VALUE ADDED TAX - A CURTAIN RAISER - Vidarbha ... POPTANI © ASHOK CHANDAK [email protected] 3...

© ASHOK CHANDAK

GOODS & SERVICE TAX=

ONE NATION ONE TAX

[email protected]

GST

[email protected]

GOODS & SERVICES

TAX

E-Commerce , TCS , TDS & e-Way BILL

By

Ca. JAI POPTANI

© ASHOK CHANDAK [email protected] [email protected] 3

DISCLAIMER

1) This presentation is purely based on

(a) the CGST Act and IGST Act passed by the Parliament recently,

(b) FAQ released on 31st March 2017, &

(c) Final & Draft Rules passed.

2) This presentation is prepared for the purpose of GST Clinic organised by

VIA, Nagpur for the reference of the participants. The information contained

herein is meant for general purpose and is not exhaustive and accordingly

will not constitute any kind of professional advice or services. By using any

part of this presentation, the user accepts that the author, presenter or any

organisation with which he/she may be associated shall be liable to the user

for any decision made or reliance placed on this presentation.

© ASHOK CHANDAK

4

e- Commerce

[email protected]

© ASHOK CHANDAK [email protected] 5

5

What is e-Commerce ?

© ASHOK CHANDAK [email protected]

Definition of e-commerce

As per CGST Act, Electronic Commerce means

the supply or receipt of goods or services or both,

including digital products

Over digital or electronic network.

Example:

(1) Booking Refrigerator online on Amazon, Flipkart,

Snapdeal etc.

(2) Booking a Cab from OLA/UBER etc.


e-Commerce Operator

As per CGST Act, Electronic Commerce Operator means

any person who owns, operates or

manages digital or electronic facility or platform

for electronic commerce.

Example:Snapdeal, OLA, Uber, Flipkart etc.

It is pertinent to note here that online retailers who are engaged in

the supply of goods and services through their own platforms shall

not be covered under the definition of an e commerce operator.

For Example- Mr. A sells a product, through the electronic platform

maintained by him, then he shall not be an e commerce operator as

per the Act.


e-Commerce Operator - Example

E-Commerce Operator

• Amazon and Flipkart are e-commerce Operators because they are facilitating actual suppliers to supply goods through their platform (popularly called Market place model or Fulfillment Model)

Not an Ecommerce

Operator

• Amazon and Flipkart will not be treated as e-commerce operators in relation to those supplies which they make on their own account (popularly called inventory Model).

Not an Ecommerce

Operator

• Titan 78 supplying watches and jewels through its own website would not be considered as an e-commerce operator for the purposes of this provision.


e-Commerce Operator

Following events take place, when e-Commerce transactions

takes place:

Products and services available with e-commerce

operator are displayed on his electronic platform.

Customer visits the e-commerce platform with his

requirement and chooses the product and price and terms

of e-commerce operator.

Customer chooses one out of the various vendors

registered with e-commerce for supply to customer.


e-Commerce Operator

Following events take place, when e-Commerce transactions

takes place:

Customer pays to e-commerce operator by one of the

payment options

E-commerce operator informs the respective vendor of

the order

The vendor concerned supplies to customer and informs

to e-commerce operator

E-commerce operator settles the vendors payment

periodically


e-Commerce Operators

Registration Requirements

Yes, e- Commerce Operator is required to get registered

compulsorily under GST.

the threshold exemption is not available to e-commerce

operators and they would be liable to be registered

irrespective of the value of supply made by them.



For Supplier of Goods/ Services

Yes, Supplier of Goods and/or Services is required to get

registered compulsorily under GST.

the threshold exemption is not available to e-commerce

operators and they would be liable to be registered

irrespective of the value of supply made by them.



For Supplier of Goods/ Services

Example- Anup has an App in the name of “Books

Online” for supply of books, which is used by various

book sellers to sell their books to customers all over

India.

For all supplies made through the electronic platform. A

charges a commission of 10%.

In this case the limit of 20 lakh/10 lakh is neither

applicable to. A nor for the suppliers that supply books

on the electronic platform owned and operated by Anup.



