GST Provision In India

 GST Provision in India 

GST stands for Goods and Services Tax, GST law is an indirect tax which has come into force on July 1, 2017, across India. GST has replaced many indirect taxes in one law i.e. GST Law in India is comprehensive, multi-stage, destination-based tax.

Though, GST is a tax levied in India. However, there are various transactions, when it may be applicable on Non-Residents also (including NRIs, OCLs, foreign citizens). Hereunder are certain relevant terms and provisions in relation to Non-Resident:

Non-Resident Taxable Person (NRTP)

Under GST Law ' non-resident taxable person' is defined as any person who occasionally undertakes transactions involving the supply of goods or services, or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India.

Registration Requirement of NRTP

Section 24 of the GST law specifies a mandatory requirement for registration for a non-resident taxable person without any threshold limit of Rs 20 lakh/10 lakh is not available to Non-Resident Taxable person. Hence, any Non-resident, who is falling in the definition of Non-Resident Taxable person, is required to obtain GST Registration irrespective of whether the business is involved in a one-time. transaction or frequent taxable transactions.

Registration Procedure for a Non-Resident Taxable person

(a) Every person, who falls within the definition of Non-Resident Taxable person, has to apply for GST registration at least 5 days prior to the commencement of business.

(b) For GST registration, NRTP shall have to provide its Tax ID or Unique number of its own country.

(c) Application for registration need not be like normal applicants. Application can be submitted in simplified form ie REG-09

(d) NRTP need not to have a PAN of India and it can use its valid passport instead.

(e) Further in the case of a high sea sale as per the GST Law provisions every person who supplies from the territorial waters of India shall have to obtain registration in the coastal state or Union territory nearest to appropriate baseline.

(f) Egg if any high -sea sale occurs near the shore of Haldia, the GST registration shall be taken in the state of West Bengal.

(g) In relation to NRTP GST registration initially a temporary reference number gets generated electronically by the common portal. The purpose of the temporary number is to advance deposit of tax in his electronic cash ledger and an acknowledgment will be issued thereafter.

GST Advance Tax payment by Non-Resident Taxable Person

(a) GST Provision provide that non-resident taxable person is required to make and advance deposit of GST. This advance payment of tax shall be of an amount equivalent to the estimated tax liability of such person for the period for which registration is being sought.

(b) At the end of GST registration period on submission of final returns, any tax, which is excess paid, shall be refunded to the NRTP.

(c) GST registration period, which is initially applied by the NRTP, can be extended by the non-resident taxable person. For the same, an application using the form GST REG -11 should be furnished electronically on GST Common portal.

Above information can be helpful on doubts of NRIs, Expatriates and other Non-Residents in relation to GST Provisions in India such as:

(a) What are the GST provisions in relation to NRIs, OCLs, Foreign companies, Foreign Citizen?

(b) Whether GST is applicable on Non-Residents also such as NRIs, OCLs, Foreign Companies?

(c) I am working with world organization based outside India. Ido services to that organization on consultant basis. Whether GST is applicable on same and what are the provisions?

OTHER TRANSACTIONS

Other than NRTP, GST provisions are also applicable on various other transactions incurred by Non-Residents, such as:

(a) Renting of Immovable Property in India eg if an NRI is holding an immovable property in India and the same is being used for commercial/ business purposes then GST provisions shall be applicable on that transaction. 

(b) Consulting services provided by Non-residents to Indian residents. On such transactions under the import rules, GST may be applicable as per the transactions.

(c) Also, on fact-to-fact basis, GST provisions may be applicable on various other transactions, where NRIs, OCLs, PIOs, Expatriates, Foreign Companies, Other Non-residents are involved.

GST Registration for Foreigners

Following the implementation of the GST framework, the Government of India mandated that all foreign non-resident taxpayers obtain GST registration when supplying goods or services to residents within the country. If you are planning to supply goods or services to India, securing a GST registration is not just a compliance measure but a key step in establishing your business presence is one of the world's most vibrant markets.

Recognizing the Importance of this registration. India filings offer specialized services to facilitate the GST registration process for foreigners. With expert guidance and streamlined procedures, we simplify the complexities of tax compliance, making it easier for international businesses to thrive in India.

