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GST: Key questions and concerns

GST: Key questions and concerns

GST- Key questions and concerns

Four months since the launch of the goods and services tax (GST) a number of concerns and questions remain:

States’ rights

The GST Bill has not infringed on the rights of the state legislatures. In fact, the amendments to the Constitution have been made by consensus and all states have agreed to the GST scheme. It is also gratifying that all decisions of the GST Council have been unanimous so far. The state legislatures have obviously agreed to the GST scheme because the levy of value-added tax (VAT) on alcohol and petroleum products has been left out of it, whereby a substantial part of the revenue accruing to the states continues to be protected as state subjects. At the same time, accommodating the demands of the states has weakened the GST regime by making it complicated. It has also resulted in very high rates of taxation including GST rates of 28 percent and above.

Exemption limit

The announced exemption for firms with a turnover below Rs 20 lakh is very low and will not ensure the protection of the informal sector. Further, the reverse charge mechanism (RCM) is a serious blow to the informal sector and it has reportedly resulted in very small units being affected since larger units are reluctant to buy from them because of the RCM. Fortunately, this mechanism has been postponed until March 2018.

GST and GDP growth

The GST scheme was expected to increase GDP growth. But the complicated structure and the initial infrastructural problems have resulted in several units of all sizes facing difficulties in compliance. There are also reports that the manufacturing sector has experienced a slowdown and exports have been affected because of goods and service tax issues. The need for payment of the GST at the outset and for claiming the refund at a later point in time has also impacted cash flow. For the present, the GST scheme will not give any boost to GDP growth.

Gold bullion, real estate, and alcohol

Traditionally, the bullion and jewellery sector has been subjected to very low rates of tax because of difficulties in compliance and the largely unorganised nature of business in this area. The tax rate of 3 percent is a continuation of a similar rate that prevailed at an earlier point in time.

As far as the real estate sector is concerned, there is no justification for keeping it outside the ambit of the GST. Indeed, housing is an extremely important segment of the economy and including housing in the GST would have benefited housing projects for weaker sections. By excluding housing from the GST, the cost of individual apartments is bound to go up and this will particularly hit the lower middle class. When all inputs like cement and steel are subject to the GST and when renting of immovable property is also subject to the GST, there is no justification in disallowing GST on the ground that the houses which are constructed are immovable property.

At the same time, alcohol was kept out of the GST because of political compulsions and because it is a substantial source of revenue for most states. They would not have parted with the right to levy taxes on potable alcohol and without this concession the GST would not have been possible.

Gainers and losers

At present, it is still uncertain as to who will gain or lose in the long run from this major tax reform. It is likely that large sectors may benefit because of input credit on both goods and services and elimination of interstate trade barriers. This is a theoretical advantage but may get partly affected because of complex legal structures. For example, the e-way bill may create problems in transportation which will offset any benefit that has arisen because of abolishing octroi/entry tax or check posts. At present, the informal sector units are affected by the GST scheme as they do not have the capability of electronically complying with complex procedural requirements. Further, serial classification disputes are also likely to arise because of multiple tax rates.

Simplifying the tax system

The tax system will have to be simplified; the present complex system cannot continue. There is already an indication that multiple tax rates will have to be reduced and the maximum rate has to be brought down. Unless there is the procedural simplification, the compliance costs will become quite heavy. There is a need to eliminate several provisions which do not serve any purpose. For example, the need to file three monthly returns is a provision which does not exist anywhere in the world and there is no reason why Indian businesses should be burdened with this onerous requirement.

Are we ready for GST?

India was not ready for GST on 1 July 2017. It would have been better if the GST had been introduced on a trial basis or like a pilot project and then suitably amended to ensure a relatively painless transition to the new regime. Unfortunately, the entire nation was required to shift to a completely new regime which was procedurally complex. There was inadequate electronic infrastructure both with the assessees as well as the government. Further, frequent changes in the rules and rates of duty added to the difficulty in having a workable software system. It is hoped that these technical problems are sorted out in the next few months.

 

Originally Written By Mr Arvind Datar (senior advocate and legal scholar)
Source: Idea For India
Could the Government’s initiatives make GST a simple affair?

Could the Government’s initiatives make GST a simple affair?

Make GST Simple

It’s been barely three months since the introduction of the Goods and Services Tax (GST), the good and simple tax law has been further simplified. The Hon’ble Prime Minister Narendra Modi also stated that the decisions taken by the GST Council in its twenty-second meeting have evoked the mood of Diwali festival for taxpayers.

The government was flooded with several representations primarily from the exporters as well as Small and Medium Enterprises (SME) on the varied challenges faced by them in the first quarter of GST implementation. The trader community especially merchant traders/exporters were facing serious concerns on account of blockage of working capital and delayed refund of the taxes paid on export of goods or services. The taxpayers were finding it difficult to undertake compliances correctly due to system issues and they were puzzled by the complications in the return filing process, reverse charge on procurement from registered suppliers, etc.

Taking a note of the increasing dissent in the exporter and trading community, the GST Council has taken several decisions which are expected to benefit the exporters and SMEs and is intended to ease the compliance burden. Some of the key decisions taken by the GST Council especially for exporters include the extension of the upfront exemption from IGST on procurements available under various schemes such as advance authorisation, Export Promotion Capital Goods Scheme and 100% Export Oriented Units (EOUs). The exemption will apply to the procurement of goods whether imported or sourced indigenously. However, the said benefit is not extended to the procurement of services. As the contribution of services sector increases in the economy, the exporters would have rejoiced had the scheme extended to cover the procurement of services as well. Further, in the absence of any specific notification, it is not clear whether the service export units (such as Software Technology Parks of India /Service EOU) can avail the said exemption.