Registration Procedure

o Under GST, a person shall be liable to get registered in

all the States from where he makes a taxable supply of

goods and services.

o The location of the supplier shall determine the place

from where the taxable supply of goods and services is

made.

o The location of the supplier covers all places of business

like offices, warehouses, godowns or any other place of

storage of goods.



Registration Procedure

o Thus, registration will have to be obtained for all the

States where there is a place of business.

o Currently, e-commerce companies discharge their output

service tax liability through centralized registration.

© ASHOK CHANDAK

16

e- Commerce Operator

&

TCS

[email protected]


Tax Collection at Source under GST

Section 52 of CGST Act mandates every

e-Commerce Operator to

• collect an amount

• not exceeding 1%

• on the net value of taxable supplies made through

it,

• where the consideration is collected by the e

commerce operator.



• Explanation to Section 52

• The net value of taxable supplies shall be computed by

deducting the sales returns made and

• the supply of services in respect of which tax is

payable by an e-Commerce Operator under reverse

charge.

• The amount of TCS collected during a month shall be

paid by the e-commerce operator by the 10th of next

month ; and the same shall be eligible as credit to the

supplier supplying goods or services through the e-

commerce operator.



• It is pertinent to note that on such supplies, the supplier

of goods and services must have charged CGST and

SGST or IGST, depending upon the nature of supply.

Hence, the amount of tax collected by the e-Commerce

Operator has to be bifurcated into CGST, SGST and

IGST. Where the supplier has charged IGST, the amount

of tax collected shall be deposited by the e commerce

operator under IGST. However, where CGST and SGST

have been charged, the amount of tax collected has to be

divided in the ratio of the rates of CGST and SGST and

deposited accordingly.


Compliances by e- Commerce Operator

Filing of Returns (in GSTR-8) Statewise

Apart from the monthly and annual returns,

E Commerce operator will be required to file monthly

TCS returns, electronically,

containing the details of supplies of goods and services

made through it, the returns of such supplies, and the

amount of tax collected during a month,

within ten days after the end of the month.

Further, an annual statement is also required to be filed

containing above details by the 31st December following

the end of the financial year.



Rectification of Error in Return

If any operator after furnishing a statement discovers any

omission or incorrect particulars therein,

other than as a result of scrutiny, audit, inspection

or enforcement activity by the tax authorities,

he shall rectify such omission or incorrect

particulars in the statement to be furnished for the month

during which such omission or incorrect particulars are

noticed, subject to payment of interest.

No Rectification allowed after due date of filing of return for the

month of September of succeeding Financial Year.



Matching of TCS Returns filed by Operator

The TCS returns in Form GSTR-8 furnished by the e commerce

operator shall be matched with

the corresponding details of outward supplies furnished by

the supplier of goods and services in GSTR-1.

The discrepancy, if any, shall be

communicated both (a) to the supplier of goods and services

as well as (b) to the e commerce operator.




Such discrepancies must be rectified in the respective return

(GSTR-8 or GSTR-1) that is to be furnished by the supplier or the

e-commerce operator

for the month in which the discrepancy is communicated.

Where the same is not done, and value of outward supplies furnished

by the supplier is less than the value of supplies furnished by the

e-commerce operator, tax in respect of such supply shall be added to

the output tax liability of the supplier,

for the month succeeding the month in which the discrepancy is

communicated.




The concerned supplier for whom output tax liability has been

added shall deposit such tax along with interest.

These measures are likely to result in huge compliances to be made

& constant correspondence between

the e commerce operator and

the supplier of goods and services.



Information to be furnished

Any authority, not below the rank of Deputy Commissioner, may

serve a notice, either before or during any proceedings under the

Act, requiring the e commerce operator to furnish details relating to

(i) Supplies of both goods and services made by any supplier of

goods and services through the e commerce platform, or

(ii) Stock of goods held by the suppliers making supplies through

the e commerce operator at the warehouses managed by such

operators and which are declared as additional place of business by

the supplier.

