1、Goods and Services Taxes in India 2024Understanding the Goods and Services Tax Regime in IndiaPreparing for GST Compliance ObligationsImpact of the GST Regime on Imports in IndiaPg 04Pg11Pg 21Issue 59 April 2024|www.india-From Dezan Shira&Associates IndIa BrIefIng Issue 59 April 20242IntroductionCre

2、ditsPublisher-Asia Briefing Media Ltd.Lead Editor-Melissa CyrillContributors-Archana Rao,Divyansh ShrivastavaDesigners-Miguel Enrico Anciano,Aparajita ZadooIndias Goods and Services Tax(GST)regime has significantly altered the landscape of indirect taxation in the country,aiming to streamline proces

3、ses,reduce cascading tax,and enhance compliance.However,managing compliance under GST can be complex,requiring businesses to stay vigilant and proactive.Accurate record-keeping is paramount,with businesses needing to meticulously document transactions,invoices,purchases,sales,and returns using GST-c

4、ompliant accounting software.Timely filing of GST returns is crucial,adhering strictly to prescribed timelines to avoid penalties and interest charges.Input Tax Credit(ITC)reconciliation is another critical aspect,requiring businesses to regularly reconcile claimed credits with vendor details to pre

5、vent discrepancies and potential penalties.Engaging with qualified tax professionals or consultants can provide invaluable guidance,assisting in compliance activities and offering strategic advice to optimize tax liabilities.Its also vital to stay informed about GST Council updates,adapting business

6、 processes to align with evolving regulations and leverage opportunities for simplification or rationalization.In this tax issue from India Briefing,we discuss the framework of the GST regime,including updates in 2024,the latest GST rates applicable on goods and services,compliance obligations and r

7、eporting requirements for various types of entities,and the levy of GST on imports.This publication is a general advisory due to its limited scope.For queries on your business exposure to the GST system and managing your GST compliance,please reach our tax experts at .ROHIT KAPURManaging DirectorDez

8、an Shira&AssociatesNew Delhi OfficeWith kind regards,Rohit Kwww.india-www.vietnam-www.china- IndIa BrIefIng Issue 59 April 20243Asia Briefing Ltd.Unit 507,5/F,Chinachem Golden Plaza,77 Mody Road,Tsim Sha Tsui East Kowloon,Hong Kong.Annual SubscriptionIndia Briefing Magazine is published four times a

9、 year.To subscribe,please visit please explore the clickable resources below.Goods and Services Taxes in India 2024ContentsUnderstanding the Goods and Services Tax Regime in IndiaPg 04Preparing for GST Compliance ObligationsPg 11Impact of the GST Regime on Imports in IndiaPg 21ReferenceIndia Briefin

10、g and related titles are produced by Asia Briefing Ltd.,a wholly owned subsidiary of Dezan Shira Group.Content is provided by Dezan Shira&Associates.No liability may be accepted for any of the contents of this publication.Readers are strongly advised to seek professional advice when actively looking

11、 to implement suggestions made within this publication.For queries regarding the content of this magazine,please contact:All materials and contents 2024 Asia Briefing Ltd.Like India Briefing on FacebookFollow India Briefing on TwitterConnect with Dezan Shira&Associates on LinkedinView Dezan Shira&As

12、sociates on Youtube Follow UsScan the QR code to follow us on WeChat and gain access to the latest investor news and resourcesConnect with us for the latest news,events and insights across Asia.Legal,Tax,Accounting Newswww.india- and W S Advisory and C IndIa BrIefIng Issue 59 April 20244Understandin

13、g the Goods and Services Tax Regime in IndiaWhat is GST?The Goods and Services Tax(GST)is a comprehensive tax system that has replaced various indirect taxes imposed by both the Central and State Governments.Implemented since July 1,2017,after over a decade of deliberations,GST is a single tax appli

14、ed throughout the supply chain,from producers to consumers.Essentially,it taxes only the value added at each stage,as input tax credits paid at earlier stages are available for deduction in subsequent stages.With offsetting benefits at each level of the supply chain,the end consumer bears only the G

15、ST levied by the final dealer.Different components of GSTThere are four different components of GST,namely the CGST,SGST,IGST,and UTGST.The GST is applied at each stage of production and refunded to all parties except the final consumer.Unlike the previous tax regime,its collected at the point of co

16、nsumption,not origin.Chapter 1Archana RaoBusiness EditorIndia BriefingAuthor1.CGST:Central Goods and Services Tax(CGST)is charged on the intra-state supply of products and services.2.SGST:State Goods and Services Tax(SGST)like CGST,is charged on the sale of products or services within a state.3.IGST

17、:Integrated Goods and Services Tax(IGST)is charged on inter-state transactions of products and services.4.UTGST:Union Territory Goods and Services Tax is levied on the supply of products and services in any of the Union Territories in the country:Ladakh,Andaman and Nicobar Islands,Daman and Diu,Dadr

18、a and Nagar Haveli,Lakshadweep,and Chandigarh.UTGST is levied along with CGST.For transactions occurring within a state,both the CGST and SGST will be collected.IndIa BrIefIng Issue 59 April 20245Taxes Subsumed Under GSTCentral taxes replaced by GSTState taxes subsumed by GST Service tax Central exc

19、ise duties(CENVAT)Additional Excise Duties Additional duties of excise(Goods of Special Importance)Additional Duties of Excise(Textiles and Textile Products)Additional duty of customs(CVD)Duties of excise(Toilet and Medicinal Preparations)Cess and Central surcharge Entry tax Luxury tax Central sales

