Jun 022017
 

As you are aware, GST is going to be introduced very shortly and it is imperative to know various aspects of the new enactment. One among the important aspects is Invoicing. Invoice is going to play a vital role in GST Input tax credit (ITC) Mechanism. Hence it is very important to know about the various aspects of Invoicing under GST.

What are the types of Invoices that can be issued by a registered person?

Two types of Invoices can be issued by a registered person. They are :-

1) Tax Invoice for goods/services supplied

2) Bill of supply

When should the Tax Invoice be issued ?

A registered person shall issue a Tax Invoice to persons who intend to claim Input Tax Credit of the GST being included in the invoice.

What should be the contents of the Tax Invoice?

A Tax Invoice being issued by a registered person shall contain the following particulars :-

(i) name, address and GSTIN of the supplier;

(ii) a consecutive serial number, in one or multiple series, containing alphabets or numerals        or special characters hyphen or dash and slash symbolised as “-” and “/” respectively, and     any combination thereof, unique for a financial year;

(iii) date of its issue;

(iv) name, address and GSTIN or UIN, if registered , of the recipient;

(v) HSN Code of goods or Accounting Code of services;

(vi) Description of goods or services

(vii) quantity in case of goods and unit or Unique Quantity Code there of

(viii) total value of supply of goods or services or both;

(ix) taxable value of supply of goods or services or both taking into account discount or                 abatement , if any;

(x) rate of tax (SGST,CGST,IGST,UTGST , as applicable)

(xi) place of supply along with the name of State, in case of a supply in the course of inter-          state trade or commerce.

(xii) address of delivery where the same is different from the place of supply;

(xiii) whether tax is payable on reverse charge basis; and

(xiv) signature or digital signature of the supplier or his authorised representative.

In case of exports of goods or services, the invoice shall carry an endorsement “SUPPLY MEANT FOR EXPORT ON PAYMENT OF IGST” or “SUPPLY MEANT FOR EXPORT UNDER BOND OR LETTER OF UNTERTAKING WITHOUT PAYMENT OF IGST”, as the case may be

What are the situations under which a registered person may not issue a tax invoice?

A Registered person may not issue a tax invoice subject to the following conditions, namely :-

(a) the recipient is not a registered person ; and

(b) the recipient does not require such invoice.

and shall issue a consolidated tax invoice for such supplies at the close of each day in respect of all such supplies.

What is the manner in which the Tax invoice should be issued ?

The tax invoice shall be prepared in Triplicate , in case of supply of goods , in the following manner :-

(a) the original copy being marked as ORIGINAL FOR RECIPIENT;

(b) the duplicate copy being marked as DUPLICATE FOR TRANSPORTER; AND

(c) the triplicate copy being marked as TRIPLICATE FOR SUPPLIER.

In case of supply of services, the tax invoice shall be in the following manner :-

(a) the original copy being marked as ORIGINAL FOR RECIPIENT; AND

(b) THE duplicate copy being marked as DUPLICATE FOR SUPPLIER

Where should the Invoice details be submitted?

The serial number of invoices issued during a tax period shall be furnished electronically through the common portal in Form GSTR-1

What is the prescribed form for the Tax Invoice?

The invoice shall be in prescribed format in “Form INV-1”. The invoice format is provided below

Download (PDF, Unknown)

What is Bill of Supply?

Where the tax credit needs to be carried on , a tax invoice shall be issued. In other cases or where supplier is not allowed to charge (Composite dealers) tax from customers, a document called bill of supply shall be issued.

Can Invoice once issued and uploaded be corrected by filing a revised return?

No. In GST era, a return once filed cannot be revised. Hence sufficient care shall be taken before final submission of the invoices.

How can we correct the mistakes in the invoices already filed/uploaded?

We need to file a Debit/Credit Note as applicable in the subsequent tax period.

What is Debit Note & Credit Note?

Where a original tax invoice is issued and the taxable value in the invoice/tax falls short of the actual taxable value/tax,  a Debit note shall be issued by the supplier.

Where a original tax invoice is issued and the actual taxable value/tax  is lesser than the taxable value/tax in the invoice, a Credit note shall be issued by the supplier.

Debit/Credit Notes includes a supplementary invoice, which is issued subsequently for making corrections in the value of supply and/or taxes.

When should a receipt voucher be issued?

As per Section 28(3) , a receipt voucher shall be issued in case of advance receipt for supply of goods or services. At the time of raising the final tax invoice, tax paid at the time of issuance of Receipt voucher shall be adjusted against the same. Receipt voucher, not being a tax invoice, will not be considered as eligible document for availment of Input tax credit in the hands of receipient.

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May 312017
 

Every taxpayer under GST will be allotted a State wise PAN based 15 digit Goods and Services Tax Payer Unique Identification Number (GSTIN). The various digits in the GSTN will denote the following:

How to read your GST Number ?

