GST Tax Solution - Bardoli

11/06/2023

22/03/2023

Jay Bhavsar
AMFI Registered Mutual fund distributor (ARN-206626)
Mob: 9429265140 / 9499608077

12/10/2022

Advantages of GST
GST eliminates the cascading effect of tax
GST is a comprehensive indirect tax that was designed to bring indirect taxation under one umbrella. More importantly, it is going to eliminate the cascading effect of tax that was evident earlier.

Cascading tax effect can be best described as ‘Tax on Tax’. Let us take this example to understand what is Tax on Tax:

Before GST regime

A consultant offering services for say, Rs 50,000 and charged a service tax of 15%
(Rs 50,000 * 15% = Rs 7,500).

Then say, he would buy office supplies for Rs. 20,000 paying 5% as VAT
(Rs 20,000 *5% = Rs 1,000).

He had to pay Rs 7,500 output service tax without getting any deduction of Rs 1,000 VAT already paid on stationery.

His total outflow is Rs 8,500.

Under GST

GST on service of Rs 50,000 @18% 9,000
Less: GST on office supplies (Rs 20,000*5%) 1,000
Net GST to pay 8,000
Higher threshold for registration
Earlier, in the VAT structure, any business with a turnover of more than Rs 5 lakh (in most states) was liable to pay VAT. Please note that this limit differed state-wise. Also, service tax was exempted for service providers with a turnover of less than Rs 10 lakh.

Under GST regime, however, this threshold has been increased to Rs 40 lakh, which exempts many small traders and service providers.

Composition scheme for small businesses
Under GST, small businesses (with a turnover of Rs 20 to 75 lakh) can benefit as it gives an option to lower taxes by utilizing the Composition scheme. This move has brought down the tax and compliance burden on many small businesses.

Simple and easy online procedure
The entire process of GST (from registration to filing returns) is made online, and it is super simple. This has been beneficial for start-ups especially, as they do not have to run from pillar to post to get different registrations such as VAT, excise, and service tax.

The number of compliances is lesser
Earlier, there was VAT and service tax, each of which had its own returns and compliances.
Under GST, however, there is just one, unified return to be filed. Therefore, the number of returns to be filed has come down. There are about 11 returns under GST, out of which 4 are basic returns that apply to all taxable persons under GST. The main GSTR-1 is manually populated and GSTR-2 and GSTR-3 will be auto-populated.

Defined treatment for E-commerce operators
Earlier to the GST regime, supplying goods through the e-commerce sector was not defined. It had variable VAT laws. Let us look at this example:

Online websites (like Flipkart and Amazon) delivering to Uttar Pradesh had to file a VAT declaration and mention the registration number of the delivery truck. Tax authorities could sometimes seize goods if the documents were not produced.

Again, these e-commerce brands were treated as facilitators or mediators by states like Kerala, Rajasthan, and West Bengal which did not require them to register for VAT.

All these differential treatments and confusing compliances have been removed under GST. For the first time, GST has clearly mapped out the provisions applicable to the e-commerce sector and since these are applicable all over India, there should be no complication regarding the inter-state movement of goods anymore.

Unorganized sector is regulated under GST
In the pre-GST era, it was often seen that certain industries in India like construction and textile were largely unregulated and unorganized.

Under GST, however, there are provisions for online compliances and payments, and for availing of input credit only when the supplier has accepted the amount. This has brought in accountability and regulation to these industries.

Jay Bhavsar
Accountant & Tax Consultant
Mob: 9429265140

25/08/2022

Reverse Charge Mechanism Get link Facebook Twitter Pinterest Email Other Apps - July 01, 2022  Let us first understand the concept of reverse charge mechanism:Generally, the supplier of goods or services is liable to pay GST. However, under the reverse charge mechanism, the liability to pay GST is ...

