Impact of GST on Affiliate Marketers, Bloggers, YouTubers & Freelancers

GST Helpline India Blog
Impact of GST on Affiliate Marketers, Bloggers, YouTubers & Freelancers

The Goods and Services Tax, or GST, was introduced in India on July 1, 2017, as a reformed indirect tax structure that effectively replaced all the existing indirect taxes such as sales tax and VAT. GST is a consumption-based tax levied on the supply, purchase, transfer, lease and/or import of relevant goods and services as instructed by the GST regulatory of India.

Now, services like blogging, affiliate marketing, and YouTube videos should also be taxable under the GST provision, but are they? Let’s find out about GST applicability to affiliate marketing, freelancing and blogging services and its impact on online bloggers, freelancers and YouTubers in India.

Bloggers and Affiliate Services under GST

As per GST rules, blogging and affiliate services fall under OIDARS (online information and database access or retrieval services) which include all kinds of electronic services such as digital promotion, blogging, online advertising, cloud and digital data storage services, online content like e-books and movies, information transfer, online gaming, etc. These services are mandatorily under the GST ambit and are therefore required to pay taxes according to the standard GST rules. Continue reading to find out more.

Also Read: GST impact on IT Sector

GST Registration for Online Service Providers

GST registration is mandatory for all types of online services providers, including bloggers, freelancers and affiliate marketers, given that they fulfil the following conditions.

• Annual turnover is more than Rs 20 lakh (Rs 10 lakh for the Reserved States)
• Eligibility (Any of the following conditions)
  1. The person/company is involved in the online selling of information or database access/retrieval services within India.
  2. The person/company is involved in the online selling of information or database access/retrieval services to an unregistered person in India from an outside country (Import of information by an unregistered person).
  3. The person/company is involved in the online selling of information or database access/retrieval services from India to an outside country (Export of information).

As you can see, GST registration is mandatory for all service providers who make an annual sale of worth more than Rs 20 lakh, irrespective of their locations. However, GST applicability rules depend on the location of the services provider.

GST Rates for Online Professionals like Bloggers, Freelancers & Youtubers

The following online professionals (service providers) will have to register and pay GST if their annual income from online services exceeds Rs 20 lakhs.

Applicable GST rates on affiliate marketers, bloggers, freelancers and YouTubers are:

Bloggers who are involved in creating and running online blogs and earn by displaying ads or through affiliate commission or any other way from blogging are required to pay GST at the rate of 18%.

Freelancers, including designers, developers, bloggers, online marketers, who are involved in providing services online have to pay GST @ 18% on their earnings.

YouTubers who earn by displaying ads on their online videos are also required to pay 18% GST on their income.

E-commerce site owners who earn by selling goods or services online will pay GST @18%

Other affiliate marketers, including freelance digital marketers, are also under 18% GST slab.

All these professionals will charge GST from their clients on the cost of services provided to them and then pay the same to the government.

Penalty on Non-Compliance

If an eligible blogger or freelancer does not register for GST and pays tax on time, they will be charged penalties as follows:

• Penalty on Non-Registration – Rs 25,000
• For short or non-payment of tax- 10% of the due tax amount subject to min Rs 10,000
• For late GST return filing – Rs 100 per day from the last date of return filing
• For evading tax or committing GST fraud – 100% of the due (evaded) tax amount subject to min Rs 10,000

GST on Export of Online Services

Professionals who reside in India and sell or provide online services to individuals/companies located outside India will have to register for GST (if annual turnover is over Rs 20 lakh), however, there is no GST on the export of such online services. These professionals are still required to register and file 0% GST Returns as per the rules but need not to pay any tax. Following are some examples of export of online services that are free from GST.

• Affiliate marketing where the money comes from outside of India through PayPal or bank transfer.
• Adsense income

For an online service supply to be considered export, the place of supply & recipient must be outside India.

Input Credit (ITC) for GST-registered Online Service Providers

If you are a GST-registered supplier of online services and pay GST on your income, you are also eligible to get input credit of GST paid on the expenses incurred for running the business.

For example, if you are paying Rs 18 GST for using Google’s Ad Services worth Rs 100, you will get that Rs 18 back when filing your GST return. The refund (ITC) amount will be deducted from your actual GST liability and you will only have to pay the remaining tax amount.

To be able to avail ITC, be sure to provide your GST number to all online companies from where you are purchasing input services/goods for your online business.

Use Gen GST Software for the easy and error-free filing of your GST returns. The software can also be used to get GST-compliant invoices to be given to your clients. GST invoices are mandatory for all online services for which you are charging GST from your clients and paying tax to the government.

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GST Software for Textile Industry in India, Free Download Gen GST

GST Helpline India Blog
GST Software for Textile Industry in India, Free Download Gen GST

Gen GST is a feature-rich, complete GST return filing and e-billing software designed for CAs and taxpayers. The software lets you generate GST-compliant tax invoices and file your monthly/quarterly/annual GST returns in the easiest way possible. With Gen GST software for textile industry, you can now manage all your Textile business accounts in one place, track inventory, generate tax reports, maintain records, file returns and pay taxes directly to the government.

Gen GST Features at a glance

Easy & Quick Invoicing

With GST software, you can create the right Textile business invoices and bills almost instantly. It is super easy. You just have to fill the details in a pre-designed format and print the invoice out.

