Goods and Services Tax – GST – By: – Anuj Bansal – Dated:- 5-10-2016 Last Replied Date:- 5-10-2016 – This article is in continuity of the article earlier written by the Author and is published in Tax Management India as regards transition of registration of the dealers under the existing system to GST system. In short, it was explained in the earlier article that the registration of existing dealers will automatically be converted to registrations under GST law and certain basic details of the dealers will also be inserted in the new registration system except that details which may further be required. Another important aspect in the transition from the existing system to GST regime is the carryover of closing balance of ITC from present tax regime to GST regime. It is quite important to understand the process of carryover of closing balance of ITC to GST regime so that full benefit of ITC is available to a dealer. ITC is available to a dealer under different categories and broadly t
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d over in the system for the purpose of CGST or SGST as the case may be. In other words, the amount of ITC to be carried over shown in the return for Service Tax / Excise Duty or for VAT as the case may be shown by a dealer will be automatically taken by the system. It may be stated once the ITC is carried over in the return of the present law and considered in the first return under GST law, there is no mechanism to correct / revise ITC carried forward from the earlier period. Therefore, the dealer is required to take an extra precaution in filing the last return for the present tax regime and first return for the GST regime. In other words, in case any amount of ITC is left out in the return for the period ending March, 2017, the dealer can only claim cash refund from the department and which would be difficult. As per the existing provisions of Service Tax / Excise Duty return for the month of March 2017 will be required to be filed by 25th of April / 10th of April. Similarly, retur
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ed that the dealer has to be cautious in filing the returns under existing laws for the month of March 2017 claiming the correct amount of ITC carried over and such returns should be in any case filed before 20th May 2017 on which date the returns under GST Law will become due. Transition of closing balance ITC on the appointed date in relation to capital goods: This situation is relevant in the cases where the assesse has partly claimed ITC on the Capital Goods in the present tax regime and the balance is pending for claim during GST Regime. In such situation, the assessee will determine the total balance ITC on capital goods on the appointed date and he will be allowed to consider the ITC in his first return under GST regime. Here the department has allowed the assessee to manually insert the value of the balance ITC relating to capital goods. It is suggested that the dealer should maintain proper accounts / records of capital goods purchased and ITC available during April 2017. Same
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nt of duty/ tax under the earlier law. Therefore, it is suggested in such situations to start preparing / documenting such kind of invoices which would be relevant for claiming ITC on the closing stock. Dealers who are registered under the composition scheme under earlier law but under GST regime paying tax as general / normal dealer, the ITC in regard to the stock held by such dealers on the appointed date will be available in GST regime. However, the dealer should be in possession of invoices or any other prescribed documents evidencing the payment of duty / tax.Moreover, the dealer would be eligible for ITC on receipt of such goods under earlier law but for being a composite dealer has not claimed ITC in earlier law. Such kind of ITC shall also be admissible under the GST regime. Therefore, it is suggested that if any such kind of situation is envisaged, proper records of invoices / documents evidencing payment of duty / tax shall be maintained. There are certain other important con
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