Aggregate Turnover in GST

1.   Turnover, in common parlance, is the total volume of a business. The term ‘aggregate turnover’ has been defined in GST law as under:

“Aggregate turnover” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess.

 

2.   The aggregate turnover is a crucial parameter for deciding the eligibility of a supplier to avail the benefit of exemption threshold of Rs. 20 Lakhs [Rs. 10 Lakhs in case of special category States except J & K] and for determining the threshold limit for composition levy. Let us dissect the definition in small parts to understand the meaning clearly. There are certain terms used in the definition which need a bit of elaboration.                              

 

3.   It may be noted that the inward supplies on which the recipient is required to pay tax under Reverse Charge Mechanism (RCM) does not form part of the ‘aggregate turnover’. The law stipulates certain supplies like, Goods Transport Agency services, services received from outside India, to name a few, where the recipient of service is made to pay the tax. The value of such supplies on which tax is paid, would not form part of the ‘aggregate turnover’ of recipient of such supplies. However, the value of such supplies would continue to be part of the ‘aggregate turnover’ of the supplier of such supplies.

 

4.   The second element of value which would not be included in the ‘aggregate turnover’ is the element of central tax, state tax, union territory tax and integrated tax and compensation cess.

 

5.   The value of exported goods/services, exempted goods/ services, inter-state supplies between distinct persons having same PAN would be added to ‘aggregate turnover’.                                                       

6.   Last but not the least, such turnover is to be calculated by taking together the value in respect of the activities carried out on all-India basis.

 

7.     The aggregate turnover is different from turnover in a State. The former is used for determining the threshold limit for registration as well as eligibility for Composition Scheme. However, the composition levy would be calculated on the basis of turnover in the State.

Advance Ruling Mechanism in GST

Advance Ruling Mechanism in GST

Introduction

An advance ruling helps the applicant in planning his activities which are liable for payment of GST, well in advance. It also brings certainty in determining the tax liability, as the ruling given by the Authority for Advance Ruling is binding on the applicant as well as Government authorities. Further, it helps in avoiding long drawn and expensive litigation at a later date. Seeking an advance ruling is inexpensive and the procedure is simple and expeditious. It thus provides certainty and transparency to a taxpayer with respect to an issue which may potentially cause a dispute with the tax administration. A legally constituted body called Authority for Advance Ruling (AAR) can give a binding ruling to an applicant who is a registered taxable person or is liable to be registered. The advance ruling given by the Authority can be appealed before an Appellate authority for Advance Ruling (AAAR). There are time lines prescribed for passing an order by AAR and by AAAR.

Objectives of Advance Ruling

The broad objectives for setting up a mechanism of Advance Ruling are:

Provide certainty in tax liability in advance in relation to an activity proposed to be undertaken by the applicant;

Attract Foreign Direct Investment (FDI)

Reduce litigation

Pronounce ruling expeditiously in a transparent and inexpensive manner                                                                                               

What is an Advance Ruling?

“Advance ruling” means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100 of the CGST Act, 2017, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant.

The definition of Advance ruling given under the Act is a broad one and an improvement over the existing systems of advance rulings under Customs and Central Excise Laws. Under the present dispensation, advance rulings can be given only on a proposed transaction, whereas under GST, Advance ruling can be obtained on a proposed transaction as well as a transaction already undertaken by the appellant.

What are the matters/questions specified in Section 97(2) & Section 100(1) of the CGST Act, 2017

Classification of any goods or services or both

Applicability of a notification issued under the provisions of CGST Act

Determination of time and value of supply of goods or services or both

Admissibility of input tax credit of tax paid or deemed to have been paid

Determination of the liability to pay tax on any goods or services or both

Whether applicant is required to be registered                                                   

Whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term.

Section 100(1) of the CGST Act, 2017 provides that the concerned officer, the jurisdictional officer or an applicant aggrieved by any advance ruling pronounced by the Authority for Advance Ruling, may appeal to the Appellate Authority.

Thus it can be seen that a decision of the Appellate authority is also treated as an advance ruling.

