I.

K GUJRAL PUNJAB TECHNICAL UNIVERSITY, JALANDHAR

KAPURTHALA

SEMINAR REPORT ON GOODS & SERVICES TAX

In Partial fulfilment of Master of Business Administration
Submitted During MBA – 3RD Sem
(2022-2023)

Submitted To:-
Nidhi Mahajan
(Head of MBA Department)

Submitted By:-
Manik Sally
MBA 3RD Sem
Roll No: 2115639

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 CONTENTS
SR NO TITLE PAGE NO:
1. GST DECLARATION 3
2. REASON FOR SIGHNING 3
3. GST HISTORY & TYPES 4
4. OBJECTIVE OF GST 8
5. FUNCTION OF GST COUNSEL 9
6. ADVANTAGE & DISADVANTAGES OF GST 10
7. BENEFITS OF GST REGISTRATION UNDER LAW 13
8. UNDERSTANDING THE IMPECT OF GST IN INDIA 15
9. CHALLENGES OF GST 20
10. THEATS OF GST 21
11. GST RETURNS 23
12. FORM GSTR – 9 44
13. TAX LAW BEFORE GST 46
14. GST HELP IN PRICE REDUCTION 47
15. NEW COMPLIANCES UNDER GST 48
16. POWER OF GST OFFICERS 49
17. RECOVERY OF TEX 52
18. CANCELLATIONS OF REGISTRATION 54
19. ACCOUNTS & RECORDS 56
20. ASSESMENT & AUDIT 58

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 GST DECLARATION
GST or Goods and Services Tax is an indirect tax applicable on all goods and
services sold in India. Businesses having an annual turnover of over Rs. 10 lakh
in North-Eastern and Hill States and businesses having an annual turnover of
over Rs.20 lakhs in all other States are required to obtain GST registration.
Along with a GST Registration application, a GST Declaration approving the
authorised signatory must be signed and submitted.

REASON FOR SIGNING

GST Declaration for Authorised Signatory is a document signed by the

promoters of a business, authorising and nominating one person from the
business as an Authorised Signatory to apply for GST registration and complete
all related formalities.

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 HISTORY

The Central Government in 2003 created a Fiscal Responsibility and Budget Management
taskforce that suggested replacing the old indirect tax regime with the GST on the supply of
all goods and services in 2004.

Union Finance Minister in his 2006-07 Budget speech articulated the movement towards the
GST. Originally, it was decided to introduce GST from 1st April 2010. Next will know when
was GST first introduced in India .

Then after all the discussion on GST first introduced in India, the central government
proposed GST W.E.F from 1st July 2017 and that's called the origin of GST in India. 1st July
2017 is the date when GST introduced in India and on this day GST started in India.

IMPLEMENTATION OF GST

GST is an indirect tax for the whole country, it will replace several indirect
taxes levied by the Central and State Government. Indirect taxes such as excise duty,
custom duty, entertainment tax, luxury tax and so on will be replaced in GST regime. After
the implementation of GST, it will make India one unified common market. GST is a single
tax on the supply of goods and services, credit of input tax paid at each stage will be
available in the subsequent stage of value addition, which makes GST essentially a tax only
on value addition at each stage. Ultimately, GST will be borne by the final consumer.

Parliament has passed the GST Bill in India and it is going to roll out from 1st
July 2017. Goods and Service Tax will be categorized at various rates starting from 0 to 28
per cent.

The GST Council Meeting has announced four- tier GST structure which includes

 5 % UPTO Total income is ₹ 0 To 2.5 Lakh

 12 % UPTO Total income is ₹ 2.5 Lakh To 5 Lakh

 18 % UPTO Total income is ₹ 5 Lakh To 10 Lakh

 28 % UPTO Total income is ₹ 10 Lakh To Unlimited

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 lower rates for essential items and the highest for luxury and ‘demerit’ goods that would
also attract an additional cess.

5
 What Is GST

1. GST offers an extensive and continuous chain of tax set-offs.

2. The supplier at each stage can use the input tax credit of GST paid on the purchase of
goods and services. The business can set off this Input Tax Credit (ITC) against the GST
payable on the supply of goods and services to be made.
3. Input tax credit refers to the set-off of tax paid on purchases that you can use against
the tax collected on sales. Only the balance amount of tax needs to be paid.
4. There is no cascading effect on tax effects under the GST framework. Cascading effect
refers to the system where tax is charged on every stage by including the tax
previously paid on purchases. This leads to tax on tax.

It is an indirect tax which has replaced many indirect taxes in India such as
the excise duty, VAT, services tax, etc. The Goods and Service Tax Act was passed in the
Parliament on 29th March 2017 and came into effect on 1st July 2017.

TYPES OF TAX PAYERS

There is two types of GST Taxpayers

1. INDIVIDUAL TAXPAYER

2. COMPOSITION TAX PAYER

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 TYPES OF GST

1. INTEGRATED GOODS AND SERVICES TAX OR IGST

The Integrated Goods and Services Tax or IGST is a tax under the GST regime that is applied
on the interstate (between 2 states) supply of goods and/or services as well as on imports
and exports. The IGST is governed by the IGST Act. Under IGST, the body responsible for
collecting the taxes is the Central Government. After the collection of taxes, it is further
divided among the respective states by the Central Government. For instance, if a trader
from West Bengal has sold goods to a customer in Karnataka worth Rs.5,000, then IGST will
be applicable as the transaction is an interstate transaction. If the rate of GST charged on
the goods is 18%, the trader will charge Rs.5,900 for the goods. The IGST collected is Rs.900,
which will be going to the Central Government.

2. STATE GOODS AND SERVICES TAX OR SGST

The State Goods and Services Tax or SGST is a tax under the GST regime that is applicable on
intrastate (within the same state) transactions. In the case of an intrastate supply of goods
and/or services, both State GST and Central GST are levied. However, the State GST or SGST
is levied by the state on the goods and/or services that are purchased or sold within the
state. It is governed by the SGST Act. The revenue earned through SGST is solely claimed by
the respective state government. For instance, if a trader from West Bengal has sold goods
to a customer in West Bengal worth Rs.5,000, then the GST applicable on the transaction
will be partly CGST and partly SGST. If the rate of GST charged is 18%, it will be divided
equally in the form of 9% CGST and 9% SGST. The total amount to be charged by the trader,
in this case, will be Rs.5,900. Out of the revenue earned from GST under the head of SGST,
i.e. Rs.450, will go to the West Bengal state government in the form of SGST.

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3. CENTRAL GOODS AND SERVICES TAX OR CGST
Just like State GST, the Central Goods and Services Tax of CGST is a tax under the GST
regime that is applicable on intrastate (within the same state) transactions. The CGST is
governed by the CGST Act. The revenue earned from CGST is collected by the Central
Government. As mentioned in the above instance, if a trader from West Bengal has sold
goods to a customer in West Bengal worth Rs.5,000, then the GST applicable on the
transaction will be partly CGST and partly SGST. If the rate of GST charged is 18%, it will be
divided equally in the form of 9% CGST and 9% SGST. The total amount to be charged by the
trader, in this case, will be Rs.5,900. Out of the revenue earned from GST under the head of
CGST, i.e. Rs.450, will go to the Central Government in the form of CGST.

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 OBJECTIVE OF GST
1. It helps create a common market in India with a uniform taxation system and curb
tax evasion in the country. The laws for GST are far more stringent compared to the
erstwhile indirect tax laws. The aim is to have a nationwide surveillance system
under GST, making it easier to catch defaulters and tax evaders.
2. It removes the cascading effect of the indirect taxes on a single transaction. It also
allows the setting off for prior taxes that are related to the same transactions in the
form of the input tax credit. Under GST, the tax is applicable only on the net value
added during each stage of the supply chain.
3. The government aims to reduce the need for multiple documentation under the
previous taxation system by introducing a consolidated tax like GST. The idea is to
help companies with an uncomplicated tax filing procedure that will improve their
efficiency and cut down the overall costs associated with business processes.
4. It helps to subsume most indirect taxes into a single taxation system that reduces
the burden of compliance for taxpayers and eases the government’s tax
administration process. The main aim of this taxation system is to simplify the entire
process of paying taxes and simplify compliance. Compared to the erstwhile indirect
taxes, almost the whole GST process, including registration, returns filing, refunds
and e-way bill generation, has shifted to the online mode.
5. One of the primary objectives of GST is to widen the tax base in India. Most of the
erstwhile indirect taxes had their threshold limits for registration based on the
turnover of a business. Under GST, there is greater scope for an increase in the
number of firms coming under the tax registration net because it includes all
transactions related to goods and services in the country.

CONCLUSION
GST is vital for the functioning of the Indian economy. The government aims
to simplify the entire taxation procedure and bring more businesses under the taxation
system. It will help them generate significant revenue from these taxes, which they can use
for the developmental activities within the country.

Research Methodology
The paper uses an elementary
research technique based on

9
literature review from respective
reports, journals,
newspapers and magazines
covering wide collection of
academic literature on GST.
According to the objectives of
the study, the research design is
descriptive in nature.
Available secondary data was
abundantly used for the present
study.
Objective of the study
The objectives of the paper are:
1. To study GST and its impact on
the Indian economy.
2. To examine the benefits and
challenges of GST in
Indian economy.
3. To know the threats of GST in
Indian economy.
10
Research Methodology
The paper uses an elementary
research technique based on
literature review from respective
reports, journals,
newspapers and magazines
covering wide collection of
academic literature on GST.
According to the objectives of
the study, the research design is
descriptive in nature.
Available secondary data was
abundantly used for the present
study.
Objective of the study
The objectives of the paper are:
1. To study GST and its impact on
the Indian economy.

11
2. To examine the benefits and
challenges of GST in
Indian economy.
3. To know the threats of GST in
Indian economy.

Research Methodology
The paper uses an elementary research technique based on literature review from
respective reports, journals, newspapers and magazines covering wide collection of
academic literature on GST. According to the objectives of the study, the research
design is descriptive in nature. Available secondary data was abundantly used for the
present study. Objective of the study.
The objectives of the paper are:
1. To study GST and its impact on the Indian economy.
2. To examine the benefits and challenges of GST in Indian economy.
3. To know the threats of GST in Indian economy.

