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SEMINAR ON GST by STPAM. Session by KIRAN G GARKAR, FCA. AGENDA. Provisions under the GST law Matching, Reversal & Reclaim of ITC Furnishing of Return, Annul Return & Final Return Notice to return defaulters Levy of Late fees on late filing of return
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SEMINAR ON GST by STPAM Session by KIRAN G GARKAR, FCA
AGENDA Provisions under the GST law • Matching, Reversal & Reclaim of ITC • Furnishing of Return, Annul Return & Final Return • Notice to return defaulters • Levy of Late fees on late filing of return • Goods and Services Tax Practitioners Based mainly on CGST Act, 2017 , Draft Rules & GSTN portal KIRAN GARKAR & CO.
Sec. 46: Matching, reversal and reclaim of input tax credit. KIRAN GARKAR & CO.
STARTER Outward Return by ‘A’ Inward Supply @ B Inward Supply @ C KIRAN GARKAR & CO.
ITC MATCHING • (1) The details of every inward supply furnished by a registered person ( “recipient”) for a tax period shall, in such manner and within such time as may be prescribed, be matched–– • (a) with the corresponding details of outward supply furnished by the corresponding registered person (“supplier”) in his valid return for the same tax period or any preceding tax period; • (b) with the integrated goods and services tax paid under section 3 of the Customs Tariff Act, 1975 in respect of goods imported by him; and • (c) for duplication of claims of input tax credit. KIRAN GARKAR & CO.
ITC MATCHING • (2) The claim of input tax credit in respect of invoices or debit notes relating to inward supply that match with the details of corresponding outward supply or with the integrated goods and services tax paid under section 3 of the Customs Tariff Act, 1975 in respect of goods imported by him shall be finally accepted and such acceptance shall be communicated, in such manner as may be prescribed, to the recipient. • (3) Where the input tax credit claimed by a recipient in respect of an inward supply is in excess of the tax declared by the supplier for the same supply or the outward supply is not declared by the supplier in his valid returns, the discrepancy shall be communicated to both such persons in such manner as may be prescribed. KIRAN GARKAR & CO.
ITC MATCHING • (4) The duplication of claims of input tax credit shall be communicated to the recipient in such manner as may be prescribed. • (5) The amount in respect of which any discrepancy is communicated under subsection (3) and which is not rectified by the supplier in his valid return for the month in which discrepancy is communicated shall be added to the output tax liability of the recipient, in such manner as may be prescribed, in his return for the month succeeding the month in which the discrepancy is communicated. • (6) The amount claimed as input tax credit that is found to be in excess on account of duplication of claims shall be added to the output tax liability of the recipient in his return for the month in which the duplication is communicated. KIRAN GARKAR & CO.
ITC MATCHING • (7) The recipient shall be eligible to reduce, from his output tax liability, the amount added under sub-section (5), if the supplier declares the details of the invoice or(7) The recipient shall be eligible to reduce, from his output tax liability, the amount added under sub-section (5), if the supplier declares the details of the invoice or debit note in his valid return within the time specified in sub-section (9) of section 39. • (8) A recipient in whose output tax liability any amount has been added under subsection (5) or sub-section (6), shall be liable to pay interest at the rate specified under subsection (1) of section 50 on the amount so added from the date of availing of credit till the corresponding additions are made under the said sub-sections. KIRAN GARKAR & CO.
ITC MATCHING • (9) Where any reduction in output tax liability is accepted under sub-section (7), the interest paid under sub-section (8) shall be refunded to the recipient by crediting the amount in the corresponding head of his electronic cash ledger in such manner as may be prescribed: Provided that the amount of interest to be credited in any case shall not exceed the amount of interest paid by the supplier. • (10) The amount reduced from the output tax liability in contravention of the provisions of sub-section (7) shall be added to the output tax liability of the recipient in his return for the month in which such contravention takes place and such recipient shall be liable to pay interest on the amount so added at the rate specified in sub-section (3) of section 50. KIRAN GARKAR & CO.
Chapter IX: ReturnsSections 37 to 48GST Law has come out with a novel ideaof single return being splitted in three parts. KIRAN GARKAR & CO.
About Returns • Section 37: Relates to furnishing of details of outward supplies. • This e-return shall be filed within 10 days from the end of the tax period. • The Board / Commr. may notify any extension in time limit • This Return is not applicable to ISD, Non resident taxable person, Deductor of Tax (Sec. 51 /52) and Composition Levy dealers (Sec. 10) • Sec. 37(2): Results after returns for ‘inward supplies’ are uploaded, details will be communicated to dealer. He shall either accept or reject the details so communicated & details furnished by him in the first place shall stand amended accordingly. This acceptance or rejection is to be done on or before seventeenth of said month. KIRAN GARKAR & CO.
