job work under GST

What is meaning of job work?

The term Job-work itself explains the meaning. A principal manufacturer can send inputs or semi-finished goods to a job worker for further processing. And after processing job worker will be return the goods to the principle or as per direction by the principle.

Meaning of job work under GST

Section 2(68) of the CGST Act, 2017 defines job work as ‘any treatment or process undertaken by a person on goods belonging to another registered person’. The one who does the said job would be termed as ‘job worker’. The ownership of the goods does not transfer to the job worker but it rests with the principal. The job worker is required to carry out the process specified by the principal, on the goods.

Job work Procedural aspects:

a) Principal can send inputs/ capital goods under intimation and subject to certain conditions without payment of tax to a job worker and from there to another job worker and after completion of job work bring back such goods without payment of tax. The principal is not required to reverse the ITC availed on inputs or capital goods dispatched to job worker.

b) Principal can send inputs or capital goods directly to the job worker without bringing them to his premises, still the principal can avail the credit of tax paid on such inputs or capital goods.

c) However, inputs and/or capital goods sent to a job worker are required to be returned to the principal within 1 year and 3 years, respectively, from the date of sending such goods to the job worker.

d) After processing of goods, the job worker may clear the goods to-

 (i) Another job worker for further processing;

(ii) Dispatch the goods to any of the place of business of the principal without payment of tax;

(iii) Remove the goods on payment of tax within India or without payment of tax for export outside India on fulfilment of conditions.

Input Tax credit on goods supplied to job worker

As per section 19 of CGST Act 2017 a principal send goods to the job worker than the principal shall be entitled to take the input tax credit on the goods send by him. Further, the proviso also provides that the principal can take the credit even when the goods have been directly supplied to the job worker without bringing into the premise of the principal. The principal need not wait till the inputs are first brought to his place of business.

Time Limits for return of processed goods

As per section 19 of CGST act 2017, principal can be avail input tax credit within one year or if capital goods than the time limit will be extended till   three year. Further, the provision of return of goods is not applicable in case of moulds and dies, jigs and fixtures or tools supplied by the principal to job worker.

Extended meaning of input

As per the explanation provided in section 143 of the CGST Act, 2017, where certain process is carried out on the input before removal of the same to the job worker, such product after carrying out the process to be referred as the intermediate product. Such intermediate product can also be removed without the payment of tax. Therefore, both input and intermediate product can be cleared without payment of duty to job worker.

Waste clearing provisions

 section 143 (5) of the CGST Act, 2017, waste generated at the premises(place) of the job worker may be supplied directly by the registered job worker from his place of business on payment of tax or such waste may be cleared by the principal, in case the job worker is not registered.

Transitional provisions: Inputs as such or partially processed inputs which are sent to a job worker prior to introduction of GST under the provisions of existing law [Central Excise] and if such goods are returned within 6 months from the appointed day i.e. 1st July, 2017 no tax would be payable. If such goods are not returned within prescribed time, the input tax credit availed on such goods will be liable to be recovered.

Whether the job worker (who converts barley into Malt) has to charge GST from the Principal only on the Job Work charges or full value of goods, i.e. (Value of Raw Material + Job Work Charges)?

The only worker has to pay gst on job work charges only.

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TDS UNDER GST

Meaning of Tax Deduction at Source TDS

Tax Deduction at Source (TDS) is a system, introduced by the Income Tax Department. It is one of the mode to collect tax, under which, certain percentage of amount is deducted by a recipient at the time of making payment to the supplier. It acts as a powerful instrument to prevent tax evasion and expands the tax net, as it provides for the creation of an audit trail.

Under the GST law as per section 51 of CGST/SGST Act 2017 authorization for Tax Deduction at Source (TDS).as 28th GST council meeting held on 21.07.2018 recommended that the introduction of TDS from 01.10.2018

Brief Diagrammatic presentation of the TDS provisions in GST:

When tax deduction is required to be made in GST:

 Tax is required to be deducted from the payment made / credited to a supplier, if the total value of supply under a contract in respect of supply of taxable goods or services or both, exceeds Rs. 2,50,000/-.