The information so requisitioned must be furnished by the

e-commerce operator within 15 days, failing which a penalty upto

Rs. 25,000/- may be levied on the e-Commerce Operator.

© ASHOK CHANDAK

OUR INDIRECT TAX SERVICES

26

Tax on Services to be

Paid by

e- Commerce Operator

[email protected]


Who is an Aggregator?

Aggregator under current service tax law is to mean a

person, who owns and manages an electronic platform,

and by means of the application and communication

device, enables a potential customer to connect with the

persons providing service of a particular kind under

the brand name or trade name of the said aggregator.

For instance, Ola cabs would be an aggregator.


e-Commerce Operator VS Aggregator

Particulars e-Commerce Operator Aggregator

Meaning whereas an ecommerceoperator(Flipkart) facilitates theentire process of the supply ofgoods/provision of service.

while an aggregator(Ola) onlyconnects the customer with thesupplier/service provider

e-Commerce Operator not onlyconnects the customer but alsoprovides all information about theproduct and looks after the deliveryand refund process. Hence and ecommerce operator is larger thanan aggregator.

Aggregator only connects thecustomer to service providers.

Example Amazon, Flipkart, Snapdeal etc. Ola, Uber etc.


Tax to be paid by e- Commerce Operator

under reverse charge

Section 9(5) of CGST Act provides that , The Government may, on

the recommendations of the Council, by notification,

specify categories of services

the tax on intra-State supplies of which

shall be paid by the

electronic commerce operator

if such services are supplied through it,

and all the provisions of this Act shall apply to such electronic

commerce operator

as if he is the supplier liable for

paying the tax in relation to the supply of such services


Tax to be paid by e- Commerce Operator

under reverse charge

Provided that where an electronic commerce operator does not have

a physical presence in the taxable territory,

any person representing such electronic commerce operator for any

purpose in the taxable territory shall be liable to pay tax:

Provided further that where an electronic commerce operator does

not have a physical presence in the taxable territory and

also he does not have a representative in the said territory,

such electronic commerce operator shall appoint a person in the

taxable territory for the purpose of paying tax and such person shall

be liable to pay tax.

© ASHOK CHANDAK

31

Impacts of GST

on

e- Commerce

[email protected]


Possible Impacts of GST on e-Commerce

I. Tax Collection at Source (TCS) provisions have been introduced

on e-commerce operators in the GST Act.

II. The procedure for all the invoices / receipts towards inward and

outward supplies will become cumbersome.

III. The frequency and number of returns to be filed will go up.

IV. Mandatory registration by the e-commerce operators & suppliers

without threshold limit.

V. Compliances will increase.

VI. Will enhance transparency in transactions

VII. Overall cost may increase due to additional Compliance Cost.


Possible Impacts of GST on e-Commerce

VIII. With the GST implementation, it will become simple for Sellers

on e-commerce to pay tax in the state where the delivery happens.

IX. In the long-run the creation of a unified market place may reduce

the tax burden, inventory cost and logistical issues, and ensure

seamless movement of goods across the country.

X. Many producers, sellers and consumers will have easy access to an

all-India market as there will be development of seamless national

supply chain.

XI. Issues such as treatment of Sales Returns, Matching of Invoices in

B2B Business model, Tax on Discounts, Tax on Stock Transfers may

arise.

© ASHOK CHANDAK

34

Tax Deducted

at Source

(TDS)

[email protected]


TDS under GST

Section 51 of the CGST Act deals with TDS

Who are Required to deduct TDS under GST ??

Under GST, Government may mandate the following

people/entities to deduct TDS:

(a) A department or establishment of the Central or State

Government, or

(b) Local authority, or

(c) Governmental agencies, or

(d) Persons or category of persons as may be notified, by the

Central or a State Government on the recommendations

of GST Council,

The person deducting TDS will be known as ‘deductor’

https://cleartax.in/s/gst-law-goods-and-services-tax


TDS under GST

What is Rate of TDS under GST ???

