GST UNIT 4

Meaning of IGST Model

• IGST is the provision under GST to monitor the Inter-state movement
of Goods and Services.
• IGST basically is the sum of Central GST (CGST) and State GST (SGST).
IGST = CGST + SGST
• IGST will help in ensuring that the ultimate SGST is received by the
state in which the goods and services are consumed since GST is a
destination-based tax.
• It helps in achieving two main objectives –
1. Prevent cascading effect, by allowing inter set off of state and central GST.
2. Helps in fulfilling the principle of destination based consumption tax.
 Features of IGST Model
• The sum of CGST and SGST.
• Levied on the Inter-state and the cross-border transactions of Goods
and Services.
• There will be a uniform IGST rate across the country.
• Will be shared by the Centre and State.
• Interstate trader will pay IGST after adjusting the available input IGST,
CGST and SGST on the transactions.
 Advantages of IGST Model

• A simple, transparent and self-monitoring model.

• Maintenance of tax neutrality in the country.
• The overall tax paying process will be quick with no additional
burdens on the taxpayer.
• No requirement for the physical verification of documents and claims
as all the relevant data will be available on the GSTN server.
• As payment of tax will be on an online platform, the process will be
easy and invulnerable to disputes and manipulation.
• Ensuring that the Input Tax Credit chain for the Interstate transactions
is continuous.
• There will be no significant blockage of funds or an upfront payment
of tax for the Interstate sellers and buyers.
• There will be no requirement of claiming refunds in the exporting
State, as Input Tax Credit will be used up while paying the tax.
• Efficient management of ‘Business to Business’ (B2B) as well as
‘Business to Consumer’ (B2C) transactions.
• The uniformity in tax rates and simplified procedures in the country
will also help in minimizing the cost of compliance.
 GST PORTAL

• GST Portal or GSTN hosted at www.gst.gov.in is a website where all

the activities related to GST can be done.

• Activities like GST registration, return filing, payment of taxes,

application for refund, etc. can be done on the GST Portal.
 Main Services on GST Portal
• Application for Registration as Normal Taxpayer, ISD, Casual Dealer
• Application for GST Practitioner
• Opting for Composition Scheme, Stock intimation, Opting out of Composition Scheme
• Payment of GST, Filing GST Returns
• Filing Export Refund
• Claim Refund of excess GST paid
• Viewing E-Ledgers
• Other than the above services changing core and non-core fields, browsing notices
received, filing ITC Forms, Engage/ Disengage GST Practitioner are some of the other
services provided on the GST Portal/ GSTN.
GST PORTAL MAIN PAGE
GST PORTAL LOGIN PAGE
 GST COUNCIL
• Hon’ble President gave assent to “The Constitution (One Hundred
And First Amendment) Act, 2016” related to GST, on 8th of
September, 2016. On 15th Sep, 2016 GST Council had been
notified bringing into existence the Constitutional body to decide
issues relating to GST.

• Apex Constitutional Authority to decide GST Policies.

• Union Finance Minister is the Chairman of the Council. Members are-
• Union Minister of State-in-charge of Revenue or Finance
• Minister-in-charge of Finance or Taxation or any other minister
nominated by each state government
• 18 meetings before enforcement of GST
• 47th meetings held on June 28-29, 2022
 GST Suvidha Providers (GSPs)

• GSPs are the special entities who have been authorized to develop a
platform to enable the taxpayer to do the GST compliances.

• All GST system functionalities like registration, return filing, payment

of taxes, uploading of invoices will be available through APIs
(Application Program Interface).
 FUNCTIONALITIES OF GSP

• It will provide a functionality to taxpayer to reconcile sales & purchase

invoices and upload the reconciled invoices on GST Network (GSTN).

• Get updates on their taxpayers from GST system.

• Error free Record keeping - Highlighting errors on a real time basis.

• Action oriented reports for every user.

• Proving MIS as may be desired by the user at any point of time.

 GST ECO-SYSTEM
• Application of GST is a collective effort of the Central and State
Governments, the tax payers and the IT platform provider i.e. GSTN,
CBEC and State Tax Departments.

• Besides these main participants there are going to be other

stakeholders e.g. Central and States tax authorities, RBI, the Banks, the
tax professionals (tax return preparers, Chartered Accountants, Tax
Advocates etc.), financial services providing companies and Tax
Accounting Software Providers etc.