GST Return Filing

The software provides support for the filing of all the GST returns including GSTR-1, GSTR-2, GSTR-3B, GSTR-9, etc. So, whether you’re looking to file your monthly return or the annual one, Gen GST is the ultimate solution.

Sales figures Reporting

With Gen GST, you can generate summarised/detailed and rate-wise reports of your sales figures for any time period

Unlimited Client E-filing

The paid version of GST software supports unlimited return filing of unlimited clients, a perfect solution for professionals.

RCM (Reverse Charge Mechanism) Invoicing

The latest version of Gen GST has been integrated with the RCM feature which can be used for creating purchase invoice for RCM dealers.

e-Payment of Taxes

In addition to filing your GST returns, you can also make payment of taxes from within the app/software.

Auto Error Detection and Alert

The Gen GST software will automatically reconcile the data filed by you in your return and invoices and notify you about errors.

Import Data

Gen GST now lets you import data directly from Excel, Govt portal and third-party software while filing your returns.

Download bulk status of return filing

As a part of GST management facility, the software enables you to download and check the bulk status of your returns.

GST credit register (calculation of credit)

The feature enables a user or CA to automatically calculate their credits (ITC) based on their tax liability and payments.

Reconciliation of Returns

The GST software will automatically reconcile GSTR-2A, GSTR 3B and other GST returns with the details in the Input Credit Register

Desktop & Online (Web-based) Variants

Gen GST is available in both online and desktop variants enabling users to file their returns on any platform as per their convenience and choice.

Gen GST is a one-in-all GST solution designed to help businesses easily file GST return and generate GST-compliant invoices for their business transactions. The software is available in two variants – online and offline. The online variant of GST software is developed in a highly secure JAVA language to provide protection for unauthorised access and data security. Gen GST is independent of the OS and can be used on any system. A free version of Gen GST software can be downloaded from the official website to be used for trial for return filing for one business. The software application is regularly updated with new modules and changes as recommended by the GST Council from time to time.

Why is Gen GST Software the best tool for your Textile Business

• One of the most popular software for GST return filing
• GST compliant invoicing, reporting and reconciliation
• Very easy to implement and use
• Customizable according to the unique needs of different kinds of businesses and accounting professionals
• Support collaboration between teams, supplier and buyers
• Custom-oriented approach
• Helps your Textile business grow in the post-GST era

Your search for a comprehensive GST-compliant accounting and GST tool ends here.

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Impact of GST Rates on Wooden Furniture in India

GST Helpline India Blog
Impact of GST Rates on Wooden Furniture in India

On 18th May 2017, a meeting was held in which the GST council declared the tax on certain goods and services under GST, the new tax regime, which has effectively replaced the existing VAT taxes on goods and services. In this article, you can read about GST rates on various wooden furniture items and supplies and how is the GST regime better (or worse) than the VAT regime.

GST Rates on Wooden Furniture Supplies

To understand the cost of wooden furniture, one should first know the GST rate on the wood product supplies.

• GST Rate for articles like wooden boxes, drums, crates and the wood used in making an umbrella, walking sticks and tool handles or anything similar is 12%.
• GST Rate for wood pulp and bamboo pulp is 12%.
• GST Rate for residual lyes from the manufacturing of wood pulp, whether or not concentrated, desugared or chemically treated, including lignin sulfonates, but excluding tall oil is 18%.
• GST Rate for wood tar; vegetable pitch; wood naphtha; brewers’ pitch; wood tar oils and similar preparations based on resin, resin acids or on a vegetable pitch and wood creosote is 18%.
• GST Rate for any wooden furniture and wooden decorates used as tableware or kitchenware (except that notified @28% under GST) is 12%.
• GST Rate for fiber wood, plywood, laminated wood and other materials having an appearance of wood or being woody in nature is 28%.
• GST Rate for firewood or wood charcoal is Exempt.
• GST Rate for wood in chips, sawdust or waste of wood is 5%.
• GST Rate for cane furniture is 28%.

Instead of the old average VAT rate of 12.5%, the final goods manufactured by the wooden furniture manufacturers will be levied at the rate of 12% under GST. Mainly for the manufacture of wooden furniture articles, plywood is used. A major increase has been made in the rate of plywood from the current average VAT rate of 5-6% to 28% under GST. This has resulted in an increase in the cost of wooden furniture. However, furniture manufacturers can now claim the ITC (input tax credit) on the tax paid for buying plywood.

GST Rate on Iron or Steel Furniture

Iron or steel furniture has also got expensive under GST. The old average VAT rate applicable to iron or steel furniture was 12.5% while under GST, any article of furniture, other than wooden furniture, will be taxable at 28% rate.

As compared to the average VAT rate of 5%, the GST will be levied on iron and steel at the rate of 18%, regardless of the metal characteristics. Manufacturers of iron and steel furniture would be able to claim ITC of the tax paid by them on imports.

Conclusion

The tax rate under GST on furniture, wood, iron or steel is much higher as compared to the older rates of the VAT.

Hence, under GST, there will be an increase in the tax liabilities of iron or steel producers. GST is expected to be more profitable for wooden furniture manufacturers but not so much for iron or steel furniture manufacturers.

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Tax Deducted at Source (TDS) under GST with Example

GST Helpline India Blog
Tax Deducted at Source (TDS) under GST with Example

Introduction to TDS under GST: GST is a consumption tax levied on the sale of goods and services. GST is collected at pre-fixed rates from consumers or purchasers of goods and services. On the other hand, TDS is deductible by payee from the amount payable by it to provider/supplier of services. TDS is deducted on services, Contract payment, Professionals, etc. The deducted or the balance payment has to be deposited as tax amount with the government. The tax amount is deposited on behalf of the recipient as future tax liabilities.