01/07/2022

Reverse Charge Mechanism

Let us first understand the concept of reverse charge mechanism:

Generally, the supplier of goods or services is liable to pay GST. However, under the reverse charge mechanism, the liability to pay GST is cast on the recipient of the goods or services.
Reverse charge means the liability to pay tax is on the recipient of supply of goods or services instead of the supplier of such goods or services in respect of notified categories of supply [Section 2(98)].

There are two types of reverse charge scenarios provided in law.
(i) First scenario occurs in case of supply of specified categories of goods or services, covered by section 9(3) of the CGST/ SGST (UTGST) Act. Similar provisions are contained under section 5(3) of the IGST Act.
(ii) Second scenario occurs in case of supply of specified categories of goods or services made by an unregistered supplier to specified class of registered recipients, covered by section 9(4) of the CGST Act. Similar provisions are contained under section 5(4) of the IGST Act. Goods and services notified under this case have been discussed subsequently in this chapter.

Goods and services notified under reverse charge mechanism under section 9(3) of the CGST Act/ section 5(3) of the IGST Act are as follows:
A. Supplies of goods taxable under reverse charge, i.e. supply of the goods where tax is payable by the recipient:
Goods like cashew nuts, bidi wrapper leaves, to***co leaves and raw cotton (when supplied by an agriculturist to any registered person), supply of lottery (when supplied by State Government, Union Territory or any local authority to lottery distributor or selling agent), silk yarn (when supplied by manufacturer of silk yarn to any registered person), used vehicles, seized and confiscated goods, old and used goods, waste and scrap (when supplied by Central Government, State Government, Union Territory or any local authority to any registered person), etc. are taxable under reverse charge.

B. Supply of services taxable under reverse charge under section 9(3) of the CGST Act, i.e. the services where tax is payable by the recipient: Notification No. 13/2017 CT (R) dated 28.06.2017 as amended has notified the following categories of supply of services wherein whole of the tax shall be paid on reverse charge basis by the recipient of services:

https://theindiataxinfo.blogspot.com/2022/07/let-us-first-understand-concept-of.html

Reverse Charge Mechanism Get link Facebook Twitter Pinterest Email Other Apps - July 01, 2022  Let us first understand the concept of reverse charge mechanism:Generally, the supplier of goods or services is liable to pay GST. However, under the reverse charge mechanism, the liability to pay GST is ...

30/06/2022

ખાસ અગત્યનું ઈન્ક્મટેક્સ રીટર્ન માટે

વર્તમાન સમયની પરિસ્થિતી જોતા ઈન્ક્મટેક્સ રીટર્ન ભરવા ખુબ જ જરૂરી છે. ટૂંકા સમયમાં ઈન્ક્મટેક્સ રીટર્ન એક જરૂરિયાત બની જશે.
2021-22 ના Income tax Retuurn ભરવા નુ ચાલુ છે.

ઈન્ક્મટેક્સ રીટર્નના ફાયદા

📌 લોન લેવા માટે પ્રાથમિક આવશ્યકતા (છેલ્લા 3 વરસના ફરજીયાત જરૂરી).
📌 ઉંચા વ્યાજની લોન ચાલુ હોય તો સસ્તા દરે લોન ટ્રાન્સફર કરવા માટે જરૂરી.
📌 કપાયેલ TDS પરત મેળવવા માટે.
📌 મોટો જીવન વીમો કે ટર્મ પ્લાન લેવા માટે.
📌 ક્રેડિટ કાર્ડ લેવા માટે.
📌 જમીન, મકાન, દુકાન, અન્ય મિલકત લેવા માટે.
📌 આવક નું પ્રુફ ગણાવી શકાય.
📌 વિઝા મેળવવા માટે.
📌 મૂડી વધારવા માટે.
📌 મોટા વ્યવહારો માટે.

આ સિવાય નીચે મુજબ ની સર્વિસ માટે પણ અમારો કોન્ટેક્ટ કરી શકો છો.
🗒️દરેક પ્રકારના બિઝનેસ એકાઉન્ટિંગ,
🗒️દરેક પ્રકારના બિઝનેસનું GST રજીસ્ટ્રેશન.
🗒️દરેક પ્રકારના બિઝનેસ સર્ટીફીકેટ.

