PRESENTATION

ON
GOODS AND SERVICE TAX:
APPLICABILITY, ITC AND RETURNS

CA AYUSHI SHARMA
 Overview of GST
State
State
Service
Service
Excise
Excise
Tax
Tax Goods & Duty
Duty
Service Tax
Excise
Excise (GST) Entertai
Entertai
Duty
Duty nment
nment
Tax
Tax

VAT
VAT
CST
CST
Luxury
Luxury Octroi
Octroi
Tax
Tax Duty
Duty

Features of GST Council

GST
1. One. Nation & One Tax & One Market
2. Events are based on Concept of Supply.
3. Streamlining & Cross Utilization of Input Tax
Credits.
4. Revolutionary Invoice Matching Concept.
GST Governing Body with power to take
decision on rates, exemption, threshold
exemptions, etc with 33.33% voting power of
Union Government & 66.66% power lies
with the State Government.
TAX STRUCTURE UNDER GST

• Stands for Central GST

CGST • Tax collected by Central Government
• Applicable on supplies within the state

• Stands for State GST

SGST • Tax collected by State Government
• Applicable on supplies within the state

UTGS • Stands for Union Territory GST

• Tax collected by Union Territory
T • Applicable on supplies within the Union Territory

• Stands for Integrated GST

IGST • Tax collected is shared between Centre and State
• Applicable on interstate and import transactions
 (1) Supply includes
(a) all forms of supply of goods and/or services such
as sale, transfer, barter, exchange, license, rental,
lease or disposal made or agreed to be made for a
consideration by a person in the course or furtherance
of business,
(b) importation of service, whether or not for a

Meaning and consideration and whether or not in the course or

furtherance of business, and

Scope of (c) a supply specified in Schedule I, made or agreed

to be made without a consideration.

Supply (2) Schedule II, in respect of matters mentioned

therein, shall apply for determining what is, or is to
be treated as a supply of goods or a supply of
services.
(2A) Where a person acting as an agent who, for an
agreed commission or brokerage, either supplies or
receives any goods and/or services on behalf of any
principal, the transaction between such principal and
agent shall be deemed to be a supply.
 (3) Subject to sub-section (2), the Central or a State
Government may, upon recommendation of the
Council, specify, by notification, the transactions that
are to be
treated as—
(i) a supply of goods and not as a supply of services;
Meaning and or

Scope of (ii) a supply of services and not as a supply of goods;

or
Supply…. (iii) neither a supply of goods nor a supply of
services.
(4) Notwithstanding anything contained in sub-
section (1), the supply of any branded service by an
aggregator, as defined in section 43B, under a brand
name or trade name
owned by him shall be deemed to be a supply of the
said service by the said aggregator.
APPLICABILITY
 Aggregate Registration Required
Turnover
For Sale of Goods
Exceeds Rs.40 Yes – For Normal
GST lakh Category States
REGISTRATION Exceeds Rs.20 Yes – For Special
LIMIT lakh Category States
(REGULAR) For Providing Services
There has been no change in the threshold
limits for service providers. Persons
providing services need to register if their
aggregate turnover exceeds Rs.20 lakh (for
normal category states) and Rs.10 lakh (for
special category states)
 A taxpayer whose turnover is below Rs 1.5
crore can opt for Composition Scheme. In case
of North-Eastern states and Himachal Pradesh,
the limit is now Rs 75 lakh. 
As per the CGST (Amendment) Act, 2018, a
composition dealer can also supply services to
an extent of ten percent of turnover, or Rs.5
lakhs, whichever is higher. 
GST The composition scheme for service providers
REGISTRATION gives an option to taxpayers rendering services
LIMIT having aggregate annual turnover up to Rs. 50
(COMPOSITION) lakh to pay tax at a nominal rate, subject to
conditions. The following persons can opt into
this scheme:
1.Supplier of services only (i.e., service
providers)
2.Suppliers of goods and services (i.e., those
suppliers who were not eligible for
composition scheme earlier)
5 PETROLEUM
PRODUCTS
PETROL

Goods Not
DIESEL
PETROLEUM CRUDE
AV I AT I O N F U E L
N AT U R A L G A S Covered
ALCOHOL FOR
HUMAN
CONSUMPTION
under GST
POWER SECTOR
ITC
ITC Claim

Possession of Tax Invoice / Debit or Credit Note / Supplementary Invoice

1
issued by a supplier

2 The said goods/services have been received

3 Returns have been filed

4 The tax charged has been paid to the government by the supplier

5 Matching of Invoices and Reversal

 ITC on the Basis of use of Inputs – Sec 17

For Business
ITC Available Note:
purposes
Use of input Attribution of
tax credit ITC to be
For Other ITC not made as per
Purposes Available the manner
prescribed in
the ITC
Rules
“input” means any
“input service” means
goods other than capital
any service used or
goods used or intended
intended to be used by a
to be used by a supplier
supplier in the course or
in the course or
furtherance of business
furtherance of business
12
 ITC on the Basis of use of Inputs – Sec 17

