Goods and Services Tax – GST – By: – Naimish Padhiar – Dated:- 2-8-2017 Last Replied Date:- 9-8-2017 – Reverse Charge Mechanism under GST and implications of exemption upto ₹ 5000 per day Let s look at the critical provisions of the GST law which have enabled reverse charge mechanism :- Compulsory Reverse Charge even if the supplier is registered
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ed from Goods Transport Agency, Lawyer, government, corporate sponsorship, director etc. Reverse Charge if the supplier is unregistered – Sec 9(4) The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recip
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4bcd-8d84-5b2d28c92f06 >Central Government
has exempted intra- State supplies of goods or services or both received by a registered person from any supplier, who is not registered, from the whole of the central tax leviable thereon under sub-section (4) of section
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r_software_uiphraseguid= fe331370-4ce9-404e-ab8a-5c777f8a6156 id= f7d80fc0-38a7-485f-940d-b536654f635b >upto a daily limit of ₹ 5000/- Example:- Mr. X purchased following items from unregistered dealer, all are dated 01.07.2017 as under: 1st bill – From Ram: Stationery = 2000/- 2nd bill – From Shyam: Lunch = 1000/- 3rd bill – From Madhu : Books = 3000/- In this case, The bills of Mr. X will not ge
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9f54c6-e44a-48b7-a681-69e658730a39 id= dd3da4a7-85b3-490e-bf9f-7ece18418386 >5000/– day limit, say bill date of Ram is 02.07.2017) 2) Any of the bills are 1000/- less than the mentioned value(Say Bill of Madhu is ₹ 2000/- 3) If the one of the bills in the same of
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85ff-cca5abfb4a1f id= 087b86d0-0e5f-4321-b3b3-a0b137d5931f >(
3) of CGST act? Where Compulsory tax is to be paid under the Reverse Charge Mechanism under 9(3) of CGST Act, and as per Notification N0o. 13/2017- Central Tax (Rate) dt 28.06.2017 the benefit of this lim
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from unregistered dealer, all are dated 01.07.2017 as under: 1st bill – From Ram: Stationery = 2000/- 2nd bill – From Shyam: Lunch = 1000/- 3rd bill – From Madhu: Goods Transport Agency = 3000/- In this case, The bills from Mr Ram and Mr Shyam will get covered under this notification as aggregate value of all supplies does not exceed 5000/- on a single date (01.07.2017). For the Third bill from Madhu Reverse cha
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GST payable over and above the value or from rupee 1? If the value of taxable supplies exceeds ₹ 5000 per day for all suppliers, then GST would be payable on the Total value of the supplies received from unregistered persons. Is this limit applicable to all supplies? The limit is applicable to only taxable supply of goods or services or both. Exempt supplies are out of the perview of this notification. Mr.
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om booking are exempt under Entry 14 of the exemption notification (12/2017). What if the supplies are procured from Interstate supply from unregistered? Benefit of this notification is available only for Intra State Purchase. If any transactions are done on an interstate basis the same are covered under the forward charge and in any case the reverse charge provisions are not applicable. Goods and services both inclusive 5000 or separate? Yes, the benefit is inclusive for all goods or services or both. What rate GST should be payable then? GST should be payable as per the
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5-f667-42a1-b518-cf75aac8907f >as
the time of supply is invoice of payment whichever is earlier. We have compiled the daily expenses which would be liable to GST if procured from unregistered supplier as below:- Sr. No. Nature of Expenses GST Rate GST IMPACT / OTHER REMARKS Supplies from UR (RCM Applicable) No GST / NIL GST or EXEMPTED :- 1 Electricity Charges 0% Out of GST 2 Water Charges 0% Out of GST
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Tax levied by local body / other association out of GST 7 Rent Deposits 0% If adjusted with rent or forfeited – GST applicable 8 Other Deposits 0% If adjusted with other expenses or forfeited – GST applicable 9 Petrol Expense 0% Petrol & Diesel out of GST 10 Salary 0% Out of GST 11 Staff Amenities 0% Out of GST if in lieu of salary. 12 Gifts to Staff 0% Gifts by employer of value above ₹ 50000/- shall be liable to GST as outward supply. 13 Staff Mediclaim Contribution 0% Out of GST if in lieu of salary 14 Allowance & incentive to employees 0% Out of GST if in lieu of salary 15 Stamp & Registration Fees 0% If only a pure agent service – ensure GL balance Nil 16 Provision for Doubtful Debts 0% No credit /
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abour
Welfare Fund Contribution 0% Out of GST 21 Staff Medical Expenses 0% Exployee service without any margin 22 Fine & Penalities by Government 0% Out of GST 23 Discounts – shown in bill 0% GST applicable is after all discount –
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ble / RCM supply of URD :- 34 Advertisement Charges 18% 35 Advetisement in Magazine, 18% 36 Advetisement in Media 18% 37 Discounts – after issue of invoice (Post supply discount) GST Impact Credit note has to be issued, liability will be reduced to extent of GST on discout. 38 Annual Maintenance Charges 18% 39 Bank Charges – Service charges recovered 18% 40
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r Training Expense 18% 57 Postage and Courier Charges 18% Subject to certain exemptions 58 Printing & Stationery(Flex Printing, Broad Printing, Notice Printing) 18% 59 Rates and Taxes Actuals Depends on case to case basis 60 Recruitment Expenses 18% 61 Rent Paid 18% 62 Rent Paid for Mess (Employees) 18% 63 Repair and Maintenance – Building / Electrical / P& M / Others 18% 64 RTO Expenses 18% or 28% 65 Sales Promotion – Others / SSI / Display 18% 66 Sponsorship services 18% Reverse Charge to Service Receiver – ITC can be availed 67 Security Charges 18% 68 Staff Recruitment 18% 69 Staff Training Expenses 18% 70 Staff Uniform Expenses 18% If a third party bill comes 71 Stationery Expenses 18% 72 Subscription & periodicals 18% 73 Telephone Charges 18% 74 Transportation Charges – GTA 5% 75 Traveling Expenses Interstate 5%/18% Services from Tour operators / Agencies 76 Traveling Expenses International 28% Note:- The above expense heads are for illustrative purpose only. The appli
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