A practical approach – GST

In this document the following areas are dealt with, keeping in mind the
day-to-day business transactions
1. Action points before or just after the date of applicability of GST Law.

2. Flow of supply under GST.

3. Overview of tax return process under GST.

Supply of goods between head office, various branches / godowns, either in same state or
other states – are allow considered as supply. Under GST regime one should treat these as
taxable supplies and follow same procedures as they would do for third parties.

4. Contents of supply Invoice, Sample format of invoice.

5. How to apply tax rates.

6. Tax Rate Structure.

7. Transaction specific treatment.

8. Detailed note on Transition from existing law to GST – whole note is related on how to carry
forward un-utilised / un-availed ITC from existing law to GST. If a registered person is holding
stock of goods on which CST is paid under existing law, he will not be able to carry forward or
avail input credit in respect of CST as the same was not eligible to be claimed as ITC under
existing law. In respect of other taxes refer this note

The above subjects are hyper linked, a reader may click to jump to a subject

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 A practical approach – GST

Action points before or just after the date of applicability of GST Law.

Industry Type Action points

Manufacturer / Trader 1. Ensure all returns under existing law are filed upto the last day of
applicability of existing law (say Jun 30, 2017).
2. Take stock of inventory as on Jun 30, 2017, including materials at
Job-work site.
3. C/f of un-availed input tax credit (ITC) under existing law file Form
GST TRANS -1.
4. In the above referred form the registered person shall provide
information the sales made against Form C, E, F, H or I.

For carry forward of ITC under special circumstances, a detailed note is

provided hereafter under the heading Transition provisions.

Once entered into the GST period

1. Issue sales invoices as per GST law.

2. Account for purchases and claim ITC.
3. File monthly returns as detailed below.

Person under 1. Ensure all returns under existing law are filed upto the last day of
Composition scheme of applicability of existing law (say Jun 30, 2017).
existing law
2. Take stock of inventory as on Jun 30, 2017.

Chooses to continue under composition scheme

1. Ascertain whether he is eligible to continue as composition dealer

under the GST Law. If so, shall intimate prior to Jul 1, 2017 or not
later than 30 days from Jul 1, 2017. Such intimation shall be Form
GST CMP-01.

2. Such person is not eligible to collect GST.

3. Any other registered person chooses to avail composition scheme,

shall intimate the same in Form GST CMP-02. Such intimation shall
be before the commencement of financial year. Such person shall
also furnish form GST ITC-3 in respect of ITC on the goods held as
on the date of conversion to Composition scheme. Such ITC shall
not be eligible to be C/f.

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 A practical approach – GST

Works Contract Under GST law works related to immovable property only is considered
as works contract.

Under existing law if any registered person is under composition

scheme, he needs to examine the eligibility to continue in the said
scheme. If not eligible, then he needs to follow the action points as
mentioned above for Trader / manufacturer.

Service Provider 1. Ensure all returns under existing law are filed upto the last day of
applicability of existing law (say Jun 30, 2017).

2. C/f of un-availed input tax credit (ITC) under existing law file Form
GST TRANS -1.

For carry forward of ITC under special circumstances, a detailed note is

provided hereafter under the heading Transition provisions.

Once entered into the GST period

1. Issue sales invoices as per GST law.

2. Account for purchases and claim ITC.
3. File monthly returns as detailed below.

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 A practical approach – GST

Flow of supply under GST

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 A practical approach – GST

Tax return process

Step-1 Step-2
Registered person to submit all outward On submission of supply details, the
supply (Sales) details (including debit / respective purchasers shall be intimated
credit notes, revised invoices) about the supplies made to him by
various registered persons.
Form – GSTR-1 Such information shall be made available
th
Due date – 10 of next mth in part A of Form 2A, he may accept,
modify or delete such details.