◼️જીએસટી રજીસ્ટ્રેશન અને રિટર્ન
◼️ ઇન્કમટેક્સ રિટર્ન
◼️ ટીડીએસ રિટર્ન
◼️ ઉદ્યોગ આધાર/ઉદ્યમ રજીસ્ટ્રેશન
◼️ ઇમ્પોર્ટ એક્સપોર્ટ સર્ટીફીકેટ
◼️MSME લોન, od cc,

તો આજે સંપર્ક કરો અને લાભ મેળવો.
Jay Bhavsar 94292 65140
9499608077

25/06/2022

Interstate supply [Section 7 of the IGST Act]

This section provides as to when the supplies of goods and/or services shall be treated as Supply in the course of inter-State trade/commerce.

Inter-state supplies:
a) Supply of goods/ services when location of the supplier and the place of supply are in two different States / UTs

b) Supply of goods/ services imported into the territory of India

c) Supplier located in India and the place of supply is outside India

d) Supply to/by an SEZ developer or SEZ unit; or

e) Supply in the taxable territory, not being an intra-State supply & not specified anywhere

[A]'SUPPLY OF GOODS' in the course of interstate trade/commerce (section 7(1) and (2) of the IGST Act)

it primarily covers two kinds of supplies:
(i) Supplies within india

Supply of goods shall be considered as supply of goods in the course of inter-state trade or commerce in the following cases:
1. Location of supplier and Place of supply is from two different states
2. Location of supplier and Place of supply is from two difference union territories
3. Location of supplier and Place of supply is from a state and a union territory.

(ii) Supplies from outside India

Supply of goods imported into the territory of India, till they cross the customs frontiers of India, shall be considered as supply of goods in the course of inter-State trade or commerce.

[B] ‘SUPPLY OF SERVICES’ in the course of inter-State trade/commerce (Section 7(3) and 7(4) of the IGST Act)
It primarily covers two kinds of supplies:

(i) Supplies within India

Supply of goods shall be considered as supply of goods in the course of inter-state trade or commerce in the following cases:
1. Location of supplier and Place of supply is from two different states
2. Location of supplier and Place of supply is from two difference union territories
3. Location of supplier and Place of supply is from a state and a union territory.

(ii) Import of services into India
Supply of services which are imported into territory of India, shall be treated as supply of services in the course of inter-State trade or commerce. The term ‘import of services’ has been defined under section 2(11) of the IGST Act as supply of any service where the supplier is located outside India, the recipient is located in India, and the place of supply of service is in India.

[C] SUPPLY OF GOODS OR SERVICES OR BOTH in the course of inter- State trade or commerce [Section 7(5) of the IGST Act]
I. Supply of goods or services or both when the supplier is located in India and the place of supply is outside India

It is important to note that in this case, location of recipient is not material to qualify as supply in the course of inter-State trade or commerce. However, such supplies of goods and/or services need to satisfy some more conditions to qualify as export of goods and/or services

II. Supply of goods or services or both to or by a Special Economic Zone developer/ Special Economic Zone unit

SEZ is a geographically bound zone within India where the economic laws relating to export and import are more liberal as compared to other parts of the country. For all tax purposes, SEZ is considered to be a place outside India. Any supplies made to SEZ unit/developer or vice versa are inter-State supplies. It is noteworthy that place of supply is not relevant in case of supplies to/from an SEZ unit or developer.
Further, supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit are zero-rated supplies [Section 16 of the IGST Act]

Jay Bhavsar (Accountant and Tax consultant)
Mob: 94292 65140

07/04/2022

28/03/2022

In relation to a Transfer, includes:

i) Sale, exchange or relinquishment of a capital asset; or

ii) Extinguishment of any rights therein; or

iii) Compulsory acquisition of a capital asset under any law; or

iv) Conversion or treatment of a capital asset into/as stock-in-trade; or

v) The maturity or redemption of a zero coupon bond; or

vi) Any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in Sec. 53A of the Transfer of Property Act, 1882; or

vii) Any transaction whether by way of acquiring shares in or by way of becoming a member of a co-operative society, company or other association of persons or by way of any agreement or arrangement or in any other manner which has the effect of transferring, or enabling the enjoyment of any immovable property.

