Demystifying GST Goods and Service Tax Tally Solutions

Agenda: 1. Introduction to GST 2. Understanding GST 3. GST Highlights 4. Registration 5.

Introduction to GST • GST- an important breakthrough – in the sphere of indirect

Journey so far…. . GST is being introduced in the country after a 13

What is GST? GST stands for Goods and Service Tax which is a comprehensive

Why GST? Simple Tax Structure Increased revenue GST Eliminates Cascading Effect Technology Driven System

Highlights of GST • Common threshold limit across the country • Continuity of tax

Highlights of GST • Valuation method broadly as ‘Transaction Value’ • Branch transfers taxable

Registration – Threshold Limit Regular Dealer North East India Rest of India Aggregate Turnover

Transition Registration Migration Automatic Registration First provisional & then final registrations © Tally Solutions

Taxes subsumed under GST Excise Duty Surcharge & Cess ADE Service Tax Purchase Tax

Tax scenario under GST Existing Example of Car: Cost of Manufactures 4, 00, 000

Input Credit Mechanism SUPPLIER Tax Laibilit y Tax Laibility Receipt TAX of Goods INVOICE

Type of Returns Dealer Type Return Type Frequency Due Date GSTR 1 Monthly 10

Upload Process GST Portal Sales Invoices Purchase Invoices GST Portal Automated Tax returns GST

GST Return 10 th of the Next Month GSTR 1 Outward Supplies made by

Input Credit Adjustment IGST CGST - ITC CGST SGST - ITC IGST SGST IGST-

Payment 20 th of subsequent Month Mandatory e-payment for amount exceeding Rs 10, 000

Inference with the existing Law: • Composition scheme • Composition levy • Reverse Credit

Inference with the existing Law: • Captive consumption • Reversal of ITC • Input

With GST What will change ? Technology Process Discipline • Digital B to G

Consequences of non-compliance Late Fee • Late fee of Rs. 100/- per day for

GST Stakeholders © Tally Solutions Pvt. Ltd. All Rights Reserved 23

Preparedness for GST • Books of accounts/ records matching 100% with the return •

Technology is the key Seamless Detection, Correction and Compliance at: • Configuration • Recording

Tally’s Technology for GST Hero of GST Success API Application Program Interface © Tally

Tally’s Technology for GST Tally’s Role Interface with GSTN GSP © Tally Solutions Pvt.

Thank You Queries: gst@tallysolutions. com © Tally Solutions Pvt. Ltd. All Rights Reserved

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Agenda: 1. Introduction to GST 2. Understanding GST 3. GST Highlights 4. Registration 5. GST Compliance 6. Brief inference in comparison with existing law 7. What will change 8. Preparedness for GST 9. Consequences of non-compliance © Tally Solutions Pvt. Ltd. All Rights Reserved 2

Introduction to GST • GST- an important breakthrough – in the sphere of indirect tax reforms in India. • Improvised Tax system over Central Excise Duty and Sales Tax system • Significant improvement –the next logical step – towards a comprehensive indirect tax reforms in the country. © Tally Solutions Pvt. Ltd. All Rights Reserved 3

Journey so far…. . GST is being introduced in the country after a 13 year long journey since it was first discussed in the report of the Kelkar Task Force on indirect taxes, 2013. Outline on the major milestones In 2003, the Kelkar Task Force Suggested Goods and Services Tax (GST) based on VAT principle. Budget Speech for the financial year 2006 -07 © Tally Solutions Pvt. Ltd. All Rights Reserved First Discussion Paper on Goods and Services Tax in India in November, 2009. Bill was passed by the Lok Sabha on 06. 05. 2015. The draft model GST Law was released and put in public domain in June 2016. The constitution Amendment bill for GST passed by Rajya Sabha in August, 2016 4

What is GST? GST stands for Goods and Service Tax which is a comprehensive tax levied on manufacture, sale and consumption of goods and services at pan-India level. Thus, GST will be one indirect tax for the whole nation , which will make India one unified common market. © Tally Solutions Pvt. Ltd. All Rights Reserved 5

Highlights of GST • Common threshold limit across the country • Continuity of tax credit across the supply chain till it reaches the consumer. • Elimination of tax cascading effect in the supply chain • Pan Based Registration • ‘on Supply’ tax liability instead of ‘Removal / Sale’ © Tally Solutions Pvt. Ltd. All Rights Reserved 7

Highlights of GST • Valuation method broadly as ‘Transaction Value’ • Branch transfers taxable and credit eligibility • Tax credit eligibility on inward supply of goods / services for Inter-state transaction • No declaration forms (Form – C, F, etc……. ) © Tally Solutions Pvt. Ltd. All Rights Reserved 8