Use of input tax

credit: Partly for

Note:
Taxable
Zero- Non-
Exempt Nil-rated Attribution of
rated taxable
Supplies
Supplies Supplies
Supplies Supplies ITC to be made
as per the
ITC manner
ITC ITC ITC
notnot
Availabl
Available available
available prescribed in
e the ITC Rules
Alternative to
apportionment between • Yearly option to avail a standard rate of 50% of eligible ITC
on inputs, capital goods and input services on a monthly basis
taxable and exempt • 50% shall not be applied on tax paid on supplies made by one
supplies in case of registered person to another registered person having same
banking companies and PAN
financial institutions:
13
 Restrictions on ITC – Sec 17(5)
Blocked credits

a) Motor Vehicles
 Transportation of goods , or
ITC for Motor Except  Making the following taxable services:
Vehicles will when i. Further supply of such vehicles /
NOT be they are conveyances, or
ii. Transportation of passengers, or
available used for
iii. Training for driving / flying / navigating
such vehicles / conveyances

Note: Where any amount has been paid on goods and / or services, in lieu of tax, under
composition scheme, no credit on such amount would be allowed.

14
 Restrictions on ITC – Sec 17(5)
Blocked credits
b) Supply of goods and services being:
Allowed ONLY if goods /
Cosmetic services of a particular category
Food and Outdoor Beauty Health
and Plastic are used towards making
Beverages Catering Treatment Services
Surgery taxable outward supplies of the
same category

Life / health
Rent-a-cab
Insurance

Travel
Membership Health and
Allowed ONLY if where the services are notified as Benefits to
of club Fitness Centre
obligatory for an employer to provide an employee or employees
services of a particular category are used towards
making taxable outward supplies of the same category
NEVER allowed

15
 Restrictions on ITC – Sec 17(5)
Blocked credits
c) Construction of Immovable Property (other than plant and machinery)

Goods or services received by a taxable

Works contract services, except
person for construction of an
where it is an input service for
immovable property on his own account
further supply of works contract
even when used in course or furtherance
service
of business;

Construction includes re-

construction, renovation,
ITC not Available additions or alterations or
repairs to the extent of
capitalisation

16
 • Taxes on supply of goods or services paid u/s 10

• Goods or services or both received by a non-

resident taxable person except on goods imported
by him, shall not be allowed

• Goods or services or both used for personal

consumption
Restrictions
on ITC : Sec • Goods lost, stolen, destroyed, written off or
disposed of by way of gift or free supplies and

17(5) • Any tax paid in accordance with the provisions of

Blocked sections 74, 129 and 130.

credits •Plant and machinery means means apparatus,

equipment, and machinery fixed to earth by
foundation or structural support that are used for
making outward supply of goods or services or both
and includes such foundation and structural supports
but excludes— (i) land, building or any other civil
structures; (ii) telecommunication towers; and (iii)
pipelines laid outside the factory premises.

17
RETURNS
 Tool for Providing Management of Finalization of
compliance necessary inputs Audit and anti- the tax liabilities
verification for policy evasion of the taxpayer
program of tax decision making programs of tax within stipulated
administration administration period of
limitation.

Importance of Returns
Types of Returns

Name What does it relate to When to be filed

GSTR-1 Outward Supplies made for a month 10th of the succeeding month
by a regular taxpayer (sec 25)
GSTR-2 Inward Supplies made for the month 15th of the succeeding month
by a regular taxpayer (sec 26)
GSTR-3 Monthly return by a regular taxpayer 20th of the succeeding month
(sec 27)

GSTR-4 Quarterly return by a composition 18th of the succeeding month after the
taxpayer(sec 27) end of the quarter
Types of Returns
Name What does it relate to When to be filed
GSTR-5 Periodic return by Non-Resident 20th of the succeeding month
Foreign Taxpayer (sec. 19-A)
GSTR-6 Return of an ISD (section 27(6) 13th of the next month
GSTR-7 TDS Return (section 27(5) 10th of the next month
GSTR-8 Annual Return 31st of December of the next
(Section 30) Financial Year
Final Return Taxpayer whose registration is With in three months of the date of
cancelled cancellation/ date of order, which
(section 31) ever is later
First Return Newly registered taxable person
(sec 27A)
 oTaxpayers having multiple registrations in a
State have to file separate returns for each
registration

oCasual Taxpayers to file regular returns

oAll returns have to be filed online only

Other points
oAnnual Returns are based on financial
statements and not just the total of the tax
periods