Another attempt made to alleviate the burden of working capital for merchant exporter was to reduce the GST rate on the procurements made by such exporters to a marginal rate of 0.1%. The GST Council has also announced that the refunds of the IGST paid on exports in the month of July 2017 will be paid/cleared from 10 October 2017 and that for the month of August 2017 will be cleared from 18 October 2017. The authorities also issued a Circular on 9 October 2017 clarifying the procedural aspects for grant of refund to exporters. Trade and industry will celebrate the festival of lights if the burden of working capital is made lighter by actual grant of refund within the timelines announced.

Also Read: GST composition scheme: GoM consensus on providing relief to small restaurants

Further, the decision to defer the compliance under the reverse charge mechanism applicable for procurements from unregistered suppliers till 31 March 2018 is a welcome relief. However, the trade expects that such reverse charge mechanism should be withdrawn completely and not deferred only for a few months.

Contrary to the industry demand for the abolition of the e-way bill system, the GST Council has decided to implement the same in a staggered manner from 1 January 2018 and on an all India basis from till 31 March 2018. The industry believes that given the stringent control and penal provisions for issuance of invoice/delivery challan for every movement of goods, the requirement for e-way bills could unnecessarily lead to additional compliance burden and not contribute to the ease of doing business in India.

Small enterprises can rejoice as the limit for composition scheme has been enhanced to INR1 crore in a move to provide relief to a large base of small taxpayers. Also, the SME sector has been granted the facility to furnish tax returns and tax payments on a quarterly basis instead of a monthly return/payment. However, all the taxpayers will have to file the monthly returns for the first quarter and the benefit of quarterly returns can be availed only from the quarter of October-December 2017. Thus, all taxpayers will have to experience the online matching concept and monthly return for the first quarter ending in September 2017.

Read: Are businesses really facing problems or is it just another political stunt with GST?

Unlike the erstwhile regime, the time of supply of goods also includes the receipt of advance and this has affected small dealers and manufacturers as they had to prepay the GST. Therefore, the GST Council has granted a waiver from payment of GST on receipt of advances. Now, small dealers and manufacturers having an annual aggregate turnover upto INR1.5 crore shall be liable to pay GST only on actual supplies of goods and not on advances received. This can also help eliminate the issue of non-availability of input tax credit albeit only for a small section of the taxpayers. Even the Tax Deducted at Source (TDS) and the Tax Collected at source (TCS) provisions are deferred till 31 March 2018.

Besides the above key measures, the GST Council has also rationalised the applicable GST rates for many products in line with the industry representation. The noteworthy items primarily include food items, unbranded ayurvedic/homoeopathy medicines, man-made and synthetic/artificial filament yarn, e-waste, etc.

Another crucial matter for the manufacturing sector is the uncertainty on the quantum of area-based incentives including incentives offered by states under the state industrial policy. Though recently a notification to the effect was issued in the public domain by the central government, the stand of state governments is not clear.

Read: Tracking the GST that you pay is now at your fingertips!

While some relaxations announced by the GST Council are a step in the right direction, however, the job is not yet done. These measures are primarily aimed at the SME sector and all other taxpayers who have an annual turnover of more than INR1.5 crore will still be required to comply with stringent compliance under GST. Besides this, there are several other challenges which the industry is facing especially with regard to a stabilisation of GSTN/technical glitches and it is expected that the GST Council will accord due importance to these issues to help ensure that the real intended benefit of GST is enjoyed equally by the trade and the consumer. These steps in a continuous dialogue between the government and trade can really make GST, in a true sense, a Good and Simple Tax.


Ease Your GST Filing & Invoice with XaTTaX GST Software

Source: Forbes India
GST composition scheme: GoM consensus on providing relief to small restaurants

GST composition scheme: GoM consensus on providing relief to small restaurants

GST compostion Scheem

In an extension of the relief measures taken by the Goods and Services Tax (GST) Council in its October 6 meeting, the Group of Ministers (GoM), constituted to make the composition scheme more attractive, broadly agreed to provide more relief for small and medium businesses in its first meeting held in Delhi on Sunday. The five-member committee is learnt to have agreed upon the need to reduce the GST composition rate for dhabas/roadside eateries/small restaurants, from the existing 5 per cent and also, have a differential GST rate for non-AC restaurants, a state finance minister who attended the meeting said.

Also, the GoM, convened by Assam’s finance minister Himanta Biswa Sarma, has agreed to invite representatives from the micro, small and medium enterprises (MSMEs) in the next GST Council meeting to incorporate their views while deciding on some more relief measures for the MSME sector.

“The broad consensus of the meeting was that there is a need to provide more relief to the smaller businesses. Tax rate for restaurants should be differential, such as the GST rate for restaurants, other than those in luxury hotels, should be lower than the existing 12 per cent (for non-AC restaurants). It was also discussed that the GST rate for restaurants under the composition scheme should be lower than (the current rate of) 5 per cent so that the dhabas/roadside eateries/small restaurants benefit from it,” the state finance minister cited above said.

The recommendations of the GoM regarding the composition scheme will be taken up in the next meeting of GST Council that is scheduled to be held early next month, the state finance minister said.

In its last meeting held on October 6, the GST Council had taken a slew of measures to significantly reduce the compliance burden of small companies and traders by allowing them to file quarterly returns instead of monthly submissions, expanding the scope of the Composition Scheme and making it easier for exporters to claim tax refund.

