Gst Presentation - CA Dinesh Singhal

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GST Private & Confidential 1GST Presentation Private & Confidential 1
Goods & Services Tax (GST)
Goods & Services Tax (GST)
CA Dinesh Singhal

Training Material
BRIEF OVERVIEW
TIME AND PLACE OF SUPPLY
VALUE OF SUPPLY
INPUT TAX CREDIT
Contents
REVERSE CHARGE MECHANISM
INVOICE, DEBIT/CREDIT NOTE

Invoicing
Present Indirect Tax Structure
GST and its Benefits
Basic Concepts under GST
Overview
Brief Overview

Present Indirect Tax Structure
The present indirect tax structure imposes various taxes on different taxable events/
transactions which is evident from the various indirect taxes, their respective laws,
regulations and rules.
CENTRAL
TAX
STATE
TAX
Excise Duty
Service Tax
Addl. Duty of Excise
Surcharge & Cess
CVD & SAD
VAT
CST
Purchase Tax
Luxury Tax
Surcharge & Cess
Entry Tax

GST was introduced in France way back in 1954 and after that nearly 160 countries
have moved to GST model.
Malaysia is the latest country which has implemented GST with effect from 1st April,
2015
India has opted for Concurrent Dual GST Model where both Centre and states would
levy taxes on both goods and services.
Apart from Concurrent Dual GST model, there are other models like National GST
Model (followed in Australia and China), State GST Model (followed in USA), Non-
concurrent Dual GST and Quebec model.
There would be no distinction between goods and services for the purpose of the tax
with common legislations applicable to both.
GST has been implemented with effect from 1st July 2017
Background of GST

01 Reduces transaction costs and unnecessary wastage
Single registration and a single compliance will suffice for both CGST and SGST and
assessment/ audit would also be done by only one authority. This would result into
reduction in transaction costs.
02 Removing cascading tax effect
Under GST, the input tax credit can be availed smoothly across the spectrum of goods and
services, thus reducing the tax burden on the end consumer and removing cascading
effect.
03 Single-tax applicable across India
This will help the business community to decide their supply chain, pricing modalities as
there would not be any tax consideration for deciding the supplier/ location of supply and
only the commercial rates/ quality would matter.
Reduces corruption
As the number of taxes reduces, so does the number of visits to multiple departments
reduces and further since most of the processes would be online and automated, there
shall be reduction in corruption.
04 Reduces Corruption
Why do we need GST ??? – Expected Benefits

Goods and Services Tax (GST) may be defined as
• “any tax on
• Supply of
• goods or
• services or both
• except taxes on the supply of the alcoholic liquor for
human consumption”
It’s a destination based consumption tax levied at
multiple stages of production and distribution of
goods and services, with taxes on inputs credited
against taxes on output.
Sectors outside proposed GST :
• 5 Petroleum products to be covered from future
date; - Crude, Petrol, Diesel, ATF and Natural Gas
• Alcohol fit for human consumption;
• Real Estate, leviable to state stamp duty;
• Electricity leviable to Electricity Duty
What is GST ???

Taxes under GST Applicability
Central GST “CGST” • To be levied by Centre on intra state supply of goods and services
• Implemented through CGST Act
• Would be paid to the account of Central Government
State GST “SGST” • To be levied by respective states on intra-state supply of goods and
services
• Implemented through respective SGST Acts
• Would be paid to the account of respective state Government
Union Territory GST
“UTGST”
• To be levied by respective Union Territories without legislature on
intra-state supply of goods and services
• Implemented through UTGST Act
• Would be paid to the account of UT administration
Integrated GST “IGST” • To be levied by Centre on inter-state supply of goods and services
• Implemented through IGST Act
• Would be paid to the account of Central Government
• Effectively it shall be sum total of CGST and SGST
GST Compensation Cess • To be levied by Centre on inter-state and intra-state supply of
selected goods and services (mostly sin and luxury goods)
• Implemented through GST (Compensation to states) Act and the
funds would be used to compensation the states towards the
revenue shortfall
Various Taxes under GST

Invoicing
Inter State or Intra State Supply
Dual Tax Structure under GSTPlace of Supply
Examples/Scenarios on Place of
Supply
Place of Supply

