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Mandatory to mention 4/6-digit HSN/SAC Code w.e.f. April 1, 2021

Mandatory to mention 4/6-digit HSN/SAC Code w.e.f. April 1, 2021

The Central Board of Indirect Taxes (CBIC) issued Notification No. 12/2017-Central Tax dated June 28, 2017, to show specified digits of Harmonised System of Nomenclature (HSN)/ Service Accounting Code (SAC) Code on raising of tax invoices for supply of goods or services as under:

Subsequently, the above notification was amended vide Notification No. 78/2020 – Central Tax, dated October 15, 2020 to mandate 4/6- digit HSN/SAC Code on supply of goods or services on the tax invoices w.e.f. April 1, 2021:

Further, a proviso was inserted to provide that 4- digits of HSN Code is optional in respect of supplies made to unregistered persons i.e., B2C supplies for a registered person having aggregate turnover upto INR 5 crores in the previous financial year.

Thereafter, Notification No. 12/2017-Central Tax dated June 28, 2017 was again amended vide Notification No. 90/2020 – Central Tax, dated December 01, 2020 to provide for class of supply- ‘Chemicals’ whose HSN Code are required to be mentioned at 8-digit on the tax invoices.

Further, it is to be noted that the above changes of mentioning 4/6 Digit HSN/ SAC code, as applicable, are also required to be captured in Table 12 of Form GSTR-1 (i.e., details of outward supplies of goods or services) and therefore, corresponding changes are made in the same.

Furthermore, it is very important to mention the correct HSN/ SAC Code on the tax invoices and Form GSTR-1 as penalty of INR 50,000/- (INR 25,000/- each for CGST and SGST) can be levied for non-mentioning or mentioning wrong HSN/ SAC Code under Section 125 of the Central Goods and Services Tax Act, 2017 (i.e., General penalty).

However, it is to be noted that there are many disputes w.r.t. classification of the various goods and services like sanitizers, railway parts, fryums etc. Further, the disputes are also going on as to whether classification as per Notification No. 1/2017- Central Tax (Rate) dated June 28, 2017 (“Goods Rate Notification”) should be in line with explanation (iii) and (iv) of said notification vide which it is provided that “Tariff item”, “sub-heading” “heading” and “Chapter” in the Goods Rate Notification shall mean tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (“CTA”) and that rules for the interpretation of the First Schedule to the CTA including the Section and Chapter Notes and the General Explanatory Notes would be apply to the interpretation of the Goods Rate Notification which provides only 1,208 goods approx. as against more than 12,000 products under First Schedule of the CTA.

Source: Taxguru.

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Roll-out of new, simplified GST return forms deferred

Roll-out of new, simplified GST return forms deferred

The pilot project envisaged for rolling out simplified monthly GST return forms from April 1 has been deferred and the new forms would be made available once they the notified and the software is ready.

The GST Council had in July last year decided that the simplified GST return forms — Sahaj and Sugam — would be rolled out on a pilot basis from April 1, 2019, while mandatory filing across the country would kick in from July.

In July last year, the Central Board of Indirect Taxes and Customs (CBIC) had come out with the draft GST returns forms and sought comments from stakeholders.

Under the new return filing format, taxpayers who have no purchases, no output tax liability and no input tax credit in any quarter of the financial year would have to file one ‘Nil’ return for the entire quarter. Facility for filing a quarterly return shall also be available by an SMS.

The new return filing format would replace the current requirement of filing final sales return GSTR-1; but as per the plan, summary sales return GSTR-3B would continue for some time.

“The pilot project of new return filing has been deferred. The new date would be decided. The forms would be notified first; following which, the pilot would be launched. Systems are being developed for the new forms,” an official said.

Small taxpayers, with a turnover of up to Rs 5 crore in the last financial year, can file a quarterly return with monthly payment of taxes on a self-declaration basis.

The return form ‘Sahaj’ is for businesses which make supplies to only consumers (B2C). It includes details of outward supplies and inward supplies attracting reverse charge as well as a summary of inward supplies for claiming an input tax credit (ITC).

Also, such B2C businesses will have to show harmonized system nomenclature (HSN)-wise summary of supplies and interest and late fee liability details along with payment of tax and verification. HSN is a code number to specify a particular product.