When and Who can Deduct TDS Under GST

A payee can deduct TDS on the payable amount if the aggregate value of the contract exceeds Rs. 2.5 lacs. TDS is deducted against taxable services to supplier. Taxable value is the total value on which tax is computed.

• TDS is applicable on taxable value or aggregate value of supply.
• Aggregate value of contract must exceed 2.5 lakhs.

The GST Law permit following people/entities to deduct TDS.

• Persons or category of persons, notified by the Centre or State, recommended by the GST Council.
• Establishment/Department of the Central or State Government.
• Governmental Agencies
• Local Authority

The person or individual responsible to deduct TDS under GST is required to file GSTR-7 form.

TDS Rate in GST

The GST Law mandates a TDS rate of 2% (CGST 1% + SGST 1%) on intra state and inter state supplies alike. This 2% TDS has to be applied on the aggregate value of supplies/payments made to the recipients.

The Central or State Governments on the recommendation of GST Council has notified that 1% TDS has to be deducted and deposited by the supplier from the payment made by recipients against services, Contract payment, salary etc.

TDS Provision under GST in PDF

Composite And Mixed Supplies

Composite supplies are two or more naturally bundled supplies, with one of the supplies being a principal supply. The GST rate on the principal supply is levied on the aggregate value of the bundled supply. In case they are not bundled naturally, then the supply becomes a composite supply. And GST rate of the principal supply will be levied on the bundled supply.

TDS Under GST Example

In case you are still confused, the following example will better highlight the above points.

Let’s suppose X has to make a payment against 10 Xerox Machines and each unit of the Xerox Machine costs Rs 50,000. Total Payment will be Rs 5,00,000 . The transaction will fall under Sec. 194C & TDS deduction on this transaction will be 1%.

Selling price of 10 Xerox Machines @ Rs. 50,000/- per unit (Taxable/Aggregate Value)	Rs. 5,00,000
If the GST rate on Typewriter is 28%
CGST @ 14%	Rs. 60,000
SGST @ 14 %	Rs. 60,000
Total Invoice Value	Rs. 6,20,000
How to deduct TDS on GST bill given above ? TDS to be calculated on the base (taxable value) = Rs. 5,00,000/- TDS rate in GST = 1% (CGST) and 1% (SGST) Calculation to be made excluding the tax amount (Rs. 6,20,000 (-) Rs. 1,20,000) In the given example TDS calculation would work out to be Rs. 5,00,000 x 1 % = Rs. 5,000 (CGST) Rs. 5,00,000 x 1%. = Rs. 5,000 (SGST)

 

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GST Rate for Gym and Beauty Parlour Services in India

GST Helpline India Blog
GST Rate for Gym and Beauty Parlour Services in India

The Goods and Services Tax (GST) rate for all types of services is based on the SAC Code (Services Accounting Code). SAC is a services classification system which was developed by the service tax department for the demand of service tax. The GST Council thought of adopting the same classification system for the demand of GST. GST rate services has five slabs namely – 0%, 5%, 12%, 18% and 28%. 18% is the default GST slab so the majority of the services fall under it. Given below are the GST rates for beauty parlours, gyms and health care services in details.

GST Registration for Beauty Parlour and Gyms in India

Beauty parlours, fitness centres and gyms which have more than Rs 20 lakhs of annual turnover (In the Special Category States, Rs.10 lakhs annual turnover) must register for GST. Since, the supply provided by beauty parlour and gyms would fall under intra-state supply, GST registration would be required only on crossing the threshold. And also the beauty parlours, fitness centres and gyms which have service tax registration have to compulsorily complete the GST registration.

GST registration will be compulsory, if fitness centre is engaged in the supply of goods and services like selling of cosmetics, protein powders, etc. and even if e-commerce is used for the supply of goods or goods are sold to persons in other states.

SAC Code and Applicable GST Rate on Beauty Parlours

• SAC Code 999721 is applicable for hairdressing and barbers services
• SAC Code 999722 is applicable for cosmetic treatment (including plastic/cosmetic surgery), manicuring and pedicuring services
• SAC Code 999729 is applicable to all other beauty treatment services

GST rate @18% is applicable for hairdressing services and beauty parlour services.

SAC Code and GST Rate on Fitness Centres (& Gyms)

• SAC Code 999723 is applicable to physical well-being services including health club & fitness centre

GST rate @18% is applicable for fitness centres and gyms.

GST rate @28% is applicable for Gym equipment.

SAC Code and GST Rate for Health Care Services

• SAC Code 999311 – Inpatient services
• SAC Code 999312 – Medical and dental services
• SAC Code 999313 – Childbirth and related services
• SAC Code 999314 – Nursing and Physiotherapeutic services
• SAC Code 999315 – Ambulance services
• SAC Code 999316 – Medical Laboratory and Diagnostic-imaging services
• SAC Code 999317 – Blood, sperm and organ bank services
• SAC Code 999319 – Other human health services including homoeopathy, Ayurveda, Unani, naturopathy, acupuncture etc.

Healthcare services provided by a clinical establishment, an authorised medical practitioner or para-medics is free from GST and also the service given by way of transportation of a patient in an ambulance is free from GST.

