List of GST Forms and its Purpose

Sr. No.Relevant FormPurpose/Use
Download
1GST REG 01Application for Registration
2GST REG 03Issue notice for clarification or information about the application
3GST REG 04Reply of notice issued in Form GST REG-03
4GST REG 05Rejection of Application
5GST REG 06Registration Certificate
6GST REG 07Application for registration for persons required to deduct/collect tax at source
7GST REG 08Cancellation of Application made by persons required to deduct/collect tax at source
8GST REG 09Application for registration to Non-resident Taxable Person
9GST REG 10Application by Person supplying online information and data base access or retrieval services from a place outside India to a non-taxable online recipient
10GST REG 11Application for extension period by Casual Taxable Person and Non-Resident Taxable Person
11GST REG 12Order to register a person on a temporary basis - In case of suomoto Registration
12GST REG 13Application for allotment of Unique Identity Number
13GST REG 14Amendment in Registration Certificate
14GST REG 15Order for approval of Amendment
15GST REG 16Application for Cancellation of Registration
16GST REG 17Notice for cancellation of Registration
17GST REG 18Reply to notice of cancellation
18GST REG 19Order for cancellation of Registration
19GST REG 20If reply in Form GST REG-19 is found to be satisfactory, proceedings will be dropped
20GST REG 21Application for revocation of cancellation of registration
21GST REG 22Order for revocation of cancellation of registration
22GST REG 23Show cause notice by proper officer before rejection of application for revocation of cancellation of registration
23GST REG 24Reply to the show cause notice issued in Form GST REG-23
24GST REG 25Certificate of registration on provisional basis
25GST REG 26Application by person possessing provisional registration shall apply, for getting certificate of registration
26GST REG 27Show cause notice before cancellation of provisional registration
27GST REG 28Order of cancellation of provisional registration
28GST REG 29Application for cancellation of provisional registration by a person not liable to be registered under the Act
29GST REG 30Report on physical verification of place of business of a registered person
30GSTR - 1Statement for Filling of details of Outwards supplies by Normal Registered person
31GSTR - 2AStatement of auto populated data of Inward supplies on the basis of GSTR 1 to the recipient of goods & Services in case of normal registered person
32GSTR - 2Statement for Filling of details of Inward supplies by Normal Registered person
33GSTR - 3ANotice to return defaulter u/s 46 for not filing return
34GSTR - 3Filling of Monthly Return by Normal Registered Person
35GSTR - 3BFilling of Monthly return by Normal Registered person in cases where Time limit for filing of monthly return extended
36GSTR - 4AStatement of auto populated data of Inward supplies on the basis of GSTR 1 in case of person registere under Composition Scheme
37GSTR - 4Quartely return by Registered person paying tax under the provisions of section 10
38GSTR - 5Monthly Return by Registered non-resident taxable person
39GSTR - 5AStatement of auto populated data of Inward supplies on the basis of GSTR 1 in case of E commerec operator required to collect tax at source u/s 52
40GSTR - 6AStatement of auto populated data of Inward supplies on the basis of GSTR 1 in case of taxable person registered as an Input Service Distributor
41GSTR - 6Monthly Return by taxable person registered as an Input Service Distributor
42GSTR - 7Monthly Return by Registered person required to deduct tax at source under the provisions of section 51
43GSTR - 8Monthly Return by E commerce operator required to collect tax at source u/s 52
44GSTR - 9Annual return by Normal Taxable person other than an Input Service Distributor, a person paying tax u/s 51 or u/s 52, a casual taxable person and a non-resident taxable person
45GSTR - 9AAnnual Return by a person paying tax u/s 10
46GSTR - 9BAnnual Statement by Electronic commerce operator required to collect tax at source u/s 52
47GSTR - 9CSubmission of Audited Accounts by taxable person whose turnover exceeding Rs. 2 Crs
48GSTR - 10Final Return by every registered person, other than an Input Service Distributor or a non-resident taxable person or a person paying tax u/s 10 or u/s 51 or u/s 52 whose registration has been cancelled
49GSTR - 11Furnishing of Inward supplies by person issued a Unique Identification Number
50GST MIS - 1Final acceptance of input tax credit and communication thereof to the recipient
51GST MIS - 2Communication of discrepancy in claim of input tax credit to the supplier
52GST MIS - 3discrepancy in the details furnished by the operator and those declared by the supplier made available to the supplier
53GST MIS - 4discrepancy in the details furnished by the operator and those declared by the supplier made available to the e-commerce operator
54GST PCT - 1Application for registering as Goods and Service Tax Practitioner
55GST PCT - 2Enrolment of the applicant as Goods and Service Tax Practitioner
56GST PCT - 3Issue of Show Cause Notice by the authorised officer when GST Practitioner is found guilty of misconduct
57GST PCT - 4Order of disqualification as Goods & Service Tax Practitioner
58GST PCT - 5Authorization or withdrawal authorization of GSTRP by taxable person
59GST RFD - 01 With Annex 1 and 2For filling refund application
60GST RFD - 02Acknowledgement of application filed
61GST RFD - 03Communication of deficiency
62GST RFD - 04Sanction of refund on provisional basis
63GST RFD - 05Payment advice of refund
64GST RFD - 06Order of refund
65GST RFD - 07Details of amount of refund along with adjustments, if any
66GST RFD - 08Notice to the applicant for filling reply
67GST RFD - 09Reply by the applicant
68GST RFD - 10Refund application for person notified as per notification issued under section 55
69FORM GST RFD-11Furnishing of Bond or Letter of Undertaking for availing the option to supply goods or services for export without payment of integrated tax
70GST PMT - 01Electronic Liability Register
71GST PMT - 02Electronic Credit Ledger
72GST PMT - 03Re-credit of ITC to Electronic Credit Ledger on Account of Rejection of Refund
73GST PMT - 04Communication ofany discrepancy in Electronic Credit Ledger to proper officer
74GST PMT - 05Electronic Cash Ledger
75GST PMT - 06Challan for payment of GST
76GST CMP - 01Intimation about composition option in case of Migrated Assessee
77GST CMP - 02Intimation about composition option in case of existing assessee opting for composition levy
78GST CMP - 03Details of Stock including the inward supply of goods received from unregistered persons
79GST CMP - 04Where registered person ceases to satisfy any of the conditions mentioned in section 10 or these rules
80GST CMP - 05Show Cause Notice (SCN) by Proper Officer
81GST CMP - 06Reply to SCN
82GST CMP - 07Order of acceptance or rejection by Proper officer
83GST ASMT - 01Application for Provisional Assessment
84GST ASMT - 02Issuance of Notice by proper officer for documents or information or to appear in person for provisional assessment
85GST ASMT - 03Reply to notice received in Form GST ASMT-02
86GST ASMT - 04Order of Provisional Assessment
87GST ASMT - 05Bond to be executed along with security
88GST ASMT - 06Issuance of Notice by proper officer for documents or information for finalization of assessment
89GST ASMT - 07Order of Final Assessment
90GST ASMT - 08Application for release of security
91GST ASMT - 09Order by the proper officer for release of Security
92GST ASMT - 10Notice to inform discrepancy and seeking explanations
93GST ASMT - 11Reply to notice received in Form GST ASMT-10
94GST ASMT - 12Information about the acceptable data submitted in Form GST ASMT-11
95GST ASMT - 13Assessment order in the assessment of non-filer of return
96GST ASMT - 14Notice to Unregistered Person for Assessment
97GST ASMT - 15Assessment order in the assessment of Unregistered Person
98GST ASMT - 16Assessment order in the summary assessment in certain cases
99GST ASMT - 17Reply letter to oredr of GST ASMT-16
100GST ASMT - 18Order of withdrawal or rejection of the application in the summary assessment in certain cases
101GST ADT - 01Notice for selection of Audit
102GST ADT - 02For conclusion of audit
103GST ADT - 03Intimation about appointment of Chartered Accountant or Cost Accountant
104GST ADT - 04For conclusion of audit
105GST ARA - 01For filling application to advance Ruling Authority
106GST ARA - 02For filling Appeal to Appellate Authority for advance Ruling by the applicant
107GST ARA - 03For filling Appeal to Appellate Authority for advance Ruling by the the concerned officer or the jurisdictional officer
108GST TRAN - 1Transitional ITC / Stock Statement
109GST TRAN - 2Details of supplies of goods effected during the tax period for which deemed credit is availed
110GST ITC - 01Declaration for claim of credit in case of section 18(1)(c) and (d)
111GST ITC - 02Furnish the details of sale, merger, de-merger, amalgamation, lease or transfer of business by the transferor
112GST ITC - 03Details to be furnished in case of any events specified in section18(4)
113GST APL - 01For filling appeal to Appellate Authority by the Assessee
114GST APL - 02Final receipt of appeal Filed
115GST APL - 03For filling application to Appellate Authority by the Authorized Officer
116GST APL - 04Order of Appellate Authority/Appellate Tribunal
117GST APL - 05For filling appeal to Appellate Tribunal by the Assessee
118GST APL - 06For filling Memorandom of cross objection
119GST APL - 07For filling application to Appellate Tribunal by the Authorized Officer
120GST APL - 08For filling appeal to High Court
121FORM GST DRC-01Electronic summary issued of the amount payable along with SCN.
122FORM GST DRC-02Electronic summary issued of the amount payable along with Statement.
123FORM GST DRC-03Intimation by the taxpayer of the payment made before issuance of SCN or statement/within 30 days of service of SCN or statement
124FORM GST DRC-04Acknowledgement of the acceptance of payment
125FORM GST DRC-05Order by the proper officer concluding the proceedings.
126FORM GST DRC-06Representation by the taxpayer
127FORM GST DRC-07A summary of the order to be uploaded electronically
128FORM GST DRC-08Rectification of the order by the proper officer
129FORM GST DRC-09Authorizing specified officer to deduct amount payable from the money owed.
130FORM GST DRC-10Notice for Auction of sale of goods under the control of proper officer
131FORM GST DRC-11Issue of notice to the successful bidder
132FORM GST DRC-12Transfer of possession and issue of Certificate
133FORM GST DRC-13Notice for Recovery from a third person
134FORM GST DRC-14Issue of Certificate of discharge of liability by the Third person
135FORM GST DRC-15Recovery through execution of a decree, etc
136FORM GST DRC-16Order of attachment or distraint and notice for sale of attached movable or immovable property
137FORM GST DRC-17Notice for Auction of attached movable or immovable property
138FORM GST DRC-18Recovery through land revenue authority
139FORM GST DRC-19Recovery through court
140FORM GST DRC-20Payment of tax and other amount in installments - Application
141FORM GST DRC-21Payment of tax and other amount in installments - Order
142FORM GST DRC-22Provisional attachment of property
143FORM GST DRC-23Release of Property
144FORM GST DRC-24Recovery from company in liquidation
145FORM GST DRC-25Continuation of certain recovery proceedings
146FORM GST INS-01Authorization form for authorizing any other officer subordinate to Joint Commissioner to conduct the inspection or searchcase may be, seizure of goods, documents, books or things liable to confiscation
147FORM GST INS-02Order of seizure of goods, documents, books or things.
148FORM GST INS-03Order prohibiting that the owner or custodian of goods shall not remove, part with, or otherwise deal with the goods.
149GST INS - 04Execution of bond for release of seized goods.
150FORM GST INS-05Order for release of seized goods.
151FORM GST CPD-01Application for compounding of offences
152FORM GST CPD-02Order rejecting or granting immunity from prosecution

