GOODS AND SERVICES TAX

GST:

 The goods and services tax (GST) is a value-added tax (VAT) levied on most goods and
services sold for domestic consumption. The GST is paid by consumers, but it is remitted
to the government by the businesses selling the goods and services.
 The goods and services tax (GST) is a tax on goods and services sold domestically for
consumption.
 The tax is included in the final price and paid by consumers at point of sale and passed to
the government by the seller.
 The GST is usually taxed as a single rate across a nation.
 Governments prefer GST as it simplifies the taxation system and reduces tax avoidance.

Objectives of GST:

Bring uniformity in taxes

One of the primary objectives of GST is to have a uniform tax code for a product or service
across the country. It also simplifies tax administration, billing, invoicing and compliance
laws. It facilitates the development of uniform tax law while removing cumbersome and
time-consuming tax filing processes. This system helps track and monitor GST collections,
returns and disputes through a single digital platform.

Remove multiple indirect taxes

Prior to implementing GST, Central and state governments could levy taxes at multiple stages
of production, supply and purchase. GST combines these indirect taxes into one. This eases
tax compliance protocols for businesses who pay and file tax reports, and helps the
government simplify and streamline the tax administration process.

Prevent tax evasion and fraud

GST is a digitised process and a taxpayer can claim an input tax credit only if a supplier
uploads a corresponding invoice. This minimises the scope of false tax credit claims using
fake invoices. GST has a stringent surveillance system, allowing authorities to identify and
initiate action against defaulters and fraudsters.

Regulate the unorganised sector of the economy

GST aims to bring more businesses both from organised and unorganised sectors into the tax
base. Strict implementation of GST laws regarding compliance and input credit have been
instrumental in making businesses come forward and register their operations with the
government. A wider tax base increases the tax that a government can collect every cycle and
facilitates a higher tax to GDP ratio. Increased GST collection can also help central and state
governments invest in infrastructure and crucial development plans.

Simplify tax filing processes

GST aims to simplify processes and procedures for taxpayers by using a digital platform.
Individuals can register businesses, generate bills, file tax returns and claim refunds online. A
centralised and digitised GST portal enhances ease of use for businesses and individuals
alike.

Optimise supply chains

Prior to the government implementing GST, traders and manufacturers required a lengthy
documentation process for the supply of goods. An important outcome of GST is that it
removes check posts on state borders that cause traffic jams and delays in transport of goods.
Removing check posts reduces transit time for goods to reach their destination and reduces
warehousing and storage costs.

Simplify the Tax Structure

GST aims to simplify the complex indirect tax structure by replacing multiple taxes with a
single tax, reducing compliance costs, and making tax administration more efficient.

Create a Common Market

GST creates a common national market by eliminating barriers to inter-state trade, enabling a
seamless flow of goods and services across state borders.

Promote Economic Growth GST is expected to reduce the tax burden on businesses,
encourage entrepreneurship, and increase investment in the country, thereby promoting
economic growth.

Improve Tax Compliance

GST is expected to reduce tax evasion by creating a comprehensive and transparent tax
system and promoting greater tax compliance among businesses and individuals.
Types of GST Or Components of GST

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.

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.

UTGT

The Union Territory Goods and Services Tax or UTGST is the counterpart of State Goods and
Services Tax (SGST) which is levied on the supply of goods and/or services in the Union
Territories (UTs) of India.

The UTGST is applicable on the supply of goods and/or services in Andaman and Nicobar
Islands, Chandigarh, Daman Diu, Dadra, and Nagar Haveli, and Lakshadweep. The UTGST
is governed by the UTGST Act. The revenue earned from UTGST is collected by the Union
Territory government. The UTGST is a replacement for the SGST in Union Territories. Thus,
the UTGST will be levied in addition to the CGST in Union Territories.

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.
Exception of GST
GST exemptions are specific goods or services that are exempt from the application of GST.
In other words, there are certain goods and services that are not covered under the ambit of
GST Act. These exemptions change from time to time and vary from country to country.

List of exempted goods under GST in India:

Food
Cereals, edible fruits and vegetables (not frozen or processed), edible roots and tubers, fish
and meat (not packaged or processed), tender coconut, jaggery, tea leaves (not processed),
coffee beans (not roasted), seeds, ginger, turmeric, betel leaves, papad, flour, curd, lassi,
buttermilk, milk, and aquatic feeds, and supplements.

Raw materials
Raw silk, silk waste, wool (not processed), khadi fabric, cotton used for khadi yarn, raw jute
fiber, firewood, charcoal, and handloom fabrics.

Tools/Instruments
Hearing aids, hand tools (such as spades and shovels), tools used for agricultural purposes,
handmade musical instruments, and aids and implements used by physically challenged
people.

Miscellaneous
Books, maps, newspapers, journals, non-judicial stamps, postal items, live animals (except
horses), beehives, human blood, semen, bangles, chalk sticks, contraceptives, earthen pots,
props used in pooja (including idols, bindi, kumkum), kites, organic manure, and vaccines.

