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Output Liability

The output liability under GST depends upon place of Supply. On the basis of place of supply the liability payable under SGST, CGST, UTGST or IGST can be determined. Below table will explain the liability under different scenario:

Location of Supply Location of Receiver Place of Supply Taxes
State A State A State A CGST + SGST
State A State B State B IGST
State A Billing to be made to  A customer in State A

Ship to in State B

State A CGST + SGST(irrespective of the place of delivery)
State A Billing to be made to  A customer in State B

Ship to in State A

State B IGST (irrespective of the place of delivery)
Branch in State A Branch in State B State B IGST

Levy under Reverse charge mechanism

  • Purchase from Unregistered dealerEvery registered person is required to pay tax as under for making purchases from unregistered supplier
  • Compulsory reverse charge on specified services
    Name of the Service Service Provider Service Receiver GST to be paid by
    Transport of goods by road Goods Transport Agency Casual Taxable person, body corporate, partnership firm, any society, factory, any person registered under CGST, SGST, UTGST Act. Service recipient
    Recovery Agent Service Recovery Agent Banking Company, NBFC or any financial institution. Service recipient
    Service by Director A director of a company or a body corporate A company or a body corporate Service recipient
    Advocate/Legal Service An individual advocate or firm of advocates , An arbitral tribunal Any business entity. Service recipient
    Radio Taxi Service Taxi driver or Rent a cab operator ( if service provided by e-commerce operator) Any person E-commerce Operator

     

    Insurance Agent Service An insurance agent Any person carrying on insurance business Service recipient
    Sponsorship Service Any person providing sponsorship services Anybody corporate or partnership firm. Service recipient
    Import of Service (service provided from non-taxable territory) A person located in non-taxable territory to a person located in non-taxable territory Importer Service recipient
    Copyright Service related to literary, dramatic ,musical, artistic work Author or music composer, photographer, artist, etc Publisher, Music company, Producer Service recipient

     

  • Exemption in Case of Services Up to 5000 per day Local Purchases up to 5000 per day from all Unregistered Parties are exempt from GST (This 5000 purchase is combination of Purchases from All Parties Combined Interstate Purchases are not covered here)

Input Credit

    • Availability of Input Tax Credit on GST
      • ITC available on any inward supply of goods or services or both only if used or intended to be used in the course or furtherance of his business
      • Every registered person shall be entitled to take credit of input tax (ITC) charged on any supply of goods or services or both
      • GST Charged on Invoice
      • Goods or Services received at place of Business or Godown.
      • Vendor has properly showed in his GSTR-1 return with our GSTN.
      • No Input tax credit available on advance payments
      • Payment should be made within 180 days to vendor from Invoice date
  • Input Tax Credit Specifically disallowed
    1. motor vehicles except when they are used:
      • for further supply of such vehicles, transportation of passengers
      • for transportation of goods
    2. Following supplies:
      • Food & Beverages, Outdoor catering etc. except where they are used for making an outward taxable supply of same category of goods or services
      • membership of a club, health and fitness centre
      • rent-a-cab, life insurance and health insurance except where Government notifies it as obligatory or are used for making an outward taxable supply of same category of goods or services
      • travel benefits extended to employees on vacation such as leave or home travel concession.
    3. works contract services for construction of Immovable property
    4. goods or services or both used for personal consumption
  • Utilisation of Input Tax Credit
    Taxes CGST SGST IGST Compensation Cess
    CGST NA NA
    SGST NA NA
    IGST NA
    Compensation cess NA NA NA

Accounting Entry

  • Ledgers to be created
Name Description
Output CGST Booking output liability of CGST
Output SGST Booking output liability of SGST
Output IGST Booking output liability of IGST
IGST Advance IGST payable on advance received
CGST Advance CGST payable on advance received
SGST Advance SGST payable on advance received
Input CGST Input Tax credit available of CGST
Input SGST Input Tax credit available of SGST
Input IGST Input Tax credit available of IGST
Electronic Cash Ledger Payment of IGST, CGST and SGST