Besides, businesses making supplies to both businesses (B2B) and consumers (B2C) have to file returns form ‘Sugam’. It includes a summary of supplies made and tax liability, a summary of inward supplies for claiming ITC, along with details of interest due and tax payment.

When goods and services tax (GST) was rolled out from July 1, 2017, a three-stage monthly return filing system was set up — GSTR-1 (sales return), GSTR-2 (purchase return) and GSTR-3 (final returns based on GSTR-1 and 2 matching).

However, with businesses facing trouble, the GST Council decided in November 2017 to keep filing of GSTR-2 and 3 in abeyance. It also introduced a simpler GSTR-3B to facilitate easier return filing and tax payment.

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Source: Money Control.
How to file GSTR-9: Preparing the first-ever annual return for financial year 2017-18

How to file GSTR-9: Preparing the first-ever annual return for financial year 2017-18

The filing of the first annual return for FY 2017-18 is due in roughly three months. It covers a period of nine months from July 2017 to March 2018, as against twelve months in a financial year. But many taxpayers still dread the preparation of annual return forms because the declaration of information in the annual returns has multiple implications.

The last date has been extended to June 30, 2019, but it is important to know that GST Annual returns in GSTR-9, GSTR-9C or GSTR-9A cannot be revised once filed. Moreover, any incorrect information can attract tax demands and interest or even penalties; leave alone the long-term litigations that can follow years later.

GSTR-9 is an annual summary of the sales, tax paid thereon, purchases, input tax credit (ITC) claimed, ineligible credits, demands and refunds. If the form was just a replica of the monthly GSTR-3B summarised at a yearly level, it would have been an easy task. Using monthly GSTR-3Bs already filed by a taxpayer, the annual form could be auto-populated for the twelve months of the financial year. However, being the first and perhaps the last GSTR-9 format under the present set up of GSTR-1 andGSTR-3B, every taxpayer must gear up to make an accurate declaration of transactions.GSTR-9 auto-populates two fields. An option to auto-fill from table 4A of GSTR-3B is available to report the ITC declared as per GSTR-3B in the Table 6A of the GSTR-9. Further, the annual summary ITC reflected in GSTR-2A is auto-filled in Table 8A of the GSTR-9. Rest of the fields must be taken care of by the businesses. Due to the decisions taken in the 31st GST council meeting, a taxpayer may have a GSTR-9 that is not exactly the sum of details reported in GSTR-1 or GSTR-3B. So, the taxpayer can now declare values as accounted in books for a particular transaction(s). Taxpayers must weigh the pros and cons of declaring a different figure that does not total up to the values as per GSTR-3B or GSTR-1 already filed for the specified period. These differences must have an explanation and any short payment of taxes at the end of the year must first be paid in cash in form DRC-03 after which the GSTR-9 must be filed.

The same council meeting had also addressed that irrespective of the month of filing, the table 8A (field that auto-populates GSTR-2A information) in GSTR-9 will reflect ITC as reported by all the suppliers of a tax filer. For invoices raised in FY 2017-18. Amid these developments, CBIC issued orders by the end of December 2018. These hold significance for filers of FY 2017-18 who have not finished compliance and those who desire to make corrections or claim ITC to already-filed returns. These are:

  • Any GST returns for July 2017 to September 2018 if not filed earlier, can now be filed up to 31st March 2019 without late fees.
  • The input tax credit against purchase invoices of FY 2017-18 can be claimed before filing the GSTR-3B for the return period of March 2019
  • Portal has allowed amendments for B2B outward supplies which happened between July 2017-March 2018 in any GSTR-1 filed after September 2018, but up to March 2019.

With the extended time limit, taxpayers who are yet to submit GSTR-9 must proceed only after ensuring that all the GST Returns applicable to their business (GSTIN) during FY 2017-18 are filed. In addition to this, businesses can make necessary amendments related to FY 2017-18 in GSTR-1 or GSTR-3B being filed for present months till March 2019 return period and claim any missed but eligible ITC. Further, they can nudge their suppliers to upload invoice details in GSTR-1 for those genuine ITC of FY 2017-18 which were not appearing in GSTR-2A between period July 2017 to September 2018.