20、 tax Purchase tax State VAT Entertainment tax State cess and surcharges Taxes on advertisements Taxes on lottery,betting,and gamblingGSTIntra-statemovementCentral GST(CGST)IntergratedGST(IGST)State GST(SGST)Inter-statemovementGST rates in IndiaThe GST Council has classified roughly 1300 items and 50

21、0 services into four tax slabs nil-rated,5 percent,12 percent,18 percent,and 28 percent.The GST Council is the constitutional body responsible for making recommendations on issues related to the implementation of the GST regime.Which taxes are not subsumed in GST?Basic Customs Duty:Duties imposed at

22、 the time of import of goods in India.Export Duty:Duty imposed on the export of specific goods that are not abundantly available in India.Road and passenger tax and toll tax:These are not levied on goods and services but can be considered as fees.Property Tax:Taxes levied on property.Stamp Duty:Tax

23、imposed on the sale of property.The GST rate is subject to frequent adjustments;it is not permanent.Rates may be changed by the government in response to changes in the economy,business demands,and revenue concerns.The GST Council Meetings decide the tax rates and the manner in which the tax will be

24、 applied.The Finance Act,2024The Finance Act,2024 brings changes to certain laws and rules and maintains the existing income tax rates for FY 2024-25.The Finance Act 2024 was enacted by Indias Parliament and signed into law by the President on February 15,2024.Its provisions apply from April 1,2024.

25、IndIa BrIefIng Issue 59 April 20246GST Rates as of 2024(Products)Tax rateProducts0%Milk Eggs Curd Lassi Kajal Educations Services Health Services Childrens Drawing&Coloring Books Unpacked Foodgrains Unpacked Paneer Gur Unbranded Natural Honey Fresh Vegetables Salt Unbranded Atta Unbranded Maida Besa

26、n Prasad Palmyra Jaggery Phool Bhari Jhadoo5%Sugar Tea Packed Paneer Coal Edible Oils Raisin Domestic LPG Roasted Coffee Beans PDS Kerosene Skimmed Milk Powder Cashew Nuts Footwear(INR 500)Milk Food for Babies Apparels(INR 1000)Fabric Coir Mats,Matting&Floor Covering Spices Agarbatti Coal Mishti/Mit

27、hai(Indian Sweets)Life-saving drugs Coffee(except instant)12%Butter Ghee Computers Processed food Almonds Mobiles Fruit Juice Preparations of Vegetables,Nuts Fruits,or other parts Packed Coconut Water Umbrella18%Hair Oil Capital goods Toothpaste Industrial Intermediaries Soap Ice-cream Pasta Toiletr

28、ies Corn Flakes Soups Computers Printers28%Small cars(+1%or 3%cess)High-end motorcycles(+15%cess)Consumer durables such as AC and fridge Beedis are NOT included here Luxury&sin items like BMWs,cigarettes and aerated drinks(+15%cess)IndIa BrIefIng Issue 59 April 20247GST Rates as of 2024(Services)Tax

29、 rateServices0%Lodge and hotel services carrying a tariff below INR 1,000,Jan Dhan Yojana Bank,Bank charges on savings accounts.5%Railways transportation of goods and passengers Goods transported in a vessel from outside India Renting a motor cab without fuel cost Transport services in AC contract/s

30、tage or radio taxi Transport by air(scheduled)/air travel for the purpose of pilgrimage via chartered/non-scheduled flights Tour operator services Leasing of aircrafts Print media ad space Working for the printing of newspapers12%Rail transportation of goods in containers from a third party other th

31、an Indian Railways Air travel excluding economy Food/drinks at restaurants without AC/heating Renting accommodation for more than INR 1000 and less than INR 2500 per day Construction of building for sale IP rights temporarily18%Renting of truck/goods carriage where the cost of fuel is included Trans

32、port of goods and passengers by ropeways.(with ITC)Services supplied to Chit Fund Job work in relation to the processing of hides,skins,etc Manufacture of footwear and clay bricks Works contract for roads,bridges,railways,metro,effluent treatment plant,crematorium etc.Works contracts are supplied to

33、 central and state governments,local authorities for historical monuments,canals,dams,pipelines,plants for water supply,educational institutions,hospitals,etc.&sub-contractor thereof.Food/drinks at restaurants with AC/heating Outdoor catering Renting accommodation for more than INR 2500 but less tha

34、n INR 5000 per day Supply of food,shamiana,and party arrangement Supply of works contract28%Entertainment events-amusement facility,water parks,theme parks,joy rides Food/drinks at AC 5-star hotels Accommodation in 5-star hotels or above IndIa BrIefIng Issue 59 April 20248Changes in the Finance Act

35、2024 include updates to the Central Goods and Services Tax Act,2017(CGST Act)regarding input service distributors(ISD),some adjustments to income tax provisions,and penalties for failing to register specific machinery used in manufacturing under special procedures.Changes to GST Rates:45th GST Counc

36、il MeetingCategoryOld GST ratesNew GST ratesRailways goods and parts under Chapter 8612%18%Pens12%18%Metal concentrates and ores5%18%Certain renewable energy devices5%12%Recorded media reproduction and print12%18%Broadcasting,sound recordings,and licensing12%18%Printed material12%18%Packing containe

37、rs and boxes12%18%Scrap and polyurethanes5%18%Changes to the Input Service Distribution complianceOne of the primary changes introduced in the Finance Act 2024 is the mandatory use of the input service distributor(ISD)system in order to distribute input tax credits(ITC)(Section 20 of the CSGT Act).F

38、or the purposes of distributing the input tax credit,an input service distributor has to issue an ISD invoice as prescribed in rule 54(1)of the CGST Rules,2017,clearly indicating in such invoice that it is issued only for distribution of input tax credit.The ISD mechanism intends to make it easier f

39、or companies with several branches or divisions to collect their ITC and to guarantee that each branch or unit can get the ITC to which they are legally entitled.Additionally,it enables more effective use of the ITC across different business divisions,which can lower expenses and boost productivity.

