GSTIndAS, Volume 01, December 2016
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©GSTIndAS Page 0 December 2016 Vol.-1 Issue 1 Pages 1-35 GSTIndAS Celebrate the change “This is not just the collection of good thoughts on the subject GSTIndAS, but also an effort to start with a new way of learning and we call it…” #SELF_LEARNING
Transcript of GSTIndAS, Volume 01, December 2016
©GSTIndAS Page 0
December 2016 Vol.-1 Issue 1 Pages 1-35
GSTIndAS Celebrate the change
“This is not just the collection of good thoughts on the subject GSTIndAS, but also an effort to start with a new way of learning and we call it…”
#SELF_LEARNING
©GSTIndAS Page 1
ABOUT GSTIndAS
This country in which we live has given many brilliant minds for which we
don't even need to give any introduction.
We all know that in today's era, everything is linked with money &
education industry is no more an exception.
Coaching institutes, training institutes etc. are not only spoon feeding
monotonic knowledge but also forcing a rigid way of thinking which retards
development creating the atmosphere of fear WHICH NEEDS A CHANGE.
Here comes the role of our ancient scholars 'the Eklavya' who set a great
example of self-learning, overcoming every difficulty coming on his way of
learning with a desire of becoming an expert in archery, and he did it.
That is what we want to do with this GSTIndAS; a new start to the
beginning that was made by our ancient tutors, start reading the content
and the knowledge is all yours.
We call this concept as Self Learning and this booklet is a part of that
motive.
Thank you,
Regards
HIMANSHU RASTOGI
Thinker for GSTIndAS
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INSIDE
Ind-AS 29 (Hyper Inflationary Economy) ....................................................................... 3
Ind-AS 104 (Insurance Contracts) ................................................................................. 5
Transitional Provisions under GST ................................................................................ 7
Levy and Exclusions .................................................................................................. ...14
Enrolment and Registration ...................................................................................... ...18
Transitional Provisions _ simplified bare .................................................................... 23
Self-Learning, Mastery, and Self-Mastery .................................................................... 27
Celebrate the change .................................................................................................... 30
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Kajal Juneja
CA Finalist
Ind-AS 29 Financial Reporting in Hyperinflationary
Economies (HIE) and Ind AS 104 Insurance Contracts
IND-AS 29 FINANCIAL REPORTING IN HYPERINFLATIONARY ECONOMIES (HIE)
NOTE: No Carve Out, No Differences, No Similar AS
SCOPE:
1) Standard applicable to the Financial Statement (including consolidated
Financial Statement) of any entity who prepares its accounts in currency of
Hyperinflationary economy.
2) In Hyperinflationary economy, reporting of accounts without restatement
becomes fruitless due to loss of purchasing power of money of earlier period within same accounting period.
3) Hyperinflationary economy means: (a) Where people prefer to keep their wealth in non-monetary assets
(land, b/d, gold, etc.). Prefer to keep monetary assets in stable foreign
currency.
(b) Cumulative inflation is around 100% in 3yr period
(c) Credit sales & purchases take place at prices after considering for
expected loss of purchasing power.
(d) Interest rates, wages & prices are linked to price index.
• All the above conditions does not establish absolute rate, it depends on the
judgement when restatement of fin. St. Is deemed necessary.
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THE RESTATEMENT OF FINANCIAL STATEMENTS
• Accounting TreatmentHISTORICAL AND CURRENT COST FINANCIAL
STATEMENT
In Balance Sheet
Monetary Items (debtor, bills receivable, bills payable): No change to
be made
Non-Monetary Items: Indexed Cost
(Amount * Current Index/Index at purchase price)
In Profit & Loss
All items are to be indexed. (Any difference shall be transferred to
P&L account.)
Corresponding Figures for the previous reporting period to be
restated by applying general price index.
In case of consolidated financial statement, subsidiaries of parent,
wherein both are reporting in currency of hyper inflationary economy, needs to restate.
DISCLOSURES
• That the financial statement and corresponding figures of previous period
have been restated.
• Whether financial statement are based on historical or current cost
approach.
• Identity and level of the price index at the end of reporting period and the
movement in index during current and previous reporting period.
• Duration of hyperinflationary situation existing in the economy.
*********************
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IND-AS 104 INSURANCE CONTRACTS
• OBJECTIVE: To specify the financial reporting for insurance contracts
issued by entities.
• MEANING: A contract under which the insurer accepts significant
insurance risk from the policyholder by accepting to compensate on
occurrence of a specified uncertain event.
• SCOPE: (a) Insurance contracts (incl. Reinsurance contracts)
b) Financial instruments that it issues with a discretionary participation (detailed discussion in Ind-AS 107).
• NON-APPLICABILITY: a) Product warranties (Ind-AS 18 & 37) b) Employers’ assets and liabilities under employee benefit (Ind-AS 19 &
102)
c) Contractual rights or obligations (Ind-AS 17, 18 & 38) d) Financial guarantee (Ind-AS 39, 32& 107)
e) Contingent consideration payable or receivable (Ind-AS 103)
f) Direct insurance contracts (i.e. Entity is the policyholder) However, a “Cedant” shall apply this standard to reinsurance contracts that it
holds.
UNBUNDLING OF DEPOSIT COMPONENTS
• Some insurance contracts contain both an insurance component & a
deposit component. In some cases, an insurer is required or permitted to
unbundle those components.