Account for compensation cess be also operated in above manner if required

  • Accounting Entries
Transaction Under GST
Outward Supply-Sales
Local Sale – B2B Dr Debtors A/c
Cr B2B Sales A/c
Cr Output CGST A/cCr Output SGST A/c
2,36,000 2,00,000
18,000
18,000
Local Sale – B2C Dr Debtors A/c
Cr B2C Sales A/c
Cr Output CGST A/cCr Output SGST A/c
2,36,000 2,00,000
18,000
18,000
Interstate Sale Dr Debtors A/c
Cr Sales A/c
Cr Output IGST A/c
     2,36,000 2,00,000
36,000
Advance receipt Dr Cash/Bank A/c
Dr IGST Advance A/cCr Debtor A/cCr Output IGST A/c
1,00,000
18,000
1,00,000
18,000
Dr Output IGST A/c

Cr Cash/Bank A/c

18,000 18,000
Raising   of   Invoice
in   subsequent month
 
Dr Debtor A/c

Cr Sales A/c
Cr Output IGST A/c

10,18,000 10,00,000
1,80,000
Dr Output IGST A/c
Cr IGST Advance A/cCr Cash/Bank A/c
1,80,000 18,000
1,62,000
Dr Cash/Bank A/c

Cr Debtor A/c

9,00,000 9,00,000
Transaction   Under GST
Inward Supply-Purchases from
Registered  Dealer  – Intra state Dr Purchase A/c

Dr Input CGST A/c

Dr Input SGST A/c
Cr Creditor

2,00,000
18,000
18,000
2,36,000
Registered Dealer (Inter State) Dr Purchase A/c

Dr Input IGST A/c
Cr Creditor

30,000
5,400
35,400
Under Reverse Charge Mechanism Dr Import Purchase A/c

Dr Input IGST A/c
Cr Creditors A/c
Cr Output IGST A/c (Liability)

20,000
3,600
20,000
3,600
Purchase from Unregistered Dealer
– RCM
Dr Purchase A/c

Dr Input IGST A/c
Cr Creditors A/c
Cr Output IGST A/c(Liability)

2,00,000
36,000
2,00,000
36,000
Composition Dealer Dr Purchase
Cr Creditors
75,000 75,000
Expenses & Purchase of Capital Goods
Indirect Expenses Dr Telephone Charges A/c

Dr Input CGST A/c
Dr Input SGST A/c

Cr Bank

10,000
900
900
11,800
Asset  Purchase (Interstate) Dr Furniture A/c

Dr Input IGST A/c
Cr Creditors A/c

80000
9,600
89,600
Transaction Under GST
Upon Monthly payment of taxes
Transfer    to    Cash Ledger

 

Cash Payment
Dr Electronic Cash Ledger {I+C+S}Cr Bank
99,000 99,000
TDS / TCS
Dr Electronic Cash Ledger
Cr Govt / eCom Operator
Transfer   to   Credit Ledger Dr Liability Ledger CGST A/c