This value shall exclude the taxes leviable under GST (i.e. ‘Central tax’, ‘State tax’, ‘UT tax’, ‘Integrated tax’ & Cess).

3.1 Conditions for & amount of deduction:

 Þ Tax deduction is required if all the following conditions are satisfied –

a. Total value of taxable supply > Rs.2.5 Lakh under a single contract. This value shall exclude taxes & cess leviable under GST.

b. If the contract is made for both taxable supply and exempted supply, deduction will be made if the total value of taxable supply in the contract > Rs.2.5 Lakh. This value shall exclude taxes & cess leviable under GST.

c. Where the location of the supplier and the place of supply are in the same State/UT, it is an intra-State supply and TDS @ 1% each under CGST Act and SGST/UTGST Act is to be deducted if the deductor is registered in that State or Union territory without legislature.

d. Where the location of the supplier is in State A and the place of supply is in State or Union territory without legislature - B, it is an inter-State supply and TDS @ 2% under IGST Act is to be deducted if the deductor is registered in State or Union territory without legislature - B.

e. When advance is paid to a supplier on or after 01.10.2018 to a supplier for supply of taxable goods or services or both.

Tax deduction is not required in following situations:

a) Where the tax is to be paid on reverse charge by the recipient i.e. the deductee.

 b) Where the payment is made to an unregistered supplier.

c) Where the payment relates to “Cess” component.

d) supply of service is exempt in terms of Sl. No. 3A of notification No.12/2017 – Central Tax (Rate) dated 28.06.2017 as amended by notification no. 2/2018- Central Tax (Rate) dated 25.01.2018

Persons liable to deduct tax under GST Law:

 As per the provisions of the GST Law, the following persons are mandatorily required to deduct TDS:-

(a) A department or establishment of the Central/ State Government; or

(b) Local authority; or

(c) Governmental agencies; or

 (d) Such persons or category of persons as may be notified by the Government on the recommendations of the Council.

 The following class of persons under clause (d) of section 51(1) of the CGST Act, 2017 has been notified vide notification No. 33/2017 – Central Tax dated 15.09.2017 :-

(a) An authority or a board or any other body,—

      (i) Set up by an Act of Parliament or a State Legislature; or

     (ii) Established by any Government, with fifty-one percent or more participation by way of equity or control, to carry out any function;

(b) Society established by the Central/ State Government or a Local Authority under the Societies Registration Act,1860;

(c) Public sector undertakings.

TDS return:

a) Every registered TDS deductor is required to file a Return in FORM GSTR 7 electronically within 10th of the month succeeding the month in which deductions have been made to avoid payment of any late fee, interest.

b)The filing the TDS Return in FORM GSTR-7 can be done both through the online mode in the GST portal as well as by using the offline tool.

Late fee, interest and penalty:

The provision of late Fees in respect of TDS in the GST is a two layered provision.

• If the deductor fails to furnish the return in FORM GSTR-7 (under Section 39(3)) by the due date (i.e. within 10 days of the month succeeding the month in which deduction was made) he shall pay a late fee of Rs. 100/- per day under CGST Act & SGST/UTGST Act separately during which such failure continues subject to a maximum amount of Rs. 5000/- each under CGST Act & SGST/UTGST Act.

Refund under GST

REFUNDS

“Refund” includes refund of tax paid on zero-rated supplies of goods or services or both or on inputs or input services used in making such zero-rated supplies, or refund of tax on the supply of goods regarded as deemed exports, or refund of unutilised input tax credit as provided under sub-section (3).