Also, finance minister Arun Jaitley had announced that the Council had decided to set up a Group of Ministers to “make the composition scheme more attractive”. The terms of reference for the GoM include examining whether turnover of exempted goods can be excluded from the total turnover threshold for levying tax under the Composition Scheme along with looking into the tax structure of different categories of restaurants, with “a view to their possible rationalisation/reduction”. The GoM will also examine if inter-state outward supplies of goods can be a part of composition scheme and if input tax credit can be allowed to registered taxpayers receiving inward supplies from composition dealers.

The measures taken for the MSME sector by the GST Council earlier this month included increase in the turnover threshold for Composition Scheme to Rs 1 crore as compared to the earlier turnover threshold of Rs 75 lakh. Composition scheme dealers have to pay GST at the rate of 1 per cent of the turnover, manufacturers at the rate of 2 per cent and restaurants at the rate of 5 per cent.

Read: Are businesses really facing problems or is it just another political stunt with GST?

The GST Council had also allowed assesses with turnover less than Rs 1.5 crore to pay taxes and file returns on a quarterly basis instead of monthly basis, starting from October-December quarter. The Council had also allowed small service providers to operate across multiple states without registering with the GST Network and had exempted exempt service providers with annual aggregate turnover less than Rs 20 lakh from obtaining registration even if they are making inter-state taxable supplies of services.

XaTTaX: Cloud and On-Premises Based GST Filing Software For India

Source: The Indian Express
Tracking the GST that you pay is now at your fingertips!

Tracking the GST that you pay is now at your fingertips!

GST Track Mobile

A mobile app to help consumers verify the rate of GST levied on the product they purchase, or the service they access, and to assist the tax authorities in the crackdown on enterprises retaining the tax they collect, is to be launched soon by the Telangana government.

The Commercial Taxes Department and IIT-Hyderabad have developed the TGST app and its beta version is available, Principal Secretary-Commercial Tax and Excise Somesh Kumar said here on Thursday.

Keep track of the GST you payExplaining the benefits, Mr. Somesh Kumar said a consumer needs to merely upload a photo of the bill issued to them by an enterprise on the app. The photo gets “automatically uploaded to the server and then (the bill) is processed by us. The consumer gets a feedback on whether the enterprise was enrolled under goods and service tax and was charging the correct rate.”

Read: Are businesses really facing problems or is it just another political stunt with GST?

It would bring in more transparency and act like a feedback mechanism. The app would also provide information on whether the enterprise had opted for the composition scheme under GST, he said. Firms that have opted for the scheme are not supposed to levy tax, including a hotel, Mr. Kumar said in an interaction with presspersons on the sidelines of the conference on ‘GST – Post Implementation Issues’. Earlier, addressing the conference organised by industry body Assocham, the senior official said it has been 100 days since the roll-out of goods & service tax and revenue income was improving. The GST Council, he added, was addressing issues concerning the exporters as well as small and medium enterprises. In two months, Rs 2,800 crore had been collected in the State, he said.

Additional Commissioner-GST (Rangareddy) Manjula D. Hosmani said at the conference that the government was aware and reacting proactively to the concerns related to GST. As of October 5, of the 2.21 lakh registered assessees under Goods & Service Tax, around 1.37 lakh had filed their GSTR-3B, she said, advising them to avoid last minute rush in filing returns. Former Chairman of CBEC S. Dutt Majumder said GST is a work in progress and the glitches were being addressed.


Ease Your GST Filing & Invoice with XaTTaX GST Software

Source: The Hindu
Are businesses really facing problems or is it just another political stunt with GST?

Are businesses really facing problems or is it just another political stunt with GST?

Are businesses really facing problems or is it just another political stunt with GST?

Lately, we hear a lot of criticism from all sections of the society, particularly the traders, who are clamouring about the tax burden, compliance difficulties, obstacles in doing business and so on. However, the Government has a different take on this (GST) , which does not support any of these claims.

As per the latest (July) statistics from the Government, you will be surprised to note that 40% of the assessees pay nil tax, while the remaining 60% did not have cash liability of over Rs. 33,000. Now, let’s get into details.

In the July month, almost 54 lakh businesses filed their returns out of which 40% have claimed ‘nil’ tax liability, without paying a single penny. That implies, around 22 lakh businesses did not even pay a single rupee of GST. Among the remaining 60% of the population or roughly around 32 lakh businesses, many did not have the cash liability and accordingly they have opted to avail the credits available for service tax or excise that they had paid, before GST was introduced on July 1. Within this figure, close to 70% had a tax liability between Rs. 0 – 33,000. However, a small figure comprising of just 10,000 companies or 3% accounted for a major GST share, i.e., 2/3rd of the GST that the Government has collected in the month of July.

Also read: Why a service provider needs to register for GST across several states

Current status of the registered buyers

According to Finance Minister, Arun Jaitley, at present, close to one crore businesses and service providers have been registered, wherein 72 lakhs have migrated from the previous tax era, while 25 to 26 lakh new taxpayers have been added. He further added that over 94-95% of the collections were mopped from large assessees (with the turnover of over Rs. 1.5 crores), who make up roughly 10% of the overall registered taxpayers.

Then, why this criticism?

One of the senior officials has quoted that everyone is simply seeking exemptions, but most are not paying taxes. Political parties, on the other hand, are blaming the government for its poor implementation for the problems being faced by several quarters of taxpayers. However, the government on its part has its own version of why criticism has been mounted from various quarters. One reason is that earlier several entity were out of the tax purview or simply evading taxes, but are now coughed up to pay taxes. The government also admitted that as of now there were low tax collections, but in near future, the government is planning to widen the base and create space in the future, thereby reducing the tax rates.