Impact of Goods and

Service Tax
GST has a positive impact on the
economy and on various
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sectors which are as follows:
1. Fast moving consumer goods
sector
With the implementation of GST,
FMCG sector changed
excessively. FMCG sector consists
of 50% Food and
Beverage sector and 30% of
Household and Personal care. It
has major contribution of taxation
in the economy. The
multiplicity of the taxation
influences the company’s decision
on manufacturing location and
distribution of Goods. FMCG
companies set their manufacturing
units and warehouses
where they can avail tax benefits. To
transfer the stock from

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the warehouses among the states
they have to pay taxes. So,
GST would surely brunt on FMCG
sector.
2. Food Industry
As food constitutes a large
portion of the consumer
expense of lower income households,
any tax on food would
be in reverse in nature. Therefore,
extending GST to food
processing sector will also cause
difficulty in view of the fact
that production and distribution of
food is largely
unorganized in India. Overall, most
of the countries tax food
at a lower rate keeping in view the
considerations of fairness

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and equity. Even in countries such
as Canada, UK and
Australia where food constitute a
relatively small portion of
the consumer basket, food is
taxed at zero rates. While
countries like Singapore and Japan
food is taxed at a standard
rate of 3% which is very low.
Even in international
jurisdictions, no distinction is
drawn on the degree of
processing of food. Hence, the
benefit of lower or zero tax
rates should also be extended to
all food items in India
regardless to degree of processing.
3. Information Technology enabled
services

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The proposed GST rate under the
IT industry is not yet
decided. While the discussed
combined rate of GST for the
product is 27%. According to the
proposed GST if the
software is transferred through
electronic form it would be
regarded as service (intellectual
property) and if it is
transferred through media or any
other tangible property then
it should be treated as goods.
Application of GST will help in
uniformity of single point taxation
and thereby reduced price.
4. Infrastructure sector
Indian infrastructure sector largely
constitute of power,

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road, port, railways and mining.
And the indirect tax levy is
different and unique for each of
them, and is complex in
nature. This sector enjoys different
exemptions and
concessions as it is important for
national front. With the
implication of GST the multiplicity
of taxes will be removed
and it would increase the tax base
with continuation of
exemptions and concessions for
national interest and growth.
5. Impact on small enterprises
Small scale enterprises have three
categories: 1) Those
below threshold need not to
register for the GST. 2) Those

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between the threshold and
composition turnovers will have
the option to pay a turnover based
tax or opt to join the GST
regime. 3) Those above threshold
limit will need to be within
framework of GST.
In respect of the central GST the
situation is slightly
complex. GST is expected to
encourage compliance and
which is also expected to widen tax
base adding up to 2% to
GDP. Manufacturers, traders will
have to pay less tax with
the implication of GST.
FUNCTION OF GST COUNSAL

The Council is required to make recommendations to the centre and the states on the
following matters:

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 1. The taxes, cesses and surcharges levied by the centre, the states and the local bodies
that would be merged in GST.
2. The goods and services that may be subjected to GST or exempted from GST.
3. Model GST Laws, principles of levy, apportionment of GST levied on supplies in the
course of inter-state trade or commerce and the principles that govern the place of
supply.
4. The threshold limit of turnover below which goods and services may be exempted
from GST.
5. The rates include floor rates with bands of GST.
6. Any special rate or rates for a specified period to raise additional resources during
any natural calamity or disaster.
7. Special provision with respect to the states of Arunachal Pradesh, Assam, Jammu and
Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal
Pradesh and Uttarakhand.
8. Any other matter relating to GST, as the Council may decide.

In addition, the council shall also recommend the date on which the GST may be levied on
petroleum crude, high-speed diesel, petrol, natural gas and aviation turbine fuel.

The Council also has to recommend the compensation to the states for the loss of revenue
arising on account of the introduction of GST for a period of five years. Based on the
recommendation, the Parliament determines the compensation.

ADVANTAGES OF GST
As mentioned above, the GST comes with a few advantages, such as one tax system and
boosting the different aspects of the Indian economy, such as:-

1. One Tax System

One of the main intentions of bringing GST was to remove different types in the Indian tax
system. Before the implementation of GST, there were different taxes such as VAT, service
tax, etc. All such taxes have been removed with GST coming into play. Now, only one tax is
charged. Although there are different slabs, GST charges are different for different items
which often creates confusion. 

2. Common National Market Creation

GST brings up a tax structure that is integrated into nature. This helps remove all kinds of
economic barriers, allowing the GST to create common national markets. Again, using input
tax credit can sometimes become difficult.

3. The Make In India Initiative

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One of the main reasons for bringing Goods and Services Tax was to help in boosting the
‘Make in India’ products. The GST helps in manufacturing the products at competitive rates.
Although the rest is yet to be explained by the Government as to how GST helps in this
campaign.

4. Cascading Effect Removal

A big advantage of GST is the removal of the cascading effect of GST. Cascading effect means
the tax levied on tax. So, if a product has 10% tax on Rs 1000, another 10% of tax will be
charged on 1100. So double tax is charged. In GST, if 28% tax is charged on Rs 1000, then Rs
1280 is charged, and on the next level, again 28% will be charged on Rs 1000. So, the Tax on
Tax system is removed. 

5. Litigation Reduction
GST helps in reducing litigation cost, which was increased due to multiple taxation systems.
As GST is meant to provide clarity in the tax assessment ability. One can use the revised
structure of GST to show the different credit flow in different businesses. But the credit
following is not very smooth and sometimes leads to errors, so one must be careful.

6. Composition Scheme
Through the GST, many small businesses with an annual turnover of less than and equal to
INR 1.5 Crore can opt for the composition scheme. They can reduce their compliance easily
using this scheme. The GST is charged at lower rates of 1%, 5% and 6% by businesses that
come under this scheme.

7. Simple Access
The GST portal can be accessed by anyone sitting anywhere at any time. This makes filing of
returns easy. This is very good for all kinds of businesses. 

8. Efficiency in Logistics
GST has removed different other tax systems such as VAT. So, since the business already
pays to the canter and state before the transportation of goods, there is no need to pay
state-level taxes during interstate movement, which makes the logistics movement better.

9. Unregulated Sectors get Regulation

Previously various businesses were not regulated, and there had been tax evasion from the
construction and textile sectors. The implementation of GST has addressed these loopholes.
The tax burden has been reduced for such sectors too. This will prevent tax evasion.

10. Automated procedures

These processes are automated and simplified for various pro

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cesses such as return, tax payment, registration, etc.; all interaction is done through a
common GSTN portal.

DISADVANTAGES OF GST
1. Very High Tax Burden on SMEs

 As per the structure of the previous tax system, only those businesses whose yearly
sales were more than Rs.1.5 crore were required to pay excise duty. But as per the
new tax structure, it is mandatory for all businesses whose annual sales are more
than Rs.40 lakh to pay GST.

2. Compliance Burden

 GST compliance is quite high due to the filing of 3 tax returns every single month.
Besides, now it is mandatory for the companies to register for the GST in all states
wherever they perform business.

 The whole procedure of registering with the regulatory body, producing GST-
compliant invoices, maintaining digital records, and filing returns have put a huge
stress burden on SMEs and others.

3. Increased Costs

 It is seen that GST compels businesses to convert their present accounting software
to ERP or GST-compliant software with a view to keeping their operations running.
But one also has to remember that the businesses may incur substantial expenses
for buying, installing, and then training employees to use GST-compliant software.

 In addition to this, the costs of doing business have increased considerably not only
for big businesses but also for small ones since they have to hire tax professionals in
order to become GST-compliant.

4. IT Software Expenditure
Keeping in view the GST regime, all businesses either have to update their current
accounting software or ERP software to make it GST compliant or purchase new GST
software to prop up their businesses. This results in an increase in IT expenses of the
businesses in terms of purchasing the GST software and training the staff to use the
software efficiently. However, Masters India, a firm that is one of the leading GST Suvidha

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Providers (GSP) has successfully developed customized GST software and APIs in order to
ease the compliance procedures for different business users.

Benefits of GST Registration under Law

Reduction in Tax Evasion
GST is online completely. Furthermore, Only if the supplier includes the correct information
in a return does the input credit apply to the beneficiary, such as producers or service
providers. This helps the providers of goods and services and, in turn, helps reduce tax
evasion.

Improvisation in Logistics
Logistics efficiency has increased as a result of the adoption of the GST, which has lowered
barriers to the free flow of products between states. Due to the GST, warehouses are
locating their units in important cities as opposed to every other city.

Regulation of Unorganized Sector

Earlier, there was little regulation of the unorganized sectors such as textile and
construction sectors. There are several provisions for online payments and compliances
under GST. Thus, these sectors have also been regularized.

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Increase in the upper limit of Threshold for Registration
Previous tax legislation made businesses with a turnover of more than 5 lakh rupees liable
for paying VAT. Besides, The threshold limit for VAT Registration varied across states.
However, it has been increased to 20 lakh rupees under the GST regime. As a result, small
businesses or GST Registration for MSME Sector has become a boon as they can easily
conduct their business operation without having to mandatory obtain GST Registration.
However, these businesses can also voluntarily have online GST Registration and avail the
benefits of GST Registration under the law.

GST Registration under Law is straight forward and quick online process
The whole GST procedure is completed online and is quite straightforward, from registration
to filing returns. This has been advantageous for start-ups in particular since it saves them
from having to go from one registration to the next for things like VAT, excise, and service
tax.

Scheme of composition for small firms

Small firms (with a turnover of between 20 and 75 lakh rupees) might profit from the GST
since it offers the possibility to reduce taxes by employing the Composition scheme under
online GST registration. The tax and regulatory burden for many small firms has decreased
as a result of this initiative.

Specific treatment for online merchants or E-Commerce Operators

Before the implementation of the GST system, the act of selling items online was not
regulated. The VAT legislation changed often as per the state. However, with the
introduction of GST the rules and regulations have been made clear for online merchants or
E-Commerce Operators. GST has also enabled ease of doing business for entrepreneurs
doing business through e-commerce mode.

Conclusion
In Conclusion, the benefits of GST Registration under law are several. If you are eligible for
GST Registration in India, you must get it and avail its several benefits. Multiple businesses
have become successful and are able to boost their growth through the implementation of
GST. If you require any further guidance on GST Registration, GST Modification etc.

23
UNDERSTANDING THE IMPACT OF GST IN INDIA

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One nation, one market, one tax’ was the motto with which GST was applied in its full
capacity on 1st July 2017. This move has brought 1.3 million citizens of our nation into a
unified indirect taxation system.

In this article, we will dive into the ground reality of the impact of GST on our nation.

IMPACT OF GST ON OUR ECONOMY

To understand how GST has impacted the overall Indian economy, we need to understand
what is GST applied to and its types. We will also discuss the various effects of GST.

GST is levied on every stage of manufacturing and sales of goods and services across India.
This tax is levied when the goods or services are consumed. There are three subcategories
to GST-

CGST (Central Goods and Services Tax) is collected by the Central Government on interstate
sale of goods and services.

SGST (State Goods and Services Tax) is collected by the State Government on intrastate
sales.

IGST (Integrated Goods and Services Tax) is collected when a supply of products and services
is supplied from one state to another. The taxes collected are shared both by the Central
and State Government.

