans: Yes, you need to upload either photo of cheque or bank statement or bank passbook.

If you have any question related to GST, Income Tax, Accounts, Finance or other matters, feel free to ask us. We shall revert to you within 24 hours!

Follow us on Instagram, Twitter and LinkedIn for regular Updates related to GST, Income Tax and Financial matters.

Goods and services tax means a tax on supply of goods or services, or both, except taxes on supply of alcoholic liquor for human consumption, petroleum Crude, diesel, petrol, ATF and Natural Gas (Article 366 (12A) of Constitution of India). GST is a destination-based tax i.e., GST is levied on consumption of Goods or Services.

GST is a path breaking indirect tax reform which attempts to create a common national market. GST has subsumed multiple indirect taxes like excise duty, service tax, VAT, CST, luxury tax, entertainment tax, entry tax, etc.

France was the first country to implement VAT/GST in 1954. Presently, more than 160 countries have implemented VAT/GST in some form or the other. Most of the countries follow unified GST i.e., a single tax applicable throughout the country. India, too, has adopted a dual GST i.e., GST is levied by both Central and State Government.

Taxes under GST are as follows:

CGST stands for Central Goods or Services Tax. CGST is levied by central government on intra-state supplies.

SGST stands for State Goods or Services Tax. SGST is levied by State government / Union territory with Legislature on intra-state Supplies.

UTGST stands for Union territory Goods or Services Tax. UTGST is levied by Union Territory without territory on intra-state Supplies.

IGST stands for Integrated Goods or Services Tax. IGST is levied by Central government on Inter-state supplies.

GST Compensation Cess at specified rate has been imposed on the specified luxury items or demerit goods, like pan masala, tobacco, aerated waters, motor cars etc.

Taxes Subsumed in GST

• Central Excise Duty & Additional Excise Duties
• Service Tax
• Excise Duty under Medicinal & Toilet Preparation Act
• CVD & Special CVD
• Central Sales Tax
• Central surcharges & Cesses in so far as they relate to supply of goods & services
• State surcharges and cesses in so far as they relate to supply of goods & services
• Entertainment Tax (except those levied by local bodies)
• Tax on lottery, betting and gambling
• Entry Tax (All Forms) & Purchase Tax
• VAT/ Sales tax
• Luxury Tax
• Taxes on advertisements

Need for GST in India:

• Cascading of taxes on account of (i) levy of Non-VATable CST and (ii) inclusion of CENVAT in the value for imposing VAT
• Non-integration of VAT and Service tax
• Double Taxation of a transaction as both goods and services e.g. software was liable to both VAT and Service tax

Basic Features of GST:

• Value Added Tax: GST is a value added tax levied on manufacture, sale and consumption of goods and services.
• Destination based tax: GST is a destination-based consumption tax i.e. revenue of GST ordinarily accrues to the consuming States.
• One Nation One Tax: GST Aims to make India a common market with common tax rates and procedures thus paving the way for an integrated economy at the national level.
• Continuous Chain of Input Tax Credit: GST paid on purchase is available as Input Tax Credit to buyer to set off against output tax liability. Thus, it removes cascading effect of taxes i.e. tax on tax.
• Final Burden on consumer: The final burden of GST is on consumer since tax charged to customer is not available as input tax credit.

Tax rates under GST:

The maximum rate of GST can be 40% ( 20 % CGST and 20 % SGST or 40 % IGST) in India. The tax slabs under GST are as follows:

0% – Fresh fruits, vegetables, Newpapers, Grains etc

0.25% – Diamond, Semi precious stones etc

3% – Silver, Gold or imitation jewellery etc

5% – Polyester fabrics, Apparels below Rs 1000, Footwear below Rs 500 etc

12% – Apparels above Rs 100, cheese, business class air ticket etc

18% – Mobile, Camera etc

28% – 5 Star Hotel Stay, Air Conditioner etc

If you have any question related to GST, Income Tax, Accounts, Finance or other matters, feel free to ask us. We shall revert to you within 24 hours!

Follow us on Instagram, Twitter and LinkedIn for regular Updates related to GST, Income Tax and Financial matters.

A taxable person whose GST registration is cancelled or surrendered has to file a return in the form GSTR-10. This return is called a final return.

Details to be provided in GSTR-10

GSTR 10 has a total of 11 sections. Following are the sections which will be auto-populated at the time of system login:

• GSTIN
• Legal Name
• Business or Trade Name
• Address for any future correspondence
• Effective Date of Surrender/Cancellation
• Reference number of Cancellation order
• Date of Cancellation Order
• Particulars of Closing Stock
• Tax payable amount and tax paid
• Interest, late fee payable and paid:

Once all the particulars are furnished correctly, the taxpayer is required to sign digitally either through a digital signature certificate (DSC) or Aadhaar based signature verification to authenticate the return.

When is GSTR 10 due?

GSTR 10 must be filed within three months from the date of cancellation or date of cancellation order whichever is later.