Taxpayers must reconcile data of FY 2017-18 throughout the year from July 2017 to September 2018 to identify differences if any between returns and between the book of accounts and returns. Advances paid or received must accordingly be adjusted at the year-end against invoices issued and balance must only be reflected. ITC reversals must be done at the end of the year as per CGST rules.

One may find it difficult to report the HSN wise summary for purchases in GSTR-9, where it is not maintained in the books of accounts while raising an invoice. Reporting of a particular HSN is required if the value under one HSN is more than 10% of the total value of all HSNs put together. This was never a requirement in GSTR-3B. Use of a tool along with the sorting and filter feature can help identify HSN and summarise for GSTR-9 details. Technology can thus come to the rescue of taxpayers, who want to do this efficiently.

All this can be easy with the help of a sturdy reconciliation tool that can easily identify mismatches, duplication of entries, match credit/ debit notes against respective invoices, correct the reporting into wrong tax heads, non-reporting and so on. Hence, taxpayers especially those subject to audit under GST must ensure that a certified reconciliation statement in GSTR-9C is obtained from the auditor who is a chartered accountant or the cost accountant as soon as possible and is filed along with GSTR-9.

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Source: Economic Times
GST Annual Return And Audit: Complexities Galore

GST Annual Return And Audit: Complexities Galore

In less than 30 days from now, over 1.15 crore taxpayers will have to file the Goods and Services annual return and audit forms. Made available by the government in September this year, the forms require businesses to not only consolidate information that they have been filing in monthly returns but also reconcile it. Both the forms are fraught with complexities and given that many companies have only now engaged auditors, it would be near impossible to meet the Dec. 31 deadline, experts told BloombergQuint.

GST Annual Return: Surprises

The annual return Form 9 is essentially consolidation of information that taxpayers have been filing via summary return Form 3B and outward supplies Form GSTR 1. It requires consolidation of outward and inward supplies, input tax credit, tax paid, GST demands and refunds.

There are two key areas of concerns in Form 9: requirement of HSN Code for input side and bifurcation of input tax credit or ITC.

The HSN Code Problem:

HSN codes are prescribed by the government to classify goods and services. So far, a buyer while filing Form 3B and GSTR 1 didn’t have to mention the HSN codes of the inputs—i.e. goods bought from a vendor. But the annual return form requires them to do this classification. This is new information altogether that needs to be given and companies’ ERP systems are not geared to give input classifications, Jigar Doshi, an indirect tax partner at SKP Business Consulting, pointed out.

Ritesh Kanodia, a partner at Dhruva Advisors questioned the need for this data.

“The liability for a taxpayer arises only on account of HSN of goods and services he sells and their rate of tax. The HSN of the vendor is not his liability. He merely takes credit for what he has paid for the inputs. He is not going to get into the debate of what is the HSN of the inputs, the rate of tax on them, etc.”

Ritesh Kanodia, Partner, Dhruva Advisors

So there is no need for him to get into the HSN for inputs and many companies won’t even have this data, he said.

ITC Bifurcation Problem: 

The annual return requires a three-way split of ITC availed into inputs, input services, and capital goods credits, Doshi said. But in the reporting so far, there was no concept of ITC bifurcation, Kanodia added. He explained the issue by way of an illustration—let’s say, we purchase some machinery. That is a fixed asset. So the credit has been taken as capital goods. If I purchase some inputs, credit has been taken as that and similarly for input services. What has been reported in Form 3B so far is the total figure.

“This data is not appearing anywhere else. Credit is available to me, I can consume that credit. Capital goods—I can understand—because there are certain rules around capital goods. But why do I need this bifurcation for input and input service?”

Ritesh Kanodia, Partner, Dhruva Advisors

That’s another layer of complication which has been added in the annual return form, he said.

GST Audit: Complexities

The complexities in the annual return form pale in comparison to what the audit process entails, both the experts pointed out.

Divided in two parts, the GST Audit Form 9C needs to be filed by a taxpayer who has an aggregate annual turnover exceeding Rs 2 crore. It requires companies to reconcile turnover declared in the financial statement and annual return, tax liability and tax paid, input tax credit availed and reported. Any liability arising out of non-reconciliation also needs to be specified.

