Transition Provisions Revised Model GST Law Hari Ganesh V

Transcription

1 Transition Provisions Revised Model GST Law Hari Ganesh V

2 Flow of Taxes Imports BCD CVD Cess SACD BCD IGST Import of Service Service tax IGST IGST (Excise, CST, or Service tax) Outside State Goods and services Within State Goods and services CGST and SGST (Excise, VAT or Service tax) Manufacturer/ Service provider CGST and SGST Within State Goods and services (Excise, VAT or Service tax) IGST (Excise, Input VAT reversal) Inter-state Goods and Services (Excise, CST, Service tax) IGST Stock transfer Goods and services 2

3 General Provisions Sec 165 GST Officers As per Section 165, all officers appointed under the Central and State laws shall be deemed to have been appointed as GST officers/competent authorities under GST Act. Sec 166 Migration of existing Taxpayers Dealer registered under any earlier laws shall be issued a Registration Certificate (RC) on provisional basis Provisional RC shall be valid for 6 months from the date of issue Dealer will submit prescribed information RC shall be granted on final basis by Central/State Government Provisional RC may be cancelled if dealer fails to furnish information within time 3

4 167 - Carry forward of CENVAT Credit 4

5 168 - Un availed CENVAT Credit on Capital Goods Issues to be addressed Capital Goods not defined under the State Law. Whether proportionate reversal would arise for a portion if both taxable and exempt. 5

6 169 - Cenvat Credit in respect of inputs/sfg/fg in stock Credit eligible for persons engaged in the manufacture of exempted goods or exempted services Entitled to take the credit of eligible duties and taxes in respect of (i) inputs held in stock and (ii) inputs contained in semi-finished or finished goods held in stock on GST day. Conditions to be fulfilled: Used for taxable supplies under GST Person eligible for input tax credit under this Act Possession of invoices/documents evidencing payment of duty on such inputs Invoices/documents were issued not earlier than 12 months preceding GST date Passes on the benefit of such credit by way of reduced prices. Issues to be addressed Whether Cesses are eligible and CST on goods in stock are eligible? What will happen to input services un availed or yet to be received? CG eligible in GST (for balance period, whether as per depreciated value??) 6

7 Sections 170 & 171 Sec 170 Credit taxable/exempted goods/services in earlier law Registered taxable person who was engaged in manufacture of taxable and exempted goods or provision of taxable and exempted services Entitled to c/f credit in return (as per earlier c/f provisions) Entitled to credit of duties on inputs/sfg/fg relating to exempted goods/services (as per above provisions) Sec 171 Credit inputs/input services during transit Entitled to credit on Inputs/input services received after GST day, but duty/tax paid before GST day ( Whether actual payment be after GST day??) Condition invoice or duty/tax paying document was recorded in books of accounts within 30 days from GST day (+) 30 days extension if sufficient cause shown. Statement to be filed in prescribed manner Similarly for VAT/Entry tax paid. (No Similar provision for Capital Goods) 7

8 Sections 172- Taxpayers opting out of Composition scheme Sec 172 Taxpayers opting out of Composition scheme Registered taxable person paying taxes at fixed rate or paying fixed amount under the composition scheme of earlier law Entitled to take the credit of eligible duties in respect of inputs/sfg/fg Conditions: Inputs/goods are used or intended to be used for making taxable supplies Not opting for composition in GST Person eligible for input tax credit under this Act Possession of invoices/documents evidencing payment of duty on such inputs Invoices/documents were issued not earlier than 12 months preceding GST date Passes on the benefit of such credit by way of reduced prices (not in this section) Similarly for SGST 8