Anti Profiteering – The next challenge for India Inc.

  1. Introduction

India is a developing country and like any other developing country it faces a challenge of making available resources to its citizen.  Being a socialist republic, government has to ensure that the resources of the Country are not limited to a certain set of persons. Inline with the understanding, Government need to ensure that post introduction of Goods and Services Tax (“GST”), the prices of goods and services are not left to the wishes of the businessman and he should not pocket the tax at the cost of consumer.  Accordingly, Anti profiteering provisions are introduced in the GST statutes which shall keep a vigil and watch over the reasons for increase in prices post GST.  This article examines the provisions and implementation of anti profiteering provisions in GST.

  1. What is Anti Profiteering provision?

Section 171 of the Central Goods and Services Tax Act, 2017 (“CGST Act”) (provisions apply in same manner to other GST statutes) provides that a supplier of goods or services shall pass onto the recipient benefit of any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit by way of commensurate reduction in prices.

The provisions apply only to all classes of goods and services, which include food and beverages, industrial goods, household goods, all construction services by builders and developers etc.

How is compliance of Anti profiteering ensured by Government?

To effect the above provisions, it has been further provided that Central Government may, on recommendations of the Council, by notification, constitute an Authority, or empower an existing Authority constituted under any law for the time being in force, to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him.

The Authority has been empowered to exercise such powers and discharge such functions as may be prescribed in the Rules.

Accordingly, the Rules provides for the following:

  • Constitution of National Anti-profiteering Authority (“hereinafter referred to as “Authority”)
  • Constitution of Authority, Standing Committee and Screening Committees
  • Appointment, salary, allowances and other terms and conditions of service of the Chairman and Members of the Authority
  • Power to determine the methodology and procedure
  • Duties of the Authority
  • Examination of application by the Standing Committee and Screening Committee
  • Initiation and conduct of proceedings

The Authority shall consist of following officers:

(a) a Chairman who holds or has held a post equivalent in rank to a Secretary to the Government of India; and

(b) four Technical Members who are or have been Commissioners of State tax or central tax for at least one year or have held an equivalent post under the existing law, to be nominated by the Council.

The Authority shall cease to exist after the expiry of two years from the date on which the Chairman enters upon his office unless the Council recommends otherwise.  Further, the Authority has been entrusted with the following duties:

  • to determine whether compliance of Section 171 requirement has been made by the supplier
  • to identify the registered person who has not passed on the requisite benefits to the recipient by way of commensurate reduction in prices
  • to order:
  • reduction in prices
  • return of the amount equivalent to the benefit under Section 171 to the recipient along with an interest at the rate of 18% from the date of collection till the date of return, or
  • recovery of the amount not returned and depositing the same in the Fund referred to in section 57
  • imposition of penalty as prescribed under the Act;
  • cancellation of registration under the Act
  1. Process of Anti evasion proceedings

The following shall be the process of determination of anti profioeeting proceedings:

  1. Application for Anti evasion proceedings

The above actions can be taken on the basis of any complaint where the complainant feels that the benefit of tax cut has not been passed on to him or on the basis of an application filed by the Commissioner or any other person. All applications from interested parties on issues of local nature shall first be examined by the State level Screening Committee.  Such Committee shall constituted by the respective State Governments and shall consist of:

  • an officer of the State Government, to be nominated by the Commissioner, and
  • an officer of the Central Government, to be nominated by the Chief Commissioner.

As of now, such Screening Committees have been constituted and details thereof are available on the government website.

If the Committee is convinced that the case is fit for Anti profiteering proceedings, it shall forward the application with its recommendations to the Standing Committee on Anti-profiteering.  The Standing Committee shall consist of such officers of the State Government and Central Government as may be nominated by the GST council, for further action.

  1. Investigation by DGS

If the Standing Committee finds the matter suitable for the proceedings, it shall then refer the matter to Director General of Safeguards (“DGS”) who shall undertake the enquiry.  DGS shall issue a notice to the interested parties and other parties as required for the investigation and to gather the requisite information.  DGS himself or under his authority, a subordinate can summon any person necessary either to give evidence or to produce a document or any other thing. DGS shall inform the interested parties of the following information:

(a) the description of the goods or services in respect of which the proceedings have been initiated;

(b) summary of the statement of facts on which the allegations are based; and

(c) the time limit allowed to the interested parties and other persons who may have information related to the proceedings for furnishing their reply.

For the above purpose, “interested party” includes

  1. suppliers of goods or services under the proceedings; and
  2. recipients of goods or services under the proceedings;

Cross examination of details provided by one party may be made available to the other parties who are participating in the proceedings. As part of investigation. DGS can also seek opinion of any other agency or statutory authorities.

The above proceedings shall be completed within 3 months or within such extended period not exceeding a further period of three months for reasons to be recorded in writing as allowed by the Standing Committee.  On completion of enquiry, DGS shall present his report along with relevant records to the Standing Committee.

  1. Orders of the Authority

The Authority shall issue an order within a period of three months from the date of the receipt of the report from the DGS.  The order shall be passed after granting an opportunity of hearing to the interested parties.  The Authority shall determine whether a registered person has passed on the benefit of the reduction in the rate of tax on the supply of goods or services or the benefit of input tax credit to the recipient by way of commensurate reduction in prices. However, in case of difference of opinion on a matter, the decision shall be taken as per  the opinion of the majority.