The expression “transfer” includes disposing of or parting with an asset or any interest therein, or creating any interest in any asset in any manner whatsoever, directly or indirectly, absolutely or conditionally, voluntarily or involuntarily, by way of an agreement (whether entered into in India or outside India) or otherwise, notwithstanding that such transfer of rights has been characterized as being effected or dependent upon or flowing from the transfer of a share or shares of a company registered or incorporated outside India – Explanation 2 to Sec. 2(47) .
Relinquishment: Relinquishment means withdrawn from, abandoning or giving up anything. Where an assessee gives up the right to claim specific performance for purchase of immovable property, it is relinquishment of a capital-asset.
Extinguishment of any rights in an asset: It means total destruction, annihilation, termination or extinction of a capital asset. It refers to extinguishment of rights on account of transfer.

https://youtu.be/u7Md-1bfDIk

10/03/2022

Speculation Business
Explanation 2 to section 28 specifically provides that where an assessee carries on speculative business, that business of the assessee must be deemed as distinct and separate from any other business.

This becomes necessary because section 73 provides that losses in speculation business unlike other business, cannot be set-off against the profits of any business other than a speculation business.

Profits and losses resulting from speculative transaction must be treated as separate and distinct from profits and gains of business and profession from any other business.

(1) Meaning of Speculative Transaction

“Speculative transaction” means a transaction in which a contract for the purchase or sales of any commodity including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips [Section 43(5)].
Where any part of the business of a company consists in the purchase and sale of the shares of other companies, such a company shall be deemed to be carrying on speculation business to the extent to which the business consists of the purchase and sale of such shares.
However, this deem provision does not apply to the following companies –

(i) A company whose gross total income consists of mainly income chargeable under the heads “Interest on securities”, “Income from house property”, “Capital gains” and “Income from other sources”;
(ii) A company whose principal business is –
(a) the business of trading in shares; or
(b) the business of banking; or
(c) the granting of loans and advances (Finance business).

Accordingly, if these companies as mentioned above carry on the business of purchase and sale of shares of other companies, they would not be deemed to be carrying on speculation business. [Explanation to section 73]

(2) Transaction not deemed to be speculative transaction
(i) Hedging contract in respect of raw materials or merchandise:
(ii) Hedging contract in respect of stocks and shares
(iii) Forward contract
(iv) Trading in derivatives
(v) Trading in commodity derivatives





https://theindiataxinfo.blogspot.com

Speculation Business Get link Facebook Twitter Pinterest Email Other Apps - March 10, 2022 Explanation 2 to section 28 specifically provides that where an assessee carries on speculative business, that business of the assessee must be deemed as distinct and separate from any other business.This beco...

03/03/2022

GST Composition scheme - Features, Eligibility and Registration Process

GST composition scheme was implemented under the respective State VAT Laws with conditions applied on eligibility for the scheme accordingly. GST composition scheme assures greater compliance without the requirement of maintaining records.

Composition Scheme is a simple and easy scheme under GST for taxpayers. Small taxpayers can get rid of tedious GST formalities and pay GST at a fixed rate of turnover. This scheme can be opted by any taxpayer whose turnover is less than Rs. 1.5 crore*.

*CBIC has notified the increase to the threshold limit from Rs 1 Crore to Rs. 1.5 Crores.

For more details visit at:

https://theindiataxinfo.blogspot.com/2022/03/gst-composition-scheme-features.html

GST Composition scheme - Features, Eligibility and Registration Process March 03, 2022 GST composition scheme was implemented under the respective State VAT Laws with conditions applied on eligibility for the scheme accordingly. GST composition scheme assures greater compliance without the requireme...