Concept paper to help in tailoring the GST rates

In the recently concluded meeting on GST, Jaitley said that the GST council has decided on how rates would be determined in the future. He added that as revenue increases and based on the revenue neutrality situation in the future, rates will be tailored, as per the Concept paper, which has been approved.

Need to know about the latest development in GST? Subscribe to our newsletter. Or need any help in filing tax returns? Talk to our experts at 8099512513 or email us at gst@xattax.in.


XaTTaX: Cloud and On-Premises Based GST Filing Software For India

Do you know why a service provider needs to register for GST across several states?

Do you know why a service provider needs to register for GST across several states?

Do you know why a service provider needs to register for GST across several states?

This is one of the tricky questions that often arises when businessmen tend to do business across multiple states or simply offer services across multiple states, apart from the state where they have been registered. There is lot of confusion on this (GST ) and this blog tries to address this ambiguity, using few practical scenarios.

Let’s take the first scenario. Assume that you are a service provider, who has operations in only one state. In such a scenario, GST is going to be quite easy for you, as you need to have a single registration from where you are operating. This way, you can ensure minimal compliance, apart from getting more input tax credit.

Now, let’s take another scenario, where you are offering services in other states, apart from the state, where you have been registered. Even in such a scenario, you are required to have only one GST registration pertaining to the state, where you have the registered office. Simply stated, you can operate with one GST registration, though you may be offering services in multiple states.

Also read: All about Goods & Services Tax

Now, let’s understand a typical scenario, where you would be operating across multiple states, apart from your home state. Or you may be on the verge of establishing an office in other states to expand your business. In such a scenario, you would be required to register in that particular state(s) as well, where you intend to open your office or expand your operations. This is quite cumbersome and complex, considering that you need to have an individual GST registration across each state, where you intend to operate.

In the pre-GST era, though your business might be operating in multiple states, you may still require a single registration, where you have established the office. However, in this post GST era, this single tax has been split that need to paid state wise. This becomes a headache for companies operating across multiple states; a typical example being the banking sector, which operates across Pan India. Though there have been requests to minimize this impact, till date, nothing much has materialized. Let’s hope for the best in the coming days that can ease the burden of multiple GST registrations.

Need advice on GST matters or help in smooth filing of GST returns to ensure timely compliance? Feel free to get in touch with our experts at 8099512513 or email us at gst@xattax.in. Also, to make you a better tax planer, we invite you to explore our state-of-the-art GST solution – XaTTaX that offers a host of benefits, apart from helping you in seamless tax filing.

 

GST rule changes: 12 things to know

GST rule changes: 12 things to know

The decision to reduce the compliance burden of small companies and traders, comes just two days after Prime Minister Narendra Modi address regarding concerns over implementation of GST.

Arun Jaitley : GST

Three months after the rollout of the indirect tax regime, the Goods and Services Tax (GST) Council, following a meeting on Friday, announced relief to small and medium businesses on filing and payment of taxes, and also eased rules for exporters and cut tax rates on 27 common use items.

After the meeting, Finance Minister Arun Jaitley said, “GST Council has considered the implementation experience of the last three months and gave relief to small traders… Compliance burden of medium and small taxpayers in GST has been reduced.”

The relief granted to small and medium enterprises comes after complaints of tedious compliance burden under the GST that was intended to be a simple indirect tax regime which replaced over a dozen Central and state taxes.

The decision to reduce the compliance burden of small companies and traders, came two days after Prime Minister Narendra Modi address regarding concerns over implementation of GST where he said that he had asked the Council to identify bottlenecks faced by small and medium enterprises.

Read: 100 days of GST: From launch to scope of reducing slabs, journey of the tax reform so far

Here’s the full list of recommendations made by the Finance Minister during the meeting:

Composition Scheme

1. The composition scheme will be made available to taxpayers having annual aggregate turnover of up to Rs. 1 crore as against the previous turnover threshold of Rs 75 lakhs. This threshold of turnover for special category States will be increased to Rs 75 lakhs from Rs 50 lakhs, while the turnover threshold for Jammu & Kashmir and Uttarakhand will be Rs 1 crore.

2. It has been decided that such People who are otherwise eligible for availing the composition scheme and are providing any exempt service(such as extending deposits to banks for which interest is being received), will be eligible for the composition scheme.

3. To make the composition scheme more attractive, a Group of Ministers (GoM) will be constituted to examine measures.

Relief for Small and Medium Enterprises

4. It has now been decided to exempt those service providers whose annual aggregate turnover is less than Rs 20 lakhs (Rs. 10 lakhs in special category states except for J & K) from obtaining registration even if they are making inter-State taxable supplies of services. This measure is expected to significantly reduce the compliance cost of small service providers.

5. To facilitate the ease of payment and return filing for small and medium businesses with annual aggregate turnover up to Rs 1.5 crores, a recommendation has been made that such taxpayers will be required to file quarterly returns in FORM GSTR-1,2 & 3 and pay taxes only on a quarterly basis, starting from the Third Quarter of this Financial Year i.e. October-December, 2017.

6. To benefit small businesses and substantially reduce compliance costs, the reverse charge mechanism under sub-section (4) of section 9 of the CGST Act, 2017 and under sub-section (4) of section 5 of the IGST Act, 2017 will be suspended till March 31, 2018 and will be reviewed by a committee of experts.

