GOODS AND SERVICES TAX

Transcription

1 GOODS AND SERVICES TAX TRANSITIONAL CREDITS AND DEMONSTRATION OF FILING OF TRAN-1 Two days webcast on GST Organised by: Indirect Taxes Committee

2 GENERAL PRINCIPLES RELATING TO TRANSITION a) Every person registered under the existing laws must be provisionally registered under the GST laws; b) Transition credits can be availed only if the relevant Form GST Tran 01 or Form GST Tran 02, as applicable are filed; c) CENVAT credits permissible under earlier laws will be permitted to be availed as CGST credits in the electronic credit ledger; d) VAT / Entry tax credits permissible would be permitted to be availed as SGST credits in the electronic credit ledger; e) Such credits must be permissible to be availed as ITC under GST laws; f) Previous six months returns must have been furnished; g) Tax / Duty paid documents must be in possession of the person who avails such transition credits; h) In my view: Credit would be subject to verification and would not be automatic; Wrongly availed credits will stand to be recovered by initiating action under Section 73 or 74; i) In terms of Rule 117(3), Form GST Tran 01 is an APPLICATION ie., such application will be verified and disposed off prior to transfer of credits to the electronic credit ledger; j) It appears that transition credits will not be available for set-off of tax for the period July 2017, since 2 Form GST 3B does not provide for a column for adjustment of such credits.

3 WHAT IS GST TRAN 1? GST TRAN 1 is the declaration to be furnished:- By every registered person who avails transitional credit of taxes, carried forward by way of furnishing last return under earlier laws; Non-availability of CREDIT if: A person opts to pay tax under composition scheme in a GST regime; Credit is inadmissible as ITC under GST law; Previous 6 months returns are not furnished; Credit relates to GOODS manufactured and cleared under exemption notification. Conditions: Ensure that last return under earlier laws is or are furnished; Ensure that credits carried forward by way of last returns are also eligible under GST law; Ensure that returns under earlier laws have been furnished for the period of last six months; Furnish declaration in Form GST TRAN 1 of credits carried forward in Table 5 (a) and 5 (c) of the said form within 90 days from i.e., within (Extendable by 90 days on recommendation of GST council) 3

4 REQUIREMENTS TO CARRY FORWARD CREDITS Table 5(a) Sl. no. Registration no. under existing law (Central Excise and Service Tax) Tax period to which the last return filed under the existing law pertains Date of filing of the return specified in Column no. 3 Balance cenvat credit carried forward in the said last return Cenvat Credit admissible as ITC of central tax in accordance with transitional provisions Total 4

5 OTHER INFORMATION TO BE DECLARED IN GST TRAN-1 Every registered person who is required to furnish declaration in Form GST TRAN-1 shall: Provide details of declaration received in C Form for the sales period to [Table 5(b)] Details of C Forms received till date of furnishing TRAN-1 can be considered; Credits not allowed to be carried forward for non-submission of declarations and forms will be allowed as refund under respective State VAT laws at the time of assessments provided such declarations and certificates Sl. are submitted. Carry forward credits Particulars carried forward under State laws will be calculated Amount as follows [Table No. 5( c )]: 1. VAT and [Entry Tax] input tax credit carried forward in last return - 1 xxxx 2. Less: differential tax payable on turnovers for which C Forms are pending 2 xxxx 3. Less: tax payable on turnover for which F forms are pending - 3 xxxx 4. Add: input tax reversed on stock transfers made for which F forms are not received 4 xxxx 5. Less: tax payable on turnovers for which certificate in Form H or I is pending - 5 xxxx 6. Net transition credit allowed to be carried forward under GST 6= 1-( ) Xxxx 5

