Procedure and Levy Under GST Notes

Procedure and Levy Under GST Notes

Power to levy GST derived from Article 246A of the Constitution, which was introduced by the Constitution (101st Amendment) Act, 2016 confers concurrent powers to both parliament and state legislatures to make laws with respect to GST. However, clause 2 of Article 246A read with Article 269A provides exclusive power to the Parliament to legislate with respect to interstate trade or commerce.

Deemed registration: The grant of registration or the Unique Identity Number under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act shall be deemed to be a grant of registration or.the Unique Identity Number under this Act subject to the condition that the application for registration or the Unique Identity Number has not been rejected under this Act within the time specified in sub-section (10) of section 25.

Registration granted under GST can be cancelled: Registration, may be cancelled, if the person, who has voluntarily registered doesn’t commence business within 6 months from the registration. Further, the registered person himself may apply for cancellation of registration only after the expiry of 1 year from the date of registration.

Nonresident become liable for registration: A nonresident taxable person shall become liable for registration, when he makes any taxable supply.

Registered person required display his certificate of registration: Every registered person shall- display his registration certificate in a prominent location at his principal place and at every additional place or place of business.

Compulsory registration: A business whose aggregate turnover in a financial year exceeds Rs 20 lakhs has to mandatorily register under Goods and Services Tax. This limit is set at Rs 10 lakhs for North Eastern and hilly states flagged as special category states.

Bill of supply: A bill of supply should be issued instead of a tax invoice in case of the following supplies:

• Supply of exempted goods or services.
• Supplies made by a composition supplier.

Copies of invoices are required in case of supply of goods: The invoice should be prepared in triplicate. The original is for the recipient, the duplicate for the transporter and the triplicate for the supplier.

Receipt voucher: Receipt voucher is issued when advance is collected/ received in relation to supply of goods or services.

Every Registered person is required to maintain books of account: Every registered person is required to maintain books of accountancy his principal place of business that is mentioned in the certificate of registration.

Basic accounts to be maintained by every registered person: The following accounts need to be maintained production or manufacture of goods, inward or outward supply of goods or services, stock of goods, input tax credit availed, output tax payable and paid.

Provisional input tax credit: The input tax credit availed by the recipient in its return is allowed to the recipient on a provisional basis. Once the input tax credit availed by the recipient is matched with the outward supply details furnished by the supplier, input tax credit will become final.

Tax deducted at source: Tax deducted at source is a mechanism, wherein the recipient of goods or services will deduct out of the amount payable to the supplier, an amount at a percentage of value of supply and deposit the same to the account of the government within the time prescribed.

Authorized to undertake the audit of a taxable person: The commissioner of CGST/SGST or any. officer authorized by him may undertake audit of any registered person.

Threshold for opting to pay tax under the composition scheme: The threshold for composition scheme is Rs. 50 Lakhs of aggregate turnover in financial year.

Minimum rate of tax prescribed for composition scheme: The minimum rate of tax prescribed for composition scheme is 1%.

Remission of tax/duty: Remission of tax/duty means relieving the tax payer from the obligation to pay taxon goods when they are lost or destroyed due to any natural causes. Remission is subject to conditions stipulated under the law and rules made there under.

Documents required for GST registration:

• PAN card of the Company
• Proof of constitution like partnership deed, Memorandum of Association (MOA) /Articles of Association (AOA), certificate of incorporation.
• Details and proof of place of business like rent agreement or electricity bill.
• Cancelled cheque of your bank account showing name of account holder, MICR code, IFSC code and bank branch details.

Cases in which registration is compulsory:

• persons making any inter-State taxable supply.
• casual taxable persons.
• persons who are required to pay tax under reverse charge.
• non-resident taxable persons.
• persons who are required to deduct tax under section 37.
• persons who supply goods and/or services on behalf of other registered taxable persons whether as an agent or otherwise.