Contact our expert team today to easily get your GST registration. we'll guide you smoothly through each step for a worry- free process.

Non- Resident Taxable Person

A "Non-Resident Taxable Person" under the Goods and Services Tax (GST) framework in India refers to any individual or business entity that conducts transactions involving the supply of goods or services, or both, within India but does not have a fixed place of business or residence in the country. This includes entities operating in India occasionally, in any capacity such as principal, agent, or any other manner, but with their base of operations or residence outside of India. The GST law mandates that this non-resident volume or frequency of their transactions in India. 

GST Registration for Foreigners 

GST Registration in India is a compulsory process for foreign individuals or entities that supply goods or services in India without a permanent establishment or residence in the country. This registration category is specifically designed for those who may not regularly operate in India but engage in economic activities or transactions under the GST regime.

The process involves obtaining a unique GSTIN (Goods and services Tax identification Number), Which allows these non-resident businesses to comply with GST laws, including filling GST Tax returns and paying applicable taxes on their transactions within India.

GST Registration Requirements for Non-resident Taxable Persons

For nonresident taxable persons engaging in taxable transactions within India, the GST registration requirements are as follows:

(a) Documentation for Business entities: Business entries based outside India must include their tax identification number (TIN) or a unique identification number recognized by their home country's government in their GST registration application. Alternatively, if available, they can provide their Indian Permanent Account Number (PAN)

(b) Mandatory Registration: Regardless of transaction volume, registration under GST is compulsory for non-resident taxable parsons. There's no minimum threshold for registration.

(c) Ineligibility for Composition Levy: Non-resident taxable persons are not eligible to opt for the composition levy scheme under GSt, which allows for a simplified tax payment process and compliance for small taxpayers.

(d) Advance Registration Requirement: Registration for GST must be completed at least five days before beginning business operations in India.

(e) Passport Required for Registration: A valid passport is required for GST registration and serves as the primary documentary evidence.

Validity of NRI GST Registration 

The NRI GST registration is valid for the period specified in the App application or ninety days from the effective date of registration, whichever is earlier.

Procedure for GST Registration for NRIs

The GST registration has two main phases: Provisional Registration and final Registration. each phase entails specific steps to ensure compliance with the GST regulations in India 

Provisional GST registration for NRI

Provisional registration under GST for non-resident taxable persons is a temporary GST registration granted before obtaining the final GST registration. This provisional status allows non-resident individuals or business entities to start their business activities in India in compliance with the GST laws without having to wait for the completion of the full registration process.

Final GST registration

Final registration under GST for non-resident taxable persons solidifies their tax obligations and compliance status within India, transitioning from a provisional to a permanent GST registration. This process ensures that non-residents engaging in taxable transactions within India are fully integrated into the GST system.

Application for Final Registration: To convert the provisional registration into a final one, the NRI must submit an application electronically using FORM GST REG-26. This step is similar to the procedure followed by resident taxpayers.

Information Furnishing: Required information must be furnished within three months of applying for final registration. This is critical for validating the provisional registration.

Discrepancies and Show-Cause Notice: In cases where the information provided is found to be incorrect or incomplete, a show-cause notice using FORM GST REG-27 may be issued. The applicant will then be given a reasonable opportunity to be neared.

Conversely, if the applicant's response satisfactorily addresses the concerns, the show-cause notice can be nullified with an order issued via FORM GST REG-20, leading to final registration.

Authorized Signatory: All applications made by NRIs must be signed by an authorized signatory who is a resident of India and possesses a valid PAN. This individual acts on behalf of the NRI for GST compliance purposes.

India Filings experts can guide you through obtaining GST registration for NRIs.

Suppose the NRI wishes to extend the registration beyond the initially approved period (up to ninety days or the period specified in the application). In that case, they must file an extension application using Form GST REG-11 before the current registration expires.

(a) This extension also requires an additional advance tax deposit for the extended period.

(b) This detailed procedure ensures that NRIs are well-informed and prepared to meet all regulatory requirements for conducting taxable transactions in India under the GST regime.