9 Goods Movement after Appointed Date Exempted Goods (under earlier law) returned to place of business after the enactment of GST (173) No Tax if the goods were removed within 6 months prior to date of enactment ie. 01/10/2016 AND the goods are returned within 6 months of enactment i.e. 30/09/2017. If returned after 6 months, tax to be paid by the person returning the goods, if the goods are liable under GST No tax payable if person returning is not registered in GST Duty Paid Goods Returned to a place of business on or after the date of enactment (174) If the goods were removed within 6 months prior to date of enactment ie. 01/10/2016 AND the goods are returned within 6 months of enactment i.e. 30/09/2017 by unregistered person, eligible as refund under earlier law as if goods are returned If goods are returned by a registered person, it shall be deemed as a supply under the GST Act Goods sent on approval basis returned on or after the date of enactment (195) No tax if the goods were removed 6 months prior to date of enactment ie. 01/10/2016 AND the goods are returned within 6 months of enactment i.e. 30/09/2017. Competent Authority can extend this period by maximum for 2 moths i.e. in total 6+2=8 months. Tax to be paid by supplier if the goods are liable to GST and not returned within 6 months (or extended period) Tax to be paid by person returning the goods if goods are returned after 6 months or extended period. (ITC??) 9

10 Goods Sent for Job work Inputs removed for Job Work and returned on or after the date of enactment (175) Semi-finished Goods removed for Job work and returned on or after the appointed day (176) Finished goods removed for carrying out certain processes and returned (177) No Tax if inputs after completion of job work or otherwise, are returned within 6 months of enactment i.e. 30/09/2017. Competent Authority can extend this period by maximum for 2 moths i.e. in total 6+2=8 months. If inputs not returned within 6 months or extended period, input tax credit shall be liable to be recovered u/s 184 (as arrears of tax under this Act and this is not allowable as ITC) Liability under old law?? No Tax if the goods were removed 6 months prior to date of enactment ie. 01/10/2016 AND the goods are returned within 6 months of enactment i.e. 30/09/2017. Competent Authority can extend this period by maximum for 2 moths i.e. in total 6+2=8 months. If inputs not returned within 6 months or extended period, input tax credit shall be liable to be recovered u/s 184 (as arrears of tax under this Act and this is not allowable as ITC) Liability under old law?? Manufacturer may (in accordance with earlier law) transfer goods to premises of registered person for domestic sale or export (within 6M or extended period) No Tax if the goods were removed 6 months prior to date of enactment ie. 01/10/2016 AND the goods are returned within 6 months of enactment i.e. 30/09/2017. Competent Authority can extend this period by maximum for 2 moths i.e. in total 6+2=8 months. If inputs not returned within 6 months or extended period, input tax credit shall be liable to be recovered u/s 184 (as arrears of tax under this Act and this is not allowable as ITC) Liability under old law?? 10

11 Price Revision(Section 178) Where the Prices of the goods/services supplied before enactment is increased on or after GST date (contract entered into prior to GST date) Taxable person shall issue a supplementary invoice or debit note within 30 days of such price revision. Supplementary invoice/debit note deemed to have been issued in respect of outward supply under the GST Act Liability under earlier law?? Where the Prices of the goods/services supplied before enactment is reduced on or after GST date (contract entered into prior to GST date). Taxable person shall issue supplementary invoice or credit note within 30 days of such price revision. Supplementary invoice/credit note deemed to have been issued in respect of outward supply under the GST Act Taxable person shall be allowed to reduce his tax liability only if the recipient has reduced his Input Tax Credit Corresponding to such reduction of tax liability 11

12 Refund Claims Pending Refund Claims (Section 179) Every claim for refund filed for Cenvat, duty, tax, interest paid before the GST date by any person shall be disposed of in accordance with the provisions of earlier law Any amount eventually accruing to him shall be paid in cash subject to unjust enrichment No refund if balance has been carried forward as credit into GST Where claim of refund of Cenvat credit is fully or partially rejected, amount rejected shall lapse (if 11 B issue and credit is not questioned still credit lapses?? To withdraw present cases of 11B if we have domestic supplies?) Refund claims filed after appointed day for goods cleared/services provided before appointed day and exported before or after appointed day(section 180) Disposed of in accordance with provisions of earlier law No refund if balance has been carried forward as credit into GST Where claim of refund of Cenvat credit is fully or partially rejected, amount rejected shall lapse (if 11 B issue and credit is not questioned still credit lapses??) Refund claims filed after appointed day for payments received and tax deposited before appointed day in respect of services not provided(section 181) Disposed of in accordance with provisions of earlier law Any amount eventually accruing to him shall be paid in cash subject to unjust enrichment 12

