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GST Composition Scheme gst-composition-scheme Composition scheme under gst

A composition scheme is an optional scheme of levy of tax available for small taxpayers in the Goods and Services Tax (GST) regime. Under this scheme, tax is levied at a reduced rate with fewer compliances. Composition dealer, the person who opted for a composition scheme, needs to pay GST at a prescribed percentage of his turnover every quarter.

GST composition scheme turnover limit

The composition scheme turnover limit in GST is 1.50 crores that mean taxpayers whose turnover is less than this limit may apply for the composition scheme. In the case of the North-Eastern States and Himachal Pradesh, this limit is Rs 75 lakhs. Additionally, as per the amended CGST act, registered composition dealers can also provide services to the extent of Rs 5 lakhs.

List of persons who cannot opt for composition scheme in GST

(a) Suppliers whose aggregate turnover in the preceding financial year exceeds Rs 1.5 crore

(b) Inter-state supplier of goods

(c) Supplier of services other than restaurant services

(d) Any person engaged in making non-taxable supply

(e) Casual Taxable Person or Non-Resident Taxable person

(f) Manufacturer of pan masala, tobacco and, manufactured tobacco substitutes

(g) Manufacturer of ice cream and other edible ice

(h) Taxpayer engaged in any supply of goods through an electronic commerce operator who is required to collect tax at source under section 52

Conditions for registering under GST composition scheme

(a) Input tax credit cannot be claimed

(b) Inter-state supply of goods is restricted*

(c) The word “Composition taxable person” must be mentioned on every bill of supply issued by the composition dealer

(d) The word” Composition taxable person” must be mentioned on every notice or signboard displayed at the place of business

(e) Tax paid cannot be collected from customers

(f) A taxable invoice cannot be issued. Bill of supply will be issued instead of tax invoice.

(g) Exempted/non-taxable goods cannot be supplied

*Note, composition dealers can purchase goods or services from other states but the supply of goods or services outside the state is restricted.

How to register for the composition scheme?

The option to pay GST under composition levy can be exercised prior to the commencement of the relevant financial year. Following steps need to follow to opt for a composition scheme-

Step 1: Visit the login page of GST official Website

Step 2: Enter login credentials

Step 3: After login, navigate to the “Services” > Registration > “Application to opt for Composition levy”

Step 4: On this screen,

  • Check the “Composition Declaration” box
  • Check the “Verification” box to confirm and declare that information given by you in the application is true and correct to the best of your knowledge
  • Select the “Name of Authorized Signatory” from the drop-down
  • Enter the “Place”
  • Click on the “Save” button
  • Submit your application using any of the three options available – “SUBMIT WITH DSC”, "SUBMIT WITH E-SIGNATURE", “SUBMIT WITH EVC”

Step 5: A Warning pop-up will be displayed on the screen. Click the “PROCEED” button. On the successful filing of an application for opting composition scheme, a success message will appear on the window and you will receive acknowledgment on your registered mobile number or email.

Format of Bill of Supply in composition scheme

Composition dealers cannot issue a tax invoice as they are not permitted to collect tax from customers. Dealer has to issue Bill of Supply specifying the particulars as given below-

(a) Name, address, and GST number of the supplier

(b) Bill of Supply number (a consecutive serial number not exceeding 16 characters)

(c) Issue date of the bill

(d) Name, address, and GST number of the recipient if the recipient is registered in GST law

(e) Description, Value (after adjusting discounts, if any), and HSN code of goods

(f) Signature or digital signature of composition dealer  

GST rates specified for composition dealer

S.No.

Category of person

CGST

SGST

Total

1

Manufacturers and traders

0.5%

0.5%

1%

2

Restaurant Services

2.5%

2.5%

5%

 

GST composition forms

Below is the complete list of GST forms involved in the composition scheme.

Form No.

Description

GST CMP-02

Registered taxpayers who opt for the composition scheme will have to intimate in form CMP-02 on the GST portal.

GST CMP-03

The composition dealer has to file form CMP-03 within 90 days from the date of filing CMP-02. This form contains the detail of stock held by the dealer on the date of registering in the composition scheme.

GST CMP 04

Composition dealer has to file form CMP-04 in the following cases –

(a) He voluntarily exits from the scheme

(b) Turnover exceeds the specified limit

(c) He fails to comply with any of the conditions of the scheme

GST CMP 05

Form CMP-05 is used by the officer to issue SCN to the dealer asking why he should be allowed for a composition scheme.

GST CMP 06

CMP-06 is filed by the taxpayer in response to notice received in form CMP-05. This form must be filed within 15 days from the date of receipt of CMP-05

GST CMP 07

Form CMP-07 is the order of acceptance or rejection issued by the proper officer in response to CMP-06 received from the taxpayer. A rejection order in CMP-07 is issued by an officer after giving an opportunity of being heard to the taxpayer.