This form is trying to dissect the entire financial statement—P&L and balance sheet— and compare the numbers on the outward-inward side and the tax-paid side with the annual return numbers which have been disclosed, Doshi said.

The objective is to assess whether you’ve paid GST on transactions recorded in the books of accounts and, if not, then the explanation for it needs to be provided, Kanodia said. “Similarly, on the credit side, whatever credits you have taken, there is an entry in the books of accounts. That needs to be reconciled with the annual return. So, reconciling rupee to rupee with the books of account is the objective of this exercise,” he added.

And the complexities are many:

Unclear Time Period: The filing threshold is based on gross turnover in a financial year, Kanodia said, but GST came in July. “You have lot of adjustments which happen in any financial accounting—for instance, unbilled revenue. Do I consider the beginning of the financial year or the beginning of July? There are lot of adjustments which need to be seen,” he added.

State-Wise Audit: Doshi explained that GST Identification Number is the basis for the audit. If a taxpayer has branches in five states and each has a separate GSTIN, then five audits need to be done. This would require GSTIN-level bifurcation of audited financial statements which most companies do not maintain, he said.

Reconciliation Issues: GSTR 1, which is filed at the state level, will need to be reconciled with the income and sales ledger at the company P&L level which is not available state-wise and it’s likely that the consolidated figure of different states’ GSTR 1 may not match with the annual P&L, Kanodia explained. This could be due to accrual entries, IND-AS, out-of-scope GST supplies, etc, he added.

“This may entail a line-item level analysis to find out unreconciled line items and ascertain reasons of such mismatch, which is time consuming. Availability of data in the right format is critical to carry out such reconciliations.”

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Source: Bloomberg Quint
Download Free – HSN Classification under GST E-Book

Download Free – HSN Classification under GST E-Book

Under Indirect Tax Laws, classification is the categorization of goods or services crucial to ascertain whether a subject matter is exigible to tax, exemption, the rate of tax etc. In GST regime, classification of goods has to be in accordance with Customs Tariff Act which is based on the Harmonized System of Nomenclature (HSN). The classification of services is based on the service code (tariff). Classification of goods or services is a complex procedure of ascertaining whether goods or services are composite, non-composite or mixed, and how to resolve competitive entries etc.

Also Read: Understanding HSN Codes and SAC Under GST

To provide some solution to these issues, the Indirect Taxes Committee of the ICAI has come out with “E-Handbook on classification under GST’. This e-publication inter alia covers meaning, need, principles/rules to be considered, steps to be followed etc. for aptly classifying goods/services. This e-handbook provides a deeper knowledge of provisions pertaining to Classification of goods and services under GST in a simplified manner along with relevant notifications issued and few judicial pronouncements.

Book Cover Following topics-

1. Introduction

2. Identification of Supply of Goods or Services

3. Classification of activities which are neither Supply of Goods nor Supply of Services

4. Identification of Composite Supplies or Mixed Supplies

5. Classification of goods as per Notification

6. General Rules of Interpretation

7. Classification Principles Evolved By Courts

8. Classification of Services as per Notification

Download Free e-book by ICAI on HSN Classification under GST

Understanding HSN Codes and SAC Under GST

Understanding HSN Codes and SAC Under GST

What is HSN Code in GST?

HSN stands for Harmonized System of Nomenclature. It is the codification of all the exchanging products into different segments with every section containing warez of comparable nature.

Every product or merchandise exchanged over the world are known by various names indialect contrasts. So also in IT-empowered multinational exchange, a special code is given to each class of tradable ware in view of its inclination and utilization. This arrangement and codification are known as HSN code that you will require to petition for your GST.

What is SAC Code in GST?

If there should arise an occurrence of administrations, for each kind of administration, gaveis given a bound together code for acknowledgement, estimation and tax assessment. These are known as SAC codes. In the present administration impose administration, SAC codes are now characterized by each sort of administration.

