Goods & Service Tax: Clarification required on various issues under Business Processes on GST Date: 31-10-2015
Multiple Line item-wise HS Code updation is mandatory for Sales Register & Purchase Register will generate huge data both for taxpayers as well as to GSTN, instead Invoice-wise summary data upload shall be allowed: Local Invoice & Bill of Entry will have multiple items with different HS Codes; Trading Goods [VAT/SIT] needs HS Code details; Item Master shall have HS Code mandatorily for all products; Category of Services to be maintained. State-wise No. of Returns filing per Registrant is numerous like:- GSTR1: Outward Supply Register; GSTR2: Inward Supply Register; GSTR3: Monthly Return; GSTR6: Return for ISD; GSTR7: Return for TDS. Annual Return. Uploading of Invoice level details: Whether Taxable Value or Gross Value to be clarified. Turnover Definition to be provided. 2
Payment of GST on advances is very cumbersome procedure & practically very difficult to implement. Secondly, advances are not recognized as revenue in the Books of Account/Accounting Standards, but GST requires to raise GST Invoice. If projects/supplies are spread over to several consignments/months/years, advance adjustment against each supplies & its tax adjustment on regular invoicing is very difficult. Hence, taxes on advances received against supply of goods & services shall not be levied. Late filing fee shall not be imposed till one year of GST implementation since this is a new tax regime & registrants shall have breathing time to understand the new law & procedure & gear up the system to GST regime. Auto population of Inward Supplies of counter-part of taxpayer by GSTN will lead to unnecessary pre-checking by the taxpayer, instead GST System can have check & provide the mis-match/deviation list once such data are uploaded by taxpayer himself with a facility to modify Outward Supply of Vendor & Inward Supply of registrant in a separate screen [manual updation or one time data updation]. Further, this requires HSN Code line item-wise wherein partly GSTN has taken & balance appearing under mis-match and in such cases, part acceptance shall not be allowed to have one to one Invoice-wise corelation of documents. Inward Supplies of Capital Goods: Provision shall also be available to avail 100% credit on capital goods if the same is cleared in the same financial year of receipt. 3
ITC credit eligibility & availment stage on the split-up consignments/sale in Transit/Trading Goods to be clarified. Procedure also to be provided for such removals. Wherever the words Value appearing in GST Return, shall be clarified as Taxable Value or Gross Value. Uploading of Shipping Bill/Bill of Export No. in Outward Supply Register shall not be insisted system GSTN will be linked to Customs Portal. GSTN shall be able to provide only mis-matching nos. on Periodical basis-quarterly based on previous quarter data. If uploading is made mandatory along with Return, it will delay the return due to pending exports, but cleared from the factory. Credit Note/Debit Note: Whether line item-wise entry is required since original invoice will have multiple line items with different HS Codes. Revision of Return: Facility to submit revised return shall be provided upto one year from the date of original return, at least for two years which can be reduced for six months after two years. 4
The definition of Gross Turnover, Value, Taxable Value shall be provided; Sl. No. 3 of Form GSTR-1: Whether Gross Turnover of particular State or entity within India shall be provided to be clarified. Gross Turnover Table [State-wise & Despatch Classification-wise] shall be maintained so as to directly fetch the data to GSTR-1. Facility to modify this Table shall be provided to make suitable corrections, if any. Sl. No. 5 of Form GSTR-1: Column No. (7) & (8) under IGST (Rate, Amt) shall be moved after SGST & before Addl Tax since both shall appear together & inter-linked. It is easy to view at the time of entry if the same appears side by side. Column (15): Place of Supply (POS): Each Invoice shall be able to identify the POS as per POS Rules. SAP to take care of such requirement. Column No. (16): Indicate if supply attracts reverse charge: What details shall be submitted under this column-whether as Yes or No. If so, indication drop down menu can be provided as Yes or No to have standard format & comment. 5
Additional columns shall be inserted for indication of Invoice Type as Intra-State or Inter- State to identify the transactions & to place the taxes in respective columns [This also can be linked based on Tax Code/Types] and Classification of Customer as B2B or B2C to declare the Turnover in Table Sl. No. 5, 6, 7 respectively based on Turnover criteria. Alternatively, classification like B2B or B2C shall not be insisted since the same data is not available to the supplier/tax payer. Para 3.1(4)(ii): Value-wise classification shall not be provided to individual registrants based on turnover, instead uniform procedure of updation of data as per format shall be provided. If flexible options are given, data accuracy in all fields can not be maintained. The following options shall not be provided which will create lot of confusion & mis-match of data between dealer s return:- Identification of B2B & B2C is very difficult task-what is the logic for such classification. Parameters of HSN/SAC will apply only to B2B supplies (Intra-State & Inter-State) & B2C Supplies (Inter-State) where taxable value per invoice is more than Rs. 2.5 Lakhs). If Invoice Value is less than Rs. 2.5 Lakhs, State-wise summary of Supply Statement will be filed covering those invoices where there is address on record. The address of the buyer has to be mandatorily reflected in every invoice having a value of Rs. 50,000=00 or more. Invoices for a value of less than Rs. 50,000=00 that do not have address on record will be treated as intra-state supply. Treating Inter-State supplies as Intra-State suppy should not be done at all. This should be allowed to continue to declare under Inter-State supply only. 6