Recent updates

03-Apr-2020

The last date to opt into the composition scheme for the FY 2020-21 in form CMP-02 has been extended up to 30th June 2020.


GST returns for composition dealer

Return

Description

Periodicity

Due date

CMP-08

Statement containing the details of payment of self-assessed tax

Every quarter or part thereof

18th of the month succeeding the quarter

GSTR-4

Annual return containing the summary of outward supplies, Inward supplies, import of services, and supplies attracting reverse charge

Every financial year or part thereof

30th day of April following the end of such financial year


Recent updates

28th May 2021

(i) GSTR-4 for FY 2020-21 can be filed up to 31st July 2021.

(ii) The maximum late fee for GSTR-4 is restricted to Rs.500 per return for nil filing and Rs. 2000 for other than nil filing.

1st May 2021

(i) The due date to file GSTR-4 for FY 2020-21 extended to 31st May 2021.

(ii) Relaxation is given in the interest charges for late filing of Form CMP-08  for January-March 2021. No interest for filing on or before 8th May, interest reduced to 9% between 9th May and 23rd May but charged at 18% thereafter.

15th February 2021

The due date for filing GSTR-4 return for FY 2020-21 is 30th April 2021.

31st August 2020

The last date for filing Form GSTR-4 for the FY 2019-20 from 31st August 2020 to 31st October 2020.

6th August 2020

Now, GSTR-4  can file using an excel-based offline tool on the GST portal.

21st July 2020

The facility to file GSTR-4 is now available on the GST portal. 13th July 2020 The due date to file GSTR-4 has been extended to 31st August.


 Difference between regular scheme and composition scheme

Basis

Regular scheme

Composition scheme

Registration

Mandatory if turnover exceeds the specified limit

Optional (Turnover must be less than 1.5 crores)

Input tax credit (ITC)

ITC can be reduced while paying GST

ITC cannot be reduced while paying GST

Compliances

More compliances

Fewer compliances

GST levy

Levy at higher rates

Levy at a fixed lower rate

Territory of business

Unlimited territory of business

Supplies can be made within the state only

GST collection

GST can be collected from customers

GST cannot be collected from customers

Invoicing

A tax invoice shall be issued

Bill of supply shall be issued instead of tax invoice

Causal taxable person or non-resident taxable person

Casual taxable person or non-resident taxable person should apply for GST registration online

Casual taxable person or non-resident taxable person cannot opt for a composition scheme

\Manufacturing activity

No restrictions

Manufacturing of ICE cream, pan masala, tobacco is prohibited

 

GST Composition Scheme | Everything about Composition Scheme The composition scheme turnover limit in GST is 1.50 crores that mean taxpayers whose turnover is less than this limit may apply for the composition levy under GST GST composition scheme, Composition scheme under GST, Composition dealer  
GST GST Registration gst-registration GST Registration Online - A start to finish guide

What is GST registration?

A unique GST identification number is issued to the taxpayer after filing an online application on the Common portal. Any person having a GST number means he is registered under Goods & Service Tax. Registered taxpayers are required to collect tax from customers and deposit it to the Government.

Registrants will enjoy the following benefits-

  • Legally recognized as supplier
  • Tax can be collected from customers
  • Taxes paid on purchases can be reduced from output tax liability
  • No inter-state sale restrictions
  • Competitive advantage in the market

Types of GST registration

Voluntary registration

Any individual or business who is not required by law to get registered under GST may apply for registration on a voluntary basis. In that case, he has to follow all GST compliances as if he was liable for registration. Further, as per section 29 of the CGST Act, voluntary registration may be canceled if the business has not been commenced within six months from the date of registration.

Mandatory registration

Every person is legally bound to register in the GST regime if,-

  • he is engaged in the supply of goods or services, and the aggregate turnover of his supplies exceeds the GST threshold limit i.e 40 lakhs in the case of goods and 20 lakhs for services.
  • he is covered under the compulsory GST registration criteria. This means it is mandatory for a specified category of persons to obtain GSTIN online even their annual turnover is less than the above-mentioned GST threshold.

Suo moto registration

As per rule 26 of CGST rules, a GST officer may register the person on a temporary basis if during any proceedings he finds that such person liable to registration under the Act and has failed to apply for same Any person to whom temporary GST registration is granted shall apply for registration within a period of ninety days from the date of the temporary registration.

Registration under composition levy

Small taxpayers whose turnover is less than Rs 1.50 crores have an option to register under the GST composition scheme. In this scheme, GST levied at the reduced rates and also fewer GST compliances need to follow.

Who should apply for GST registration?

