Draft GST Rules & Formats

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Draft GST Rules & Formats

Which got approved by the GST Council

HIGHLIGHTS OF

INDEX S. No. Particulars Page No. 1. Highlights of GST Draft

Rules approved by the GST council 1 Treatment of Exemptions 1 Disagreement on Centre’s power 2

2. Rules and Formats for Registration under GST 17 Rules for Registration 2 26 Forms for Registration 2 Online Application 4 Information Verification 4 No Registration fee 4 Time Period for Registration 4 Registration of Casual Taxable person & Non Resident Person 4 Migration of existing taxpayers to GST 4 Physical verification of Business Premises 5

3. Rules and Formats for Payment under GST

4 Rules for Payment 5 Forms of Electronic Ledger 5 Mode of Payment of tax 5 Unique Identification Number (UIN) 5 7 forms for Payment 6

4. Rules and Formats of Invoice under GST

5 Rules for Invoice 6 Information to be filed in Tax Invoice 6 Manner of issuing invoice 7 Electronic Reference Number of Invoice 7 Bill of Supply 7 Time period for raising invoice 7

5. Rules and Formats for Return under GST 7

25 Rules on Return 7 27 Return forms 9 Forms for Outward and Inward Supplies 9 Number of Monthly Returns 9 Forms for taxable person, composition dealer, Non- resident

taxable person 9

No time period for issuing SCN to non- filers of return 9 Annual return 9 Tax return preparers 9

6. Rules and Formats for Refunds under GST

6 Refund Rules 10 10 Refund Forms 10 Form for Refund application 11 Refund relating to balance amount 11 Provisional refund 11 Documentary evidence for Refund application 11 Refund amount to be credited to bank account 11

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HIGHLIGHTS OF DRAFT GST RULES & FORMATS WHICH GOT APPROVED BY THE GST COUNCIL

The Government is not leaving any stone unturned to roll out the much awaited indirect tax reform from April 1, 2017. In less than a week after the first meeting of the GST Council (on September 22-23, 2016), the Central Board of Excise and Customs (“CBEC”) on September 26, 2016, has unveiled the Draft Rules and formats under GST relating to registration, invoice and payment. Further on September 27, 2016, more GST Draft Rules and formats on return and refunds were also put in public domain (collectively referred to as “the Draft GST Rules”). Earlier, in the month of October, 2015, the Draft GST Business Processes on registration, payment, returns and refunds were put in public domain for public comments.

Draft GST Rules approved by the GST Council

The CBEC invited comments on the Draft GST Rules by September 28, 2016. Now, the GST Council, in its second meeting held on September 30, 2016, has approved the 5 sets of Draft GST Rules - registration, payment, refund, returns and invoice. The Draft GST Rules will be notified after enactment of the GST Act.

Some of the other important discussions in the second meeting of the GST Council are stated hereunder:

Treatment of exemption from GST

In the Current regime, the Centre gives exemption to 11 states mostly in North East and hilly regions from Excise duty as also many States give the same as incentive for setting up industry. The GST Council has decided that under GST, which will subsume Excise duty and VAT among other levies, taxes will have to be collected and it can be reimbursed from the annual budgets to the exempted categories.


Disagreement on Centre’s power for assessment of 11 lakh Service tax assesses in the new dispensation

The GST Council in its first meeting held on September 22-23, 2016 has given the power for assessment to Centre for assessing 11 lakh Service tax assessees who are currently assessed by them. However, there were divisions over ratifying/ approving the minutes of the first meeting of the GST Council after at least two States disagreed with the Centre's power for assessing these taxpayers in the new dispensation. The discussion was in conclusive and therefore it will continue in the next meeting.

The next meeting of GST Council will be held on October 18-20, 2016 to discuss on issues like Service tax assessment and the formula for calculating compensation to be paid to States in case of revenue shortfall as a result of implementation of the GST regime, possibly from April 1, 2017.GST rates, Draft GST law to be decided by November 22, 2016.

KEY HIGHLIGHTS OF THE DRAFT GST RULES

Key highlights of the Draft GST Rules for registration, invoice, payment, return and refunds are stated below for easy digest:

I. Draft Rules and Formats for Registration under GST

Section 19 of Model CGST/SGST Act (“the Model GST Act”)dealing with registration, prescribes that every person who is liable to be registered shall apply for registration in the manner prescribed, which is now provided by way of the Draft Rules for Registration under GST (“the Draft Registration Rules”) along with Registration formats.