• In totality they form a GST Eco-System having various stakeholders

including GSTN & GSPs.
Uploading Invoices on GST
By following steps invoices can be uploaded on GSTN:
Step 1: Login on GST Portal
Step 2: Reach the Dashboard
Step 3: Click on Service-Returns-Return dashboard
Step 4: Reach File Returns
Step 5: Select Financial Year & Month-Click Search
Step 6: Reach Outward Supplies (GSTR1), Inward
Supplies (GSTR2), Monthly Return (GSTR3)
Step 7: Click on Prepare Online in section Outward
supplies or Inward supplies
Step 8: Select B2B or B2C or as per requirement
Step 9: Click on Add Invoices
Step 10: Fill details like GSTIN of receiver, invoice
number, date, category of supply, taxable value, tax rate
etc.
Step 11: Add & Save the Invoice
GST Calculation
Step 1: Find the GST Rate Applicable for the Goods or Service
The first step in calculating GST is to find the GST Rate applicable for the Goods or
Service under the GST Act.

a. Find HSN Code or SAC Code-

To find GST Rate, the individual must first make a distinction between the
type of supply supplied, i.e., is it a good or service. If the supply is a good, then its
important to interpolate with the HSN Code applicable for the Good. HSN Code is
an international system for classifying all types of goods in international
transactions.
The concerned individual shall verify the SAC Code, whether the SAC Code
relates to the service when a transaction involves the supply of a service. SAC Code
stands for Service Accounting Codes and used for classifying all the services under
GST.
b. Determine the GST Rate applicable for the HSN or SAC Code-
Once the HSN or SAC Code is determined for the supply, then the GST Rate for the
HSN Code or SAC code can be easily interpolated. GST is levied under 5 different
slab rates at NIL, 5%, 12%, 18% and 28% for both goods and services. Hence, the
GST rate applicable for the Goods or Service would be any of the slab rates.
Step 2: Determine the Applicability of IGST or CGST and SGST
Once the GST rate is determined, then the applicability of IGST or CGST and SGST
must be determined. To determine if IGST or CGST and SGST would be applicable,
the individuals should have to determine the place of supply. In most cases, the
place of supply of goods or services would be the address where the goods were
delivered or the service was provided.
Inter-State Supply
If goods or services are provided between two states, i.e., from one state to
another, then IGST or Integrated Goods and Services Tax would be applicable on
the transaction. Whenever any supplier is involved in providing inter-state supply,
GST registration is mandatory.
Intra-State Supply
If the individual provides the goods or service within the same state, then CGST or
Central Goods and Services Tax and SGST or State Goods and Service Tax would be
applicable.
Calculating IGST, CGST and SGST
The calculation for IGST, CGST or SGST is only for classification purposes for
crediting the tax revenue to the state of consumption. The GST tax rate would
remain same and there would be no double-taxation.
Step 3: Apply GST rate to Transaction Value
For example total price chargeable to a product will be Sale price + GST.
In this case we will use sale price and multiply GST rate to that price. In
this way we can calculate tax liability and total amount payable by
buyer. Seller will collect the tax and after deducting Input Tax Credit
balance amount will be paid to the tax authority through GST Portal.

For example:
Q.1. Mr. A (Varanasi) purchased raw material from Mr. B (Lucknow)
amounting to Rs 1 lac + 5% GST. A sold the finished products to Mr. C
(Agra) for Rs 1.5 lac + 12% GST. Determine tax liability of concerned
parties.
In case Mr. C belongs to Delhi, If it will affect the answer?
 Electronic Cash/Credit Ledgers and
Liability Register in GST
• On the common portal each registered taxpayer will have one
electronic register called the Electronic liability register and two
electronic ledgers namely Electronic Cash Ledger and Electronic
Credit Ledger.
 Electronic Cash Ledger

• Every deposit made by a person by internet banking or by using credit

or debit cards or National Electronic Fund Transfer (NEFT) or Real
Time Gross Settlement (RTGS) or by over the counter deposit will be
credited to the electronic cash ledger.

• The electronic cash ledger shall be maintained in FORM GST PMT-05.

• The amount available in the electronic cash ledger may be used for
making any payment towards tax, interest, penalty, fees or any other
amount payable.
• On successful credit of the amount to the concerned government
account maintained in the authorized bank, a Challan Identification
Number (CIN) shall be generated by the collecting bank and the same
shall be indicated in the challan.

• On receipt of the CIN from the collecting bank, the said amount shall
be credited to the electronic cash ledger of the person on whose
behalf the deposit has been made and the common portal shall make
available a receipt to this effect.

• The amount deducted under section 51 or collected under section 52

will be credited to his electronic cash ledger.
 Electronic Credit Ledger

• The electronic credit ledger shall be maintained in FORM GST PMT-02 for
each registered person eligible for input tax credit on the common portal
and every claim of input tax credit will be credited to this ledger.