Thus, in case the Authority finds that the registered person has passed the benefit to the buyer, an order providing said decision be communicated.  However, where the Authority determines that a registered person fails the test of Anti profiteering, the Authority may order-

(a) reduction in prices;

(b) return to the recipient, an amount equivalent to the amount not passed on by way of commensurate reduction in prices along with interest;

  1. Time allowed for various process in Anti profiteering proceedings
S.No. Proceeding Time allowed
1. Application to Screening Committee Within a period of two months from the date of the receipt of a written application
2. Decision by Screening Committee
3. Decision by Standing Committee
4. Investigation and report by DGS Within 3 months from the date of reference by Standing Committtee or another three months when extended
5. Decision by Authority Within 3 months from the receipt of report

Conclusion:

To ensure compliance with the Anti Profiteering provisions, businesses should ensure and analyse any price increases made by them post July 1, 2017 by examining the increase in costs viz a viz benefits which have accrued on account of reduction in costs on count of increased ITC. Authority is a body which shall ensure that prices remain under check and that businesses do not gain from taxes at the cost of consumers.  While the provision shall deter unfair pricing and pocketing of taxes by business houses.  However, this may also become a medium for undue harassment, tool for troubling competitors etc if the mechanism is not effected in a fair manner.

Recommendations made by the GST Council in the 23rd meeting

Following are the Recommendations made by the GST Council in the 23rd meeting: –

  1. Changes in Filling of GST Returns
  • The time period for filing GSTR-2 and GSTR-3 for the months of July, 2017 to March 2018 would be worked out by a Committee of Officers.
  • All taxpayers would file return in FORM GSTR-3B along with payment of tax by 20th of the succeeding month till March, 2018.

   A . Due Date of Changes in GSTR-3B :

Period / Month GSTR‐3B along with payment
 July 2017 25‐Aug‐2017
 August 2017 20‐Sep‐2017
 September 2017 20‐Oct‐2017
 October 2017 20‐Nov‐2017
 November 2017 20‐Dec‐2017
December 2017 20‐Jan‐2018
January 2018 20‐Feb‐2018
February 2018 20‐Mar‐2018
March 2018 20‐Apr‐2018

   B . Due Date of Changes in GSTR-1 :

 

 

Period / Month

GSTR‐1  

 

GSTR‐2

 

 

GSTR‐3

Taxpayers with annual aggregate turnover upto Rs. 1.5 crore Taxpayers with annual aggregate turnover more than Rs. 1.5 crore
July 2017  

31‐Dec‐2017

31‐Dec‐2017  

 

 

The time period for filing GSTR‐2 and GSTR‐3 for the months of July 2017 to March 2018 would be worked out by a Committee of Officers.

August 2017 31‐Dec‐2017
September 2017 31‐Dec‐2017
October 2017  

15‐Feb‐2018

31‐Dec‐2017
November 2017 10‐Jan‐2018
December 2017 10‐Feb‐2018
January 2018  

30‐Apr‐2018

10‐Mar‐2018
February 2018 10‐Apr‐2018
March 2018 10‐May‐2018

 

   C . Other GST Returns : 

Form / Period Particulars Due Date
GSTR‐4

July to Sept 17

Quarterly return for registered person opting for composition levy 24‐Dec‐2017
GSTR‐5

July 2017

Return for Non‐resident taxable person 11‐Dec‐2017
GSTR‐5A

July 2017

Details of supplies of online information and database access or retrieval services by a person located outside India made to non‐taxable persons in India 15‐Dec‐2017
GSTR‐6

July 2017

Return for input service distributor 31‐Dec‐2017
TRAN‐1 Transitional ITC / Stock Statement 31‐Dec‐2017
ITC‐01 Declaration for claim of input tax credit under sub‐section (1) of section 18 30‐Nov‐2017
ITC‐04

July to Sept 17

Details of goods/capital goods sent to job worker and received back 31‐Dec‐2017

 

  1. Changes in GST Rates

A. Goods on which the Council has recommended reduction in GST rate from 28% to 18% include:

 

Item (HSN CODE) Description of Goods Old Rate New Rate
8544 Wire, cables, insulated conductors, electrical insulators, electrical plugs, switches, sockets, fuses, relays, electrical connectors 28 % 18 %
7322 Electrical boards, panels, consoles, cabinets etc for electric control or distribution 28 % 18 %
4411 Particle/fibre boards and ply wood. Article of wood, wooden frame, paving block 28 % 18 %
3405 Furniture, mattress, bedding and similar furnishing 28 % 18 %
4202 Trunk, suitcase, vanity cases, brief cases, travelling bags and other hand bags, cases 28 % 18 %
3401  30 Detergents, washing and cleaning preparations 28 % 18 %
3401 30 Liquid or cream for washing the skin 28 % 18 %
3305 Other Then 3305 9011, 3305 9019) Shampoos; Hair cream, Hair dyes (natural, herbal or synthetic) and similar other goods; henna powder or paste, not mixed with any other ingredient; 28 % 18 %
3307 Pre-shave, shaving or after-shave preparations, personal deodorants, bath preparations, perfumery, cosmetic or toilet preparations, room deodorisers 28 % 18 %
3303 Perfumes and toilet waters 28 % 18 %
3304 Beauty or make-up preparations 28 % 18 %
8511 Fans, pumps, compressors 28 % 18 %
9405 Lamp and light fitting 28 % 18 %
Primary cell and primary batteries 28 % 18 %
7324 Sanitary ware and parts thereof of all kind 28 % 18 %
6910 Articles of plastic, floor covering, baths, shower, sinks, washbasins, seats, sanitary ware of plastic 28 % 18 %
6802 Slabs of marbles and granite 28 % 18 %
6808 Goods of marble and granite such as tiles 28 % 18 %
6901, 6904 Ceramic tiles of all kinds 28 % 18 %
9617 Miscellaneous articles such as vacuum flasks, lighters, 28 % 18 %
9101, 9102 Wrist watches, clocks, watch movement, watch cases, straps, parts 28 % 18 %
4203 Article of apparel & clothing accessories of leather, guts, furskin, artificial fur and other articles such as saddlery and harness for any animal 28 % 18 %
7321 Articles of cutlery, stoves, cookers and similar non electric domestic appliances 28 % 18 %
8212 Razor and razor blades 28 % 18 %
8443 Multi-functional printers, cartridges 28 % 18 %
8304 Office or desk equipment 28 % 18 %
7610 100 Door, windows and frames of aluminium. 28 % 18 %
6809 Articles of plaster such as board, sheet, 28 % 18 %
6810 Articles of cement or concrete or stone and artificial stone, 28 % 18 %
6807 Articles of asphalt or slate, 28 % 18 %
6814 Articles of mica 28 % 18 %
6906 Ceramic flooring blocks, pipes, conduit, pipe fitting 28 % 18 %
4814 Wall paper and wall covering 28 % 18 %
7009 Glass of all kinds and articles thereof such as mirror, safety glass, sheets, glassware 28 % 18 %
8423 Electrical, electronic weighing machinery 28 % 18 %
8424 Fire extinguishers and fire extinguishing charge 28 % 18 %
8427 Fork lifts, lifting and handling equipment, 28 % 18 %
8429 Bull dozers, excavators, loaders, road rollers, 28 % 18 %
8430 Earth moving and levelling machinery, 28 % 18 %
8428 Escalators, 28 % 18 %
8419 Cooling towers, pressure vessels, reactors 28 % 18 %
9618 Crankshaft for sewing machine, tailor’s dummies, bearing housings, gears and gearing; ball or roller screws; gaskets 28 % 18 %
8525 Electrical apparatus for radio and television broadcasting 28 % 18 %
8528 Sound recording or reproducing apparatus 28 % 18 %
8530 Signalling, safety or traffic control equipment for transports 28 % 18 %
9506 Physical exercise equipment, festival and carnival equipment, swings, shooting galleries, roundabouts, gymnastic and athletic equipment 28 % 18 %
9209 All musical instruments and their parts 28 % 18 %
6702 Artificial flowers, foliage and artificial fruits 28 % 18 %
1804 Cocoa butter, fat, oil powder, 28 % 18 %
2101 11 , 2101 120 Extract, essence ad concentrates of coffee, miscellaneous food preparations 28 % 18 %
1704 Chocolates, Chewing gum / bubble gum 28 % 18 %
1901 90  (Other then 1901 10,20) Malt extract and food preparations of flour, groats, meal, starch or malt extract 28 % 18 %
1905 32 Waffles and wafers coated with chocolate or containing chocolate 28 % 18 %
4013 Rubber tubes and miscellaneous articles of rubber 28 % 18 %
9005 Goggles, binoculars, telescope, 28 % 18 %
8528 Cinematographic cameras and projectors, image projector, 28 % 18 %
9010, 9011, 9012 Microscope, specified laboratory equipment, specified scientific equipment such as for meteorology, hydrology, oceanography, geology 28 % 18 %
3814 Solvent, thinners, hydraulic fluids, anti-freezing preparation 28 % 18 %