The salient features of the Draft Rules and Formats for Registration are as follows-

17 Rules for Registration prescribed-The Draft Registration Rules have 17 Rules viz. application for registration, verification, issuance of registration certificate, Grant of registration to non-resident taxable person, Amendment to Registration etc.

26 Forms for Registration prescribed-26 Forms for Registration have been prescribed (Form GST REG-01 to Form GST REG-26), namely-


S. No Form Number Content

1 GST REG-01 Application for Registration under Section 19(1) of Goods and Services Tax Act, 20--

2 GST REG-02 Acknowledgement

3 GST REG-03 Notice for Seeking Additional Information/ Clarification/ Documents relating to Application for<<Registration/Amendment/Cancellation>>

4 GST REG-04 Application for filing clarification/additional information/ document for<<Registration/Amendment/Cancellation/Revocation of Cancellation>>

5 GST REG-05 Order of Rejection of Application for <Registration /Amendment / Cancellation/ Revocation of Cancellation>>

6 GST REG-06 Registration Certificate issued under Section 19(8A) of the Goods and Services Tax Act, 20--

7 GST REG-07 Application for Registration as Tax Deductor or Tax Collector at Source under Section 19(1) of the Goods and Service Tax Act, 20--

8 GST REG-08 Order of Cancellation of Application for Registration as Tax Deductor or Tax Collector at Source under Section 21 of the Goods and Service Tax Act, 20--.

9 GST REG-09 Application for Allotment of Unique ID to UN Bodies/Embassies /any other person under Section 19(6) of the Goods and Service Tax Act, 20

10 GST REG-10 Application for Registration for Non-Resident Taxable Person.

11 GST REG-11 Application for Amendment in Particulars subsequent to Registration

12 GST REG-12 Order of Amendment of existing Registration

13 GST REG-13 Order of Allotment of Temporary Registration/ Suo Moto Registration

14 GST REG-14 Application for Cancellation of Registration under Goods and Services Tax Act, 20--.

15 GST REG-15 Show Cause Notice for Cancellation of Registration

16 GST REG-16 Order for Cancellation of Registration

17 GST REG-17 Application for Revocation of Cancelled Registration under Goods and Services Act, 20--.

18 GST REG-18 Order for Approval of Application for Revocation of Cancelled Registration

19 GST REG-19 Notice for Seeking Clarification/Documents relating to Application for << Revocation of Cancellation>>

20 GST REG-20 Application for Enrolment of Existing Taxpayer


S. No Form Number Content

21 GST REG-21 Provisional Registration Certificate to existing taxpayer

22 GST REG-22 Order of cancellation of provisional certificate

23 GST REG-23 Intimation of discrepancies in Application for Enrolment of existing taxpayer

24 GST REG-24 Application for Cancellation of Registration for the Migrated Taxpayers not liable for registration under Goods and Services Tax Act 20--

25 GST REG-25 Application for extension of registration period by Casual / Non-Resident taxable person.

26 GST REG-26 Form for Field Visit Report

Online filling of application- Application for registration is to be made online either directly on the GSTN Portal or through Facilitation Centres (FC) notified by the Board or Commissioner.

Verification of Information- for GST Registration, Part A of FORM GST REG-01 (application for registration under Section 19(1) of the Model GST Act) seeks to verify PAN through Income Tax Portal, mobile number and email i.d. through one-time password (OTP) sent to the said mobile number/email address.

No fee for filling registration application-No fee is payable for filing application for registration as nothing regarding fee is mentioned under Draft Registration Rules.

Time period for Registration-The Draft Registration Rules provides that registration will be granted within 3 common working days if no discrepancy is found. If any discrepancy is found, the same will be communicated through the GSTN within the above time limit.

Registration of Casual taxable persons and Non- resident taxable person- The Model GST Act provides for registration of Casual taxable person and Non-resident taxable person i.e. a person who occasionally undertakes transactions involving supply of goods and/or services and has no fixed place of business in India. The said person are also required to deposit GST in advance on estimated basis and thereafter an acknowledgement will be issued electronically.

Migration of existing taxpayers to GST - The Draft Registration Rules provides rules for migration of person already registered under earlier law, thereby stating that person registered under an earlier law and having a PAN shall be granted registration on a provisional basis and a certificate of registration incorporating the GSTIN therein, shall be made available on the Common Portal.