• GST is destination based tax i.e consumption tax, which means tax will be levied where
goods and services are consumed and will accrue to that state. Under GST, there are three
types of taxes viz. IGST, CGST & SGST and on the basis of determined ‘’place of supply’’, the
respective tax will be levied.
• Taxes under the GST laws would be imposed in the following manner :
✓ Intra-state supplies: Centre shall impose CGST and the respective state/UT shall
impose SGST/ UTGST; and
✓ Inter-state supplies: Centre shall impose IGST.
• It thus becomes imperative to define “intra-state supply”; and “inter-state supply”.
• Intra-State supply means any supply where the location of the supplier and the place
of supply are in same State
• Inter-State supply means any supply where the location of the supplier and the place of
supply are in different States
Place of Supply – Inter State or Intra State Supply

Place of supplyPlace of Supply – Dual Tax Structure under GST

Under GST Regime, the place of supply shall be the location where the goods or services
supplied/deemed to be supplied under GST Regime.
For levy of tax under GST, we need to check the place where the goods are supplied.
Place of supply
Goods Services
Specific Rules General Rule Specific Rule
Place of Supply – How to determine

Rules for determining place of supply are divided into two parts:
✓ General Rules
✓ Specific Rules
General Rules
• Where the goods are supplied to a registered person, then the place of supply shall be the
‘Location of such goods’.
• Where the goods are supplied to an unregistered person then place of supply shall be the
‘Location of goods’ if address on records is available, otherwise ‘Location of supplier of
goods’.
Specific Rules
• If Supply involves movement of goods, Place of supply shall be the location where the
movement of goods terminates for delivery to the recipient.
• Where the goods are delivered by the supplier to a recipient on the direction of a third
party, it shall be deemed that third person has received the goods and the place of supply
shall be the place of business of such person
• If Supply does not involves movement of goods, Place of supply shall be location of such
goods at the time of delivery to the recipient.
• Where goods are assembled or installed at site, the place of supply shall be the place of
such installation or assembly.
• Where goods are supplied on board a conveyance the place of supply shall be the
location at which such goods are taken on board
Place of Supply – For Goods

General Rules
• Where the services are supplied to a registered person, then the place of supply shall be the
‘Location of such service receiver’.
• Where the service are supplied to an unregistered person then place of supply shall be the
‘Location of service receiver’ if address on records is available, otherwise ‘Location of
provider of service’.
Specific Rules
• In relation to immovable property place of supply of service shall be the location of at which
the immovable property is located. Services shall include:
✓ services provided by architects, engineers, interior decorators
✓ by way of lodging accommodation by a hotel, inn, guest house including a house boat or
any other vessel
✓ any services ancillary to the services referred above
• The place of supply of restaurant and catering services, personal grooming, fitness, beauty
treatment, health service including cosmetic and plastic surgery shall be the location where
services are actually performed.
Place of Supply – For Services

• The place of supply of services in relation to training and performance appraisal to
✓ a registered person, shall be the location of such person
✓ otherwise the location where the services are actually performed
• The place of supply of services provided by way of organizing an event shall be the place
where the event is actually held.
• The place of supply of services by way of transportation of goods, including by mail or
courier to,
✓ otherwise it shall be the location at which such goods are handed over for their
transportation.
• The place of supply of passenger transportation service to
✓ Otherwise it shall be the place where the passenger embarks on the conveyance for a
continuous journey
• The place of supply of services on board a conveyance shall be the location of the first
scheduled point of departure of that conveyance for the journey.
Place of Supply – For Services

Place of supplyPlace of Supply – Examples/ Scenarios
Situation Classification Nature of Tax
Location of supplier and place of
supply in different states/UT or
state & UT (Goods)
Inter- State IGST
Supply of Goods imported into
the territory of India till they
cross custom frontiers
Imports IGST (CVD)
Location of Supplier and Place
of supply in different states/UT
or state & UT (Services)
Inter- State IGST
Supply of services imported into
India
Imports IGST (RCM)
Location of supplier in India &
Place of supply outside India
Exports IGST (Zero Rated)
Location of supplier and place of
supply in same state/UT (Other
than above)
Intra State CGST+ SGST/UTGST

Invoicing
Time of Supply of Goods
Time of Supply of Services
Time of Supply
Time of Supply