7. In order to mitigate inconvenience faced by small dealers and manufacturers, it has been decided that taxpayers having annual aggregate turnover up to Rs 1.5 crores shall not be required to pay GST at the time of receipt of advances on account of supply of goods. The GST on such supplies will be payable only when the supply of goods is made.

8. In order to remove the hardship being faced by small unregistered businesses, the services provided by a Goods Transport Agencies (GTA) to an unregistered person will be exempted from GST.

Other Facilitation Measures

9. After assessing the readiness of the trade, industry and Government departments, it has been decided that registration and operationalisation of TDS/TCS provisions will be postponed till March 31, 2018.

10. In order to give trade and industry more time to accustom itself with the GST regime, the e-way bill system will be introduced in a staggered manner with effect from January 01, 2018 and then will be rolled out nationwide with effect from April 01, 2018.

11. The last date for filing the return in FORM GSTR-4 by a taxpayer under composition scheme for the quarter July-September, 2017 will be extended to November 15, 2017. Also, the last date for filing the return in FORM GSTR-6 by an input service distributor for the months of July, August and September, 2017 will be extended to November 15, 2017.

12. Invoice Rules are being modified to provide relief to certain classes of registered persons.

Ease Your GST Filing & Invoice with XaTTaX GST Software

Source: Indian Express

 

These 4 errors in GST return form can make your return invalid

These 4 errors in GST return form can make your return invalid

 These 4 errors in GST return form can make your return invalid

From a large corporate house to a small business, everybody is busy in decoding the law of goods and service tax (GST) so that they can remain compliant and they do not have to pay the interest or penalties unnecessarily. However, it is easier said than done. The law of GST is so confusing that most of the taxpayers are committing mistakes while filing the GST returns.

As said, we have received a number of queries for resolving the mistakes committed in GST return from every quarter of the industry about the GST return including the multi-national companies (MNCs) and even government department.

Further, there are some mistakes, which could prove to be fatal for a smaller business or even for a large corporate house and hence, make sure you do not commit these four mistakes in GST return.

Error No1 – Making payment under wrong head of GST i.e. Central GST (CGST) instead of Integrated GST (IGST)

This is one of the asked queries of the taxpayers, as people are very confused between the three heads of GST i.e. IGST, CGST and State GST (SGST). Let us understand this query with the help of an example.

Example: The summary of GST of the ABC Ltd for September 2017 is as follows:

The summary of GST of the ABC Ltd for September 2017

The total liability of the ABC Ltd is Rs1.55 crore and the total ITC available to the company is Rs51 lakh. Hence, Rs1.04 crore needs to be paid to the government. This is what the ideal situation should be.

Also read: Most businessmen may be allowed to file GST returns quarterly

The mistake
Now, one can see that the total tax liability of ABC is Rs1.55 crore which is divided into three heads of GST. Now, at the time of payment of tax, the taxpayers are making payments under wrong heads, i.e. CGST instead of IGST and vice versa.Suppose, in our case, the payment of tax is wrongly made by the ABC as follows:

payment of tax is wrongly made by the ABC
Now, one can see that IGST has been paid less by Rs11,00,000 and CGST has been paid in excess by Rs11,00,000.The question by the taxpayer

Now the question of the taxpayer is that whether he can utilise the excess cash balance in CGST against the balance of IGST?
The solution to the above query

As per the legal provisions of GST, the excess balance in electronic cash balance cannot be utilised against any other head. For example, the excess balance paid for CGST cannot be utilised the liability of IGST.
Hence, in our case, ABC needs to pay the IGST again and keep the excess balance in CGST for future adjustments. Further, in case the person is not able to adjust the excess balance in CGST, then he may claim the refund of the excess balance in CGST.
The loss of working capital
Due to this error committed by the ABC, the amount of Rs11,00,000 get blocked in electronic cash ledger and due to this, the shortage of working capital for shorter duration may arise.

Error No2 – Entering wrong values under reverse charge

If by mistake you have entered values wrongly under reverse charge, then you really have performed a sin and the punishment for this is to pay the additional tax liability to the government.

Let us understand the concept of reverse charge. The government has notified certain cases where the recipient is liable to make payment of GST to the government. However, the important point is that the person has to pay the GST liability on a reverse charge from cash and not by input tax credit or ITC.
The mistake
Now, suppose ABC made a supply of Rs50,00,000 at 18% tax, which amounts to Rs9,00,000. Now, if ABC also enters this transaction under reverse charge wrongly, then the company shall be liable to pay additional Rs9,00,000.

Possible solution
The only solution to this problem is that one has to pay the additional tax since the return cannot be revised and claim the ITC of the tax paid because any tax paid under reverse charge can be claimed as input tax credit (ITC).

Error No3 – Entering exports value under the wrong item

This is a very important point for the exporters because if any mistake is committed at this step, then he might not able to claim the export benefits. Let us understand how exports are treated under GST.

Under GST, exports are zero-rated. Here zero-rated does not mean that exports are taxed at ‘0%’ rate rather it means that exports should be taxed at not, that is no tax on output and no tax on input.


Ease Your GST Filing & Invoice with XaTTaX GST Software

In other words, there are different types of supplies under GST:
Normal taxable supply: Any normal supply of goods or services, which carry a valid tax invoice and the tax has been calculated properly and shown in GSTR 1.
Exempted or nil rated supply: Nil rated supplies are those supplies, which are taxed at nil or ‘0% rate’. This is different from a zero-rated supply. Because in case of nil rated or exempted supply, the ITC is not allowed to the taxpayer.
However, in case of zero-rated supplies, all the tax paid on input is also refunded back to the customer.
Zero Rated supplies: Zero-rated supplies are supplies, which are zero taxed at both input and output. Zero-rated supplies include exports and supply to special economic zone (SEZ).

