SERVICES UNDER GST REGIME (PART-III) (Supply, Valuation & Input Credit)
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 24-2-2017
Time of Supply of Services
GST shall be payable at the earliest of the following dates, namely:
* the date of issue of invoice by the supplier or the last date on which he is required to issue the invoice with respect to the supply, or
* the date on which the supplier receives the payment with respect to the supply.
The provisions are generally similar to existing Point of Taxation Rules.
Domestic / SEZ Supply
For units located in SEZ having operations across India and providing supply of services to customers located across India, the issue would arises as to where to pay GST, and whether this would require splitting of invoices based on various locations of the service provider or the service recipient. For this purpose, the draft law has prescribed the requirement of determination of the location from where the servi
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ply
Place of supply of services where the location of supplier of service and the location of the recipient of service is in India
In general
Location of recipient of supply, if available otherwise location of supplier of supply.
Place of supply of services where the location of the supplier or the location of the recipient is outside India
In general
Location of recipient of supply, if available otherwise location of supplier of supply.
However, for specific services, place of supply of services provisions have been prescribed in sections 9 and 10 of model IGST law.
Valuation of Services
Transaction value shall be considered for payment of tax, with various inclusions prescribed in the valuation provisions.
This transaction value of supply is subject to specific inclusions or exclusions. Specific inclusions are as follows:
* Any taxes, duties, cesses, fees and charges levied under any statute, other than SGST /CGST/IGST.
* Any amount that the supplier is liable to pay i
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s to be issued.
Payment of Tax
Taxes shall be paid on a monthly basis online. Physical payments have been prohibited. Payment of tax can also be made by debit card / credit card / RTGS etc. Presently, in certain cases, payment of tax is allowed on a quarterly basis. For Government supplies, Tax Deduction at Source (TDS) will be done by the Government. In case of e-commerce, Tax Collection at Source (TCS) will have to be done.
Returns
Under Service Tax law, assessee is required to submit two half yearly returns in a year. However, Model GST law (version-II) provides for more than 30 returns which are required to be submitted by a registered person. Since the number of returns to be filed will be over 30, it would add to cost of compliance and more compliances. GSTN has appointed over 30 GST Suvidha Providers (GSPs) who will be the conduit or interface between the taxpayer and the GST network (GSTN). Service providers can avail the services of GSPs to comply with the GST requirements
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liability. While the GSTN system will enable fulfillment of this requirement based on the matching principle, inserting this as a condition may require discharge of responsibility by the recipient.
A taxable person, being an exporter may claim refund of any unutilized input tax credit at the end of any tax period. In other words, exporter of services shall be eligible to get refund on eligible inputs, capital goods and input services.
'Capital goods' has been liberally defined for being eligible to claim input tax credit in respect of capital goods. 'Capital goods' means goods, the value of which is capitalized in the books of accounts of the person claiming the credit and which are used or intended to be used in the course or furtherance of business. Accordingly, input tax credit will be eligible for capital goods only on those goods, the value of which is capitalized in the books of accounts. This will enable many service providers to claim Cenvat credit.
Input Se
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