6 REQUIREMENTS TO CARRY FORWARD UNAVAILED CREDITS ON CAPITAL GOODS SEC 140(2) Every registered person who wants to avail transition credit of unavailed CENVAT / Input tax credit on capital goods, shall - Ensure that partial credit on such capital good is already availed under earlier laws; Ensure that such credits were eligible under earlier laws as well as is or are, eligible under GST law; Furnish the details of capital goods, on which unavailed credit is to be availed in Table 6 Form GST TRAN 1 within 90 days from i.e., within ; Table 6(a) Unavailed CENVAT credit Sr. no Invoice / Documen t no. Invoice / document Date Supplier s registration no. under existing law Recipients registration no. under existing law Details of capital goods on which credit has been partially availed Value Duties and taxes paid ED/ CVD SAD Total eligible cenvat credit under existing law Total cenvat credit availed under existing law Total cenvat credit unavailed under existing law (admissible as ITC of central tax) (9-10) Total Table 6(b) Unavailed Input tax credit Sr. no Invoice / Document no. Invoice / document Date Supplier s registration no. under existing law Recipients registration no. under existing law Details of capital goods on which credit has been partially availed Value Taxes paid VAT [and ET] Total eligible VAT [and ET] credit under existing law Total VAT [and ET] credit availed under existing law Total VAT [and ET] credit unavailed under existing law (admissible as ITC of State/UT tax) (8-9) Total

7 REQUIREMENTS TO AVAIL CREDITS FOR GOODS IN TRANSIT SEC140(5) - VAT & ET Every registered person who has paid taxes under earlier laws but receives goods after shall: Ensure original invoices are available; Ensure that taxes on such goods are paid under earlier laws; Ensure that receipt of such goods is or are recorded in books of accounts within 30 days from ; Ensure that returns under earlier laws have been furnished for the period of last six tax months; Furnish declaration of goods received on or after which are accounted in books of accounts within , in Table 7 (b) of Form GST TRAN 1 within 90 days from i.e., within ; Statement to be furnished in the following format: Name of the Supplier Invoice Number Invoice Date Description Quantity UQC Value Eligible Duties and taxes VAT/ [ET] Date on which entered in recipient books of account

8 ELIGIBILITY TO AVAIL CREDITS ON STOCK AS ON (4) and 140(6) Following persons shall be eligible to claim credits of taxes paid on inputs held in stock as on : a. Persons who were not liable to be registered or who were engaged in manufacture of exempted goods but who obtain registration under GST laws or goods manufactured by him become taxable in GST regime; b. Persons who were paying tax under composition scheme i.e., at fixed rate or fixed amount under earlier laws and who register as a regular taxpayer under GST by force or by choice; c. The following conditions must be fulfilled for taking credit: such person is in possession of invoice(s); or any other duty paying document as evidence of tax payment; such invoice(s) relates to procurement made on or after ; such inputs are used or intended to be used for making taxable supply; such person is eligible for input tax credit on such inputs under GST Act; Such person furnishes details of such stock with prescribed details in sub-table 7A and 7B of Table 7(a) of Form GST TRAN-1 within 90 days from

9 ELIGIBILITY TO AVAIL CREDITS ON STOCK... Persons other than manufacturer or service provider who are not in possession of invoice or any other duty paying document, will be eligible for deemed transitional credit on stock held as on , provided the said person in his possession of document for procurement of such goods; such inputs are used or intended to be used in making taxable supply under GST Act; such inputs are separately identifiable; details of such stock is declared in GST TRAN-1 within 90 days from i.e., within credits will be credited only after supply is made out of such stock; such stock is cleared within 6 tax periods as the scheme is available for the such period; credit on balance stock will lapse; Must pass on credit to the Recipient by way of reduction in prices statement of goods supplied out of such stock is furnished at the end of each of the six tax periods in Form GST TRAN-2 Amount of credit available: Rate of tax payable CGST / IGST 9% / 18% or more CGST / IGST less than 9% / 18% % of tax paid available as deemed credit 60% of CGST payable / 30% of IGST payable 40% of CGST payable / 20% of IGST payable 9

10 DETAILS OF THE INPUTS HELD IN STOCK IN TERMS OF SECTIONS 140(3), 140(4)(B) AND 140(6) (a) Amount of duties and taxes on inputs claimed as credit excluding the credit claimed under Table 5(a) and 7(a) Sr. no. Details of inputs held in stock or inputs contained in semi-finished or finished goods held in stock HSN (at 6 digit level) Unit Qty. Value Eligible Duties paid on such inputs A Where duty paid invoices or any other document are available Inputs Inputs contained in semi-finished and finished goods 7B Where duty paid invoices are not available (Applicable only for person other than manufacturer or service provider) Credit in terms of Rule 1 (4) Inputs (b) Amount of eligible duties and taxes / VAT/ [ET] in respect of inputs or input services under section 140(5): Name of the Supplier Invoice Number Invoice Date Description Quantity UQC Value Eligible Duties and taxes VAT/ [ET] Date on which entered in recipent books of account