Step-3 Step-4
On the bases of information available in Any modification in step 2/3 shall be
part A of Form 2A and his books of communicated to the concerned
accounts, the registered person shall registered person, in Form GSTR-1A.
prepare and submit all inward supplies
(purchases)
Form GSTR-2
th
Dues Date - 15 of next mth

Step-5 Step-6
Based on the information available in Annual Return
GSTR-1, 2, 1A, 2A, the registered person Form GSTR-9
shall submit the tax return with payment Due Date – Dec 31.
of tax
Form GSTT-3
Due date – 20th of next mth

Note –
1. On discovery of any error or omission in submitting the information, the registered person shall pay the
tax and interest, if any.
2. Nil return is compulsory.
3. A registered person shall not be allowed to file the return if the previous period tax return is not
furnished.
4. In the return process the input claimed by the registered person shall be allowed provisionally for the
purpose of the filing the return.
5. Any mis-matching between the outward supplies and corresponding acceptance / modification /
deletion by the other registered person shall be communicated to the concerned registered persons.
The concerned registered person shall rectify such mis-match in the month subsequent to the month in
which such communication of mis-match is given. If not rectified, tax due, if any, shall be added as
output tax and he shall pay the same.

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 A practical approach – GST

Supply invoice

Under GST regime a tax invoice shall contain the following information:

(a) name, address and GSTIN of the supplier;

(b) a consecutive serial number, in one or multiple series, containing alphabets or numerals or
special characters hyphen or dash and slash symbolised as “-” and “/” respectively, and any
combination thereof, unique for a financial year;

(c) date of its issue;

(d) if supplied to registered person - name, address and GSTIN or UIN of the recipient;

(e) If supplied to un-registered person - name and address of the recipient and the address of
delivery, along with the name of State and its code;

(f) HSN code of goods or Accounting Code of services;

(g) description of goods or services;

(h) quantity in case of goods and unit or Unique Quantity Code thereof;

(i) total value of supply of goods or services or both;

(j) taxable value of supply of goods or services or both taking into account discount or
abatement, if any;

(k) rate of tax (central tax, State tax, integrated tax, Union territory tax or cess);

(l) amount of tax charged in respect of taxable goods or services (central tax, State tax,
integrated tax, Union territory tax or cess);

(m) place of supply along with the name of State, in case of a supply in the course of inter-State
trade or commerce;

(n) address of delivery where the same is different from the place of supply;

(o) whether the tax is payable on reverse charge basis; and

(p) signature or digital signature of the supplier or his authorized representative.

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 A practical approach – GST

With all these particulars a tax invoice will look like

Tax Invoice

GSTIN - XXXXXXXXXXXXXXXXX
Na me -
Addres s -
Invoi ce No.
Da te -

Details of Receiver (Billed to) Details of consignee(ship to)

Na me Na me
Addres s Addres s
Sta te Sta te
Sta te Code Sta te code
GSTIN/Uni que ID GSTIN/Uni que ID

Rate CGST SGST IGST

Description Taxable
S.NO HSN Qty Unit (per Total Discount
of Goods Value Rate Amt Rate Amt Rate Amt
Item)

1
2
3

Frei ght
Ins ura nce
Pa cki ng a nd forwa rdi ng cha rges

Total
Tota l i nvoi ce va l ue (In fi gure)
Tota l Invoi ce Va l ue (In word)
Amount of Ta x s ubject to revere cha rges

Declaration : Signature
Name of Signatory
Electronic reference number

Various other formats – like tax invoice, receipt voucher, credit / debit note, etc, are
available at

https://drive.google.com/drive/folders/0B5NYIeai27_Eb3NGZmdzS1JycTg?usp=sharing

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 A practical approach – GST

Notes for invoicing

1. Please note the IGST col is for reference only. Depending on the place of supply IGST or
CGST/SGST are applicable.

2. In case of export, the invoice shall carry following endorsement

“SUPPLY MEANT FOR EXPORT ON PAYMENT OF IGST” or “SUPPLY MEANT FOR EXPORT UNDER
BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF IGST”, as the case may be, and
shall, in lieu of the details specified in clause (e), above, contain the following details:

1. name and address of the recipient;

2. address of delivery:
3. name of the country of destination: and
4. number and date of application for removal of goods for export:

3. For supply of goods invoice or delivery challan, as the case may be, shall be issued in
triplicate,

(a) the original copy being marked as ORIGINAL FOR RECIPIENT;

(b) the duplicate copy being marked as DUPLICATE FOR TRANSPORTER; and
(c) the triplicate copy being marked as TRIPLICATE FOR SUPPLIER.