oCommon returns under CGST, IGST and

SGST Acts

oNo revised returns

Who should file what
Nature of taxpayer
Taxpayer under regular scheme
Taxpayer under composition scheme
Casual Taxpayer
Non-resident Foreign Taxpayer
Input Service Distributor
TDS Authority
UN Bodies and UID Cases
Must file
Monthly GSTR-1, GSTR-2, GSTR-3
Annual Return
Quarterly GSTR-4, Annual Return
GSTR-1, GSTR-2, GSTR-3 during validity
period of registration
and GSTR-5 on expiry of registration
GSTR-1, GSTR-2, GSTR-3 during validity
period of registration
and GSTR-5 on expiry of registration
Monthly GSTR-6
GSTR-7 for the month in which TDS is done,
Annual Return
GSTR-2 for the month in which inward
supplies are received [sec. 19 (6)]
 What is entered
◦ GSTIN, period
◦ GTO for the previous year (in the first year
only)
◦ Invoice wise details
◦ All B2B supplies, including to those with
uids and those related to reverse charge –
GSTR-1 – imports and URD purchases

Statement of ◦ All inter-state B2C supplies made where

the invoice value is more than rs.2.5 lakhs
Outward ◦ All exports
◦ Separate line for each HSN
Supplies ◦ Details of credit notes and debit notes
issued relating the earlier outward supplies
made
◦ Amendments to details of outward supplies
of earlier tax periods (including post-
supply discounts)
◦ Advances received and invoices related to
advances
 ◦ Summary details
◦ State wise supplies made to consumers
where the address on record is known
irrespective of turnover (address on record
mandatory for sales more than rs.50,000)
GSTR-1 – ◦ Nil rated supplies

Statement of ◦ Exempted supplies

◦ Non-gst supplies
Outward
Supplies What is auto-populated
◦ Identity details
◦ GTO for the previous year
GSTR-1 –
Statement of
Outward
Supplies
HSN Code for goods and
Accounting Code for services
No description of goods in
GSTR-1 , GSTR-2 and
GSTR-3
Accounting Code for services
must be prefixed with s
Description of goods and
services to be mentioned for
taxpayers with turnovers
below Rs.1.5 Crores
Taxpayer group Requirement
Taxpayers with turnovers in
preceding year above Rs.5
4 digit code mandatory
crores
Taxpayers with turnover
between Rs.1.5 crores and
2 digit code optional in first
year and mandatory later
Rs.5 crores
Any taxpayer 6 to 8 digits if he desires
Compounding dealers and No HSN Code mandatory to
taxpayers below turnover of start with
Rs.1.5 Crores
Taxpayer with services for Prescribed Accounting Code
which place of supply Rules mandatory
are dependent on nature of
services to apply the
destination principle –
irrespective of turnover
Exporters and Importers 8 digit HSN Code and
Accounting Code mandatory
 Every Registered Taxable person has to submit
(other than an Input Service Distributor,
Composition dealer and TDS Authority)
Electronically
GSTR-1 – Extension of time, by notification for valid and
Statement of sufficient reason

Outward Rectification of un matched details along with

tax and interest, if any.
Supplies No Rectification after filing return for the
month of September following the end of
financial year or filing of the relevant annual
return, which ever is earlier
 Consolidation of the entire transaction details
of the month – to be auto-populated from
GSTR-1 and GSTR-2 already filed
To be filed within 20th of the succeeding month
– late fee for delayed filing
To be filed by all regular taxpayers - even
when there is no transaction
GSTR-3 – Payment to be made earlier to get credit in the
Monthly Cash Ledgers – so that the same can be debited
to make payment of tax for the returns
Return ITC Ledger will have the credit of all claimed
Input Tax Credits and Cash Ledger will have
credits of TDS received
Refund can be claimed in case of Exporters
and Inverted Duty (GST) Structure cases.
No revised returns
 Auto populated Items
◦ Taxpayer Identity details
◦ Details of Inward Supplies and outward
supplies, revisions of invoices, credit and
debit notes, TDS credits, ITC received,
Output tax, ITC reversal on mismatched
invoices,
GSTR-3 – To be filled
Monthly ◦ ITC Reversal on account of adjustments

Return ◦ Debit entries from Cash Ledger and ITC

ledger
◦ Options relating to Refund claims
Treated as a non-filer if GSTR-3 is not filed
but both GSTR-1 and GSTR-2 are filed
Return would be treated as Invalid if short
payment is made
 To be filed quarterly
Invoice details auto-populated from
◦ RD inward supplies – from GSTR-1 of
counterparties

GSTR-4 – Details to be furnished

◦ URD inward supplies
Return of ◦ Import of goods and/or services

Composition Summary details

◦ Outward supplies made
dealer ◦ Non-GST Supplies
◦ Exports
Tax payable is auto-calculated and the same is
paid from the Cash Ledger by debiting it,
THANK
YOU