11 CREDITS RELATING TO ISD 140 (7) If an ISD receives any input tax credit for services prior to ; On amount of service received prior to ; Invoices relating to SUCH services are received after appointed date; ISD is permitted to distribute such credit as GST; Receiving unit can claim as CGST credit is Form GSTR-3B and thereafter while filing Form GSTR-2. 11

12 CENTRALISED REGISTRATION - SEC 140(8) The details of credits transferred to other units registered in different States under same PAN along with,- o details of GSTIN of recipient unit; o document details under which such credits are distributed; o details of registration number earlier laws and date of filing of last return; Needs to be furnished in Form GST Tran - 01 Table 8 Details of transfer of cenvat credit for registered person having centralized registration under existing law (Section 140(8)) Sl. No. Registration no. Tax period to under existing which the last law (Centralized) return filed under the existing law pertains Date of filing of the return specified in Column no. 3 Balance GSTIN of receivers eligible (same PAN) of ITC cenvat credit CENTRAL TAX carried forward in the said last return Distribution document /invoice ITC of CENTRAL TAX transferred No. Date Total 12

13 PROVISIONS RELATING TO JOB WORK SEC 141(1) / (2) / (3) If inputs removed by principal as such of after partial processing for further processing, testing, repair, reconditioning etc; If semi-finished goods are removed by principal for further manufacturing; When excisable goods are removed by principal without payment of duty for testing or processing (not amounting to transfer); No tax if: Goods are returned within 6 months or 1 year (in case of inpits and capital goods respectively) from the appointed date or; Such extended period not exceeding 2 months; Principal and job worker declare details of stock as per Table 9(a) and 9(b) of Form GST Tran

14 DETAILS OF GOODS HELD IN STOCK AS AGENT ON BEHALF OF THE PRINCIPAL UNDER SECTION 142 (14) Principal and agent to declare stock as per Table 10(a) & 10(b) 10. Details of goods held in stock as agent on behalf of the principal under section 142 (14) of the SGST Act a. Details of goods held as agent on behalf of the principal Sr. No. GSTIN of Principal Details of goods with Agent Description Unit Quantity Value Input Tax to be take b. Details of goods held by the agent Sr. No. GSTIN of Principal Details of goods with Agent Description Unit Quantity Value Input Tax to be take

15 DETAILS OF CREDIT AVAILED & GOODS SENT ON APPROVAL Details of credit availed in terms of Section 142 (11) ( c ) 11 Details of credit availed in terms of Section 142 [11(c )] Sr No.Registration No Service Tax Invoice/document of VAT Registration No. no. Invoice/ document date Tax Paid VAT paid Taken as SGST Credit or Service Tax paid as Central Tax Credit Total Details of goods sent on approval 12. Details of goods sent on approval basis six months prior to the appointed day (section 142(12)) Sr No. Document Docume GSTIN no. of Name & Details of goods sent on approval basis no. nt date recipient, (if applicable) address of recipient HSN Description Unit Quantity Value Total 15

16 PRACTICAL ISSUES Issues Identification of stock on which deemed credits are to be claimed Accounting of services in transit Non availability of immediate transition credit for payment of taxes under GST Capital goods in transit as on with taxes paid under earlier laws Possible Solutions Carry out inventory count as on , segregate this stock and maintain separate inventory ledger for the same. On receipt of invoice ensure invoice is dated prior to and account it within 30 days from in books of accounts. To forecast net taxes liability and make proper working capital arrangements. To avoid receipt of capital goods after on which taxes under earlier laws are paid, as no credit is available on capital goods in transit. To receive capital goods with GST and avail GST credit. Attempt can be made to avail the credit u/s 140(2). 16

17 Thank you S. Venkatramani Chartered Accountant 17