40、What is the Finance Act?A Finance Bill is a part of the countrys Union(federal)Budget presented annually to introduce proposed taxation changes by the finance minister.The bill,once passed by the Indian parliament,is known as the Finance Act.The Act offers a thorough road map for the governments int

41、ended distribution of financial resources and its provisions can simplify,update,or reform existing tax regulation.The Finance Act also passes into law key provisions introduced in the Union Budget.IndIa BrIefIng Issue 59 April 20249To report on the ITC distribution to its various units,an ISD must

42、file a separate return,i.e.,Form GSTR-6.The distribution of credit and the interactions between the input service providers and the various branches or divisions must also be accurately documented by the ISD.An ISD will have to file monthly returns in GSTR-6 within 13 days after the end of the month

43、 and will have to furnish information of all ISD invoices issued.The details in the returns will be made available to the respective recipients in their GSTR 2A.The ISD can obtain the information of ITC from the GSTR-2B return,which consists of details of inward supplies as per the information furni

44、shed by the suppliers.In terms of ITC distribution,credit can only be allocated to the unit directly associated with the supply.For instance,an ISD has four locations nationwide.However,if a certain input service is solely related to one unit,an ISD can only give the credit to that unit and not to a

45、ny other units and the bill is raised in the name of ISD.If all units share the same input services,then the distribution will be based on the turnover ratio of each unit.In India,its common for businesses to operate primarily in one state while conducting transactions across multiple states and uni

46、on territories.Consequently,products and services are often transferred between these business units.Such inter-unit transfers within the same organization are subject to GST.Every individual obligated to obtain GST registration must do so separately for each state or union territory where the tax i

47、s applicable.This implies that each business location established in a different state or union territory must have its own distinct GST registration.Registration Procedure for ISDTo operate as an ISD,proper registration is essential.Apart from being registered as a normal taxpayer under GST,an Inpu

48、t Service Distributor must also register specifically as an ISD.Step 1:Visit the GST portalGo to the official GST website,www.gst.gov.in,and head to the Services tab.Step 2:Select the“New Registration”optionClick on the“Register Now”button and choose the“New Registration”option and select the“Taxpay

49、er”option.Step 3:Complete the required detailsProvide all the necessary details,such as the legal name of the business,PAN,email address,and mobile number.Step 4:Provide the Principal Place of Business(Head Office)Enter the address of the principal place of business for the ISD.Step 5:Additional inf

50、ormationFurnish details regarding the jurisdiction,nature of possession of the premises,and any additional places of business.Step 6:Provide authorized signatory detailsSubmit necessary information about the authorized signatory,including name,PAN,and mobile number.Step 7:Application verificationA o

51、ne-time password(OTP)will be sent to the applicant on the provided email address and mobile number for the form verification.Step 8:Obtain the Application Reference Number(ARN)Upon successful verification,an Application Reference Number(ARN)will be generated and sent to the registered email address

52、and mobile number.IndIa BrIefIng Issue 59 April 202410Section 122A,CGST Act:Penalties and Registration Procedures for Specified MachinesSection 122A has been introduced in relation to penalty for failure to register certain specified machines used to manufacture specified goods as notified under sec

53、tion 148 of the CGST Act,2017.Penalties under Section 122A consist of two aspects:Monetary penalty:Individuals breaching the special registration procedure face a fine of INR 100,000 for each unregistered machine employed in manufacturing.This penalty is supplementary to any other penalties prescrib

54、ed under Chapter XV or other GST Law provisions.Seizure and confiscation:Unregistered machines are liable to seizure and confiscation.However,specific conditions,as detailed in the provisos,may exempt them from confiscation.Conditions for non-confiscation:To avoid the confiscation of unregistered ma

55、chines,the following prerequisites must be fulfilled:Penalty payment:The concerned individual must settle the imposed penalty.Timely registration:Registration of the unregistered machine must be finalized within three days of receiving the penalty order communication.Notification No.4/2024-Central T

56、ax introduced the special procedure under Section 148.This notification specifies the registration procedures for machines and lists goods such as pan masala,unmanufactured tobacco,hookah,smoking tobacco,chewing tobacco,Gutkha,etc.,which are subject to these procedures.SERVICES|TAX,TRANSFER PRICING,

57、INTERNATIONAL TAX Dezan Shira&Associates tax professionals have a deep understanding of Indias complex tax environment,as well as in-depth industry knowledge and experience.Our experienced team of tax accountants,lawyers,and chartered accountants can help on a wide spectrum of tax service areas acro

58、ss all major industries.Our areas of expertise include:Indirect Tax(including VAT,GST etc.)Advising on Transactions Guidance with Issuing and Receiving Receipts Application for Indirect Tax(e.g.VAT)Exemptions,Zero Rating for Exported Services Advisory on Customs,Tariffs,and Applicability of Free Tra

59、de AgreementsFor a tax consultation,please reach our professionals at EXPLORE MORERELATED READINGAn Introduction to Doing Business in India 2024An Introduction to Doing Business in India 2024 is compiled by the experts at Dezan Shira&Associates and covers essential aspects of investing in India,incl

60、uding corporate establishment,investment climate,tax,audit,accounting,human resources,payroll,and the trade environment.READ MORE IndIa BrIefIng Issue 59 April 202411Chapter 2Preparing for GST Compliance ObligationsNon-compliance with GST regulation can result in significant costs for businesses,wit