(1) Any person who is engaged in the exclusive supply of goods, and his aggregate turnover of such supplies exceeds Rs 40 lakh in a financial year

(2) Any person who is engaged in the supply of services, and his aggregate turnover of services exceeds Rs 20 lakh in a financial year.

(3) Inter-state state supplier of goods or services

(4) Person liable to pay tax under reverse charge mechanism

(5) Casual taxable person

(6) Non-Resident taxable person

(7) E-commerce operator

(8) A person who requires to deduct tax under section 51 of CGST act, 2017

(9) Input service distributor

(10) Any person who is engaged in the supply of goods or services on the behalf of another taxable person

(11) Every person supplying OIDAR  services from a place outside India to an unregistered person in India

(12) Persons notified by the government

Who is not required to register under GST?

Any person engaged in the following supplies exempted from registration under GST-

(a) Supply of exempted or non-taxable goods/services

(b) Agriculturists

(c) Inter-state sale of services and aggregate turnover is less than Rs 20 lakhs.

(d) Supply covered under the reverse charge mechanism

Documents for online GST registration

Following documents are required to be uploaded on GST official website for registration-

(1) PAN card of the applicant

(2) Aadhaar card of the applicant

(3) Cancel cheque copy or bank A/c statement

(4) Business address proof i.e. rent agreement or property tax receipt/electricity bill

(5) MOA, AOA, and certificate of incorporation in case of a company

(6) Partnership deed in case of a firm

 

Documents for GST registration 

 

GST provisions applicable to registration

CGST Act

CGST Rules

Sections 22 – Persons liable for registration

Section 23 – Persons not liable for registration

Section 24 – Compulsory registration in certain cases

Section 25 – Procedure for registration

Section 26 Deemed registration

Section 27 – Special provisions relating to casual taxable person and non-resident taxable person

Section 28 – Amendment of registration

Section 29 – Cancellation or Suspension of registration

Section 30 – Revocation of cancellation of registration

Rule 8 – Application for registration

Rule 9 -Verification of the application and approval

Rule 10 – Issue of registration certificate

Rule 10A – Furnishing of Bank Account Details

Rule 11 – Separate registration for multiple places of business within a State or a Union territory

Rule 12 – Grant of registration to persons required to deduct tax at source or to collect tax at source

Rule 13 – Grant of registration to non-resident taxable person

Rule 14 – Grant of registration to a person supplying online information and database access or retrieval services from a place outside India to a nontaxable online recipient

Rule 15 – Extension in period of operation by casual taxable person and nonresident taxable person

Rule 16 – Suo-moto registration

Rule 17 – Assignment of Unique Identity Number to certain special entities

Rule 18 – Display of registration certificate and Goods and Services Tax Identification Number on the name board

Rule 19 – Amendment of registration

Rule 20 – Application for cancellation of registration

Rule 21 –  Registration to be cancelled in certain cases

Rule 21A – Suspension of registration

Rule 22 – Cancellation of registration

Rule 23 – Revocation of cancellation of registration Rule 24 – Migration of persons registered under the existing law

Rule 25 -Physical verification of business premises in certain cases

Rule 26 – Method of authentication

GST registration validity

There are no time restrictions given in law for the validity of the GST number. Registration is valid for a lifetime if It has not canceled by the tax officer nor surrendered by the taxpayer. However, In the case of a casual taxpayer or non-resident taxable person, the validity of registration is limited for a period of 90 days or the period mentioned in the registration application.

Steps to track GST application status

After submission of application for registration on GST portal, the status of an application can be tracked by following steps given below -

Step 1: Visit the GST portal

Step 2: Click on the “Service” tab

Step 3: Select the “Registration” tab from the dropdown menu

Step 4: Click on “Track Application Status”

Step 5: Enter ARN and click on the search button

Step 6: Status of application will be displayed

Deemed Registration

As per Section 26, the grant of registration or the Unique Identity Number (UIN) under the SGST Act or the UTGST Act shall be deemed to be a grant of registration/UIN under the CGST Act subject to the condition that the application for registration/UIN has not been rejected.

Amendment of registration

As per section 28, every registered taxpayer shall inform the proper officer of any changes in the GST certificate. The requirement for amendments in registration may arise due to several factors such as a change in address, change in contact number, change in business details, and so on. Application for amendment of registration can be categorized into two types:

  • Application for amendment of Core fields in registration - Approval of tax official is required.
  • Application for amendment of Non-Core fields in registration - Auto approved after successful filing by the taxpayer.