Petroleum Product

Petrol and diesel, so far, are not subsumed under GST (Goods and Services Tax). Currently,
fuels like petrol, diesel, natural gas, and ATF are covered under Vat (Value-Added Tax),
central excise duty, and central sales tax. Every state has a different rate of petrol and diesel.

Alcoholic Liquor

GST on alcohol is not charged, but various other taxes are charged.

List of exempted services under GST in India:

Agricultural services
 This includes all services related to agriculture except the rearing of horses. Exempt services
include cultivation, harvesting, supply of farm labor, fumigation, packaging, renting or
leasing of machinery for agricultural purposes, warehouse activities, and services
by an Agricultural Produce Marketing Committee or Board that is provided by an agent
for the sale or purchase of agricultural produce.

Transportation services
 Transportation service by road or bridge on payment of toll; transportation of goods by
road (except when carried out by transportation agency or courier agency).
 Transportation of goods by inland waterways.
 Transportation of passengers by air (in the states of Manipur, Meghalaya, Assam,
Arunachal Pradesh, Nagaland, Sikkim, Tripura, and Bagdogra).
 Transportation by non-AC horse or contract carriages; transportation of agricultural produce,
milk, salt, newspapers, or woodgrains.
 Transportation of goods where the gross amount charged is less than Rs. 1500.
 Hiring services provided to any state transport undertaking, including motor vehicles with a
capacity to carry more than 12 passengers; services provided to goods transport agencies.

Services provided by the government and diplomatic missionaries

 Services by any foreign diplomatic mission located in India.
 Services provided by the Reserve Bank of India.
 Services by the Government or any local authority except the following services:
o Services by the Department of Posts via speed post, express parcel post, life insurance, and
agency services provided to any individual other than the government.
o Services related to an aircraft/vessel within or beyond the boundaries of a port or airport.
o Transportation of goods or passengers.
o Any other service, except those that come under (a) and (b), that is provided to business
entities.
 Services provided to diplomats, including the United Nations.
 Life insurance services provided under the National Pension System; life insurance provided
by the Army, Naval and Air Force Groups.

Judicial services
 Services provided by an arbitral tribunal (i.e., services provided by the court or a judge) to
any individual other than a business entity or to a business entity with a turnover up to Rs. 20
lakhs (Rs. 10 lakhs for special category states) in the preceding financial year.
 Services provided by a partnership firm of advocate(s) to: an advocate or partnership firm of
advocates, any individual that is not a business entity, or a business entity with a turnover up
to Rs. 20 lakhs (Rs. 10 lakhs for special category states) in the preceding financial year.
 Services provided by a senior advocate (legal services) to any individual other than a business
entity or to a business entity with a turnover up to Rs. 20 lakhs (Rs. 10 lakhs for special
category states) in the preceding financial year.

Educational services
 Transportation of students and faculty, mid-day meal catering services, admission,
examination services, and security and housekeeping services.
 Services provided by Indian Institutes of Management (except the Executive Development
Programme).
 Coaching services provided by institutions and NGOs under the central sector scheme of
„Scholarships for students with Disabilities‟.

Medical services
 Services provided by a veterinary clinic; health-care services provided by clinics or
paramedics.
 Services provided by ambulances, charities, and organizations facilitating religious
pilgrimage.

Services provided by organizers

 Services provided by organizers for business exhibitions held outside India.
 Services provided by tour operators to foreign tourists (this includes tours that are conducted
completely outside India).
Needs of GST Act
GST has mainly removed the cascading effect on the sale of goods and services. Removal of
the cascading effect has impacted the cost of goods. Since the GST regime eliminates the tax
on tax, the cost of goods decreases.

