Journey so far CGST IGST UTGST SGST Acts

Journey so far CGST/ IGST/ UTGST/ SGST Acts finalized and 7 final rules and draft formats released GST Compensation Cess rates and Chapter wise rate wise GST schedule decided Tax slabs for other items and services to be decided Fitment of more than 1200 items in various tax slabs 19%of items taxed over 18%GST tax slab

Item fitment in tax slabs (%) (28% Tax Slab) 19% (Exempted) 7% (5% Tax Slab) 14% (12% Tax Slab) 17% (18% Tax Slab) 43%

Migration of existing tax payers- Sec 139 Every person holding a valid PAN Existing Regime Provisional RC Final RC GST Regime Note: The enrolment window will reopen at a later date for taxpayers who could not enrol themselves as well as those who enroled but did not sign the enrolment form.

Conditions to carry forward input tax credit- Sec 140(1) ITC/CENVAT CREDIT C/F ELECTRONIC CREDIT LEDGER Carry forward only eligible ITC/CENVAT Credits; All returns for preceding 6 months filed; ITC/CENVAT Credit not related to Exempted goods Credit admissible as ITC under GST; Admissible CENVAT Credit to be reflected in the last return filed Application in Form GST TRAN 1 within 90 days Existing Regime GST Regime

Restriction on carry forward of input tax credit- sec 140(1) Particulars Amount (INR) ITC Balance as per last VAT Return Input credit attributable to the value of claims u/s 3, 5(3), 6, 6 A and 8(8) of Central Sales Tax Act, 1956 (CST Act) Less: Input credit attributable to the value of declarations received in Form C/F/E/H/I specified in Rule 12 of CST Act Input credit attributable to the value of claim u/s 3, 5(3), 6, 6 A and 8(8) of CST Act for which declarations are pending as on the appointed day. (Note: Will be refunded post submission of forms) Total ITC allowed to be carried forward as per the provisions Amount (INR) 1, 000 500 (300) (200) 800

Carry forward of Unavailed Cenvat credit on capital goods- sec 140(2) UNAVAILED CENVAT CREDIT ON CAPITAL GOODS Credit admissible as CENVAT credit under the existing law; Unavailed CENVAT credit in respect of capital goods is not carried forward in the return Existing Regime ELECTRONIC CREDIT LEDGER Not paying tax under composition levy; Credit admissible as ITC under GST; Form GST TRAN 1: Specify amount availed/utilised and yet to be availed/utilised for every item GST Regime

Credit of inputs held in stock on the appointed day- sec 140(3) CREDIT OF INPUTS HELD IN STOCK ON THE APPOINTED DAY 1) 2) 3) 4) 5) 6) 7) 8) Unregistered person under existing law Manufacturer of exempted goods Provider of exempted services Provider of Works Contract services and availing benefits of Not. No. 26/012 -ST First stage dealer Second stage dealer Registered importer Depot of a manufacturer Existing Regime Now Registered Person GST Regime

Inputs held in stock on the appointed day – conditions attached- Sec 140(3) Inputs/goods used or intended to be used for making taxable supplies under GST ITC available on such inputs under GST Invoices issued not earlier than 12 months prior to appointed day Availability of invoices evidencing payment of tax or duty Supplier of services not eligible for abatement under GST

Inputs held in stock on the appointed day – A scheme for traders- Sec 140(3) A registered person other than a manufacturer or supplier of services i. e. a trader can claim such credit at the rate of 60 per cent of central tax/ state tax applicable on supply of such goods within 6 tax periods from the appointed day even though he is not in possession of invoice evidencing payment of duty or tax, if he passes on the benefit of such credit by way of reduced prices to the recipient. This can be understood by studying the following tables: Particulars Amount Value of stock held 100 Add: Excise Duty paid 12. 5 Add: VAT paid 12. 5 Total Value (Cost to Supplier) 125 Existing Regime Particulars Net Selling Price Add: C/SGST at 12% Total Commercial value Amount 200 24 224 Less: Eligible credit at 60% of 24 (14. 4) Gross Selling Price 209. 6 GST Regime

Credit of eligible duties on supply of taxable and exempted goods - Sec 140(4) EXEMPT – GOODS / SERVICES Taxable goods/services CENVAT Credit carried forward in the return as per provision of section 140(1) Manufacturer or supplier of services Exempted goods/services Existing Regime Credit of input held in stock as per provision of Section 140(3) GST Regime