With this brief idea, let’s go through the impacts of GST on the Indian economy –

6. SIMPLER TAX STRUCTURE

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With GST, the taxation system of our country has become simpler. It is a single tax, ensuring
easier calculation. With this tax, the buyer gets a clear idea of the amount paid as tax when
purchasing certain products. This is crucial when considering GST and its impact on the GDP.
7. MORE FUNDS FOR PRODUCTION

Another effect of GST on the Indian economy has been the reduction in the total taxable
amount. This saved fund can again be invested back into the production cycle to foster
production.
8. SUPPORT FOR SMALL AND MEDIUM ENTERPRISES

Based on the size of your organization, the amount of GST depends on your firm’s annual
turnover, provided you have been registered under the Composition Scheme introduced by
GST. Enterprises with a yearly turnover of 50 lakhs have to pay 6% GST whereas enterprises
with 1.5 crores worth of turnover have to pay 1% GST.
9. INCREASED VOLUME OF EXPORT
When considering GST and its impact on the Indian economy, customs duty on exporting
goods has reduced. So now production units save money while producing goods and also
while shipping them. This two-way savings has lured many production units to export their
goods, increasing the export quantity.
10. ENHANCED OPERATIONS THROUGHOUT INDIA
With a unified taxation system, transporting goods around India has now become easy,
boosting operations throughout the country.
11. NO MORE CASCADING EFFECT
With GST, taxes of the State and Central Government have been merged. This has removed
the cascading effect of taxes, reducing the burden on the buyer and the seller. So even if it
may look like one big chunk of tax to be paid, you pay lesser hidden taxes.

How did the introduction of GST impact real estate

Real estate contributes to almost 8% of our nation’s total GDP. Before the onset of GST,
buying an under-construction property meant you were subject to VAT, service tax, stamp
duty, and registration charges. However, purchasing a completed property meant only the
application of stamp duty and registration charges.

The application of GST will reduce the amount of buying a house, especially if booked before
construction. Now developers too shall enjoy input credits on GST paid on goods and
services delivered by them as that liability shall be passed on to potential buyers.

Taxes levied over real estate have also become simpler as the government has removed
stamp duty after the application of GST, thereby making the impact of GST on the real
estate sector more prominent. All under-construction properties will total to 5% of GST

26
without the input tax credit. There is no GST applicable for ready-to-move-in properties. If
you are looking to purchase a house, consider these effects of GST on properties. 

Suppose the carpet area of a particular property is up to 60 sq. meters, and in a non-metro,
it is up to 90 sq. meters. In that case, that property can be included in the affordable
housing scheme. This affordable house will accrue 1% GST if its value is below 45%;
otherwise, 5% GST is applicable. These are some of the important effects of GST on the real
estate sector.

Builders have to pay a higher tax amount in the 4-tier taxation, but they also avail input
credits later. However, the burden for potential buyers has risen, as they will have to bear
GST apart from those who are a part of the CLSS Scheme. Thus, one can easily notice how
GST benefits the Indian economy.
THE IMPACT OF GST ON THE COMMON MAN’S POCKET
If you see the short-term impacts, customers now shall need to pay more taxes on goods
and services they purchase. A majority of essential consumables will input either the same
or a higher amount of tax. The benefits of GST to the common man are plentiful.

Small-scale trades also have to bear the cost of compliance, which may raise the prices of
their produce, affecting the consumer.

Nevertheless, in the long term, GST also promises several benefits. With the decrease of
payable taxes for producers of consumer goods like FMCG, the automotive sector will have
to reduce the prices of their commodities. This will allow the consumer to pay less while
trying to avail of these services.

A drop in prices will show an immediate surge in demands, boosting the production cycle
bringing in more profits. With this, both the buyer and the seller get to save a fair share of
money eventually, and the economy, too, shall be boosted.

A boost in production shall also pave the way for expansion, leading to more employment
and increased income. This not only creates a better scope for the common man but also
strengthens the economy.

The implementation of GST also implies raising an invoice for the purchase of any goods and
services. With a proper billing system, the prospect of black money and corruption shall also
go down. These have been troubling aspects for the common man in India.

How does GST affect the other sectors?

Till now, we discussed the small, medium, and largescale manufacturers and the real estate
sector; let’s now take a look at the impact of GST on businesses other than real estate-

Logistics

27
In a country as big as ours, logistics plays a key contribution to the economy. A well-
organized and structured logistics industry can grow exponentially, especially under the
Make in India banner.

E-commerce
E-commerce has high growth potential. However, e-commerce companies shall have to bear
with tax collected at source factor for GST.

Pharma
The pharma and healthcare sector shall have a positive impact on GST with its simplified tax
structure. It will also be availing a tax respite in lieu of making healthcare cheaper and
accessible to people of all income groups.
TELECOM
A drop in prices can be expected in the telecom sector, as costs like warehousing, logistics,
etc., will reduce.

Textile
Indian textile is one of the largest employers of skilled and unskilled labour. With the textile
industry also making 10% of total exports in India, the numbers are likely to increase with
the removal of customs duties. GST shall also affect the value of cotton, a material on which
most small-scale textile industries depend. These are some of the impacts of GST on small
traders.

Agriculture and farming

Agriculture is the biggest contributor to India’s GDP, covering more than 16%. With the ease
of logistics, transportation costs of agricultural produce will also go down. Thus, the impact
of GST on wholesalers has been greatly positive.
FMCG
With GST eliminating the need for multiple sales depots, FMCG shall save a lot on logistics
and distribution costs.

Automobile
Under the previous taxation system, several taxes like excise, VAT, sales tax, road tax, motor
vehicle tax, registration duty were applicable, which has now been replaced by GST.
Automobile prices are likely to drop as the producers are saving more in the form of taxes
now.

Start-ups

28
GST has tremendously benefitted Indian start-ups with perks like a DIY compliance model,
increased limits for registration, a free flow of goods and services and tax credit on
purchases. It has also become easier for companies with a pan India presence to calculate
taxes, especially if belonging to the e-commerce sector. Understand the impact of GST on
small-scale industries if you are a part of this sector.

Self Employed & Individuals

Self-employment or freelancing is a young industry in our country, but filing for taxes has
become easier as they fall under service providers with GST implementation. Understanding
the impact of GST on micro small and medium enterprises is important for such individuals.

Entrepreneurs engaged in the hospitality sector should also check out the impacts of GST on
the hospitality industry.
GST comes with its set of pros and cons, affecting both buyers and sellers. One must be
aware of GST’s negative impact on the GDP as well. So one side, when taxes have become
simplified, they have also led to a rise in compliance costs.

Challenges of GST
1. With respect to Tax Threshold

29
 The threshold limit for turnover above which GST would be levied on area which
would have to be strictly looked at. First of all, the threshold limit should not be so
low to bother small scale traders and service providers. It also increases the
allocation of government resources for such a petty amount of revenue which
may be much more costly than the amount of revenue collected. The first impact
of setting higher tax threshold would naturally lead to less revenue to the
government as the margin of tax base shrinks; secondly GST may have affected
small and less developed states which have set low threshold limit under current
VAT regime.
2. With respect to nature of taxes
Taxes that are generally included in GST would be excise duty, countervailing duty,
service tax, and state level VATs among others. Interestingly, there are
numerous other states and union taxes that would be still out of GST.
3. With respect to number of enactments of statutes
There are two types of GST laws, one at a Centre level called ‘Central GST
(CGST)’ and the other one arrange at the state level - ‘State GST (SGST)’. As there
seems to have different tax rates for goods and services at the Central Level and at
the State Level, and in addition division based on necessary and other property
based on the need, location, geography and resources of each state.
4. With respect to Rates of taxation
It is true that a tax rate should be devised in accordance with the state’s
necessity of funds. Whenever states feel that they need to raise greater revenues
to fund the increased expenditure, then, ideally, they should have power to
decide how to increase the revenue.
5. With respect to tax management and Infrastructure
It depends on the states and the union how they are going to make GST a simple
one. Success of any tax reform policy or managerial measures depends on the
inherent simplifications of the system, which leads to the high conformity with the
administrative measures and policies.

Inter-State Transactions and the IGST Mechanism

The Centre empowers custom and collects the Integrated Goods and Services
Tax (IGST) on all inter-State supply of goods and services. The IGST mechanism has
been designed to ensure consistent flow of input tax credit from one State to
another. The inter-State vendor direct pay IGST on the sale of his goods to the
Central Government after adjusting credit of GIST, CGST and SGST on his purchases
(in that order). The exporting State will transfer to the Centre the credit of SGST
used in payment of IGST. The importing dealer will claim credit of IGST while

30
 discharging his output tax liability (both CGST and SGST) in his own State. The
Centre will transfer to the
importing State the credit of IGST used in payment of SGST

Threats of GST
1. Higher tax burden for manufacturing SMEs
Small businesses in the construction sector will carry most of the burden of GST
implementation. Under the existing excise laws, only manufacturing business
with a turnover more than Rs. 1.50 cores have to pay excise duty. Anyhow,
under GST the turnover limit has been reduced to Rs. 20 lakh thus increasing the
tax burden for many manufacturing SMEs.
2. Increase in operating costs
Most small businesses do not employ professionals and prefer to pay taxes and
file returns on their own to save costs. For GST though, as it is a completely new tax
system, they will require professional assistance. While this will benefit the
professionals, the small businesses will have to bear the additional costs of
hiring experts. Also, businesses will need to train their employees in GST
conformity increasing their overhead expenses.
3. Change in business software
Most businesses use accounting Software’s or ERPs for filing tax returns which
have excise, VAT, and service tax already incorporated in them. The change to GST
will require them to change their ERPs, too, leading to increased costs of purchasing
new software and training employees.
4. GST will be implemented during the middle of the year
The tentative GST implementation date is 1st July 2017. So, for the fiscal year
2017-18 business will follow the old tax structure for the first 3 months, and
GST for the rest of the time. It is absurd to cross over from one tax structure to
the other in just a day, and hence businesses will end up running both tax
systems in parallel, resulting in more confusion and compliance issues.
5. Increase in taxes will increase prices
Presently, some sectors like the textile industry are exempted from taxes or pay low
tax. GST has only 4 proposed tax rates of 5%, 12%, 18%, and 28%. Thus, for many
sectors the tax burden will increase which in turn will increase the price of the final

31
 goods.

GST TAX

5%
1st
12% 2nd
28% 3rd
4th

18%

6. Petroleum products are not part of GST yet

As of now petroleum products are being kept outside the scope of GST. States
will impose their own taxes on this sector. Tax credit for inputs will consequently
not be available to related industries like the plastic industry which are heavily
dependent on petroleum products. Petrol and diesel are required to run factory
machinery and unavailability of input tax credit on petroleum products will most
probably push up the final price of all manufactured goods.
7. Registration in different states
GST requires businesses to register in all the states they are operating in. This will
increase the burden of compliances. 8. Conclusion It is concluded from the study
that GST is the most

32
 What is a GST Return?
A GST return is a document containing details of all income/sales and/or
expenses/purchases that a GST-registered taxpayer (every GSTIN) is required to file
with the tax administrative authorities. This is used by tax authorities to calculate net
tax liability.