Input Tax Credit

A non-resident taxable person is not eligible to claim input tax credit for any goods or services, except for those directly imported foods. However, the taxes paid by a non-resident taxable person can be utilized as a credit by the respective recipients.

GST Returns Filings for Foreigners

A non-resident taxable person must electronically submit a GST return using FORM GSTR-5. This return, which includes outward and inward supply details, must be filed. Any due tax, interest, penalty, fees, or other charges under the Act of regulations must be paid withing thirteen days following the end of a calendar month or seven days after the registration validity period expires, whichever comes first.

Refund of Advance Tax

The advance tax paid by a non-resident taxable person will be eligible for a refund only after submitting all necessary returns for the duration their registration certificate was valid. The application for a refund can be made in section 13 of FORM GSTR -5.

                                                                           

GST

 COMPOSITION LEVY

Small taxpayers can opt to pay tax at a flat rate and opt for composition of tax if their annual aggregate turnover is within 75 lakhs. This option is available for certain special category of manufacturers and service providers also. No input tax credit is available for a compounding dealer. Compounding dealer cannot issue a tax invoice but only a bill of supply. Compounding dealers are not permitted to collect tax

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.                                                                                                                     

Income Tax

 Last Income Tax Slab and

Rates-FY2024-25/AY 2025-26

The financial minister Nirmala Sitharaman has made Chages in the income tax slabs under the new tax regime in Budget 2024. The new income tax slabs under the new tax regime have retrospectively come into effect from 1st April 2024 for the current financial year 2014-25. The changes in income tax slabs of new tax regime were announced in July 2024 as government presented its full budget after the Lok Sabha elections 2024. Remember there were no. changes announced by the government in the interim budget announced in February 2024

Not all the tax slabs have been changed in the new tax regime. Only two tax slabs under the tax regime. Only two tax slabs under the new tax regime have been changed in the Budget 2024. The changes in the income tax slabs raise the upper limit in two slabs by Rs. 1 Lakh. 

The current Rs. 3 Lakh - Rs. 6 Lakh slab has become Rs 3 lakh - Rs.7 lakh; and the Rs.6 lakh - Rs. 9 lakh slabs have become Rs. 7 -Rs 10 lakhs. This means people earning Rs 7 lakh would be taxed at 5% instead of 10 earlier; and those earning Rs. 10 lakhs would be taxed at 10% instead of 15% earlier.

This income tax slabs under the new tax regime are as follows: Rs. 0 - Rs. 3,00,000 - 0%, Rs 3,00,001 and Rs.7,00,000 - 5%, Rs 7,00,001and Rs 10,00,000-10%, Rs 10,00,001 and Rs. 12,00,000 and Rs. 15,00,000-20% and 15,00,001 and above - 30%

Apart from making Chages in the two-income tax slabs in the new tax regime, the finance minister has announced Chages in the standard deduction limit and employer's contribution to employee's NPS account available in the new tax regime. Even standard deduction available for family pensioners have been changed under the new tax regime. No. other changes, such as tax rebate available under the Section 87A, surcharge rate applicable for incomes exceeding Rs.50 lakh, have been made in the new tax regime.

The new tax regime continues to offer tax rebate of up to Rs. 25,000 for taxable incomes not exceeding Rs. 7 lakhs. Further, no Chage in surcharge for those earning more than Rs. 2 Crore.

The Chages have been made to make the new tax regime attractive. However, no changes have been made in the old tax regime. The income tax slab, rates and other income tax rules have not been changed under the old tax regime. 

The old rules will continue to apply under the old tax regime. This means that higher deduction available under the new tax regime for standard deduction and employer's contribution will not be available in the old tax regime. Further, tax, rebate or Rs. 12,500 will continue to be available under the old tax regime if the taxable incomes do no exceed Rs. 5 lakhs. The main difference between the old and new tax regime is the availability of usual deductions and tax exemptions. The new tax regime does not allow deduction of common deductions such as Section 80C deduction up to Rs. 1.5 lakh for specified investments and expenditures, Section 80D deduction up to Rs. 25,000/Rs 50,000 for health insurance premium paid and Section 80TTA deduction of up to Rs 10,000 for interest earned from savings accounts of bank and post office, among others. 