 

B. Goods on which the Council has recommended reduction in GST rate from 28% to 12% include:

 

Items (HSN CODE) Details of Goods Old Rate New Rate
8509 Wet grinders consisting of stone as grinder 28 % 12 %
8710 Tanks and other armoured fighting vehicles 28 % 12 %

 

C. Goods on which the Council has recommended reduction in GST rate from 18% TO 12% include:

 

Items  ( HSN CODE) Description of Goods Old Rate New Rate
0402 99 20 Condensed milk 18 % 12 %
1701 91 00 Refined sugar and sugar cubes 18 % 12 %
1902 Pasta 18 % 12 %
2103 90 10 Curry paste, mayonnaise and salad dressings, mixed condiments and mixed seasoning 18 % 12 %
2106 90 91 Diabetic food 18 % 12 %
2804 40 10 Medicinal grade oxygen 18 % 12 %
3215 Printing ink 18 % 12 %
4202 22 30 Hand bags and shopping bags of jute and cotton 18 % 12 %
6505 Hats (knitted or crocheted) 18 % 12 %
8436 Parts of specified agricultural, horticultural, forestry, harvesting or threshing machinery 18 % 12 %
8453 Specified parts of sewing machine 18 % 12 %
9003 Spectacles frames 18 % 12 %
9403 Furniture wholly made of bamboo or cane 18 % 12 %

 

D. Goods on which the Council has recommended reduction in GST rate from 18% TO 5% include:

 

Items (HSN CODE) Description of Goods Old Rate New Rate
2106 Puffed rice chikki, peanut chikki, sesame chikki, revdi, tilrevdi, khaza, kazuali, groundnut sweets gatta, kuliya 18 % 5 %
1105 Flour of potatoes put up in unit container bearing a brand name 18 % 5 %
0910 Chutney powder 18 % 5 %
6815 Fly ash 18 % 5 %
2503 Sulphur recovered in refining of crude 18 % 5 %
2621 Fly ash aggregate with 90% or more fly ash content 18 % 5 %
E. Goods on which the Council has recommended reduction in GST rate from 12% TO 5% include:

 

Items ( HSN CODE) Description of Goods Old Rate New Rate
0801 Desiccated coconut 12 % 5 %
5806 Narrow woven fabric including cotton newar [with no refund of unutilised input tax credit] 12 % 5 %
2106 Idli, dosa batter 12 % 5 %
4114 Finished leather, chamois and composition leather 12 % 5 %
9404 Coir cordage and ropes, jute twine, coir products 12 % 5 %
5608 Fishing net and fishing hooks 12 % 5 %
6309 Worn clothing 12 % 5 %
6815 Fly ash brick 12 % 5 %

 

F. Goods on which the Council has recommended reduction in GST rate from 5% TO Nil Rated include:

 

Items (HSN CODE) Description of Goods Old Rate New Rate
1106 Guar meal 5 % Nil  (0 %)
1210 Hop cone (other than grounded, powdered or in pellet form) 5 % Nil  (0 %)
0714 Certain dried vegetables such as sweet potatoes, maniac 5 % Nil  (0 %)
1404 Unworked coconut shell 5 % Nil  (0 %)
0303 Fish frozen or dried (not put up in unit container bearing a brand name) 5 % Nil  (0 %)
1701 Khandsari sugar 5 % Nil  (0 %)
G. Miscellaneous :
  • GST rates on aircraft engines from 28%/18% to 5%, aircraft tyres from 28% to 5% and aircraft seats from 28% to 5%.
  • GST rate on bangles of lac/shellac from 3% GST rate to Nil.

Note : All changes will be applicable after the notification issued

Understanding GSTIN formats

GSTIN is a fifteen digit alpha numeric number provided to each person registered under GST.  Following are the type of persons who can obtain registration in GST:

a.  Normal Registration

b.  Compositions registration

c.   Non resident registration

d.   Casual Person Registration

e.   Input Service Distributor

f.    UIN Holders

Different types of GSTIN are issued to identify different type and category of taxpayers which are as follows:

The state code is followed by the 10 digit PAN number (For TDS, it can be either PAN or TAN) followed by another 3 alpha numeric digits. Sample GSTIN for Normal Taxpayer, Composition Taxpayer, Casual Taxpayer etc. :

e.g. 07AAAAA1234A1Z1

  • For Non-resident Foreign Taxpayers or Non-resident online service provider,  the state code is followed by 2 digit year, 3 digit country code and 5 digit serial number per year and another 3 alpha numeric digits . Sample GSTIN for Non-resident Foreign Taxpayers and Non-resident online service provider :

e.g. 0717USA12345NF1 

  • For UN Bodies, Embassies etc. and other notified persons, the term used is UIN. For the UIN, The state code is followed by two digit year, 3 digit country code and 5 digit serial number and another 3 digit of alpha numeric character. Sample UIN for Embassies, UN Bodies and other notified person etc.:

e.g. 0717AUS12345UN1

GSTN has also provided a facility to search the registered taxpayer at https://services.gst.gov.in/services/searchtp.

Recent Changes in GST


Update on GST Notifications released on October 18 and 23, 2017


  1. Refund in case of deemed exports can be applied by:
(a) the recipient of deemed export supplies; or
(b) the supplier of deemed export supplies in cases where the recipient does not avail of input tax credit on such supplies and furnishes an undertaking to the effect that the supplier may claim the refund
  1. Relief to exporters to export beyond three months :
    GST Rates have been amended to provide that goods can be exported beyond three months from the date of issuance of invoice when allowed by Commissioner.
  1. Certain suppliers notified as deemed exports :
    Following supplies have been notified as deemed exports:
a. Supply of goods by a registered person against Advance Authorisation
b. Supply of capital goods by a registered person against Export Promotion Capital Goods Authorisation
c. Supply of goods by a registered person to Export Oriented Unit
d. Supply of gold by a bank or Public Sector Undertaking specified in the notification No. 50/2017-Customs, dated the 30th June, 2017 (as amended) against Advance Authorisation.
  1. Documents to be produced by deemed exporter for refund : Documents have been notified which are to be produced by  supplier of deemed export supplies for claiming refund, which includes:
  1. Acknowledgment by the jurisdictional Tax officer of the Advance Authorisation holder or Export Promotion Capital Goods Authorisation holder, as the case may be, that the said deemed export supplies  have been received by the said Advance Authorisation or Export Promotion Capital Goods Authorisation holder, or a copy of the tax invoice under which such supplies have been made by the supplier, duly signed by the recipient Export Oriented Unit that said deemed export supplies have been received by it.
  2. An undertaking by the recipient of deemed export supplies that no input tax credit on such supplies has been availed of by him.
  3. An undertaking by the recipient of deemed export supplies that he shall not claim the refund in respect of such supplies and the supplier may claim the refund.
  1. Relief in case of supply of food for economically weaker sections : GST rate on food preparations put up in unit containers and intended for free distribution to economically weaker sections of the society under a programme duly approved by the Central Government or any State Government has been notified at 5%.  The rate is subject to further condition that when the supplier of such food preparations produces a certificate from an officer not below the rank of the Deputy Secretary to the Government of India or  the Deputy Secretary to the State Government or the Deputy Secretary in the Union Territory concerned to the effect that such food preparations have been distributed free to the economically weaker sections of the society under a programme duly approved by the Central Government or the State Government concerned, within a period of five months from the date of supply of such goods or within such further period as the jurisdictional commissioner of the Central tax or jurisdictional commissioner of the State tax, or jurisdictional officer of  the Union Territory Tax as the case maybe, may allow in this regard.
  1. Relief in case of supply of goods to exporters:  Registered Supplier when making supply of taxable goods to exporters shall be required to pay tax @0.1% (0.05% CGST + 0.05% SGST or 0.1%IGST) from GST provided following conditions are satisfied:
  1. the registered supplier shall supply the goods to the registered recipient on a tax invoice
  2. the registered recipient shall export the said goods within a period of ninety days from the date of issue of a tax invoice by the registered supplier
  3. the registered recipient shall indicate the Goods and Services Tax Identification Number of the registered supplier and the tax invoice number issued by the registered supplier in respect of the said goods in the shipping bill or bill of export, as the case may be
  4. the registered recipient shall be registered with an Export Promotion Council or a Commodity Board recognised by the Department of Commerce
  5. the registered recipient shall place an order on registered supplier for procuring goods at concessional rate and a copy of the same shall also be provided to the jurisdictional tax officer of the registered supplier
  6. the registered recipient shall move the said goods from place of registered supplier-
  1. directly to the Port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be exported; or
  2. directly to a registered warehouse from where the said goods shall be move to the Port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be exported
  1. the registered recipient shall place an order on registered supplier for procuring goods at concessional rate and a copy of the same shall also be provided to the jurisdictional tax officer of the registered supplier
  2. if the registered recipient intends to aggregate supplies from multiple registered suppliers and then export, the goods from each registered supplier shall move to a registered warehouse and after aggregation, the registered recipient shall move goods to the Port, Inland Container Deport, Airport or Land Customs Station from where they shall be exported
  3. in case of situation referred to in condition (vii), the registered recipient shall endorse receipt of goods on the tax invoice and also obtain acknowledgement of receipt of goods in the registered warehouse from the warehouse operator and the endorsed tax invoice and the acknowledgment of the warehouse operator shall be provided to the registered supplier as well as to the jurisdictional tax officer of such supplier; and
  4. when goods have been exported, the registered recipient shall provide copy of shipping bill or bill of export containing details of Goods and Services Tax Identification Number (GSTIN) and tax invoice of the registered supplier along with proof of export general manifest or export report having been filed to the registered supplier as well as jurisdictional tax officer of such supplier
  5. The registered supplier shall not be eligible for the above mentioned exemption if the registered recipient fails to export the said goods within a period of ninety days from the date of issue of tax invoice.