The time of supply of goods shall be the earliest of the following:
✓ The date of issue of invoice by the supplier or the last date on which he is required
to issue the invoice under section 31(1) i.e. before delivery of goods.
✓ The date on which supplier receives the payment with respect to such supply or
*The date on which supplier receives the payment shall be earlier of :
 The date on which the payment is entered in his books of accounts or
 The date on which the payment is credited to his bank account
Time of supply
Illustrations - Time of Supply
Cases Invoice Date
Invoice Due
Date
Payment entry
in supplier’s
books
Payment
credited to
bank
account
Time of
Supply
Invoice raised
before removal 10.10.2017 20.10.2017 26.10.2017 30.10.2017 ?????
Advance Received 30.10.2017 20.10.2017 10.10.2017 30.10.2017 ?????
Time of Supply- for Supply of Goods

Basic Conditions for taking Input tax creditThe time of supply of services shall be the earliest of the following:
✓ If invoice is issued within the prescribed period then then the date of issue of invoice
or date of receipt of payment whichever is earlier; or
✓ If invoice is not issued within the prescribed time, then the date of completion of
provision of service or date of receipt of payment whichever is earlier; or
*The date receipt of payment shall be the date earlier of:
• Date on which payment is entered in the books of account of the supplier or
• Date on which payment is credited to his bank account, whichever is earlier.
*The period prescribed for issuance of tax invoice, under Invoice Rules, will be 30 days from
the date of provision of services.
Time of Supply- for Supply of Services
Cases Date of Invoice
Date of
Completion of
Service
Date of
Receipt of
Payment
Time of
Supply
Invoice issued before due
date 15-07-2017 21-07-2017 18-07-2017 ?????
Invoice not issued in due
date 15-09-2017 18-07-2017 25-07-2017 ?????

Time of Supply- Reverse Charge
Reverse
Charge for
Supply of
Goods
Reverse
Charge for
Supply of
Services

Invoicing
Valuation of Supplies- Normal
Case
Valuation Rules
Value of Supply
Value of Supply

• The value of a supply of goods and/or services shall be the
✓ transaction value, that is the price actually paid or payable
✓ For the said supply of goods and/or services
✓ where the supplier and the recipient of the supply are not related and
✓ the price is the sole consideration for the supply.
Transaction value shall include
*Incidental expenses such as, commission and packing, charged by supplier to recipient of a
supply.
*Any discount or incentive that may be allowed after the supply has been effected.
*Any taxes, duties, fees levied under any law other than GST Laws, if charged separately by
supplier.
*Any Interest or late fee or penalty for delayed payment of consideration.
Value of Supply- Transaction Value

• Where price is not a sole consideration (In order)
• be the open market value (OMV) of such supply,
• If OMV is not available, be the sum total of consideration in money and value of
such consideration which is not in money, if available.
• be the value of supply of goods or services or both of like kind and quality.
• Value shall be one hundred and ten percent of the cost of
production/manufacture/acquisition or provision of such services.
• Otherwise, value shall be determined using reasonable means consistent with the
principles and general provisions of GST Laws.
• Where both the parties are related/ Related Party Transactions
• be the open market value (OMV) of such supply,
• If the OMV is not available, be the value of supply of goods or services of like kind and
quality
• Value shall be one hundred and ten percent of the cost of
production/manufacture/acquisition or provision of such services.
• Otherwise, value shall be determined using reasonable means consistent with the
principles and general provisions of GST Laws.
*Provided where the goods are intended for further supply as such by recipient, the supplier may opt for
the option of Ninety percent value of supply of goods or services. Sales- 10% of sales
*further provided that where the recipient is eligible for full ITC, value may be taken as the Invoice Value
Value of Supply- Valuation Rules
GST Private & Confidential 23
GST Presentation Private & Confidential 23

Input Tax Credit
What is Input Tax Credit ??
Blocked Credits under GST Regime
Existing Regime Vs. GST Regime
Input tax credit
Availability & Utilization of ITC
Other Important Provisions
Key Conditions
Input Tax Credit