61、h strict penalties imposed for errors leading to underpayment of taxes or incorrect credit utilization.Divyansh ShrivastavaAssistant ManagerCorporate Accounting ServicesContributorThe GST Council has established regulations governing how businesses should maintain records,issue invoices,report purch

62、ases and sales,and fulfill tax obligations by filing returns.Adhering to these rules is mandatory,whereas non-compliance can result in significant costs for businesses.GST registration complianceThe initial step towards compliance involves registering for GST,which can be conveniently done online vi

63、a the website-www.gst.gov.in.GST registration is determined by a businesss annual turnover and falls into specific categories:Regular,Composition,and Casual and Non-Resident.Types of GST registrationa.Regular taxpayers:The majority of businesses in India fall into this category.Businesses with a tur

64、nover exceeding INR 4 million in a financial year are mandated to register as regular taxable entities.However,in the northeastern states,Jammu&Kashmir,Himachal Pradesh,and Uttarakhand,the threshold limit is INR 1 million.b.Casual taxable individuals:Occasional or seasonal businesses fall under this

65、 category and must register for GST.These businesses are required to deposit an amount equivalent to the GST liability arising from their occasional operations.Registration is valid for a period of 3 months,with the option to apply for renewal or extensions.c.Non-resident taxable individuals:Individ

66、uals residing outside India but engaging in the occasional supply of goods or services to Indian residents as agents,principals,or in other capacities,must register under this category.A deposit equivalent to the expected GST liability during the active GST tenure must be made.Registration typically

67、 lasts for 3 months,with provisions for extension or renewal if necessary.Archana RaoBusiness EditorIndia BriefingAuthor IndIa BrIefIng Issue 59 April 202412d.Composition registration:Businesses with an annual turnover of up to INR 10 million are eligible for registration under the Composition Schem

68、e.Under this scheme,businesses pay a fixed amount of GST regardless of their actual turnover.Tax invoice complianceGST-registered businesses must adhere to invoicing regulations to facilitate input tax credit.Each sale of goods or services requires the issuance of a tax invoice containing essential

69、details such as the invoice number,date,customer information,HSN/SAC code,item details,taxable value,taxes,and the suppliers signature.Non-compliance with GST invoicing standards may result in penalties up to INR 10,000 or 100 percent of the tax due(whichever is higher)for failure to issue invoices

70、and INR 25,000 for incorrect invoicing.GST return complianceAll registered businesses must file returns on a monthly/quarterly/yearly basis,depending on their business activity.Returns are filed online through the GST website and include:GSTR-1:Details of sales filed with the government,with no tax

71、payment required.GSTR-3B:A simplified return declaring summary GST liabilities for a tax period,self-declared monthly by all GST-registered taxpayers.GSTR-9:Filed annually by taxpayers with turnover exceeding INR 20 million,consolidating details of outward sales,inward purchases,and taxes payable an

72、d paid throughout the year.GST return provision for small taxpayersSmall taxpayers include individuals or enterprises with an annual turnover of up to INR 50 million in the preceding fiscal year.These entities are afforded the flexibility to choose between filing their primary GST returns on a quart

73、erly or monthly basis.For those opting for quarterly filing,three distinct options are available:1.GSTR-Quarterly:This choice enables small taxpayers to submit their primary GST returns on a quarterly basis.2.GSTR-Sahaj:Tailored for businesses with simpler tax obligations,GSTR-Sahaj offers another q

74、uarterly filing alternative.3.GSTR-Sugam:Geared towards taxpayers with relatively straightforward tax affairs,GSTR-Sugam provides a quarterly filing option.Introduction to the Quarterly Return Filing SchemeThe Quarterly Return Filing Scheme,known as the Quarterly Returns with Monthly Payment(QRMP)sc

75、heme,presents eligible taxpayers with the convenience of filing GSTR-1 and GSTR-3B returns on a quarterly basis rather than monthly.This scheme is tailored for registered taxpayers with a turnover of up to INR 50 million in the previous fiscal year.Traditionally,taxpayers were required to file GSTR-

76、1 and GSTR-3B on a monthly basis.However,with the introduction of the QRMP scheme,they now have the flexibility to file returns once every quarter.For instance,returns for the April-June quarter can be filed once,with taxes for April due by May.IndIa BrIefIng Issue 59 April 202413Under the QRMP sche

77、me,taxpayers are obligated to make monthly tax payments utilizing either the fixed sum method(via a pre-filled challan)or the self-assessment method(calculating the tax amount post-adjustment of the Input Tax Credit).Once opted,taxpayers remain enrolled in this scheme until they exceed the turnover

78、threshold or choose to opt-out.Eligible participants for the QRMP SchemeThe QRMP Scheme caters to the following registered entities:1.Registered individuals or entities with an Aggregate Annual Turnover(AATO)up to INR 50 million in the previous fiscal year.If AATO surpasses INR 50 million during a q

79、uarter,the individual or entity becomes ineligible for the scheme from the subsequent quarter.2.Individuals or entities obtaining new GST registration or opting out of the GST Composition Scheme may also opt for the QRMP Scheme.The QRMP Scheme option can be exercised per GSTIN(Goods and Services Tax

80、 Identification Number),implying that certain GSTINs linked to the same PAN may opt for the scheme while others may remain outside its purview.Invoice Furnishing Facility The Invoice Furnishing Facility(IFF)caters to taxpayers under the QRMP scheme,facilitating the declaration of outward supplies to

81、 registered persons for the initial two months of any quarter.It is an optional provision akin to Form GSTR-1,specifically allowing for the filing of B2B invoices,credit notes,debit notes,etc.The deadline for filing IFF for a month is the 13th of the subsequent month.This enables recipient taxpayers