About Returns: • RD shall not be allowed to furnish details of outward supplies during the period from 11th to 15th day of the month succeeding the tax period. • POSER, if GSTR-1 is not uploaded, but recipient informs the corrections/deletions. How it can be accepted by 17th when original Return is not uploaded? • Revision / Rectification of original return - In case any outward supplies are not matched with the respective recipients’ return of inward supplies, the return for outward supplies requires rectification which is allowed. Such rectification, however, is not permitted after filing of annual return or the return for the month of September of the following year whichever is earlier. KIRAN GARKAR & CO.
About Returns: Some Components of valid GSTR-1 Return for Outward Supplies • Final invoice-level supply information • for all B2B supplies (whether inter-state or intra-state), invoice level specified details will be uploaded. (ii) for all inter-state B2C supplies (including to non-registered government entities, consumer / person dealing in exempted / nil rated / non GST goods or services), the suppliers will upload invoice level details in respect of every invoice whose value is more than Rs. 2,50,000/-. For invoices below this value, State wise summary of supply statement will be filed covering those invoices where there is address on record. KIRAN GARKAR & CO.
About Returns (iii) Recommendations with respect to the details about HSN code for goods & accounting code for services to be captured in an invoice have been accepted:- (a) HSN code (4-digit) for goods / accounting codes for services will be mandatory initially for all taxpayers with TO in the preceding financial year above Rs. 5 crore. (b) for TO between Rs 1.5 crores and Rs 5 crores, HSN codes may be specified only at 2-digit chapter level as an optional exercise to start with. (c) any taxpayer, irrespective of his turnover, may use HSN code at 6- digit or 8-digit level if he so desires. (d) to start with, composition dealers may not be required to specify HSN at 2-digit level also. KIRAN GARKAR & CO.
About Returns (e) prescribed accounting code will be mandatory for those services for which place of supply rules are dependent on nature of services to apply the destination principle, irrespective of turnover. (f) HSN codes at 8-digit level and accounting codes for services will be mandatory in case of exports and imports. (iv) the taxpayers who have TO below the limit of Rs. 1.5 crore will have to mention the description of GS, as the case may be, wherever applicable. (v) for all intra-state B2C supplies (incl. to non-registered government entities, consumer / person dealing in exempted / nil rated / non GST goods or services), consolidated sales (supply) details will be uploaded. however, a dealer may at his option furnish invoice wise information in respect of exempted and nil rated supplies also. KIRAN GARKAR & CO.
About Returns (vi) the supply information will also have details relating to the POS in order to identify the destination State as per the POS rules where it is different from the location of the recipient. (vii) details relating to supplies attracting reverse charge will also be submitted. • details relating to advance received against a supply to be made in future • details relating to taxes already paid on advance receipts for which invoices are issued in the current tax period • details relating to supplies exported (including deemed exports) both on payment of IGST as well as without payment of IGST • GSTR-1 would be filed by the 10th of the succeeding month. Late filing would be permitted on payment of late fees only. KIRAN GARKAR & CO.
About Returns: • SEC. 38: FURNISHING OF DETAILS OF INWARD SUPPLIES : • In respect of the return for outward supplies filed by the supplier of GS, the receiver is required to match his receipts with the details of supplies filed by the supplier. • He is required to –verify, validate, modify or even delete – the details furnished by the suppliers. [Details of inward supplies include debit notes, credit notes and inward supplies liable for tax payment on reverse charge basis.] • This return has to be filed after 10th day but within 15 days from the end of the relevant tax period. KIRAN GARKAR & CO.
About Returns: • Some Components > Return for inward supplies (GSTR-2): • Auto population of inward supplies would be auto-populated in the ITC ledger of the taxpayer on submission of his return. • There will be a separate table for submitting details in relation to ITC received on an invoice on which partial credit has been availed earlier. • Capital goods : There will be a field to capture appropriate information regarding availing ITC over a period from the date of accounting of capital goods in the taxpayer’s books of accounts. KIRAN GARKAR & CO.