Under GST, a registered dealer has to file GST returns that broadly include:
Purchases
Sales
Output GST (On sales)
Input tax credit (GST paid on purchases)
To file GST returns or for GST filings, check out the Clear GST software that allows
the import of data from various ERP systems such as Tally, Busy, custom Excel, to
name a few. There is also the option to use the desktop app for Tally users to directly
upload data and file.

Who should file GST Returns?

Under the GST regime, regular businesses having more than Rs.5 crore as annual
aggregate turnover (and taxpayers who have not opted for the QRMP scheme) have
to file two monthly returns and one annual return. This amounts to 25 returns each
year.

Taxpayers with a turnover of up to Rs.5 crore have the option to file returns under
the QRMP scheme. The number of GSTR filings for QRMP filers is 9 each year, which
include 4 GSTR-1 and GSTR-3B returns each and an annual return. Note that QRMP
filers have to pay tax on a monthly basis even though they are filing returns
quarterly.

There are also separate statements/returns required to be filed in special cases such
as composition dealers where the number of GSTR filings is 5 each year (4
statement-cum-challans in CMP-08 and 1 annual return GSTR-4).

How many returns are there under GST?

There are 13 returns under GST. They are the GSTR-1, GSTR-3B, GSTR-4, GSTR-5,
GSTR-5A, GSTR-6, GSTR-7, GSTR-8, GSTR-9, GSTR-10, GSTR-11, CMP-08, and ITC-04.
However, all returns do not apply to all taxpayers. Taxpayers file returns based on
the type of taxpayer/type of registration obtained.

Eligible taxpayers, i.e. with a turnover exceeding Rs.5 crore are also required to also
file a self-certified reconciliation statement in Form GSTR-9C.

33
 Besides the GST returns that are required to be filed, there are statements of input
tax credit available to taxpayers, namely GSTR-2A (dynamic) and GSTR-2B (static).
There is also an Invoice Furnishing Facility (IFF) available to small taxpayers who are
registered under the QRMP scheme to furnish their Business to Business (B2B) sales
for the first two months of the quarter. These small taxpayers will still need to pay
taxes on a monthly basis using Form PMT-06.

Who should file GST Returns?

Under the GST regime, regular businesses having more than Rs.5 crore as annual
aggregate turnover (and taxpayers who have not opted for the QRMP scheme) have
to file two monthly returns and one annual return. This amounts to 25 returns each
year.

Taxpayers with a turnover of up to Rs.5 crore have the option to file returns under
the QRMP scheme. The number of GSTR filings for QRMP filers is 9 each year, which
include 4 GSTR-1 and GSTR-3B returns each and an annual return. Note that QRMP
filers have to pay tax on a monthly basis even though they are filing returns
quarterly.

There are also separate statements/returns required to be filed in special cases such
as composition dealers where the number of GSTR filings is 5 each year (4
statement-cum-challans in CMP-08 and 1 annual return GSTR-4).

GSTR-1 – Return Filing, Format, Eligibility & Rules

GSTR-1 is a monthly/quarterly return that summarises all sales (outward supplies) of a

taxpayer. You must make sure that a valid GSTIN is filled while entering sales invoice details.
Try our GST search tool to be 100% accurate.
Latest Updates on GSTR-1

1st February 2022

Budget 2022 updates
(1) The last date to make amendments, corrections in GSTR-1, and upload missed invoices
or debit/notes of one financial year is no longer the due date to file September return of the
following year, but it is 30th November of the following year or filing of annual return,
whichever is earlier.
(2) The amendments also prescribe tax period-wise sequential filing of details of outward
supplies.

21st December 2021

34
(1) From 1st January 2022, taxpayers cannot file GSTR-1 if the previous period’s GSTR-3B
was not filed.
(2) From 1st January 2022, the GST officers can initiate recovery proceedings without any
show-cause notice against taxpayers who under-report sales in GSTR-3B compared to GSTR-
1.

29Th August 2021

Company taxpayers can continue filing GSTR-1 and GSTR-3B using EVC or DSC up to 31st
October 2021 via the CGST notification GSTR-1 – Return Filing, Format, Eligibility & Rules
GSTR-1 is a monthly/quarterly return that summarises all sales (outward supplies) of a
taxpayer. You must make sure that a valid GSTIN is filled while entering sales invoice details.
Try our GST search tool to be 100% accurate.

Latest Updates on GSTR-1

1st February 2022
Budget 2022 updates-
(1) The last date to make amendments, corrections in GSTR-1, and upload missed invoices
or debit/notes of one financial year is no longer the due date to file September return of the
following year, but it is 30th November of the following year or filing of annual return,
whichever is earlier.
(2) The amendments also prescribe tax period-wise sequential filing of details of outward
supplies.

21st December 2021

(1) From 1st January 2022, taxpayers cannot file GSTR-1 if the previous period’s GSTR-3B
was not filed.
(2) From 1st January 2022, the GST officers can initiate recovery proceedings without any
show-cause notice against taxpayers who under-report sales in GSTR-3B compared to GSTR-
1.
29th August 2021
Company taxpayers can continue filing GSTR-1 and GSTR-3B using EVC or DSC up to 31st
October 2021 via the CGST notification number 32/2021 dated 29th August 2021.

26th August 2021

From 1st September 2021, taxpayers will not be able to file GSTR-1 or use the IFF for August
2021 on the GST portal if they have pending GSTR-3B filings. It applies if GSTR-3B is pending
for the past two months till July 2021 (monthly filer) or for the last quarter ending 30th June
2021 (quarterly filer) as per CGST Rule 59(6).
What is GSTR-1?

35
GSTR-1 is a monthly or quarterly return that should be filed by every registered GST
taxpayer, except a few as given in further sections. It contains details of all outward supplies
i.e. sales. The return has a total of 13 sections, listed down as follows:

Tables 1, 2 & 3: GSTIN, legal and trade names, and aggregate turnover in the previous year
Table 4: Taxable outward supplies to registered persons (including UIN-holders) excluding
zero-rated supplies and deemed exports
Table 5: Taxable outward inter-state supplies to unregistered persons where the invoice
value is more than Rs.2.5 lakh
Table 6: Zero-rated supplies as well as deemed exports
Table 7: Taxable supplies to unregistered persons other than the supplies covered in table 5
(net of debit notes and credit notes)
Table 8: Outward supplies that are nil rated, exempted and non-GST in nature
Table 9: Amendments to outward supplies that are taxable and reported in table 4,5 & 6 of
the earlier tax periods’ GSTR-1 return (including debit notes, credit notes, refund vouchers
issued during the current period)
Table 10: Debit note and credit note issued to unregistered person
Table 11: Details of advances received or adjusted in the current tax period or amendments
of the information reported in the earlier tax period.
Table 12: Outward supplies summary based on HSN codes
Table 13: Documents issued during the period.

When is GSTR-1 due?

The due dates for GSTR-1 are based on your aggregate turnover. Businesses with sales of up
to Rs.5 crore have an option to file quarterly returns under the QRMP scheme and are due
by the 13th of the month following the relevant quarter.

Whereas, those taxpayers who do not opt for the QRMP scheme or have a total turnover
above Rs.5 crore must file the return every month on or before the 11th of the next month.

For businesses with turnover

Month/Quarter Due Date More than Rs.5 crore
October 2021 11th November 2021
November 2021 11th December 2021
December 2021 11th January 2022
January 2022 26th February 2022
February 2022 11th March 2022

36
March 2022 11th April 2022
Turnover up to Rs.5 crore
(QRMP Scheme) Oct-Dec 2021 13th January 2022

Jan-Mar 2022 13th April 2022

Who should file GSTR-1?

Every registered person is required to file GSTR-1 irrespective of whether there are any
transactions during the period or not. For nil GSTR-1 filers, there is a facility to file through
an SMS that began from the 1st week of July 2020. The following registered persons are not
required to file GSTR-1:

Input Service Distributors

Composition Dealers
Non-resident taxable person
Taxpayer liable to collect TCS
Taxpayer liable to deduct TDS
Suppliers of online information and database access or retrieval services (OIDAR), who have
to pay tax themselves (as per Section 14 of the IGST Act)

How to revise GSTR-1?

A return once filed cannot be revised under GST. Any mistake made in the return can be
rectified in the GSTR-1 filed for the next period (month/quarter). It means that if a mistake is
made in GSTR-1 of January 2022, rectification for the same can be made in the GSTR-1 of
February 2022 or subsequent months.

Late Fees and Penalty

The following table explains the late fee to be charged (for other than nil GSTR-1 filing
cases):

Name of the Late fees for Maximum late Maximum late Maximum late
Act every day of fee turnover in fee annual fee turnover
delay previous Year turnover More then 5 Cr
1.5 Cr between Rs.
1.5-5 Cr
CGST Act, 2017 Rs 25 Rs 1,000 Rs 2,500 Rs 5,000
Respective Rs 25 Rs 1,000 Rs 2,500 Rs 5,000
SCGT Act,
2017 / UTGST
Act, 2017
Total late fees Rs 50 Rs 2,000 Rs 5,000 Rs 10,000

37
 to be paid
The following table explains the late fee to be charged in case of nil GSTR-1 filing:

Name of the Act Late fees for every day of Maximum late fee
delay
CGST Act, 2017 Rs 10 Rs 250
Respective SCGT Act, 2017 / Rs 10 Rs 250
UTGST Act, 2017
Total late fees to be paid Rs 20 Rs 500
The original late fees used to be Rs.100 per day under each CGST Act and respective SGST/
UTGST Act. Also, the original late fee for Nil return filers used to be Rs.25 per day under
each CGST Act and respective SGST/ UTGST Act.

However, CBIC has notified reduced late fees to provide relief for businesses having
difficulties in GST return filing.

Also, the CBIC issued notification 20/2021 dated 1st June 2021, to cap the maximum late fee
chargeable from June 2021 onwards.

Latest update on GST-R 2A

1ST FEBRUARY 2022
BUDGET 2022 UPDATE
1. ITC cannot be claimed if it is restricted in GSTR-2B available under Section 38.
2. Time limit to claim ITC on invoices or debit notes of a financial year is revised to earlier of
two dates. Firstly, 30th November of the following year or secondly, the date of filing annual
returns.
3. Section 38 is completely revamped as ‘Communication of details of inward supplies and
input tax credit’ in line with the Form GSTR-2B. It lays down the manner, time, conditions
and restrictions for ITC claims and has removed the two-way communication process in GST
return filing on the suspended return in Form GSTR-2. It also states that taxpayers will be
provided information of eligible and ineligible ITC for claims.
4. Section 41 is also revamped to remove the references to provisional ITC claims and
prescribes self-assessed ITC claims with conditions.
5. Sections 42, 43 and 43A on provisional ITC claim process, matching and reversal are
eliminated.
6. Section 50 stands amended for levying interest on excess ITC claims and utilisation,
together with the manner of interest computation.