Revocation of cancellation of registration

Section 30 gives an option to taxpayer to restore his registration by making the application within 30 days from the date of service of the cancellation order. Revocation is not allowed for UIN holders, GST practitioners or, GST cancelled on taxpayer request. It is important to note that restoration application can be filed only after filing returns along with interest and penalties. If registration has been cancelled due to the non-filing of GST returns, Proper officer may reject the application only after giving an opportunity of being heard taxpayer.

Related: Revocation of cancelled GST registration

GST Registration Online | Everything about GST Registration Process Every supplier of goods is required to take GST registration online if his aggregate turnover exceeds 40 lakh. Online GST registration limit for services is Rs 20 lakhs GST registration, GST registration online, GST registration process, GST registration fees  
GST Input Tax Credit input-tax-credit Input Tax Credit under GST

Meaning

Input tax credit (ITC) means taxes paid on purchases of goods or services can be claimed at the time of payment of taxes on output. For example, Mr. Juneja is running a garments shop, and in the month of April, he paid a tax of Rs. 1000 on purchases and collected tax of Rs 1500 from customers. In the given situation, the Tax of Rs 1000 paid by Mr. Juneja is ITC and can be reduced from GST dues. Accordingly, he is liable to deposit Rs 500 (1500-1000) to the government.

Similarly, In Goods and Services tax, a registered taxpayer can claim the GST paid on purchases against GST liability on outward supplies. Undoubtedly, ITC is one of the major reliefs provided to the taxpayers in the GST regime. But the fact also cannot be denied that a lot of amendments in ITC provisions have created complications not only for businesses but for CA professionals also. Let’s proceed towards the solution you are looking for.

Conditions to claim ITC

As per section16 of the CGST Act, ITC shall be available to a taxable person only if  the following conditions are satisfied:

  • Claimant must be registered in the GST regime.
  • Possession of GST compliant invoice or debit note issued by the registered supplier.
  • Goods or services have been received.
  • GST returns have been filed.
  • Tax paid on purchases has been deposited by the supplier to the government.

Supply must not be covered under blocked credit.

Payment for the respective supply must be made within 180 days.

Documents required availing ITC in GST

Taxpayers have to submit the following documents on the common portal to claim GST credit -

  1. GST compliant invoice issued by a supplier
  2.  A Bill of Entry in case of imports
  3. An invoice/credit note issued by input service distributor
  4. A bill of supply issued by the supplier, if any
  5.  Debit Note issued by the supplier for less amount charged in invoice
  6. Invoice issued as a recipient under reverse charge mechanism

Blocked credit

The input tax credit shall not be available in respect of the following supplies-

  • Motor vehicles and conveyances for transportation of persons
  • Vessels and aircraft
  • Membership of a club, health & fitness center
  • Works contract service
  • Restaurants
  • Composition scheme
  • Personal consumption
  • Free samples
  • Travel benefits to employees
  • Non-resident taxable person
  • Outdoor catering
  • Health services
  • Beauty treatment services
  • Food and beverages
  • Cosmetic & plastic surgery

Order of utilization of input tax credit in GST regime

Once all conditions of claiming ITC are satisfied it would be credited in the electronic credit ledger and can be used to pay GST dues. As per new rules, the balance available in the credit ledger shall be used in the following manner-·

  • ITC of integrated tax first shall be utilized to pay integrated tax dues and then balance will be utilized to pay dues of state tax/central tax. Please note that before utilizing the credit of state tax & central tax, the credit of integrated tax shall be utilized FULLY in any manner to pay dues of integrated tax/central /state tax.
  • ITC of state tax first shall be utilized to pay state tax and then balance will be utilized to pay integrated tax.
  • ITC of central tax first shall be utilized to pay central tax and then balance will be utilized to pay integrated tax.

When a refund of the accumulated input tax credit can be claimed?

A refund of ITC is available in the GST regime if ITC is accumulated on account of the following supplies.

(1) Exports without payment of IGST

(2) Inverted duty structure

(3) Supplies to SEZ units/SEZ developers without payment of IGST

Reversal of input tax credit

Reversal of ITC means credit availed by the taxpayer will be added to output liability in the electronic cash ledger. Also, the taxpayer shall liable to pay interest on the reversal amount from the date of availing of input credit to the date of payment. Following are the cases when credit needs to be reversed;

(1) Payment has not been made to the supplier within 180 days from the invoice date. In the case of part payment of invoice, ITC will be reversed on a proportionate basis.

(2) Input used for personal purposes or exempted supplies. In that case, the amount of reversal will be calculated on a proportionate basis.

(3) Taxpayer switches to a composition scheme. In that case, the electronic credit ledger will be debited equal to the ITC balance on the day immediately preceding the date on which the taxpayer liable to pay as a composition dealer.

(4) ITC availed on supplies that are covered under blocked credit.