Refund in certain cases

1.The Government may, on the recommendations of the Council, by notification, specify any specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries and any other person or class of persons as may be specified in this behalf, who shall, subject to such conditions and restrictions as may be prescribed, be entitled to claim a refund of

2. Excess payment of tax is made due to mistake or omission.

3. Dealer Exports (including deemed export) goods/services under claim of rebate or Refund

4. ITC accumulation due to output being tax exempt or nil-rated

5. Tax Refund for International Tourists

6. Finalization of provisional assessment

7. Inverted rated supply of goods and services 

Time limit for Refund of Tax

Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed:

Provided that a registered person, claiming refund of any balance in the electronic cash ledger in accordance with the provisions of sub-section (6) of section 49, may claim such refund in the return furnished under section 39 in such manner as may be prescribed.

A specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries or any other person or class of persons, as notified under section 55, entitled to a refund of tax paid by it on inward supplies of goods or services or both, may make an application for such refund, before the expiry of six months from the last day of the quarter in which such supply was received.

Document required

1.       GST RFD 01

2.       copy of refund application acknowledgement

3.       Copy of relevant GSTR-3B and GSTR-1

4.       Cash Ledger and Credit Ledger

5.       payment receipt of the relevant period

6.       cancelled cheque and bank statement

7.       GSTR REG-06

8.       copy of ID proof of proprietor

9.       Self-declaration

10.   all the document shall be signed and stamped

11.   attached a Annexure for working of refund

Interest on delayed refunds

If any tax ordered to be refunded under sub-section (5) of section 54 to any applicant is not refunded within sixty days from the date of receipt of application under sub-section (1) of that section, interest at such rate not exceeding six per cent.

If any order passed by an Appellate Authority and the same is not refunded within sixty days from the date of receipt of application filed consequent to such order, interest at such rate not exceeding nine per cent.

(1)    Explanation – For the purposes of this section, where any order of refund is made by an Appellate Authority, Appellate Tribunal or any court against an order of the proper officer under sub-section (5) of section 54, the order passed by the Appellate Authority, Appellate Tribunal or by the court shall be deemed to be an order passed under the said sub-section (5).

Utilisation of Fund

(1) All unutilised credited fund shall be used by the government for the welfare of the Consumers.

 (2) The Government shall specified to maintain proper and separate account and prepare an annual Statement of accounts in such form as may be prescribed in consultation with the Comptroller and Auditor General of India(CAG).

       

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conclusion of E-WAY BILL

A waybill is a receipt or a document issued by a carrier giving details and instructions relating to the shipment of a consignment of goods and the details include name of consignor, consignee, and the point of origin of the consignment, its destination, and route.

Rule 138 of the CGST Rules, 2017 provides for the e-way bill mechanism and in this context it is important to note that “information is to be furnished prior to the commencement of movement of goods” and “is to be issued whether the movement is in relation to a supply or for reasons other than supply”.

Why E-way bill needs?

A consignment value of goods is more than 50,000 for interstate transaction and also for intera state transaction but there is some of exemptions are there that goods value is more than 1, 00,000 like Delhi and west Bengal

Who should generate the e-way bill?

E-way bill is to be generated by the consignor or consignee himself if the transportation is being done in own/hired conveyance or by railways, by air or by Vessel. If the goods are handed over to a transporter for transportation by road, E-way bill is to be generated by the Transporter. Where neither the consignor nor consignee generates the e-way bill and the value of goods is more than Rs.50, 000/- it shall be the responsibility of the transporter to generate it

And here two exception is also there

1.       Where goods are sent by a principal located in one State to a job-worker located in any other State, the e-way bill shall be generated by the principal irrespective of the value of the consignment.

2.       Where handicraft goods are transported from one State to another by a person who has been exempted from the requirement of obtaining registration, the e-way bill shall be generated by the said person irrespective of the value of the consignment.

E-Way bill to be issued whether for supply or otherwise

E-way bill is to be issued irrespective of whether the movement of goods is caused by reasons of supply or otherwise. In respect of transportation for reasons other than supply, movement could be in view of export/import, job-work, SKD or CKD, recipient not known, line sales, sales returns, exhibition or fairs, for own use, sale on approval basis etc.

link of E-Way Bill site

https://ewaybillgst.gov.in/

Creation of User id & Password

Notified Goods for movement of those way bill is not required

a) As per rule 138 of CGST 2017 these goods are specified in the annexure for the movement of those goods e-way bill is not required give as follows.