13 Finalisation of Proceedings-Sections 182 &183 Relating to claim of CENVAT Credit Appeal, revision, review or reference relating to Cenvat credit claim (initiated before, on or after GST date) under the earlier law shall be disposed of in accordance with provisions of earlier law. Claim found admissible shall be refunded in cash subject to unjust enrichment; not admissible as ITC under GST Act. No refund if balance of amount has been carried forward into GST Relating to output duty/tax Appeal, revision, review or reference relating to output duty/tax (initiated before, on or after GST date) under the earlier law shall be disposed of in accordance with provisions of earlier law. If amount becomes recoverable, shall be recovered as arrear of duty/tax under GST Act amount so recovered not admissible as ITC under GST Act If amount found admissible, shall be refunded in cash subject to unjust enrichment amount shall not admissible as ITC under GST Act. 13

14 Treatment of Amount refunded Amount recovered or refunded in pursuance of assessment / adjudication (Section 184) If tax/interest/penalty/fine becomes recoverable after appointed day in respect of assessment/adjudication (initiated before, on or after GST date) under the earlier law, same recovered as arrears of tax under GST Act amount not admissible as ITC If tax/interest/penalty/fine becomes refundable after appointed day in respect of assessment/adjudication (initiated before, on or after GST date) under the earlier law, same shall be refunded in cash under earlier law subject to unjust enrichment Amount recovered or refunded pursuant to revision of returns(section 185) Recovery as arrears and refund in cash subject to unjust enrichment 14

15 Miscellaneous Treatment of long term construction/works contracts(section 186) Provision relating to progressive or periodic supply (Section 187) The goods and/or services supplied on or after GST date in pursuance of a contract entered into prior to the date of enactment shall be liable to tax under the provisions of this Act What will happen to advances on which tax is already paid?? No tax shall be payable for supply of goods or services made after GST date where consideration (part or full) has been received prior to the GST date and duty or tax has already been paid under the earlier law Credit Distribution of service tax by Input Service Distributor(Section 190) ITC on account of any services received prior to the date of enactment by an ISD shall be eligible for distribution as credit under this Act even if the invoice(s) relating to such services is received on or after the date of enactment. Whether ISD can carry forward credit not distributed as on appointed day? 15

16 Transfer of unutilized credit by taxable person having centralized registration under earlier law-section 191 Sec 191 Transfer of unutilized credit by taxable person having centralized registration: Taxable person having centralized registration under earlier law has obtained registration under GST, allowed to take in electronic credit ledger, the amount of credit carried forward in return, in such manner prescribed. Amount admissible as cenvat credit under earlier law and also admissible as ITC in GST Act Such credit may be transferred to any of the registered taxable persons having the same PAN for which centralized registration was obtained earlier 16

17 Goods lying with agent (Section 192/193) Where any goods (including capital goods) belonging to the principal are lying at the premises of the agent on the GST date Agent shall take credit of the tax paid on fulfilling the following conditions: i) Agent is registered ii) Declaration by both of principal and agent regarding the stocks/cg iii) Invoices for such goods have been issued 12 months immediately preceding GST date iv) Principal has either reversed or not availed the input tax credit in respect of such goods Treatment of branch transfers(section 194) ITC reversal Any amount of input tax credit reversed prior to the GST date shall not be admissible as ITC under this act 17

18 Sections- 196 & 197 Sec 196 Provisions relating to TDS Where supplier has made any sale of goods in respect of which tax was required to be deducted at source under earlier law and also issued the invoice before GST date, no tax shall be deducted where payment to the supplier on or after GST date. Sec 197 Transitional Provision for availing cenvat Where Cenvat availed for input services provided in earlier law has been reversed due to nonpayment of consideration with 3 months, credit can be reclaimed (as which GST credit??), provided the taxable person has made the payment within 3 months from GST date. 18

19 Thank You! Hari Ganesh