Input tax credit forms

GST forms related to ITC has summed up in one place by way of the below table-

Form

Form Description

Form GST ITC-01

Form ITC-01 is filed by newly registered taxpayers to claim the tax credit.

Form GST ITC-02

Form ITC-02 is filed to transfer the credit from the electronic credit ledger of the transferor to the transferee in case of business transfer.

Form GST ITC-03

Form ITC-03 is used to pay credit through electronic cash or credit ledger. This form is filed under two cases;

a) Taxpayer switches from normal to composition scheme,

b) Taxable supply become an exempt supply

Form GST ITC-04

Form ITC-04 is used to file a declaration in case of job-work

Treatment of input tax credit in different situations

Goods received in installments 

One of the preconditions to claim credit in GST is that goods or services must be received. Accordingly, if goods are received in installments, credit would be available only on receipt of the last installment.

For example, in the month of October, TaxGyata made a payment of Rs 500,000 (Including GST of Rs 90,000) for raw material. The vendor delivered material to TaxGyata in three lots - 1st lot in October, 2nd lot in November, and the final lot in the month of December. In the given situation, TaxGyata can take credit of Rs 90,000 in December on receipt of the final lot.

Goods sent for Job Work

As per section 19 of CGST Act, the principal manufacturer eligible to take credit on goods sent out for further processing to a job worker, with the condition that goods sent on job work must be received back by the manufacturer within 1 year (or 3 years in case of capital goods). It is relevant to note that credit is available even goods sent directly to the place of the job worker without bringing back it to the main manufacturer premises.  

iii. Composition scheme

Under the composition scheme, a taxpayer is liable to pay GST at a lower fixed rate, and therefore the benefit of ITC would not available. Also, the composition dealer is not permitted to take credit for tax paid in the reverse charge mechanism. If a composition dealer ceases to pay tax under the composition scheme and liable to pay as a regular taxpayer then he can take credit in respect of the following-

a) Input held in stock;

b) Input contained in semi-finished goods and finished held in stock;

c) Capital goods.

Import transactions

Integrated tax or compensation cess paid on import transactions can be used for payment of GST dues. However, basic custom duty paid by the importer would not be admissible as ITC. And, to validate ITC in imports,

a) GST number must be declared in the Bill of Entry

b) GST common portal will be inter-connected with the customs EDI system

Cancellation of registration

GST cancellation can be done by the tax officer on his own motion or at the request of a taxpayer. Once GST canceled, ITC would not be available from that date. Not will only that, a refund of surplus credit will also not permissible.

Input tax credit provisions in different business sectors

Works contract service

GST credit shall be available to the taxpayer if work contract service for;

  1. Installation of plant and machinery or
  2. Construction of Immovable property which is received as input service for further supply.

For example,

  • ABC builder (Sub-Contractor) provides service of construction of building to XYZ builder (Main Contractor) – XYZ is entitled to take credit of GST paid to ABC.
  • ABC Builder (Sub-Contractor) provides service of construction of building to Tech Company –Tech Company shall not be allowed to take credit of GST paid to ABC.
  • ABC Builder provides service of installation of plant or tools to Tech Company. Tech Company is entitled to take credit of GST paid to ABC.

Good Transportation Agency (GTA)

GTA is permitted to claim the credit in GST only if he is liable to pay tax. Further, GTA has the option to pay GST @ 5% without taking the benefit of ITC. But this option must be chosen by GTA at the beginning of the year.

For example, GTA transports goods to an unregistered dealer. Freight- Rs 35,000, Tax paid by GTA on inward supplies – Rs 2000.

Option 1: GTA opted to pay GST @ 12%. Tax liability of GTA will be (35000*12%) 4,200 –Rs 2000 = Rs. 2200Option 2: GTA opted to pay GST @ 5%. Tax liability of GTA will be 35000^5% = Rs 1,750. No credit would be available in this option.

Hotel & Restaurants

Restaurants are not allowed to claim credit in GST as restaurants are liable to pay GST at a lower rate of 5%. However, this credit restriction will not be applicable to restaurants inside hotels having a room tariff of Rs 7,500 or more. For example, 

  1. Food courts at the metro station cannot claim ITC on purchases and they will pay GST at a lower rate of 5%.
  2. Amrit Sagar restaurant in Taj Lake Place will pay GST @12% on sale after reducing the tax paid on purchases.

Hotel accommodation bill

GST paid on a bill of hotel accommodation can be claimed while paying GST dues subject to the following conditions -

  • Hotel accommodation must be for business purposes.
  • Taxpayer must be registered under GST in the state of the service provider (hotel).