Dr Liability Ledger SGST A/c

Dr Liability Ledger IGST A/c
Cr ITC CGST Ledger A/c

Cr ITC SGST Ledger A/c

Cr ITC IGST Ledger A/c
Cr Electronic Cash Ledger

{I + C + S}

64,800
64,800
59,400
28,350
28,350
33,300
99,000

Documents to be Issued

S. No. Document Type Requirement of issuance
a) Tax Invoice Supply of Taxable Goods
b) Receipt Voucher On receipt of advance payment with respect to any supply of goods or services or both.
c) Payment Voucher To be issued at the time of making payment to the supplier on which recipient has to pay tax.
d) Refund Voucher When advance is received, but no supply is made and no tax invoice is issued in pursuance thereof, it shall be issued on refund of such advance.
e) Debit Note To be issued in cases where taxable value or tax charged in that tax invoice is found to be less than the taxable value or tax payable in respect of such supply.
f) Bill of Supply Supply of exempt goods (Nil rated, Exempt, non-taxable)
g) Credit Note To be issued in cases where taxable value or tax charged in that tax invoice is found to be more than the taxable value or tax payable in respect of such supply or the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient.
h) Invoice To be issued in respect of goods or services or both received by him from the supplier who is not registered on the date of receipt of goods or services or both.
i) Delivery Challan In case of movement of goods other than for Supply.
  1. Tax Invoice should contain
    • Name, address and GSTIN of the supplier;
    • date of its issue;
    • name, GSTIN or UIN, if registered, of the recipient;
    • name of recipient if unregistered
    • HSN code of goods or Accounting Code of services;
    • description of goods or services;
    • quantity in case of goods and unit or Unique Quantity Code thereof;
    • total value of supply of goods or services or both;
    • taxable value of supply of goods or services or both taking into account a discount or abatement, if any;
    • rate of tax (central tax, State tax, integrated tax, Union territory tax or cess);
    • amount of tax charged in respect of taxable goods or services (central tax, State tax, integrated tax, Union territory tax or cess);
    • place of supply along with the name of State, in case of a supply in the course of inter-State trade or commerce;
    • address of delivery where the same is different from the place of supply;
    • whether the tax is payable on reverse charge basis; and
    • signature or digital signature of the supplier or his authorized representative

    Important Points

    • Tax invoice is to be issued for all taxable Sales irrespective of the fact as to whether the same is issued to a registered person or not or whether the supply is of goods or services or it is inter-state or intra state
    • Either the Tax Invoice will have CGST + SGST / UTGST or IGST
    • Being an insurance business Tax invoice in case of taxable supply of services, shall be issued within a period of forty five days from the date of supply of service:
    • Draft Invoice Formats is attached herewith as Annexure A
    • CGST + SGST / UTGST shall be applicable in cases when state in which invoice is issued and place of supply as mentioned on invoice is same
    • Rate of SGST may vary from state to state
    • Multiple Series of Invoices are possible and have to start from 1 every year
    • Invoices for supply of goods (scarp or fixed assets sales) to be issued in three copies
      • the original copy being marked as ORIGINAL FOR RECIPIENT;
      • the duplicate copy being marked as DUPLICATE FOR TRANSPORTER; and
      • the triplicate copy being marked as TRIPLICATE FOR SUPPLIER.
    • Invoices for supply of Services to be issued in two copies
      • the original copy being marked as ORIGINAL FOR RECIPIENT;
      • the duplicate copy being marked as DUPLICATE FOR SUPPLIER
    • Insurer making taxable supplies of services, may issue the invoice before or at the time such supplier records the same in his books of account or before the expiry of the quarter during which the supply was made.
  2. Bill of Supply should include
    • name, address and GSTIN of the supplier;
    • a consecutive serial number not exceeding sixteen characters, in one or more multiple series, containing alphabets or numerals or special characters -hyphen or dash and slash symbolized as “-” and “/”respectively, and any combination thereof, unique for a financial year;
    • date of its issue;
    • name, address and GSTIN or UIN, if registered, of the recipient;
    • HSN Code of goods or Accounting Code for services;
    • description of goods or services or both;
    • value of supply of goods or services or both taking into account discount or abatement, if any; and
    • signature or digital signature of the supplier or his authorized representative:
  3. Credit Note should include
    • Name, address and GSTIN of the supplier;
    • nature of the document;
    • a consecutive serial number not exceeding sixteen characters, in one or multiple eries, 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;
    • date of issue of the document;
    • name, address and GSTIN or UIN, if registered, of the recipient;
    • name and address of the recipient and the address of delivery, along with the name of  State and its code, if such recipient is un-registered;
    • serial number and date of the corresponding tax invoice or, as the case may be, bill of supply;
    • value of taxable supply of goods or services, rate of tax and the amount of the tax credited or, as the case may be, debited to the recipient; and
    • signature or digital signature of the supplier or his authorized representative