• The amount available in the electronic credit ledger can be used for making
any payment towards output tax.

• In case a registered person has claimed refund of any unutilized amount

from the electronic credit ledger, the amount to the extent of the claim
shall be debited in the said ledger.
• If the refund so filed is rejected, either fully or partly, the amount
debited to the extent of rejection, shall be re-credited to the
electronic credit ledger by the proper officer.

• Unless otherwise allowed, entries will not be allowed to be made

directly in the electronic credit ledger under any circumstance.
 Electronic Liability Register

• The electronic liability register is maintained in FORM GST PMT-01 for

each person liable to pay tax, interest, penalty, late fee or any other
amount on the common portal and all amounts payable by him shall
be debited to the said register. The electronic liability register will be
maintained in two parts at the common portal.

• All liabilities accruing due to return and payments made against the
same will be recorded in this Part I of the register.
• Part II will be for maintaining the complete description of the
transactions of all liabilities accruing, other than return related
liabilities. Such other liabilities may include Payment made against
the show cause notice or any other payment made voluntarily,
Liabilities due to reduction or enhancement in the amount payable
due to decision of appeal etc.
The electronic liability register of the person shall indicate the
following:

• The amount payable towards tax, interest, late fee or any other
amount payable as per the return furnished by the said person;

• The amount of tax, interest, penalty or any other amount payable as

determined by a proper officer in pursuance of any proceedings under
the Act or as ascertained by the said person;

• The amount of tax and interest payable as a result of mismatch of

input tax credit or any amount of interest that may accrue from time to
time;
• The amount payable on reverse charge basis;

• The amount payable under the Composition levy scheme;

• Amount payable towards interest, penalty, fee;

• Any other amount under the GST Act.

 TIME OF GST PAYMENT

GST Payment & Due Date

• GST payment is extremely crucial for the compliance of a business. As per
the guidelines, every registered regular taxpayer has to furnish the GST
returns on a monthly basis, and pay the requisite tax by the due date for
payment of GST – 20th of every month.

• If by any chance, if a person furnishes a monthly return without paying the

tax due, the return furnished will be considered as an invalid return.
Without furnishing the return for a month and paying the tax due, the
subsequent month’s return cannot be furnished. Also, if the tax due is not
paid, interest will be applicable on the same, starting from the GST
payment due date on which the tax was supposed to be paid.
 Filling of Tax & Returns
ANNUAL RETURN IN GSTR 9 BY 31ST
DECEMBER OF SUCCEEDING FINANCIAL YEAR

MONTHLY RETURN IN GSTR 3 OF TAX BY 20TH OF

SUCCEEDING MONTH

Final Turnover of Input Autopopulated based on GSTR-2 Final Turnover of Output Autopopulated based on GSTR 1

INWARD GSTR 2 TAXABLE GSTR 1 OUTWARD

SUPPLIER PERSON 10TH OF SUCCEEDING RECEIPIENT
15TH OF SUCCEEDING
MONTH MONTH

INVOICE WISE DETAILS TO BE UPLOADED IN THE RETURNS UNDER GSTR-I.

System for dealers upto 1.5 Crore will need Quarterly returns
CONCEPT OF INVOICE MATCHING INTRODUCED IN THE RETURNS
GST PAYMENT
 Online GST Payment
1. Login to www.gst.gov.in to access the GST portal.
2. Click on services – payments – create challan option – enter details.
3. (If you have created the challan already) Click on services – payments –
saved challan.
4. Select payment method – click on E- Payment.
5. Click on the generate challan option after filling in all the details. (CPIN)
6. Click on the Net Banking option under E- Payment
7. Choose the bank with which you want to make the payment.
8. Agree to all terms and conditions.
9. Make the payment. (CIN)
10. Once the payment is done, download the challan for future reference.
 GST Offline Payment Methods - NEFT/RTGS

1. After logging in, click on the NEFT/RTGS as your payment mode.

2. Once the Remitting Banks list appears select the bank of your choice.
3. Click on the generate challan option.
4. Print the challan and visit your bank. The mandate form will be
generated simultaneously.
5. Make the payment in the bank with your cheque. You can also use the
account transfer facility to make the payment.
6. The bank will process the transaction and the RBI will confirm it within 2
hours.
7. The payment will be updated in the Electronic Cash Ledger under its
respective head.
 Over The Counter GST Payment
1. After logging in, click on the over the counter option as your
payment method.
2. Select the bank from the drop list, where you are supposed to
deposit.
3. Select the type of instrument, that is, cheque/ cash/ Demand draft.
4. Click on the generate challan option.
5. The challan will be generated.
6. Take a printout of the challan and visit your respective bank.
7. Make the payment with your instrument within its validity date.
GST CHALLAN GENERATION
 GST Challan Generation Steps (Pre-login)

