26 FAQ’s on GST covering Transition, registration, filing of returns and input tax credit
GST Act was passed by Rajya Sabha yesterday and today it is again presented at Lok Sabha. There are some more steps to go and hopefully it will be a legislation very soon. Our finance minister is expecting to roll out GST by 1st April 2017. There are so many queries and questions in the mind of professionals as well as taxpayers. Here we have tried to answer all of them in simple manner.
- What is GST?
GST stands for Goods and services tax going to be the largest taxation revolution in India after independence?
- Which taxes it will replace?
GST will subsume two types of taxes state taxes and central taxes.
Central taxes to be subsumed by GST
- Central Excise duty
- Additional excise duty
- Service tax
- Medicinal and toiletries preparation Act
- Special additional duty of customs (Levied on imports in lieu of VAT/CST)
- Countervailing duties (on imports in lieu of Excise duty)
- Central surcharge and cess related to supply of goods and services.
State taxes to be subsumed by GST
- Value added tax/sales tax
- Entertainment tax (unless it is levied on local bodies)
- Luxury tax
- State surcharge and cess to the extent they are related to supply of goods and services.
- Entry tax not in lieu of Octroi
- Tax on Lottery , betting and Gambling
- Why it is bought in to India?
There were variety of taxes and complex Law prevailing in India. Every state had their own rules and regulations and taxpayer have to suffer a lot because of that. There were taxes not available for set off with each other. GST was introduced to remove all those difficulties and make the process of tax simple and smooth.
- What are the types of taxes one may need to pay under GST?
There will be basically three version of same tax which are a) Central Goods and services tax (CGST) b) State goods and services tax (SGST) , c) Integrated Goods and services tax (IGST).
- What is the expected rate of GST?
Expected rate of GST will be 18%.
- How do I get registration for GST if I am an existing VAT/service tax /Central Excise payer?
For existing registered businesses no need of any formality. Their data will be migrated to the new portal formed for GST. In case of any missing information they will be asked to provide. Department have already collected most of missing information. Thus the existing taxpayers will be automatically get registered under GST.
- How do I get a fresh registration?
It is very easy to get a fresh registration under GST. You need you PAN/Adhar and mobile number and you can get register online on GSTN portal. Once you will be registered a number GSTIN of 15 digits will be generated. It is a combination of state code ad 10 digit PAN. Within 3 days of generation of GSTIN dealer will be deemed registered. Current system of inspection will stop and post registration verification will be only for risk based cases.
- What is the frequency of returns?
Returns under GST will be filed monthly. Annual return will be filed annually.
- When I need to file my returns if I opt for composition scheme?
Small taxpayers opting for composition scheme will be able to file their return quarterly. Due date for filing of return will be 18th of next month to the end of quarter.
- Which return I need to file if I am a non-resident?
Non-resident taxpayer need to file their return by the end of registration.
- What is the due date for various returns?
| Normal Taxpayer including Casual taxpayer | GSTR 1 | For outward Supplies | 10th of Next month |
| GSTR 2 | For inward Supplies | 15th of Next Month | |
| GSTR 3 | Consolidated monthly return | 20th of Next month | |
| GSTR 8 | Annual return | 31st December of next FY | |
| Compounding Taxpayer | GSTR 4 | Quarterly Return | 18th of month next to quarter |
| GSTR 8 | Annual return | 31st December of next FY | |
| Non resident foreign taxpayers | GSTR 5 | Periodic Return | Last Day of registration |
| Input service distributor | GSTR 6 | Return for ISD | 15th of next month |
| GSTR 8 | Annual return | 31st December of next FY | |
| Tax deducted at source | GSTR 7 | Return for Tax deducted at source | 10th of next month |
- Which return I need to file if I am a casual trader?
Casual trader will file their in the same way as a normal taxpayer will file in form GSTR 1, GSTR 2,GSTR 3 and annual return.
- When I need to file Annual return?
Annual return will be file by all the taxpayers except non-resident taxpayers up to 31st December of the next financial year.
- What information I need to fill in GSTR-1?
In GSTR 1 the details of supplies made will be given by the services provider. It will be file up to 10th of next month. (Click here for details)
- What information I need to fill in GST-2?
In GSTR 2 details of inward services will be given. Details already filled by services provider/Goods seller under GSTR 1 will be auto populated and services receiver /Goods buyer can confirm those invoices and they can also enter the new invoices if they have their hard copies or services delivered. (Click here for details)
- What information I need to fill in GSTR-3?
Details of interstate/intrastate supplies made and received will be auto populated from GSTR 1 and GSTR 2 here we will need to reconcile entire data. (Click here for details)
- What information I need to fill in Annual return?
Annual return is the reconciliation of data provided in GST returns with financial statements prepared by the dealer.
- When I don’t need to file annual return?
A non-resident foreign taxpayer don’t need to file annual return
- How I can pay the taxes under GST?
Under GST an online portal will be developed and payment of all taxes will be online via that web portal.
- What are the taxes I need to pay?
Basically there may be three types of payments under GST CGST, SGST and IGST.
- How I will be able to avail credit of taxes I paid?
Under GST three taxes will be paid CGST, SGST and IGST. Taxpayer will be able to take credit of all of them but credit of CGST will be used for the payment of CGST and IGST, and SGST will be used for payment of SGST and IGST, IGST can be used to make payment of all IGST , CGST and SGST. He we can say that
CGST can be paid by CGST and IGST
SGST can be paid by SGST and IGST
IGST can be paid by CGST, SGST, and IGST
Credit of CGST can’t be used for payment of SGST and vice versa
- What taxes I need to pay if I am an Importer?
The Additional Duty of Excise or CVD and the Special Additional Duty or SAD presently being levied on imports will be subsumed under GST. As per explanation to clause (1) of article 269A of the Constitution, IGST will be levied on all imports into the territory of India. Unlike in the present regime, the States where imported goods are consumed will now gain their share from this IGST paid on imported goods.
- What tax I need to pay for sale/services within my state?
Intra state sale will attract both CGST and SGST
- What taxes I need to pay for interstate sales?
For interstate sale IGST will be payable credit to the respective states will be given by central government.
- What credit will be available for me if a dealer sells to a dealer within same state?
In case of a supply of goods or services within a state CGST and IGST will be payable and ITC of both taxes will be used for their respective payments. i.e CGST will be available for payment of CGST and SGST will be available for payment of SGST.
- What credit will be available to me if a manufacturer sells to a Dealer?
AT present a manufacturer can’t claim credit of Excise duty on manufacture of goods with the VAT/CST on sale of Goods but in GST they will be able to claim credit of CGST and SGST paid on purchase of input.
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CA Shafaly Girdharwal
CA
New Delhi, India
CA Shaifaly Girdharwal is a GST consultant, Author, Trainer and a famous You tuber. She has taken many seminars on various topics of GST. She is Partner at Ashu Dalmia & Associates and heading the Indirect Tax department. She has authored a book on GST published by Taxmann.