For medicines and pharmacy products, GST is applicable. Hence, GST registration is compulsory for clinical establishments and hospitals who are involved in the supply of medicines and pharmacy.

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Impact of GST Rate for Passenger Transport Services

GST Helpline India Blog
Impact of GST Rate for Passenger Transport Services

GST Council in India has decided the GST rate for goods and services. The GST Council consists of members from State Government as well as Central Government. After several meetings, the GST Council has successfully decided the GST rate. Now let us look at the GST rate for passenger transport services like air travels, railways, GST on bus services or taxi services and more.

Do Transport Service Providers need GST Registration?

The businesses which are involved in giving passenger transport services have to obtain GST registration and also file GST returns annually if their turnover is more than Rs 20 lakhs or they are involved in supplying inter-state services.

GST on Passenger Transport Services

In India, GST rates are connected to SAC (Service Accounting Code), a system of classification which was developed by the Service Tax Department in India for the purpose of service tax. Under SAC Code, there are two groups in which the passenger transport fall – group 99642 for long for distance transport services of passengers and group 99641 for sightseeing transportation and local passenger transport services.

Goods are classified using the HSN Code, which is an internationally accepted methodology for the classification of goods in the course of export or import by over 200 countries.

SAC for Sightseeing Transportation and Local Transport Services for Passengers

Given below are the SAC Codes for the services which fall under sightseeing Transportation and Local Transport Services for Passengers:

• SAC Code 996411 – Local land transport services of passengers by metro, tramway, railways, monorail, bus, autos, scooters and other motor vehicles.
• SAC Code 996412 – Taxi services which include radio taxi & other similar services.
• SAC Code 996413 – Non-scheduled coach charter and local bus services.
• SAC Code 996414 – Other land transportation services of passengers.
• SAC Code 996415 – Local water transport services of passengers by cruises, ferries, etc.
• SAC Code 996416 – Sightseeing transportation services by land, water, air and rail.
• SAC Code 996419 – Other local transportation services for passengers.

SAC for Long Distance Transport Services of Passengers

Given below are the SAC Code for the services which fall under Long Distance Transport services for Passengers:

• SAC Code 996421 – Long-distance transport services of passengers through Metro, Rail network by Railways, etc.,
• SAC Code 996422 – Long-distance transport services of passengers through Road by Car, Bus, non-scheduled long distance bus and stage carriage, coach services, etc.,
• SAC Code 996423 – Taxi services which include radio taxi & other similar services.
• SAC Code 996424 – transoceanic (overseas) and Coastal water transport services for passengers by Cruise Ships, Ferries, etc.,
• SAC Code 996425 – Domestic/International Scheduled Air transport services of passengers.
• SAC Code 996426 – Domestic/international non-scheduled air transport services of Passengers.
• SAC Code 996427 – Space transport services for passengers.
• SAC Code 996429 – Other long-distance transportation services of passengers.

Rates of GST for Transport Services of Passengers

Points given below are the GST rates on passenger transport services ordered by the GST Council.

Railways: Other than sleeper class, the GST rate for transport of passengers by rail has been fixed @ 5% with ITC of input.

Read more: Impact of GST on Railway Tickets and Transport Services

Taxi Services: For renting of motorcabs wherein the fuel cost is borne by the service recipient, a GST rate of 18% will be applicable. With no ITC, GST rate of 5% will be applicable for the transport of passengers by an AC contract or stage carrier (i.e. buses) and radio taxis.

Air Travel: With ITC allowed on input services, the GST rate of 5% will be applicable to the transport of passengers by air in the economy class. With ITC allowed on input services, the GST rate of 5% is applicable for the transport of passengers, with or without accompanied belongings, by air, boarding or terminating in a Regional Connectivity Scheme Airport. With full ITC, GST rate of 12% will be applicable to the transport of passengers by air in other economy class.

Recommended: GST Rate on Aviation Sector

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How is GST Applicable to Advance Payment Received?

GST Helpline India Blog
How is GST Applicable to Advance Payment Received?

While paying tax for a transaction under GST, it is very necessary to determine the norms for the time of supply. The GST on advance is charged based on the time of supply made. Check out the below terms.

Given below are the general norms for the time of supply for services –

1. Date of issue of invoice
2. Date of receipt of payment/advance*
3. Date on which invoice should be issued

The second point – date of receipt of advance – indicates that if the buyer pays has paid an advanced before the invoice is issued, the date of receipt of advanced would be the time of supply.

The GST must be paid on the money received by the taxpayer who has received the advance.

*Note: there is no GST for the supply of goods payment which is received in advance but on the issue of invoice, the total amount will be taxed.

Treatment of Advance Payment Received for the future supplies under GST in PDF

What must a taxpayer do when he receives an advance?

Below are the given points on which a taxpayer must take an action on receipt of advance:

1. To issue a Receipt Voucher:
The receipt voucher must be issued by the supplier to the person who is paying advance. Details like the rate of tax applicable, description of goods or services, amount of advance, etc will be present in the receipt voucher.

2. To compute tax on Advance Received
While filing the return for the month, you have to compute and pay the tax on the advance.

The advance which has been received must be collected which means that the advance which is received must be considered inclusive of GST.

If the rate of tax is not determined during receipt of advance then the GST @ 18% will be imposed.

Also if the point of sale cannot be ascertained the advance is considered as interstate supply and IGST has to be paid.