Also, GST is mainly technologically driven. All the activities like registration, return filing,
application for refund and response to notice needs to be done online on the GST portal,
which accelerates the processes.
Different Types of GST Returns
GSTR-3B
 GSTR-3B is a self-declared summary GST return filed every month. Taxpayers need to
report the summary figures of sales, ITC claimed, and net tax payable in GSTR-3B.
 Form GSTR (Goods and Services Tax Return)-3B is a simplified summary return and the
purpose of the return is for taxpayers to declare their summary GST liabilities for a
particular tax period and discharge these liabilities. A normal taxpayer is required to file
Form GSTR-3B returns for every tax period.
 Every person who is registered under GST must file GSTR-3B.
GSTR-1
 Form GSTR-1 is a monthly/quarterly Statement of Outward Supplies to be furnished by
all taxpayers making outward supplies of goods and services or both and contains details
of outward supplies of goods and services.
 It contains invoice-wise outward supply details.
 GSTR-1 is a monthly/quarterly return that summarizes all sales (outward supplies) of a
taxpayer. You must make sure that a valid GSTIN is filled while entering sales invoice
details.
GSTR-2
 GSTR-2 is a monthly return that allows the taxpayer to declare and summaries the details
of inward purchases of taxable goods and/or services.
 The GSTR-2 is a monthly tax return showing the purchases you've made for that month.
When you make purchases from registered vendors, the information from their sales
returns (GSTR-1) will be available in the GSTN portal as GSTR-2A for you to use in
your GSTR-2.
GSTR-3
 GSTR-3 is a monthly return with the summarized details of sales, purchases, sales during
the month along with the amount of GST liability. This return is auto-generated pulling
information from GSTR-1 and GSTR-2.
 GSTR 3 is to be filed monthly and the taxpayers must report the details of their inter-state
movement of the goods, sales, purchases for the month along with the tax liability. This is
a return that must be filed by the taxpayers who are registered under GST.
GSTR-4
 All taxpayers who have opted for composition scheme under GST, for any period during
the financial year, need to file Form GSTR-4 (Annual Return). This will include a
 taxpayer who have opted for composition scheme since registration and have never opted
out.
 GSTR-4 is a return that must be filed by the taxpayers opting for Composition Scheme on
an annual basis.
 GSTR-4 is a GST Return that has to be filed by a composition dealer. Unlike a normal
taxpayer who needs to furnish 3 monthly returns, a dealer opting for the composition
scheme is required to furnish only 1 return which is GSTR 4 once in a year by 30th of
April, following a financial year.
GSTR-5
 he Goods and Services Tax Return 5 is a document/statement that has to be filed by every
registered non-resident taxable person for the period during which they carry out
businesses transactions in India. This can either be done online or from a tax facilitation
center.
 This form contains the details of all outward supplies (i.e., sales) and inward supplies
(i.e., purchases) made and received by the non-resident taxpayer.
GSTR-6
 Form GSTR-6 is a monthly return to be filed by all the Input Service Distributors (ISD)
for distribution of credit (ITC) amongst its units.
 GSTR-6 is to be filed by only those taxpayers who are registered as Input Service
Distributor (ISD). It is a mandatory return which is required to be filed on a monthly
basis. In the case of no business activity, a nil return is required to be filed.
 This return must contain the details of inward supplies received/purchases made from
other registered taxpayers (B2B) and the details of input tax credit that was distributed
among the branches of the organization.
GSTR-7
 GSTR-7 is a return which is required to be filed by the persons who deduct tax at the time
of making/crediting payment to suppliers towards the inward supplies received.
GSTR-9
 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.
 It is an annual compilation of outward supplies, inward supplies, tax liability and input
tax credit availed during a financial year.
 It is due to be filed by 31st December of the year following the particular financial year.
The GST Council in its 31st meeting decided that a New GST Return system will be
introduced to facilitate taxpayers. In May 2019, a prototype of the offline tool has been
shared on the GST Portal to give the users a look and feel of the tool. The look and feel of the
offline tool would be the same as that of the online portal.

Latest Update

24th June 2022

The 47th GST Council meeting was held on the 28th and 29th of June 2022 in Chandigarh.
Union FM Nirmala Sitharaman chaired this meeting and made recommendations to revise
rates for revenue augmentation and correction of inversion while pruning the GST exemption
list. Compliance relief was granted to e-commerce suppliers and composition taxpayers.

29th December 2021

The 46th GST Council meeting was held on 31st December 2021 in New Delhi. Union FM
Nirmala Sitharaman led meeting has decided to defer the GST rate hike to 12% for textiles.

1st September 2021

45th GST Council meeting was held on 17th September 2021. Tax concessions on COVID-
19 essentials got extended, Matter on GST compensation to states was taken up, correction of
inverted tax structure, etc were on the agenda.

SAHAJ or SUGAM
 ITR Sahaj is ITR-1 and ITR Sugam is ITR-4, now GST will have Sahaj and Sugam
forms. Regular taxpayers with a turnover of up to Rs 5 crores can now file GST returns
on a quarterly basis against the earlier limit of Rs 1.5 crores, either in „SAHAJ‟ or
„SUGAM‟.
 Sahaj is a type of GST return for small taxpayers whose aggregate turnover in the
financial year does not exceed 5 Crores and their outward supplies are of B2C nature i.e.
outward supplies are made to end consumers and unregistered business.
 Sugam (GST RET-3) is a quarterly GST return form which will be filed by registered
taxpayers whose annual turnover is up to INR 5 crore and who are engaged in B2B &
B2C supplies. The RET-3 form is required to be filed on a quarterly basis.
 Small taxpayers making only B2C supplies can file Sahaj returns. Taxpayers making B2B
supplies or making B2C and B2B supplies, but having turnover of Rs 5 crore or less, have
been given an option to file „Sugam‟ Returns on quarterly basis.
 In case of new business as well, they are allowed to file Sahaj or Sugam - as their
turnover in the previous year would be considered as nil.
 The quarterly returns will be mostly be similar to the monthly returns, but require lesser
information to be filled as compared to the regular returns.
 The monthly returns are compulsory to be filed for taxpayers having turnover above Rs. 5
crores.
 For businesses opting Sahaj GST return, the due date to file a quarterly return is 25th of
the subsequent month following the quarter-end. The payment of tax is on the self-
assessed basis and should be made through a payment declaration form known as Form
GST PMT-08. The due date for monthly payment of tax for Sahaj return is 20th of
succeeding month. Following are due dates for filing Sahaj returns:
Due Date to File Sahaj GST Return
Quarters Due Data
April -June 25th July
July – September 25th October
October- December 25th January
January-March 25th April
Registration Procedure to Become a GST Practitioner in India