82、 to claim credit for these invoices in the same month,provided they are reported in IFF by the supplier taxpayer under the QRMP scheme.GST state code and jurisdiction for registrationUnderstanding GST state codes and jurisdiction is vital for compliance,accurate reporting,claiming input tax credit(I

83、TC),and avoiding legal issues in India.Each state and union territory has a unique two-digit alphanumeric GST state code assigned by the federal government,facilitating identification during transactions.The GSTIN,a 15-digit number issued by the government,includes this state code,enabling precise d

84、ocumentation.Accurate jurisdiction information is essential for valid GST registration,ensuring taxpayers are directed to the correct tax authority.State Jurisdiction manages tax administration within states or union territories,covering SGST and UTGST,while Central Jurisdiction oversees CGST and IG

85、ST for inter-state transactions.Taxpayer division is based on turnover percentages.GST jurisdictions are hierarchically organized,comprising zones,Commissionerate,division offices,and range offices,each serving specific roles in tax administration.Composition SchemeThe GST Composition Scheme offers

86、a simplified tax framework that eligible taxpayers can choose,provided their annual turnover falls below a specified threshold.Once an applicant has notified their switch to the GST Composition Scheme,taxpayers arent obligated to reapply as long as specific conditions are met.These conditions entail

87、 IndIa BrIefIng Issue 59 April 202414the taxpayers continued eligibility for the scheme or their decision not to withdraw from it.For instance,eateries and similar businesses with an annual turnover of up to Rs 15 million(or INR 7.5 million for certain northeastern and hill states)are eligible for t

88、he GST Composition Scheme.On the other hand,service providers,except for restaurants,must maintain a turnover below INR 5 million to qualify.Eligible GST-registered taxpayers seeking to participate in the GST Composition Scheme must submit an electronic notification using Form CMP-02 before the star

89、t of the financial year they intend to join the scheme.Once submitted,this notification remains valid as long as the taxpayer meets the schemes eligibility criteria or until they choose to withdraw from it.The category of registered persons,eligible for composition levy under section 10 and the prov

90、isions of Chapter 2 of the CGST Rules,2017,specified in column(2)of the able below shall pay tax under section 10 at the rate specified in column(3)of the said table:The following category of people are not eligible to opt for the GST Composition scheme:A casual taxable person,i.e.a person who occas

91、ionally undertakes supplies in a State/UT where he has no fixed place of business;A non-resident taxable person,i.e.a person who occasionally undertakes supplies but has no fixed place of business or residence in India;A person engaged in providing inter-state supply of goods and/or services;A perso

92、n engaged in non-taxable supplies of goods and/or services;and A person supplying goods or services through an e-commerce operator who is required to collect tax at source(TCS)as per GST provisions.The composition approach has the following benefits:Fewer requirements to be met in terms of complianc

93、e(returns,keeping records in books,sending invoices,etc.)Quarterly tax payment Reduced tax obligation High liquidity due to reduced tax ratesS.No.Section under which composition levy is optedCategory of registered personsRate of tax(1)(1A)(2)(3)1.Sub-sections(1)and(2)of section 10Manufacturers,other

94、 than manufacturers of such goods as may be notified by the Government0.5%of the turnover in the State or Union territory2.Sub-sections(1)and(2)of section 10Suppliers making supplies referred to in clause(b)of paragraph 6 of Schedule II2.5%of the turnover in the State or Union territory3.Sub-section

95、s(1)and(2)of section 10Any other supplier eligible for composition levy under sub-sections(1)and(2)of section 100.5%of the turnover of taxable supplies of goods and services in the State or Union territory4.Sub-section(2A)of section 10Registered persons not eligible under the3%of the turnover of sup

96、plies of goods and services in the State or Union territory IndIa BrIefIng Issue 59 April 202415When applicable,a composition merchant must pay tax under the reverse charge mechanism.The rate at which GST must be paid is the rate that applies to the supplies.This indicates that using the rate under

97、the composition scheme for reverse charging is not recommended.Furthermore,a composition dealer is not eligible Category of personsDocuments required for GST registrationSole proprietor/Individual PAN card of the owner Aadhar card of the owner Photograph of the owner(in JPEG format,maximum size 100

98、KB)Bank account details*Address proof*Partnership firm/LLP PAN card of all partners(including managing partner and authorized signatory)Copy of partnership deed Photograph of all partners and authorised signatories(in JPEG format,maximum size 100 KB)Address proof of partners(Passport,driving license

99、,Voters identity card,Aadhar card etc.)Aadhar card of authorised signatory Proof of appointment of authorized signatory In the case of LLP,registration certificate/Board resolution of LLPBank account details*Address proof of principal place of business*Hindu Undivided Family PAN card of HUF PAN card

100、 and Aadhar card of Karta Photograph of the owner(in JPEG format,maximum size 100 KB)Bank account details*Address proof of principal place of business*Company(Public/Private/Indian/foreign)PAN card of Company Certificate of incorporation given by Ministry of Corporate Affairs Memorandum of Associati

101、on/Articles of Association PAN card and Aadhar card of authorized signatory.The authorised signatory must be an Indian even in case of foreign companies/branch registration PAN card and address proof of all directors of the Company Photograph of all directors and authorised signatory(in JPEG format,

102、maximum size 100 KB)Board resolution appointing authorised signatory/Any other proof of appointment of authorised signatory(in JPEG format/PDF format,maximum size 100 KB)Bank account details*Address proof of principal place of business*Photo of company premisesNotes:*Bank account details:For bank ac

103、count details,a copy of cancelled cheque or extract of passbook/bank statement(containing the first and last page)must be uploaded (in JPEG format/PDF format,maximum size 100 KB)*Address proof:Includes Property tax receipt,Municipal Khata copy,Electricity bill copy,Ownership deed/document(in the cas