HSN / SAC  under GST:

Under Goods and Service Tax, the larger part of merchants should receive two-, four-, or eight-digit HSN codes for their products, contingent upon their turn over the earlier year:

  • Businesses with the turnover of not as much as Rs 1.5 crores won’t be required to utilize HSN codes for their wares.
  • Businesses with turnover between Rs 1.5 crores and Rs 5 crores should be required to utilize two-digit HSN codes for their wares.
  • Businesses with turnover equivalent to Rs 5 crores or more should be required to utilize four-digit HSN codes for their wares.
  • In the instance of imports/sends out, HSN codes of eight digits might be mandatory, as GST must be perfect with worldwide models. You can download the HSN codes and check your HSN code for your business in the GST site.
  • Small merchants under organization plan won’t be required to say HSN codes in their solicitations.
  • HSN will be specified in Invoice and said in the GST expense from points of interest, which will be transferred on the GST entrance.
  • Small organizations under synthesis plan won’t be required to specify HSN codes in their solicitations
  • At the season of enlistment/movement, the business citizen will be required to specify HSN code of the products he manages amid enrollment
  • Services will be named per the Services Accounting Code (SAC). There are Service bookkeeping codes issued by the government for Service charge. This is required to continue as before in GST administration also.


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GST regime: Classification of goods still a bane for traders

GST regime: Classification of goods still a bane for traders

GST regime : Traders

A month after the Goods and Service Tax (GST) came into force, trade and industry here is still grappling to understand the new structure. While some sectors have reported a slow down in sales, the classification of goods, which is yet to be properly understood, has been a bane for the trading community, trade and industry sources say.

The crucial food grains sector is still struggling to maintain pace even as traders have reported a drop in sales by almost 30%, said the president of the Bengaluru Wholesale Foodgrains and Pulses Association Ramesh Chandra Lahoti. “The new classification has been confusing. For example, a trader in pulses has to look out for dry leguminous seed classification, which is causing confusion,” he said, and added that they have been demanding simplification of language that can be understood by the trading community.

He said trade had been sluggish after GST, as many traders, unable to understand the new HSN codes stopped trading for a few days after the new tax regime kicked in. “About 50% of the traders in Yeshwantapur APMC, the largest wholesale foodgrain market in the city, do not have computers. They are still generating handwritten bills.”

Traders believe that the initial impact of the GST would be known when they file the first returns on August 20. An estimated 6.2 lakh trade and industry bodies have registered under GST in Karnataka so far. Under the earlier VAT regime, 5.6 lakh trade and industries had registered.

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Garment sector

For the garment sector, which employs one of the large force, the confusion on the tax over job work seems to have slowed down offtake. The former president of the Karnataka Hosiery and Garments Association Sajjan Raj Mehta said, “Most garment units involve multiple job works, including knitting, dyeing, printing, cutting, and embroidery. Instead of taxing job work, a uniform rate of 5% on the readymade garment will result in better understanding and compliance.”

Acknowledging that the classification under GST required more clarity, a member of the GST Advisory Committee, set up by the Karnataka government, B.T. Manohar said confusion still exists among the trade community and there needs to be clarity in tax rates too. Further, traders also need to understand the input tax credit well, he added. “However, for those who complied with VAT well, the first filing of returns under GST may not be a problem. Though there are problems now, we hope it to settle down in the next two to three months.

Many branded food produce turn unbranded

Many branded food produce have turned unbranded in the last one month. According to the president of the Bengaluru Wholesale Foodgrains and Pulses Association Ramesh Chandra Lahoti, at least 75% of the branded products have not been using a logo in order to escape from the 5% tax net. “In foodgrain business, a 5% margin is huge. It will be difficult for branded products to compete with unbranded ones that has 0% tax, he said, and added that a ₹5 to ₹7 difference per kg at the wholesale market will make a lot of difference in sale. “So many mills that were selling branded rice, pulses, wheat, aata, maida, and soji have not been using logos,” he said. According to Mr. Lahoti, they are expecting some relief during the next GST Council meeting.

‘Buisiness has been dull’

For some small businesses, the kicking in of GST regime has brought more than expected misery. “In the last one month, I have managed to raise just one bill that too for a few thousand. There has been almost no sale as wholesalers and retailers have refused to lift fresh stock owing to confusion and fear,” said a Bengaluru-based woman entrepreneur, who manufactures soft toys. With the “season” for soft toys starting in mid-August, she is anxious to sell her products that are piling up in her stock.