29TH December 2021

38
CGST Rule 36(4) is amended to remove 5% additional ITC over and above ITC appearing in
GSTR-2B. From 1st January 2022, businesses can avail ITC only if it is reported by supplier in
GSTR-1/ IFF and it appears in their GSTR-2B.

21st December 2021

From 1st January 2022, ITC claims will be allowed only if it appears in GSTR-2B. So, the
taxpayers can no longer claim 5% provisional ITC under the CGST Rule 36(4) and ensure
every ITC value claimed was reflected in GSTR-2B.
Advanced GST Reconciliation Tool – ClearTax GST

What is GSTR-2A?
When a seller files his GSTR-1, the information is captured in GSTR-2A. GSTR-2A is a
purchase-related tax return that is automatically generated for each business by the GST
portal. It takes information from every seller’s GSTR-1 for a particular buyer registered
under GST. The return is dynamic in nature and can vary with changes or revisions done by
sellers in later tax periods. So, GSTR-2B return was introduced.

What is GSTR-2B?
GSTR-2B  is a new static auto-drafted statement for regular taxpayers. It is available month
wise and was introduced on the GST portal from the August 2020 tax period onwards. The
details of ITC in this return does not get altered for a particular tax period, even if the seller
makes revisions. Hence, the taxpayers can refer to the ITC appearing in this return for
eligible ITC claims in GSTR-3B for a tax period.

GSTR 3: Return Filing, Format, Eligibility & Rules

We have already discussed GSTR-1 which contains details of all sales andGSTR-2 which the
details of purchases. Now we will discuss GSTR-3 which will contain the monthly summary of
sales and purchases along with the tax liability.

Latest updates
5th July 2022
Table 3.1.1 was inserted to allow taxpayers, both e-commerce operators and e-commerce
sellers to report such sales and tax payable on the same for the tax period. It is notified in
the CGST Notification 14/2022 dated 5th July 2022 along with a few more changes in Table
3.2 and Table 4.

17TH May 2022

39
The due date to file GSTR-3B for April 2022 was extended up to 24th May 2022.

1ST FEBRUARY 2022

BUDGET 2022 UPDATES
1. The last date to make amendments, corrections in GSTR-3B, and claim any missed Input
Tax Credit or ITC of one financial year is no longer due date to file September return of the
following year, but it is 30th November of the following year or filing of annual return,
whichever is earlier.
2. GST registration can be cancelled if GSTR-3B is not filed for continuous tax periods under
Section 29.

29 DECEMBER 2021
CGST Rule 36(4) is amended to remove 5% additional ITC over and above ITC appearing in
GSTR-2B. From 1st January 2022, businesses can avail ITC only if it is reported by supplier in
GSTR-1/ IFF and it appears in their GSTR-2B. Section 16(2)(aa) was notified on 21st
December 2021.
What is GSTR-3?
The GSTR-3 is a document containing the details of all transactions during
the month, including purchases, sales, and interstate movement of stock for a particular
month. This return is auto-generated based on the information available inside the GSTR-1
and GSTR-2 that have been filed for the same tax period.
Why is GSTR-3 important?
GSTR-3 Will show the amount of GST liability for the month. The taxpayer must payer must
pay the tax & file the return.

What happens if GSTR-3 is not filed?

If gstr-3 return is not filed then gstr-1 of the next month cannot be filed. Hence, late filling of
GST return will have a cascading effect leading to heavy fines & penalty.

What happens if GSTR-3 is filed late?

If you delay in filling you will be liable to pay interest a late fees interest is 18% per annum.
It has to be calculated in filling by the tax payer on the amount of outstanding tax to be paid
Time period will be from the next day of filling (16th of the month) to the date of payment.
Late fee is Rs. 100 per day per Act. So it is 100 under CGST & 100 under SGST. Total will be
Rs. 200/day. Maximum is Rs. 5,000. There is no late fee on IGST.

Who should file GSTR-3?

Every registered person is required to file GSTR-3 irrespective of whether there are any
transactions during the month or not However, these registered, persone do not have to file
GSTR-3.
 Input Service Distributors

40
  Composition Dealers
 Non-resident taxable person
 Taxpayer liable to collect TCS
 Taxpayer liable to deduct TDS
Suppliers of online information and database or retravel services (OIDAR), who have to pay
themselves (as per section 14 of the IGST Act)

How to revise GSTR-3?

GSTR-3 once filed cannot be revised. Any mistake made in the return can be revised in the
next month’s GSTR-1 & GSTR-2 returns. Direct revision in GSTR-3 is not possible as GST-3 IS
Auto-generated without provision for editing.

How will GSTR-3 and GSTR-3B be reconciled?

GSTR 3B is a simple return form introduced by the CBE
C for the month of July and August 2017. GSTR-3 will also have to be filed for July & August
2017.On filing the GSTR 3, if actual liabilities are different from those declared in GSTR 3B,
the system will update the (difference) between GSTR 3B and GSTR 3 automatically. In case,
actual liabilities in GSTR-3 are higher than those declared and paid with GSTR-3B, you will
have to pay the extra amount tax along with interest on the extra amount.

Note: GSTR-3 must be filed only after paying entire tax liability otherwise it will not be
treated as valid return. If taxpayer has filed an invalid return and later on he wants to pay
the remaining liability then he has to file the Part B of GSTR-3 again.

Details to be provided in GSTR-3

There are 15 headings in GSTR-3 format prescribed by the government. We have explained
each heading along with the details required to be reported under GSTR-3.

1. Provide GSTIN
Provisional id can also be used as GSTIN if you do not have a GSTIN

2. Name of the Taxpayer

Name of the taxpayer including legal and trade name (will be auto-populated)

Month, Year – Mention the relevant month and year for which GSTR-3 is being filed.

There are 2 parts of GSTR-3. Part A is auto-populated from GSTR-1, GSTR-1A & GSTR-2 and
Part B must be filled up manually.

PART A (entirely auto-populated)

41
3. Turnover
This heading will include total turnover of all types of supplies. Total turnover will be
bifurcated between:

Taxable Turnover [other than zero rated]: This includes the normal sales to both registered
and unregistered buyers.

Zero-rated supply on payment of tax: This will include exports which are paid by paying IGST
(later reclaimed as a refund)

Zero-rated supply without payment of tax: This will include exports which are paid with
bond/LUT.

Deemed exports: These are items sold to SEZ (the goods do not actually leave the country)

Exempted: These are goods/services which do not attract GST.

Nil Rated: These are goods/services which attract 0% GST.

Non-GST supply: These are items like petrol, and electricity which are outside the scope of
GST.

4. Outward supplies
This heading will contain summary of all your sales during the month. The information will
be pulled automatically from your GSTR-1.

42
4.1 Inter-State supplies (Net Supply for the month)
This heading will contain all inter-state sales with the following details
A. Taxable supplies (other than reverse charge and zero-rated supply) [Tax Rate Wise]: Total
sales except on those on which reverse charge applies and exports
B. Supplies attracting reverse charge-tax payable by recipient of supply: These are sales on
which your buyer will pay GST under reverse charge
C. Zero rated supply made with payment of IGST: These are exports which are paid by
paying IGST (later reclaimed as refund)
D. Out of the supplies mentioned at A, the value of supplies made though an e-commerce
operator attracting TCS-[Rate wise]: This will contain the portion of sales made through e-
commerce (point A has the total sales including e-commerce sales). GSTIN of e-commerce
operator will also be displayed. Note:
Zero rated supplies made without payment of taxes, i.e., exports through bond/LUT will not
be included.
Amendments of supplies originally made under reverse charge basis will not be included in
Table 4.

4.2 Intra-State supplies (Net supply for the month)

This is similar to above heading except that this will contain details of intra-state sales.

This will contain the changes made to your sales invoice. If the amount is changed, the
amount of ITC to claim also changes which impacts the tax payable to the government. It
may result in excess or under payment. The information under this heading helps to keep

43
track of invoices on which changes have been made and the impact of the change on the tax
amount.

4.3 Tax effect of amendments made in respect of outward supplies

This will contain the changes made to your sales invoice. If the amount is changed, the
amount of ITC to claim also changes which impacts the tax payable to the government. It
may result in excess or under payment. The information under this heading helps to keep
track of invoices on which changes have been made and the impact of the change on the tax
amount.

44
Inward supplies attracting reverse charge including import of services (Net of advance
adjustments)
This heading will contain your purchases during the month and supplies you received during
this month. The information will be pulled automatically from your using the data that you
have recorded under the GSTR-2.
5A. Inward supplies on which tax is payable on reverse charge basis:
This includes your purchases where reverse charge is applicable (you the buyer will pay
GST). Both inter-state and intra-state sales appear here. Tax liability due to reverse charge is
net of invoices, debit/credit notes, advances paid and adjustments of advances

5B. Tax effect of amendments in respect of supplies attracting reverse

charge:
This will contain the changes made to your purchases which attract reverse charge. If the
amount is changed, the amount of ITC also changes which changes the tax payable. It may
result in excess or under payment. The information under this heading helps to keep track
of invoices on which changes have been made and the impact of the change on the tax
amount.

45
6. Input tax credit
ITC on inward taxable supplies, including imports and ITC received from ISD [Net of debit
notes/credit notes]

Part I
This heading will have a summary of ITC available to you during the month. ITC will be
shown separately for:

Inputs– Your raw materials

Input Services– Such as consulting fees

Capital Goods– Such as laptop

ITC received from Input Service Distributor (ISD) will also be shown here. All ITC will be
shown after adjusting debit/credit notes.

Part II
46
This part will contain changes made to earlier month’s details and their effect on ITC.

7. Addition and reduction of amount in output tax for mismatch and other
reasons
This heading will contain the mismatches in ITC and tax liability between the original returns
and any changes filed during the current month. This information will be sourced from
GSTR-2.

a. ITC claimed on mismatched or duplication of invoices or debit notes

  In case mismatch of invoices, there may be double claiming of ITC. The excess ITC claimed
from duplicate purchase invoices will be reversed and added to the tax liability.

b. Tax liability on mismatched credit notes

 Incorrect credit notes issued by you will also result in incorrect ITC. Extra ITC claimed due to
mismatch will now be added to your tax liability.

c. Reclaim on rectification of mismatched invoices/Debit Notes

 This is the opposite of point (a). In this case, mismatch has led to claiming lower ITC. You
are entitled to more ITC and so the additional amount will be reduced from the output tax
liability.

47
d. Reclaim on rectification of mismatch credit note: (Reduce)
 This is opposite to (b), i.e., lower ITC has been claimed and will work in the same way as (c).

e. Negative tax liability from previous tax periods

 This is due to excess tax paid during the previous months and will be reduced from output
tax liability of this month.

f. Tax paid on advance in earlier tax periods and adjusted with tax on
supplies made in current tax period. 
This refers to tax paid along with advance payments in earlier months for supplies received
during this month.

g. Input Tax credit reversal/reclaim

This refers to ITC being reversed or reclaimed due to any other reason.