Thereafter, an application along with the information/documents specified therein shall be submitted electronically. Information asked for shall be furnished within a period of 6 months or such further period as may be extended by the Board or Commissioner. Failure to submit relevant information within prescribed time period can lead to cancellation of provisional registration.

Physical verification of business premises- Verification of premises may be taken up by the proper officer after granting registration and verification report to be uploaded in Form GST REG-26.

Read more on the Draft Rules and Formats for Registration under GST at: http://www.cbec.gov.in/resources//htdocs-cbec/gst/draft-registration-rules.pdf http://www.cbec.gov.in/resources//htdocs-cbec/gst/draft-formats-under-registration-rules.pdf

II. Draft Rules and Formats for Payment under GST

Section 35 of the Model GST Act deals with payment of tax, interest, penalty and other amounts. It provides that every deposit made by internet banking or by using credit/debit cards or NEFT/RTGS or by any other mode, shall be credited to the electronic cash ledger to be maintained in the manner prescribed. Further, the amount of input tax credit as self-assessed in the return shall be credited to electronic credit ledger etc.

In this regard, the Draft Rules for Payment under GST (“the Draft Payment Rules”) along with Payment formats have been prescribed, salient features of which are as follows-

4 Rules for Payment Prescribed- The Draft Payment Rules have 4 Rules viz. Electronic Tax Liability Register, Electronic Credit Ledger, Electronic Cash Ledger and Identification number for each transaction.

Forms of various electronic register/ledger- The electronic tax liability register shall be maintained in FORM GST PMT-1, the electronic credit ledger in FORM GST PMT-2 and the electronic cash ledger in FORM GST PMT-3.

Mode of Payment of tax- Tax can be paid either through net banking, credit or debit card, NEFT/RTGS, Over the Counter (“OTC”) [OTC payment only up to Rs. 10,000per challan per tax period].

Unique Identification Number (UIN)- A UIN shall be generated at the Common Portal for each debit or credit to the electronic cash or credit ledger.


Generation of UIN for every transaction – to be correlated with tax liability register.

7 Forms for Payment prescribed -7 Forms for payment has been prescribed (Form GST PMT-1 to Form GST PMT -6 and Form GST PMT-2A), namely-

S. No. Form No. Title of the Form

1. Form GST PMT-1

Electronic Tax Liability Register of Taxpayer (Part–I: Return related liabilities) Electronic Tax Liability Register of Taxpayer (Part–II: Other than return related liabilities)

2. Form GST PMT-2 Electronic Credit Ledger

3. Form GST PMT-2A Order for re-credit of the amount to cash or credit ledger

4. Form GST PMT-3 Electronic Cash Ledger

5. Form GST PMT-4 Challan For Deposit of Goods and Services Tax

6. Form GST PMT-5 Payment Register of Temporary IDs/Un-registered Taxpayers

7. Form GST PMT-6 Application For Credit of Missing Payment (CIN not generated)

Read more on the Draft Rules and Formats for Payment under GST at: http://www.cbec.gov.in/resources//htdocs-cbec/gst/draft-payment-rules.pdf http://www.cbec.gov.in/resources//htdocs-cbec/gst/draft-formats-under-payment-rules.pdf

III. Draft Rules and Formats of Invoice under GST

Section 23 of the Model GST Act contains the provisions regarding tax invoice. Tax invoice is an important document stating transaction of supply or agreement of supply of goods and/or services.

The Draft Rules of Invoice under GST (“the Draft Invoice Rules”) along with Invoice formats have now been put on Public domain. The salient features of the Draft Invoice Rules and Formats are as follows-

5 Rules for Invoice prescribed-The Draft Invoice Rules have 5 Rules viz. Tax invoice, Manner of Issuing Invoice, Bill of supply, Supplementary tax invoice and Credit or debit notes, Tax Invoice in special cases.

Information to be filed in Tax Invoice-The Draft Invoice Rules provides that the tax invoice which is to be issued by supplier shall have an extensive list of information, numbering around 20 viz. name, address and GSTIN of the supplier, HSN code of goods or Accounting Code of services, rate of tax (CGST, SGST or IGST), place of delivery where the same is different from the place of supply etc.