    Important Points

    • Credit note cannot be issued later than September following the end of the financial year in which such supply was made or filing of annual return whichever is earlier.
  4. Debit Note should include
    • Name, address and GSTIN of the supplier;
    • nature of the document;
    • a consecutive serial number not exceeding sixteen characters, in one or multiple eries, 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;
    • date of issue of the document;
    • name, address and GSTIN or UIN, if registered, of the recipient;
    • name and address of the recipient and the address of delivery, along with the name of  State and its code, if such recipient is un-registered;
    • serial number and date of the corresponding tax invoice or, as the case may be, bill of supply;
    • value of taxable supply of goods or services, rate of tax and the amount of the tax credited or, as the case may be, debited to the recipient; and
    • signature or digital signature of the supplier or his authorized representative

    Important Points

      • Can be issued anytime (no outer limit of issuance)
      • Should be linked to original invoice
  5. ISD Invoice should include
    • name, address and GSTIN of the Input Service Distributor;
    • a consecutive serial number not exceeding sixteen characters, in one or multiple series, containing alphabets or numerals or special characters hyphen or dash and slash symbolised as , “-”, “/”, respectively, and any combination thereof, unique for a financial year;
    • date of its issue;
    • name, address and GSTIN of the recipient to whom the credit is distributed;
    • amount of the credit distributed; and
    • signature or digital signature of the Input Service Distributor or his authorized representative
  6. Receipt Voucher should include
    • name, address and GSTIN of the supplier;
    • date of its issue;
    • name, address and GSTIN or UIN, if registered, of the recipient;
    • description of goods or services;
    • amount of advance taken;
    • rate of tax (central tax, State tax, integrated tax, Union territory tax or cess);
    • amount of tax charged in respect of taxable goods or services (central tax, State tax, integrated tax, Union territory tax or cess);
    • place of supply along with the name of State and its code, in case of a supply in the course of inter-State trade or commerce;
    • whether the tax is payable on reverse charge basis; and
    • signature or digital signature of the supplier or his authorized representative
  7. Refund Voucher should include
    • name, address and GSTIN of the supplier;
    • a consecutive serial number not exceeding sixteen characters, 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
    • date of its issue;
    • name, address and GSTIN or UIN, if registered, of the recipient;
    • number and date of receipt voucher issued in accordance with provisions of sub- rule 5;
    • description of goods or services in respect of which refund is made;
    • amount of refund made;
    • rate of tax (central tax, State tax, integrated tax, Union territory tax or cess);
    • amount of tax paid in respect of such goods or services (central tax, State tax, integrated tax, Union territory tax or cess);
    • whether the tax is payable on reverse charge basis; and
    • signature or digital signature of the supplier or his authorized representative.
  8. Payment Voucher should include
    • name, address and GSTIN of the supplier if registered;
    • a consecutive serial number not exceeding sixteen characters, 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
    • date of its issue;
    • name, address and GSTIN of the recipient;
    • description of goods or services;
    • amount paid;
    • rate of tax (central tax, State tax, integrated tax, Union territory tax or cess);
    • amount of tax payable in respect of taxable goods or services (central tax, State tax,  integrated tax, Union territory tax or cess);
    • place of supply along with the name of State and its code, in case of a supply in the course of inter-State trade or commerce; and
    • signature or digital signature of the supplier or his authorized representative.
  9. Delivery Challan should include
    • Date and number of the delivery challan,
    • name, address and GSTIN of the consigner, if registered,
    • name, address and GSTIN or UIN of the consignee, if registered,
    • HSN code and description of goods,
    • quantity (provisional, where the exact quantity being supplied is not known),
    • taxable value,
    • tax rate and tax amount – central tax, State tax, integrated tax, Union territory tax or cess, where the transportation is for supply to the consignee,
    • place of supply, in case of inter-State movement, and
    • signature
    • To be issued in following cases
      • supply of liquid gas where the quantity at the time of removal from the place of business of
      • the supplier is not known,
      • transportation of goods for job work,
      • transportation of goods for reasons other than by way of supply, or
      • such other supplies as may be notified by the Board,
    • To be prepared in three copies:
      • the original copy being marked as ORIGINAL FOR CONSIGNEE;
      • the duplicate copy being marked as DUPLICATE FOR TRANSPORTER; and
      • triplicate copy being marked as TRIPLICATE FOR CONSIGNOR.