104、e of owned property),Lease/rent agreement(in case of leased/rented property)for an ITC for taxes paid under reverse charge.Documents required for GST registrationThe following documents are required to obtain GST registration depending on the type of entity.IndIa BrIefIng Issue 59 April 202416Docume

105、ntation based on the category of GST registration The GST portal necessitates the submission of various documents for GST registration,contingent on the specific type of GST registration required.The documentation requirements are determined by the nature of activities conducted by the entity.Below

106、is a list detailing the documentation requirements for each type of GST registration:Nature of GST registration Purpose of registration Documents to be uploadedNormal taxpayer registration(including composition dealer,government departments and ISD registrations)For undertaking a taxable supply of g

107、oods/services PAN card of Company(only in case of company)Certificate of incorporation given by Ministry of Corporate Affairs/Proof of constitution of business Memorandum of Association/Articles of Association(only in case of company)PAN card and Aadhaar card of authorised signatory.Authorised signa

108、tory must be an Indian even in case of foreign companies/branch registration PAN card and address proof of all directors of the Company(partners in case of firm)Photograph of all directors and authorised signatory(in JPG format,maximum size 100 KB)Board resolution appointing authorised signatory/Any

109、 other proof of appointment of authorised signatory(in JPEG format/PDF format,maximum size 100 KB)Bank account details*Address proof of principal place of business*GST practitioner For enrolling as GST practitioner Photo of the applicant(in JPG format,maximum size 100 KB)Address proof of place where

110、 professional practice takes place Proof of qualifying degree(Degree certificate)Pension certificate(only in case of retired Government officials)TDS registrationFor deducting tax at source Photo of drawing and disbursing officer(in JPG format,maximum size 100 KB)PAN and TAN number of the person bei

111、ng registered Photo of authorised signatory(in JPG format,maximum size 100 KB)Proof of appointment of authorised signatory Address proof of tax deductor*TCS registrationFor collecting tax at source(E-commerce operators)PAN number of the person being registered Photo of authorised signatory(in JPG fo

112、rmat,maximum size 100 KB)Proof of appointment of authorised signatory Address proof of tax collector*A non-resident OIDAR service providerFor online service providers not having any place of business in India Photo of authorised signatory(in JPG format,maximum size 100 KB)Proof of appointment of aut

113、horised signatory Bank account in India*Proof of non-resident online service provider(eg:Clearance certificate issued by Government of India,License issued by original country or certificate of incorporation issued in India or any other foreign country)IndIa BrIefIng Issue 59 April 202417Nature of G

114、ST registrationPurpose of registrationDocuments to be uploadedNon-resident taxable person(NRTP)For non-residents occasionally undertaking taxable supply of goods/or services in India Photo and Proof for the appointment of an Indian authorised signatory In case of individuals,scanned copy of the pass

115、port of NRTP with VISA details.In case of business entity incorporated outside India,unique number on the basis of which the Country is identified by the Government of that country.Bank account in India*Address proof*Casual taxable personFor non-registered domestic persons occasionally undertaking t

116、axable supply of goods/or services in India Photo and Proof for the appointment of an Indian authorised signatory Proof of constitution of business Bank account in India*Address proof*UN bodies/embassyFor obtaining Unique Identification Number to claim the refund of taxes paid on goods/services Phot

117、o of authorised signatory Proof of appointment of authorised signatory Bank account in India*Notes:*Bank account details:For bank account details,a copy of cancelled cheque or extract of passbook/bank statement(containing the first and last page)must be uploaded (in JPEG format/PDF format,maximum si

118、ze 100 KB)*Address proof:Includes Property tax receipt,Municipal Khata copy,Electricity bill copy,Ownership deed/document(in the case of owned property),Lease/rent agreement(in case of leased/rented property)HAVE A TAX QUERY?WE CAN ASSISTThe fast pace of tax reform,combined with sometimes inconsiste

119、nt local practice and enforcement,makes the tax landscape difficult to navigate for many.Companies face a number of tax challenges throughout all stages of their business cycle.We are here to help.Contact our Tax Team at EXPLORE MOREWEBINARUnderstanding Indias Competitive Manufacturing LandscapeSect

120、or Analysis|FDI|MSMEs in India Industrial Regions|Cost Competitiveness VIEW IndIa BrIefIng Issue 59 April 202418GST due dates The period for filing GST returns and types of returns vary among different categories of taxpayers.Below is a brief description of the types of returns to be filed under the

121、 GST.GST ReturnsFormParticularsFrequencyDeadlineGSTR-1Outward supplies return.Monthly(large taxpayer)11th of next monthQuarterly(small taxpayer whose turnover is less than or equal to INR 50 million under QRMP scheme13th of the month succeeding the quarterIFF(Optional by taxpayers under the QRMP sch

122、eme)Details of B2B(business-to-business)supplies of taxable goods and/or services affected.Monthly(for the first two months of the quarter)13th of the next month.GSTR-2AGSTR 2A is a purchase-related tax return that is automatically generated for each business by the GST portal.It is a read only retu

123、rn and no action can be taken.MonthlyAuto-populated.GSTR 2BGSTR-2B is an automatically populated statement that allows taxpayers to conveniently reconcile ITC with their own books of accounts and record.MonthlyAuto-populated.Can be generated by recipient tax-payers once a month on the 12th of the mo

124、nth next to the tax period.GSTR-3BInward and outward supply summary.MonthlyFor annual turnover less than or equal to INR 50 million22nd or 24th of each month(state-wise)For annual turnover more than INR 50 million20th of each month IndIa BrIefIng Issue 59 April 202419GST ReturnsFormParticularsFreque