Input Tax Credit
• Input Tax Credit is the backbone of the
GST Regime. GST is nothing but a value
added tax on goods and services
combined. It is these provisions of Input
tax credit that make GST a value added
tax at all points after allowing credit for
the inputs.
• ‘Input Tax‘ in relation to a taxable
person, means the Goods and Services
Tax charged on any supply of goods
and/or services to him which are used
or are intended to be used, during the
furtherance of business.
ITC- Introduction of Input Tax Credit

Input Tax Credit
ITC- Key conditions to avail Input Tax Credit

Input Tax Credit
ITC- Blocked Credits under GST
• Motor Vehicles used except when supplied in the usual course of
business or for providing taxable service of passengers, goods and
training/ driving skills.
• Goods or services used mainly for the purpose of personal use or
consumption of employees.
• Principal acquiring goods or services in works contract for
construction of immovable property except P&M.
• Principal acquiring goods or services wherein the property is not
transferred and are used in construction of immovable property
except P&M.
• Goods or services on which composition tax has been paid
• Goods or services used for private or personal consumption

Input Tax Credit
ITC- Blocked Credits under GST
• Sale of membership in a club, health, fitness center.
• food and beverages, outdoor catering, beauty treatment,
health services, cosmetic and plastic surgery;
• Rent-a-cab, health insurance and life insurance except the
following:
• Govt. makes it obligatory for employers to provide it to
employees.
• Goods/services are taken to deliver the same kind of
goods/services as output supply.
• Travel Benefits extended to employees on vacation such as
leave or Home travel concession.
• Goods lost, stolen destroyed, written off or disposed off by
way of gift or free samples.
• ITC is not eligible on invoice after filing of return for the
month of September or filing of annual return for the said
year whichever is earlier.

Input Tax Credit
Present Law GST Regime
Availment of capital goods credit No such condition
in installments/Partial Credit System
Wider negative list Trimmed negative list
Restriction / retention of credits in case Free flow of credits. No such restrictions /
of stock transfers or even CST Sales restriction
(C Form/ H Form)
No credit of CST spend on inter-State sale Credit of IGST paid on interstate supplies
No concept of online and Credits based on matching of invoices
meticulous matching of invoices
Eligibility based on use in factory; Eligibility based on use in course or
provision of output service in furtherance of business
central taxes
Capital goods defined with reference Broad based definition to include all
to headings, description etc. goods capitalized in account and used
in course or furtherance of business.
ITC- Existing Vs. GST Regime

ITC
CGST SGST IGST
IGST CGSTSGST IGSTCGST IGST SGST
ITC – Availability and Utilization of Input Tax Credit

Input Tax Credit
ITC- Other Important Provisions
APPORTIONED CREDITS
• The input tax credit used Partly for business purpose and partly for other purposes.
• The input tax credit used Partly for effecting taxable supplies and partly for effecting
exempt supplies.
ITC AVAILMENT
• The goods against an invoice are received in lots or installments, are eligible for input only
after receipt of last Lot/Installment.
• The recipient is also eligible for Input tax credit for GST paid by recipient under reverse
charge mechanism.
TIMELINES/DEADLINES
• If recipient fails to pay the amount of supply, including GST, to supplier within 180 days
from the date of issue of invoice, then amount equals to ITC availed needs to be payable
by the recipient along with Interest thereon.
• No one is allowed to take input credit of any supply of goods/services for a financial year
after the due date of furnishing of the return for the September of the subsequent
financial year i.e. 20th October or the actual date of filing of annual return whichever is
earlier.
• The most important deadline is that Input Tax Credit is allowed only if your supplier has
deposited the tax collected from you. So, every input credit you are claiming shall be
matched and validated before you can claim it.

Invoicing
Introduction to Reverse
Charge Mechanism
Reverse Charge
Reverse charge on supplies
from Unregistered dealers and
other supplies
Reverse charge Mechanism

Reverse charge- Introduction
• “Reverse charge” may be defined as a mechanism where the liability to pay tax is on the
recipient of supply of goods or services instead of the supplier of such goods or services.
• Reverse charge shall be applicable on goods as well as services under GST. Earlier goods
were exempt from this scheme, now the collection of GST will increase tremendously.
• The scheme of partial reverse charge under RCM, currently prevailing under the service tax
laws, would be discontinued under GST Regime.
• There is no threshold limit available for registration if RCM is applicable on such person. The
person has to be registered under GST irrespective of the aggregate limit.
• The recipient is required to raise a Self generated Invoice at the time of receiving the
services.
• The recipient paying tax on reverse charge basis, is required to issue a ‘payment voucher’ at
the time of making payment to the supplier.

