No GST for industry at the time of advance payment for supply of goods

Source: The Hindu Business Line, Nov 19, 2017

New Delhi: In a relief for industry, the GST Council has dropped an earlier requirement of payments of Goods and Services Tax (GST) on advances received for supply of goods.This is a relief for industry as payment of GST on advances was proving to be a major working capital hurdle for businesses.

The GST Council’s latest move has restored the pre-GST position where no excise duty or VAT was required to be paid on advances, said MS Mani, Partner GST, Deloitte India.

However, service providers would continue to be required to pay GST on advances, Mani told BusinessLine.

This is a dampener as even services face similar challenges. Tax experts feel that since GST is a unified law, there should not be divergence in treatment for goods and services considering the fact that accounting treatment is uniform.

This GST Council’s move meets the long standing demand of the industry, particularly by FMCG and auto sectors, said Pratik Jain, Leader-Indirect Tax, PwC.

“Under the VAT regime, there was no tax on advances for goods but was introduced under GST. Since the input credit was only available after receipt of goods, this led to working capital blockage for industry and additional compliance burden,” he said.

Further, there was ambiguity around the State where tax has to be paid in few cases, he added.

Jain also said that requiring GST payment on advances for services is in line with the provisions under the erstwhile service tax laws.

The GST law provides for payment of GST at the time of receipt of advance towards supply of goods or services. In October this year, the GST Council removed the requirement of payment of GST on advance receipts towards supply of goods, for persons having turnover of less than ₹1.5 crore in a year.However, on November 15, this relaxation was extended to all persons, except those opting to pay GST under composition scheme.Now, the GST Council has done away with the requirement to pay GST on advances post November 15 for all persons for supply of goods.

After the GST Council’s move, the time of supply for goods would be the date of issue of invoice by the supplier (or the due date, by when the invoice needs to be issued). This would apply even in case of a change in rate of tax.

The requirement to issue an advance receipt voucher at the time of receipt of advance remains.The GST Council has also now provided the facility of submission of· manual refund claims. This is seen as yet another taxpayer friendly measure for expeditious processing of the refund claims of taxes paid/input tax credits.


GSTN utility for exporters to claim refunds gets activated

Source: The Hindu Business Line, Nov 15, 2017

New Delhi: Merchant exporters can start claiming tax refunds using the new utility that will be activated on the GST Network portal tonight, GSTN CEO Prakash Kumar said.

With the new utility RFD-1A, a merchant exporter can claim refund of GST paid at the time of buying goods which he has exported in the relevant month.“GST RFD-1A for refund of input tax credit on export of goods and services and additional amount in cash ledger would go live on GSTN portal tonight,” Kumar told PTI. The refund claims can be filled for July-September and that would be matched with the corresponding GSTR-3B filed by the exporter.

Earlier, GSTN had launched the utility for processing refund claims by manufacturing exporters who had paid Integrated GST (IGST) while exporting goods.Kumar further said a new functionality has been introduced on the portal that enables businesses to engage and disengage a GST Practitioner (GSTP).

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No extra GST liability on supplies of diplomatic missions, UN bodies: Govt

Source: Business Standard, Nov 13, 2017

The government on Monday clarified that supplies to foreign diplomatic missions and United Nations (UN) organisations will not have any additional impact on the businesses tax liability.

Amid reports of businesses showing unwillingness to give their Good and Services Tax (GST) Unique Identify Number (UIN) while supplying to foreign diplomatic missions and UN bodies, the government said such supplies were like any other business-to-consumer (B2C) sale and hence would not attract any extra tax liability.

“It may be noted that sale or supply to foreign diplomatic missions/UN organisations is like any other B2C sale and will not have any additional effect on the supplier’s tax liability.

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GSTN eases process for exporters to claim refunds under Form GSTR1

index.jpgSource: Business Standard, Nov 06, 2017

New Delhi: GST Network on Sunday said it has introduced a utility Table 6A in Form GSTR1 for exporters to claim refunds.