The income tax slabs applicable under the old tax regime depends on the age of individual.

The old tax regime offered multiple basic income exemption limits depending on the ae of the taxpayer. For individuals below 60 years of age, the basic income exemption limit is Rs 2.5 lakhs. For senior citizens aged 60 years and above but below 80 years, the basic exemption limit is Rs. 3 lakhs. For super senior citizens aged 80 years and above, the basic exemption limit is Rs. 5 lakhs.

Currently, the new tax regime is the default tax regime. An individual who wants to opt for the old tax regime now has to specifically choose it while filing income tax return. When new tax regime was introduced in FY 2020-21, it was an optional tax regime, they knew tax regime has lower tax rates as compared with the old tax regime. if individuals opt for the new tax regime, they can now claim only two deductions - Standard deduction of Rs, 50,000 from salary/pension income and Section 80CCD (2) for empolyer'scontribution to the employee's account. 

Currently, a taxpayer having business income waiting to continue with the old tax regime in a financial year, will specifically have to opt for it. Once opted, they would have once in a lifetime option to switch to new tax regime. Once new tax regime is opted, they cannot opt for old tax regime again.

Income tax slabs for FY 2024 - 25 (AY 2025-26), FY 2023-24(AY 2024-25) under the new tax regime

The income tax slabs in the new tax regime have been tweaked for the current FY 2024-25(AY 2025-26). The changes in the income tax slabs raised the upper limit in two labs by Rs. 1 lakh. The Rs. 3 lakhs - Rs. 6 lakhs slab become Rs. 3 lakh - Rs. 7 lakhs; and the Rs. 6 lakh- Rs. 9 lakh slabs have become Rs. 7 lakh- Rs 10 lakh.

The changes in the new tax regime have been made to make it more attractive vis-a-vis old tax regime. In February 2023, the changes were announced in the new tax regime to make it more attractive for the individual taxpayers. Some of these changes were - introduction of standard deduction, rising basic exemption limit, hike in tax rebate under section 87A for taxable income up to Rs 7 lakh and so on.

Here are the new income tax slabs under new tax regime.

Income tax slabs under new tax regime for FY 2024-25

Income tax slabs (Rs)               Income Tax rate (%)

From 0 to 3,00,000                                            0

From 3,00,001 to 7,00,000                                5

From 7,00,001 to 10,00,000                             10

From 10,00,001 to 12,00,000                           15

From 12,00,001 to 15,00,000                           20

From 15,00,001 and above                               30

Changes made in the new tax regime in Budget 2024

Apart from tweaking income tax slabs, some changes were also made in the new tax regime. Changes announced in the new tax regime are as follows:

(a) new tax regime is the default tax regime. An individual has an option to opt for the old tax regime in any financial year, provided there is no business income

(b) Basic exemption limit of Rs 3 lakh for all individual taxpayers irrespective of their age

(c) Tax rebate under section 87A makes zero tax payable for taxable incomes up to Rs. 7 lakhs

(d) Highest surcharge rate for those earning above Rs 2 crore is 25%

Income tax slabs under new tax regime for FY 2023-24(AY 2024-25)

For those filing income tax return for previous financial year 2023-24, the income tax slabs under the new tax regime are different. Following are the income tax slabs under new tax regime for FY 2023-24 (AY 2024-25) that will be used for ITR filing:

Income tax slabs (Rs)                         Income tax rate (%)

From 0 to 3,00,000                                              0

From 3,00,001 to 6,00,000                                  5

From 6,00,001 to 9,00,000                                10

From 9,00,001 to 12,00,000                              15

From 12,00,001 to 15,00,000                            20

From 15,00,001 and above                                30

Income tax slab rates for FY 2024-25 (AY 2025-26), FY 2023-24(AY2024-25), FY 2022-23(AY 2023-24), FY 2021-22 (AY 2022-23) under old tax regime

There are no Chages in the income tax slabs of the old tax regime in the July Budge 2024. Remember, income tax slabs under the new tax regime are tweaked. It will mean that anyone choosing the old tax regime for the current financial year 2024-25 (1st April 2024 and 31 March 2025) will calculate the income tax payable at the same rates as in FY 2023-24 (1st April 2023 and 31st March 2024).