About Returns: • In respect of ITC, • If inputs are received in one lot, the ITC will be given in the return period in which the purchase is recorded in the books of accounts. • In case inputs covered under one invoice are received in more than one instance/lot, the ITC will be given in the return period in which the last purchase is recorded in the books of accounts. • Auto-Population to be done on or after 11th of the succeeding month. Amends to be permitted between 12th and 15th of the succeeding month. GSTR-2 would be filed by 15th of the succeeding month. Late filing would be permitted on payment of late fees only. KIRAN GARKAR & CO.
About Returns • Section 39 > Every registered taxable person: (i) For every calendar month furnish, in prescribed form and manner, a electronic return: • (a) of inward & outward supplies of GS • (b) input tax credit availed, (c) tax payable, (d) tax paid and (e) other particulars as may be prescribed • (f) within 20 days after the end of such month: (ii) Paying tax under composition scheme shall furnish a return for each quarterly basis, electronically, in prescribed form manner, within 18 days after the end of such quarter: KIRAN GARKAR & CO.
Returns Process 21 CA Kiran G. Garkar
About Returns (iii) No return for a tax period if valid return for any previous tax period has not been furnished by him. (iv) Payment of tax due as per such return not later than the last date on which he is required to furnish such return. (v) Shall furnish a return for every tax period whether or not any supplies of GS have been effected during such tax period. (vi) TDS return with the payment of tax so deducted, within 10 days after the end of such month. [draft rule to furnish certificate is contrary as on today] KIRAN GARKAR & CO.
About Returns (vii) A return furnished without payment of full tax due as per such return shall not be treated as a valid return for allowing input tax credit in respect of supplies made by such person. (viii) Every ISD shall, for every calendar month or part thereof, furnish a return, electronically, in prescribed form and manner within 13 days after the end of such month. (ix) Non resident taxable person to furnish return within 20 days from end of the month or within 7 days after last day of registration. [ Matching of this data with Inward supplies return will be issue to be taken care of.] KIRAN GARKAR & CO.
About Returns • (x) If any taxable person after furnishing a return discovers any omission or incorrect particulars therein, shall rectify in the return to be filed for the month or quarter, during which such omission or incorrect particulars are noticed, subject to payment of specified interest as applicable. • No rectification after the due date for filing of return for the month of September or second quarter, following the end of the financial year, or the actual date of filing of relevant annual return, whichever is earlier. • (xi) Such rectification cannot be done when omission or incorrect particulars are discovered as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities. KIRAN GARKAR & CO.
About Returns: • Few basic Components of valid GST Return (GSTR-3) – • Final aggregate level outward and inward supply information. These details will be auto populated from GSTR-1 and GSTR-2. • Tax liability under CGST, SGST, IGST and Additional Tax. • Details regarding revision of invoices relating to outward and inward supplies • Information about ITC ledger, Cash ledger and Liability ledger (these are running electronic ledgers maintained on the dashboard of taxpayer by GSTN). These would be updated in real time on an activity in connection with these ledgers by the taxpayer. KIRAN GARKAR & CO.
About Returns: • Details of cash balance (CGST, SGST, IGST & Additional tax) in personal ledger at the end of the tax period • Information regarding quantity of goods (as per Unique Quantity Code) supplied will not be contained in the monthly return. However, the same would be submitted by the taxpayer in the annual return. • The return would be permitted to be filed both on online and offline mode. Offline mode> payment by debit to cash / ITC ledger can be done at an earlier date also & such debit entry number would be verified at the time of uploading of the return. In online mode, both debiting and filing can be done simultaneously. • The return would be filed by 20th of the succeeding month. Late filing would be permitted on payment of late fees only. KIRAN GARKAR & CO.
About Returns: • ISD Return (GSTR – 6) • This will be auto populated on the basis of GSTR-1 filed by the Counterparty Supplier of the taxpayer. The same maybe modified i.e. added or deleted by the Taxpayer while filing the ISD return. The recipient would be permitted to add invoices (not uploaded by the counterparty supplier)if he is in possession of invoices and has received the services. • Details of the Invoices along with the GSTIN of the receiver of the credit i.e. to whom the ISD is distributing credit. • There will be separate ISD Ledger in the return that will detail the Opening Balance of ITC (to be auto- populated on the basis of previous return), credit for ITC services received, debit for ITC reversal and ITC distributed and Closing Balance. • This return would be filed by 15th of the succeeding month. KIRAN GARKAR & CO.
