Key highlights of GST

Do you know about the GST(Goods and Service Tax). In a landmark decision, the parliament passed the much anticipated Goods and Services Tax.

Financial tax help

Composition Scheme

Composition Scheme is a simple and easy scheme under GST for taxpayers. Small taxpayers can get rid of tedious GST formalities and pay GST at a fixed rate of turnover.

Financial tax help

GST Refund

Under GST the process of claiming a refund is standardized to avoid confusion. The process is online and time limits have also been set for the same.

Important Points about GST in India

Do you know about the GST(Goods and Service Tax). In a landmark decision, the parliament passed the much anticipated Goods and Services Tax. The GST Bill was passed in the RajyaSabha on Monday with 203 votes in favour paving the way for a historic change in the dimension of India’s growth story. So Below are Most Important Points all about the GST in India.

  • Now, GST in simple terms means a uniform tax that will be implemented across the nation. Goods and Service Tax will replace all the indirect taxes that are levied by Central and State Governments.
  • The current committee headed by ArvindSubramaniam has recommended the three-rate setup for rolling out GST successfully. The panel has recommended that for goods that are meant for the poor, 12% GST can be levied. The panel has also suggested an 18% GST for all other common items and 40% for luxury items.
  • In this newly passed GST Bill or the Constitution (122 Amendment) Bill, 2014, the exemption list includes alcohol, petroleum and its products.
  • GST will enable the creation of the GST Council comprising the Union Finance Minister and members of the State Government. The Council will look into all monitor all issues relating to GST and suggest recommendations on improving the GST Bill. It will look into all factors such as taxes, exemptions and surcharges. The Council will decide the tax rate that will be levied by the Centre and the State.

Key Decisions Taken in the 25th GST Council Meet:

1. Late fee reduction:

  • For GSTR-1, GSTR-5, GSTR-5A  and GSTR-6 the late fees is reduced to Rs. 50 per day
  • In case of Nil return filed for GSTR-1, GSTR-5, GSTR-5A late fee is reduced to Rs. 20 per day

2. Cancellation of registration by voluntary registrants can be applied before expiry of 1 year from the date of registration

3.Cancellation of registration (REG – 29) by migrated taxpayers extended till 31st March 2018.

4. On successful implementation of e-Way bills, the E-way bill portal to be shifted  to ewaybillgst.gov.in

5. Certain modification to e-way bill rules to be notified soon.

6. Recommendations made by Handicraft committee has been accepted by the council: The rates are to be worked out later.

7.  GST Rates for 29 Goods and 53 Services have been reduced. These rates will come into effect from 25th January 2018.

GST Rate Changes for Goods:

Nil Rated Goods:

  1. Vibhuti
  2. Parts and accessories for the manufacture of hearing aids.
  3. De-oiled rice bran

Rates reduced from 28% to 18%

  1. Old and used motor vehicles [medium and large cars and SUVs] with a condition that No ITC is availed
  1. Public transport Buses that run on Biofuel

Rates reduced from 28% to 12%

For Old and used motor vehicles [other than medium and large cars and SUVs] with a condition that No ITC is availed

Composition Scheme is a simple and easy scheme under GST for taxpayers. Small taxpayers can get rid of tedious GST formalities and pay GST at a fixed rate of turnover. This scheme can be opted by any taxpayer whose turnover is less than Rs. 1.5 crore*.

1. Who can opt for Composition Scheme

A taxpayer whose turnover is below Rs 1.5 crore* can opt for Composition Scheme. In case of North-Eastern states and Himachal Pradesh, the limit is now Rs 75* lakh.

Turnover of all businesses registered with the same PAN should be taken into consideration to calculate turnover.

2. Who cannot opt for Composition Scheme

The following people cannot opt for the scheme:

  • Taxpayer supplying exempt supplies.
  • Supplier of services other than restaurant related services
  • Manufacturer of ice cream, pan masala, or tobacco
  • Casual taxable person or a non-resident taxable person
  • Businesses which supply goods through an e-commerce operator

3. What are the conditions for availing Composition Scheme?

The following conditions must be satisfied in order to opt for composition scheme:

  • No Input Tax Credit can be claimed by a dealer opting for composition scheme
  • The taxpayer cannot make any inter-state supply of goods.
  • The dealer cannot supply GST exempted goods
  • Taxpayer has to pay tax at normal rates for transactions under Reverse Charge Mechanism
  • If a taxable person has different segments of businesses (such as textile, electronic accessories, groceries, etc.) under the same PAN, they must register all such businesses under the scheme collectively or opt out of the scheme.
  • The taxpayer has to mention the words ‘composition taxable person’ on every notice or signboard displayed prominently at their place of business.
  • The taxpayer has to mention the words ‘composition taxable person’ on every bill of supply issued by him.
  • Those supplying goods can provide services of upto Rs. 5 lakh,

GST Refund

Tax refund for international tourist scheme provide an opportunity to foreign tourist to buy goods manufactured during their stay in any country and claim refund of the tax suffered on such goods at the time of their exit from the country. In India, it is expected that the scheme will be implemented through the retailer registered for the purpose of this scheme.

Casual taxable persons or Non-resident taxable persons are required to make an advance payment of estimated tax liability at time of registration application

Refund of tax, if any excess paid shall be allowed subjected to that the dealer must file all the returns.

Supply of goods and/ or services to or by a SEZ developer or an SEZ unit, shall be deemed to be a supply of goods and/or services in the course of inter-State trade or commerce and would be Zero rated supplies.

However, probably as it exists today such upfront exemptions could be subjected to certain conditions only after fulfilling these conditions it is likely that the SEZs would enjoy the abinitio exemption else, they would have to opt for refund route

Refund of unutilized input tax credit shall be allowed only in twoscenarios.

Refund of unutilized input tax credit shall be allowed only for Exports including Zero rated supplies (SEZ Supplies). The Ministry has confirmed that refund of 90% of the duties paid by exporters in the process of manufacturing items for export would be made within a period of seven days under the Goods and Services Tax (GST) regime on provisional basis. The remaining 10% refund will be made after verifications by tax authorities.

Credit accumulation due to inverted duty structure.

Refund of balance in the electronic cash ledger which is a concept similar to PLA account can be claimed by registered taxable person.

Refund to be claimed through the GSTR-3 – Monthly return to be filed by tax payer (Sl. No. 12 – Refunds claimed from cash ledger).