Under the old tax regime, income tax slabs applicable to an individual depend on the age of an individual in a particular financial year. Hence, the basic exemption limit will also be different for individuals.

For an individual below 60 years of age, the basic exemption limit is or Rs 2.5 lakh. For senior citizens (aged 60 years and above but below 80 years) the basic income exemption limit is of Rs. 3 lakhs. For super senior citizens (aged 80 years and above), the basic income exemption limit is Rs. 5 lakhs. For non-resident individuals, the basic income exemption limit is of Rs. 2.5 lakh irrespective of age.

Given below are the income tax rates for FY 2024-25(AY2025-26), FY 2023-24 (AY 2024-25), FY 2022-23(AY 2023-24) and FY 2021-22 (AY 2022-23) under the old tax regime.

Income tax slabs for individuals under old tax regime

Income tax slabs (Rs)                Income tax rate (%)

From 0 to 2,50,000                                      0

From 2,50,001 to 5,00,000                          5

From 5,00,001 to 10,00,000                       20

From 10,00,001 and above                         30

Income tax slabs for senior citizens under old tax regime

Income tax slabs (Rs)                            Income tax rates (%)

From o to 5,00,000                                               0

From 5,00,001 to 10,00,000                                20

From 10,00,001 to above                                     30

Comparison of income tax slabs under the old and new tax regime for FY 2024-25 (AY 2025-26)

Taxable income           Old Tax Regime          New Tax Regime

0 to Rs 2,50,000                      0%                                  0%

Rs 2,50,001 to 3,00,000          5%                                  0%

Rs 3,00,001 to 5,00,000           5%                                 5%

Rs 5,00,001 to 7,00,000         20%                                 5%

Rs 7,00,001 to 10,00,000       20%                               10%

Rs 10,00,001 to 12,00,000      30%                               15%

Rs 12,00,001 to 15,00,000      30%                               20%

Rs 15,00,001 and above          30%                               30%

How to calculate income tax payable under new tax regime

For those salaried individuals who are continuing with the new tax regime for the current financial year, 2024-25

                                                   

GST REGISTRATION

 GST REGISTRATION 

Registration is the most fundamental requirement for the identification of taxpayers to ensure compliance and to obtain a unique registration number for the purpose of collecting tax on behalf of the Government and to avail ITC accrued on the inward supplies.

Benefits of registration - 

Registration will confer the following advantages to a taxpayer:

(a) He is legally recognized as supplier of goods or services.

(b) He is legally authorized to collect taxes from his customers and pass on the credit of the taxes paid on the goods or services supplied to the purchasers/recipients.

(c) He can claim input tax credit of taxes paid and can utilized the same for payment of taxes due on supply of goods or services.

(d) Seamless flow of Input Tax Credit from suppliers to recipients at the national level.

Threshold limit for registration - 

Registration is mandatory when Aggregate Turnover in a Financial year exceeds Rs.20 lakhs (Aggregate Turnover = Value of Taxable of Supplies + Exempt supplies + Inter State supplies + Exports of both Goods and services of persons having the same PAN calculated on all India basis less tax under IGST, CGST, SGST and Cess), except for special Category States, where the threshold limit for aggregate turnover is Rs.10 lakhs.

Exemption from registration - Irrespective of the turnover, the following dealers are exempted from Registration: -

(a) Agriculturist for the purpose of Agriculture.

(b) Supply of exclusively exempted goods

Voluntary Registration -

A person not liable to be registered under the Act, may get himself registered voluntarily to avail ITC and pass on the ITC to the recipient.

Compulsory Registration - The following class of persons shall compulsorily register; -

(a) Casual Taxable person.

(b) Persons making Inter-state Taxable supply.

(c) Persons who are required to pay tax under reverse charge.

(d) Persons who are required to pay tax as e- commerce operators.

(e)Non-resident taxable person.

(f) Persons required to deduct tax as TDS (Government Agencies, Department etc.)