Registration – Threshold Limit Regular Dealer North East India Rest of India Aggregate Turnover exceeds 4 L for Registration 9 L for Registration 5 L for Payment of Tax 10 L for Payment of Tax Composition Scheme Composition Levy © Tally Solutions Pvt. Ltd. All Rights Reserved Aggregate Turnover does not exceeds 50 L 9

Taxes subsumed under GST Excise Duty Surcharge & Cess ADE Service Tax Purchase Tax VAT Luxury tax CST CVD & SAD Entry Tax GST Surcharge & Cess CGST © Tally Solutions Pvt. Ltd. All Rights Reserved SGST IGST 11

Tax scenario under GST Existing Example of Car: Cost of Manufactures 4, 00, 000 Excise @ 12 % + Infrastructure cess 1% Vat 12. 5% 52, 000 CGST@11% 44, 000 56, 500 SGST@11% 44, 000 Dealer Invoice 5, 08, 500 4, 88, 000 Dealer Cost (4, 000 + 52, 000) 4, 52, 000 4, 000 45, 200 40, 000 4, 97, 200 4, 40, 000 Margin @ 10 % Sale Price for delear Vat 12. 5% Price to customer Saving to Consumer © Tally Solutions Pvt. Ltd. All Rights Reserved 62, 150 5, 59, 350 CGST@11% 48, 400 SGST@11% 48, 400 5, 36, 800 Amount. Percentage 22, 550 4% 12

Input Credit Mechanism SUPPLIER Tax Laibilit y Tax Laibility Receipt TAX of Goods INVOICE /Services Receipt of Goods /Services TAX INVOICE BUYER Returns Eligible ITC Provisional ITC Electronic Credit Ledger Provisional ITC Returns Amount ITC Tax credited Department © Tally Solutions Pvt. Ltd. All Rights Reserved 13

Type of Returns Dealer Type Return Type Frequency Due Date GSTR 1 Monthly 10 th of succeeding month GSTR 2 Monthly 15 th of succeeding month GSTR 3 Monthly 20 th of succeeding month GSTR 8 Annual 31 st Dec of next fiscal GSTR 4 Quarterly 18 th of succeeding month GSTR 8 Annual 31 st Dec of next fiscal Foreign Non-Resident Taxpayer GSTR 5 Monthly 7 day after expiry of registration Input Service Distributor GSTR 6 Monthly 15 th of succeeding month Tax Deductor GSTR 7 Monthly 10 th of succeeding month Regular & Casual Dealer Compounding Tax Payer © Tally Solutions Pvt. Ltd. All Rights Reserved 14

Upload Process GST Portal Sales Invoices Purchase Invoices GST Portal Automated Tax returns GST Portal 10 th, every month © Tally Solutions Pvt. Ltd. All Rights Reserved 15 th, every month 20 th, every month 15

GST Return 10 th of the Next Month GSTR 1 Outward Supplies made by the Taxpayer 15 th of the Next Month G S P GSTR 2 Inward Supplies received by the Taxpayer GST NET(GSTN) 20 th of the Next Month GSTR 3 GST Return for the Month with Tax © Tally Solutions Pvt. Ltd. All Rights Reserved 16

With GST What will change ? Technology Process Discipline • Digital B to G connect • Transaction Focused • On-Time submission of returns • End-to-End Technology Driven System • GST compliance rating • Transparency from grass-root level of business records • Triangulation of suppliers and recipient records • Rectification errors and omissions • On-Time Payment • Interest on disputed credits Vat only Dealers to GST • Compliance to Inherited provisions of Excise and Service Tax in GST • Less scope for Kacha Bill • Reconciling returns with books © Tally Solutions Pvt. Ltd. All Rights Reserved 21

Consequences of non-compliance Late Fee • Late fee of Rs. 100/- per day for every day during which such failure continues subject to a maximum of Rs. 5000/-. Interest • Delay in tax payment Fines © Tally Solutions Pvt. Ltd. All Rights Reserved • The rate of interest is yet to be notified . • Rs. 10, 000/- or an equal amount to the extent of tax evaded. • Imprisonment with fine up to 5 years depending on amount of tax evasion with slab ranging from 25 L to 500 L 22

Preparedness for GST • Books of accounts/ records matching 100% with the return • Discipline in maintaining, recording and reconciling ‘electronic’ – Credit and Cash ledger • Records to substantiate ITC eligibility on stocks / capital goods held as of last day of GST transition • Transitioning to GST © Tally Solutions Pvt. Ltd. All Rights Reserved 24

Technology is the key Seamless Detection, Correction and Compliance at: • Configuration • Recording • Reconciling at source • Reconciling post reporting • Triangulation with GSTN © Tally Solutions Pvt. Ltd. All Rights Reserved 25