GST

GST is a unified tax system that replaced multiple indirect taxes levied by both the Central and State Governments. Under GST, both the Central and State Governments share the authority to levy and collect taxes on goods and services.

40 Lakhs (for goods) and Rs. 20 lakhs (for services) are required to register for GST and pay taxes on their taxable goods and services. Businesses with a yearly turnover of less than Rs. 40 Lakhs are not required to register for GST, but can choose to register for GST voluntarily.

GSTR – 1 Details of outward supplies , 

GSTR – 2A or 2B Details of inward supplies (Suspended temporarily), 

GSTR – 3B Finalised details of the supplies with payment of taxes, 

GSTR – 4 Quarterly return by Composition Taxpayers, 

GSTR – 5 Return by Non-Resident Foreign Taxpayer, 

GTSR – 6 Monthly return by Input Tax Distributor (ISD), 

GSTR – 7 Monthly return by Tax deductor, 

GSTR – 8 Monthly return by e-commerce operator,

GSTR – 9 GST Annual Return for normal taxpayers

It allows registered businesses to claim a credit for the tax paid on their purchases of goods or services, which can be used to offset their tax liability on the supply of goods or services.

Reversal of Input Tax Credit: In certain scenarios, such as if the supplier does not pay the tax to the government or if the recipient fails to pay the supplier within 180 days, the input tax credit claimed may be reversed.

Restrictions and Conditions: There are certain restrictions and conditions on claiming input tax credit for specific goods or services, such as motor vehicles, food and beverages, and goods used for personal purposes.

Cross Utilization: Input tax credit can be utilized to offset the output tax liability under the same tax head (i.e., CGST for Central GST, SGST for State GST, or IGST for Integrated GST). Cross utilization between different heads of tax is generally not permitted.

Refund of Unutilized Credit: If the input tax credit accumulated exceeds the tax liability, a taxpayer may claim a refund of the unutilized credit in certain cases, subject to the provisions of the GST law.

The Reverse Charge Mechanism (RCM) is a provision in the Goods and Services Tax (GST) system that shifts the liability to pay tax from the supplier to the recipient of goods or services. It is applicable in certain specified scenarios where the recipient of goods or services is responsible for the payment of tax instead of the supplier.

Here’s a brief overview of the Reverse Charge Mechanism in GST:

Applicability: The Reverse Charge Mechanism is applicable in specific cases as notified by the government. It is typically imposed to ensure the collection of tax from unregistered or partially registered entities.

Registered Recipient: Under RCM, the liability to pay tax is shifted to the registered recipient of goods or services. The recipient is required to pay the tax directly to the government instead of the supplier.

Unregistered Supplier: The Reverse Charge Mechanism is generally applicable when a registered person purchases goods or services from an unregistered supplier. In such cases, the recipient is responsible for paying the tax on the transaction.

Specific Goods/Services: RCM may be applicable for specific goods or services as notified by the government. These can include goods like precious stones, certain agricultural products, etc., or services provided by certain categories of individuals or entities.

Compliance and Reporting: The recipient of goods or services under RCM is required to comply with the relevant provisions of the GST law, including registration, invoicing, and filing of returns. They need to account for the tax payable under RCM and report it in their GST returns.

Input Tax Credit: The recipient who pays tax under RCM is generally eligible to claim input tax credit for the tax paid. This can be utilized to offset their output tax liability or claimed as a refund, subject to the provisions of the GST law.

Threshold Exemption: In some cases, the Reverse Charge Mechanism may not apply if the value of goods or services received by a registered person from an unregistered supplier does not exceed a specified threshold. This threshold may vary depending on the country or jurisdiction.

It’s important to note that the specific provisions and conditions of the Reverse Charge Mechanism may vary across countries or jurisdictions implementing the GST system. Businesses should refer to the relevant GST laws and regulations applicable to their specific jurisdiction for detailed information and compliance requirements regarding the Reverse Charge Mechanism.

HSN (Harmonized System of Nomenclature) and SAC (Services Accounting Codes) are classification systems used for the identification and categorization of goods and services under the Goods and Services Tax (GST) system in India.

HSN (Harmonized System of Nomenclature):

HSN codes are used to classify goods for tax purposes and enable uniformity in trade globally.
HSN codes are numeric codes assigned to different goods, products, or commodities.
Each HSN code consists of a specific number of digits, ranging from 2 to 8, representing different levels of classification.
The first two digits represent the chapter, followed by the next two digits indicating the heading, and subsequent digits providing further classification.
HSN codes are used to determine the applicable tax rate, exemptions, and other regulations related to specific goods.