(g) Persons required to collect tax as TCS (electronic commerce operators)

Casual taxable person and a Nonresident taxable person - A Casul taxable person is one who has a registered business in some State in India but wants to effect supplies in some other State in which he is not having any fixed place of business. such person needs to register in the State from where he seeks to supply as a Casual taxable person.

A Non-Resident taxable person is one who is a foreigner and occasionally wants to effect taxable supplies from any State in India, and for that he needs GST registration. GST law prescribes special procedure for registration, as also for extension of the operation period of such Casual or Non-Resident taxable persons.

They have to apply for registration at least five days in advance before making any supply. Also, registration is granted to them, or period of operation is extended only after they make advance deposit of the estimated tax liability.

Registration process 

(a) Application to be filed online within 30 days of becoming liable.

(b) Casual Dealers and non-resident taxable person shall apply at least 5 days prior to the date of commencement of business period of Validation is as specified in the application or 90 days from the effective date of registration whichever is earlier and an advance deposit of tax, an amount equivalent to the estimated tax liability of such person.

(c) All the core fields (name of business, principal place of business and stakeholders' details, etc.) should be filled up.

(d) Scanned documents to be attached.

(e) Digital Signature or e-sign should be done.

(f) Application to be processed within 3 common working days.

(g) If application is successful the Registration Certification will be sent in the PDF format to the e-mail.

(h) All queries to be raised and communicated by the proper officer within 3 common working days sent in PDF format to the e-mail of the applicant.

(I) Applicant should reply to query within 7 days - failure will entail automatic rejection by the system.

(j) On receipt of reply, registration should be granted/rejected within 7 days.

(k) Rejection of Application under CGST will be a deemed rejection under SGST and vice-versa.

(l) Deemed Approval, if no query.

Credit Note 

For issuing credit note, an invoice for a supply should have been issued earlier. A credit note may be issued in the following circumstances.

(a) The taxable value on which the tax collected is more than the actual taxable value

(b) The tax charged is more than what should have been charged

(c) The recipient has returned the goods

Debit Note 

A debit note may be issued in the following circumstances

(a) The taxable value on which the tax collected is less than the actual taxable value.

(b) The tax charged is less than what should have been charged.

Copies of invoices   for supply of goods the invoice should be prepared in triplicate.

(a) The original copy being marked as "ORIGINAL FOR RECIPENT"

(b) The duplicate copy being marked as "

DUPLICATE FOR TRANSPORTER "and

(c) The triplicate copy being marked as "TRIPLICATE FOR SUPPLIER"

Document for Reverse charge Were tax is to be collected on reverse charges basis, the recipient of goods or services has to issue a payment voucher at the time of making payment to the supplier. The dealer is also required to issue tax invoice mentioning that the tax has been collected on reverse charge basis

Contents of an INVOICE - 

A Tax invoice should contain the following details:

(1) Name, address and GSTIN of the supplier

(2) Consecutive serial number containing alphabets or numerals or special characters hyphen (-) or slash (/) for a financial year.

(3) Date of issue 

(4) Name, address and GSTIN or UIN of the recipient, if the recipient is a registered dealer.

(5) Name and address of the recipient if the invoice value is more than Rs. 50000/-

(6) HSN code of goods or accounting code of services

(7) Description of goods or services 

(8) Quantity in case of goods and unit or Unique Quantity code thereof

(9) Total value of supply of goods or services or both

(10) Taxable value of supply of goods or services or both taking into account

(11) Rate of tax separately for each type of tax (central tax, State tax, integrated tax or cess)

(12) Amount of tax charged (central tax, State tax, integrated)

Amendment in Registration:

Except for the changes in some core information in the registration application, a taxable person shall be able to make amendments without requiring any specific approval from the tax authority. In case the Chage is for legal name of the business or additional place of business, the taxable person will apply for amendment within 15 days of the event necessitating the change. The proper officer, then, will approve the amendment within the next 15 days. For other charges like the name of day-to-day functionaries, e-mail IDs, mobile numbers etc. no. approval of the proper officer is required, and the amendment can be affected by the taxable person on his own on the common portal.