By CA. Gaurav Gupta 

Relief to supplies made to exporters under GST

Relief to Suppliers of Taxable Goods when making supplies to registered exporters

Registered Supplier when making supply of taxable goods to exporters shall be required to pay tax @0.1% (0.05% CGST + 0.05% SGST or 0.1%IGST) from GST provided following conditions are satisfied:

  1. the registered supplier shall supply the goods to the registered recipient on a tax invoice.
  2. the registered recipient shall export the said goods within a period of ninety days from the date of issue of a tax invoice by the registered supplier.
  3. the registered recipient shall indicate the Goods and Services Tax Identification Number of the registered supplier and the tax invoice number issued by the registered supplier in respect of the said goods in the shipping bill or bill of export, as the case may be.
  4. the registered recipient shall be registered with an Export Promotion Council or a Commodity Board recognised by the Department of Commerce.
  5. the registered recipient shall place an order on registered supplier for procuring goods at concessional rate and a copy of the same shall also be provided to the jurisdictional tax officer of the registered supplier.
  6. the registered recipient shall move the said goods from place of registered supplier-
    1. directly to the Port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be exported; or
    2. directly to a registered warehouse from where the said goods shall be move to the Port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be exported.
  7. the registered recipient shall place an order on registered supplier for procuring goods at concessional rate and a copy of the same shall also be provided to the jurisdictional tax officer of the registered supplier
  8. if the registered recipient intends to aggregate supplies from multiple registered suppliers and then export, the goods from each registered supplier shall move to a registered warehouse and after aggregation, the registered recipient shall move goods to the Port, Inland Container Deport, Airport or Land Customs Station from where they shall be exported
  9. in case of situation referred to in condition (vii), the registered recipient shall endorse receipt of goods on the tax invoice and also obtain acknowledgement of receipt of goods in the registered warehouse from the warehouse operator and the endorsed tax invoice and the acknowledgment of the warehouse operator shall be provided to the registered supplier as well as to the jurisdictional tax officer of such supplier; and
  10. when goods have been exported, the registered recipient shall provide copy of shipping bill or bill of export containing details of Goods and Services Tax Identification Number (GSTIN) and tax invoice of the registered supplier along with proof of export general manifest or export report having been filed to the registered supplier as well as jurisdictional tax officer of such supplier
  11. The registered supplier shall not be eligible for the above mentioned exemption if the registered recipient fails to export the said goods within a period of ninety days from the date of issue of tax invoice

 

“Free gifts” and FOC items under GST law

Treatment of “Free gifts” and FOC items under GST law

By CA. Raginee Goyal (Guwahati) and Advocate Rakesh Chitkara (New Delhi)

The issue of taxability and Input Tax Credit availability on gifts has been a constant matter of discussion and confusion among trade and professionals too. Especially with the festive season following the implementation of GST in India, “Sale”, “gift and “free” are the buzzwords at this time of the year. The word ‘gift’ has not been defined in the CGST Act. Thus, to determine the meaning of this term, one will have to refer to other laws as well as case laws.

The Gift-Tax Act had defined the word “gift” to mean transfer by one person to another of any existing movable or immovable property voluntarily and without consideration in money or money’s worth.

The Honorable Supreme Court cited the definition of ‘gift’ from Corpus Juris Secundum, Volume 38 in the case of Sonia Bhatia v. State of UP [1981] 2 SCC 585 as follows: A ‘gift’ is commonly defined as a voluntary transfer of property by one to another, without any consideration or compensation therefor. A ‘gift’ is a gratuity and an act of generosity and does not require a consideration, but there can be none; if there is a consideration for the transaction, it is not a gift. The Australian High Court in the case of Commissioner of Taxation (Cth) v. McPhail [1968] 41 ALJR 346 held that to constitute a ‘gift’ the property should be transferred voluntarily and not as a result of a contractual obligation. In this case a person agreed to give a donation to a school in return of school charging less fees for the education of the child of said person. Hence, the Court held that such donation cannot be termed as ‘gift’ as it was made under a contractual obligation wherein school was required to charge lower fees against the donation made.

Thus, for any item to be held as a gift, there are two basic ingredients that MUST exist:

  1. Absence of any contractual obligation
  2. Absence of consideration in money or money’s worth either.

Different types of gifts may be given in course or furtherance of business. In the commercial world also, some of them are customary and almost all of them are in course or furtherance of business. Customary gifts are like Diwali gifts or gifts on festive occasions, New year gifts etc. whereas, other gifts given by business houses may be unbranded gifts, FOC items, branded/ customized gifts in the form of publicity material, target based rewards in lieu of discounts/ incentives etc., promotional schemes of various denominations, etc. Some of these are in course of business while others are in furtherance of business.

“In course of business” means usual business practice such as manufacturing, trading etc. It implies those transactions which are directly related to business without which business cannot be run, like purchase of raw material, capital goods etc. On the other hand, furtherance of business means the act of advancement/promotion of business for its sustained growth and profitability. In such a scenario, it can be understood that Diwali gifts and other festive and customary gifts are given to persons related to a business and shall be deemed to be in the furtherance of business. These gifts are generally given to sustain good business relations for the advancement of business activity. Whereas, gifts for sales promotion/ target based or incentive based gifts shall be understood to be given “in course of business” and may not actually be “gifts” but incentives given under contractual obligations.

Now the question that has been raised and argued is the availability of ITC on gifts, which has been dealt at two specific places under the GST law. The first provision is Section 17 (5) of the CGST Act which deals with Blocked credits. Clause (h) of Section 17(5) deals with ITC on gifts. The relevant part of the said provision reads as under:

Sec. 17(5): Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely:—

(a) …………………………….

(h) goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples;

The Second provisions is Entry Number 2 to Schedule – I, which reads as under:

  1. Supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business:

Provided that gifts not exceeding fifty thousand rupees in value in a financial year by an employer to an employee shall not be treated as supply of goods or services or both.

The above two provisions stipulate that any goods disposed off by way of gift are not eligible for ITC and that even if supply is in course or furtherance of business between related or distinct persons, it shall be considered as supply except to the extent of fifty thousand rupees in a financial year, when given by an employer to its employee.

In order to avail ITC, two basic provisions need to be complied with, i.e. Section 16 and Section 17. As per Section 16, a taxpayer is entitled to take credit of input tax charged on any supply of goods or services to him which are used in the course or furtherance of his business.  Thus, Section 16 itself disallows ITC for non-business purposes. This certainly gives an indication of the intent of law that what remains to be subjected to Sub-Section (5) under Section 17 is thus, business gifts only, which has been barred. The issue for the blocking of credit by way of Section 17(5) is not whether it is in course or furtherance of business or not, but rather it is whether it is for consideration or not. If yes, whether the quantification of the consideration and payment of GST on the same is distinctively required or not.