Reverse charge- Introduction
• The liability under reverse charge can be discharged by cash payment only. It is not allowed to
pay GST, under RCM, by the utilisation of Input Credit under GST Regime.
• The recipient is required to upload the details on GST portal (Invoice wise) at the time of
payment.
• If payment is made within 60 days, the time of supply shall be the date of payment.
• The Input Tax Credit is available for the payment of GST under Reverse charge mechanism
provided block list.
• Inward supplies shall include supplies on which the tax is payable under reverse charge.
• It is mandatory to mention in the tax invoice whether the tax is payable on reverse charge.
• GST Compensation cess will also be applicable on Reverse charge mechanism.

Reverse Charge – Supplies from Unregistered Dealers
• All types of procurement of taxable goods or services by a registered dealer from
unregistered dealer shall be chargeable under reverse charge mechanism of GST Laws.
• Responsibility to issue self invoice for all the procurement availed from unregistered dealers.
Option has been grated to raise a consolidated invoice at the end of the month for all such
supplies received during the month.
• There is a small exemption granted, to the tune of Rs.5,000/- per day for total consolidated
purchases made during a particular day, of goods and services, from on or all unregistered
vendors in the day.
• Self assess HSN Code/SAC classification and the applicable rate of GST for such goods or
services procured from an unregistered person.
• This provision may spear up working capital requirements, classification disputes,
unwarranted litigations and additional cost for all types of businesses. This could dampen
businesses of unregistered dealers and either force them to voluntarily register.

Reverse charge- Other Supplies
Services : There are total twelve services specified by GST Council to be covered under reverse
charge mechanism of GST. Some relevant services are explained below:
• Import of Services where the person located in taxable territory i.e. service recipient is liable to
pay GST under RCM
• Service provided by GTA to any person (covered mostly all types of person)
• Sponsorship Services to any body corporate or partnership firm
• Service provided by Director to Company, Service provided by Insurance Agents and Legal
Services.
The following services are not in the list of reverse charge, which were in RCM under Service tax
Laws :
• Manpower Supply/Security Services, Works Contract services and Rent a Cab scheme service
Goods: GST Council notified goods like cashew nuts, Bidi wrapper leaves (Tendu Leaves), Tobacco
leaves, silk yarn, supply of lottery etc. to be covered under Reverse charge mechanism in GST Laws.

Invoicing
Time and Manner of Issuance
Types of Invoices/ documents
Content of an Invoice
INVOICE
Invoicing under GST

Time Limit for issue of invoice
Invoicing – Time and manner of Issuance of an Invoice
Manner of issue of invoice
*The serial number of the invoices issued during a tax period shall be furnished electronically through
common portal in Form GSTR-1
Cases Time Limit
Supply of Goods (Normal Case) On or before the date of removal/delivery
Supply of Goods (Continuous supply) On or before the date of issue of account
statement/payment
Supply of Services (General Case) Within 30 days of supply of services
Supply of Services (Continuous supply) As per dates agreed in contract otherwise on
receipt of payment or on completion of event/
milestone
For Goods For Services
The invoice shall be prepared in Triplicate:
• Original Copy for Recipient
• Duplicate for Transporter
• Triplicate for Supplier
The invoice shall be prepared in duplicate:
• Original for Recipient
• Duplicate for Supplier

How many Types of Invoices are there in GST??
Invoicing - Types of invoice
Tax Invoice (For charging GST) Bill of Supply (for not charging GST)
• When a registered taxable person supplies
taxable goods or services, a tax invoice is
issued.
• A tax invoice is important for availing the
GST credit.
• Tax invoice is a statutory document. Under
the GST law it is compulsory for a supplier to
issue an invoice.
• A Supplier may not issue a tax invoice if the
receiver is not a registered person and the
receiver does not require such invoice, and
shall issue a consolidated tax invoice for such
supplies at the close of each day in respect of
all such supplies.
• A bill of supply is issued in cases where:
• a registered person is a supplier of
exempted goods/services,
• if they have opted to pay GST under the
composition scheme.
• In either of these cases, the registered
person cannot charge GST to the buyer, and
hence there is no tax amount listed on the
bill.
• A bill of supply is a document of transaction
that is different from a normal tax invoice.
These bills do not contain any tax amount,
as input tax cannot be charged in these
cases.