S.No.	HSN code	Description of goods
1	1001	Wheat and meslin
2	1006	Rice
3	‘0713	Dried Leguminous vegetables ,shelled, Whether or not skinned or split-other
4	1003	Barley
5	1005	Maize
6	1008	Jawar,bajra,Ragi

b) Goods being transported by a non-motorised conveyance;

 c) goods being transported from the port, airport, air cargo complex and land customs station to an inland con- 145 tainer depot or a container freight station for clearance by Customs;

d) In respect of movement of goods within such areas as are notified under rule 138(14)

(d) Of the SGST Rules, 2017 of the concerned State; and

e) Consignment value less than Rs. 50,000/-

Generated E-way Bill

Validity of E-Way Bill

other than over dimensional cargo

Distance	Validity of EWB
Less Than 100 Km	1 Day
For every additional 100 Kms or part thereof	additional 1 Day

For Over dimensional catgo

Distance	Validity of EWB
Less Than 20Km	1 Day
For every additional 20 Kms or part thereof	additional 1 Day

Cancellation of E-Way Bill

Where an e-way bill has been generated under this rule, but goods are either not transported or are not transported as per the details furnished in the e-way bill, the e-way bill may be cancelled electronically on the common portal, either directly or through a Facilitation Centre notified by the Commissioner, within 24 hours of generation of the e-way bill. However, an e-way bill cannot be cancelled if it has been verified in transit in accordance with the provisions of rule 138B of the CGST Rules, 2017 .

 The facility of generation and cancellation of e-way bill will also be made available through SMS.

Consequences of non-conformance to E-way bill rules

If e-way bill is not issue or wherever required, are not issued in accordance with the provisions incorporate in Rule 138 of the CGST Rules, 2017, the same will be considered as breach of rules. As per Section 122 of the CGST Act, 2017, a taxable person who transports any taxable goods without the cover of specified documents (e-way bill is one of the specified documents) shall be liable to a penalty of Rs. 10,000/- or tax sought to be evaded (wherever applicable) whichever is greater.

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GST impact on cab services

In today’s lifestyle cabs are our basic need. Cabs and taxis are very important part in over transportation services. And now days it is an important sectors that provide good jobs.

Now we are discussed about what is impacted of GST on radio taxis companies and the cab operators.

after introduces of GST With cab service provider like Ola and Uber providing affordable services and  it can be said the market has achieve more opportunity for growth.

What is the provision of tax before GST on cab services?

Under service tax passengers by a contract carriage, a radio taxi, a motor cab and stage carriage will be available abatement in respected payment of tax that is rent a Cab service is 60% abatement and only taxable portion is 40%.

Let’s take an example

XYZ travels Pvt.Ltd. located in New Delhi is engaged in providing services of renting of motor cab. And the value of services rendered by the company during the month is Rs 6, 00,000

Than the value of tax liability  

Value of service is 6, 00,000

Now company get 60 % abatement and the value of taxable service is 2, 40,000 @15%

Tax payable is 36,000

REVERSE CHARGE MECHANISM:

Taxable service in relation to services provided or agreed to be provided by way of renting of motor vehicles designed to carry passengers, to any person who is not engaged in the similar business by any individual, HUF or a partnership firm, whether registered or not, including association of persons, located in the taxable territory to a business entity registered as a body corporate, located in the taxable territory.

Reverse charge will apply only if all the following conditions are satisfied:

1.Service is provided by way of renting of a motor vehicle designed to carry passengers.

2.Service provider should be an individual, HUF or a partnership firm, whether registered or not, including association of persons.

3.Service provider should be located in the taxable territory.

4.receiver should a business entity registered as a body corporate.

5.Service provider should be located in the taxable territory.