4. For supply of service the invoice shall be prepared in duplicate,

(a) the original copy being marked as ORIGINAL FOR RECIPIENT; and
(b) the duplicate copy being marked as DUPLICATE FOR SUPPLIER.

For further information or more details one may refer to http://www.cbec.gov.in/htdocs-

cbec/gst/invoice-gst-rules17052017.pdf

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 A practical approach – GST

How to apply tax rates

Supply of goods within state

under Existing law under GST

Value of supply of goods 1,00,000 Value of supply of goods 1,00,000

Add: Excise @ 12% 12,000 NA Nil

Sub-total 1,12,0000 1,00,000

Add: VAT @ 14.5% 16,240 GST rate (total tax rate, say
18%),
Add: CGST @ 9% 9,000
Add: SGCT @ 9% 9,000
Total Value 1,28,240 Total Value 1,18,000

Supply of goods outside the state

under Existing law under GST

Value of supply of goods 1,00,000 Value of supply of goods 1,00,000

Add: Excise @ 12% 12,000 NA Nil

Sub-total 1,12,0000 1,00,000

Add: CST @ 14.5% 16,240 GST rate (total tax rate, say
18%),
Add: IGST @ 18% 18,000

Total Value 1,28,240 Total Value 1,18,000

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 A practical approach – GST

Supply of service within the state

under Existing law under GST

Value of supply of service 1,00,000 Value of supply of service 1,00,000

Add: Service Tax @ 14.5% 14,500 GST rate (total tax rate, say
18%),
Add: CGST @ 9% 9,000
Add: SGCT @ 9% 9,000

Total Value 1,14,500 Total Value 1,18,000

Supply of service outside the state

under Existing law under GST

Value of supply of service 1,00,000 Value of supply of service 1,00,000

Add: Service Tax @ 14.5% 14,500 GST rate (total tax rate, say
18%),
Add: IGST @ 18% 19,000

Total Value 1,14,500 Total Value 1,18,000

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 A practical approach – GST

GST Rate Structure

Tax Goods Services
rate

0% Items like Jute, fresh meat, fish chicken, eggs, milk, butter milk, curd, Hotels and lodges with
natural honey, fresh fruits and vegetables, flour, besan, bread, prasad, salt, tariff below Rs 1,000
bindi. Sindoor, stamps, judicial papers, printed books, newspapers,
bangles, handloom, Bones and horn cores, bone grist, bone meal, etc.;
hoof meal, horn meal, Cereal grains hulled, Palmyra jaggery, Salt - all types,
Kajal, Children's' picture, drawing or colouring books, Human hair , Exports

5% Items such as fish fillet, Apparel below Rs 1000, packaged food items, Transport services
footwear below Rs 500, cream, skimmed milk powder, branded paneer, (Railways, air
frozen vegetables, coffee, tea, spices, pizza bread, rusk, sabudana, transport), small
kerosene, coal, medicines, stent, lifeboats, Cashew nut, Cashew nut in restraurants
shell, Raisin, Ice and snow, Bio gas, Insulin, Agarbatti, Kites, Postage or
revenue stamps, stamp-post marks, first-day covers