TDS is to be deducted

at the rate of 1 percent

on payments made to the supplier of taxable goods and/or services,

where the total value of such supply, under an individual contract,

exceeds 2,50,000/-.

Note: No tax deduction required where the location of supplier

and place of supply is different from the State of the

registration of the recipient.


TDS under GST

What is Value on which TDS be deducted???

• For TDS deduction, the value of supply shall be

• the amount of supply

• excluding the central tax, State tax, Union territory tax,

integrated tax and cess indicated in the invoice.

When & where the TDS deducted to be deposited ???

• TDS shall be paid within 10 days from the end of the month in

which tax is deducted.

• The payment shall be made to the appropriate

Government which means:

The Central Government in case of the IGST and the CGST

The State government in case of the SGST.

https://cleartax.in/s/what-is-sgst-cgst-igst


TDS under GST

Other Procedural Compliances by deductor???

i. Deductor needs to get compulsorily registered under GST.

ii. File return of TDS by the 10th day of the month succeeding the

month in which TDS was collected in GSTR 7.

The amount deposited as TDS will be reflected in the electronic

cash ledger of the supplier.

iii. Issue a certificate of such TDS to the deductee within 5 days of

deducting TDS.


TDS under GST

Other Procedural Compliances by deductor???

iv. The Following should be mentioned in TDS Certificate

• the contract value,

• rate of deduction,

• Amount deducted,

• the amount paid to the appropriate Government and

• such particulars as may be prescribed.

Note: Non-deduction / short deduction / non-payment or short

payment of TDS is on offence under the act for which a minimum

penalty of Rs. 10,000/- is prescribed under the act.


TDS under GST

Can Deductee claim credit of TDS Deducted ???

The deductee shall claim credit,

in his electronic cash ledger,

of the tax deducted and reflected in the return of the deductor.

Amount deducted as TDS and reported in GSTR – 7 will

automatically reflected in electronic cash ledger.


TDS under GST

What if excess amount of TDS deducted and deposited by

deductor??? Can it be refunded ?????

If deductee has not claimed the credit of such excess TDS

deducted and Paid, the deductor can claim such the refund of

Such excess TDS deducted and deposited.

Seperate Application needs to be filed for claming such refund

within 2 years from dated of such wrong deduction.

If the amount deducted has been credited to the electronic cash

ledger of the deductee than no refund to the deductor shall be

granted.


TDS under GST

What are consequences in case of default in deduction and payment

TDS by deductor???

If deductor fails to pay to the Government the amount deducted,

he shall pay interest in accordance with the provisions of sub-

section (1) of section 50,

in addition to the amount of tax deducted.

© ASHOK CHANDAK

E WAY BILL UNDER GST (DRAFT RULES ISSUED)

What is e-way bill ?

E-way bill is an electronic way bill for movement of goods

which can be generated on the GSTN (common portal).

A ‘movement’ of goods of more than

Rs. 50,000/- in value cannot be made

by a registered person without an

e-way bill.

[email protected] 44

https://cleartax.in/s/cleartax-guide-on-gst-portal

© ASHOK CHANDAK


When should an e-way bill be generated?

E-way bill will be generated when there is movement of goods –

1) In relation to a ‘supply’

2) For reasons other than a ‘supply’

(say a return)

3) Due to inward ‘supply’ from an

unregistered person


© ASHOK CHANDAK


What is a ‘supply’ in case of e-way bill?

A supply may be –

Supplied for a consideration (means payment) in the course of business

Supplies made for a consideration (payment) which may not be in the course

of business

Supplies without consideration ( without payment)

Basically supply means –

Sales

Transfer

Barter/Exchange

Therefore, e-way bills must be generated on the common portal for all types

of movements.


© ASHOK CHANDAK


Who can generate e-way bill?

E-way bill must be generated when there is a movement of

goods of more than Rs. 50,000/- in value to or from

a Registered Person. Registered person or the transporter may

choose to generate and carry e-way bill even if value of goods is

less than Rs. 50,000/-.