• Unbundling is required when:
a) The insurer can measure the deposit component separately.
b) The insurer’s accounting policies do not otherwise require it to recognise all obligations & rights arising from deposit component.
• Unbundling is permitted, but not required if (a) above is satisfied but the
accounting policies requirement is in contrary to (b) above.
• Unbundling is prohibited if condition given in (a) above is not satisfied.
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Note: Apply this Ind-AS for insurance component, and for deposit component
refer Ind-AS 39.
• An insurer:
a) Shall carry out the liability adequacy test.
b) Shall remove an insurance liability when it is extinguished.
c) Shall not offset the reinsurance assets against reinsurance liabilities.
LIABILITY ADEQUACY TEST
An assessment of whether the carrying amount of an insurance liability
needs to be increased based on a review of future cash flows.
• If an insurer applies liability adequacy test that meets specified min.
requirements of Para 16, this Ind-AS imposes no further requirements.
• As per Para 16, we compare our liability against all future cash flows estimates, & deficiency , if any, is recognised in P&L.
CHANGES IN ACCOUNTING POLICIES
• An insurer may change its accounting policies for insurance contracts only
if the change makes the financial statement more relevant to the economic decision making needs of the users.
IMPAIRMENT OF REINSURANCE ASSETS
• If a cedant’s reinsurance asset is impaired, the cedant shall reduce its
carrying amt. & recognise the impairment loss in P&L.
• A reinsurance asset is impaired if:
a) There is objective evidence, cedant may not receive all the amounts due
under the terms of the contract.
B) The event has a significant impact on the amounts that cedant will receive from the reinsurer.
Note: “Cedant” is the policyholder under a reinsurance contract.
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DiwakarJha
CA Finalist
TRANSITIONAL PROVISIONS UNDER GOODS AND SERVICE TAX
General Provisions
All persons appointed by respective departments shall be deemed to
have been appointed as GST officers.
CG or SG may issue orders/make rules for smooth transition to GST.
MIGRATION OF EXISTING TAXPAYERS TO GST
On appointed day, all registered persons under earlier laws shall be
given provisional RCs.
Meaning of “appointed day”: the day on which section 1 (i.e.
applicability) of this Act comes into effect.
Registration certificate (RC) shall be valid for 6 months from its issue, which may be extended by Govt.
Very person to whom RC is issued, shall furnish reqd. info within 6 months
On furnishing info, provisional RC shall be converted into final one by Govt.
Provisional RC may be cancelled if the person fails to furnish reqd. info within given time
Provisional RC shall be deemed to have not been issued if said registration is cancelled in pursuance of an application that he was not liable for registration.
A person to whom provisional RC is issued and who is eligible to pay tax under composition scheme, may opt for that within given time.
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AMOUNT OF CENVAT CREDIT C/F TO BE ALLOWED AS INPUT
TAX CREDIT (ITC)
A Registered tax payer (RTP), other than a composition dealer, may take credit of CENVAT credit C/F in the return for immediately preceding
period before appointed day furnished under earlier law.
Credit not allowable if that amount is inadmissible as ITC under this Act.
AMOUNT OF VAT CREDIT C/F TO BE ALLOWED AS ITC
A RTP, other than a composition dealer, may take credit of VAT credit C/F in the return for immediately preceding period before appointed day
furnished under earlier law.
Credit not allowable if that amount is inadmissible as ITC under this Act.
AMOUNT OF CENVAT CREDIT NOT C/F TO BE ALLOWED IN CERTAIN
CASES
A RTP, other than a composition dealer, may take credit of un-availed CCR not carry forward in respect of CG in the return for immediately
preceding period before appointed day furnished under earlier law.
CREDIT NOT ALLOWABLE UNLESS THAT AMOUNT WAS ADMISSIBLE UNDER EARLIER LAW AND IS ALSO ADMISSIBLE AS
ITC UNDER THIS ACT.
UNAVAILED CCR ON CG = AGGREGATE CCR ON CG – CCR ALREADY AVAILED I.R.O. CG UNDER EARLIER LAW.
AMOUNT OF INPUT TAX CREDIT ON CG NOT C/F TO BE ALLOWED IN
CERTAIN CASES
A RTP, other than a composition dealer, may take credit of un-availed
ITC not carry forward in respect of CG in the return for immediately preceding period before appointed day furnished under earlier law
CREDIT NOT ALLOWABLE UNLESS THAT AMOUNT WAS
ADMISSIBLE UNDER EARLIER LAW AND IS ALSO ADMISSIBLE AS ITC UNDER THIS ACT
UNAVAILED ITC ON CG = AGGREGATE ITC ON CG – ITC ALREADY
AVAILED I.R.O. CG UNDER EARLIER LAW
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CREDIT OF ELIGIBLE DUTIES & TAXES IN RESPECT OF INPUTS TO BE
ALLOWED IN CERTAIN CASES
A RTP, who was engaged in manufacturing of exempted or non-exempted goods under CEA 1944 or provision of exempted or non-exempted
services under FA 1994, shall be entitled to take credit of THE AMOUNT OF CCR CARRY FORWARD IN RETURN FURNISHED
UNDER THE EARLIER LAW; AND
THE AMOUNT OF CCR OF ELIGIBLE DUTIES IN RESPECT OF INPUTS HELD AS STOCK (SEMI-FINISHED OR FINISHED)
RELATING TO EXEMPTED GOODS OR SERVICES.