Step 1 – Visit the official website of the GSTN portal, https://www.gst.gov.in

Step 2 – Click on Services – Registration. Click on „New Registration‟

Step 3 – It will open a new registration page

 Click on New Registration

 In the dropdown list where „I am a‟ given, select GST Practitioner
 Select your State and District from the dropdown list
 Enter Name, PAN, Email Address and Mobile Number
 Enter the captcha code
 Click on „Proceed‟

After the completion of validation, it will be redirected to the OTP verification

page

Step 4 – Enter both OTPs which are received by e-mail and mobile number.
Click on „Proceed‟

Step 5 – After which a TRN will be generated, click on proceed

Step 6 – Enter TRN and Captcha. Click on „Proceed‟

Step 7 – Enter the OTP received on the registered mobile number and click on
„Proceed‟

Step 8 – Enter complete details required and upload documents in pdf and jpeg
format. Click on „Submit‟ on the Verification page.
Place of Supply
 GST is a destination-based tax wherein the tax is payable in the state where goods and
services are finally consumed.
 The taxes under GST may be CGST, SGST, UTGST and IGST. In order to determine
the type of GST, the nature of supply is to be ascertained.
 This nature may be either Inter-state or Intra-state. The supply of goods imported into,
or exported from India is treated as Inter-state supply.
 The location of the supplier and the place of supply together define the nature of the
transaction. The registered place of business of the supplier is the location of the
supplier, and the registered place of the recipient is the place of supply.
 GST is a destination-based tax, i.e., the goods/services will be taxed at the place
where they are consumed and not at the origin. So, the state where they are consumed
will have the right to collect GST.
 Therefore, place of supply is crucial under GST as all the provisions of GST revolve
around it. Place of supply of goods under GST defines whether the transaction will be
counted as intrastate or interstate, and accordingly, levy of SGST, CGST & IGST will
be determined.
 Hence, it is recommended to cross-check the place of the supplier, using the GST
search tool.
 Under GST, the place of supply is the place of delivery of goods or the place where
service is rendered by the taxpayer.
 In simple words, the place of supply is nothing but the registered place of the recipient
of goods or/and services.
 Place of supply is important to determine the kind of tax that is to be levied.
 The IGST is levied in case of inter-state supply whereas CGST and SGST become
applicable in case of intra state supply. Whether a supply is inter-state or intra state, it
depends upon the location of supplier and the place of Supply.
 When the location of supplier and the place of supply are in two different States, it
will be an Inter-State supply and IGST will be applicable but when the two are in the
same State, then it will be an Intra-State supply and CGST & SGST/UTGST is
applicable.
 Time of Supply
 Time of supply is a relevant measure under the GST law for every transaction entered
into by the supplier of goods and services.
 It means the point in time when goods have been deemed to be supplied or services
have been deemed to be provided for determining when the taxpayer is liable to pay
taxes.
 Time of supply means the point in time when goods/services are considered supplied'.
When the seller knows the 'time', it helps him identify due date for payment of taxes.
 In order to calculate and discharge tax liability it is important to know the date when
the tax liability arises
 Once the time of supply is determined, the rate of GST and the amount GST payable
is calculated at that point of time and such liability is to be discharged by making
payment of GST within the time specified.