  • The First two digits represents the State in the Country where the registration is done. For Example, for Tamilnadu the unique code of “33” has been allotted and hence GST number of all assessees in Tamilnadu will start with “33”
  • Next 10 digits represents the Permanent Account Number (PAN) of the taxpayer. In case of Individual Proprietorship firms , the proprietor’s PAN number will reflect here. In case of other entities, the entity’s PAN will appear here.
  • The 13th digit would be alpha-numeric (1-9 and then A-Z) will be the entity code representing the number of registration of the tax payer (having the same PAN Number) within the State. For Example, a taxpayer with single registration within the state would have “1” as the 13th digit of his GSTIN. For the same taxpayer, the second entity will have “2” as the 13th digit of his GSTIN. This way, 35 business verticals of the same legal entity can be registered within a State.
  • The 14th digit of GSTIN would be kept blank for future use. As of now, the letter “Z” is in 14th digit.
  • The 15th digit of GSTIN will be the check digit.

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May 292017
 

The proposed GST law is going to be implemented very shortly.  Big companies/business houses will have sufficient expertise and work force for complying , maintenance of books of accounts and filing the returns under GST. But on the other side, SMEs, Start ups and small companies/traders will not be having such a big work force for complying with the GST regulations with regard to maintenance of details records, reconciliation etc.,

A separate scheme was available in earlier VAT law. A Similar Scheme is proposed in the GST law also. Let us know about the same in this Article.

Who can opt for Composition Scheme under GST ?

Assessees who deal in goods (either trader or manufacturer) can opt for this Composition scheme.

Can a person providing Services opt for this scheme?

No. This is applicable only for dealers dealing with goods (Traders/Manufacturers).

What is the rate of tax (GST) Payable under Composition Scheme?

Type of Dealer Rate of Tax
 

Manufacturer

 

1%

 

 

Restaurants

 

 

2.5%

 

Others (Retailers/wholesalers)

 

0.5%

 

 

Is this Scheme Compulsory for Small Assessees ?

No. This is optional. If the small dealers do not wish to opt for this scheme, they can opt for regular scheme of Input Credit based scheme.

How to opt for this Scheme?

The assessees who intent to opt for this scheme shall make an application exercising this option to pay tax under this scheme. Once this is approved , it is valid until it is cancelled or he becomes ineligible.

Should the assessee opt for Composition scheme for all businesses across India

Yes. Since the assessee is covered under same PAN all over India, he needs to opt for Composition scheme across India.

Can Composition dealer make Inter state sales?

No. An assessee opting for composition scheme cannot make Inter state sales. (ie) Sale from one state to another

 

Can  composition dealer collect Tax from his customers?

No. The composition dealer cannot collect tax from his customers in the Invoice. The tax payable (0.5%, 1% or 2.5%) as the case may be shall be on the bill value payable by the composition dealer.

Can composition dealer claim the Input Tax credit?

No. The Input tax Credit (Tax paid on the purchases) cannot be claimed by the composition dealer.

Can the customer who buys from Composition dealer claim Composition tax as Input tax Credit?

No. A customer who buys from the Composition scheme dealer is not eligible to claim the tax paid under Composition scheme as Input Tax Credit.

What happens if a Composition dealer violates any of the conditions after opting for the scheme?

If any assessee violates any conditions of the Composition scheme, he will be liable to pay taxes as applicable to a regular dealer along with a penalty of equivalent amount.

How to calculate the aggregate turnover?

Aggregate Turnover = Value of All taxable supplies + exempt supplies + Export Turnover

What are the return filing obligations of the Composition dealer?

The Composition dealer shall file the following forms :-

Form GSTR – 4                    –              Quaterly Return – to be filed on a Quarterly basis

Form GSTR – 9 A                –              Annual Return – to be filed on Annual basis

What are the relevant forms for Composition scheme ?

The option of Composition levy can be filed electronically through form GST CMP-01

What happens if a Composition dealer buys goods from a unregistered dealer

The composition dealer who purchases goods from an unregistered dealer shall pay taxes due on the same on reverse charge basis.

What happens if a composition dealer fails to file Quarterly returns

Consequence 1 :-             A penalty for non filing @ Rs. 100/- per day upto maximum of Rs. 5000 is                                               payable.

Consequence 2 :-             If Quarterly returns are not filed for 3 consequtive tax periods (Quarterly),                                          the registration under the GST will be cancelled.

Should a Composition dealer maintain detailed records?

No. Compared to Normal dealer, Composition scheme dealer need not maintain detailed records under GST.

Comparitive Analysis under Regular Scheme & Composition Scheme

Particulars Regular
Scheme
Composition
Scheme
Gross Tax @ 10% Gross Tax @ 10%
Purchases 100 10 100 10
Sales 120 12 120 1.2
Net Tax Payable 2 1.2
Net Out flow (for taxes) 2 11.2*
* Tax on Sales Rs. 1.20 plus Tax on purchases Rs.10/-

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