CREDIT OF ELIGIBLE DUTIES & TAXES IN RESPECT OF INPUTS OR
INPUT SERVICES IN TRANSIT
A RTP will be eligible to take credit of eligible duties and taxes i.r.o. input or input services recd. on or after appointed day (but duty or tax has
been paid before appointed day), provided entry passed in BoA/cs within 30 days from appointed day;
Period of 30 days may be extended by further 30 days;
A statement needs to be furnished.
CREDIT OF VAT IN RESPECT OF INPUTS IN TRANSIT
A RTP will be eligible to take credit of VAT in respect of input received on or after appointed day (but tax has been paid before appointed day),
provided invoice received or entry passed in Books of Accounts (BOA)
within 30 days from appointed day;
Period of 30 days may be extended by further 30 days;
A statement needs to be furnished.
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CREDIT OF DUTIES & TAXES ON INPUTS HELD IN STOCK ALLOWED IN
CASE OF SWITCH
A RTP, who was paying tax under composition scheme, can take credit of duties & taxes in respect of inputs held as stock,
Conditions:
Inputs are used for making taxable supplies; Person not opted for composition scheme;
Person is eligible for ITC on such inputs;
Such person has possession of invoice; Invoice is not older than 12 months.
CREDIT OF VAT ON INPUTS HELD IN STOCK ALLOWED IN CASE OF
SWITCH
A RTP, who was paying tax under composition scheme can take credit of VAT in respect of inputs held as stock,
Conditions: Inputs are used for making taxable supplies;
Person not opted for composition scheme;
Person is eligible for ITC on such inputs;
Such person has possession of invoice; Invoice is not older than 12 months.
PENDING REFUND CLAIMS TO BE DISPOSED OF
Every claim for refund filed under earlier law shall be disposed of as per earlier law and amount accruing shall be paid in cash;
Where claim is rejected, the amount rejected shall lapse;
Where CCR has been C/F, no refund shall be allowed.
REFUND FOR EXPORTS BEFORE APPOINTED DAY
Every refund claim for goods or services exported before appointed day, of any duty or tax, shall be disposed as per earlier law;
Where claim is rejected, the amount rejected shall lapse;
Where CCR has been C/F, no refund shall be allowed;
CLAIM OF CCR TO BE DISPOSED UNDER EARLIER LAW
Every appeal, revision, review etc. relating to claim for CCR, initiated
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anytime, under earlier law shall be disposed of as per earlier law;
Any amount of credit found admissible to claimant shall be paid in cash and no ITC granted for that;
No refund allowed in case CCR has been C/F under GST law;
If any amount of credit becomes recoverable as a result of appeal, revision etc., same shall be recovered as an arrear of tax under GST law;
No ITC shall be granted for the amount so recovered.
APPEAL ETC. RELATING TO OUTPUT TAX UNDER EARLIER LAW
Every appeal etc. relating to output tax, interest, fine, penalty,
initiated anytime, shall be disposed as per earlier law;
If any amount becomes recoverable, it shall be recovered as an arrear of tax under GST law and will not be eligible for ITC;
If amount found to be admissible to claimant, it shall be paid in cash and it will not be eligible for ITC;
TREATMENT OF AMOUNT RECOVERED DUE TO REVISION OF RETURNS
If any return, furnished under earlier law, is revised after appointed day, and as a result
ANY AMOUNT IS FOUND TO BE RECOVERABLE; OR ANY AMOUNT OF CCR IS FOUND INADMISSIBLE.
Same shall be recovered as an arrear of tax under GST law and no ITC
shall be allowed.
TREATMENT OF AMOUNT REFUNDED DUE TO REVISION OF RETURNS
If any return, furnished under earlier law, is revised after appointed day but within time limit specified, and as a result
ANY AMOUNT IS FOUND TO BE REFUNDABLE; OR
ANY AMOUNT OF CCR IS FOUND ADMISSIBLE. SAME SHALL BE REFUNDED IN CASH.
WORKS CONTRACTS & PERIODIC SUPPLY
GST shall be applicable on Contract entered into prior to appointed day; and
Goods and/or service supplied on or after appointed day
No tax shall be payable on supply of goods and/or services on or after appointed day, where
Supply has been received prior to appointed day and
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Duty or tax has already been paid under earlier law.
TAXABILITY OF GOODS/ SERVICES IN SOME CASES
Tax shall be payable in respect of taxable goods or services under earlier law to the extent POT in respect of such goods or services arose before appointed day.
ITC on account of services received prior to appointed day by an ISD shall be eligible for distribution as credit, even invoice for such service
recd. on or after appointed day.
TRANSFER OF UNUTILIZED CCR BY TAXABLE PERSON HAVING
CENTRALIZED REGISTREATION EARLIER
When a taxable person, having centralized registration under earlier law, has obtained registration under GST law, such person may take credit of
CCR C/F in the return for immediately preceding period before appointed day furnished under earlier law;
Credit not allowable if that amount is inadmissible as ITC under this Act;
Such credit may also be transferred to RTPs having same PAN for which centralized registration was taken.
TAX PAID ON GOODS/ CAPITAL GOODS LYING WITH AGENTS
If any goods/capital goods belonging to principal are lying with agent on appointed day, agent can take credit on such goods, conditions:
Agent is a RTP; Both principal and agent declare the details of stock lying with
agent within specified time;
Invoice for such goods is not more older than 12 months;
Principal has either reversed or not availed ITC on such goods.