An exporter can claim refund of Integrated GST tax paid at the time of export by filling the details of shipping bill and tax paid GST invoice in his Form GSTR1 in the relevant month.”Table 6A of Form GSTR1 has been introduced on the GST portal,” GSTN said in a statement.

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Deadline for GSTR-2, 3 of July extended to Nov 30

Source: The Hindu Business Line, Oct 30, 2017

New Delhi: Hoping to make compliance easier for businesses under the Goods and Services Tax regime, the government has extended the deadline for GSTR-2 and 3 for the month of July.

The Finance Ministry on Monday said that the last date for filing GSTR-2 for July has been shifted to November 30 from the earlier deadline of October 31.Similarly, the deadline for GSTR-3 has been extended to December 11 from the earlier last date of November 10.

“This will facilitate about 30.81 lakh taxpayers for filing GSTR-2 for the month of July 2017,” it said, adding that a notification to this effect will be issued soon.

Significantly, this is the second time that an extension has been given to file GST returns.

Earlier, in September, the GST Implementation Committee had shifted the deadline for filing GSTR-1, GSTR-2 and GSTR-3 for July to September 10, September 25 and September 30, 2017, respectively.It was then further extended by the GST Council when it met on September 9 in Hyderabad.

The original deadline for filing the full returns for July was September 5, September 10 and September 25.

However, there is still no clarity on when the full returns for August will be filed.

Till now, businesses have filed the GSTR-3B which is a summary return form for July, August and September and have been paying taxes accordingly.Many businesses had called for another extension in filing GSTR-2 returns due to technical glitches. Further, the deadline of October 31 for the return coincided with that for filing income tax returns and audited reports by businesses.

“GSTR-2 is the most important return for GST compliance since availability of input tax credit depends on it. This return requires matching and reconciling and automatic review, to make sure manual effort is minimised,” noted Archit Gupta, Foudner and CEO, ClearTax.

IGST relief likely for foreign banks, MNCs

Source: The Economic Times, Oct 26, 2017

The government may be looking to give some respite to foreign banks and multinationals which are saddled with the additional cost of paying 18% integrated goods and services tax (IGST) on the services provided to their international offices, said two people close to the development.

An advisory to this effect may be issued by the tax department in the coming weeks, one of the persons cited earlier said, requesting not to be named.

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GST invoicing norms for retailers eased

Source:, Oct. 24, 2017

NEW DELHI: Retailers won’t have to issue long invoices detailing prices and taxes for each item under the goods and services tax (GST) regime, further easing the billing and compliance burden on them. They will also not have to issue separate invoices for exempted items taxed at the 0% rate and can club all purchases in one bill.

The GST Council has approved these changes based on the recommendations of the law committee set up to review demands by stakeholders. The two changes will make invoicing and filing easier for retailers. They can issue invoices clubbing all goods taxed at one rate and mention just the total tax, facilitating smaller and less cumbersome invoices.

Under the earlier arrangement, all items had to be mentioned separately along with their prices and taxes. Retailers had argued that the end-customer is concerned with the net sale price and didn’t need a detailed tax breakup, but this was rejected by the committee. It said buyers have a right to know the tax being levied on all goods and services purchased by them.

A supplier need not provide the rate of tax against each item in the invoice and can instead show the cumulative value of all items liable to tax at a particular rate and the total levied on them. This will allow for clubbing of items and simpler invoices.

Exempt Items
A similar relief has been provided in the case of 0% items.

The GST law provides that a retailer selling both regular and exempt items has to provide two separate receipts — one for each. If a consumer buys grocery items taxed at 0% and consumer goods taxed at 18%, then the retailer will need to issue two separate invoices.

Under the new rules, the retailer will be allowed to issue one single ‘invoice-cum-bill of supply’ for all the goods sold to a consumer or unregistered entity. Tax experts said the move is in the right direction.

“Allowing aggregate level-value on the invoice, based on GST rate, would be a significant relief for B2C (business to consumer) supplies by retailers. It would be good if the requirement of mentioning harmonised system of nomenclature (HSN) code is also dispensed with in such cases,” said Pratik Jain, indirect tax leader, PwC.