The Mistake

Taxpayers do not understand the above difference and hence they used the terms interchangeably. Due to this, they tend to enter values of exports against nil rated. As soon as values are entered against the nil rated supply, they become ineligible to claim the ITC as a refund and hence it can lead to disaster for an exporter.

Here is the screenshot of the GST return just to clarify where to enter the exports value:

GST return

Error No4 – Not filing the GST return if no sales

GST is not like income tax where no return is to be filed if no income is earned. Under GST law, if the GST registration is obtained then it is mandatory to file the GST return even if there is no turnover. If GST return is not filed one time, then there is a late fine of Rs200 per day.

Highest penalty if you forget to file nil return

Now, we will explain to you if you forget to file the GST return for one year and we assume that highest penalty is applicable.

The maximum penalty per return per month will be Rs10,000. Total returns to be filed each year under GST [(3 X 12) + (5 X 5)] X 10,000 = Rs4,60,000.

You can see that even if you do not earn even a single rupee, however, you forget to file the GST return, then you shall incur Rs4,60,000 as late fees.

We have tried to explain the four errors committed by the taxpayers more often and get them into trouble. Hence, through this article, we want to also recommend that if you are not fully aware of the GST law, then you should hire a professional to file GST returns.


XaTTaX: Cloud and On-Premises Based GST Filing Software For India

Source: Money Life
Filing GSTR-1 return using XaTTaX GST Software

Filing GSTR-1 return using XaTTaX GST Software

GSTR-1 Filing through XaTTaX GST Software

With GST filing around the corner, it becomes necessary for you to understand how to file your GSTR-1 return with simple steps using our state-of-the-art GST filing and reconciliation solution – XaTTaX.

  What is GSTR-1 return?

 GSTR-1 return needs to be filed by all individuals, who are registered under GST. The taxpayer needs to provide details of the outward returns (sales), upload and file the invoices with GSTN. The due date to file this return is 10th October 2017.

What do you need to report in your GSTR-1 return?

 As outlined earlier, GSTR-1 is a sales return and every tax payer has to mandatorily report the following set of information in this return:

  • Invoice summary that includes invoice types, credit notes and advance receipts
  • Summary of documents issued
  • Summary of HSN/SAC
  • Details of the turnover, which should be provided only once.

Now, let’s understand the procedure for filing the GSTR-1 return using XaTTaX:

  1. Login to XaTTaX as an accountant.

XaTTaX GST Software Login Page

Figure 1

  1. From the Home page, select the GSTIN that you want to access to direct you to the Dashboard.

Note: You can switch between different GSTINs from a single legal entity.

  1. In the Dashboard, you can view the analytics pertaining to various returns such as GSTR-1, GSTR-2, apart from other useful information such as list of activities, returns dates and XaTTaX updates.

XaTTaX GST Software Dashboard

Figure 2

  1. In the GSTR 1 – DATA IMPORT screen (appears when you click GSTR 1 -> Import in the left section), click Browse to choose the desired file and then click Import to import the GSTR-1 data in Tally or XaTTaX format (excel).

XaTTaX GST Software Dashboard GSTR 1

Figure 3

  1. Click Classify to classify the invoices into various categories such as B2B, B2C, etc and then click Submit for Approval.

 The invoices get routed to the manager for approval.

XaTTaX GST Software GSTR 1 Outward Transaction

Figure 4

  1. Once the manager approves the invoices, you can proceed to save, submit and file the GSTR-1 returns with GSTN.

This ends the process of filing the GSTR-1 return using XaTTaX, which is quite simple and ensures 100% security.

Also read: How to File GSTR 3B in Details and download GSTR 3B- Format.


XaTTaX: Cloud and On-Premises Based GST Filing Software For India

How to File GSTR 3B in Details and download GSTR 3B- Format

How to File GSTR 3B in Details and download GSTR 3B- Format

GSTR 3B return

GSTR 3B  is a simplified summary return and the purpose of the return is for taxpayers to declare their summary GST liabilities for the tax period and the discharge of these liabilities in a timely manner.

A normal taxpayer is required to file Form GSTR-1 & 2, GSTR-3 return for every tax period. In case of extension of due dates for filing of GSTR-1 and GSTR-2, GSTR 3B needs to be filed by them (in addition to the GSTR-3 return), as and when notified by the government.

Note:

  • Taxpayer has to submit GSTR 3B even if there is no business activity. (Nil Return).
  • Mismatch report will not be generated based on GSTR 3B rather the same will be generated only after filing of GSTR-1, 2 and 3 for the applicable tax period.
  • Amendment of GSTR 3B is not allowed.

 

Due Date For Filling Form GSTR 3B Return For August is 20th September

Sl. No. Month Last Date for filing of return in FORM GSTR-3B
(1) (2) (3)
1. August, 2017 20thSeptember, 2017
2. September, 2017 20thOctober, 2017.
3. October, 2017 20th November, 2017
4. November, 2017 20th December, 2017.
5. December, 2017 20th January, 2018

Download Excel Format – Donwload 3B Format

 

To create, submit, pay taxes and file GSTR 3B return, perform the following steps:

  1. Login and Navigate to GSTR 3B – Monthly Return page
  2. Enter Details in Section – 3.1 Tax on outward and reverse charge inward supplies
  3. Enter Details in Section – 3.2 Inter-state supplies
  4. Enter ITC Details in Section – 4. Eligible ITC
  5. Enter Details in Section – 5. Exempt, nil and Non GST inward supplies
  6. Enter Details in Section – 5.1 Interest and Late Fee
  7. Submit and Save GSTR 3B
  8. Enter Payment Details in Section – 6. Payment of Tax
  9. File GSTR 3B

Login and Navigate to GSTR 3B – Monthly Return page

1. Access the www.gst.gov.in URL. The GST Home page is displayed.

2. Login to the GST Portal with valid credentials.

3. Click the Services > Returns > Returns Dashboard command.

 

 

4. The File Returns page is displayed. Select the Financial Year & Return Filing Period (Month) for which you want to file the return from the drop-down list.