GOODS SENT ON APPROVAL BASIS
Where any goods are sent on approval basis, not earlier than 6 months before appointed day, are not approved by buyer, then no tax shall be
payable if goods are returned within 6 months from appointed day;
Aforesaid period may be extended by further 2 months;
Tax shall be payable by person returning the goods after a period of 6 months or extended period.
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DEDUCTION OF TAX AT SOURCE
Where a supplier has supplied goods in respect of which tax was to be deducted at source under earlier law, no tax shall be deducted by
deductor where payment to supplier is made on or after appointed day.
Where CCR on input services reversed due to non-payment of consideration within 3 months, such credit can be reclaimed provided that taxable person made payment within 3 months from appointed day.
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Himanshu Rastogi
CA Finalist
Levy & Exclusions and Enrolment & Registration
Levy and Exclusions under Goods and Service Tax
BASICS
Both States and Center empowered to Levy GST, DUAL GST model.
Taxation on value additions only, allow seamless credit.
Strong focus TO REMAIN on compliance with state of art GSTN network.
Center would levy and collect CGST, States would Levy and Collect SGST.
Destination Based Taxation instead origin based.
Central and States Indirect Taxes to be subsumed.
ABOUT DESTINATION BASED -PRINCIPLE
Taxes will go to that state and territory which consume resources.
Imports & domestic consumption shall be at par where exports are made
at Zero Percent.
India being developing country and have higher consumption, shall gain
from GST.
Producer states shall get nothing, consumption state to get the entire pie of
taxes, among the reason for disputes e.g., Gujarat and MH, TN, HR etc.
DIFFERENCES IN GST AND PRESENT TAXES
Taxable event is supply
Concept of two parties, Interstate t/f to own unit shall be taxable.
No centralized Registration.
No credit unless payment made.
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LEVY SEC-8 OF CGST/ SGST ACT
Both CGST and SGST shall be levied on all Intrastate transfer of goods
and/or services,
At the rates given under S-15 but not exceeding 14%.
Supply will be called intrastate when both Location of Supplier and Place of supply is within state.
CGST/ SGST shall be paid by Taxable person.
May specify category on which taxes are paid on reverse charge by recipient of such goods/ service.
CG or SG shall specify category of Service on which taxes are to be paid by
Ecommerce operator.
If E commerce operator do not have any physical presence in the taxable
territory, any person representing such shall pay.
If no such person, operator shall appoint a person for such purpose.
MEANING OF SUPPLY (S-3)
Inclusive definition
All forms of supply of goods and/or Services such as sale, transfer,
barter, exchange, license, rental, lease or disposal ++ Consideration++
Furtherance of business.
Import of Services +With Consideration + Whether or not for furtherance of business.
Consideration is not important as compare to present situation.
Supply by Agent for a commission etc (Principal and Agency relation).
Deemed Supply by an aggregator.
NOT TO BE TREATED AS SUPPLY:
By CG/SG as a public authority.
Mentioned in schedule III.
Tax liability on composite supply and its manner provided
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MEANING OF GOODS / SERVICES
GOODS
Same Definitions as present, means all kind of moveable property other
than money and securities but includes actionable claims, growing crops, grass and things attached to or forming part of the land which are agreed
to be severed before supply or under a contract of supply.
Goods don’t include Intangibles.
SERVICES
Anything other than goods.
Includes transactions in money but doesn’t include money and securities, if separate consideration is charged for transaction in money, includible.
MEANING OF BUSINESS (FURTHERANCE OF BUSINESS) S – 2(17)
Very wide and Inclusive definition
Any trade, commerce, profession, whether or not monetary etc
(illustrative only).
Definition has been drafted in such a manner so that no transaction could
skip levy of GST.
PERSON
Widest Definition
14 clause are given which inclusive of residual clause considering any
other artificial judicial person not covered in other clauses.
TAXABLE PERSON S-9
A person who is registered or required to be registered.
person who has obtained or is required to obtain more than one
registration, whether in one State or more than one State, shall, in respect
of each such registration, be treated as distinct persons for the purposes of this Act
An establishment of a person who has obtained or is required to obtain
(3)registration in a State, and any of his other establishments in another
State shall be treated as establishments of distinct persons for the purposes of this Act
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COMPOSITION LEVY
Notwithstanding contrary in section 8
Aggregate turnover should not exceed 50 Lakh in a preceding FY.
at rates prescribed but shall not be less than 1% of turnover (1% each for CGST and SCGT).
Only Intra state supply.
50 Lakh limit is for single PAN.
Collection of Tax and credit of tax not permitted.
No such permission to:
Manufacturer
Making Supply not leviable to tax
Makes Inter state outward supply.
Make supply through e commerce operator.
Permission shall be withdrawn once aggregate turnover exceed 50 Lakh.
MEANING OF AGGREGATE TURNOVER
“All Outward Supply” in simple terms
Aggregate value of:
Taxable, Non Taxable, Exempt, Exports in the single PAN on all India Basis.
Excludes taxes under CGST, SGST, IGST.
Do not include value of supply on reverse charge
Do not include Inward supply.
EXCLUSION FROM TAXABLE PERSON
An Agriculturist.
An registered till he reach threshold limit of 20Lakh/ 10Lakh.
Sovereign functions of CG/ SG.
Services by Employee to Employer including trainee and apprentice.
Exclusive engaged in Non taxable supplies.
Any Person liable to pay under reverse charge basis for his personal purpose.