Cancellation of registration - Cancellation of registration can be done in the following circumstances

(1) Transfer of business or discontinuation of business or merger

(2) Death of the proprietor

(3) Change in the constitution of business. (Partnership firm may be changed to sole Proprietorship due to death of one of the two partners, leading to Change in (PAN)

(4) Person no longer liable to be registered (Except when he is voluntarily registered)

(5) Registered taxable person has contravened provisions of the Act or Rules

(6) A composition supplier has not furnished returns for 3 consecutive tax period/any other taxable person has not furnished returns for a continues period of 6 months

(7) Non- commencement of business within 6 months from date of registration by a person who has registered voluntarily.

(8) Where registration has been obtained by means of fraud, willful misstatement or suppression of facts, the registration may be cancelled with retrospective effect.

Revocation of cancellation of registration:

Application for revocation should be made within 30 days from the date of service of cancellation order. The proper officer can revoke cancellation/reject application.

Issue of Invoice for supply of goods - When movement of goods is not involved, tax invoice has to be issued before or at the time of removal of the goods.

When movement of goods is not involved, tax invoice has to be issued before or at the time of delivery of goods to the recipient or when the goods are made available to the recipient.

Issue of Invoice for Supply of services

 In case of supply of service, tax invoice has to be issued within 30 days of supply of services. In case of banking, insurance and other finance companies, invoice has to be raised within 45 days of supply of services.

Issue of invoice by an unregistered person Only a registered person can issue a tax invoice. GST law specifically prohibits collection of tax by persons who are not registered under the GST law

Revised Invoice - The words 'Revised invoice' or Supplementary invoice' should be mentioned prominently in such invoices along with reference of the date and invoice number of the original invoice.

Bill of supply

A Bill of supply is a document issued instead of a tax invoice. Bill of supply is issued for the following supplies

(a) Supply of exempted goods or services, or 

(b) Supply made by a composition taxpayer

For all sales of exempted goods made for a value more than Rs. 200/- and for all sales made by a composition supplier for a value more than Rs. 200/-, Bill of supply need not be issued unless the recipient demands for such a bill. At the end of the day, a consolidated Bill of supply should be.                                  

GST

GST REGISTRATION 

Registration is the most fundamental requirement for the identification of taxpayers to ensure compliance and to obtain a unique registration number for the purpose of collecting tax on behalf of the Government and to avail ITC accrued on the inward supplies)

Benefits of registration

Registration will confer the following advantages to a taxpayer.

(a) He is legally recognized as supplier of goods or services 

(b) He is legally authorized to collect taxes from his customers and pass on the credit of the taxes paid on the goods or services supplied to the purchasers/recipients.

(c) He can claim input tax credit of taxes paid and can utilize the same for payment of taxes due on supply of goods or services

(d) Seamless flow of Input Tax Credit from suppliers to recipients at the national level

Compulsory Registration

The following class of persons shall compulsorily register: -

(a) persons making Inter-State Taxable supply.

(b) Casual Taxable person.

(c) Persons who are required to pay tax under reverse charge.

(d) Persons who are required to pay tax as e-commerce operators.

(e) non-residential taxable person.

(f) Persons required to deduct tax as TDS (Government Agencies, Department etc.,)

(g) Persons required to collect tax as TCS (electronic Commerce operator)

Casual taxa

Goods and services tax (GST)

GST is an indirect tax, which is a transaction-based taxation regime, that has been in effect in India since 1 July 2017

Multiple indirect taxes (except customs duty) have been subsumed within GST, and there is one single tax applicable on supply of goods and services. However, there are a few products that continue to be outside the ambit of GST, such as petrol, diesel, aviation turbine fuel (ATF), natural gas, alcohol for human consumption, and crude oil.

For smooth GST implementation, the government has formed a GST Council. The Council consists of the State Finance Ministers representing their states. The GST Council provides recommendations to the government on various aspects of GST law, such as rate revisions and amendments in GST rules, etc.

GST regime

GST is a comprehensive 'consumption tax' levied on the supply of all goods and services. Indian GST is a dual model:

In case of intra-state supply of goods and services, GST+SGST/UTGST would become applicable, and in case of inter-state supply of goods and services, integrated GST (IGST). The rate of GST varies from 5% to 28% depending upon the category of goods and services being supplied or procured, the general rate of tax being 18% for the majority of supplies. Additionally, some categories of goods/services, such as vehicles, aerated beverages, etc. notified by the government are subject to compensation cess under GST.