12% Apparel above Rs 1000, frozen meat products , butter, cheese, ghee, dry State-run lotteries,
fruits in packaged form, animal fat, sausage, fruit juices, Bhutia, namkeen, Non-AC hotels,
Ayurvedic medicines, tooth powder, agarbatti, colouring books, picture business class air
books, umbrella, sewing machine, cellphones, Ketchup & Sauces, All ticket, fertilisers, Work
diagnostic kits and reagents, Exercise books and note books, Spoons, forks, Contracts
ladles, skimmers, cake servers, fish knives, tongs, Spectacles, corrective,
Playing cards, chess board, carom board and other board games, like ludo

18% Most items are under this tax slab which include footwear costing more AC hotels that serve
than Rs 500, Bidi Patta, Biscuits (All catogories), flavoured refined sugar, liquor, telecom
pasta, cornflakes, pastries and cakes, preserved vegetables, jams, sauces, services, IT services,
soups, ice cream, instant food mixes, mineral water, tissues, envelopes, branded garments and
tampons, note books, steel products, printed circuits, camera, speakers financial services will
and monitors, Kajal pencil sticks, Headgear and parts thereof, Aluminium attract 18 per cent tax
foil, Weighing Machinery [other than electric or electronic weighing under GST, Room
machinery], Printers [other than multifunction printers], Electrical tariffs between
Transformer, CCTV, Optical Fiber, Bamboo furniture, Swimming pools and Rs.2,500 and Rs.7,500,
padding pools, Curry paste; mayonnaise and salad dressings; mixed Restaurants inside
condiments and mixed seasonings five-star hotels

28% Bidis, chewing gum, molasses, chocolate not containing cocoa, waffles and Private-run lotteries
wafers coated with choclate, pan masala, aerated water, paint, authorised by the
deodorants, shaving creams, after shave, hair shampoo, dye, sunscreen, states, hotels with
wallpaper, ceramic tiles, water heater, dishwasher, weighing machine, room tariffs above
washing machine, ATM, vending machines, vacuum cleaner, shavers, hair Rs.7,500, 5-star hotels,
clippers, automobiles, motorcycles, aircraft for personal use race club betting,
cinema

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 A practical approach – GST

For more detailed list one may refer the following links,

Tax rates for goods http://www.cbec.gov.in/htdocs-cbec/gst/chapter-wise-rate-wise-gst-

schedule-18.05.2017.pdf

http://www.cbec.gov.in/htdocs-
cbec/gst/addendum_%20gst_rate_schedule_22.05.2017.pdf

http://www.cbec.gov.in/htdocs-cbec/gst/chapter-wise-rate-wise-gst-
schedule-03.06.2017.pdf

http://www.cbec.gov.in/htdocs-
cbec/gst/gst_rates_approved%20_by_gst_council%20_11.06.2017.pdf

Tax rates for services http://www.cbec.gov.in/htdocs-

cbec/gst/Schedule%20of%20GST%20rates%20for%20services.pdf

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Transaction specific treatment

Transaction Remarks Output tax treatment Input Tax treatment

Sales / Purchase Issue and confirmation Supplier - Reduce Purchaser – reduce

Return of debit / credit notes output tax liability – input claim – GSTR-2
From GSTR-1

Change in rate of unit Issue and confirmation Supplier - Reduce / Purchaser – reduce /
/ value of supply of debit / credit notes increase in output tax increase in input
liability – From GSTR-1 claim – GSTR-2

Cash Discount Issue and confirmation Supplier - Reduce Purchaser – reduce in

of debit / credit notes output tax liability – input claim – GSTR-2
From GSTR-1

Interest for delayed Issue and confirmation Supplier - Increase Purchaser – Increase
payment of of debit / credit notes output tax liability – in input claim – GSTR-
consideration From GSTR-1 2 (specifically not
mentioned in GST)

Damaged goods at NA Purchaser – reduce

input stage (Raw- input claim – GSTR-2
material stage) if
purchaser is
responsible for
damage

Damaged goods at Issue and confirmation Supplier - Reduce Purchaser – reduce

input stage (Raw- of debit / credit notes output tax liability – input claim – GSTR-2
material stage) if From GSTR-1
supplier is responsible
for damage