Also, in case of exports information such as name and address of the recipient, address of delivery, name of the country of destination and number and date of application for removal of goods for export [ARE-1] are also required to be given.

Manner of issuing invoice- The invoice shall be prepared in triplicate, in case of supply of goods, and in duplicate, in case of supply of services.

Form for application for Electronic Reference Number of Invoice- Form GST INV -1 has been prescribed in which a taxable person can apply for obtaining Electronic Reference Number of an Invoice (valid for 30 days) and produce the same for verification by the proper officer as required under Section 61 of the Model GST Act instead of the tax invoice.

Bill of supply-A registered taxable person supplying non-taxable goods and/or services or paying tax under Composition scheme is required to issue, bill of supply instead of a tax invoice. Bill of Supply, which is to be issued by supplier shall have a list of information numbering around 12 viz. name, address and GSTIN of the supplier, date of its issue, HSN Code of goods or Accounting Code for services, description and value of goods or services etc.

Time period for raising invoice- The Draft Invoice Rules provides for 30 days’ time limit for raising invoice from the date of supply of services. However, the Model GST Act provides that for goods, the tax invoice is to be issued at the time of supply.

Read more on the Draft Rules and Formats of Invoice under GST at: http://www.cbec.gov.in/resources//htdocs-cbec/gst/draft-invoice-rules.pdf http://www.cbec.gov.in/htdocs-cbec/gst/draft-formats-under-invoice-rules.pdf

IV. Draft Rules and Formats for Return under GST

A return is a statement of specified particulars relating to business activity undertaken by the taxable person during a prescribed period. GST is a self-assessed destination based consumption taxation system. Thus, the submission and processing of return is an important link between the taxpayer and tax administration. Chapter – VIII of the Model GST Act contains the provisions regarding returns.

The Draft Rules of Return under GST (“the Draft Return Rules”) along with Return Formats have now been put on Public domain. The salient features of the Draft Return Rules and Formats are as follows-

25 Rules on Return prescribed- The Draft Return Rules have 25 Rules viz. Form and manner of furnishing details of outward supplies and inward supplies, Form and manner of submission of monthly return, quarterly return by the composition supplier, return by non-resident taxable person, return by an input service distributor, Notice to non-filers of returns, Refund of interest paid on reclaim of reversal etc.

27 Return forms prescribed-27 GST Returns/Statements have been prescribed (Form GSTR- 1 to GSTR-11, Form GST-TRP-1 to Form GST-TRP-7 etc.), namely-


S. No. Form Number Content

1 Form GSTR-1 Details of outward supplies of taxable goods and/or services effected

2 Form GSTR-1A Details of outward supplies as added, corrected or deleted by the recipient

3 Form GSTR-2 Details of inward supplies of taxable goods and/or services claiming input tax credit

4 Form GSTR-2A Details of inward supplies made available to the recipient on the basis of FORM GSTR-1 furnished by the supplier

5 Form GSTR-3 Monthly return on the basis of finalization of details of outward supplies and inward supplies along with the payment of amount of tax

6 Form GSTR-3A Notice to a registered taxable person who fails to furnish return under section 27 and section 31

7 Form GSTR-4 Quarterly Return for compounding Taxable persons

8 Form GSTR-4A Details of inward supplies made available to the recipient registered under composition scheme on the basis of FORM GSTR-1 furnished by the supplier

9 Form GSTR-5 Return for Non-Resident foreign taxable person

10 Form GSTR-6 ISD return

11 Form GSTR-6A Details of inward supplies made available to the ISD recipient on the basis of FORM GSTR-1 furnished by the supplier

12 Form GSTR-7 Return for authorities deducting tax at source

13 Form GSTR-7A TDS Certificate

14 Form GSTITC-1 Communication of acceptance, discrepancy or duplication of input tax credit claim

15 Form GSTR-8 Details of supplies effected through e-commerce operator and the amount of tax collected as required under sub-section (1) of section 43C

16 Form GSTR-9 Annual return

17 Form GSTR-9A Simplified Annual return by Compounding taxable persons registered under Section 8

18 Form GSTR-9B Reconciliation Statement

19 Form GSTR-10 Final return

20 Form GSTR-11 Details of inward supplies to be furnished by a person having UIN



21 Form GST-TRP-1 Application for enrolment as Tax return preparer

22 Form GST-TRP-2 Enrolment certificate as Tax return preparer

23 Form GST-TRP-3 Show cause to as Tax return preparer

24 Form GST-TRP-4 Order of cancelling enrolment as Tax return preparer

25 Form GST-TRP-5 List of Tax return preparers

26 Form GST-TRP-6 Consent of taxable person to Tax return preparer

27 Form GST-TRP-7 Withdrawal of authorization to tax return preparer

Forms for Outward Supplies and inward Supplies- Separate forms are prescribed for outward supplies, inward supplies and the addition/deletion thereunder.