5. Click the SEARCH button.

 

 

6. The File Returns page is displayed. This page displays the due date of filing the returns, which the taxpayer is required to file using separate tiles.

In the GSTR 3B tile, click the PREPARE ONLINE button.

 

Note: The due date for filing GSTR 3B is displayed on this page.

 

 

The GSTR-3B – Monthly Return page is displayed.

 

 

There will be several tiles representing Tables to enter relevant details. Click on the tile names to provide requisite details, for the relevant tax period:

 

3.1 Tax on outward and reverse charge inward supplies: To provide summary details of outward supplies and inward supplies liable to reverse charge and tax liability thereon.

3.2 Inter-state supplies: To provide details of inter-state supplies made to unregistered persons, composition taxable persons and UIN holders and tax thereon.

4. Eligible ITC : To provide summary details of Eligible ITC claimed, ITC Reversals and Ineligible ITC.

5. Exempt, nil and Non GST inward supplies: To provide summary details of exempt, nil and Non GST inward supplies.

5.1 Interest and Late Fee: To provide summary details of Interest and Late fee payable.

6. Payment of Tax: To provide details of payment of taxes, interest and late fee.

Enter Details in Section – 3.1 Tax on outward and reverse charge inward supplies

To provide details of outward supplies and inward supplies liable to reverse charge, perform the following steps:

1. Click the 3.1 Tax on outward and reverse charge inward supplies tile.

 

 

2. Enter the Total Taxable value, Integrated Tax, Central Tax, State/UT Tax and Cess under respective nature of supplies column. In case of other outward supplies (Nil Rated, exempted ) and Non-GST outward supplies, the total taxable value imply the total values of such supplies, excluding taxes.

3. Click the CONFIRM button.

 

 

You will be directed to the GSTR-3B landing page and the 3.1 Tax on outward and reverse charge inward supplies tile in GSTR-3B will reflect the added data in a summary form. The taxpayer is advised to click on SAVE GSTR-3B  button at the bottom to save the data in the GST system, if he wants to exit at this stage and come back later to complete the filing.

 

Enter Details in Section – 3.2 Inter-state supplies

To provide details of inter-state supplies made to unregistered persons, composition taxable persons and UIN holders and taxes thereon, perform the following steps:

1. Click the 3.2 Inter-State supplies tile.

 

 

Supplies made to Unregistered Persons

2. In the section Supplies made to Unregistered Persons, from the Place of Supply (State/UT) drop-down list, select the place of supply.

3. In the Total Taxable Value field, enter the total taxable value for each State/UT.

4. In the Amount of Integrated Tax field, enter the amount of integrated tax. Please ensure that the integrated tax amount provided here do not exceed the integrated tax liability declared at (a) row in Table-3.1. Only integrated tax amount has to be declared, cess amount is not required to be mentioned.

5. Click the ADD button to provide details of such supplies for another state.

Note: Select the checkbox and click the REMOVE button to remove the data added. The system will accept only one entry for each place of supply. The details of tax paid on exports may not be entered here.

 

 

Supplies made to Composition Taxable Persons

2. In the section Supplies made to Composition Taxable Persons , from the Place of Supply (State/UT) drop-down list, select the place of supply.

3. In the Total Taxable Value field, enter the total taxable value for each State/UT.

4. In the Amount of Integrated Tax field, enter the amount of integrated tax. Please ensure that the integrated tax amount provided here do not exceed the integrated tax liability declared at (a) row in Table-3.1. Only integrated tax amount has to be declared, cess amount is not required to be mentioned.

5. Click the ADD button to provide details of such supplies for another state.

Note: Select the checkbox and click the REMOVE button if you want to remove the data added. The system will accept only one entry for each place of supply. The details of tax paid on exports may not be entered here. The information regarding supplies to composition taxable persons has to be based on the information available with the taxpayer.

 

 

Supplies made to UIN holders

2. In the section Supplies made to UIN holders, from the Place of Supply (State/UT) drop-down list, select the place of supply.

3. In the Total Taxable Value field, enter the total taxable value for each State/UT.

4. In the Amount of Integrated Tax field, enter the amount of integrated tax. Please ensure that the integrated tax amount provided here do not exceed the integrated tax liability declared at (a) row in Table-3.1. Only integrated tax amount has to be declared, cess amount is not required to be mentioned.

5. Click the ADD button to provide details of such supplies for another state.

Note: Select the checkbox and click the REMOVE button to remove the data added. The system will accept only one entry for each place of supply. The details of tax paid on exports may not be entered here. The information regarding supplies to UIN  holders has to be based on the information available with the taxpayer.

 

 

6. Once all details are added, click the CONFIRM button.

 

 

You will be directed to the GSTR-3B landing page and the 3.2 Inter-State supplies tile in GSTR-3B will reflect the total of taxable value and integrated tax as declared in the details table. The taxpayer is advised to click on SAVE GSTR-3B button at the bottom to save the data in the GST system, if he wants to exit at this stage and come back later to complete the Return filing process.