State-wise summary of inter-state supply will be filed covering (a) those invoices value of which is less than Rs. 50,000=00 and where address is on record and (b) those invoices whose value is between Rs. 50,000=00 to Rs. 2,50,000=00. Table Sl. No. 5, 6 & 7 in GSTR-1 shall be merged since the same can be verified from Invoice Value declared in Table Sl. No. 5-Column (4) or (6). Sl. No. 7 of Form GSTR-1: Column No. (4) & (5) under IGST (Rate, Amt) shall be moved after SGST & before Addl Tax since both shall appear together & inter-linked. It is easy to view at the time of entry if the same appears side by side. Sl. No. 9 of Form GSTR-1: Column No. (9) & (10) under IGST (Rate, Amt) shall be moved after SGST & before Addl Tax since both shall appear together & inter-linked. It is easy to view at the time of entry if the same appears side by side. What is the difference between Table Sl. No. 8 & 9: Whether supplementary Invoices shall be entered in Sl. No. 9 whereas Debit Note & Credit Note other than supplementary Invoices shall be entered in Sl. No. 8-Clarification required. 7
Sl. No. 10 of Form GSTR-1: In case of supply to unregistered person who is not a consumer-where the data to be entered. Separate row shall be inserted for Inter-State & Intra-State supplies to unregistered person or alternatively, the words supplies to consumer can be substituted with the words supplies to consumer/unregistered person. Why nil rated & non-gst supplies shall be entered under column (3) under Exempted instead of respective columns in case the same is declared under Table Sl. No. 5, 6, 7 [Refer Note provided under this Table Sl. No. 10]. Sl. No. 11 of Form GSTR-1: Column for Additional Tax is not available in case dealer wants to pay GST & claim refund for Inter-State transactions of Deemed Exports. In case additional tax column is added, the same shall be added together with IGST. Additional column shall be added for providing the details of Category of Deemed Exports from the Drop Down Menu as per Foreign Trade Policy/other notifications to differentiate between Physical Exports, SEZ & Deemed Exports. 8
Shipping Bill/Bill of Export column shall not be made mandatory since Deemed Export will not have such documents. Sl.No.5,6&7inGSTR-1shallbemergedsincethesamecanbeverified from Invoice Value declared in Table Sl. No. 5-Column (4) or (6). Sl. No. 12 & 13 of Form GSTR-1: Column No. (5), (6) & (4) & (5) respectively under IGST (Rate, Amt) shall be moved after SGST & before Addl Tax since both shall appear together & interlinked. It is easy to view at the time of entry if the same appears side by side. Sl. No. 12 & 13 shall be deleted & shall be removed from taxation since this concept is a very cumbersome system in case of multiple consignments/longer period projects wherein advances shall be adjusted against each & every invoice as per customer s requirement & in such cases Tax liability shall be deducted from such invoices to the extent of taxes paid on advances. Secondly, invoices raised for advances are not recognized as Revenue in the Books of Account as per Accounting Standards. Wherever the word Date is shown, Date Format like DD-MM-YY shall be prescribed to have uniform database. Wherever the word Value is shown, whether Gross Invoice Value or Taxable Value to be clarified. 9
When there is multiple line items having:- different HSN; Different Rate of GST, Whether each line item-wise data uploading is required which will have huge transactions. This includes for Local, import, export transactions. Wherever the word Turnover is shown, Turnover definition to be provided. Wherever the word Address on Record is shown, more clarity is required with respect to record-whether maintained in GSTIN or assessee record & if so, in which record?. Details of advances & taxability on advances on Supplies [goods & services]: This is very cumbersome procedure particularly in case of projects running for a longer period & also having multiple variety of transactions wherein advances shall be adjusted against each & every invoice. This will lead to lot of manual work & control & revenue recognition is not there against advances, hence gap with Books of Account (Revenue) & GST Return will be there. Late filing Fee: This shall not be levied till one year of implementation of GST since the whole concept is new to the trade. 10