Note that, the taxpayer who pays advance are not qualified for claiming ITC on the advance payment. ITC can be claimed by the taxpayer on advance paid on goods or services receipt.

3. Furnishing details of Advance Receive in GSTR-1
If a taxpayer receives an advance for which invoice is not issued then it should be stated in Pt.11A of GSTR1 return.

It is not compulsory to give all the details of each advance, A accumulative figure of the entire advances must be given.

The advance must be separated into Intrastate and Interstate advances.

The gross figures of advances must be stated under Gross Advance Adjusted/Received.

Then, the tax payable i.e. IGST in case of interstate and CGST and SGST in case of intrastate advances must be mentioned.

This tax on advance is added to the tax liability of the supplier.

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What are the key features of the Simplified GST Quarterly returns?

GST Helpline India Blog
What are the key features of the Simplified GST Quarterly returns?

GST Quarterly Forms for Small Traders and Business Owners

The new GST quarterly returns norms have come as a welcome relief for small traders and business owners who were grieved by burdening compliance procedures and rules. In this blog, we discuss salient features of the new GST quarterly returns.

GST Quarterly Returns: Eligibility and Features

Business owners, traders as well as new and old taxpayers with turnover not exceedings 5 Crores in the previous financial year can file quarterly returns. Such individuals can also opt for monthly returns if they wish to do so once during a year when the financial quarter begins.

Quarterly returns are a welcome break for small business owners from the monthly return norms. The return procedure is also significantly simplified. Taking into account the fact that small businesses deal with fewer suppliers, the GST council and the Finance Ministry has given important consolations in new quarterly returns filing.

These include :

Missing and pending invoice reporting has been omitted from quarterly returns filing.

Non-GST supplies, exempted supplies, etc. which do not create any liability.
Input tax credit on capital goods

Invoices which have not been uploaded by suppliers are termed as missing invoices. Pending invoices refer to those supplies which have not been yet received by the supplier or have been uploaded by the supplier but need correction. Also, invoices on which input tax credit claims have not been made yet by recipients are treated as pending invoices by the tax department. But quarterly return filers will have to furnish details of non-GST supplies, exempt supplies and input tax credit on capital goods in the Annual return.

Recommended: What are the key features of the Simplified GST monthly returns?

In case the business owner feels the need to report missing and pending invoices they can revert to monthly return filing at the start of a fresh quarter.

Types of GST Quarterly Returns

Quarterly Returns are of three types and taxpayers need to file returns as per that their business. These include:

Sahaj

Sahaj Returns are for businesses making purchases only from Indian suppliers and making sales to unregistered persons (B2C) or consumers in India.

Sugam

Sugam Returns are for businesses making purchases only from Indian suppliers and making supplies to both registered businesses as well as consumers or unregistered businesses (B2B + B2C) in India

Recommended: New Single GST Return Forms and Sahaj-Sugam Schemes from FY 2019

Quarterly Return

The third return form can be filed by business owners or taxpayers whose business activities expand to foreign shores in addition to domestic purchases and supplies. Business owners with import and export operations and yearly turnover less than 5 Crore can file quarterly returns.

Taxes will be paid on a monthly basis

For business owners and traders filing quarterly returns, taxes must be paid on monthly basis only. Taxpayers need to submit a payment declaration form for the same. The payment declaration form will contain all tax liabilities of the business owners depending on the invoices uploaded. On a similar line, based on the uploaded invoices, the taxpayer or business owners will be notified about their ITC ( input tax credit) claims. This will enable taxpayers to pay taxes as well as make ITC claims on a monthly basis.

One important point to note about payment declaration form is that taxpayers or business owners will not be penalized with additional penalties for minor mistakes or errors as it is a declaration form and not a return form.

Quarterly Returns but Monthly Tax

Late payment of taxes due for each month will attract interest on the liable tax amount. Quarterly returns are aimed primarily for reducing GST compliance burden on small businesses. Sahaj and Sugam returns are more than a welcome move from the GST Council and Tax Authorities.

However, taxpayers and business must remember that reporting of missing or pending invoices will require a shift to monthly return filing.

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What are the key features of the Simplified GST monthly returns?

GST Helpline India Blog
What are the key features of the Simplified GST monthly returns?

The new GST monthly returns were accepted by the GST Council in the 28th Council meeting. For feedback, these were kept in the public place like businesses, CAs and industry bodies. In the new GST returns, the important change is the clarified monthly return which is to be filed by the person whose turnover is more than Rs 5 crores. Given below are the key features of the new monthly GST returns:

Latest GST monthly return applicability

Monthly GST return must be filed by the regular taxpayer whose yearly income is more than or equal to Rs 5 Crores in spite of quarterly return.

What is the due date of the latest GST monthly return?

20th of the coming month is the due date for filing the latest GST monthly returns.

What is the advantage of filing the latest GST monthly returns over quarterly returns?

Taxpayers who will be filing the GST monthly return will have the power to report pending and missing invoices, while the person who is paying quarterly will not have this power. Missing invoice feature gives the recipients the power to report invoice which the suppliers have forgotten uploading. The invoices which are uploaded by the supplier is called pending invoices. Given below are the three situations of pending invoices:

1. The recipient did not receive the supply
2. The recipient asked for the amendment of the invoices
3. The recipient is confused to avail ITC on the invoice for the period or not

Business who will be filing quarterly returns will not have these three necessary capabilities. Therefore, even the businesses who are having an annual amount up to Rs 5 Crores must assess their suppliers and make sure that they select monthly returns if they want to have the facility of reporting pending or missing invoices.