About Returns: • Brief Details of Section on TDS Return (GSTR – 7) • Details of GSTIN of the Supplier along with the invoices against which the Tax has been deducted. This will also contain the details of tax deducted against each major head i.e. CGST, SGST and IGST. • This return should be filed by 10th of the succeeding month. • The return (GSTR-3) would be entirely auto-populated through GSTR-1 (of counterparty suppliers), own GSTR-2, ISD return (GSTR-6) (of Input Service Distributor), TDS return (GSTR-7) (of counterparty deductor), own ITC Ledger, own cash ledger, own Tax Liability ledger. However, the taxpayer may be allowed to fill the missing details to begin with. KIRAN GARKAR & CO.
About returns: KIRAN GARKAR & CO.
Processing of Return by the GST Administration: • Acknowledge the receipt of the return after conducting required validations. Forward that GST Return to tax authorities through the established IT interface. • The ITC claim will be confirmed to purchasing taxpayer in case of matched invoices after 20th of succeeding month of the tax period month provided counterparty supplying taxpayer has submitted the valid return (and paid self-assessed tax as per return). • Communicate to the taxpayers through SMS/e-Mail, about the macro-results of the matching. The details will be in the taxpayers’ dashboard/ledger which can be viewed after log-in at the Portal. • Auto-populate the ITC reversals due to mismatching of invoices in the taxpayer’s account in the return for the 2nd month after filing of return for a particular month. KIRAN GARKAR & CO.
About returns: • Section 40: First Return • outward supplies in the period between the date on which he becomes liable to registration till the date on which registration has been granted to be declared in first return • Section 41 relates to claim of input tax credit and its provisional acceptance. • Every regd. tax payer is entitled to claim the ITC. However, till he discharges his self-assessed tax liability he cannot utilize the input tax credit. In other words, one cannot enjoy Input Tax Credit till he ensures fair Self-assessment of Tax (even belatedly) vide relevant valid returns. • Concept of ‘electronic credit ledger’ that will be put in place to record and carry the balance of credit either of CGST, SGST or IGST KIRAN GARKAR & CO.
About returns: • Discrepancies relating to duplication of credit will be added to the output liability of the recipient for the month in which the discrepancy is communicated. • Recipient will be liable to payment of interest in every case when discrepancy is added and interest will be paid on reversal of the liability added earlier after due rectification by the outward supplier. • Refund provisions under section 54 are not to be applicable and the reversal of interest and this refund will be credited into the electronic cash ledger in prescribed manner. Interest paid that is reversed to the recipient will not exceed interest recovered from the supplier. Any reduction of liability by the recipient in contravention of the provisions will be added to the output liability of the recipient and recovered along with applicable interest. KIRAN GARKAR & CO.
About returns: • Section 44: Annual Return • Every registered tax payer shall file Annual Return on or before 31st December following the end of the financial year. • Input Service distributor, deductor of tax [51 or 52], casual taxable person and Non-Resident taxable person are not required to furnish annual return. • Taxable persons who get their accounts audited under section 35(5) are required to electronically file annual return under this section along with a copy of the audited accounts as well as a reconciliation statement reconciling value of supplies declared in the return furnished for the year along with the audited annual financial statement and such other prescribed particulars. KIRAN GARKAR & CO.
About returns: • Section 45: Final Return • Within three months of the date of cancellation or date of cancellation order, whichever is later, in prescribed form and manner. KIRAN GARKAR & CO.
About returns: • Section 46: ‘Notice to defaulter’: • Where a registered person fails to furnish a return under section 39 or section 44 or section 45, a notice shall be issued requiring him to furnish such return within fifteen days in such form and manner as may be prescribed. • Section 47: Late fee • In case of delayed filing of regular returns late fee of Rs. 100 per day, subject to maximum of Rs. 5000 has been prescribed. • For Annual return, it is scaled at Rs. 100 per delay, subject to maximum of quarter percent of dealer’s turnover in the State KIRAN GARKAR & CO.
SEC. 48: GSTP • Section 48: This provision relates to Goods and Service tax practitioners. • (1) The manner of approval of GSTP , their eligibility conditions, duties and obligations, manner of removal and other conditions relevant for their functioning shall be such as may be prescribed. • (2) A registered person may authorise an approved GSTP to furnish the details of outward supplies under section 37, the details of inward supplies under section 38 and the return under section 39 or section 44 or section 45 in such manner as may be prescribed. • (3) Notwithstanding anything contained in sub-section (2), the responsibility for correctness of any particulars furnished in the return or other details filed by the GSTP shall continue to rest with the registered person on whose behalf such return and details are furnished. KIRAN GARKAR & CO.