HSN Code
 HSN code stands for “Harmonized System of Nomenclature”. This system has been
introduced for the systematic classification of goods all over the world.
 HSN codes are six digits (worldwide) and eight digits (in India) long, each with a specific
meaning. HSN codes are designed to be used by businesses to classify their products for
purchase or resale. This classification can be for pricing purposes, product descriptions,
or inventory purposes. HSN code is a 6-digit uniform code that classifies 5000+ products
and is accepted worldwide.
 It was developed by the World Customs Organization (WCO) and it came into effect from
1988.
 It has about 5,000 commodity groups, each identified by a six-digit code, arranged in a
legal and logical structure.
 HSN codes are eight digits long, each with a specific meaning. HSN codes are designed
to be used by businesses to classify their products for purchase or resale. This
classification can be for pricing purposes, product descriptions, or inventory purposes.
Governments and other agencies also use HSN codes to collect taxes and customs duties
on imported goods.
 The first two digits of an HSN code will tell you what type of good it is. The third digit
tells you what industry sector it belongs to, while the fourth and fifth numbers will tell
 you which subsector it falls into. A zero indicates that it‟s not a final product; if the last
four numbers are all zeros, then it‟s not classified under any of these categories.
 The main purpose of HSN is to classify goods from all over the World in a systematic and
logical manner. This brings in a uniform classification of goods and facilitates
international trade.
 The HSN system is used by more than 200 countries and economies for reasons such as:
 Uniform classification
 Base for their Customs tariffs
 Collection of international trade statistics
 India is a member of World Customs Organization (WCO) since 1971. It was originally
using 6-digit HSN codes to classify commodities for Customs and Central Excise. Later
Customs and Central Excise added two more digits to make the codes more precise,
resulting in an 8 digit classification.
 The HSN structure contains 21 sections, with 99 Chapters, about 1,244 headings, and
5,224 subheadings.
 Each Section is divided into Chapters. Each Chapter is divided into Headings. Each
Heading is divided into Sub Headings.
 Section and Chapter titles describe broad categories of goods, while headings and
subheadings describe products in detail.
 For example:
 Handkerchiefs made of Textile matters 62.13.90
 First two digits (62) represent the chapter number for Articles of apparel and clothing
accessories, not knitted or crocheted.
 Next two digits (13) represent the heading number for handkerchiefs.
 Finally, last two digits (90) is the product code for handkerchiefs made of other textile
materials.
 India has 2 more digits for a deeper classification. If the handkerchiefs are made from
a man-made fiber, then the HSN code is 62.13.90.10.
Generation of Challan under GST

To create and generate a Challan, post logging onto the GST Portal, perform the following
steps:

1. Access the https://www.gst.gov.in/ URL. The GST Home page is displayed. Login with
valid credentials and then navigate to Services > Payments > Create Challan option.
Note:
 For taxpayer filing Form GSTR-3B on quarterly basis (under QRMP Scheme) and
intending to make payment for first and second months of the quarter, please select
reason as Monthly Payment for quarterly return.
 Selecting Monthly payment for quarterly returns displays the Financial Year, Period
and Challan Type fields.
 Selecting Any other payment option directly takes you to the Create Challan page.
 For taxpayers who have selected the filing preference as monthly, they will not be
able to generate challan with 'Monthly payment for quarterly return' reason.
 You can click the VIEW LEDGER BALANCE to view the Cash and Credit ledger
balance as on date.

2. The Reason for Challan page is displayed. Select the reason as Monthly payment for
quarterly return or Any other payment.

3. The Create Challan page is displayed. Enter the challan details in the Details of
Deposit section and select the mode of payment from the Payment Modes displayed.

Note:

 The taxpayer can save a challan in Post-login method. However, taxpayer cannot save
a challan in Pre-login method.
 Reason for challan details will be shown on the Create Challan page. You can click
the EDIT REASON to change the reason for generating the challan. It will take you
back to the Reason of Challan page.

4. The Challan is generated. You can also download the GST Challan by clicking
the DOWNLOAD button.

Note: You can select the Mode of E-Payment and click MAKE PAYMENT to make the
payment for the challan generated.

The Challan will be downloaded.

TRAN 1 (Tax Revenue Anticipation Note 1)
 Transition Form or TRAN-1 is filed by those taxpayers who are eligible to claim the
credit on the tax already paid in the pre-GST regime. The credit can be by the way of
VAT/Service Tax/Excise Duty. In order to claim the complete amount as a credit, TRAN-1
is to be filed along with the particulars of stock carried forward.
 The GST TRAN 1 is a transition form for the already registered taxpayers in old schemes
who are filing the GST TRAN -1 form for availing their previous input tax credit
accumulated from earlier purchased stock before the implementation of the GST.
 A lot of registered entities are under GST in the current time period which stuffed with
their old tax credits and benefits, which is a concerned part of the transition.
 There is a variety of tax paid in the previous tax scheme, ranging from raw materials,
semi furnished goods or on the items and material given to the job working process.
 To claim Input Tax Credit (ITC) on former stock under the GST regime, the balance of
closing stock ruled by the business as of July 1, 2017 must be shown in TRAN-1.
 All the persons registered under the Goods and Services Tax (GST) who may or may not
be registered under the pre-GST regime. It involves all those who migrated to GST and
have an ITC on closing stock. However, the composition dealers under GST need not file
Transition Form 1.
 To file transition form GST TRAN - 1, perform the following steps:
 1. Login and Navigate to Transitions Forms > TRAN - 1 page
 2. Enter details in various tiles
 3. Download TRAN-1 details
 4. Submit TRAN - 1 to freeze data
 5. File TRAN - 1 with DSC or EVC
 6. Uploading Documents in GST Transition Forms