It is pertinent to note that reverse charge mechanism in respect of renting of motor vehicle is not applicable if service provider and service receiver are engaged in a similar business. It means No reverse charge will apply if the vehicles are hired to another person who is in the same line of business of renting of vehicles irrespective of the type of entity of service provider and service receiver.

Sr.No.	Description of Service	% of ST payable by Service provider	% of ST payable by Service receiver
1	2	3	4
	(a)    On abated value	Nil	100%
	(b)   On non-abated value	50%	50%

Impact of GST on Cab service 

The same provision will pursue under GST, that is the radio taxis and AC buses will be liable for tax. Metered cabs or auto rickshaws (including e-rickshaws) will not be liable to GST.

Reverse Charge Mechanism

As per the reverse charge notification, radio taxi companies are liable to pay GST pay under Reverse charge method.

On the behalf of Driver the company like Uber will be pay tax to the government on the reverse charge basics.

For example, a driver is to receive Rs. 200 as share of fare. Uber will pay Rs. 200 to the driver and deposit Rs. 10 to the government. On later providing the service to the passenger, Uber will collect GST on the fare. Uber pays GST on the drivers’ services on reverse charge basis. Uber can claim the ITC on tax paid under RCM and adjust with output taxes payable.

   

Input Tax Credit

Notification No. 20/2017-Central Tax, 22nd august 2017

Government will be give two option that

GST rate will be 5% without ITC.

GST rate will be 12% with ITC

Annual retrurn (GSTR-9)

What is annual return?

Annual return (FORM GSTR-9) is to be filled by the registered taxpayer on or before the thirty-first day of December following the end of such financial year. It consists of details regarding the supplies made and received during the year. It consolidates the information furnished in the monthly/quarterly returns during the year.

But there is some exception who is not required to fill the annual return an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person.

What is the format of the return?
As per the GST Rules, various forms have been prescribed for the purpose of return, depending upon the categories of the tax payers, which are as follows :
There is four type of return annual return

GSTR 9: GSTR 9 should be filed by the regular taxpayers filing GSTR 1, GSTR 2, and GSTR 3.

GSTR 9A: GSTR 9A should be filed by the persons registered under composition scheme under GST.

GSTR 9B: GSTR 9B should be filed by the E- commerce operators who have filed GSTR8 during the financial year.

GSTR 9C: GSTR 9C should be filed by the taxpayers whose annual turnover exceeds Rs 2 crores during the financial year. All such taxpayers are also required to get their account audited in accordance with the provisions of sub-section (5) of section 35 and file a copy of audited annual accounts and a reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year with the audited annual financial statement along with GSTR 9C.

What is the penalty of non-filing the return? 

Failure to file annual return shall attract a late fee of RS 200 per day during the period of failure, subject to a maximum of 0.25% of the said Financial Year's turnover. 

FORMAT OF GSTR-9

Composite and Mixed Supply

Composite or  Mixed Supply



The term composite supply is used at section 8.  In this regard, the tax liability on a composite or a mixed supply shall be determined in the following manner:

(a) Composite Supply under GST
a composite supply would mean a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are" naturally bundled" and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply.
The concept of composite supply under GST is identical to the concept of "naturally bundled services"
but if ‘bundled service’ would be air transport services provided by airlines wherein an element of transportation of passenger by air is combined with an element of provision of catering service on board.
so in that case these services are not naturally bundles so each service involves differential treatment as a manner of determination of value of two services for the purpose of charging service tax is different.

Time of supply in case of Composite supply
If the composite supply involves supply of services as principal supply, such composite supply would qualify as supply of services and accordingly the provisions relating to time of supply of services would be applicable.
Alternatively
if composite supply involves supply of goods as principal supply, such composite supply would qualify as supply of goods and accordingly, the provisions relating to time of supply of goods would be applicable.
lets take a example to understand

 Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply

(b) Mixed Supply
 a mixed supply means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply.