SAC (Services Accounting Codes):

SAC codes are used to classify services for tax purposes under GST.
SAC codes are numeric codes assigned to different services provided by businesses.
Similar to HSN codes, SAC codes have a specific structure and number of digits.
SAC codes help in identifying the nature of services and determining the applicable tax rate or exemption.
They also assist in maintaining records and analyzing service-related data.
It’s important to note that HSN and SAC codes are continuously updated and revised by the GST authorities to ensure accuracy and relevance. Businesses are responsible for determining the appropriate HSN or SAC code applicable to their goods or services based on the nature and characteristics of their offerings. The use of correct codes facilitates compliance with GST regulations, including proper invoicing, tax calculation, and reporting.

The due dates for filing Goods and Services Tax (GST) returns vary based on the type of return and the taxpayer’s turnover. Here’s a brief overview of the due dates for GST returns in India, as of my knowledge cutoff in September 2021:

GSTR-1: GSTR-1 is the return for outward supplies, i.e., sales made by the taxpayer. The due date for GSTR-1 filing 10th of the following month or depends on the taxpayer’s turnover:
Quarterly Filing: Taxpayers with an annual turnover up to INR 1.5 crores can file GSTR-1 on a quarterly basis, with the due date being the 13th of the month following the quarter.
Monthly Filing: Taxpayers with an annual turnover above INR 1.5 crores need to file GSTR-1 monthly, with the due date being the 11th of the following month.
GSTR-3B: GSTR-3B is a summary return containing details of outward supplies, inward supplies, and tax liability. The due date for GSTR-3B is generally the 20th of the following month.

GSTR-4: GSTR-4 is a return for composition scheme taxpayers. It needs to be filed on a quarterly basis by the 18th of the month following the quarter.

GSTR-5: GSTR-5 is the return for non-resident foreign taxpayers. It needs to be filed within 20 days after the end of the relevant tax period or at the time of their departure, whichever is earlier.

GSTR-6: GSTR-6 is the return for input service distributors. It needs to be filed by the 13th of the following month.

GSTR-7: GSTR-7 is the return for taxpayers who need to deduct tax at source (TDS). It needs to be filed by the 10th of the following month.

GSTR-8: GSTR-8 is the return for e-commerce operators who collect tax at source (TCS). It needs to be filed by the 10th of the following month.

GSTR-9/9C: GSTR-9 is an annual return, while GSTR-9C is a reconciliation statement and certification. Both need to be filed by the 31st of December of the subsequent financial year.

1.ITC is not available for Motor vehicles used to transport persons
2.Food and beverages, Outdoor catering, Beauty treatment, Health services, Cosmetic and plastic surgery
3.No ITC is allowed on services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft
4.No ITC will be allowed on any membership fees for gyms, clubs, etc.
5.ITC is not available in the case of travel, benefits extended to employees on vacation such as leave or home travel concession.
6.ITC shall not be available for any work contract services. ITC for the construction of an immovable property cannot be availed, except where the input service is used for further work contract services.
7.No ITC is available for goods/services for construction of an immovable property on his own account. Even if such goods/services are used in the course or furtherance of business, ITC will not be available. But this rule does not apply to the plant or machinery. ITC is available on inputs used to manufacture plant and machinery for its own use.
8.No ITC would be available to the person who has made the payment of tax under composition scheme in GST law. Please read our extensive guides on the composition scheme under GST and whether you are eligible for it.
9.ITC cannot be availed on goods/services received by a non-resident taxable person. ITC is only available on any goods imported by him. Please read our articles on GST on non-residents and the registration process for non-residents.
10.No ITC will be available for the goods/ services used for personal purposes and not for business purposes. Find out more on how to calculate the amount of common credit applicable for business if you use the same input for both business and personal uses.
11.No ITC is available for goods lost, stolen, destroyed, written off or given off as gift or free samples.
12.No ITC on restaurants

All the regular taxpayer registered under GST and having an annual turnover of more than Rs. 2 crore should file GSTR-9 or GST Annual Return. The only category of GST registered entities not required to file GSTR-9 filing are input service distributors, casual taxable persons and non-resident taxable persons.

In the CGST Rule 88D, a mechanism is outlined for system-based notification of cases where the ITC claimed in GSTR-3B exceeds the prescribed available ITC amount in GSTR-2B by a certain percentage or amount.( 20% or 25 Lakhs)

15 Days

Exempted goods or services- If the goods or services are exempted from GST then the Reverse Charge would not be applicable. If the aggregate value of the goods & services does not exceed the amount of Rs. 5000 a day, then such transactions will be exempted from the provisions of reverse charges.

The supplier has to report the same in table 4B of GSTR-1 (Outward supplies attracting tax on reverse charge basis). The recipient has to report the summary of purchases attracting reverse charge. The recipient has to report in Table 3.1 (D) of GSTR-3B (inward supplies liable to reverse charge).

The supplier must fill out GST RET-1 to disclose the total sales subject to RCM. He must record external RCM supply in accordance with GST RET-1 Table 3D. Sales subject to RCM do not require to be reported in GST RET-2 and GST RET-3. Reverse charge purchases must be reported invoice-by-invoice in GST ANX-1 by the recipient. He must mention this in GST ANX-1 Table 3H.