Invoicing - Type of invoice
Receipt Voucher (Advance Receipt) Refund Voucher (Refund of Advance )
• As we know that GST is to paid on the
receipt of advances. The tax on the advance
amount is to be deposited with the
Government.
• In case any entity is receiving any advance
from its customer then such entity needs to
issue a Receipt voucher to the customer.
• If at the receipt of advance:
• The rate of tax is not determinable, the
tax shall be paid at the rate of eighteen
per-cent ;
• The nature of supply is not determinable,
the same shall be treated as Inter-state
supply.
• Where after receipt of advance and issuance
of receipt voucher no supply is made or no
tax invoice is issued, then the person
receiving the invoice may issue to the
person, who made the payment, a Refund
voucher against such payment.
Is Advance Receipt are taxable? Do we need to issue invoice for every advance receipt?

A payment voucher shall be issued by the person who is paying the tax on reverse charge
basis. Where the supplier is not registered person and he is providing the services to a
registered person, the registered person shall be liable for issuing payment voucher.
Payment Voucher
Revised Invoice
A registered person within thirty days from date of issuance of certificate of registration
issue a revised invoice for all the invoices issued between
• Effective date of registration
• Date of issuance of Registration certificate
Registered person may issue consolidated revised tax invoice in respect of all taxable supplies
made to a recipient who is not registered under the Act during such period.

A credit note will be issued where
• In original tax invoice taxable value exceeds actual taxable value
• In original tax invoice tax charged exceeds actual tax to be paid.
• Recipient refunds the goods to the supplier
• Services are found to be deficient.
Person issuing a credit note shall declare its details in the return for the month of issuance.
Credit Note
Debit Note
A debit note will be issue where
• In original tax invoice taxable value found to be less than actual taxable value.
• In original tax invoice tax charged is less than actual tax to be paid.

The tax invoice shall contain the following:
1. Name, address and GSTIN of the supplier
2. Tax invoice number (it must be generated consecutively and each tax invoice will have a unique
number for that financial year)
3. Date of issue
4. If the buyer (recipient) is registered then the name, address and GSTIN of the recipient
5. If the recipient is not registered AND the value is more than Rs. 50,000 then the invoice should
carry:
i. name and address of the recipient,
ii. address of delivery,
iii. state name and state code
6. Accounting code of services
7. Description of the goods/services
8. Total value of supply of goods/services
9. Taxable value of supply after adjusting any discount
10. Applicable rate of GST (Rates of CGST, SGST, IGST, UTGST and cess clearly mentioned)
11. Amount of tax (With breakup of amounts of CGST, SGST, IGST, UTGST and cess)
12. Place of supply and name of destination state for inter-state sales
13. Delivery address if it is different from the place of supply
14. Whether GST is payable on reverse charge basis
15. Signature of the supplier
Content of invoice
Invoicing - Content

CA Dinesh Singhal
(dinesh.singhal@snr.net.in)
CA Chirag Nagpal
(chirag.nagpal@snr.net.in)
For Any Query or
Assistance regarding
GST,
Please contact us:

Gurgaon
Email : snr@snr.net.in Website : www.snr.net.in
No 605, 2nd Floor, 62nd Cross,
5th Block Rajajinagar, Bangalore,
Karnataka- 560010 (India)
Tel. +91 80 42064178
110, Plot No. 56,
Institutional Area, Sector - 44,
Gurgaon – 122002, Haryana (India)
Ph: +91 124 4534650
BangalorePune
Office No. 5,Kalashree Apartment,
Opposite Bank of Maharashtra,
Karve Road,
Pune 411004 (India)
Ph: +91 20 25435788
A-15, Second Floor, Hauz Khas,
New Delhi- 110016(India)
Tel. +91 11 26856421, 41655801, 26855884,
Fax: +91 11 26567540
Delhi
❖ Locations

Gst Presentation - CA Dinesh Singhal

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