Read Also: Refund Can Now Be Claimed Online On Excess GST

Return based on the profile

The fields which are shown in the GST monthly return will be based on the profile of the taxpayer as most of the taxpayers have finite types of inputs and supplies. A form will be used to understand the profile of the taxpayer. If the taxpayer makes supplies then the fields such as supplies to SEZ, exports, etc will be shown.

What is the facility to file ‘Amendment return’?

To correct the mistakes made in return filing, amendment returns can now be filed by taxpayers. For each tax period, two amendment returns can be filed. If there will be any carelessness taking tax responsibility in the amendment returns more than 10%, a higher late fee will be due.

File Nil return by SMS

One nil return can be filed for the entire quarter if the person does not have purchases, input tax credit, output tax liability in any quarter. A facility will be made available in which nil return can be filed easily by sending an SMS.

When all the facilities mentioned above will be made available then the latest GST monthly return will be simpler for taxpayers. The lives of taxpayers will be simpler because of the new return filing process. The feature of the key benefit for the person filing monthly return is reporting pending and missing invoices.

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Queries Over Trading & Manufacturing via a Single GST Number?

GST Helpline India Blog
Queries Over Trading & Manufacturing via a Single GST Number?

After the launch of GST on 1 July 2017, almost all the departments of the government started working towards an absolute transition to the newly implemented indirect tax reign. Several questions have been raised by the Central Board of Excise and Customs relating to GST concerning individual sectors. From IGST (Integrated Goods and Service Tax) to GSTIN to trade to Special Economic Zones: the government highlighted many situations to clarify GST.

Given below are the queries mentioned by the CBEC:

If an event has been held by Maharashtra company in Delhi, will they have to register in Delhi? Will the IGST paid by Maharashtra company be enough?

Registration is required in Delhi if you provide any supply from Delhi or else, registration from Mumbai is enough (and any IGST on supplies made from Mumbai to Delhi).

Will a separate GSTIN be assigned to a registered person for deducting TDS (if he/she has PAN and TAN as well)?

As tax deductor, separate registration is required.

Are separate registrations required for trading and manufacturing by an entity in one state?

For all activities, there will be only one registration per state.

Will turnover of agents be added to that of the principal for registration?

No, the turnover of agents will not be added to the principle for registration.

I am registered in TN and getting the services from an unregistered dealer of AP. Should I take registration in AP to discharge GST under RCM?

Any person who makes an inter-state taxable supply is required to take registration. Therefore, in this case, the AP dealer will take registration and pay tax.

If I take up composition scheme under GST and purchase goods from an unregistered person, will I be required to pay GST to the government?

Yes, you will be liable to pay tax on a reverse charge basis for supplies from an unregistered person.

Which duties will be charged on the import of goods?

Customs duty and cess as applicable under the IGST and GST compensation cess.

After adding all customs duty and customs cess to the value of imports, IGST and GST compensation will be paid.

The current procedures have service tax on Nepal but not goods tax. With GST, which tax will apply?

The export procedure for Nepal would be the same as that to other countries.

Are there any exemptions for SEZ (Special Economic Zone)? How will an SEZ transaction happen in the GST reign?

As defined in Section 16 of IGST Act, supplies to SEZs are zero-rated supplies.

Read Also: AAR: Now Vehicle Owners Pay 18% GST on Pollution Certificate

As per the Section 16: “‘ZERO rated supply’ means any of the following supplies of goods or services or both, namely:- (a) export of goods or services or both; or (b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit. (2) Subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services Tax Act, the credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply. (3) A registered person making zero-rated supply shall be eligible to claim refund under either of the following options, namely: — (a) he may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilised input tax credit; or (b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder.”

How would the sale and purchase of goods to and from SEZ be treated? Will they be export or import?

Supplies by SEZs to DTA are treated as imports and supplies to Special Economic Zones are zero-rated supplies.

What is the status of international export freight under GST?

It was exempt under POPS rules. It is zero-rated in most of the countries.

POS or ‘place of supply’ for transport of goods determinable in terms of Section 12(8) or Section 13(8) of IGST Act, 2017, depending upon the location of service provider/service receiver. Exports are treated as zero-rated supplies.

As per to the eighth clause in Section 12 of the IGST Act: “The place of supply of services by way of transportation of goods, including by mail or courier to (a) a registered person, shall be the location of such person; (b) a person other than a registered person, shall be the location at which such goods are handed over for their transportation.”

Read Also: AAAR Fixed 18% GST Rate for Solar Power Projects

Also, Section 13(8) states: “The place of supply of the following services shall be the location of the supplier of services, namely:- (a) services supplied by a banking company, or a financial institution, or a non-banking financial company, to account holders; (b) intermediary services; © services consisting of hiring of means of transport, including yachts but excluding aircrafts and vessels, up to a period of one month.”

Who will pay IGST, if the goods are imported from a Special Economic Zone?

Under this, the supply is served as import and the pre-GST policy of payment continues with the difference that IGST is charged instead of CVD.

What will happen after GST if I have a pending export refund in service tax?

Refunds under previous laws will be given under the particular laws only.

How do I verify that my working capital is not blocked as refunds, as an exporter?

Within seven days of filing the refund, suitable provision has been made in the law by giving for the permit of 90 per cent of refund on a provisional basis.