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Enrolment and Registration under GST
ENROLMENT- BASICS
Before appointment date, all registered taxpayer Under Excise, Service
tax, sales tax, entry tax, luxury tax and entertainment tax need to get enroll at GST common portal.
Enrolment is the pre-registration process; no provisional certificate will be
issued to existing registered person unless they complete enrolment.
Enrolment process is different for registered taxpayer at State VAT department and different for Other Tax departments.
Process for enrolment in Delhi will remain open from 16-12-16 to.
Only one provisional ID will be issued.
GST will be applicable from the appointed date.
PROCESS OF ISSUANCE OF PROVISIONAL ID FOR REGISTERED TAXPAYER UNDER STATE VAT
Provisional ID and Password;
Access to GST common portal and create a new unique username and password using (1);
Login GST Portal with new unique username & P/w (2);
Fill enrolment application (Steps discussed later);
Verify Auto populated details;
Sign enrolment using E sign;
Submit application with attachments;
On verification Application reference number (ARN) be issued, Provisional ID status “Migrated” till appointed date.
On appointed date, status – “Active”
VARIOUS STATUS OF PROVISIONAL ID
STEPS UNDER ENROLMENT
Business details;
Promoters/ Partners details;
Authorized signatory;
Principal Place of business;
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Additional Place of business;
Goods & Services to be identified by harmonized system of nomenclature (HSN) or Services AccountingCode (SAC) code or by name of commodity.
Bank Accounts
Verification E sign
E- SIGNING OF ENROLMENT APPLICATION
After verifying Enrolment application, using Electronic sign are mandatory;
REGISTRATION UNDER GST- BASICS
Every person who is required to take registration as per Schedule V shall apply within 30 days.
Casual Taxable Person and NR taxable person shall apply at least 5 days prior to the commencement of business.
A separate reg. may be taken within state for each vertical (optional).
Volunteering registration may be taken.
PAN mandatory (except for NR and the person who is required to deduct tax U/s 46) [docs to be prescribed for NR]
SCHEDULE V (PERSONS LIABLE TO BE REGISTERED)
Every supplier if Aggregate turnover exceeds 20lakhs (10Lakhs for North Eastern states) in the state from where he makes taxable supply;
Aggregate turnover means
Every existing registered taxpayers;
If business is transferred, by successor, effective from date of transfer;
In case of amalgamation or demerger, by the transferee;
PERSONS LIABLE TO BE REGISTERED – CONTD. IRRESPECTIVE OF
THRESHOLD
Notwithstanding to what is stated above, following shall be required to be
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registered;
Interstate supplier;
Casual Taxable person;
Every person supplying online information and database access or
retrieval;
Supplying as an Agent;
Persons who are required to deduct tax under section 46;
E-commerce operator, ISD, person liable under Reverse charge;
Other Notified
SCHEDULE V (PERSONS NOT LIABLE TO BE REGISTERED)
Exclusively in the business of supplying goods and/or services that are not
liable to tax or are wholly exempt and
An agriculturist;
OTHER POINTS…
Unique identity number shall be allotted to UNO or any Multilateral Financial Institutions and other notified org.
Registration or UIN shall be granted or rejected after due verification, however if not granted within particular period it shall be deemed to be
granted.
Rejection under CGST/ SGST be deemed as rejection under SGST/CGST.
Certain person be exempted from taking registration by central government.
WHERE TO REGISTER?
Taxable person shall get register at a place from where making taxable supply i.e., Place of Supply.
PLACE OF SUPPLY
It has been separately defined both for
SUPPLY OF GOODS; AND
SUPPLY OF SERVICES;
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SPECIAL PROVISIONS- CASUAL AND NON RESIDENT TAXABLE
PERSON
Certificate of registration be valid for up to 90 days as increased by further 90 days on request to Proper officer, taxable supply shall be made only
after certificate.
They shall be liable to deposit advance tax equivalent to estimated tax liability for original and extension both.
Such amount be credited to e-cash ledger of such person and utilized as per Section-44 i.e., for Payment of tax, interest, penalty and other
amounts.
AMENDMENT OF REGISTRATION UNDER GST
INFORM PROPER OFFICE ABOUT CHANGES WITHIN PRESCRIBED TIME PERIOD, PROPER OFFICER (PO) MAY APPROVE OR REJECT
SUCH CHANGES HOWEVER FOR SOME ITEMS APPROVAL OF PO
SHALL NOT BE REQUIRED AS PRESCRIBED.
IF REJECTION SHOW CAUSE NOTICE (SCN) + OPPORTUNITY OF
BEING HEARD.
REJECTION OR APPROVAL OF AMENDMENTS UNDER CGST/ SGST
SHALL BE REJECTION OR APPROVAL UNDER SGST/CGST.
CANCELLATION OF REGISTRATION
Proper officer may on his own or on the application by registered taxable person or legal heirs in case of death may cancel the registration-
CIRCUMSTANCES
Business discontinued, transferred fully, amalgamated, demerged or otherwise disposed of.
Change in constitution.
Taxable person which is no longer liable to get registered (except under voluntary registered person).
Further PO may cancel registration from such date as he may deem fit- Where:
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A) Registered Taxable person contravened provisions;
B) Not furnished return for 3 consecutive tax period;
C) Other than “B”, not furnished returns for a continuous period of six months;
D) Voluntary Registration? Have not commenced business within six months from date of registration.
In case of Fraud, Misrepresentation. Or suppression of facts, may cancel registration with retrospective effect.