TRAN 2

 Form TRAN-2 would be submitted by a dealer or trader who has registered for GST but
was previously unregistered.
 If a dealer does not have a VAT or excise invoice for stocks held by them on June 30,
2017, he or she can use TRAN -2 to claim tax credit on the stock.
 Form GST TRAN – 2 cannot be filed by a manufacturer or service provider.
 A dealer or trader must file TRAN-2 at the end of each month when stock is sold,
reporting the details in order to claim input tax credit.
 Every registered person who is eligible to take credit in his/her Electronic Credit Ledger
of eligible duties and taxes paid under existing laws in respect of inputs, in respect of
 which he is not in possession of invoice or any other documents evidencing payment of
duty or tax, needs to declare such stock in Form GST TRAN – 1. Subsequently he is
required to file Form GST TRAN – 2.\
 Process
 1. Login and Navigate to Transitions Forms > TRAN – 2 page
 2. Enter details in various tiles Online Mode Offline Mode
 3. Preview TRAN-2
 4. Submit TRAN – 2 to freeze data
 5. File TRAN – 2 with DSC or EVC

TRAN 3

 The Form GST Tran-3 requires to file by the following person:

 The manufacturer who has issued Credit Transfer Document to dealers.
 Dealers who have received the Credit Transfer Document (CTD) issued by
manufacturers.
 Form GST Tran-3 is a statement which contains the details of credit transfer document
which is issued by a manufacturer as a proof of his Excise Duty payment on goods, which
were manufactured and transacted before the date of GST implementation.
 A Credit Transfer Document (CTD) is a form issued by a manufacturer of goods, as
evidence of payment of Excise Duty on goods manufactured and cleared in the pre-GST
regime.
 The one [manufacturer / dealer] who has received the Credit Transfer Document [CTD] is
liable to file TRAN-3.
E-Way Billing System
Under GST, transporters should carry an eWay Bill when moving goods from
one place to another.

EWay Bill is an Electronic Way bill for movement of goods to be generated on

the eWay Bill Portal. A GST registered person cannot transport goods in a
vehicle whose value exceeds Rs. 50,000 (Single Invoice/bill/delivery challan)
without an e-way bill that is generated on ewaybillgst.gov.in.

Alternatively, Eway bill can also be generated or cancelled through SMS,

Android App and by site-to-site integration through API entering the correct
GSTIN of parties. Validate the GSTIN with the help of the GST search tool
before using it.

When an eway bill is generated, a unique Eway Bill Number (EBN) is

allocated and is available to the supplier, recipient, and the transporter.

Validity of eWay Bill

An e-way bill is valid for periods as listed below, which is based on the distance travelled by
the goods. Validity is calculated from the date and time of generation of e-way bill-

Validity of
Type of conveyance Distance
EWB

Less Than 200 Kms 1 Day

Other than Over dimensional
cargo For every additional 200 Kms or part additional 1
thereof Day

Less Than 20 Kms 1 Day

For Over dimensional cargo
For every additional 20 Kms or part additional 1
thereof Day
 Preparation of GST returns
Goods and Services Tax (GST) is a comprehensive indirect tax that has replaced
various indirect taxes such as VAT, service tax, excise duty, and others. GST returns
are periodical statements filed by taxpayers containing details of their inward and
outward supplies, tax collected and paid, and other related information. In India,
GST returns need to be filed monthly or quarterly, depending on the type of
taxpayer. The preparation of GST returns involves the following steps:

1. Obtain GST registration:

The first step in preparing GST returns is to obtain GST registration. Every person
who supplies goods or services in India and has an annual turnover of more than Rs.
20 lakhs (Rs. 10 lakhs for special category states) needs to register for GST. Once
the registration is obtained, the taxpayer is assigned a unique Goods and Services
Tax Identification Number (GSTIN).

2. Maintain proper records:

The taxpayer needs to maintain proper records of all the inward and outward
supplies, including invoices, receipts, and other supporting documents. It is essential
to maintain accurate records to ensure that the GST returns are filed correctly.

3. Identify the type of return to be filed:

There are several types of GST returns that need to be filed, depending on the type
of taxpayer. The most common types of returns are GSTR-1, GSTR-3B, and GSTR-
9. GSTR-1 is the return for outward supplies, GSTR-3B is the return for summary of
tax liability and payment, and GSTR-9 is the annual return.

4. Calculate the tax liability:

The next step is to calculate the tax liability based on the GST rates applicable to the
goods or services supplied. The taxpayer needs to calculate the tax liability for both
the outward supplies (sales) and the inward supplies (purchases). The tax liability is
calculated by multiplying the taxable value of the goods or services by the applicable
GST rate.

5. Fill in the GST return form:

The taxpayer needs to fill in the GST return form with the relevant details, such as
the invoice number, taxable value, and tax amount. The details need to be filled in
accurately to ensure that the returns are filed correctly.

6. Submit the returns:

Once the GST return form is filled in, the taxpayer needs to submit the returns on the
GST portal within the due date. Late submission of returns can result in penalties
and interest.