Accounting entries of input tax credit in the books

Transaction

Accounting Entry

Entry

Debit

Credit

Purchases within the state (ITC claimed)

Inward Supplies A/c

XXX

 

ITC-CGST A/c

XXX

 

ITC-SGST A/c

XXX

 

To  Creditor

 

XXX

Purchases outside the state (ITC claimed)

Inward Supplies A/c

XXX

 

ITC-IGST A/c

XXX

 

To Creditor

 

XXX

Utilization of ITC

Output Tax Liability – CGST A/c

XXX

 

Output Tax Liability – SGST A/c

XXX

 

Output Tax Liability – IGST A/c

XXX

 

To ITC-CGST A/c

 

XXX

To ITC-SGST A/c

 

XXX

To ITC – IGST A/c

 

XXX

Reversal of ITC for inward supplies within state

ITC Reversal –CGST A/c

XXX

 

ITC Reversal –SGST A/c

XXX

 

GST Interest A/c

XXX

 

To ITC-CGST A/c

 

XXX

To ITC-SGST A/c

 

XXX

To Interest Payable A/c

 

XXX

 

Input Tax Credit Guide | Input Tax Credit under GST GST input tax credit means taxes paid on purchases can be claimed while paying GST dues. A person must be registered in GST to claim credit of input and all relevant conditions must be fulfilled  
GST Accounts & Records gst-accounts-and-records Accounts and Records under GST Accounts and Records under GST - TaxGyata What accounts and records to be maintained under GST? GST records must be maintained at least for 72 months.  
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GST Assessment & Audit gst-assessment-and-gst-audit Assessment & Audit under GST

Assessment under GST

As per Section 2(11) of the CGST Act, “assessment” means determination of tax liability under this Act and includes self-assessment, re-assessment, provisional assessment, summary assessment and best judgement assessment. GST law permit a registered person to rectify any incorrect details furnished in the returns. In terms of Section 39(9), if a registered person discovers any omission or incorrect particulars furnished in a return, he is required to rectify such omission or incorrect particulars in the return to be furnished for the tax period during which such omission or incorrect particulars as are noticed (on payment of due interest), unless the same is as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities, or such rectification is time barred.

Types of Assessment in GST

  • Self-assessment (Section 59)
  • Provisional Assessment (Section 60)
  • Scrutiny of returns filed by registered taxable persons (Section 61 )
  • Assessment of non-filers of returns (Section 62)
  • Assessment of unregistered persons (Section 63)
  • Summary Assessment in certain special cases (Section 64)

Self-assessment

As per section 59, "every registered person shall self-assess the taxes payable under this Act and furnish a return for each tax period as specified under section 39". This means, every taxpayer shall be required to assess his tax dues in accordance with the provisions of GST law and report the basis of calculation of tax dues to the tax administrators, by filing periodic GST returns. The provisions of the law permit a registered person to rectify any incorrect particulars furnished in the returns.

It is important to note that ‘self-assessment’ does not confer authority of an assessing officer (called Proper Officer) on the taxpayer. Taxpayer must exercise this liberty to assess tax liability voluntarily with the perils of interest and penalty for any miscalculations or misinterpretations without usurping the role of Proper Officer. For eg. If tax is charged in excess to a customer and the same has been reported in GSTR 1 and paid in GSTR 3B, whether taxpayer on realizing the error, is required to file a refund claim under section 54 or free to adjust the excess with any other dues. And if the tax is correctly charged to customer but error is in GSTR 1 and GSTR 3B, whether taxpayer is still liable to file refund under section 54 or does section 59 permit taxpayer to suo moto adjust the excess by reducing any other tax payable.

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GST E-Way Bill e-way-bill E way bill rules under GST What is E waybill? E way bill rules under GST E way bill is an electronic document carried by the transporter if the value of goods exceeds Rs 50000. E way bill is created on EWB system by registered person.  
GST GST Refund gst-refund Refund under GST

When a refund is allowed under GST?

In the following cases, a refund can be claimed in Goods and Services Tax law-

(1) Excess payment of tax due to mistake or error

(2) Excess GST balance in Electronic Cash Ledger

(3) Unutilized input tax credit balance on account of inverted rated supply (Rate of GST paid on purchases higher than GST rate on output)

(4) Unutilized input tax credit balance on account of zero Rated Supply

(5) GST paid on an inter-state supply which later held as intra-state supply or vice-versa

(6) GST paid on a supply that is not rendered and an invoice for which has not been issued

(7) GST paid on zero-rated supplies

(8) Refund in respect of finalization of provisional assessment

(9) Refund in respect of the decision of any court, appellate authority, or appellate tribunal in favor of the taxpayer

(10) Taxes paid during the investigation (Pre-deposit)

What are the preconditions to claim a GST refund?

(a) Refund application must be filed within 2 years from the relevant date.

(b) GSTR-3B for the relevant month has been filled.