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Ten Major Issues after GST implementation in India: Needs Attention!!

GST Helpline India Blog
Ten Major Issues after GST implementation in India: Needs Attention!!

As evident GST implementation in India has been a great success in terms of Revenue collection and the detection and control of the invasion of the Revenue. But as we all know every subject and work has its own pros and cons and so has been with the GST implementation.

Though declared by the world bank as the most complex taxation system, the Tax collection department along with the Government has worked very hard to get the GST fully implemented in India and bring the best out of it and has been a success to a great extent.

We witnessed a lot of fraudulent cases which came in light after the implementation of GST. The Administrative department has also walked hand in hand with the tax collection department and thus we saw how progressively the GST has been implemented in India in almost all the departments. GST implementation has been the great achievement of the Government. Initially, Government has to face several complaints due to the complicated process and the less understanding of the business class regarding the filing of the GST tax. But later the process was revised and made easier for all the class and segment of the society. Petroleum products, power, and real estate have been kept outside the GST ambit.

Yet, there are still some major issues like a mismatch in the returns filed, errors in filing returns and also India experienced numerous exporters strikes, which needs rectification. Here we shall discuss the same though keeping in mind that the Government had pre-assumed the problems which could arrive and is all set to get them rectified at the earliest.

Technical Issues regarding Tax filing

There are some burning and solution seeking problems regarding Tax filing. The Taxpayers are looking upon the finance ministry as well as the GST council to get their tax filing problems rectified as soon.

Return Due Dates for September 2018

As directed, the Taxpayers cannot file ITC without getting the invoices matched and the credit of ITC being claimed or reversed, depends solely on the filing dates. The Taxpayers thus want the dates to be extended to December 31st to check any error and to process error-free filing.

Composition scheme dealers and Complexity in the Management of Detailed records

Composition scheme dealers are supposed to give the complete purchase details in the GSTR 4 form and within the filing return dates for September 2018 but the dealers are not allowed to claim the ITC credit. Thus the dealers are facing problems in managing the detailed records.

The questioned credibility of the Annual GSTR 9 form

As there has been no Addition or modification, i.e. no solution has been advised to the taxpayers regarding tax filing, the GSTR 9 annual return form which is due 31st December 2018, seems to be useless. On the other hand, the due date also coincides with the MVAT Audit Report due date i.,e Jan 2019. Thus, the due date for tax filing needs to be extended.

The Reversal of Claimed credit

The credit claimed for such a purchase for which payment has not been made to the supplier within 180 days, needs to be reversed as per the GST ITC claim rules. This is an extra burden on the organization to keep the separate records of such pending claims.

No Refund procedure for the extra Tax Paid

No option for Refund has been kept for the taxpayer if by mistake he has paid extra Tax. Thus the taxpayers are facing problems in getting the extra amount refunded.

Download option not available for the GSTR 2A form

The Taxpayers are facing difficulties in matching the returns with their books of accounts, as the Annual GSTR 2A form has to be filed on the Monthly basis.
Joint Development Agreement Issues

There are some goods which are rated Nil and the commission attached to them are not taxable, whereas, as per rules, the tax liability is supposed to be paid on the commission attached to the taxable goods. Thus, there is a discrepancy between the rule and the actual scenario, hence creating a gap in the understanding.

Issues related GSTR 3B Form

The lack of modification or amendment facility for this return type and the lengthy and delaying Amendment procedure has created interest liability issues.

GSTR 1 Form filing; A serious task

The GSTR 1 form filing becomes a serious task as the credit note/debit note or B2C sales made cannot be modified again in the form.

TRAN 1 form Issues

Trans 1 notice in Form 603 is now being sent by the department to everyone hence creating trouble for the real taxpayers, as the notice requires all the previous records to be made available and that is a tiresome task.

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5 Way to Filing Your GST Return Easily | File GST Return Online

GST Helpline India Blog
5 Way to Filing Your GST Return Easily | File GST Return Online

Introduction

With the introduction and implementation of GST in India, the Nature of Tax filing has changed. ITC has come into existence and plays a crucial role in the whole process. As we know, earlier there was no need for the buyers to get the invoices reconciled with the invoices of the respective vendors. But in the current, changed scenario they have to do the same and at times it becomes very difficult to reconcile the inward supply invoices with the outward supply of their vendor’s invoices especially when the buyer has to purchase goods from different suppliers. When one fails to do so, he must face a loss of the Input Tax Credit (ITC). Thus we see that how important is ITC, for paying off the business Tax liabilities

Thus, we see that apart from being important, the GST taxation is crucial. Below are some measures which could be followed to get the procedure simplified and hassle-free.