A “gift” is nothing but an inducement, i.e. a means of influencing the recipient. The act of inducement cannot in general be excluded from the scope of being a supply, however, the point that deserves attention here is that the consideration is not wholly in money, the transaction becomes subject to Valuation Rules. In such case the Valuation Rules require the transaction to be valued at Open Market Value of the subject goods (given by way of gift). The “Open Market Value” of ordinarily purchased goods can be easily reckoned as the purchase price of the same goods. In such case, if the giving away by way of gift is considered as a supply to be valued at the cost of purchase, the Input Tax Credit involved shall be equal to the output GST payable on the supply of the said gift, in course or furtherance of business. Thus the output GST and input GST on the goods to be given as gift will be same and the act of not paying GST on the giving of the gift shall be compensated by way of foregoing the Input Tax Credit on the purchase of the said gifts. Availing ITC on purchases of said goods and paying same amount as GST on giving the goods as gift or foregoing both would stand at par. The concept of input removed as such under Central Excise law also was established on similar principles.

Due to Section 17(5), it is so stipulated that no ITC on any goods can be availed, if they are given as gifts, whether or not in course of furtherance of business. Or in other words, if it is so opined that the said gifts have an extra commercial consideration, then they shall be subjected to GST when given away or disposed of and then ITC of the same shall also be available, because as soon as a commercial value is assigned to any transaction, it shall not remain a gift anymore. However, in that case, the value shall require to be assigned in compliance with Section 15 read with the Valuation Rules and not hypothetically.

Clause (h) of Section 17(5) of CGST Act 2017 stipulates that the input tax credit with respect to the “goods” disposed of by way of gift shall not be allowed. The definition of goods as per Section 2 (52) means “every kind of movable property…………..which are agreed to be served before supply or under a contract of supply”.  That means, for a commodity to be called “goods” under this law, it is necessary that it is used for the purpose of supply and in order to deem a particular transaction as supply, it should have some consideration involved or else, the same should be mentioned under Schedule I of the Act. There is neither any consideration nor is there any reference of gifts under Schedule I except in case of those given to employees. In such circumstances, another view emerges that do these Diwali gifts move out of the ambit of the terms “goods” itself from the perspective of the registered person, purchasing such gifts and hence they are not even goods and hence not hit be Section 17(5). Here it deserves to be noted that a “gift” is a regular supply of goods for the supplier who supplies such gifts to the purchaser who will gift it further. What is vital is that there should be tax charged on supply of “goods” by a supplier to a recipient. It nowhere restricts that such commodities should also qualify as “goods” for the recipient to be held as “goods” for him separately. The inward supply is the event that brings in ITC to the recipient, whether eligible or reversible whatsoever. Therefore, it can be clearly construed that Diwali gifts fulfil the conditions of Section 2(52) and Section 16 as well, and cannot be said to be excluded from being hit by provisions of Section 17(5)(h) by way of this fiction of the definition of “goods”.

Now, when it is clear enough that gifts are in course or furtherance of business and the conditions under Section 2 (52) and Section 16 also are satisfied, why ITC on gifts should not be available.

ITC on goods given away or disposed as “gifts” should not be available when no tax is being paid on their disposal. The logic of satisfying Section 16 (1) is of no avail to earn this credit lawfully, because Section 17(5) itself starts with a non obstante clause, which means even if Section 16 (1) allows, Section 17(5) shall block. Moreover, Section 17 (5) is a specific provision because it is an established principle that specific provisions prevail over general provisions.This doctrine has always been upheld. The cases on the subject will be found collected in the third edition of Maxwell which is ‘generalia specialibus non derogant’ – i.e. ‘general provisions will not abrogate special provisions.

Similar application arises when there are two provisions under the same statute also, one of which is specific and the other general. If there is dispute between Section 16 and Section 17(5), in our view, Section 17(5) should prevail.

Readers would appreciate that Section 16 is a general provision and Section 17(5) is specific. Section 17(5) over rides Section 16(1) in clear words. Furthermore, though 17(5) is non obstante clause unless section 16 conditions fulfilled ITC is not eligible and once eligible if not hit by 17(5), only then ITC can be availed. In other words, if something qualifies for ITC under section 16 but is blocked from ITC under section 17 then ITC would not be available. Similarly, if there is a contradiction between Schedule I and Section 17(5) (h), in my view, Schedule I should prevail.

The above discussion would remain incomplete without discussing the question whether the sweets and beverages purchased for distribution to employees/workers/customers/ associates on Diwali would be eligible for ITC. It should be noted that section 17(5) (b) (i) specifically restricts the input tax credit with respect to food and beverages and Section 17(5) (h) restricts or bars credit on gifts. Hence any sweets or beverages given to bought for employees/workers/customers/ associates whether construed as “food or beverages” or as “gifts” shall not be eligible for claiming input tax credit (however the monetary limit under Schedule I shall interfere when given to employees). Furthermore, since the ITC availability on food and beverages, also is separately dealt with under Section 17(5), the treatment in case of inward supply of food and beverages except when given away as gifts may vary depending upon facts.

Regarding gifts given as offer packs, like Buy1Get1free, X item free against purchase of 100 pieces Y item etc., the first provision that deserves attention is Section 15 of the CGST Act talks about “Transaction Value”. Every time, something is given free of cost or a promotional scheme, it has an extra commercial consideration which creates the confusion for payment of GST on outward supply or reversal of ITC or both. The above are gifts/ free supplies in course of business. If consideration for these goods is not charged directly, they shall qualify as “gifts” and ITC shall not be eligible. If these goods are said to be given in lieu of discount, and the said discount satisfies the conditions under Section 15(3), i.e. the discount (whether in full or in part) arises and is recorded as a contractual obligation under specific invoice(s), ITC shall be available on such goods. It may be worthwhile to show such goods under the respective invoice/ credit note after establishing on record, the agreement under which it arises. As soon as an obligation is attached, the commodity loses its identity as a “gift” and no denial of ITC can arise under Section 17(5) in such case. However, festive gifts/ customary gifts, in our view can never fetch this status.

 

It is also very common that publicity material or company branded goods, say an umbrella is bought and branded with the company’s logo and given as gift to a wholesaler by the distributor company. Such giving away is sales promotion expenditure and hence some businesses contend that it is not a gift and can ITC be availed. The intention in such kind of gifting is not to popularize the logo in itself, but to get some sort of business mileage, however, it is worthy to note first, that incurring an expenditure is nothing, but consuming something. When that expenditure is directly related to the supply in course or furtherance of business, it is an input. No customer seeks an obligation of company logo printed publicity material, in course of supply of its goods. It is the supplier’s own will to supply such goods and he gives them as gifts as no customer would wish to pay for it voluntarily, and hence it cannot be said to be a component in course of supply.

The above arguments emphasize towards two vital aspects to be comprised in a transaction for furtherance of business:

  • Regularity : Is the activity conducted in a regular manner based on sound and recognized business principles?
  • Consideration: Is the activity predominantly concerned with the making of taxable supply for consideration/ profit motive?

In the above transaction, both are missing and ITC cannot be availed even by virtue of Section 16 in such case, whether or not these publicity materials are considered as gifts. We all know, nothing in the business world is free, then what is the intent of the harsh Section 17(5)(h). The intent of Section 17(5) (h) can be read by connecting with the erstwhile provisions under Central Excise law or the Cenvat Credit Rules to understand the intent and relate the principles underlying the provision.

The basic intent behind Section 17(5)(h) seems to be that it tries to restrict people from (a) selling goods in cash without payment of tax by showing them as gift (b) give benefits or exchange consideration in kind in lieu of cash/ goods in the garb of gifts to avoid valuation and thus avoid levy of tax (c ) give incentives / benefits to employees as business expenditure, which are not clearly accountable as given to them as reward for their services and which do not become taxable in their hands as remuneration either.

The intent is that, all goods should suffer indirect tax upto the level at which they are consumed, unless specifically exempted. If gifts given to business associates or employees are not taxed when they are disposed, and ITC is also allowed upon them, the tax on such goods shall get avoided in a way.