125、ncyCMP-08Special statement-cum-receipt to declare the details or summary of their self-assessed tax payable for a given quarter.It is meant for composition taxpayers.QuarterlyOn or before the 18th of the month succeeding the quarter of any fiscal yearGSTR-4A taxpayer opting for the composition schem

126、e is required to file GSTR-4.Annual30th AprilGSTR-5Return for non-resident taxable person.Monthly20th of next monthGSTR-5AReturn to be filed by non-resident OIDAR service providers.Monthly20th of next monthGSTR-6Return for input service distributor.Monthly13th of next monthGSTR-7Return for taxpayers

127、 that are required to deduct TDS.Monthly10th of next monthGSTR-8Return to be furnished by the e-commerce platform that is required to collect TCS.Monthly10th of next monthGSTR-9Annual return for normal registered tax-payers.Annual31st DecemberGSTR-9BAnnual return for e-commerce platforms that are re

128、quired to collect TCS.Annual31st DecemberGSTR 9CSelf-certified reconciliation statement.Annual31st December of the next financial yearGSTR-10Annual return for the registered taxpayer whose GST registration is cancelled.Once,after the registration of GST is cancelled or surrendered.Within three month

129、s from the date of cancella-tion or date of can-cellation order,whichever is later.GSTR-11Return for Unique Identification Number holders.Monthly(as per applicability)28th of following monthITC-04Statement to be filed by a principal/job-worker about details of goods sent to/received from a job-worke

130、r.Annual,for annual aggregate turnover up to INR 50 millionHalf-yearly,for annual aggregate turnover more than INR 50 million25th April where annual aggregate turnover is up to INR 50 million25th October and 25th April where annual aggregate turnover is more than INR 50 million IndIa BrIefIng Issue

131、59 April 202420Consequences of missing GST deadlinesFailing to meet GST deadlines can have significant negative effects for businesses,impacting their reputation,financial stability,and operational efficiency.Consequences of missing GST deadlines are as follows:1.Penalties and interestMissing GST de

132、adlines often result in penalties and interest charges.These penalties,either fixed amounts or a percentage of the tax due,are levied for late submission of GST returns or delayed payment of GST liabilities.Interest accrues on unpaid taxes for each day of delay.Some penalties are:A penalty of INR 10

133、,000 or 10 percent of the tax due,whichever is higher,for not registering despite being liable to do so.A penalty of INR 10,000 or the tax amount,whichever is higher,for collecting GST but not depositing it to the government within three months.2.Cash flow disruptionsLate filing or payment can disru

134、pt a businesss cash flow management,affecting its ability to fund daily operations.Accumulation of interest and penalties can lead to unforeseen financial challenges.3.Inability to claim input tax credit Failure of suppliers to file GST returns on time can hinder a businesss ability to claim ITC on

135、eligible purchases,increasing its tax burden.4.Loss of business credibilityConsistent failure to meet GST deadlines can undermine a companys credibility,raising doubts about its financial management practices and eroding trust among customers,suppliers,and stakeholders.5.Increased scrutiny by tax au

136、thoritiesPersistent non-compliance may attract heightened scrutiny and audits by tax authorities,diverting resources and attention away from core business activities.6.Blocking of e-way billsLate or non-filing of GST returns can result in the blocking of e-way bills,disrupting supply chains and oper

137、ations dependent on the seamless transportation of goods.7.Loss of ITC claimsDelays in filing returns may prevent businesses from correcting errors and making legitimate ITC claims,leading to higher tax expenses.8.Legal consequencesRepeated failure to meet GST deadlines and comply with tax laws may

138、prompt legal action,including prosecution and legal proceedings initiated by tax authorities.9.Delay in GST refund processingLate filing of returns can lead to delays in processing GST refunds,potentially causing working capital issues for businesses awaiting reimbursements.Other than financial pena

139、lties,missing GST deadlines can have other far-reaching negative implications,such as,operational disruptions,and legal challenges.Maintaining robust compliance measures and adhering to GST regulations is crucial for businesses to operate efficiently within the GST framework.IndIa BrIefIng Issue 59

140、April 202421Impact of the GST Regime on Imports in IndiaThe import of goods or services in India are treated as deemed inter-State supplies and will be subject to Integrated tax.Chapter 3Under the GST regime,importing goods or services into India is considered inter-State trade and subject to Integr

141、ated tax as per Article 269A.The IGST Act governs the levy on imported services,while the Customs Act,1962,and the Custom Tariff Act,1975,apply to the levy on imported goods.Importers of services typically pay tax on a reverse charge basis,except for online information and database access or retriev

142、al services(OIDAR)received by unregistered,non-taxable recipients,where the supplier outside India bears the responsibility for IGST payment.Supplying goods or services to a Special Economic Zone(SEZ)developer or unit is also treated as inter-State supply and subject to integrated tax.Tax incidence

143、on goods importsThe IGST Act,2017 defines the import of goods as the act of bringing goods into India from a location outside the country.All imports are considered inter-State supplies,hence Integrated tax is imposed along with applicable Custom duties.Integrated tax on imports is collected under t

144、he Customs Tariff Act,1975,based on the value determined when customs duties are levied under the Customs Act,1962.This integrated tax is in addition to the Basic Customs Duty(BCD)as per the Customs Tariff Act.Moreover,certain luxury and de-merit goods may attract GST compensation cess under the Goo

145、ds and Services Tax(Compensation to States)Cess Act,2017.To implement these provisions,the Customs Tariff Act,1975 has been amended to include the levy of integrated tax and compensation cess on imported goods.Consequently,any imported goods are subject to integrated tax,in addition to the Basic Acc