In conclusion, the preparation of GST returns involves obtaining GST registration,

maintaining proper records, identifying the type of return to be filed, calculating the
tax liability, filling in the GST return form, and submitting the returns on the GST
portal. It is essential to ensure that the returns are filed correctly and within the due
date to avoid penalties and interest.
 METHODS OF PREPARING GST RETURNS

Goods and Services Tax (GST) is a comprehensive tax system that has replaced
various indirect taxes like VAT, service tax, excise duty, and others. GST returns are
periodical statements filed by taxpayers containing details of their inward and
outward supplies, tax collected and paid, and other related information. There are
several methods of preparing GST returns, and here are the details:

1. MANUAL METHOD
In the manual method, the taxpayer manually calculates the tax liability using
pen and paper. The steps involved in the manual method are:
 Collect the necessary documents such as invoices, receipts, and other
supporting documents.
 Calculate the tax liability based on the GST rates applicable to the goods or
services supplied.
 Fill in the GST return form manually with the relevant details, such as the
invoice number, taxable value, and tax amount.
 Submit the return form on the GST portal within the due date.

The manual method is suitable for small taxpayers with a low volume of
transactions.

2. EXCEL BASED METHOD

In the Excel-based method, the taxpayer uses a pre-designed Excel sheet to
record the transactions and calculate the tax liability. The steps involved in the
Excel-based method are:
 Download the Excel sheet from the GST portal.
 Fill in the Excel sheet with the relevant details, such as the invoice
number, taxable value, and tax amount.
 The Excel sheet automatically calculates the tax liability based on the
GST rates applicable to the goods or services supplied.
 Upload the Excel sheet on the GST portal to file the returns.

The Excel-based method is suitable for taxpayers with a moderate volume of

transactions.

3. ACCOUNTING SOFTWARE
Many accounting software such as Tally, QuickBooks, and Zoho Books come
with built-in GST features. The steps involved in using accounting software
are:

 Record the transactions in the software.

 The software automatically calculates the tax liability and generates the GST
returns in the specified format.
 The returns can be submitted on the GST portal directly from the software.
 The accounting software method is suitable for taxpayers with a high volume of
transactions and who prefer a digital solution.

4. GST Suvidha Providers (GSP):

GST Suvidha Providers are third-party service providers that offer GST
compliance services to taxpayers. The steps involved in using GSP services
are:
 Subscribe to the GSP services.
 Record the transactions in the GSP software.
 The GSP software automatically calculates the tax liability and generates the
GST returns in the specified format.
 The returns can be submitted on the GST portal directly from the GSP
software.

The GSP method is suitable for taxpayers who prefer to outsource their GST
compliance activities to a third-party service provider.

In conclusion, choosing the most suitable method of preparing GST returns depends
on the taxpayer's business requirements, the volume of transactions, and their level
of expertise in GST compliance. Using accounting software or GSP services can
simplify the process of preparing GST returns and minimize errors
 FILING OF GST RETURNS
Filing GST returns is the process of submitting the periodic statements containing
the details of a taxpayer's inward and outward supplies, tax liability, tax paid, and
other related information to the GST authorities. In India, GST returns need to be
filed monthly or quarterly, depending on the type of taxpayer. The filing of GST
returns involves the following steps:

1. Login to the GST portal:

The taxpayer needs to login to the GST portal using their unique Goods and Services
Tax Identification Number (GSTIN) and the password.
2. Select the type of return to be filed:
Once logged in, the taxpayer needs to select the type of GST return to be filed,
depending on the nature of their business and their turnover.
3. Enter the details:
The taxpayer needs to enter the details of their inward and outward supplies,
including the invoices, receipts, and other supporting documents. The details need to
be filled in accurately to ensure that the returns are filed correctly.
4. Reconcile the data:
The taxpayer needs to reconcile the data in the GST return with the data in their
books of accounts to ensure that the returns are filed accurately.
5. Compute the tax liability:
The taxpayer needs to compute the tax liability based on the GST rates applicable to
the goods or services supplied. The tax liability is calculated by multiplying the
taxable value of the goods or services by the applicable GST rate.
6. Pay the tax liability:
The taxpayer needs to pay the tax liability online through the GST portal using any
of the available payment modes.
7. Submit the return:
Once the data has been entered, reconciled, and the tax liability has been paid, the
taxpayer needs to submit the GST return on the GST portal. The return needs to be
filed within the due date to avoid any penalties and interest.
8. Acknowledgment:
After submitting the GST return, the taxpayer receives an acknowledgment in the
form of an email or SMS. This acknowledgment serves as proof of the return filed.
In conclusion, filing of GST returns involves logging in to the GST portal, selecting
the type of return to be filed, entering the details of the inward and outward supplies,
reconciling the data, computing the tax liability, paying the tax liability, submitting
the return, and obtaining an acknowledgment. It is essential to ensure that the returns
are filed correctly and within the due date to avoid any penalties and interest.
 TEMPORARY AND PERMANENT RETURNS

Goods and Services Tax (GST) is a consumption-based tax levied on the supply of
goods and services in India. The concept of temporary and permanent returns in GST
relates to the periodic filing of tax returns by registered taxpayers.