8. Total tax liability

This is the main portion as GST Portal will calculate your tax liability here under different tax
heads of CGST, SGST & IGST It will show the following break up:-

8A. On outward supplies

 This is tax payable on your normal sales including inter-state sales.

8B. On inward supplies under reverse charge

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 This is the tax payable on purchases attracting reverse charge.

8C. On account of ITC reversal or reclaim

 This is the additional tax payable/or reduction available due to ITC reversal or reclaim. The
information flows from Table 11 of GSTR-2.

8D
On account of mismatch/ rectification /other reasons: This will include tax liability due to
any other reason.

9. Credit of TDS and TCS

This heading will contain the details of TDS and TCS paid by you. The amounts of TDS/TCS
will be deducted from the total liability to arrive at net tax amount you must pay.

10. Interest liability (Interest as on ..)

Interest is applicable on delay of payment. Interest is 18% per annum. It has to be calculated
by the tax payer on the amount of outstanding tax to be paid. The time period will be from

49
the next day of filing (20th of the month) to the date of payment. This heading shows the
reason and the amount of interest applicable. Breakup into CGST, SGST, IGST & Cess will be
given.

Output liability on mismatch

 Your tax liability has increased due to a change in the sales invoice and you must pay
interest on the increased amount

ITC claimed on mismatch invoice: Your tax liability has increased due to a change in the
purchase invoice and ITC was claimed on such invoice. You must pay interest on the
increased amount.

On account of other ITC reversals: Your ITC claimed was reversed which has increased your
tax liability and so interest is payable.

Undue excess claims or excess reduction [refer sec 50(3)]: You have claimed extra ITC and
now you are required to pay interest
The credit of interest on rectification of mismatch
You had paid interest on the mismatch and now the interest is reversed or credited back.

Interest liability carry forward

 You had an interest liability which you have paid partly. The balance amount will be carried
forward.

Delay in payment of tax

This is due to late payment/ late filing of returns.

Total interest liability

Finally, it will show the total interest payable under CGST, SGST & IGST.

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11. Late Fee
A late fee is also applicable along with interest on delayed return filing. The late fee is Rs.
100 per day. Maximum is Rs. 5,000.

Note: There is no late fee for IGST.

Part B
This part will be filled up by the taxpayer. Part A is shown automatically by the GST Portal

12. Tax payable and paid

You will fill up the appropriate columns with the appropriate amounts.For example, if you
have a tax liability of Rs. 30,000 and ITC of Rs. 10,000, you can opt to pay Rs. 20,000 in cash
(fill up col 3) and Rs. 10,000 through ITC (fill up the appropriate columns under 4,5,6.

Remember to follow the ITC claim rules.

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13. Interest, Late Fee and any other amount (other than tax) payable and
paid
Here, you will fill in the amount payable and the amount paid under interest, late fee with
the breakup of tax heads. Note: There is no late fee for IGST.

14. Refund claimed from Electronic cash ledger

If it is found that the tax paid is higher than the actual amount then the difference will be
refunded to you. Note:

Refund from the cash ledger can only be claimed only when all return related liabilities for
the month have been discharged.

Refund claimed Table 14 will result in a debit entry in the electronic cash ledger on the filing
of valid GSTR 3.

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15. Debit entries in electronic cash/Credit ledger for tax/interest payment 
[to be populated after payment of tax and submissions of return]

This section will be automatically filled in when you pay taxes and submit your returns.

Finally, sign off with a declaration that all information has been supplied and is correct.

To know more about the different types of returns, deadlines and the frequency of filing,
read our article on GST Returns. File your GSTR-2 Returns using the ClearTax
GST Software. You can now create GST compliant invoices for FREE on ClearTax Bill Book.

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 What is Form GSTR-9?

Form GSTR-9 is an annual return to be filed once for each financial year, by the registered
taxpayers who were regular taxpayers, including SEZ units and SEZ developers. The
taxpayers are required to furnish details of purchases, sales, input tax credit or refund
claimed or demand created etc.

Different types of Annual Returns under GSTR 9 Form

As per Rule 80 of CGST Rules 2017, below are the different types of Returns under GSTR 9
Form:
GSTR 9 : To be filed by the regular taxpayers filing GSTR 1, GSTR 2, GSTR 3, GSTR 3B during
the financial year.
GSTR 9A : To be filed by Composition Scheme Taxable persons
GSTR 9B : To be filed by Electronic Commerce Operator
GSTR 9C : To be filed by Person who are required to get their accounts audited under Form
Sec 35 of CGST Act.

Who need to file Annual Return in Form GSTR-9?

Form GSTR-9 is to be filed by a person who is registered as a normal taxpayer, including SEZ
unit or SEZ developer and the taxpayers who have withdrawn from the composition scheme
to normal taxpayer any time during the financial year.
Note:
Composition taxpayers can file Annual Return in Form GSTR-9A.
Annual Return is not required to be filed by casual taxpayer / Non-Resident taxpayer / ISD/
OIDAR Service Providers.

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Who is required to file GSTR-9?
All registered taxable persons under GST must file GSTR-9. However, the following persons
are not required to file GSTR-9:
Taxpayers opting Composition Scheme
Casual Taxable Person
Input service distributors
Non-resident taxable persons
Persons paying TDS

Important Note: For businesses Whose aggregate turnover in a financial year does not
exceed 2 crore rupees, filing of GSTR-9 is made optional. This means those who have not
furnished the annual return so far and if they choose not to file, it will be deemed to be
furnished on the due date.

What if GSTR-9 filing is done late?

If the GSTR-9 return is not filed on time, then a penalty of INR 100 per day under CGST & INR
100 per day under SGST shall be levied i.e. a total of INR 200 per day. However, the
maximum of such a penalty will be an amount calculated at a quarter percent of the total
taxpayer turnover in the respective State or Union Territory.

How to revise GSTR-9?

Form GSTR-9 once filed cannot be revised. It’s recommended to carefully check the values
auto-populated in the annual returns, match with books of accounts and accordingly make
suitable corrections before filing Annual GST Return in form GSTR-9.

Simplified and Revised Annual Return GSTR-1

With the recent changes in form GSTR- Format, the Government simplified annual return
forms by making various fields of these forms is optional. In most of the fields where the
taxpayers were required to split the information such as ITC on inputs, capital goods,
services are made optional.

With the simplified annual return GSTR-9, the taxpayers no longer mandated to provide a
split of input tax credit availed on inputs, input services and capital goods and to not to
provide HSN level information of outputs or inputs etc.

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 Tax Laws before GST
In the earlier indirect tax regime, there were many indirect taxes levied by both the state
and the centre. States mainly collected taxes in the form of Value Added Tax (VAT). Every
state had a different set of rules and regulations.

Inter-state sale of goods was taxed by the centre. CST (Central State Tax) was applicable in
case of inter-state sale of goods. The indirect taxes such as the entertainment tax, octroi
and local tax were levied together by state and centre. These led to a lot of overlapping of
taxes levied by both the state and the centre.

For example, when goods were manufactured and sold, excise duty was charged by the
centre. Over and above the excise duty, VAT was also charged by the state. It led to a tax on
tax effect, also known as the cascading effect of taxes.

The following is the list of indirect taxes in the pre-GST regime:

Central Excise Duty

Duties of Excise
Additional Duties of Excise
Additional Duties of Customs
Special Additional Duty of Customs
Cess
State VAT
Central Sales Tax
Purchase Tax
Luxury Tax
Entertainment Tax

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Entry Tax
Taxes on advertisements
Taxes on lotteries, betting, and gambling
CGST, SGST, and IGST have replaced all the above taxes.

However, certain taxes such as the GST levied for the inter-state purchase at a concessional
rate of 2% by the issue and utilisation of ‘Form C’ is still prevalent.

It applies to certain non-GST goods such as:

Petroleum crude;
High-speed diesel
Motor spirit (commonly known as petrol);
Natural gas;
Aviation turbine fuel; and
Alcoholic liquor for human consumption.
It applies to the following transactions only:

Resale
Use in manufacturing or processing
Use in certain sectors such as the telecommunication network, mining, the generation or
distribution of electricity or any other power sector

How Has GST Helped in Price Reduction?

During the pre-GST regime, every purchaser, including the final consumer paid tax on tax.
This condition of tax on tax is known as the cascading effect of taxes.

GST has removed the cascading effect. Tax is calculated only on the value-addition at each
stage of the transfer of ownership. Understand what the cascading effect is and how GST
helps by watching this simple video:

The indirect tax system under GST will integrate the country with a uniform tax rate. It will
improve the collection of taxes as well as boost the development of the Indian economy by
removing the indirect tax barriers between states.

Illustration:
Based on the above example of the biscuit manufacturer, let’s take some actual figures to
see what happens to the cost of goods and the taxes, by comparing the earlier GST regimes.

57
Tax calculations in earlier regime:

Action Cost (Rs) Tax rate at 10% (Rs) Invoice Total (Rs)
Manufacturer 1,000 100 1,100
Warehouse adds a 1,400 140 1,540
label and repacks at
Rs.300
Retailer advertises 2,040 204 2,244
at Rs. 500
Total 1,800 444 2,244
The tax liability was passed on at every stage of the transaction, and the final liability comes
to a rest with the customer. This condition is known as the cascading effect of taxes, and the
value of the item keeps increasing every time this happens.

Tax calculations in current regime:

Action Cost (Rs) Tax rate at 10% Tax liability to Invoice Total
(Rs) be deposited (Rs)
(Rs)
Manufacturer 1,000 100 100 1,100
Warehouse 1,300 130 30 1,430
adds label and
repacks at Rs.
300
Retailer 1,800 180 50 1,980
advertises at Rs.
500
Total 1,800 180 1,980
In the case of Goods and Services Tax, there is a way to claim the credit for tax paid in
acquiring input. The individual who has already paid a tax can claim credit for this tax when
he submits his GST returns.

In the end, every time an individual is able to claims the input tax credit, the sale price is
reduced and the cost price for the buyer is reduced because of lower tax liability. The final
value of the biscuits is therefore reduced from Rs.2,244 to Rs.1,980, thus reducing the tax
burden on the final customer.

What are the New Compliances Under GST?

Apart from online filing of the GST returns, the GST regime has introduced several new
systems along with it.

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e-Way Bills

GST introduced a centralised system of waybills by the introduction of “E-way bills”. This
system was launched on 1st April 2018 for inter-state movement of goods and on 15th April
2018 for intra-state movement of goods in a staggered manner.

Under the e-way bill system, manufacturers, traders and transporters can generate e-way
bills for the goods transported from the place of its origin to its destination on a common
portal with ease. Tax authorities are also benefited as this system has reduced time at check
-posts and helps reduce tax evasion.

E-invoicing

The e-invoicing system was made applicable from 1st October 2020 for businesses with an
annual aggregate turnover of more than Rs.500 crore in any preceding financial years (from
2017-18). Further, from 1st January 2021, this system was extended to those with an annual
aggregate turnover of more than Rs.100 crore.