(c) Outward supplies must be taxable i.e. should not be nil rated or exempted

(d) Claimed refund amount should not be less than Rs 1000.

(e) In case of a refund of an input tax credit, the export supply shall not be subject to export duty and duty drawback of integrated tax paid has not been availed by the taxpayer.

(f)  IGST amount has been deposited to the Government - in case of refund arises because of CGST/SGST paid on an inter-state supply which later held as intra-state supply or vice-versa.

What is the refund process under GST?

Steps to claim a refund under Goods & Services Tax is given below in the categorized manner-

Step 1: Filing of refund application

Online refund application will be filed in Form GST RFD-01 within 2 years from the relevant date. An application must be supported by documentary evidence proving the payment of tax, interest, or any other amount. Note, where a refund claimed by a taxpayer is less than 2 lakh, documentary evidence is not required to furnish.

Step 2: Securitization of application

At this step, the concerned officer will check whether the application filed by the applicant is complete or accurate in all aspects. If there is no issue with an application, the acknowledgment will be issued in GST RFD-02. This form will apparently specify that period of refund shall be counted from this date. In case of any variance in an application, the same will be communicated to the applicant in GST RFD03.

Step 3: Refund Order

The tax officer has to pass the refund order within 60 days from the date of receipt of a complete application. A refund order will be issued in GST RFD05 with payment advice in the form GST RFD06. The amount of refund will be automatically credited to the registered bank account of the taxpayer. In case of zero-rated supply, provisional refund order for 90% of the claimed amount shall be passed within 7 days of acknowledgment of application. A provisional refund order will be issued in GST RFD-04.

When interest is payable on refund under GST?

The taxpayer entitled to claim interest on a period of refund delay if the refund has not been processed by the concerned officer within 60 days from the date of receipt of the refund application. Amount of interest along with refund amount shall be credited electronically to a taxpayer registered bank account.

  • Interest rate is 9% p.a. if a refund arises on account of the favorable decision of any court or appellate authority.
  • Interest rate will be 6% p.a. in any other case.

Refund forms under GST

Documents involved in the refund process are said to be GST refund forms. There is a total of 11 refund forms prescribed in GST law which are given below.

GST RFD–01

Application for refund

GST RFD- 01A

Application for a refund (Manual)

GST RFD- 01B

Refund order details

GST RFD–02

Acknowledgment

GST RFD–03

Deficiency memo

GST RFD–04

Provisional refund order

GST RFD–05

Payment advice

GST RFD – 06

Refund sanction/rejection order

GST RFD–07

Order for Complete adjustment of sanctioned refund

GST RFD–08

Notice for rejection of application for refund

GST RFD–09

Reply to show cause notice

GST RFD–10

Application for Refund by any specialized agency of UN or any Multilateral Financial Institution and Organization, Consulate or Embassy of foreign countries, etc.

GST RFD-10A

Application for a refund by Canteen Stores Department (CSD)

GST RFD–10B

Application for a refund by Duty-Free Shops/Duty Paid Shops (Retail outlets)

GST RFD–11

Furnishing of bond or Letter of Undertaking for export of goods or services

Computation of GST refund in various cases

Refund formula in case of export of goods or services, (Export turnover*Net input tax credit) / Adjusted total turnover Refund formula in case of inverted rated supply, (Inverted rated supply turnover*Net input tax credit) /Adjusted total turnover – Tax paid on inverted rated supply Explanation of terms used in the formula

  • Net ITC shall mean input tax credit availed on inputs during the relevant period other than the input tax credit availed for which refund is claimed under sub-rules (4A) or (4B) or both.
  • Inverted Supply Turnover = Value of inverted supply of goods and services during the relevant period.
  • Tax payable on such inverted rated supply = Tax liability on such inverted rated supply under the same head, i.e. IGST, CGST, SGST.
  • Adjusted Total turnover = Total turnover during the relevant period – Exempted supplies during relevant period
  • Relevant period means the period for which the refund claim has been filed.
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GST GST Return gst-return GST return due dates

GST return due dates applicable in June 2021 (Revised) 

Details

Period

Due date

GSTR-1

May-21

26-Jun-21

IFF (QRMP)

May-21

28Jun-21

GSTR-3B (Turnover in PFY more than Rs. 5 Crore)

Apr-21

04Jun-21

May-21

25-Jun-21

GSTR-3B (Turnover in PFY upto Rs. 5 Crore and not opting for QRMP scheme)

Mar-21

19Jun-21

May-21

20-Jun-21

GSTR-3B (Turnover in PFY upto Rs. 5 Crore and opting for QRMP scheme – specified states-I)

