COMPOSITION LEVY
Persons not eligible for Composition
(a) Supplier of services other than Supplier of Restaurant service
(b) Neither a casual Taxable person nor a Non-Resident Taxable person.
(c) An Inter State supplier of Goods
(d) Persons supplying Goods through e-commerce operator
(e) Manufacturers of certain notified goods
Composition Rates
(a) For manufacturers, SGST 1% + CGST 1%
(b) For hotels other than Liquor SGST 2.5% + CGST 2.5%
(c) For others SGST 0.5% + CGST 0.5%
Return of a composition dealer: A composition dealer instead of filing monthly return, has to file return for each quarter in GSTR-4 within 18 days after the end of such quarter. In GSTR -4, invoice wise details of inter-state and intra-state supplies received from registered persons as well as unregistered persons, imports of goods and services, consolidated details of outward supplies, consolidated statement of advances paid/advances adjusted on account of receipt of supplies, debit note, and credit note received and issued have to be reported
Conditions for Composition
(a) With respect to migrated dealers, the Goods in stock should not have been purchased on Inter-State basis/imports/stock Transfer.
(b) The Goods in stock must not have been purchased from Un-registered Dealers, and if purchased tax has to be paid under Reverse charge mechanism.
(c) Composition dealers have to issue Bill of supply instead of invoice
(d) In the bill of supply, such dealer should mention "Composition Taxable person not eligible to collect tax on supplies"
(e) In sign boards at prominent place of business he shall mention the words "Composition Taxable person."
Cancellation of registration: Failure to file returns for 3 consecutive tax periods will lead to cancellation of registration.
Transitional Provisions: Dealer paying tax in the composition scheme under the earlier law but decided to pay tax under section 9 of the GST law (i.e. Regular dealer), shall be eligible for ITC in GST on the closing stock of goods purchased locally.
INPUT TAX CREDIT
Uninterrupted and seamless chain of input tax credit (hereinafter referred to as,"ITC") is one of the key features of Goods and services Tax. ITC is a mechanism to avoids cascading of taxes. Cascading of taxes, in simple language, is 'tax on tax; Under the present system of taxation, credit of taxes being levied by Central Government is not available as set-off for payment of taxes being levied by Central Government is not available as set- off for payment of taxes levied by State Government, and vice versa.
One of the most important features of the GST system is that the entire supply chain would be subject to GST to be levied by Central and state Government Concurrently. As the tax charged by the Central or the state Governments would be part of the same tax regime, the credit of tax paid at every stage would be available as set- off for payment of tax at every subsequent state.
Under this new system, most of the indirect taxes levied by Central and the State Government on supply of goods or services or both, would be combined together under a single levy.
GST comprises of the following levies:
(a) Central Goods and services Tax (CGST) on intra-state supply of goods or services or both
(b) State Goods and Services Tax (SGST) on intra-state supply of goods or services or both
(c) Integrated goods and services Tax (IGST) on inter-state supply of goods or services or both. In case of import of goods also, the present levy of Countervailing Duty (CVD)and Special Additional duty (SAD) would be available as set- off for payment of tax at every subsequent stage.
Conditions for claiming ITC
(I) Taxpayer should possess tax invoice or debit note or any other tax paying documents issued by supplier registered under the GST Act.
(ii) He should have received the goods or services or both.
(iii) Supplier should have reported the supply in the returns and should have paid tax.
ITC not allowed in the following circumstances
(i) ITC not allowed for a composition dealer.
(ii) ITC not allowed for goods or services received by a nonresident taxable person except on goods imported by him.
(iii) ITC not allowed for goods or services used for personal consumption
(iv) ITC not allowed for Goods lost/stolen/destroyed/returned or disposed of by way of gift/free samples.
Time limit for claiming ITC
ITC for a supply received in a financial year has to be claimed any time before the filing of returns for the month of September (of the following financial year) or the relevant annual return whichever is earlier.
TIME OF SUPPLY OF GOODS
Under GST, the point of taxation, i.e. the liability to pay CGST/SGST will arise at the time of supply as determined for Goods & Services
The time of supply of Goods shall be the earlier of the following dates, namely: -
(a) The date of issue of invoice by the supplier (or the last date on which he is required to issue the invoice)
or
(b) The date on which the supplier receives the payment with respect to the supply.
The time of supply of goods where tax is to be paid on reverse charge shall be the earlier of the following dates, namely: -
(i) The date of receipt of goods or (ii) The date of payment or 30 days from the date of issue of invoice by the supplier (If it is not possible to determine under i), ii) or iii), the date of entry of supply in the books of the recipient)
The time of supply of goods in case of vouchers shall be the earlier of the following dates, namely: -
(a) The date of issue of voucher (If the date could not be determined then the date of periodical return filed or the date on which the CGST/SGST is paid
JOB WORK
Job-work means 'any treatment or process undertaken by person on goods belonging to another registered person. The one who does the said job would be termed as 'job worker'. The ownership of the goods does not transfer to the job-worker, but it rests with the principal. The job worker is required to carry out the process specified by the principal on the goods.
Registration of a job worker
Job work is a service. Job worker is required to obtain registration if his aggregate turnover exceeds Rs. 20 lakhs.
Procedural aspects for job work
(a) A registered person under intimation can send/receive inputs or capital goods without payment of tax, provided the input or capital goods are brought back within one year (for input) and three years (for capital goods) of their being sent out.
(b) The principal is allowed to do so. The tax paid on input or capital goods (ITC) can be claimed by the principal provided the inputs or capital goods are received back within one year and three years respectively.
(Provided the principal had declared the unregistered job worker's premises as his additional place of business or if the job worker is a registered person or if supply of such goods are notified by the commissioner.)
If the inputs or capital goods are not received back or are not supplied from the place of business of the job worker within the prescribed time limit, it would be treated as supply and the principal would be liable to pay tax.
