Goods and Services Tax – GST – By: – CS SANJAY MALHOTRA – Dated:- 19-9-2016 Last Replied Date:- 30-12-2016 – As Goods and Service Tax will bring in Business Transformation; it s important to understand the Transitional Provisions to ensure that the proposed tax system takes care of existing tax credits, payments and should not be a TAX COST for the assessee s in GST. Due care has to be taken in shift over from Present set of Indirect Tax system to GST Regime so that the required compliances shall be complied with and taxes paid under present taxation system should be rolled over in GST Law. Appointment of Officers under GST Act (Section 141) of Model GST Law provides that all the officers appointed under Central / State Laws relating to Taxes shall be deemed to have been appointed as GST Officers under the respective Acts. Migration of Existing Tax Payers (Section 142) All the persons registered under the present Tax structure shall be migrated automatically to GST on provisional basi
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
day on which GST Act comes into force. Tax credit has to be taken as opening balance in Electronic Ledger i.e. online Input Tax Credit Ledger in GSTIN. CENVAT Credit available under Excise and Service Tax as on date preceding to GST Act date shall be carried forward in Electronic Ledger under the head CGST and Vat credit under the head SGST . Tax Credit has to be carry forward provided the same is admissible both under present and in GST law. Tax Credit shall be recovered as tax arrears by Central / State GST officers if the same is found to be recoverable as a result of any proceeding initiated before or after the GST Act comes into force. The above provisions shall be incorporated under respective CGST and SGST Acts. Unavailed CENVAT Credit on Capital Goods not carry forward in return to be allowed in GST in certain situation (Section 144) Unavailed CENVAT credit means that the tax credit on capital goods which have not been availed. For e.g. in the present Excise law, CENVAT credit
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
r after the GST Act comes into force. The above provisions shall be incorporated under respective CGST and SGST Acts. Credit of eligible duties and taxes in respect of inputs held in stock to be allowed in certain situations (Section 145) Any person who is into the sales of exempted goods under the present law is exempted from Registration and further he shall have to get himself registered under the GST Act if the products come out of exemption or is subject to levy under the GST Act. Such registered persons under the GST Act shall be eligible to claim Input Tax credit in respect of Inputs, WIP held in stock , Inputs contained in final products as on the date immediately preceding to the Date from which GST Act comes into force. Credit of eligible duties and taxes on inputs held in stock to be allowed to a taxable person switching over from composition scheme (Section 146) Any Registered person who is paying tax in the capacity of Composite Tax Payer at a fixed rate or fixed amount un
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
hall pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date of such switch over: Provided that after payment of such amount, the balance of input tax credit, if any lying in his electronic credit ledger shall lapse. The above provisions shall be incorporated under respective CGST and SGST Acts. Exempted Goods Returned to Place of Business in GST regime(Section 148) No Tax shall be payable by the person returning the exempted goods provided the said goods are cleared not earlier than a period of 6 months from the date of enactment of GST Act and further returned to supplier of goods within a period of 6 months from the date on which GST Act comes into force. Tax stands payable if the above stated condition is not satisfied. The above provisions shall be incorporated unde
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ed back within a period of 6 months from the date when GST comes into force OR Tax is to be paid by Job Worker if the goods after processing are returned back after a period of 6 months after the GST enactment date. If registered person shows sufficient cause, then the period of 6 months may be extended by another 2 months by the competent authority. The above provisions shall be incorporated under respective CGST and SGST Acts. Semi-finished Goods removed for job work and returned on or after the appointed day (Section 151) In case Semi-finished goods are removed for carrying out certain manufacturing processes under the provisions of present tax law for further processing, testing, repair, etc and are returned after processing within a period of 6 months from the date on which GST Act comes into force, then NO Tax shall be payable. Tax shall be payable by manufacturer if the inputs are not received back within a period of 6 months from the date when GST comes into force OR Tax is to
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
after the GST enactment date. If registered person shows sufficient cause, then the period of 6 months may be extended by another 2 months by the competent authority. The above provisions shall be incorporated under respective CGST and SGST Acts. Issue of supplementary invoices, debit or credit notes where price is revised in pursuance of a contract (Section 153) In case the price of goods are revised upwards after their clearance from the supplier premises, the taxable person issuing the goods has to issue supplementary Invoice or Debit Note containing such particulars as may be prescribed under the GST Rules within a period of THIRTY DAYS of such price revision. In case the price of goods are revised downwards after their clearance from the supplier premises, the taxable person issuing the goods has to issue supplementary Invoice or Credit Note containing such particulars as may be prescribed under the GST Rules within a period of THIRTY DAYS of such price revision Such Debit Note /
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
provisions shall be incorporated under respective CGST and SGST Acts. Claim of CENVAT Credit to be disposed of under earlier Law (Section 155) Claim for CENVAT Credit on account of any appeal, revision, review or reference shall be disposed off in accordance with the provisions of earlier law and any amount stands accrue to the person shall be paid in Cash. In similar way, any amount stands recoverable on account of any appeal, revision; review or reference shall be recoverable as Tax arrears and shall not be admissible as input tax credit under this Act. The above provisions shall be incorporated under respective CGST and SGST Acts. Finalisation of proceedings relating to Output Tax Liability (Section 156) Every proceeding initiated under any appeal, revision, review or reference shall be disposed off in accordance with the provisions of earlier law and any amount stands accrue to the person shall be paid in Cash and ANY amount stands recoverable on account of any appeal, revision; re
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
of Returns (Section 158) Where any duty / interest / penalty or any other amount stands recoverable due to Revision in Return furnished under earlier law, the same shall be recovered as Tax arrears and amount shall not be admissible as input tax credit under this Act. Where any duty / interest / penalty or any other amount becomes Refundable due to Revision in Return furnished under earlier law, the same shall be refunded to him in Cash or as per the provisions of earlier act. The above provisions shall be incorporated under respective CGST and SGST Acts. Treatment of long term construction / works contracts (Section 159) Tax is applicable at the rates specified under GST Act in respect of Supply of Goods and services provided after the enactment of GST Act even if the agreement / contract is executed prior to introduction of GST Act. The above provisions shall be incorporated under respective CGST and SGST Acts. Progressive or periodic supply of goods or services (Section 160) No Tax
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
lace subject to the following conditions:- (i) the agent is a registered taxable person under this Act; (ii) both the principal and the agent declare the details of stock of goods lying with such agent on the date immediately preceding the appointed day in such form and manner and within such time as may be prescribed in this behalf; (iii) the invoices for such goods had been issued not earlier than twelve months immediately preceding the appointed day; and (iv) the principal has either reversed or not availed of the input tax credit in respect of such goods. Tax paid on Capital Goods lying with Agents to be allowed as Credit under SGST Law (Section 162B) This provision shall be incorporated only under respective SGST Acts. Input Tax credit is admissible to the Agent in respect of CAPITAL goods lying at his place subject to the following conditions:- (i) the agent is a registered taxable person under this Act; (ii) both the principal and the agent declare the details of stock of capita
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =