GST Ki Master Class III - Composition and record keeping
GST Ki Master Class III
Composition and record keeping
This class is in two parts..
PART A-Composition Scheme
What is the composition scheme
Who is eligible to avail composition scheme
Category of persons excluded from the Scheme
Composition rates and computation of tax
Procedure to be followed
Part B- Accounts and records
Accounts and records to be maintained
Period for which to be retained
Part A
Composition Scheme
Composition levy is an option for specified categories of small taxpayers to pay GST at a very low rate on the basis of turnover.
Advantages
Low rate of tax
Hassel free simple procedures for such taxpayers
Simple calculation of tax based on turnover
A very simple quarterly return
Composition Scheme
The composition scheme is for
Manufacturers (other than few notified goods)
Traders of goods
Restaurants
having aggregate turnover of Rs 75 lakh in the previous financial year subject to certain conditions and restrictions
The aggregate turnover limit is Rs 50 lakh for following 9 states
Assam
Meghalaya
Manipur
Arunachal Pradesh
Mizoram
Tripura
Nagaland
Sikkim
Himachal Pradesh
Two special category states, Uttrakhand and J & K have opted for keeping the turnover limit as Rs 75 lakh
Aggregate turnover for determination of eligibility:
Total all India turnover of all units under same PAN.
It includes the value of exempt supplies and exports.
It does not include the GST paid and the value of supplies received by a person on which he pays tax on reverse charge basis.
Composition Scheme if availed shall include all registered persons having same PAN
Composition scheme availability to a person shall lapse with effect from the date of his reaching the threshold turnover of seventy five lakh rupees.
Tax rates
Category of taxpayer - Rate
Manufacturer 2% (1% State tax and 1% Central tax)
Traders 1%
Restaurants 5%
Tax computation illustrated
Taxpayer ‘A’ is a manufacturer having one unit in U P and another in M P. Total turnover of two units in last FY was Rs 55 lakh. Total turnover of two units in the first quarter of this year was Rs 20 Lakh
Unit
|
Location
|
Turnover
in previous FY
|
Turnover
in 2nd quarter of this FY
|
Total
tax (@2%)
|
A1
|
U.P.
|
Rs 25
lakh
|
Rs 5
lakh
|
Rs
10,000
|
A2
|
M. P.
|
Rs 30
lakh
|
Rs 10
lakh
|
Rs 20,000
|
Aggregate turnover
|
Rs 55
lakh
|
Rs 15
lakh
|
Supplier of services except restaurants
Any person who
makes (i) a supply of non-GST goods; or (ii) an inter-state supply; or (iii) a supply that attract TCS
is engaged in manufacture of goods, namely, ice cream, pan masala or tobacco and manufactured tobacco substitutes
Is a casual or a non-resident taxable person
If at the time of opting for scheme he has stock of goods purchased from unregistered person he will pay the tax on such goods
Not entitled to take ITC on inputs
Pay tax on inward supply from unregistered dealers
Pay tax on supply attracting reverse charge
Shall not collect any amount as tax
Shall mention on bill of supply “Composition taxable person, not eligible to collect tax on supplies”
Shall mention “composition taxable person” on notice or sign board displayed at a prominent place at his place of businesses
Opting for composition scheme
Category
of persons
|
How to
exercise option
|
Effective
date of composition levy
|
Persons
migrated from central excise and VAT
|
Intimation
in form CMP-01 & declare stock in CMP03
|
From
beginning in GST
|
New
registration under GST
|
Intimation
in the registration form
|
From
the effective date of registration
|
In
other cases
|
Intimation
in Form CMP-02
|
Beginning
of the financial year
|
Return filing
Quarterly- by the 18th of the month after the quarter
Opting out of composition scheme- Anytime at option
File an application if Form CMP-04
Register person is required to maintain records and accounts of
Production or manufacture of goods Supplies (inward/outward supply, supplier and recipient details, invoice, credit/debit note, delivery challan)
Stock ( receipt, used, lost, balance and location where goods are stored including in transit etc)
Input tax credit and use of inputs/input service
Output tax payable
Advance payments received and adjusted
Accounts and Records
Composition person to maintain simpler records
Warehouse/godown operator/transporter (even if not registered), to maintain record of consignor, consignee, movement, delivery, storage
Agent to maintain records receipt and supply on behalf principal and records of authorization by the principal
A C&F agent or a carrier having custody of goods on behalf of a registered person shall maintain details of goods handled by him.
Accounts and Records-requirements
It is sufficient (but not necessary) to maintain accounts and records in electronic form
Records can also be maintained manually – Such records are to be kept and be accessible at related place of business.
Required to retained for six years from the due date of annual return
Commissioner may for a class of taxable persons
notify maintenance of additional documents
prescribes alternative documents, if such class is not able to maintain records as per the provisions of the Act.
Separate records for works contract ( receipt /supply /payments etc.)
Production of records on demand
It is sufficient (but not necessary) to maintain accounts and records in electronic form
Records can also be maintained manually – Such records are to be kept and be accessible at related place of business.
Required to retained for six years from the due date of annual return
Commissioner may for a class of taxable persons
notify maintenance of additional documents
prescribes alternative documents, if such class is not able to maintain records as per the provisions of the Act.
Separate records for works contract ( receipt /supply /payments etc.)
Production of records on demand
Every taxable person having turnover exceeding prescribed limit shall get his account audited by a chartered accountant or cost accountant (Prescribed limit at present is two crore rupees)
He shall submit the copy of audited annual account and a reconciliation statement.
Maintaining electronic records:
Are to be authenticated by digital signature
Maintained and preserved in the manner that these can be restored within reasonable period in any circumstances
On demand to provide details, password, and explanation of codes used.
Thank You
The following material is available on www. cbec.gov.in
www.cbec-gst.gov.in
Presentation on GST
GST – Concept & Status
FAQs on GST in Hindi, English and 10 regional languages
CGST, UTGST, IGST & Compensation Acts
18 Rules
Constitutional Amendment Act
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