Even the erstwhile Central Excise law, did not allow Cenvat credit on items purchased and given as gifts, or free samples. The erstwhile Rule 3(5) had prescribed that when inputs or capital goods, on which CENVAT credit has been taken, are removed as such from the factory, or premises of the provider of output service, the manufacturer of the final products or provider of output service, as the case may be, shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice referred to in Rule 9. The Cenvat Credit availed on procurement of such goods could be utilized for payment of –

Duty on such goods when removed as such or after being partially processed and the duty payable on these goods was held to be an amount equal to CENVAT credit taken on inputs. A conjoint harmonious reading of Section 15, 16 and Section 17(5) appears to carry the same intent.

As far as ‘gifts’ to employees is concerned, there are two rival entries; the first in Schedule I and the second in Schedule III. The proviso to Entry 2 of Schedule I gives an implied meaning that gifts exceeding Rs.50000 to an employee by his employer in a financial year is to be construed as “supply”.

Whereas Entry I of Schedule III states that services of an employee in the course of or in relation to his employment is not a ‘supply’. When both these entries are read together, it so appears that anything which has been given in the ordinary course of employment to an employee is reward or compensation for the service which he rendered as an employee and hence beyond scope of supply.

Entry 2 of Schedule I, requires one to pay GST on gifts made to employees exceeding Rs 50,000/- to an employee during a year. Now what is Schedule I, it is those transactions which are without consideration but held as supply. Which means, if anything is given for a consideration, i.e. service as per terms of service in case of employment, it is covered by Schedule III and cannot be covered under Schedule I at all. Only those transactions shall enter Schedule I, which are without consideration, i.e. not covered by the terms of contract in case of employees, but given voluntarily. Since they are not exempt by virtue of Schedule III, limited exemption of Rs 50000/- per year employee is conferred under Schedule I specifically.

There is little space to argue beyond the principle that anything given to an employee, unless mentioned in his offer letter or such defined remuneration / incentive will be “gift”. Thus, if gift to employee is more than Rs. 50,000/- during a year, it will become a fresh supply from employer to employee and because they are related party, value is to be determined as per rules as discussed above. This gives an impression that there is double taxation on all gifts which get covered under Entry 2 of Schedule I. Similarly, for gifts exceeding Rs. 50,000/- whether foregoing of ITC under Section 17(5)(h) will suffice or GST will have to be paid again on the amounts exceeding 50,000/-. If yes, how will such valuation be made?

For once, on a plain reading, it so appears that there is double taxation in this case, but then taxing twice is against the spirit of GST and it is hard to accept that this is the intent of the provisions. As discussed above, the value of outward supply in such cases as per valuation rules is open market value, i.e same as purchase cost. The foregoing of GST is nothing but payment of GST on the said goods disposed without any consideration. This should suffice. This also paves way for availing ITC on gifts to employees upto the value of Rs 50,000 in a year.

Any gift above Rs 50,000 to an employee during an year is deemed supply by virtue of Schedule I, and 17(5) talks about non availment of credit on all gifts. First of all, does the exemption of Rs 50,000/- under Schedule I entitle one to avail ITC on such gifts when procured, because not allowing ITC on such goods will tantamount to levy of GST on such goods, when disposed as gifts by way of deemed fiction of valuation. However, it seems reasonable and convincing to accept that the foregoing or reversal of ITC (as a consumer of such goods / as a B2C transaction as discussed above) is itself at par/ equivalent to the payment of GST on any transaction being considered as deemed outward supply. As per earlier central excise law also, payment of duty was considered at par with reversal of cenvat credit. In GST also, if ITC is foregone, no further payment of GST should lie on transactions without consideration.

Now, it is ironical though, it so appears that under Schedule I, gifts to all other related persons are considered as supply as gifts are invariably, without consideration. In case, gifts are given to those who are not related persons, it will not be a supply, and hence not liable to GST. In both cases, Section 17(5) (h) disallows/ blocks the ITC. This definitely leaves the question unanswered that how are they both different or are they different at all. The ultimate impact appears to remain same in both cases of gifts to employees above the monetary limit of Rs 50,000 or below such limit, as double taxation cannot be held tenable.

The dynamic idea of charging nominal amount for gifts to employees or other related persons does not help to avoid double taxation due to the force of the Valuation Rules when transactions are between related persons and not fully in money’s worth. Gifts to employees which are not part of the terms of service or not contractually obligatory cannot be said to be a mode of payment for his services, unless so recorded. In that case they will even get subjected to TDS obligations of employer for the employee under Income tax law.

The crus of the above few paragraphs is that Entry No 2 of Schedule I vis a vis employees and all other related persons is a gamut of confusion and needs to be immediately reviewed by the law makers with seriousness and addressed with clarity.

All said and done, the reversal or non availment of ITC on gifts shall be a tedious task in return filing, as to which items are given as gifts, and under which bill the same were purchased would need to be identified and reversal shall need to be made. Businesses are confused as to how the invoices should be taken for these gifts and how this hardship can be reduced.

 

It cannot be denied that since a gift is without consideration, the purchaser of the goods who disposes the said goods as gifts is himself the consumer of the said goods and ITC is available only against B2B supplies. ITC cannot be availed on B2C supplies and it seems reasonable to purchase goods for the purpose of gifts as B2C inward supply to eliminate the pain of reconciliation, matching and reversal on such goods by the person who makes the gift. When purchased as B2C, ITC will not become available and the total cost of purchases including the GST component can be availed as deduction under Income tax law. Especially, because gifts are voluntarily given and do not create any contractual obligation, even if they are in course or furtherance of business, the registered person should adopt a policy that whenever goods are purchased for the purpose of gifts, they are purchased as B2C supplies from a registered person to reduce/ remove hardship of reversal and reconciliation.

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The authors duly acknowledge the academic contributions and time given by various GST experts, consultants and academicians based in various cities of India, namely, Sri Akshay Rajendra Shah, Sri Amar Nath Singla, Sri Anket S Dodya, Sri Anuj Kakkar, Sri Ashu Dalmia, Sri Abhay Desai, Sri Chintan Shah, Sri Gaurav Gupta, Sri Gawesh Narula, Sri Jignesh Kansara, Sri Keshav R Garg, Sri Mithun Khatri, Sri Mohit Golchha, Sri Monish S Shah, Sri Prashant Shukla, Sri R K Soni, Sri Sanjiv Pahwa, Sri Saurabh Gupta, Ms. Shaifaly Girdharwal, Sri Sudhir Jhanjee, Sri Tarun Agarwal, Sri MP Vasudevan (IRS), Sri Vikas Modi and Sri Vikas Yadav thorugh an online panel discussion for completing this study and presenting this Article.

Refund to eligible units in J&K, Himachal Pradesh, Uttrakhand and North east

Department of Industrial Policy & Promotion of Government of India has vide Notification No. F. No. 10(1)/2017-DBA-II/NER, dated October 5, 2017, has notified benefit under GST regime for units enjoying benefits under different Industrial Promotion Schemes of the Government of India.  The erstwhile Schemes which were in operation on 18.07.2017 were as follows:

Notifications for which scheme is announced:

Jammu & Kashmir: Notification nos. 56/2002-CE dated 14.11.2002, 57/2002-CE dated 14.11.2002 and 01/2010-CE dated 06.02.2010 as amended from time to time.

Himachal Pradesh & UttarakhandNotification nos. 49/2003-CE dated 10.06.2003 and 50/2003-CE dated 10.06.2003 as amended from time to time.

North East States including SikkimNotification no 20/2007-CE dated 25.04.2007 as amended from time to time.

The above notifications were rescinded vide notification no. 21/2017 dated 18.07.2017.

In lieu of above schemes, Government has notified Scheme of Budgetary Support (“SBS”) under Goods and Services Tax (GST) Regime.

The Salient features of the scheme are as under:

Eligibility:

–        SBS shall be available to the units located in State of Jammu & Kashmir, Uttarakhand, Himachal Pradesh and North Eastern States including Sikkim

–        SBS shall come into operation w.e.f. 01.07.2017 for an eligible unit.  ‘Eligible unit’ means a unit which was eligible to avail the benefit of ab-initio (since beginning) exemption or exemption by way of refund from payment of central excise duty under above specified notifications and was availing the said exemption immediately before 1st day of July, 2017.

–        SBS shall remain in operation for residual period.  ‘Residual period’ means the remaining period out of the total period not exceeding ten years, from the date of commencement of commercial production, as specified under the relevant notification listed above, during which the eligible unit would have been eligible to avail exemption for the specified goods under the earlier regime.

–        SBS shall be available for each of the eligible unit in respect of specified goods.  ‘Specified goods’ means the goods specified under exemption as specified in above said notifications which were eligible for exemption under the said notifications, and which were being manufactured and cleared by the eligible unit by availing the benefit of excise duty exemption.