Import of goods and services

The import of goods under the GST regime will be subject to IGST and compensation cess (if applicable), along with basic custom duty (BCD)and social welfare surcharge (up to 10% levied on the BCD), BCD and social welfare surcharge paid at the time of imports are not available as credit under GST; consequently, they will always be a cost to the importer.

Similar to erstwhile service tax laws, on import of service, service recipient would be liable to pay IGST under reverse charge. Also, there are specified categories of goods and services notified by the government on which GST needs to be paid by the recipient under reverse charge such as legal services. Goos Transport Agency services, etc.

CBIC vide Notification Nos.11/2023 and 13/2023 and 13/2023 dated 26 September 2023, has exempted the importers from paying IGST on ocean freight in CIF contracts. This is pursuant to the Supreme Court's pronouncement inf the matter of Moth Minerals.

Zero-rated supplies/export of goods and services

Export of goods and services are zero rated under GST. Exporters can claim refund of input tax credit (ITC) of inputs/input services used in export of goods/services, subject to fulfilment of prescribed conditions. To claim the zero, rate on exports, there is a requirement to file a bond/Letter of Undertaking (LUT) to the jurisdictional tax authorities at the beginning of each financial year. Alternatively, the exporter can pay tax on output and claim refund for the same.

Also, the supplies to an SEZ for authorized operations have been made zero rated under GST. Unlike the erstwhile indirect tax regime, which involved a lot of paperwork to claim export refund claims, a simplified online process to claim refund of exports has been speckled under GST.

(A) Bank account for credit of refund means such bank account of the applicant that is in the name of the applicant and obtained on one's Permanent Account Number (PAN)

(B) Option for filing refund of accumulated ITC by taxpayers making exempt/nil-rated supplies, by selecting an option of not having an LUT number is the refund application (to enable a taxpayer making exempt and/or nil-rated supplies, without LUT, to file a refund application as they don't have a valid LUT number to enter in the refund application the Form RFD-01has now been modified

(C) To facilitate exporters, bunching of refund claims across financial years has now been allowed.

(D) Previously to claim a refund of zero-rated supply of services, there was a requirement to receive remittance in foreign exchange within a stipulated time period. Now this requirement has been extended to zero-rated supply of goods as well.

(E) Refund of accumulated ITC is restricted to the amount appearing in Form GSTR-2A/2B. However, the department has now clarified that the restriction will not impact the refund of ITC availed on the invoices/documents relating to imports, input service Distributor (ISD)invoices, and the inwards supplies liable to reverse charge (RC supplies) merely because the same is not reflecting in Form GSTR-

2A

(F) For export of goods, if unutilized ITC is claimed as refund, it is proposed to be mandated to realize the considerations foreign currency within the timelines prescribed in the Foreign Exchanged Management Act (FEMA) guidelines, if the consideration is not realized within the prescribed time, the refund needs to be remitted back to the government along with interest.

(G) Refund of payment wrongly made through electronic credit ledger is allowed (refund amount would be re-credited to credit ledger).

(1) "goods" means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract

(2) "existing law" means any law, notification, order, rule or regulation relating to levy and collection of duty or tax on goods or services or both passed or made before the commencement of this Act by Parliament or any Authority or person having the power to make such law, notification, order, rule or regulation.

(3) "family" means-  (I) the spouse and children of the person, and the parents, grand-parents, brothers and sisters of the person if they are wholly or namely dependent on the said person.

(4) "Fixed establishment" means a place (other than the registered place of business) which is characterized by a sufficient degree of permanence and suitable structure in terms of human and technical resources to supply services, or to receive and use services for its own needs.

(5) "fund" means the consumer welfare fund established under section 57.

(6) "electronic cash ledger" means the electronic cash ledger referred to in sub section (1) of section 49.

(7) "existing law" means any law, notification order, rule or regulation relating to levy and collection of duty or tax on goods or services or both passed or made before the commencement of this Act by parliament or any Authority or person having the power to make such law notification, order, rule or regulation.