SCN + opportunity of being heard in all cases.
CONSEQUENCES - CANCELLATION OF REGISTRATION
No impact on pending dues and other obligations of prior to the date of cancellation.
Cancellation under CGST/SGST shall have deemed cancellation under
SGST/CGST respectively.
#every registered taxable person whose registration is cancelled shall have-
Payment of credit of Input tax taken on raw material or finished goods shall be made as per method prescribed.
HOWEVER FOR CAPITAL GOODS PAYMENT SHALL BE AS PER CURRENT SYSTEM OF EXCISE WHICH IS EQUAL TO ITC AS REDUCED BY PERCENTAGE POINTS OR ON TRANSACTION VALUE.
REVOCATION OF CANCELLATION OF REGISTRATION
Person whose registration cancelled on own motion, may apply within 30
days for revocation to proper officer.
Proper office may accept or reject.
Rejection of revocation application shall be made with SCN & opportunity of being heard.
Revocation under CGST/SGST shall be revocation under SGST/CGST.
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Yash Priyadarshi
CA Finalist
Transitional Provisions _ Simplified BARE
GENERAL PROVISIONS
All persons earlier appointed under various Central/State Acts & continuing in
office on appointed day shall be appointed under GST.
MIGRATION
Every registered person under earlier law will be issued provisional
certificate, which will remain valid for 6 months (or extended period). Final Registration Certificate will be issued on furnishing of prescribed
information.
Provisional Certificate will get cancelled if it is issued to person not liable
for registration under GST (provided application is filed regarding this).
If person opts for composition scheme, he may proceed with that.
Provisional Certificate may get cancelled if person does not provide necessary information
within specified time.
AMOUNT OF CENVAT CREDIT CARRIED FORWARD IN A RETURN TO BE
ALLOWED AS INPUT TAX CREDIT
The amount of credit which is carried forward in return for immediately
preceding period before appointed day, same can be entered in GST electronic
credit ledger, i.e. can be used for paying output tax under GST. (Not for composition scheme)
The condition is that credit must be eligible under GST law as well.
If excess credit carried forward, it will be recovered under GST
VAT return should be filed within 90 days of enactment of GST.
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UNAVAILED CENVAT CREDIT ON CAPITAL GOODS, NOT CARRIED
FORWARD IN A RETURN, TO BE ALLOWED IN CERTAIN SITUATIONS
Basically this deals with the case when credit in respect of capital goods is
allowed upto 50% in first year, and balance in subsequent years.
Only a registered taxable person can avail the credit on capital goods (i.e.
entered in electronic credit ledger), which was not carried forward in the return for immediately preceding period before appointed day.
The condition is that credit must be eligible under earlier law as well as GST law.
Meaning of unavailed CENVAT credit on capital goods: Total eligible credit on capital goods as reduced by the credit utilized in earlier law.
Excess claim should be recovered as an arrear under GST law.
CREDIT OF ELIGIBLE DUTIES & TAXES IN RESPECT OF INPUT HELD IN
STOCK TO BE ALLOWED IN CERTAIN SITUATIONS (SGST LAW) Credit of eligible duties & taxes will be allowed in respect of inputs held in
stock as semi-finished goods or finished goods on the appointed day.
Persons eligible for credit:
Who was not liable to registration under earlier law but now is required
under GST
Manufacturer of exempted goods or provider of exempted services which
now became taxable
Works contract service provider
First stage or second stage dealer
Conditions for credit:
Inputs are used for making taxable supplies
Taxable person passes the benefit of credit to recipient
Taxable person is eligible for input tax credit
Invoice should be issued & should not be more than 12 months earlier
No abatement is taken
Excess credit taken shall be recovered.
CREDIT OF ELIGIBLE DUTIES & TAXES IN RESPECT OF INPUT HELD IN
STOCK TO BE ALLOWED IN CERTAIN SITUATIONS (CGST LAW)
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Registered taxable person (manufacturer of exempted & non-exempted goods
and provider of exempted & non-exempted services) can take CENVAT Credit of tax paid in respect of inputs held in stock in the electronic credit ledger.
CREDIT OF ELIGIBLE DUTIES OF TAXES IN RESPECT OF INPUTS OR
INPUT SERVICES DURING TRANSIT
A registered taxable person can take credit in his electronic credit ledger, credit
of duties & taxes paid before appointed day but inputs or services are received
after appointed day, provided that invoice is recorded in books within 30 days from the appointed day (can be extended to further 30 days).
CREDIT OF ELIGIBLE GOODS & TAXES OF INPUTS HELD IN STOCK TO
BE ALLOWED TO A TAXABLE PERSON SWITCHING FROM
COMPOSITION SCHEME
A registered person, who has opted for composition scheme under earlier law, can take credit of inputs held in stock semi-finished goods or finished goods, if
he doesn’t opt for composition scheme in GST law and other conditions are
satisfied.
EXEMPTED GOODS RETURNED TO THE PLACE OF BUSINESS ON OR
AFTER THE APPOINTED DAY
Where any exempted goods under earlier law which were removed within 6 months prior to appointed day and are returned to any place of business on or
after appointed day, no tax shall be payable if returned within 6 months from
appointed day. No tax shall be payable if goods are returned by an unregistered person.