Operation of Scheme:

–        SBS shall operate by way of part reimbursement of the Goods and Services Tax, paid by the unit limited to the Central Government’s share of CGST/ IGST.

–        SBS shall be worked out on quarterly basis for which claims shall be filed on a quarterly basis – January to March, April to June, July to September & October to December

–        The benefit under SBS shall be computed in the following manner:

  • Unit shall from its output liability utilise available ITC towards CGST / IGST.
  • From the balance amount as payable in cash, 58% in case of CGST and 29% in case of IGST
  • The amount so computed be decreased by such percentage as goods procured from composition supplier bears for such unit to all purchase of goods.  This may have a detrimental to the units as ITC of Services is also getting reduced in the above computation.

Other Deterrents of the Scheme:

–        Limitations, conditions and prohibitions under the respective notifications issued by Department of Revenue as they existed immediately before 01.07.2017 would continue to be applicable under this scheme

–        Activity relating to concealment of input tax credit, purchase of inputs from unregistered suppliers (unless specifically exempt from GST registration) or routing of third party production or other activities aimed at enhancing the amount of budgetary support by mis-declaration would be treated as fraudulent activity

–        Specific rates above which if value addition is found in certain specified goods, such cases shall be taken up for scrutiny by the department.  General rate other than specific ones is 36% paid on value addition is higher

–        SBS shall be allowed to an eligible unit subject to an inspection by a team constituted by DIPP for every State to scrutinize in detail the implementation of the previous schemes

–        Special audit by the Chartered Accountant/Cost Accountant may be undertaken for units selected based on the risk parameters identified by CBEC

–        Strong recovery provisions in case of wrongful availment of benefits

Procedural aspects of the scheme:

–        In case of multiple units, the computation with other documents be supported by a CA Certificate

–        The manufacturer shall file an application to the Assistant Commissioner or Deputy Commissioner of Central Taxes, as the case may be, by the 15th day of the succeeding month after end of quarter after payment of tax relating to the quarter to which the claim relates.  This means for July- September , the last date shall become 15th November, 2017.

–        The manufacturer shall file an application for payment of budgetary support for the Tax paid in cash, other than the amount of Tax paid by utilization of Input Tax credit under the Input Tax Credit Rules, 2017, to the Assistant Commissioner or Deputy Commissioner of Central Taxes, as the case may be, by the 15th day of the succeeding month after end of quarter after payment of tax relating to the quarter to which the claim relates

–        Documents to be filed by the applicant to SBS:

(a) the copy of the option filed by the manufacturer with the jurisdictional Deputy Commissioner/ Assistant Commissioner of Central Excise officer at the relevant point of time, for availing the exemption notification issued by the Department of Revenue;

(b) document issued by the concerned Director of Industries evidencing the commencement of commercial production

(c) the copy of last monthly/quarterly return for production and removal of goods under exemption notification of the Department of Revenue.

(d) An Affidavit-cum-indemnity bond, as per Annexure A, to be submitted on one time basis, binding itself to pay the amount repayable under para 9 below.


To download the Official Notification : Click Here


 

Amend in GST Registration

AMEND/MODIFY GST REGISTRATION

Application for Amendment in Registration Particulars (for both core and non-core) service is available on the portal now. Taxpayers who wish to change their particulars may do so now.

  • Core Fields And Non Core fields

In core fields approval of Tax official is must.
In Non core fields no approval is required and any taxpayer can edit it.

in core we can change these following feilds

  1. Addition / Deletion of Stakeholders
  2. Principal Place of Business (other than change in State) or Additional Place of Business (other than change in State)
  3. Name of the Business, (Legal Name) if there is no change in PAN

There is also some unchangeable fields like PAN , Place of business from one state to another.

HOW  I APPLY FOR CHANGE IN CORE FIELDS OF THE REGISTRATION APPLICATIONS THAT WERE SUBMITTED DURING REGISTRATION?

Amendment to These fields require approval by the Tax Officials. These fields include the following:

  • Principal place of business
  • Additional Place of Business (Other than change in State)
  • Any change in name of business (if there is no change in PAN)

Addition or deletion of Partners/ Directors  / Board of Trustees/ Chief Executive officer or equivalent etc.

To amend the information provided in the core fields during registration, you need to follow this simple steps:

  • Go To  http://www.gst.gov.in URL.
  • Login
  • Click on the Services
  • Registration 
  • Amendment of Registration Core Fields link.

As per requirement, Taxpayer can amend information in the editable fields in the tabs as mentioned below:

 

BUSINESS DETAILS TAB:

The Business Details tab is selected by default.

  1. a) Select the field which to be editing by clicking on the Edit icon black pen icon).
  2. b) Edit the details and select Date of Amendment using the calendar.
  3. c) In the Reasonsfield, enter the reason for amendment of information provided in the Core fields.
  4. d) After changes Click on the SAVE
  5. e) Once all the changes are done, click the CONTINUE button.

PRINCIPAL PLACE OF BUSINESS TAB:

  1. a) Scroll down the page and click the EDIT button.

The form is displayed for editing. Edit the desired fields.

  1. b) In the Reasons field, enter the reason for amendment of information.
  2. c) Select the Date of Amendment using the calendar.
  3. d) Click the SAVE

ADDITIONAL PLACE OF BUSINESS TAB:

  1. a)  Number of additional places field, enter the number of additional places for which information is to be added.
  2. b) Click the ADD NEW

The form is available for editing. Edit the desired details.

  1. b) In the Reasons field, enter the reason for amendment in information.
  2. c) Select the Date of Amendment using the calendar.
  3. d) Click the SAVE& CONTINUE
  4. e) Click the SAVE

Note: You can click the EDIT and DELETE button to edit or delete the additional place of business

PROMOTER / PARTNERS TAB:

  • View the details of Promoter or Partners, click the VIEW button.
  • Edit the details of Promoter or Partners, click the EDIT button.
  • Delete the details of Promoter or Partners, click the DELETE button.
  1. a) Click the ADD NEW button to add details of Promoter or Partners.
  2. b) Enter the details of the Promoter/Partner and upload the necessary documents required as a proof for amendment.

 

  1. c) In the Reasons field, enter the reason for amendment in information.
  2. d) Select the Date of Amendment using the calendar.
  3. e) Click the SAVE
  4. f) Once details are added, click the CONTINUE

VERIFICATION TAB:

In the Verification tab, select the Verification checkbox.

In the Name of Authorized Signatory drop-down list, select the authorized signatory.

In the Place field, enter the name of the place.

After filling the application for Amendment of Registration, you need to digitally sign the application using Digital Signature Certificate (DSC)/ E-Signature or EVC.

Once digitally signed application for amendment of registration is filed, the successful messeage shows submission of application is displayed. You will receive the acknowledgement in next 15 minutes on  registered e-mail address and mobile phone number. SMS and email will be sent to the primary authorized signatory intimating ARN and successful filing of the Form.

Note: Amendment to Core fields require approval by the Tax Official. Once the amendment application is approved or rejected, you will receive a notification through SMS and e-mail message.

 

Last Dates of Filing of GST Returns


Information related to Last dates of Filing of GST Returns in below table : 

Particular Form 3B Form GSTR 1 Form GSTR 2 Form GSTR 3 Form GSTR 6 Reference Note
Jul-17 25.08.2017 03.10.2017 / 10.10.2017 31.10.2017 10.11.2017 13.10.2017 Notification No. 35/2017 – Central Tax / Notification No. 31/2017 – Central Tax / Notification No. 30/2017 – Central Tax/ Notification No. 24/2017 – Central Tax 3rd October is laste date for persons with turnover in state / UT more than Rs. 100 crores
Aug-17 20.09.2017 Not yet notified Not yet notified Not yet notified Not yet notified Notification No. 26/2017 – Central Tax / Notification No. 26/2017–Central Tax
Sep-17 20.10.2017 Not yet notified Not yet notified Not yet notified Not yet notified Notification No. 35/2017 – Central Tax
Oct-17 20.11.2017 Not yet notified Not yet notified Not yet notified Not yet notified Notification No. 35/2017 – Central Tax
Nov-17 20.12.2017 Not yet notified Not yet notified Not yet notified Not yet notified Notification No. 35/2017 – Central Tax
Dec-17 20.1.2018 Not yet notified Not yet notified Not yet notified Not yet notified Notification No. 35/2017 – Central Tax