146、ording to DGFTs Trade Notice No.09 dated June 12,2017,an entitys PAN will serve as its Import Export Code(IEC).When applying for IEC,the applicants PAN will automatically be authorized as their IEC.Importers are only required to declare their GSTIN if registered under GST.Melissa CyrillDeputy Managi

147、ng EditorAsia BriefingAuthor IndIa BrIefIng Issue 59 April 202422Customs duty,at the rate applicable under the IGST Act,2017,similar to the rate levied on the same goods supplied within India.Tax treatment of goods imported into India,stored in warehouse,and sold before customs clearanceGoods stored

148、 in an Indian warehouse before customs clearance are exempt from Integrated tax upon removal,as per Circular No.46/2017,dated November 24,2017.However,subsequent sales or transfers of these goods are taxable under the IGST Act,2017,even if the price exceeds the assessable value.Such transactions are

149、 treated as inter-State supplies subject to IGST.The value of these supplies follows regulations outlined in the CGST Act,2017,and IGST Act,2017.Customs duty,including Basic Customs Duty and applicable IGST,is collected upon warehouse clearance.Integrated tax on High Seas Sales transactionsCircular

150、No.33/2017-Customs,dated August 1,2017,addresses the scope of levy of IGST on High Seas Sales transactions.High Seas Sales involve the original importer selling goods to a third party before customs clearance.IGST on such transactions is imposed only at the time of importation when customs declarati

151、ons are filed for the first time.Moreover,any value addition in each high sea sale contributes to the value on which IGST is collected during clearance.Import of goods by 100%EOUs and SEZsThe import of goods by 100 percent Export Oriented Units(EOUs)and SEZs is governed by specific notifications.EOU

152、s benefit from duty-free import of goods,including exemption from Customs duties,Integrated Goods and Services Tax(IGST),and Compensation Cess under Notification no.52/2003-Customs,as amended by Notification no.78/2017-Customs.However,The value used for calculating the cess on imported articles incl

153、udes the assessable value,Basic Customs Duty imposed by the Act,and any additional charges applicable to the goods under current laws,treated akin to customs duty.However,the integrated tax paid is not considered when determining the cess amount.Consider the below case as an example:Lets say the ass

154、essable value of an article imported into India is INR 100/-.With Basic Customs Duty set at 10 percent ad-valorem,Education Cess at 3 percent,Integrated tax rate at 18 percent,and Compensation Cess at 15 percent,the tax calculation unfolds as follows:A.Assessable Value-INR 100/-B.Basic Customs Duty

155、10%-INR Rs.10/-C.Education Cess 3%-INR 0.30D.Value for Integrated Tax INR 110.30E.Integrated Tax 18%-INR 19.85F.Value for Compensation Cess-INR 110.30 G.Compensation Cess 15%-INR 16.55Total Duty(B+C+E+G)=INR 46.70 In cases where goods are also subject to cess under the Goods and Services Tax(Compens

156、ation to States)Cess Act,2017,the cess is calculated on the value considered for levying integrated tax.Therefore,in the above example,if cess applies,it will be levied on INR 110.30/-.When imported goods are subject to Anti-Dumping Duty or Safeguard Duty,the value for calculating IGST and Compensat

157、ion Cess includes the amounts of Anti-Dumping Duty and Safeguard Duty.IndIa BrIefIng Issue 59 April 202423IGST exemption for EOUs was applicable only until March 31,2018.Goods imported by units or developers in SEZs for authorized operations are entirely exempted from integrated tax under section 3(

158、7)of the Customs Tariff Act,1975,as per Notification No.64/2017-Customs.Input tax credit of integrated taxInput tax for a registered entity includes integrated tax and compensation cess on imported goods.Importers can claim input tax credit for these taxes paid during importation,which can offset ta

159、xes on their outward supplies.However,input tax credit for compensation cess can only be used for paying compensation cess,and BCD and education cess are not eligible for input tax credit.Goods are classified under the GST regime using the HSN code.The place of supply for imported goods is determine

160、d by the importers location according to section 11 of the IGST Act,2017.For instance,if an importer is based in Tamil Nadu,the state tax component of the integrated tax will be attributed to Tamil Nadu.Tax incidence on import of servicesImport of services is specifically defined under the IGST Act,

161、2017,denoting the supply of any service where the supplier is located outside India,the recipient is in India,and the place of supply is within India.Import of services pay tax on a reverse charge basis.According to Section 7(1)(b)of the CGST Act,2017,import of services for a consideration,whether o

162、r not in the course or furtherance of business,is considered a supply.However,import of services without consideration is generally not regarded as a supply,without the need to meet a business test.Nevertheless,under Schedule I of the CGST Act,2017,import of services by a taxable person from a relat

163、ed or distinct person,as defined in Section 25 of the CGST Act,2017,in the course or furtherance of business,is treated as a supply even without consideration.Determining place of supplySection 13 of the IGST Act,2017 provides for the determination of the place of supply for services where either th

164、e supplier or the recipient is situated outside India.This section facilitates the identification of the place of supply for international or cross-border service transactions,crucial for classifying a service as import or export.Import of free services from entities like Google and Facebook by indi

165、viduals,as per Section 14 of the IGST Act,2017,is not considered a supply.Conversely,importing a song for personal use,even without business motives,is regarded as a service.Similarly,import of certain services by an Indian branch from their parent company,even without consideration,qualifies as a s

166、upply when conducted in the course or furtherance of business.Thus,the classification of import of services as a supply hinges on the presence of consideration and whether the service is provided in the course or furtherance of business.Our Offices in IndiaAsiapedia is a collection of resources base

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