Taxable only if:
Goods are returned after 6 months from appointed day and Goods are liable to tax under GST
DUTY/TAX PAID GOODS RETURNED TO THE PLACE OF BUSINESS ON
OR AFTER THE APPOINTED DAY
Where any goods which have been removed under earlier law within 6 months
prior to appointed day and duty has been paid thereon, are returned to place of business within 6 months from appointed day, the registered taxable person
will be eligible for refund of duty paid under earlier law.
©GSTIndAS Page 26
If the said goods are returned by registered taxable person, it is deemed to be supply.
INPUTS REMOVED FOR JOB WORK AND RETURNED ON OR AFTER
APPOINTED DAY
If any inputs have been removed for job work and is returned within 6 months
(can be extended further by 2 months) from appointed day, no tax shall be
payable on such inputs.
If not returned within given time, tax credits will be recovered as per GST law.
©GSTIndAS Page 27
Prateek Mohan Sharma
CA Finalist
Self-Learning, Mastery, and Self-Mastery
“We don’t believe in colleges and universities. We believe in libraries
because most students don’t have any money. When I graduated from high school, it was during the depression and we had no money. I couldn’t go
to college, so I went to library 3 days a week for 10 years.”
- Ray Bradbury
Now-a-days people are fond of taking selfies, and one can easily relate this with
self-learning. Self-teaching can be done anywhere at any time! It is unlimited
but not unstructured.
These days, if you want to learn something, get a teacher. But you have to pay
a cost and these costs are expensive. To be self-learning is just great!!!
What is Self-learning? Learning by applying their own mind and solving
the problems by using the accessible recourses. A self-learner can easily
understand the motive. At times it can be a monotonous task but one must
keep himself motivated and content so that he will enjoy the self-learning
process and at the end it will be a lucrative deal.
If you have the desire and really want to develop the habit of learning take
initiative from Today itself and make yourself comfortable with the concepts.
Self-learners are self-motivated because they have the confidence that if they don’t know an answer to a question, they know how to use the resources available to find out the answer.
©GSTIndAS Page 28
Quintessence to be A Self Learner-
Ekalavya, a character in the Hindu Mythology ‘Mahabharata’, was in such a
situation and did what no one else would have done. He too wanted to learn
archery from Guru Drona, so he approached and requested him to teach
archery.
But Drona refused to teach him saying that he only teaches royal princes or
people of such cadre. Ekalavya’s heart was broken, but his will was not.
So, he made a statue of Drona in clay and started practicing archery by
himself. With time, enormous efforts and determination he became a master of
archery, learning and practicing the skill by himself. Once, when he was
practicing in the forest, Dronacharya and his shishyas had come to a forest
visit. They brought a dog along with them and it was continuously barking –
thereby disturbing Ekalavya’s practice.
Without seeing the dog (and just by listening to its barking sound), Ekalavya
was able to hit seven arrows in its mouth in a manner that the dog was not
hurt but just stopped barking. When Drona and his pupils saw the dog, they
were astonished at the skill of the archer and wanted to meet the person, who
could fire his arrows so accurately.
But Arjuna, who was the favorite disciple of Drona was upset at this and asked
Drona as to how he could become the best archer in the world when there was
this person who could do something that he couldn’t. So, Drona, says that
since Ekalavya considered Drona to be his Guru, he should offer a Guru
Dakshina.
Ekalavya is happy that at last he has been recognized by his Guru as a disciple
and feelshonored by this request of Guru Dakshina. Drona asks for Ekalavya’s
right hand thumb – which he gives immediately without bothering much about
the consequences, which includes that fact that Ekalavya might never be able
to practice his archery again!
©GSTIndAS Page 29
So, what do I infer from this? – Self learning is the best way to learn!
The best way to become the best was not to drag others down, but to rise
himself to reach (or better) their heights.
Initiative taken by like Minded people (Self learners)
Likewise we people also formed a mutual group and named it as GSTIndAS.
Well it is too much formal but our agenda is also to learn about GST &IND-AS
perpetually and also sharing knowledge with members of the group rather than
keeping it back.
This will dwindle the ambiguity for the topic in our mind. At times we are in a
situation where we are not able to conclude the topic, as a self-learner this
situation is very generic. That time we can ask for some clarification and
instances from our co-member of the group & everything will be in streamline
too.
There is a saying in our mother tongue – “Ek or Ek 11”.
We can prove this saying right and fruitful as we all are having an individual
identity and when we are in group no one can beat us. It will be very lucrative
for all of us to share our knowledge and thoughts among all.
People who were not able to attend the meets can also be a part of it by reading
the minutes and getting all the knowledgeable stuffs for future references. We
share a bond by being a self learner with each other. Come what may we will
get into the roots of GST &IND-AS and will hit the nail.
Eventually, the bottom line is we are united and we are self learner. Self-
learning gives the opportunity to develop a good work ethic.
©GSTIndAS Page 30
Sahil Makkar
CA Finalist
Celebrate the Change
“CHANGE IS HARD AT FIRST, MESSY IN THE MIDDLE AND GORGEOUS AT END”- ROBIN SHARMA
Although most of the nation claims to be globalized themselves, but the real
essence of the globalization lies in the uniformity among the markets.
Companies across the nations might be operating in multiple nations but to do
so they have to significantly alter modus operandi as to fit the need of specific
nation. The framework of reporting the financial reports of any organization is
not untouched by the scale of deviation that prevails while switching from
nation to nation. Scale of such deviation fabricates the main spirit of
globalization which is unification of various economies into one economy.