 

 

Enter ITC Details in Section – 4. Eligible ITC

To provide details of eligible ITC claimed, perform the following steps:

1. Click the 4. Eligible ITC tile.

 

 

2. Enter the Integrated Tax, Central Tax, State/UT Tax and Cess vales under respective ITC claimed/ ITC reversed/ Ineligible ITC heads.

3. Click the CONFIRM button.

 

 

You will be directed to the GSTR-3B landing page and the 4. Eligible ITC tile in GSTR-3B will reflect the total value of Integrated Tax, Central Tax, State/UT Tax and Cess net ITCs. The taxpayer is advised to click on SAVE GSTR-3B button at the bottom to save the data in the GST system, if he wants to exit at this stage and come back later to complete the filing.

 

 

Enter Details in Section – 5. Exempt, nil and Non GST inward supplies

To add values of exempt, Nil and Non GST inward supplies, perform the following steps:

1. Click the 5. Exempt, nil and Non GST inward supplies tile.

 

 

2. Enter the Inter-state and Intra-state supplies under respective Nature of Supplies head.

3. Click the CONFIRM button.

 

 

You will be directed to the GSTR-3B landing page and the 5. Exempt, nil and Non GST inward supplies tile in GSTR-3B will reflect the total value of Inter-state and Intra-state supplies. The taxpayer is advised to click on SAVE GSTR-3B button at the bottom to save the data in the GST system, if he wants to exit at this stage and come back later to complete the filing.

 

 

Enter Details in Section – 5.1 Interest and Late Fee

To add details of the Interest and Late fee payable, perform the following steps:

1. Click the 5.1 Interest and Late Fee tile.

 

 

2. Enter the Integrated Tax, Central Tax, State/UT Tax and Cess under Interest and Late fee heads. The late fee would be system computed based on the number of days elapsed after the due date of filing.

3. Click the CONFIRM button.

 

 

You will be directed to the GSTR-3B landing page and the 5.1 Interest and Late Fee tile in GSTR-3B total value of Integrated Tax, Central Tax, State/UT Tax and Cess. The taxpayer is advised to click on SAVE GSTR-3B button at the bottom to save the data in the GST system, if he wants to exit at this stage and come back later to complete the filing.

 

 

7. Once all details are added, click the SAVE GSTR-3B button at the bottom of the page to save the GSTR-3B details.

 

 

A success message is displayed on the top of the page that the data has been added successfully. The taxpayer is advised to save if he wants to exit after partially entering the data. Once all the details are saved, SUBMIT button at the bottom of the page is enabled.

Submit and Save GSTR-3B

8. Scroll down the page and click the SUBMIT button to submit the GSTR-3B.

 

 

9. A success message is displayed at the top of the page that the GSTR-3B is submitted successfully. Once you submit the data, data is frozen and you cannot change any fields in this return. The ITC and Liability ledger will get updated on submission.

Status of the GSRT3B is changed to Submitted.

Note: Scroll down the page. The “Payment of Tax” tile is enabled only after successful submission of the return.

 

 

Enter Payment Details in Section – 6. Payment of Tax

To pay the taxes and offset the liability, perform the following steps:

1. Click the 6. Payment of Tax tile.

Note: Tax liabilities as declared in the return along with the credits gets updated in the ledgers and reflected in the “Tax payable” column of the payment section. Credits get updated in the credit ledger and the updated balance is available and can be seen while hovering on the said headings of credit in the payment section.

 

 

2. Click the CHECK BALANCE button to view the balance available for credit under Integrated Tax, Central Tax, State Tax and Cess. The functionality enables the taxpayers to check the balance before making the payment for the respective minor heads.

 

 

The Check Balance page is displayed. The page lists the minor head wise balance available as ITC and Cash Balance. Click the OK button to go back to previous page.

 

 

3. Please provide the amount of credit to be utilized from the respective available credit heads to pay off the liabilities, so as the cash.

 

Note: If there is no/ less balance in Electronic Cash Ledger, create Challan make payment to update the balance in Electronic Cash Ledger. Click here to refer the FAQs and User Manual on Making Payment.

 

While providing the inputs please ensure the utilization principles for credit are well adhered otherwise system won’t allow for offset of liability.

4. Click the OFFSET LIABILITY button to pay off the liabilities.

 

A confirmation message is displayed. Click the OK button.

 

 

File GSTR-3B

11. Select the checkbox for declaration.

12.  From the Authorised Signatory drop-down list, select the authorized signatory.

13. Click the FILE GSTR-3B WITH DSC or FILE GSTR-3B WITH EVC button.

 

 

FILE GSTR-3B WITH DSC:

a. Click the PROCEED button.

 

 

b. Select the certificate and click the SIGN button.

 

FILE GSTR-3B WITH EVC:

a.  Enter the OTP sent on email and mobile number of the Authorized Signatory registered at the GST Portal and click the VALIDATE OTP button.

 

13. The success message is displayed. Click the OK button.

 

 

14. Scroll down the page and click the Back button.

 

 

15. The File Returns page is displayed. Select the Financial Year & Return Filing Period (Month) for which you want to view the return from the drop-down list.

16. Click the SEARCH button.

 

 

Status of the GSTR 3B return changes to “Filed”. You can click the VIEW GSTR 3B button to view the GSTR 3B return.

 

 


Ease Your GST Filing & Invoice with XaTTaX GST Software

Source: https://www.gst.gov.in/