• Step 1: On the GST portal’s homepage, navigate to the Services > Payments > Create
Challan option.
• Step 2: Enter the GSTIN or the ID of a temporary user or tax return preparer or UN body.
Enter the captcha code.
• Step 3: Enter amounts for CGST, SGST, IGST or other heads, as applicable. Thereafter,
choose the relevant payment mode with bank details if applicable.
• Step 4: Re-enter the GSTIN/Other ID for Challan Generation field and click on the
‘PROCEED’ button.
• Step 5: Click on the ‘DOWNLOAD’ button to download the challan that is generated.

Payment must be completed immediately in case of pre-login challan creation for net-
banking mode. This will be 15 days where an offline mode is chosen.
• GST Challan Generation Steps (Post-login) : If a taxpayer chooses to
generate challan after logging in, he/she can find the button to create
challan on your dashboard itself. The rest of the steps to fill and
generate challan remains the same.

In the case of post-login challan creation, a taxpayer can wait up to 15 days to

complete the payment
 CPIN
• CPIN stands for Common Portal Identification Number. The 14-digit CPIN number
is generated before payment of GST.

• The CPIN is issued at the time generating GST tax challan online. An online GST
tax challan can be saved temporarily and edited before generating the final
challan.

• The validity of CPIN is for a period of 15 days from the date of generation.

• You get an invalid challan error if the CPIN has expired. In such case, generate the
challan again and go for the payment.

• CIN stands for Challan Identification Number. On submission, GST Portal

generates a challan with a 17-digit unique identity number. This number is CIN. It
comprised the 14-digit CPIN along with a 3 digit Bank Code. After cross-checking,
you can submit the challan.

• 17-digit CIN number is issued after payment of GST.

 Tax Deducted at Sources
Under the GST regime, section 51 of the CGST Act, 2017 prescribes the
authority and procedure for ‘Tax Deduction at Source’. The Government
may order the following persons (the deductor) to deduct tax at source:
(a) a department or establishment of the Central Government or State
Government; or
(b) local authority; or
(c) Governmental agencies; or
(d) such persons or category of persons as may be notified by the
Government on the recommendations of the Council.
• The tax would be deducted @2% (1% CGST, 1% SGST/ 2% IGST) of the
payment made to the supplier (the deductee) of taxable goods or
services or both, where the total value of such supply, under a
contract, exceeds two lakh and fifty thousand rupees (excluding the
amount of central tax, State tax, Union territory tax, Integrated tax
and Cess indicated in the invoice).

• However,, ono deduction shall be made if the location of the supplier

and the place of supply is in a State or Union territory which is
different from the Stater as the case may be, Union territory of
registration of the recipient. Thus, when both the supplier as well as
place of supply are different from that of recipient, no tax deduction
at source would be made.
• Registration of TDS deductors: A TDS deductor has to compulsorily
register without any threshold limit. The deductor has a privilege of
obtaining registration under GST without having required to obtain
PAN.

• Deposit of TDS with the government: The amount of tax deducted at

source should be deposited to the Government account by the
deductor by 10th of the succeeding month. The deductor would be
liable to pay interest if the tax deducted is not deposited within the
prescribed time limit.
• TDS Certificate: A TDS certificate is required to be issued by deductor
(the person who is deducting tax) in Form GSTR-7A to the deductee
within 5 days of crediting the amount to the Government, failing
which the deductor would be liable to pay a late fee of Rs. 100/- per
day from the expiry of the 5th day till the certificate is issued. This
late fee would not be more than Rs. 5000/-.

• The purpose of TDS is just to enable the government to have a trail of

transactions and to monitor and verify the compliances.

• TDS Return: The deductor is also required to file a return in Form

GSTR-7 within 10 days from the end of the month.
S. No. Event
1 TDS not deducted
2 TDS certificate not issued or
delayed beyond the prescribed
period of five days
3 TDS deducted but not paid to the Interest to be paid along with the TDS amount;
government or paid later than
10th of the succeeding month
4 Late filing of TDS returns
Consequence
Interest to be paid along with the TDS amount;
else the amount shall be determined and
recovered as per the law.
Late fee of Rs. 100/- per day subject to a
maximum of Rs. 5000/-
else the amount shall be determined and
recovered as per the law.
Late fee of Rs. 100/- for every day during which
such failure continues subject to a maximum
amount of five thousand rupees.
Thanks