1. Temporary Returns:
Temporary returns are filed by taxpayers during the initial stages of GST
implementation or during transitional periods when the GST law undergoes
significant changes. These returns capture essential information about the taxpayer's
business activities and help in the smooth transition to the GST regime. Temporary
returns serve as a provisional mechanism until the permanent return forms are
introduced.

2. Permanent Returns:
Permanent returns, also known as regular returns, are the standard returns that
taxpayers are required to file periodically under the GST regime. They provide
detailed information about the taxpayer's inward supplies, outward supplies, and tax
liability. Permanent returns help the tax authorities monitor compliance, determine
the tax liability, and facilitate the input tax credit (ITC) mechanism.

Permanent returns in GST are categorized into different forms based on the type of
taxpayer and their turnover:

a. GSTR-1: This form is used to report outward supplies made by regular taxpayers
(other than composition scheme taxpayers) on a monthly or quarterly basis. It
includes details such as invoices issued, taxable value, and tax charged.

b. GSTR-3B: It is a monthly summary return where taxpayers report their

summarized details of outward supplies, input tax credit availed, and tax liability.
GSTR-3B is a self-declared return used to pay taxes and file GST returns in the
initial stages of GST implementation.

c. GSTR-4: This return is filed by taxpayers opting for the Composition Scheme,
which provides certain relaxations and a simplified compliance process. GSTR-4
captures the summary of outward supplies, tax payable, and payment of tax by
composition dealers.

d. GSTR-9: It is an annual return filed by regular taxpayers, providing a consolidated

summary of all inward and outward supplies made during the financial year. GSTR-
9 includes details of turnover, taxes paid, ITC availed, and any additional liability to
be discharged.

e. GSTR-9C: This is a reconciliation statement and certification to be filed along

with GSTR-9 by taxpayers whose annual turnover exceeds a specified threshold. It
requires reconciliation between the financial statements and GST returns, and it
needs to be certified by a chartered accountant or a cost accountant.
It's important to note that the specific return forms and frequencies can vary based
on the taxpayer's turnover, nature of business, and the applicable GST regulations.
Taxpayers should consult the GST law and regulations or seek professional advice to
understand their specific return filing requirements.
 VAT

Value Added Tax (VAT) is an indirect tax levied on the value added to goods or
services at each stage of the supply chain, from the manufacturer to the end
consumer. VAT is a multi-stage tax system where the tax liability is borne by the
end consumer, but it is collected and remitted by businesses at each stage of the
production and distribution process. Here's a detailed explanation of the basic
concept of VAT and its applicability to petrol and liquor after the enforcement of the
GST Act 2007:

1. Basic Concept of VAT:

VAT is based on the principle of taxing the value added at each stage of the supply
chain. It is a consumption tax that is ultimately borne by the final consumer. The tax
liability is calculated by deducting the input tax credits (taxes paid on purchases)
from the output tax (taxes collected on sales). This ensures that the tax burden is not
cascaded or duplicated at different stages of production and distribution.

2. Applicability of VAT to Petrol and Liquor:

Prior to the enforcement of the GST Act 2007, petrol and liquor were subject to
VAT in many countries, including India. VAT was applied to these items at each
stage of their supply chain, from production to retail. The tax liability was calculated
based on the value added at each stage, including manufacturing, wholesale, and
retail.

3. Impact of GST on Petrol and Liquor:

With the enforcement of the Goods and Services Tax (GST) Act 2007, the
applicability of VAT to petrol and liquor underwent significant changes. GST is a
comprehensive indirect tax that subsumed various indirect taxes, including VAT, in
India. However, the GST Act has specific provisions for the exclusion or separate
treatment of certain goods, including petrol and liquor.

a) Petrol: After the enforcement of the GST Act, petrol continues to be outside the
purview of GST in most countries, including India. Instead, it is subject to separate
state-specific taxes, such as excise duties, road cess, and additional taxes levied by
the state governments. These taxes are typically imposed by the respective state
governments and vary across different states.

b) Liquor: Liquor is also kept outside the ambit of GST in most countries, including
India. Instead, it remains subject to separate state-specific taxes, such as excise
duties and other levies imposed by the state governments. The taxation of liquor
varies from state to state, with different rates and structures for excise duties and
other taxes.

It's important to note that the specific tax rates, structures, and regulations for petrol
and liquor vary across different countries and states. The enforcement of the GST
Act may have led to changes in the overall tax framework, but petrol and liquor
continue to be subject to separate taxes imposed by the respective governments.

In summary, VAT is a multi-stage tax system based on the value added at each stage
of the supply chain. While petrol and liquor were subject to VAT before the
enforcement of the GST Act, they are now kept outside the purview of GST in most
countries. Instead, they remain subject to separate state-specific taxes, such as excise
duties and other levies imposed by the respective state governments.