‘Authority for advance ruling’ (AAR) and ‘Appellate authority for advance ruling’ (AAAR)

The Authority for advance ruling constituted under the provisions of State Goods and Services Tax Act or Union Territory Goods and Services Tax Act shall be deemed to be the Authority for advance ruling in respect of that State or

Union territory under the CGST Act, 2017 also.

The Appellate Authority for Advance Ruling constituted under the provisions of a State Goods and Services Tax Act or a Union Territory Goods and Services Tax Act shall be deemed to be the Appellate Authority in respect of that

State or Union territory under the CGST Act, 2017 also.

Thus it can be seen that both the Authority for Advance Ruling (AAR) & the Appellate Authority for Advance Ruling (AAAR) is constituted under the respective State/Union Territory Act and not the Central Act. This would mean that the ruling given by the AAR & AAAR will be applicable only within the jurisdiction of the concerned state or union territory. It is also for this reason that questions on determination of place of supply cannot be raised with the AAR or AAAR.

To whom the Advance Ruling is applicable

An advance ruling pronounced by AAR or AAAR shall be binding only on the applicant and on the concerned officer                                

or the jurisdictional officer in respect of the applicant. This clearly means that an advance ruling is not applicable to similarly placed other taxable persons in the State. It is only limited to the person who has applied for an advance ruling.

Time period for applicability of Advance Ruling

The law does not provide for a fixed time period for which the ruling shall apply. Instead, it has been provided that advance ruling shall be binding till the period when the law, facts or circumstances supporting the original advance ruling have not changed.

However, an advance ruling shall be held to be ab initio void if the AAR or AAAR finds that the advance ruling was obtained by the applicant by fraud or suppression of material facts or misrepresentation of facts. In such a situation, all the provisions of the CGST/SGST Act shall apply to the applicant as if such advance ruling had never been made (but excluding the period when advance ruling was given and up to the period when the order declaring it to be void is issued). An order declaring advance ruling to be void can be passed only after hearing the applicant.

Procedure for obtaining Advance Ruling

The applicant desirous of obtaining advance ruling should make application to AAR in a prescribed form and manner. The format of the form and the detailed procedure for making application have been prescribed in the Advance Ruling Rules.

Upon receipt of an application, the AAR shall send a copy of application to the officer in whose jurisdiction the applicant falls and call for all relevant records. The AAR may then examine the application along with the records and may also hear the applicant. Thereafter he will pass an order either admitting or rejecting the application.

Application for advance ruling will not be admitted in cases where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of this Act.

If the application is rejected, it should be by way of a speaking order giving the reasons for rejection.

If the application is admitted, the AAR shall pronounce its ruling within ninety days of receipt of application. Before giving its ruling, it shall examine the application and any further material furnished by the applicant or by the concerned departmental officer.

Before giving the ruling, AAR must hear the applicant or his authorised representative as well as the jurisdictional officers of CGST/SGST.

If there is a difference of opinion between the two members of AAR, they shall refer the point or points on which they differ to the AAAR for hearing the issue. If the members of

AAAR are also unable to come to a common conclusion in regard to the point(s) referred to them by AAR, then it shall be deemed that no advance ruling can be given in respect of the question on which difference persists at the level of AAAR.

Appeals against order of AAR

If the applicant is aggrieved with the finding of the AAR, he can file an appeal with AAAR. Similarly, if the prescribed or jurisdictional officer of CGST/SGST does not agree with the finding of AAR, he can also file an appeal with AAAR. The word prescribed officer of CGST/SGST means an officer who has been designated by the CGST/SGST administration in regard to an application for advance ruling. In normal circumstances, the concerned officer will be the officer in whose jurisdiction the applicant is located. In such cases the concerned officer will be the jurisdictional CGST/SGST officer.

Any appeal must be filed within thirty days from the receipt of the advance ruling. The appeal has to be in prescribed form and has to be verified in prescribed manner. The format has been prescribed in the Advance Ruling Rules.