Credit of input for services received after the appointed day- Sec 140(5) Duties or taxes paid under existing law Inputs or Inputs Services received June 25, 2017 July 01, 2017 Invoice issued and inputs dispatched Existing Regime Appointed Day July 31, 2017 Inputs received with invoice GST Regime Invoice is recorded in books within 30 days from appointed date, unless additional 30 days granted

Credit of input tax credit in case of composition dealers- Sec 140(6) ITC/CENVAT CREDIT C/F ELECTRONIC CREDIT LEDGER Inputs As such ABC- Composition Scheme Conditions as per 140(3) Semi Finished Goods Existing Regime GST Regime

Credit of input tax credit carried forward in a return by person having centralized registration or ISD- Sec 140(7) and (8) ITC/CENVAT CREDIT C/F ELECTRONIC CREDIT LEDGER Branch A Delhi ABC Limited Centralised Registration in Mumbai Branch B Bangalore Branch C Gujarat Existing Regime Last return filed within 3 months from appointed day GST Regime

Material removed for job work/ other process - Sec 141 Inputs, Semi. Finished goods or Finished goods sent to Job worker for further processing, testing, repairing, etc. In such cases July 01, 2017 Before Appointed Day No tax payable by person returning the goods Conditions: Goods returned within 6 months by Job worker from Appointed day (Unless, additional 2 months granted) Manufacturer and Job worker both must declare such goods in FORM GST TRAN 1 If not returned, ITC availed by the manufacturer on inputs liable to be recovered u/s 142(8)(a)

Goods sold by manufacturer in the existing regime and returned within 6 months from the appointed day - Sec 142(1) Jan 1, 2017 If supplies were sent to an unregistered dealer If supplies were sent to a registered dealer Manufacturer can claim refund of duty paid Termed as outward supply in the hands of dealer – Manufacturer can claim ITC July 1, 2017 Sold by manufacturer prior to appointed day Existing Regime Dec 31, 2017 Returned by dealer post appointed day GST Regime

Section 142 : Miscellaneous Transition Provision Goods cleared not before six months from the appointed day if returned by unregistered person within 6 months from the appointed day - Refund of tax paid under earlier law Goods returned by registered person – Deemed Supply Goods or services where price increases after the appointed day - Additional tax to be paid by issue of debit note or supplementary invoice to be issued within 30 days Goods or services where price decreases after the appointed day – Credit note be issued within 30 days upon which taxpayer shall be allowed to reduce the tax liability 17 Gaurav Shah & Co, Chartered Accountants

Section 142 : Miscellaneous Transition Provision Refund under the existing laws to be disposed as per provision of existing law Refund of tax paid under existing law to be paid under the provisions of earlier law even if application is made after the appointed day Refund of tax of services not provided but tax paid under the existing law to be refunded under the provisions of existing law Appeal, Review or reference relating to claim of CENVAT credit or output duty liability shall be disposed of under earlier law 18 Gaurav Shah & Co, Chartered Accountants

Section 142 : Miscellaneous Transition Provision Arrears to be recovered, including that of CENVAT, due to any assessment, adjudication or revision of return be recovered as an arrear of GST, unless recovered under the existing law. Goods or services supplied after the appointed day will be taxed under GST even if contract is entered prior to appointed day ( except where point of taxation has occurred in the existing law) Goods sent, not before six months from the appointed day, on approval basis are returned back in 6 months - No GST If tax was deducted under earlier law and invoice also issued, no further TDS even if payment is made after the appointed day. 19 Gaurav Shah & Co, Chartered Accountants

12 -Point Impact on manufacturers Multiple CE registration can be avoided in same state Level playing field for Organized and unorganized sector Single point of compliance - VAT + CST + Excise under existing regime Reduction in cascading effect but Working Capital increase- CST Purchases

12 -Point Impact on manufacturers Job worker charges liable to GST Input Tax Credit Reversal- Non-Payment Distinct Person Concept Area-based exemption to discontinue

12 -Point Impact on manufacturers Matching Concept Robust ERP Software required for B 2 B reporting including invoice-wise, HSN-wise reporting Unregistered dealer procurements liable to GST under reverse charge Advances liable to GST Vs. excise/sale applicable only on removal of goods from plant or at the time of inovice

+91 9731510198 gaurav@gs-ca. in