Jan-Mar 21

21Jun-21

Apr-June 21

25-Jun-21

GSTR-3B (Turnover in PFY upto Rs. 5 Crore and opting for QRMP scheme – specified states-II)

Apr-June 21

25-Jun-21

GSTR-3B

May-21

20-Jun-21

GSTR-5

Mar, Apr & May 2021

20-Jun-21

GSTR-5A

May-21

20-Jun-21

GSTR-6

April & May 2021

30-Jun-21

GSTR-7

April & May 2021

30-Jun-21

GSTR-8

April & May 2021

30- Jun-21

 

GST return due dates applicable in June 2021 

Return

Period

Due Date

Extended due date

GSTR-1

April 2021

11th May

26th May

GSTR-3B

April 2021

20th May

GSTR-4

FY 2021-21

30th April

31st May

GSTR-5

April 2021

20th April

31st May

GSTR-6

April 2021

13th May

31st May

GSTR-7

April 2021

10th May

31st May

GSTR-8

April 2021

10th May

31st May

GSTR-9

April 2021

 

 

GSTR-9C

April 2021

 

 

 

GSTR-1

Who is required to file GSTR-1?

  • Every registered taxpayer except the following-
  • Composition dealer
  • Input Service distributor
  • Non-resident taxable person
  • Persons who are required to deduct TDS
  • Persons who are required to collect TCS
  • OIDAR

Details to be provided in GSTR-1

  • Taxable outward supplies
  • Nil rated, exempted, and non GST outward supplies
  • Zero-rated supplies and deemed exports
  • Debit notes and credit notes
  • Advances received for future supplies
  • Summary of supplies based on HSN codes

Periodicity

Every month. Taxpayers having turnover upto Rs 1.5 crores have an option to furnish GSTR-1 quarterly (QRMP scheme).

 GSTR-1 must be filed even there is no transaction in the tax period (NIL return).

Due date of GSTR-1

11th of every next month

 

GSTR-4

Who is required to file GSTR-4?

Composition Dealer.

 A person who opted to pay tax under the composition scheme called a composition dealer. Taxpayers with a turnover upto 1.5 crores may opt to pay GST under the composition scheme.

Details to be provided in GSTR-4

  • Inward supplies including supplies attracting reverse charge
  • Outward supplies including exempt supplies
  • Available credit of TDS/TCS
  • Tax, interest, and late fees
  • Refund claimed if any

Periodicity

Annually

Due date of GSTR-4

30th of April of the next financial year.

 

GSTR-5

Who is required to file GSTR-5?

Every registered non-resident taxpayer.

Non-resident taxpayer means any person who occasionally engaged in the supply of goods or services but who has no fixed place of business or residence in India.

Preconditions

  • Registration under GST as non-resident taxable person
  • Valid GSTIN
  • Valid user id and password for login
  • Valid and non-expired Digital Signature Certificate

Periodicity

Monthly.

GSTR-5 has to be filed by the NR taxpayer even there is no transaction in the respective month (NIL return).

Due date of GSTR-5

20th of every next month.

 

GSTR-6

Who is required to file GSTR-6?

Input service distributor.

Input service distributor is an office of the supplier which receives invoice of its branches and distributes the input to such branches proportionately by raising an ISD invoice.

Details to be provided in GSTR-6

  • Input tax credit (ITC) received and distributed by ISD.
  • Documents issued for distribution and manner of distribution of ITC.

Preconditions

  • Registration under GST as input service distributor
  • Valid GSTIN
  • Valid user id and password for login
  • Valid and non-expired Digital Signature Certificate for companies & LLPs

Periodicity

Monthly.

GSTR -6 has to be filed by ISD even there is no transaction in the respective month.

Due date of GSTR-6

13th of every next month.

 

GSTR-7

Who is required to file GSTR-7?

Every person who is liable to deduct tax under section 51 of CGST Act, 2017.

Following persons specified under section 51 of CGST Act-

  • A department or establishment of the Government
  • Local Authority
  • Government Agencies
  • Such persons or category of persons as may be notified by the Government

 Note, a supplier can claim credit of TDS only after filing of GSTR-7 by the deductor.

Details to be provided in GSTR-7

  • TDS deducted
  • TDS payable
  • TDS refund claimed if any

Periodicity

Monthly.

 GSTR-7 is not required to file for the month in which no TDS is deducted.

Due date of GSTR-7

10th of every next month

 

GSTR-8 

Who is required to file GSTR-8?

Every e-commerce operator who required to collect tax at source under GST law.

Details to be provided in GSTR-8

  • Supplies made through e-commerce platform
  •  TCS collected on above-mentioned supplies

Periodicity

Monthly.

Due date of GSTR-8

10th of every next month.

GST return due dates | Extended due dates chart GST return due dates applicable in May, June and July 2021