Unregistered persons or his transporter may also choose to

generate e-way bill. Which means eway bill can be generated by

both registered and unregistered persons. However, where a

supply is made by an unregistered person to a registered person,

the receiver will have to do all the compliances as if he’s the

supplier.


© ASHOK CHANDAK

E WAY BILL UNDER GST (DRAFT)

Who When Part Form

Every Registered person under GST

Before movement of goods

Fill Part A Form GST INS-1

Registered person is consignor or consignee (mode of transport may be owned or hired) OR is recipient of goods


Fill Part B Form GST INS-1

Registered person is consignor or consignee and goods are handed over to transporter of goods


Fill Part A & Part B Form GST INS-1

Transporter of goods Before movement of goods

Fill form GST INS-1 if consignor does not.

Unregistered person under GST and recipient is registered.

Compliance to be done by Recipient as if he is the Supplier.


An e-way bill can be generated by

© ASHOK CHANDAK


What is Validity of an e-way bill ??

An e-way bill is valid for periods as listed below, which is based on the

distance travelled by the goods. Validity is calculated from the date and time

of generation of eway bill-

The Commissioner may extend the validity period of e-way bill for certain

categories of goods.


Distance Valid from Valid for

Less than 100km Date & time at which e-way bill is generated 1 day

100km to 300km Date & time at which e-way bill is generated 3 days



1000km or more Date & time at which e-way bill is generated 15 days

© ASHOK CHANDAK


Communication of details of E-Way bill to recipient, if he is

registered:

In case of registered recipient, the details of e-way bill will be

communicated to the recipient.

Recipient on receipt of the aforesaid communication,

communicate his acceptance or rejection of the consignment

covered by the e-way bill.

However in case of non-communication up to 72 hours, his

acceptance will be assumed towards the consignment.


© ASHOK CHANDAK

GST RATES on Goods

Exempted Goods (i.e. zero tax goods) under GST

Cereals & Preparation of Cereals , Products of Milking industry (i.e. Milk,

Butter Milk), Salt, Cane Jagerry, Fresh vegetables, Edible Fruits, Oil seeds,

Lac, Gum, Organic Manure, Firewood, Printed books and newspapers, Silk,

Cotton ( Gandhi Topi, Khadi Yarn) , Bangles, Human Blood etc.

Goods Taxable @3% under GST

Gold, Silver, Processed Diamonds


Common use products such as Sugar, tea, coffee (barring instant coffee),

edible oil, mithai, pizza bread, sevaiya, condensed milk and frozen

vegetables , baby food, kerosene and coal , Agricultural Machinery, Solar

Panels etc. are covered under 5% bracket.


© ASHOK CHANDAK

GST RATES on Goods


Live Horses, Marble & Granite Blocks, Frozen Meat, Butter, Dry Furits,

Starches, Namkeen Bhujia , Soya milk Drinks, Tender Coconut Water, Bio

Gas, Fountain Pen, Tooth Powder, Agarbatti, Sports Gloves,


Most of Petroleum Products, Condensed Milk, Katha, Refined Sugars, Jams,

Jellies, Hair Oil, Refactory Bricks, Blocks, Tiles, Pig Iron, Iron & Steel etc.


Molases, Chewi ng Gum, White Chocolate, Cocoa Butter, Motor Vehicles

and other luxury Goods.


© ASHOK CHANDAK

GST RATES on Services

Exempted Services

Services Taxable @5% under GST

GTA, Passenger Rail Transport , Transport by vessels, Passenger Air

Transport by economy class, Selling of space for advertisement in print media

etc.


Supply of Foods & Drinks in Restaurant (without AC), Renting of Room

(where tarrif is 1000>2500 per day), Construction of Complex (incl. Value of

Land), etc.


Most of service other than covered else where.


VALUE ADDED TAX - A CURTAIN RAISER - Vidarbha ... POPTANI © ASHOK CHANDAK [email protected] 3...

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Transcript of VALUE ADDED TAX - A CURTAIN RAISER - Vidarbha ... POPTANI © ASHOK CHANDAK [email protected] 3...