“Wholesalers are scared that I will raise a bill and hence are going slow. Business has never been so dull,” she said on condition of anonymity the entrepreneur, who chose to remain anonymous, said. While she has been in the soft toys manufacturing industry for the past 18 years, she has been an entrepreneur for the past four years.

According to her, running her business has become very difficult since she hires people on a piece-work basis. “If I do not give work to them, they will move on to other jobs. When business increases in the future, I may not be able to get the workers back. Rotation of money in business is almost not there in the last one month,” she said.

Inquiries with others running small businesses revealed that rotation of money that supported the continuation of businesses has come down drastically, hurting many in the supply chain. The former president of the Karnataka Hosiery and Garments Association Sajjan Raj Mehta acknowledged that much cash is not available in the supply chain.

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Source: The Hindu
GST: Call for clarity and reduction in tax rates by MADITSSIA

GST: Call for clarity and reduction in tax rates by MADITSSIA

GST: Call for clarity and reduction in tax fees

Demand for reduction of tax slabs and clarity on tax rates for several goods by entrepreneurs from micro, small and medium enterprises (MSME) dominated the dissemination meet on Goods and Services Tax (GST) organised by Madurai District Tiny and Small Scale Industries Association (MADITSSIA) here on Sunday.

Entrepreneurs from a variety of industries, particularly small and medium scale players like idly batter manufacturers, candy manufacturers, bakers and hollow blocks manufacturers, presented their grievances to Nirmala Sitharaman, Union Minister of State for Commerce and Industry, who chaired the meeting.

P. Paramanandam, representing the association for idly batter manufacturers, pointed out that there was no clarity on tax slab for idly batter under GST. “The list of Harmonised System of Nomenclature (HSN) codes released for GST for a variety of goods does not include idly batter. Hence, we fear that it will come under 18 % slab, which is the standard rate for non-listed items. Such a rate will be high for perishable goods,” he said.

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Pointing out that the business was an emerging sector with the participation of a large number of micro and small scale players, he appealed to Ms. Nirmala Sitharaman to recommend GST Council to provide tax exemption to the product irrespective of whether it was branded or not.

N. Pandi, president of Candy and Biscuits Manufacturers and Sellers Association, alleged that the GST Council had put the small-scale candy manufacturers and big brands with turnover of hundreds of crore on the same footing. “All of us are asked to pay 18 % tax. We want it to be brought down to 5 % for small scale and cottage industries,” he said.

Similar concern was raised by S. Anburajan, secretary of Indian Bakers Association, regarding the uniform tax slab fixed for small-scale players as well as top brands manufacturing cakes and biscuits.

“Top brands have fully automated manufacturing, which give more shelf-life to their produce. Ours is not,” he said.

Concerns were also raised by entrepreneurs dealing in recycled plastics, gunny bags, incense sticks, pickles, camphor, palmyrah sugar and others about high tax rates.

K.R. Gnanasambandan, past president, MADITSSIA, highlighted the need for the Tamil translation of list of goods for HSN codes to avoid confusion on a lot of products. L. Murari, president, appealed to the minister to address the issues so that the full benefits of GST could be realised.

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GST : Govt asks traders to issue advertisement about price hike post new tax regime

GST : Govt asks traders to issue advertisement about price hike post new tax regime


The government on Friday asked traders and businesses to immediately issue advertisements informing the public about increase in maximum retail price (MRP) on mass consumption products post implementation of GST.

To clear pre-GST stocks, the government had earlier this week allowed use of dual stickers reflecting the new rate alongside the old printed price of a product for three months.

Revenue Secretary Hasmukh Adhia said the law provides for indicating the maximum retail price (MRP) of a product clearly on every product.

With rates of some products undergoing change because of alteration in incidence of taxation involving over a dozen central and state levies unifying into the Goods and Services Tax, there is a requirement as per law to indicate the new rate clearly.

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Adhia said that to tide over the problem of changing printed MRP on unsold pre-GST stock, the government has allowed pastable stickers with new rates.

“I would appeal to traders that it is not a very difficult job to paste stickers. The sooner they do it, the better it is for them,” he said at the second GST Master Class in New Delhi.