Time of supply in case of mixed supplies
The mixed supply, if involves supply of a service liable to tax at higher rates than any other constituent supplies, such mixed supply would qualify as supply of services and accordingly the provisions relating to time of supply of services would be applicable.
Alternatively
 the mixed supply, if involves supply of goods liable to tax at higher rates than any other constituent supplies, such mixed supply would qualify as supply of goods and accordingly the provisions relating to time of supply of services would be applicable.

lets take a example to understand
 A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks and fruit juices when supplied for a single, price is a mixed supply.


Determination of tax liability of tax liability of Composite and Mixed Supplies

The tax liability on a composite or a mixed supply shall be determined in the following manner, namely: —
a) a composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply; and
b) a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax.

Composition Scheme

Today we are discussing a very basic topic of gst and it is also important for the small trader. who are not Handel paper work .it is “composition Scheme”

What is composition scheme?

The Composition scheme is a very simple, (hassle) difficulty free compliance scheme for small taxpayers. It is a voluntary and optional scheme.

Persons who are not eligible for the scheme.

Few exceptions, a registered taxable person whose” aggregate turnover” has not exceeded Rs. One crore (Rs. 75 lakhs for special category states except J & K and Uttrakhand) in the last financial year are eligible to opt for this scheme.

 List of taxable persons who are not eligible for the scheme is as below:

i.                     A person who occasionally undertakes supplies in a State or Union Territory where he has no fixed place of business. i.e. a casual taxable person

ii.                   A person who occasionally undertakes supplies but has no fixed place of business or non-residence of India. i.e. a non-resident Taxable person

iii.                 A person who is engaged in a business supply of services except a person engaged in supply of restaurant service.

iv.                  A person engaged in providing inter-state supply of goods.

v.                    A person engaged in supply of non-taxable goods i.e. goods which are not taxable under GST law

vi.                  A person engaged in supply of goods through an Electronic Commerce Operator (ECO) who is required to collect Tax at source under section 52 of the CGST Act.

vii.                 The goods held in stock by him on the appointed day have not been purchased in the course of inter-State trade or commerce or imported from a place outside India or received from his branch situated outside the State or from his agent or principal outside the State where registration under the Composition Scheme has been taken.

viii.               The goods held in stock by him have not been purchased from an unregistered supplier and where purchased, he pays the tax under the reverse charge mechanism.

ix.                   A person engaged in manufacturing of goods notified under sec 10 (2) (e) of the CGST Act either in the year 2016-17 or later. Following goods have been notified for which composition scheme is not available.

 Method to calculate Aggregate Turnover

Aggregate turnover is computed on all India basis for a person having same Permanent Account Number (PAN).

It is sum of value of all outward supplies falling in the following four categories:

• Taxable supplies

 • Exempt supplies

• Exports of goods or services or both

• Inter-state supplies, but excludes

• The value of inward supplies on which tax is payable by a person on reverse charge basis

• Taxes including cess paid under GST law.

Rate of tax is apply on the person who opt composition scheme

 Please use the chart below to understand the tax rate on turnover applicable:

Bill of Supply

A taxable person opting for the scheme has to issue bill of supply as he is “not eligible to issue taxable invoice under GST”. He has to mention the words “composition taxable person, not eligible to collect tax on supplies” at the top of every bill of supply issued by him.

Conditions & Restrictions under the scheme

A person opting for the scheme has to adhere to the following conditions

• Issue bill of supply in the prescribed manner

• Pay all taxes on purchases including taxes to be paid on reverse charge basis

 • Don’t claim input tax credit of purchases

• Mention the words “composition taxable person” on every notice board or signboard displayed at the prominent place at his every place of business.

• Where ever a person, registered under any of the existing laws, and who has been given provisional registration, gives an intimation for the composition scheme, he shall not be allowed the composition scheme in case the goods held in stock by him on the appointed day have been purchased in the course of inter-State trade or commerce or imported from a place outside India or received from his branch situated outside the State or from his agent or principal outside the State.