GST Return Types & Due Dates

GSTR Form Type	Details to be Furnished	Frequency	Due Date
Form GSTR 1	Details of outward supplies of taxable goods or services or both affected	Monthly	10th of succeeding month
Form GSTR 2	Registered taxable recipient should file details of inward supplies of taxable goods and services claiming input tax credit.	Monthly	15th of succeeding month
Form GSTR 3	Registered taxable person should file monthly return on the basis of finalization of details of outward supplies and inward supplies plus the payment of amount of tax.	Monthly	20th of succeeding month
Form GSTR 4	Composition supplier should file quarterly return.	Quarterly	18th of the month succeeding quarter.
Form GSTR 5	Return for the non-resident taxable person.	Monthly	20th of the subsequent month.
Form GSTR 6	Return for input service distributor.	Monthly	13th of Next Month
Form GSTR 7	Return for authorities carrying out tax deduction at source.	Monthly	10th of Next Month
Form GSTR 8	E-commerce operator or tax collector should file details of supplies effected and the amount of tax collected.	Monthly	10th of Next Month
Form GSTR 9	Registered taxable person should file annual return.	Yearly	31st December of Next Financial Year
Form GSTR 9A	Simplified Annual return by Compounding taxable persons registered under section 10	Yearly	31st December of Next Financial Year
Form GSTR 9C	Annual Audit Form for taxpayers	Yearly	31st December of Next Financial Year
Form GSTR 10	Taxable person whose registration has been cancelled or surrendered should file final return.	Quarterly	Within 3 months of date of cancellation or date of cancellation order, whichever is later.
Form GSTR 11	Person having UIN claiming refund should file details of inward supplies.	Monthly	28th of the month

The below Five steps need to be followed to make the whole process easier:

Step 1: To Get the Business Computerised

The very first step needs to be followed is to get the Business computerised which will ultimately result in keeping an accurate record of all the transactions and the errors would get detected easily. Getting the accounts and the billing computerised ensures the accuracy of the records.

Step 2: Adopting an accounting software right for a compliant business

As we know that GST focusses on Compliance and for a better compliant business we need software which is right for our business. Though GST returns could be filed directly on the GST portal with the help of the utilities provided by GSTN. But things would be easier if the GST ready software or ERP’s are used if there are a large number of transactions or customers.
There are some important points required to be taken care of while purchasing a software.

You should be able to maintain your accounts under the GST compliance rules.
It should be efficient enough to detect and rectify the error if any at the earliest.

The connectivity should be good and all the transaction level information should be speedily made available to the GST Portal.

Facility for matching the invoices with the suppliers online for the right ITC should be available.

Thus we see how the selection of the correct software for the business is important for a hassle-free and compliant business and at the same time, GST filing would not be a havoc anymore for any business Big or Small.

Step 3: Recording Accurate Transactions in Real Time

Buying a computer and getting the accounting software updated is not sufficient if the transactions are not recorded accurately and in real time. The Accounting books could be maintained and kept GST compliant if we, once a day reconcile them. This ensures that the accounting records are already GST compliant and results in seamlessly filing the requisite returns of one’s business.

Step 4: Getting Guidance in GST Return Filing from GST Practitioners and Experts

Businesses these days take help from the internal or external auditors or tax return preparers for filing the GST returns who would be known as GST Practitioners or GSTPs. If one wants to manage compliance in-house, one must be assured that the team helping is well trained in GST. Also, training and sessions are being held across the country which could help one understand the GST and tax filing more accurately.

Step 5: Appointing a Resource to resolve the discrepancies

As we know the process of GST return filing which requires that the data provided by the Supplier must match the one provided by the customer. Also, the correct implementation of this process helps in the extraction of the correct ITC. But as we know that the system is new and the data requirements are high thus discrepancies could occur. The software is efficient enough to detect out the discrepancy but for negotiations, there should be some resource. It is always beneficial to have a resource in one’s office who could talk to the suppliers and resolve the issue.

Conclusion

All the above-mentioned measures are there to ensure the basic discipline of Compliance and availing the right ITC. Along with this it also guarantees a maintained cash flow and profitability in the GST era. It also raises the Goodwill and credibility of the Business in the business world.

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AAAR Fixed 18% GST Rate for Solar Power Projects

GST Helpline India Blog
AAAR Fixed 18% GST Rate for Solar Power Projects

Putting all questions and doubts to rest, the AAR Maharashtra has confirmed that all EPC activities will be subjected to 18% GST. This decision could affect India’s Solar Capacity. Reportedly, the cost of setting a solar plant would increase post the ruling. Most importantly, solar plants are considered immovable property under GST and hence there are no provisions of Input Tax Credit claim on the supply of input services.

• Solar Plants are permanent stations to fixed Consumers.
• EPC contractor and the counterparty are bound by a contract that clearly states the place of operation and construction will remain permanent.

The revised Model GST Law leaves service providers under work contracts on slippery ground. The ambivalence related to ITC claims for works contracts related to immovable properties has been the topic of several debates now. The point of concern is the GST provisions which make work contract services during construction on immovable properties eligible for ITC claims but the same services are eligible for ITC claims if input services are meant for a further supply of works contract services.

This has further aggravated with the recent ruling from Authority for Advance Ruling (AAR) for GST in Maharashtra. The ruling states that EPC (engineering, procurement, and construction) activities are liable for 18 percent GST. A petitioner argued that EPC activities must be treated as composite supplies and thereby a concessional rate of 5 percent must be levied on all solar power generation stations. But the AAR Ruling stands true for now.

Read Also: Impact of GST on Commission Income and Agents

Input GST Becomes a Cost

The issue was taken to the Supreme Court but to no avail. EPC players confirm that they are now planning to raise concerns with GST council against the 18 percent GST. Tax Experts believe that the 18% GST is not in tune with the general industry belief of 5 %. In case the GST Council sticks with the 18%, and electricity not falling within GST ambit, cost of solar power plants increases..”

Solar Contractors argue that the ‘works contract’ under GST involve immovable property and the solar power plant is movable. This necessitates consideration of solar power plant under the ‘works contract’.

You can read the Full Order Here

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