Further Globalization in context of Direct Tax Regime is light years away;
rather India has yet not achieved Unification of tax regime within local
boundaries itself. At current juncture India seems to have a revolutionary
wave, where regulators are striving hard to adopt Indian Economy In line to
global Economy, as to ease International Investments and to realize the
essence of Globalization. As a part of this revolution Currently India is all set to
welcome two of the crucial reforms. While IndAS will go a long way for pushing
Indian Financial reporting framework in line to global standards, and GST will
play its game to unify the taxation regime within local boundaries. Regulators
are simultaneously implementing both of these reforms to carve global edge for
Indian Corporates. Advantages of both the reforms have been briefed below.
What Is GST?
The GST is basically an indirect tax that brings most of the taxes imposed on
most goods and services, on manufacture, sale and consumption of goods and
services, under a single domain at the national level. In the present system,
©GSTIndAS Page 31
taxes are levied separately on goods and services. The GST is a consolidated
tax based on a uniform rate of tax fixed for both goods and services and it is
payable at the final point of consumption. At each stage of sale or purchase in
the supply chain, this tax is collected on value-added goods and services,
through a tax credit mechanism.
Cause to Celebrate:
This model is a single Tax model and Tax on Tax will be removed. Many
Indirect Taxes will be merged as Single Tax.
After the implication of Goods and Service Tax act India will be a one market.
All the products and services will be provided at same price in all the states. As
the rate of tax will be the same in all over India. This is the biggest advantages
of GST bill in India.
After this the tax is not applicable on manufacturing hand. So for
manufacturers it is easy to grow their business and develop it. Now Excise and
some other taxes are applicable at the manufacturing Point. After this these
will applicable at consumption point.
This system will affect the evasion and theft of Tax will be minimized as it is
easy to track. This may be the demerit of GST for Tax Evaders.
All the Products where multiple taxes where applicable will be cheaper like
excise duty and vat both will come to about 30% of Tax but in GST it is
assumed to be 18-20%.
Above were the advantages of GST bill and now I will show you some
Disadvantages of GST bill in India. This are the losses which will affect you
only in short term and may not be painful for you in the long run if the system
will work properly.
In the GST system, taxes for both Centre and State will be collected at the
point of sale. Both will be charged on the manufacturing cost. Individuals will
be benefited by this as prices are likely to come down and lower prices mean
more consumption, and more consumption means more production, thereby
helping in the growth of the companies.
©GSTIndAS Page 32
What is IndAS
Ind-AS is the abbreviation used for the “Indian Accounting Standards”. The
Ind-AS are named and numbered in the same wayas named and numbered in
the “corresponding International Financial Reporting Standards (IFRS)”. As the
base note of the Ind-AS is the IFRS itself, it takes Indian Financial reporting
framework from GAAP (Generally Accepted Accounting Principles) oriented to
globally recognized IFRS oriented, in a shot. Ind-AS are the converged AS.
Although the Ind-AS are not wholly the same as the IFRS. But grossly Ind-AS
almost represents the IFRS. And the differences are sidelines as “carve in’s” or
“carve outs”.
Cause to Celebrate
Introduction of Ind-AS will bring variety of causes for stakeholders at various
levels to make them assure about the reliability of Ind-AS. Some of its
Advantages may include transparency for investors and easy fund raising for
the companies. Few other Advantages are briefed below.
•Comparability
The convergence to IFRS has improved the comparability of financial
statements in the Economies. This has been achieved through having the same
reporting standard under a globalized market.
•Better access to foreign capital markets and investments
•The new IFRS based Ind-AS reflects on economic substance more than legal
form. This helps the companies and other stakeholders to have true and fair
view of the companies’ transactions.
•Improved consistency and transparency of financial reporting.As all
companies, preparing their consolidated financial statements, have been
reporting undergone reporting standard have improved the comparability not
only for investors, but also all stakeholders who use the financial statements.
©GSTIndAS Page 33
Give above are the fraction of benefits that give a reason to celebrate to all the
users of financial statements and more transparent reporting id the key
outcome of the adoption of the IndAS.
I started this article with a quote and that quote perfectly fits in here. As
Implementation of both the IndAS and GST could be hard and messy in the
beginning, but this short term disturbance would be worthy enough as it will
be fetching gorgeous return for a very long run of time. Hardship will be in the
face of Implementation and understanding the new framework, training of
people responsible for it, altering of system to fit the new framework, etc. While
IndAS will be increasing transparency at corporate level and GST will be
unifying the Indirect Taxation regime throughout the Country; Ultimately Both
of the Frameworks will be having a lot of causes for the stakeholders at the
macro and micro level to celebrate the change. Moreover currently prevailing
GAAP and Indirect Tax Framework are now dated which stands nowhere near
the Global Standards. If not late then it is the perfect time for the overhauling
of both the frameworks.
*************
©GSTIndAS Page 34
KNOW MORE ABOUT US
How this content is generated is a great example of what can be done through
what we do, we have decided to re-ignite the young brain and energetic youth of this country and inspire them to do something on their own,
This is just a beginning to the great start that we all need,
To know more about GSTIndAS,
Contact: Prateek Mohan Sharma - 9811435863
Sharad Dixit -9555666317
Join us on facebook: https://www.facebook.com/GSTIndAS/
Mail us at: [email protected]
With Regards, HIMANSHU RASTOGI
+91 995 885 3024
NOTE: Updated content on GSTIndAS has been used, however few error may crept in,
reader own circumspection is advised and re-verify from the bare law before making
any decisions;
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