Return

  • General Provisions
    Taxable Person Monthly Quarterly Annual
    Normal/Regular GSTR-1, 2 ,3 NA GSTR-9 A
    Compounding Taxpayer NA GSTR- 4 GSTR-9 C
  • Return for the Month of July, August & September due dates
    Month GSTR 3B Simplified returns (Pay tax)
    July 20th August
    August 20th September

                                           AND

    Month GSTR 1 GSTR 2 GSRT 3
    July -17 5th September 10th September
    August –17 20th September 25th September
    Sept – 17 10th October 15th October 20th October
  • GST Return Applicability
    PERSON FILING RETURN OUTWARD SUPPLY(SALES) RETURN

    (GSTR-1)

    INWARD SUPPLY(PURCHASE) RETURN

    (GSTR-2)         

    MONTHLY RETURN (GSTR-3) ANNUAL RETURN

    (GSTR-9)

    Registered taxable person

    [Section 39(1)]

    Yes Yes Yes Yes
    Composition dealer

    [Section 39(2)]

        No        No Yes Yes
    TDS Deductor

    [Section 39(3)]

    Yes       No Yes   No
    Input Service Distributor (ISD)

    [Section 39(4)

      No       No Yes   No
    Non-resident taxable person

    [Section 39(5)]

      No       No Yes   No
    TCS/

    e-commerce operator

    [Section 52(4)]

    Yes Yes Yes Yes
  • GST return flow

Reports and Registers

  1. Records required
    • Record for Inward and outward supply of goods or services or both;
    • names and complete addresses of suppliers from whom he has received the goods or services;
    • names and complete addresses of the persons to whom he has supplied the goods or services;
    •  Record for stock of goods;
    • The complete addresses of the premises where the goods are stored by him, including goods stored during transit along with the particulars of the stock stored therein.
    • Record for input tax credit availed;
    • Record for output tax payable and paid;
  2. Reports
    • Report of goods or services imported or exported or of supplies attracting payment of tax on reverse charge along with relevant documents, including invoices, bills of supply, delivery challan, credit notes, debit notes, receipt vouchers, payment vouchers, refund vouchers and e-way bills.
    • The above report to be maintained separately for each class of goods and services supplied
    • Mismatch Report
    • Report of advances received, paid and adjustments made thereto
    • Report of purchase from unregistered suppliers including details of tax collected and paid, input tax, input tax credit claimed, together with a register of tax invoice, credit note, debit note, delivery challan issued or received during any tax period
    • Report of purchase on which tax is to be paid under reverse charge including details of tax collected and paid, input tax, input tax credit claimed, together with a register of tax invoice, credit note, debit note, delivery challan issued or received during any tax period
    • Report of advances received, paid and adjustments made thereto 
  3. Other important Points
    • The records under these rules may be maintained in electronic form and the record so maintained shall be authenticated by means of a digital signature.
    • Proper electronic back-up of records shall be maintained and preserved in such manner that, in the event of destruction of such records due to accidents or natural causes, the information can be restored within reasonable period of time. 
  4. Registers formats 
    Name Format
    Output Supply Tax Invoice Register Appendix 1
    Receipt Register Appendix 2
    Bill of Supply Register Appendix 3
    Payment Voucher Register Appendix 4
    Invoice register Appendix 5
    Debit Note Register Appendix 6
    Credit  Note Register Appendix 7
    Input Tax Register Appendix 8

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