The Appellate Authority must pass an order after hearing the parties to the appeal within a period of ninety days of the filing of an appeal. If members of AAAR differ on any point referred to in appeal, it shall be deemed that no advance ruling is issued in respect of the question under appeal.                                                                 

Rectification of Mistakes

The law gives power to AAR and AAAR to amend their order to rectify any mistake apparent from the record within a period of six months from the date of the order. Such mistake may be noticed by the authority on its own accord or may be brought to its notice by the applicant or the prescribed or the jurisdictional CGST/SGST officer. If a rectification has the effect of enhancing the tax liability or reducing the quantum of input tax credit, the applicant must be heard before the order is passed.

Powers and procedure of AAR and AAAR

Both the AAR and AAAR are vested with the powers of a civil court under Code of Civil Procedure, 1908, for discovery and inspection, enforcing the attendance of a person and examining him on oath, and compelling production of books of account and other records. Both the authorities are deemed to be a civil court for the purposes of section 195 of the Code of Criminal Procedure, 1973. Any proceeding before the authority shall be deemed to be judicial proceeding under section 193 and 228 and for the purpose of section 196, of the Indian Penal Code, 1860.

The AAR and AAAR also have the power to regulate their own procedure.

Conclusion

To conclude, it can be stated that the law makes a comprehensive provision for advance rulings to ensure that disputes are minimal. Timelines are also given within which the ruling is to be given by the concerned authority. The aim is to provide certainty to the tax payer with respect to his obligations under the GST Act and an expeditious ruling, so that the relationship between the tax payer and administration is smooth and transparent and helps to avoid unnecessary litigation.

FILING OF GSTR-1,2 RETURN FOR JULY, 2017

Following are important points to be remembered in regards to filing of Form GSTR-1

I.   Timelines

The regular Returns filing (GSTR-1, GSTR-2, and GSTR-3) deadline relaxed for July/August 2017. The Time period for filing returns (GSTR-1, GSTR-2, and GSTR-3) is given below.

Forms	For July 2017	August 2017	Sept., 2017	Oct., 2017	Nov., 2017	Dec., 2017
GSTR-1	10th October, 2017	GSTR-3B	GSTR-3B	GSTR-3B	GSTR-3B	GSTR-3B
GSTR-2	31st October, 2017	20th Sept.,2017	20th Oct.,2017	20th Nov.,2017	20th Dec.,2017	20th Jan.,2017
GSTR-3	10th November, 17

 Please note that

a.      Supplier Tax Payer will not be able to Upload Invoices or Submit Form GSTR1, for the month of July, 2017, during the period of filing of Form GSTR-2 of July, 2017, viz. 10^th to 31st October, 2017. 

b.     Therefore it is necessary that supplier taxpayers files his Form GSTR 1 for the month of July, 2017, using EVC or DSC (mandatory for companies, LLPs and FLLPs etc.), to avoid late fees payment by 10^th October, 2017.

c.      If supplier taxpayer does not submits his Form GSTR 1 of July , by 10^th October, 2017 and if these invoices are uploaded/added by his receiver tax payer in his Form GSTR 2,  then 

i.             Supplier taxpayer will be required to necessarily take action on (Accept or Reject), the invoices uploaded by Receiver taxpayer. 

ii.            Supplier will not be able to Edit or Modify Receiver taxpayer uploaded invoices. 

iii.          Further the same invoices uploaded, but not filed by the supplier taxpayer in his Form GSTR 1, will be marked as invalid.

II. Who should file Form GSTR- 1

1.      GSTR-1 to be filed mandatorily by all normal and casual registered tax payers.

2.     GSTR 1 needs to be filed even if there is no business activity (Nil Return) during a given tax period.

III. Who should not file Form GSTR -1?   

1.      Taxpayer  opted for Composition scheme

2.     Input Service Distributor (ISD)

3.      Non-Resident taxable person

4.     Tax Deductor at Source

5.      Tax Collector at Source

6.     Taxpayer Covered under Online Information and Database Access or Retrieval (OIDAR)

 