These businesses must obtain a unique invoice reference number for every business-to-
business invoice by uploading on the GSTN’s invoice registration portal. The portal verifies
the correctness and genuineness of the invoice. Thereafter, it authorises using the digital
signature along with a QR code.

e-Invoicing allows interoperability of invoices and helps reduce data entry errors. It is
designed to pass the invoice information directly from the IRP to the GST portal and the e-
way bill portal. It will, therefore, eliminate the requirement for manual data entry while
filing GSTR-1 and helps in the generation of e-way bills too.

Powers of GST Officers

Every GST taxpayer must know about the powers of the GST officers as this will help them
approach the proper officer at the right time. Also, this will help to save the valuable time
that they might lose by approaching the wrong GST officer, including any illegal exploitation
by the GST officers. It also protects the GST taxpayer from any misguided inquiry and
assessment. In this article, we will discuss the powers of officers under GST Act, what are
the powers of SGST officers / CGST officers, specific GST superintendent powers, and
general powers of GST officers. Here we will also discuss the Power of GST officer delegated
by the Commissioner or Additional Commissioner.

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Legal Provision
Appointment powers of gst Like powers given to the different officers under the different
types of Laws, the GST law also granted specific Power of officers under GST. As per Section
5 of the CGST Act, 2017, GST officers have been given powers that each officer may exercise,
subject to the conditions and limitations as may be imposed by the board. It also permits a
commissioner to delegate his powers to any other officer who is a subordinate to him. One
question that may arise is “what are the powers of SGST officers?. The answer is all powers
given under CGST Act shall mutatis mutandis given to the SGST officers under SGST Act,
2017. If we talk about the specific powers of officers under the GST Act, the following are
the leading powers of GST authorities officers.

Power of Inspection
The GST authorities and their powers officer not below the rank of Joint Commissioner may
authorize any proper officer who can inspect any business place of the taxable person,
transporter, business owner, warehouse operator, or any other person. But the person
reviewing the above shall have written authorization from the officer not be below the rank
of Joint Commissioner. They can inspect any GST taxpayer’s premises at any time but with
written permission from the officer not below the rank of joint Commissioner. They can
inspect their business place, goods and supply, and also transport.

Power of Search and Seizure

The GST officer not below the rank of Joint Commissioner has the power to search and seize
any goods if he believes that any goods, documents, or information relevant to the
proceedings are hidden or not disclosed after seeking such information. It may also
authorize the proper officer to search and seize such goods, documents, information at any
place. The GST officers have the power to search and seize any goods or any documents or
information which will be helpful for the legal proceedings. It shall be noted that search and
seizure can only be carried out by any officer who has authorization from the officer not
below the rank of Joint Commissioner.

Power to Arrest
GST officers can arrest the people who do not follow the rules of his law, or if the taxpayer
commits any offence, they have the Power to ask for all the documents and evidence of
goods/services if necessary. Suppose the Commissioner has reason to believe that a
taxpayer has committed an offence that is punishable under the CGST Act. In that case, he
may authorize any proper officer to arrest such a person. Provided the detained person
should be informed about grounds of arrest and be produced before the magistrate within
24 hours of his arrest.

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Power to Summon Persons to Give Evidence and Produce Documents
The commission may authorize any GST officer on his behalf to summon any person whose
attendance he considers necessary to give evidence or produce a document or any other
thing in any proceedings or inquiry that such officer is carrying out for any of the purposes
of this Act.

Power to access Business Premises

The GST officer authorized by the Additional/Joint Commissioner of CGST shall have access
to any place of business of a registered taxable person. This Power is given to GST officers to
carry out an audit, scrutiny, and checks to protect revenue interest. So as per this, the GST
officer can inspect books of accounts, computers, documents, computer programs or
software, and other things he may think necessary, available at such places.

Revisional Powers
The Chief Commissioner or Commissioner who may be on Suo-moto or upon information
received by him may call for and examine the record of any proceeding. And if he considers
that any decision or order passed under this Act by any officer subordinate to him is
erroneous may pass an order of inquiry or modify/revise the decision or orders. But before
doing so, an opportunity of being heard will be given to such taxpayers.

Power to Enable Officers to Implement the Law

GST officers have various powers within their hands to implement GST in India properly and
to reduce tax evasion. But these powers are sometimes misused, and considering this, we
can say that absolute power to anyone’s hand corrupts him absolutely.

Power to impose penalty

Under the CGST Act, 2017, if the proper officer believes that the person is liable to a penalty
which is not covered by Section 62, 63, 64, 73, 74, 129, 130 of the Act, the proper office may
issue an order levying penalty on such person after giving him an opportunity of being
heard.

Power to Collect Statistics

The GST officer authorized by the Commissioner may on his behalf collect data if he finds it
necessary for the administration of the Act. The authorized may call upon all the concerned
taxpayers to furnish all the information relating to GST, such as GST returns. The GST officer
authorized by the Commissioner may on his behalf collect data if he finds it necessary for
the administration of the Act. The authorized person may call upon all the concerned
taxpayers to furnish all the information relating to GST, such as GST returns.

General Powers

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Here is the list of some cases under GST that may require the GST officer to exercise their
powers:

Supplies any goods and services without the issue of any invoice
Intentionally declares the description of the supply on the invoice wrongly to evade tax
Issues any invoice or bill without supply of goods and services to claim ITC or refund
Collects any amount as tax but fails to pay the same to the credit of the appropriate
Government beyond a period of 3 months from the date on which such payment becomes
due
Avails or use Input Tax Credit without actual receipt of goods and services either fully or
partially
The above-discussed powers are the critical powers that have been specified under GST Act,
and for the GST officers, there are other general powers as well which are conferred on the
proper officers. However, it is also crucial that the officers should use such powers
judiciously.

Recovery of Tax
Under GST, there are well defined procedures for demand of unpaid tax, which is done via
the issue of Show Cause Notice (SCN) and Order. However, if the due tax amount still
remains unpaid, then the department is authorised to start recovery of tax, meaning
proceedings can be started officially.

When to initiate proceedings for recovery of tax under GST?

As per the provisions of recovery of tax in GST, if the amount payable by a taxable person,
remains unpaid, even after 3 months from the date of issuing the order for demand of tax,
then the recovery of tax under GST will be initiated. However, if the proper officer considers
it urgent in the interest of revenue, he may state reasons recording in writing, and direct the
concerned taxpayer to make payment in a reduced period as well. In any case, if the
demand is not paid in the time specified, then the department will initiate proceedings for
recovery of tax in GST.

What are the modes of recovery of tax under GST?

 Deduction of due amount from the tax amount payable to such person by the
department
 Recovery of tax by way of detaining and selling any goods belonging to such person
 Recovery of tax from another person, from whom money is either due or may
become due to such person

62
  Recovery of tax from another person, who holds or may subsequently hold money
for or on account of such person, to pay to the credit of the Central or a State
Government
 Detention of any movable or immovable property belonging to such person, until the
amount payable is paid. If the dues are not paid within 30 days, the said property is
to be sold and with the proceeds of such sale the amount payable and cost of sale is
to be recovered
 Recovery of tax through the collector of the district, in which such person owns any
property or resides or carries on his business, as if it were an arrear of land revenue.
The proper officer will need to prepare a certificate specifying the amount due from
such person and hand it over to the concerned collector, for this purpose
 Recovery of tax by way of application to the appropriate magistrate, who in turn
shall proceed to recover the amount as if it were a fine imposed by him
 Recovery of tax via enforcing the bond or instrument executed under the Act or any
rules or regulations made under the Act
 Recovery of tax done by the proper officer of the State Government or Union
Territory Government, wherein, any CGST arrears will be recovered as if it were an
SGST / UTGST arrear. Such an amount will be recovered, and then later credited to
the account of the Central Government. In case the amount recovered by this
means, is less than the amount due, then the amount will be apportioned among the
Central Government and State / UT Government in proportion to the amount due to
each authority

Special provisions for recovery of tax under GST

Void transfer of property

As per the GST provisions, the department can seize properties belonging to the defaulter to
recover the due tax amount. Sometimes, in order to avoid such seizures, the taxpayer
transfers the property via sale, mortgage, exchange etc. after the amount has become due –
the intention being to evade paying the tax amount which is due. To handle such a scenario,
the provisions have been laid down, which state that transfer of property will become void,
whenever there is a tax amount due to be paid.

However, the transfer will not be held as void, provided:

 Transfer has been made for an adequate consideration

 Transfer has been made in good faith, i.e. without any intention to cause fraud
 The taxpayer has not received any notice regarding pending tax dues or proceedings
at the time of transfer
 Prior permission of the proper officer has been obtained

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Tax to be the first charge on property
As per the provisions of recovery of tax in GST, any tax amount which is due, including
interest and penalty, will be the first charge on the property of the defaulter, and will
override all laws, except the Insolvency and Bankruptcy Code.

Provisionally attaching property to protect revenue

If at any point in time, the commissioner is of the opinion, that the government revenue is
at stake, then he has the authority to provisionally attach any property of the defaulting
taxpayer. Such a provisional attachment will have a validity of 1 year.

Properties are generally treated as a temporary security for the purpose of provisional
attachment, especially when there is a strong suspicion that the defaulter will abscond. That
is the reason why the provision has been made to include bank accounts also into such
property and include them as part of provisional attachment of property to protect revenue.

Appeal and Revisions

If the taxpayer files for an appeal or revision against the notice of demand received, then
either of the following can occur, as far as the decision is concerned:

Due Amount is Increased – In this case, the commissioner will serve another notice of
demand for the difference amount. The old amount will anyway be covered by the notice
issued earlier.
Due Amount is Decreased – In this case, the commissioner will inform the taxpayer about
the reduction, and also apprise the authority with whom the recovery of tax under GST is
pending. No new notice will be issued in this case.

Cancellation of registration
(1) The proper officer may, either on his own motion or on an application filed,
in the prescribed manner, by the registered taxable person or by his legal
heirs, in case of death of such person, cancel the registration from such date,
including any anterior date, as he may deem fit, having regard to the
circumstances where, -
(a) the business has been discontinued, transferred fully for any reason
including
death of the proprietor, amalgamated with other legal entity, demerged or
otherwise disposed of; or
(b) there is any change in the constitution of the business; or
(c) the taxable person, other than the person registered under sub-section (3)
of section 26, is no longer liable to be registered under Schedule III.

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(2) The proper officer may, in the manner as may be prescribed, cancel the
registration of taxable person from such date, including any anterior date, as
he may deem fit, where, -
(a) the registered taxable person has contravened the provisions of the Act or
the rules made thereunder as may be prescribed; or
(b) the taxable person has not filed the return for a continuous period of six
months;
or
(c) any person who has taken voluntary registration under sub-section (3) of
section 26 has not commenced business operations within six months from the
date of registration.