For items of mass consumption, the revised MRP has to be advertised in two local newspapers.

“Supposing it (the commodity) is an item of mass consumption, then immediately the revised MRP should be advertised in newspapers. Inform the people through advertisements. And sooner they paste the revised MRP on the product (the better it is),” he said.

He, however, stopped short of stating the legal provisions that would apply in case of non-compliance.

Besides, to help businesses find the HSN code applicable for various commodities under the GST regime, the CBEC has launched on its website a search option by which they can find out the code by just typing the name of the product.

Harmonized System Nomenclature (HSN) code is used to classify goods for taxation purpose.

Adhia said that there are over 11,000 commodities and all of them have specific HSN codes which may run up to 8 digits in some cases.

“To make it easy for businesses, the CBEC has launched on its website a search option wherein businesses can just type the product they are searching for and get the HSN code,” Adhia said.

Businesses with turnover of up to Rs 1.5 crore need not quote HSN code in the invoices GST, but those above the limit will have to do so.

Adhia said there is no prescribed format that businesses have to follow while raising an invoice in the GST regime.

However, details like GSTIN of the trader and the amount of the bill would have to be clearly specified.

In a relief to traders, there is no compulsion on issuing a digitised bill, as a manual invoice will also hold good.

Adhia said that issuing an invoice is not necessary if the transaction is below Rs 200.

However, the trader needs to furnish an invoice in case the consumer insists on it or the transaction is B2B (business to business).

Further, if a business does not have GSTIN or provisional id, then it can transact business using the ‘bill of supply’.

Source: Firstpost
Here’s how you may draft a GST compliant bill

Here’s how you may draft a GST compliant bill


GST compliant bill

With GST, every invoice drafted would need to follow certain provisions and details. Some of it is new, and some basic, but what is clear that under GST a tax invoice would certainly need an innovative approach. From July 1, a tax invoice that a registered person needs to draft must be containing the following:

The basics
Every invoice should contain:
(a) name, address and GSTIN of the supplier. It should also have:
(b) a consecutive serial number, in one or multiple series, containing alphabets or numerals. It can also have special characters like hyphen, dash and slash or any combination that uses the above, but one that is unique for every financial year.
(c) date of its issue

Some details
It should also contain the:
(d) name, address and GSTIN or UIN, if registered, of the recipient;
(e) if such recipient is un-registered and where the value of taxable supply is Rs 50,000 or more, the invoice would need the name and address of the recipient and the address of delivery, along with the name of State and its code.
(f) Harmonized System of Nomenclature (HSN) code of goods or Accounting Code of services. This list is quite exhaustive and it is imperative that you quote the correct code from the list. You can find the list here .

 Greater description
The invoice should also contain
(g) description of goods or services. Along with this you would need to state:
(h) quantity in case of goods and unit or Unique Quantity Code;
(i) total value of supply of goods or services or both;
(j) taxable value of supply of goods or services or both taking into account discount or abatement;
(k) rate of tax (central tax, State tax, integrated tax, Union territory tax or cess);
(l) amount of tax charged in respect of taxable goods or services (central tax, State tax, integrated tax, Union Territory tax or cess);

Recipient details
When it comes to details of the recipient of the invoice it should contain details like:
(m) place of supply along with the name of State when the supply in the course of inter-State trade or commerce;
(n) address of delivery when it is different from the place of supply;
(o) whether the tax is payable on reverse charge basis; and
(p) signature or digital signature of the supplier or his authorized representative:

Manner of issuing invoice
One should note that in case of taxable supply of services, the invoice will be issued within a period of thirty days from the date of supply of service.
(1) The invoice shall be prepared in triplicate, in case of supply of goods, in the following manner:
(i) the original copy being marked as “Original for Recipient”
(ii) the duplicate copy should be marked as “Duplicate for Transporter”
(iii) the triplicate copy being marked as “Triplicate for Supplier”.
(2) The invoice should be prepared in duplicate, in case of supply of services, in the following manner: –
(i) the original copy being marked as “Original for Recipient”
(ii) the duplicate copy being marked as “Duplicate for Supplier”
(3) The serial number of invoices issued during a tax period can be furnished electronically through the Common Portal in FORM GSTR-1.



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