Goods distributed at NA Purchaser – reduce

free of cost input claim – GSTR-2

Replacement of goods Returned goods to Same as damaged Same as damaged

due to damage or treat as purchase goods goods
expiry or any other returns, new goods to
reason treat as new purchases

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Transition provisions related to carry forward of input tax credit (ITC)

Various situations that may arise in practice are listed below

1. Carry forward of CENVAT credit in return

filed under the existing law

2. Credit of un-availed / un-utilised CENVAT on

capital goods not carried forward in a return

3. Credit of eligible duties and taxes in respect of

inputs held in stock allowed in certain
situations

4. Credit of eligible duties and taxes in respect of

Transition – carry
inputs or input services received under
forward of ITC under
during transit existing law after appointment
existing law to GST st
day 01 July 2017

5. Composition scheme – Credit of eligible duties

and taxes in respect of inputs held in stock
for Switching over form composition scheme
under existing law to non-composition
scheme under GST

6. Job Work - Inputs, Semi-Finished & Finished

goods removed for carrying out certain
processes and returned on or after the
st
appointed day 01 July 2017

The above subjects are hyper linked, a reader may click to jump to a subject

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 A practical approach – GST

CENVAT credit carried forward in the return allowed as input tax credit
The amount of any ITC C/f in a return, which is unutilized under the existing tax regime may be
carried forward into the GST regime except in the case of a person who opts to pay tax under
composition scheme in a GST regime.

Type of ITC eligible 1. Central Excise paid on ‘inputs’ /capital goods

to be carried 2. Countervailing duty paid on ‘inputs’/capital goods.
forward 3. Special Additional Duty paid on ‘inputs’ /capital goods in case of
manufacturers
4. NCCD paid on ‘inputs’
5. Service tax paid on ‘input services’– both direct or reverse charge
6. Krishi Kalyan Cess for Service Provider.

Conditions 1. The said credit is admissible as input tax credit under the provisions of
the CGST Act.
2. The registered person has furnished all the returns required under the
existing law for the period of six months immediately preceding the
appointed date.
3. The said credit does not relate to goods manufactured and cleared
under such exemption notifications as are notified by the Government;
4. Must have been reflected as input credit carried forward in the return
filed for the last month / period under the existing law, viz., last
monthly return or quarterly return or the half yearly return, as the case
may be.
5. The registered person shall also disclose the supplies made against
Form C, E, F, H, I under the existing law.

Form to be used FORM GST TRAN-1

for c/f of ITC from To be submitted electronically within 90 days of the appointed day 01st
existing law to GST July 2017

Example
st
Assume that GST is applicable from 1 July, 2017
Assume the amount of ITC under the existing law C/f in the return for June 2017, is as follows:
Types of ITC Amount

Central Excise 200,000

Service Tax 100,000
Education Cess 10,000
Secondary and Higher Education Cess 5,000
Krishi Kalyan Cess 5,000
Swachh Bharat Cess 5,000
Additional Duty u/s 3(1) of CTA – CVD 40,000
Additional Duty u/s 3(5) of CTA – SAD 30,000
Input Tax Credit under VAT 50,000
Total 445,000

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What will be the amount of opening CGST / SGST to be brought forward as per the GST Law as on
1stJuly, 2017?

Ans - The amount of CGST to be brought forward on 1st July, 2017 will be calculated as follows

CGST Components If the tax payer is

Manufacturer / Service Provider
Trader
Central Excise 200,000 200,000
Service Tax 100,000 100,000
Education Cess 10,000 10,000
Secondary and Higher Education Cess 5,000 5,000
Additional Duty u/s 3(1) of CTA- CVD 40,000 40,000
Additional Duty u/s 3(5) of CTA- SAD 30,000 NIL
Krishi Kalyan Cess 5,000 5,000
Total CGST 390,000 360,000

Note:
1. Swachh Bharat Cess will not be allowed to be carried forward.
2. Service Provider not entitled to avail credit of SAD.
3. For Service Provider credit of additional Duty u/s 3(1) of CTA – CVD will be available if it is paid on import
purchase of specified goods.
4. Input credit under VAT will not be allowed to be carried forward as CGST. But it can be carried forward as
SGST.
5. EC and SHEC – Provision relating to carry forward of the same would need to be seen subsequently. At
present, the law lacks to provide clarity on the same.
6. KKC may not be allowed to be carried forward by manufacturer.