What will happen if you won’t file the return?

If the GSTR 10 is not filed within the due date, a notice will be sent to such a registered person. The person will be given 15 days’ time for filing the return with all the documents required. If the person still fails to file the return, the tax officer will pass the final order for the cancellation with the amount of tax payable along with interest or penalty.

If you have any question related to GST, Income Tax, Accounts, Finance or other matters, feel free to ask us. We shall revert to you within 24 hours!

Follow us on Instagram, Twitter and LinkedIn for regular Updates related to GST, Income Tax and Financial matters.

Note: These notifications are available on www.egazette.nic.in

If you have any question related to GST, Income Tax, Accounts, Finance or other matters, feel free to ask us. We shall revert to you within 24 hours!

Follow us on Instagram, Twitter and LinkedIn for regular Updates related to GST, Income Tax and Financial matters.

Every person is liable to pay tax as per provisions of Time of Supply. If a person does not pay taxes on time, then he is liable to pay interest for delayed payment. The section 50 of CGST Act deals with the same. The provision is silent for the manner of calculation of interest which created confusion among assesses.

BRIEF TIMELINE

• 22nd December 2018 – The GST council

Proposed for amendment of Section 50 of CGST Act, 2017 to allow payment of interest on net cash liability.

• 04th February 2019 – The Principal Commissioner

(Hyderabad) issued a Standing Order 01/2019 to clarify that interest is payable on gross liability, including on the portion of the liability that was adjusted using the accumulated ITC.

• 18th April, 2019 – The Hon’ble High Court

Of Telangana held that interest is payable on gross liability wherein the High Court observed that since the ownership of such money is with the registered person till the time of actual payment, the Government is entitled for earning interest on gross amount.

• 1st August, 2019 – Finance (No.2) Act, 2019

Introduced proviso to section 50(1) of the CGST Act, 2017 which substantiated that interest shall be levied on that portion of the tax that is paid by debiting the electronic cash ledger which means interest is payable on net liability. However, it was not made effective and even it didn’t clarify whether the change would apply on a prospective or retrospective.

• 6th January, 2020 – Madras High Court

Held that levy of interest on delayed payment of GST is purely compensatory. Accordingly, interest is liable to be charged on the net cash payment and not on the gross liability.

• 1st February, 2020 – The Finance Minister

In her budget speech of 2020 has acknowledged that the harassment of tax payer will not be tolerated, and assured that tax payer won’t be harassed to pay interest on gross liability.

• 14th March, 2020 – 39th GST Council Meeting

It was decided that,interest for delay in payment of GST would be charged on the net cash tax liability w.e.f. 01st July, 2017.

After series of litigation, judgments, tweets, interpretations and amendments under the erstwhile law it was settled that liability for payment on interest shall arise on net liability. However, the proposed amendment is still not effective.

Written by: CA Abhinav Sharma

If you have any question related to GST, Income Tax, Accounts, Finance or other matters, feel free to ask us. We shall revert to you within 24 hours!

Follow us on Instagram, Twitter and LinkedIn for regular Updates related to GST, Income Tax and Financial matters.

The GST Annual return i.e. GSTR 9 is a return to be filed by the every taxpayer once a year which is summary of all monthly/quarterly returns (GSTR 1, GSTR 2A, GSTR-3B) filed for that year. It consists of details regarding the outward and inward supplies made/received during the relevant year, ITC availed and utilised, Refund claimed under different tax heads i.e. CGST, SGST & IGST.

Reconciliation Statement and GST Audit

GST is a trust-based taxation regime wherein a taxpayer is required to self-assess his tax liability, pay taxes and file returns. Thus, to ensure whether the taxpayer has correctly self -assessed his tax liability a robust audit mechanism is a must. Various measures are taken by the government for proper implementation of GST and audit is one amongst them.

Audit under GST involves examination of records, returns and other documents maintained by a registered person. It ensures correctness of turnover declared, taxes paid, refund claimed, input tax credit availed and compliance with provisions of law. Till Year 2019-20, GST Audit was to conducted by CA/CMA. From year 2020-21, Government has amended the act and there is no need of audit to be done by CA/CMA. The taxpayer can himself self-certify the GSTR-9C i.e. Reconciliation Statement.

Applicability

GSTR 9 is to be filed by every registered taxpayer* except Composition Dealer, Casual Taxable Person, Input Service Distributor, Non Resident Taxable Person, taxpayer paying TDS u/s 51.

*As per decision taken in GST Council Meeting, For FY 17-18, 18-19, 19-20 and 20-21 if aggregate turnover of taxpayer is less than 2 Crores, then he need not file GSTR 9. In such cases, it shall be deemed that GSTR 9 has been filed with auto-populated figures, if not filed by taxpayer by due date and hence no late fees shall be levied.

GSTR-9C is to be filed by every registered taxpayer* except Composition Dealer (GSTR-9A is prescribed for them), Casual Taxable Person, Input Service Distributor, Non Resident Taxable Person, taxpayer paying TDS u/s 51.