Number of Monthly Returns-Every registered taxable person has to furnish minimum 3 Monthly returns along with annual return.

Forms for taxable person, composition dealer, Non- resident taxable person etc.-Distinct forms are prescribed for periodical returns by Regular Taxable Persons, composition dealers, Non-resident taxable persons, Persons who are required to deduct or collect tax at source etc.

No time period for issuing SCN to non- filers of return-No time period has been prescribed for issuing Notice to non- filers of return under Rule 9 of the Draft Returns Rules.

Annual return-Every registered taxable person shall furnish an annual return electronically in FORM GSTR-9 through the Common Portal either directly or from a FC, notified by the Board or Commissioner.

Tax return preparers-The Draft Return Rules prescribe the conditions for enrolment as tax return preparers.

Read more on the Draft Rules and Formats for Return under GST at: http://www.cbec.gov.in/resources//htdocs-cbec/gst/draft-return-rules-26092016.pdf http://www.cbec.gov.in/resources//htdocs-cbec/gst/draft-return-formats-26092016.pdf


V. Draft Rules and Formats for Refunds under GST

Section 38 of the Model GST Act contains the provisions regarding refund of tax. Any person claiming refund of any tax and interest shall make an application before the expiry of 2years from the relevant date in prescribed form.

The Draft Rules of Refunds under GST (“the Draft Refund Rules”) along with Refund Formats have now been put on Public domain. The salient features of the Draft Refund Rules and Formats are as follows-

6 Refund Rules prescribed-The Draft Refunds Rules have 6 Rules viz. Refund of tax, interest, penalty, fees or any other amount, Grant of provisional refund, Order sanctioning refund, Refund of tax to certain persons etc.

10 Refund Forms prescribed-10 Forms have been prescribed (Form GST RFD-01- Form GST RFD- 10), namely-


1. GST RFD-01 Refund Application form

Annexure 1 Details of Goods Annexure 2 Certificate by CA

2. GST RFD-02 Acknowledgement

3. GST RFD-03 Notice of Deficiency on Application for Refund

4. GST RFD-04 Provisional Refund Sanction Order

5. GST RFD-05 Refund Sanction/Rejection Order

6. GST RFD-06 Order for Complete adjustment of claimed Refund

7. GST RFD-07 Show cause notice for reject of refund application

8. GST RFD-08 Payment Advice



9. GST RFD-09 Order for Interest on delayed refunds

10. GST RFD-10 Refund application form for Embassy/International Organizations

Form for Refund application- A common refund application is prescribed for all refunds arising on various instances which is to be made in Form GST RFD-1 electronically through the Common Portal either directly or from a FC notified by the Board or Commissioner.

Refund relating to balance amount in electronic cash ledger- Claim for refund of balance amount in the electronic cash ledger is to be made through the return for the relevant tax period.

Provisional refund- The Draft Refund Rules provides for a stipulation of provisional refund within 7 days from the date of acknowledgement, where the proper officer after scrutinizing the claim is prima facie satisfied. However, such provisional refund, is only contemplated if the compliance rating of the supplier is at least 5 (on scale of 10), amongst other conditions.

Documentary evidence to be filled with refund application- Refund application is to be accompanied by around 10 documentary evidence to establish that a refund is due to applicant including a CA/CMA Certificate to certify that incidence of the tax and interest, claimed refund, has not been passed to any person, wherever applicable.

Refund amount to be credited to bank account- Refunds will be directly credited to the bank accounts of the tax payer as declared while obtaining registration and as specified in the application for refund.

Read more on the Draft Rules and Formats for Refunds under GST at: http://www.cbec.gov.in/resources//htdocs-cbec/gst/draft-refund-rules-26092016.pdf http://www.cbec.gov.in/resources//htdocs-cbec/gst/draft-refund-formats-26092016.pdf

Draft GST Rules & Formats

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