Credit of un-availed / un-utilised CENVAT credit in respect of capital

goods, not carried forward in a return, shall be allowed

This relates to a person who is registered under excise law and who has purchased a machine on
which excise duty (+CVD+SAD) is charged. Under excise law such person is eligible to take credit to
the extent of 50% of CENVAT in the financial year of purchase and the balance in the next financial
year. In GST the balance of CENVAT can be carried forward as CGST.

Example 1
A manufacturer purchased a capital asset worth Rs.11,25,000 (including excise duty of Rs.1,25,000) on 5th
May, 2017. In the month of June, 2017, he could avail CENVAT Credit to the extent of 50% only i.e. Rs. 62,500.
The un-availed CENVAT Credit on capital goods as on 1st July, 2017 (appointed day) will be Rs.125,000 –
62,500 = Rs.62,500.

Example 2
CENVAT Credit on Capital Goods used outside the factory of manufacturer is not allowable. So, it will not be
admissible as input tax credit in the GST Law either.

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Credit of eligible duties in respect of inputs held in stock allowed in

certain situations
Type of persons A registered person
1. was not liable to be registered under the earlier law, or
2. was engaged in the manufacture of exempted goods or provision
of exempted services, or
3. was providing works contract service and was availing the
benefit of notification No.26/2012-Service Tax, dated
20.06.2012, or
was a first stage dealer or a second stage dealer or a registered
importer or a depot of a manufacturer
Type of ITC Eligible duties and taxes on inputs held in stock and inputs contained
carried forward in semi–finished or finished goods held in stock on the appointed
day 01st July 2017.
Please note only eligible duties and taxes are carried forward. For
meaning of eligible duties and taxes, please refer – Eligible Duties
Conditions Such person
1. utilises such inputs and/or goods for making taxable supplies
under GST.
2. is eligible for input tax credit on such inputs under GST.
3. is in possession of invoice and/or other prescribed documents
evidencing payment of duty under the earlier law in respect of
such inputs, which were issued not earlier than twelve months
immediately preceding the appointed date Jul 7 ,2 017.
4. In case of the supplier of services – he is not eligible for any
abatement under GST.
Form to be used for c/f of FORM GST TRAN-1 . To be submitted electronically within 60 days of
ITC the appointed day 01st July 2017
Availability of Credit to Credit may be allowed to a trader even if he is not in a possession of
person who is not in such invoice / document disclosing payment of duty / tax.
possession of document
evidencing payment of Conditions
Central Excise Duty 1. Credit shall be allowed at the rate of 60% (on goods which
attract central tax rate of 9% or more,) or 40% (on other goods),
of the central tax applicable on supply of such goods after the
appointed date and shall be credited after the central tax
payable on such supply has been paid. In case integrated tax is
paid, the percentage shall be 30% or 20%.
2. The registered person is in possession of documents relating to
procurement of goods.
3. Such goods were no wholly exempt from duty of excise in Sch 1
or were not nil rated.
4. He will pass on the benefit of such credit by way of reduced
prices.

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Type of persons A registered person engaged in manufacture of taxable as well as

exempted goods under Central Excise or provision of taxable as well as
exempted services under Finance Act.

ITC eligible to be 1. Amount of CENVAT credit carried forward in a return furnished

carried forward under existing law and
2. eligible duties relating to the inputs held in stock / semi-finished /
finished goods or services, which were exempt under Central
Excise law but liable to tax under GST.