*As per decision taken in GST Council Meeting, For FY 17-18, 18-19, 19-20 and 20-21 if aggregate turnover of taxpayer is less than 5 Crores, then he need not file GSTR-9C.

These limits for FY 20-21 have been simplified in following manner:

Here, “Aggregate Turnover” includes aggregate value of taxable supplies, zero rated supply of goods or services or both, exempt supplies and interstate branch transfers under same PAN. It should be noted that Aggregate turnover excludes inwards supplies on which GST has been paid on RCM basis and it excludes outward GST liability too.

It is worthwhile to note that calculation of Aggregate turnover should be done on PAN basis. This simply means that if the aggregate turnover during financial year is more than prescribed limit and taxpayer has multiple branches then every branch is liable for the GST audit whether it individually reached the threshold limit or not.

Details required to be furnished for annual return and Reconciliation Statement

GST annual return and audit for any given financial year requires following details to be reported in prescribed forms by tax payers.  These details should be reported after due reconciliation of data reported in GST returns during the year and books of accounts. So that any errors reported earlier can be duly rectified:

1. Annual turnover including taxable turnover, exempted turnover, zero rated turnover during the year and output tax liability thereon.
2. Input tax credit available in books of accounts (whether availed or not in GST returns).
3. Details of ITC reversed during the year due to ineligibility of ITC or any other reasons.
4. Details of adjustments of turnover or ITC made in current financial year pertaining to previous applicable financial year. 
5. Details of refund applications filed, sanctioned and rejected during the financial year.

Due date of filing GSTR-9 and GSTR-9C

Note: For effective and speedy filing of GST audit and annual return, government has prescribed due dates in staggering manner for FY 2017-18. According to this, various states and territories have been divided in two groups.  Taxpayers can identify their group according to their registered principal place of business.

1) 5th February 2020

Chandigarh, Delhi, Gujarat, Haryana, Jammu and Kashmir, Ladakh, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh, Uttarakhand

2) 7th February 2020

Andaman and Nicobar Islands, Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Dadra and Nagar Haveli and Daman and Diu, Goa, Himachal Pradesh,Jharkhand, Karnataka, Kerala, Lakshadweep, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Puducherry, Sikkim, Telangana, Tripura, West Bengal and Other Territory

Late fee and Penalty

The late fees for not filing GSTR-9 within the due date is Rs.  200 (Rs. 100 under CGST Act and SGST Act each). This late fees is subject to maximum of 0.25% of aggregate turnover. 

For late filing and submission of GSTR-9C, No such late fees or penalties have been prescribed under the act.  Hence, general penalty of Rs.  25000 should be applicable.

Frequently Asked Questions

Input credit means at the time of paying tax on output, you can reduce the tax you have already paid on inputs. Input Tax Credit is the backbone of GST. GST was implemented to remove the cascading effect of taxes i.e. to make seamless flow of credit available at every stage of supply chain. In GST, it is the provisions of ITC which essentially make GST a value added tax i.e. collection of tax at all points of supply chain after allowing credit of tax paid at earlier points. This seamless chain of credit is broken in case of supplies charged to Composition scheme, Supply of exempted goods or services or both, Ineligible ITC on certain goods or services or both (as provided in Section 17(5) of CGST Act, 2017).

Detailed analysis of Section 17(5) of CGST Act, 2017

ITC on Motor Vehicles

Further, ITC of general insurance, servicing, repair and maintenance in respect of motor vehicles shall not be allowed except as permitted above. Further, in two more cases ITC of general insurance, servicing, repair and maintenance shall be available, which are as follows:

1. Where above services are received by a person engaged in manufacture of such motor vehicles
2. Where above services are received by a person engaged in supply of general insurance of such motor vehicles insured by him.

“Motor vehicle” or “Vehicle” means any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed  premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding twenty-five cubic centimeters.

Thus, it can be inferred that followings are not motor vehicles as per above definition and credit shall be allowed in respect of them:

1. Vehicle running upon fixed rails
2. Vehicles adapted for use only in a factory or enclosed premises
3. Two-wheeler or three wheelers with engine capacity of 25 CC or less.

ITC is not available for 

Consequences of availing Ineligible ITC

Taxpayer will be liable to reverse claimed ineligible ITC in GSTR-3B as soon as claim of wrong ITC is detected along with Interest at the rate of 18%  per annum starting from the date of filing of GSTR-3B with wrong ITC till the date of its reversal.

Frequently Asked Questions

If you have any question related to GST, Income Tax, Accounts, Finance or other matters, feel free to ask us. We shall revert to you within 24 hours!

Doubts have been raised as to whether remuneration paid by company to director falls under entry in Schedule III “Services by an employee to employer in course or in relation to employee” or whether the same is liable to taxed under RCM in terms of NN 13/2017 dated 28.06.2017

Link for Ciruclar