IV.           Pre-conditions for filing of Form GSTR 1

1.      The receiver taxpayer should be a Registered Normal Dealer and should have an active GSTIN.

2.     Supplier taxpayer should have valid login credentials (i.e., User ID and password).

3.      Supplier taxpayer should have valid and non-expired/unrevoked digital signature certificate (DSC)( in case of  companies, LLPs and FLLPs etc.) or EVC ( for remaining Taxpayers)

 V. Steps in filing Form GSTR 1  

1.      Login>GST portal > Services > Returns > Returns Dashboard

2.     Select the financial year and tax period for which GSTR 1 needs to be filed and click SEARCH

3.      Select GSTR 1 tile and click on PREPARE ONLINE or PREPARE OFFLINE

4.     Fill in the data in respective section 

5.      Generate summary of GSTR 1 

6.     Click submit to validate data. No changes can be made in Form GSTR 1 once data is submitted

7.      File GSTR 1 using DSC ( in case of  companies, LLPs and FLLPs etc.) or EVC

8.     An Application Reference Number (ARN) is generated and SMS and mail is sent to the Taxpayer 

VI.      Methods of filing Form GSTR 1:  The Form GSTR-1 can be filed by any of the following methods:

a)    Upload of invoices online: If the taxpayer has limited number of entries, he can directly enter the details on the GST portal. He needs to log in to the GST portal using his user ID and password and navigate to the return dashboard page where he can click on prepare online tab available on GSTR 1 tile to prepare his return online.  

b)    Preparation of Form GSTR 1 using Off-line tool :  Excel based offline tool is also provided at https://www.gst.gov.in/download/returns . This can be downloaded and installed on the taxpayer’s computer to prepare the return in an offline mode using excel without connecting to internet.  The benefits and main features of offline tool (mentioned above) are:

§  Can fill in invoices data up to 19, 000 line items using excel utility in offline mode.

§  Using offline tool, taxpayer can upload their invoices in Form GSTR 1, more than once, at any time during the day/week/month. 

§  The invoices uploaded in Form GSTR 1 by supplier will be auto populated in GSTR 2A of the receiver and will be available for view to the receiver.

§  Where invoices are more than 500, it will not be available for viewing online to the tax payers. However, they can download it using offline tool and later on upload after edit.  

c)     Filing of Form GSTR 1 Through GSPs: Taxpayers having very large number of invoices can directly furnish details of Form GSTR 1 to GST System using their accounting applications if they use the services of the GST Suvidha Providers to connect to the GST system through a secured MPLS network connectivity.   

VII.          Salient Features of Form GSTR-1 :

1.      Supplier taxpayers (Normal and Casual) are required to file GSTR 1 return (Statement of outward Supplies) on a monthly basis  

2.     Information to be uploaded in GSTR-1 statement can be broadly divided in two groups. 

a.      Group I:  The B2B Invoice Details of Supplies to registered person,B2Cl Invoice details of Interstate Supplies with invoice value more than Rs 2.5 lacs per invoice, exports details, credit debit notes related to B2B,B2Cl and Export invoices for which invoice wise details are to be provided and amendment of earlier furnished invoices and credit/debit notes

b.     Group II: Group summary information for whole month is to be reported for B2Cs details of  supplies to consumers within the state and inter-state supplies  of value less than Rs. 2.5 lacs per invoice, details of advances received and adjusted, NIL rated, Exempt and nontaxable supplies, details of documents like invoice, challans etc.  Issued during the month and amendments of above information having impact on tax liabilities.

. VIII.        Late fees for not filing GSTR 1 by the due Date (as per CGST Act) : Late fees of Rs 100/- for every day during which such failure continues subject to maximum of Rs 5000/- , (fees as per SGST Act will be charged separately as per respective SGST Act).

IX.            So please don’t wait till the last date to act for accept/reject/modify or keep pending of invoices received from Suppliers who have filed GSTR 1. You can accept/reject/modify or keep pending  invoices during  11^th September to 25^th September  2017  on   daily or weekly  basis at your convenience. There is a Help Section on GST Common Portal for any further assistance or click on the link https://www.gst.gov.in/help/helpmodules/ .  

 For assistance please contact us at Email helpdesk@gst.gov.in or Call at Helpdesk on 01204888999