(3) The proper officer shall not cancel the registration without giving a notice
to show cause and without giving the person a reasonable opportunity of being
heard.

(4) The cancellation of registration under this section shall not affect the
liability of the taxable person to pay tax and other dues under the Act for any
period prior to the date of cancellation whether or not such tax and other dues
are determined before or after the date of cancellation.

(5) The cancellation of registration under the CGST Act/SGST Act shall be
deemed to be a cancellation of registration under the SGST Act/CGST Act.

(6) Every registered taxable person whose registration is cancelled shall pay,
in respect of all goods held in stock on the date of cancellation, an amount
equal to the input tax credit availed of on such goods or the output tax
payable on
Provided that in case of capital goods, the taxable person shall pay an amount
equal to the input tax credit taken on the said capital goods reduced by the
percentage points as may be specified in this behalf.

Revocation of cancellation of registration

1. Subject to such conditions and in such circumstances as may be
prescribed, any registered taxable person, whose registration is cancelled by
the proper officer on his own motion, may apply to such officer for revocation
of cancellation of the registration in the prescribed manner within thirty days
from the date of service of the cancellation order.
2. The proper officer may, by way of an order, to be passed within thirty

65
days, either revoke cancellation of the registration or reject the application for
revocation for good and sufficient reasons after providing the applicant an
opportunity of being heard.
3. Revocation of cancellation of registration under the CGST Act / SGST Act
shall be deemed to be a revocation of cancellation of registration under the
SGST Act / CGST Act.
Suggestions in respect of Schedule III of the report of the Sub Committee-I
In Schedule III, after item (iii) of paragraph 5, the following items may be
added:
(iv) non-resident taxable persons;
(v) persons who are required to deduct tax under section 48;
(vi) persons who supply goods and/or services on behalf of other persons
whether as
an agent or otherwise ; and
(vii) such other person or class of persons as may be notified by the Central
Government or a State Government on the recommendations of the Council.

ACCOUNTS AND RECORDS

Tax invoice
A registered taxable person supplying taxable goods and/or services shall
issue, at the time of the supply, a tax invoice showing the amount of tax which
will form part of the price at which such goods and/or services are supplied
and such other particulars as
may be prescribed:
Provided that a registered taxable person supplying non-taxable goods and/or services or
paying tax under the provisions of section
8 of this Act shall issue,
instead of a tax invoice, a bill of supply containing such particulars as may be
prescribed.
Credit and debit notes
(1) Where a tax invoice has been issued for supply of any goods and/or
services and the taxable value and/or tax charged in that tax invoice is found
to exceed the taxable value and/or tax payable in respect of such supply, the
taxable person, who has supplied such goods and/or services, mayissue to the
recipient a credit note containing such particulars as may be prescribed on or
before the thirtieth day of September following the end of the financial year in
which such supply was made, or the date of filing of the relevant annual
return, whichever is earlier.

66
(2) Where a tax invoice has been issued for supply of any goods and/or
services and the taxable value and/or tax charged in that tax invoice is found
to be less than the taxable value and/or tax payable in respect of such supply,
the taxable person, who has supplied such goods and/or services, shall issue
to the recipient a debit note containing such particulars as may be prescribed
on or before the thirtieth day of November following the end of the financial
year in which such supply was made, or the date of filing of the relevant
annual return, whichever is earlier.
(3) Any registered taxable person who issues or receives a credit or debit note
in relation to a supply of goods and/or services shall declare the details of such
credit or debit note, as the case may be, in the return for the month during
which such credit or debit note has been issued or received or in the return for
any subsequent month but not later than September or November, as the case
may be, following the end of financial year in which such supply was made, or
the date of filing of the relevant annual return, whichever is earlier, and the
tax liability shall be adjusted in the manner specified in this Act.

Accounts and other records

1. Every registered taxable person shall keep and maintain, at his principal
place of business, as mentioned in the certificate of registration, a true and
correct account of production or manufacture of goods, of inward or outward
supply of goods and/or services, of stock of goods, of input tax credit availed,
of output tax payable and paid, and such other particulars as may be
prescribed in this behalf:
Provided that where more than one place of business is specified in the
certificate of registration, the accounts relating to each place of business shall
be kept at such places of business concerned.
2. The [Commissioner/Chief Commissioner] may notify a class of taxable
persons to maintain additional accounts or documents for such purpose as
may be specified.
3. Where the [Commissioner/ Chief Commissioner] considers that any class
of taxable persons is not in a position to keep and maintain accounts in
accordance with the provisions of this section, he may, for reasons to be
recorded in writing, permit such class of taxable persons to maintain accounts
in the manner as may be prescribed.
4. Every registered taxable person whose turnover during a financial year
exceeds the prescribed limit shall get his accounts audited by a chartered
accountant or a cost accountant and shall submit to the proper officer a copy

67
of the audited statement of accounts, the reconciliation statement under subsection (2) of
section 43 and such other documents in the form and manner as
may be prescribed in this behalf.

Period of retention of accounts

1. Every registered taxable person required to keep and maintain books of
account or other records under sub-section (1) of section 32 shall retain them
until the expiry of sixty months from the date of filing of Annual Return for the
year pertaining to such accounts and records:
Provided that a taxable person, who is a party to an appeal [or revision] or
any other proceeding before any Appellate Authority or Tribunal or Court,
whether filed by him or by the department, shall retain the books of account
and other records pertaining to the subject matter of such appeal [or revision]
or proceeding for a period of one year after final disposal of such appeal [or
revision] or proceeding, or for the period specified under sub-section (1),
whichever is later.

ASSESSMENT AND AUDIT

Self-Assessment
Every registered taxable person shall himself assess the taxes payable under
this Act and furnish a return for each tax period as specified under section 36.
Scrutiny of returns
1. The proper officer may scrutinize the return and related particulars
furnished by the taxable person to verify the correctness of the return in such
manner as may be prescribed.
2. The proper officer shall inform the taxable person of the discrepancies
noticed, if any, after such scrutiny in such manner as may be prescribed and
seek his explanation
thereto.
3. In case the explanation is found acceptable, the taxable person shall be
informed accordingly and no further action shall be taken in this regard.
4. In case no explanation is furnished or the explanation furnished is not
found satisfactory or the taxable person fails to take the corrective measure
after accepting the discrepancies, the proper officer may initiate appropriate
action including those under section 54, 55 or section 68, or proceed to
determine the tax and other dues under subsection (6) of section 20A or under
sub-section (6) of section 20B of this Act.

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Assessment of non-filers of returns
1. Where a registered taxable person fails to furnish his periodical or final
return even after issue of a notice to do so, the proper officer may proceed to
assess the tax liability of the said person to the best of his judgement taking
into account all the relevant material which is available or which he has
gathered and issue an assessment order.
2. Where the taxable person furnishes a valid return within thirty days of the
service of the assessment order under sub-section (1), the proper officer may
withdraw the said assessment order.

Assessment of unregistered persons

Where a taxable person fails to obtain registration even though liable to do so,
the proper officer may proceed to assess the tax liability of such taxable
person to the best of his judgement for the relevant tax periods and issue an
assessment order:
Provided that no such assessment order shall be passed without giving a
notice to show cause and without giving the person a reasonable opportunity
of being heard.

Summary assessment in certain special cases

The proper officer may, on any evidence showing a tax liability of a person
coming to his notice, with previous permission of [Additional/Joint
Commissioner], proceed to assess the tax liability of such person to protect
the interest of revenue and issue an assessment order, if he has sufficient
grounds to believe that any delay in doing so will adversely affect the interest
of revenue:
Provided that no such assessment order shall be issued without complying
with the principles of natural justice:
Provided further that where the taxable person to whom the liability pertains is
not ascertainable and such liability pertains to supply of goods, the person in
charge of such goods shall be deemed to be the taxable person liable to be
assessed and pay tax and amount due under this section.

Audit
1. The [Commissioner of CGST/Commissioner of SGST] or any officer
authorised by him, by way of a general or a specific order, may undertake
audit of the business transactions of any taxable person for such period, at
such frequency and in such manner as may be prescribed.
2. The tax authorities referred to in sub-section (1) may conduct audit at the
place of business of the taxable person and/or in their office.

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 3. The taxable person shall be informed, by way of a notice, sufficiently in
advance, not less than fifteen working days, prior to the conduct of audit in
the manner prescribed.
4. The audit under sub-section (1) shall be carried out in a transparent
manner and completed within a period of three months from the date of
commencement of audit:
Provided that where the [Commissioner] is satisfied that audit in respect of
such taxable person cannot be completed within three months from the date
of commencement of audit, he may, upon giving the taxable person an
opportunity of being heard and for the reasons to be recorded in writing,
extend the period for another three months.
Explanation. For the purposes of this sub-section, ‗commencement of audit‘
shall mean the date on which the records and other documents, called for by
the tax authorities, are made available by the taxable person or the actual
institution of audit at the place of business, whichever is earlier.
5. During the course of audit, the authorised officer may require the taxable
person,
(i) to afford him the necessary facility to verify the books of account or other
documents as he may require and which may be available at such place,
(ii) to furnish such information as he may require and render assistance for
timely completion of the audit.
6. On conclusion of audit, the proper officer shall without delay notify the
taxable person, whose records are audited, of the findings, the taxable
person‘s rights and obligations and the reasons for the findings.
7. Where the audit conducted under sub-section (1) results in detection of tax
not paid or short paid or erroneously refunded, or input tax credit erroneously
availed, the proper officer may initiate action under section 20 of the Act.

Special audit
1. If at any stage of scrutiny, enquiry, investigation or any other proceedings
before him, any officer not below the rank of [Deputy/Assistant Commissioner]
having regard to the nature and complexity of the case and the interest of
revenue, is of the opinion that the value has not been correctly declared or the
credit availed is not within the normal limits, he may, with the prior approval
of the [Commissioner], direct such taxable person by notice in writing to get
his records including books of account examined and audited by a chartered
accountant or a cost accountant as may be nominated by the [Commissioner]
in this behalf.
2. The chartered accountant or cost accountant so nominated shall, within the
period of ninety days, submit a report of such audit duly signed and certified
by him to the said [Deputy/Assistant Commissioner] mentioning therein such

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other particulars as may be specified:
Provided that the proper officer may, on an application made to him in this
behalf by the taxable person or the chartered accountant or cost accountant or
for any material and sufficient reason, extend the said period by another
ninety days.
3. The provision of sub-section (1) shall have effect notwithstanding that the
accounts of the taxable person have been audited under any other provision of
this Act or any other law for the time being in force or otherwise.
4. The taxable person shall be given an opportunity of being heard in respect
of any material gathered on the basis of audit under sub-section (1) which is
proposed to be used in any proceedings under this Act or rules made there
under.
5. The expenses of, and incidental to, the examination and audit of records
under sub-section (1), including the remuneration of such chartered
accountant or cost accountant, shall be determined and paid by the
[Commissioner] and that such determination shall be final.

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