Form to be used for c/f FORM GST TRAN-1

of ITC from existing law To be submitted electronically within 60 days of the appointed day
to GST 01st July 2017

Note
What is eligible duties and 1. Central Excise paid on ‘inputs’ specified in schedules I and II of CETA,
taxes, which is referred 1985
above or referred herein 2. Countervailing duty paid on ‘inputs’ under Customs Tariff Act
after 3. Special Additional Duty paid on ‘inputs’
4. National Calamity Contingent Duty paid on ‘inputs’
5. AED paid under AED (Textile &Textile Articles) Act, 1978 on ‘inputs’
6. AED paid under AED (Goods of Special Importance) Act, 1957 on
‘inputs’

Credit of eligible duties and taxes in respect of inputs or input services

during transit

In any given business scenario it is possible that invoices are raised in the current tax regime and
applicable taxes are also remitted under the existing laws. However, inputs or input services in
respect of such transactions are received in a GST regime.

ITC to be carried Eligible Duties and taxes

forward
Conditions 1. Invoices / duty paid documents must be recorded in the books
within 30 days from the appointed date 01st July 2017.
2. The recipient of inputs or input services must furnish a statement
as follows:
a) A statement indicating the name and address of the supplier
together with invoice details.
b) Description, quantity and value of goods or services.
c) The amount of taxes, duties, VAT, Entry tax charged by the
supplier.
d) The date at which receipt of goods or services are entered in
the books of the recipient.

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Credit of eligible duties and taxes on inputs held in stock to be allowed to

a taxable person switching over from composition scheme
ITC eligible to be Eligible Duties
carried forward

Conditions 1. The person must be a registered person under the existing law
(under composition scheme) as well as GST Laws (but not under
composition scheme).
2. The relevant inputs should be held in stock (inputs / semi-
finished / finished goods) on the appointed date – Jul 1, 2017.
3. Such inputs must be used or intended to be used for making
taxable supplies under the GST Laws.
4. Such goods should qualify as eligible inputs under the GST law.
5. The registered person should be in possession of the invoice and
such other documents (as may be prescribed) that shall satisfy
the following conditions:
i) The invoice / other document should evidence the
payment of duty / tax on such goods.
ii) The invoice should not be more than 12 months prior to
the date of introduction of GST.

Form to be used for c/f FORM GST TRAN-1

of ITC from existing law To be submitted electronically within 60 days of the appointed day
to GST 01st July 2017

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 A practical approach – GST

Job Work - Inputs, Semi-Finished and Finished goods removed for carrying
out certain processes and returned on or after the appointed day 01st July
2017

Tax payable when and by

Tax not payable when Applicability of Exemption
whom

Goods were Goods are liable for

removed/dispatched as
such or after partial
processing for job work
under the earlier law
prior to appointed day
01st July 2017
Such goods are returned
within 6 months or
within the extended
period (2 months) from
the appointed day to the
said place iof business
payment of taxes under
GST; and
Principal and job worker
should declare details of
Such goods are returned
inputs held in stock by
after 6 months from the
the job worker on behalf
appointed day 01st July
2017 of the sender within 60
days from the appointed
day 01st July 2017 file an
If goods are not returned
application in Form GST
within 6 months or
extended period, input tax TRAN-1.
credit availed in respect of
inputs removed, Semi-
Finished & Finished goods
will be recovered from the
principal.

Example 1
A manufacturer had removed inputs worth Rs.5,00,000 on 1st January, 2017 for job work. GST is assumed to
be applicable from 1st July, 2017. On 10th December, 2017, the inputs are returned by the job worker. Since,
inputs are returned within 6 months from the date of applicability of GST, no tax will be payable.

Example 2
In Example 1 above, if the goods are not returned by the job worker within the period of 6 months from the
applicability of GST i.e. by 31st December, 2017, then the input tax credit shall be liable to be recovered in
terms of section 142 (8)(a); i.e., the input tax credit shall be liable to be recovered as an arrear of tax under the
CGST Act and the amount so recovered shall not be admissible as input tax credit.

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