Inward Supplies: GSTR-2 Return: Auto population of Inward Supply of counter-party of taxpayer by GSTN will lead to unnecessary pre-checking at the time of Purchase Register correction/addition/deletion in GSTN, instead dealer can upload their monthly Purchase Register on daily or regular basis which can be validated by GSTN & mismatch Statements can be generated by GSTN. Option shall be provided to dealer to modify mis-match items. Clarity on certain data uploading discrepancies like Alpha numerical Invoice No., rounding of value, Taxable Value, Taxes & Duties etc. between Vendor GSTR-1 & Recipient s GSTr-2 will create major reconciliation. GST Law shall prescribe Standard Invoice Numbering Logic along with mandatorily rounding off of values, duties & taxes & GSTR shall consider rounded off figures only at the time of data uploading. Dealer Item Master shall have clear identify of Capital Goods since credit is allowed on installments. In case of rejections/despatch in the financial year of receipt, facility to take full credit & reverse accordingly shall be available. In case of short receipt, excess receipt, rejections, information as per vendor invoices shall be entered at the time of receipt of goods or services & corresponding Credit Note/Debit Note shall be issued. Time gap between Vendor s Invoice Date, Receipt Date & Debit Note/Credit Note Date & its upload in GSTR2 shall be clarified. 11
ITC eligibility in case of split-up consignment or spread over consignments shall require more clarity on the method of invoicing/invoicing pattern. When each consignment is having value with GST payment element, why credit is allowed only on receipt of the last consignment. Updation of TDS details is a big task needs more linkage of internal systems. Uploading of Shipping Bill/Bill of Export No. at the time of Outward Supply uploading shall not be insisted since there will be a time gap between factory despatches & Shipping Bill Clearance. GSTN shall be able to link internally with Customs Portal for such details & mis-match or non-availability of Shipping Bill against a particular Invoice No. shall be auto generated listing which can be sent to the Dealer for clarification & further updation in GSTN. Alternatively, option shall be given to dealer to enter the details of Shipping Bill/Bill of Export on Quarterly basis pertaining to the previous quarter wherever GSTN not able to link with Customs Portal. This linkage is made mandatory for Rebate Claims, hence manual updation at the time of Invoice data uploading shall not be insisted 12
GSTR2: Inward supplies received by a Taxpayer (other than compounding taxpayer & ISD): Sl. No. 4 of Form GSTR-2: Column No. (7) & (8) under IGST (Rate, Amt) shall be moved after SGST & before Addl Tax since both shall appear together & inter-linked. It is easy to view at the time of entry if the same appears side by side. Colum No. (15): There is no drop down menu for Input Services, hence to be included in the list. Table Sl. No. 4 of GSTR-2: The following conditions will hamper the whole process & time gap is very less to handle huge data assessees. Invoice-wise data will be auto-populated on the basis of GSTR-1 of counterparty supplier, on or after 11 th of succeeding month. Addition of invoices/debit note/credit note, not submitted by counter-party supplier, will be permitted between 12 th to 15 th of succeeding month. Adjustments will be permitted on 16 th and 17 th of succeeding month. Invoice-wise data to be uploaded with the details of HSN/SAC (Service Accounting Code) against non-auto populated data from GSTR-1 including Imports, RCM Services & purchases from un-registered dealers. 13
GSTR2: Inward supplies received by a Taxpayer (other than compounding taxpayer & ISD): Table Sl. No. 4 of GSTR-2: Item Master shall have clear identify of Inputs, Capital Goods & Input Services to upload the data in GSTR-2. Vendor PO shall contain such details to avoid mis-match between GSTR-1 of vendor & GSTR-2 of Recipient. 14
GSTR2: Inward supplies received by a Taxpayer (other than compounding taxpayer & ISD): Table Sl. No. 7 of GSTR-2: Details of Debit Note/Credit Notes received from supplier only shall be submitted. Dealer s Debit Note/Credit Note shall not be uploaded in this Table. Debit Note/Credit Note shall have the details of original Invoice No. & Date mandatorily. In case of short receipt, excess receipt, rejections, information as per vendor invoices shall be entered at the time of receipt of goods or services & corresponding Credit Note/Debit Note shall be issued. Time gap between Vendor s Invoice Date, Receipt Date & Debit Note/Credit Note Date & its upload in GSTR2 shall be clarified. 15
Issue of Credit Note [CN]/Debit Note [DN]: Whether line item wise Credit Note & Debit Note shall be issued since one DN/CN will have multiple original invoice no. & multiple line items having different HSN/Rate of GST. Whether original Invoice No.-wise DN/CN shall be issued. In case of clerical error in data updation, DN/CN is not applicable, then how correction can be done in GSTN. Any mistakes done by dealer not affecting the customer will not require DN/CN & in such case how correction can be made in GSTN. One year time limit shall be provided for DN/CN [Sales Return or Purchase Return]. Whether Purchase Register shall be uploaded for the first time as per Vendor Invoice or only against the accepted quantity by a dealer leaving aside rejected quantity. Eg. Handling of short receipt, excess receipt, rejections & method of entry of purchase register in such cases shall be provided. Facility for Revised Return is a must, else, lot of dispute will be raised by the department for small issues having no revenue implications. 16
: GSTR-3: Monthly GST Return: Wherever the word Value is appearing in the return, clarification is required whether Value means Taxable Value. If so, Heading to be renamed as Taxable Value. 17