GST – Decoded

GST – Decoded NOVEMBER 2021

LET’S EXPLORE GST TOGETHER

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Table of Contents

IMPORTANT DUE DATES-NOVEMBER 2021 ............................................................................................................... 3

CONCEPT OF E-INVOICING UNDER GST ..................................................................................................................... 4

CONCEPT OF REVERSE CHARGE MECHANISM ........................................................................................................... 6

CLARIFICATION REGARDING GST RATE & CLASSIFICATION (GOODS) ........................................................................ 8

CLARIFICATION REGARDING APPLICABLE GST RATE & EXEMPTION ON CERTAIN SERVICES .................................. 10

NOTIFICATIONS/CIRCULARS .................................................................................................................................... 12

Contact us: ............................................................................................................................................................. 13

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IMPORTANT DUE DATES-NOVEMBER 2021

Income Tax Compliances

Due date Particulars

07-Nov-21 Due date for Deposit of TDS/TCS for the month of November, 2021

07-Nov-21 Due date for deposit of TDS for the period July 2021 to October 2021 when Assessing Officer

has permitted quarterly deposit of TDS under section 192, 194A, 194D or 194H.

15- Nov-21 Due date for issue of TDS Certificate for tax deducted under section 194-IA, 194-IB, 194M in

the month of September, 2021

15- Nov -21 Due date for Quarterly statement of TCS deposited for the quarter ending October 30, 2021

30- Nov-21 Due date for furnishing of challan-cum-statement in respect of tax deducted under section

194-IA, 194-IB, 194M in the month of October, 2021

30-Nov-21 Due date for furnishing of return of income for Assessment Year 2021-22 has been extended

from July 31, 2021, to December, 2021

Payroll Compliances


15- Nov-21 Due date for ESI contribution for the month of Oct 2021

15- Nov-21 Due date for PF contribution for the month of Oct 2021

15- Nov-21 Due date for LWF contribution of Haryana for the month of Oct 2021

20-Nov-21 Due date for PT payment & Return of Karnataka for the month of Oct 2021

30-Nov-21 Due date for PT payment & Return of Maharashtra for the month of Oct 2021

GST Compliances

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10- Nov-21 Due date for GSTR-7 and GSTR-8 for the m/o of Nov 21

11- Nov-21 Due date for GSTR-1 for the taxpayers having an aggregate turnover of more than Rs. 1.50 Crores or

opted to file Monthly Return

13- Nov-21 Due date for GSTR-1 (IFF) for the taxpayers who opted for QRMP scheme (Optional)

13- Nov-21 Due date for GSTR-6 for the month of Oct 2021 (NRI return for ISD)

18-Nov-21 Due date for GSTR CMP-08 for the quarter (Oct 21 to Dec 21)

20-Nov-21 Due date for GSTR-5 & 5A for the month of Oct 2021 (Return for NRTP & ODIAR)

20- Nov-21 Due date for GSTR-3B for the taxpayers having an Annual Turnover of more than 5 Crores

22-Nov-21 Due date for GSTR-3B for the taxpayers having Turnover upto 5 crores (Category I states)

24-Nov-21 Due date for GSTR-3B for the taxpayers having Turnover upto 5 crores (Category II states)

25- Nov-21 Due date for GST Challan Payment if no sufficient ITC for Oct (for all Quarterly Filers)

CONCEPT OF E-INVOICING UNDER GST

E-invoicing or electronic invoicing is a system where you can raise invoices, and the invoices generated

under this system can also read with other system. It also reduces the need for any fresh data entry or errors.

The invoices generated under this system has standardized format and the data can also be shared with other

E- Invoicing is applicable to the following businesses

• Taxpayer with aggregate turnover exceeding Rs 500 crores implemented from 1st October 2020

• Taxpayer with aggregate turnover exceeding Rs 100 crores implemented from 1st January 2021

• Taxpayer with aggregate turnover exceeding Rs 50 crores implemented from 1st April 2021

E-Invoicing not applicable irrespective of turnover for following business

• An insurer or banking company or financial institution including NBFC

• A goods transport agency

• A registered person supplying transportation services

• Special economic zone unit however no exemption available to SEZ developers

• A department of government or local authorities

• A registered person who supplies services by way of admission to the exhibition of cinematographic

films in multiplex services

Advantages of E invoicing system

• It will help with data reconciliation and accuracy during manual data entry

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• You can track e invoices in real time

• The e invoice data will auto populate on tax return forms and e way bills

• It helps to keep a check on fake invoices

Steps to generate E-Invoice

• Invoice Creation: The seller/supplier will create an invoice in the prescribed format (e-invoice

schema) using his/her accounting or billing software. It must have the mandatory details. The

accounting software of the supplier will generate a JSON for each B2B invoice. The JSON file will be

uploaded to the IRP.

• IRN Generation: The next step would be to generate a unique Invoice Reference Number (IRN) by the

seller using a standard hash-generation algorithm. Invoice Uploading : Now, the seller will upload

JSON for each of the invoices, along with IRN, to the Invoice Registration Portal, either directly or

through third-party software.

• Authentication and Signing: RP will validate the hash/IRN attached with JSON or generate an IRN if

not already uploaded by the supplier. Then, it will authenticate the file against the central registry of

GST. Upon successful verification, it will add its signature on the invoice and a QR code to JSON. Hash

generated earlier will become the new IRN of the E-invoice. It will be the unique identity of that e-

invoice for the entire financial year.

• Sharing of Data : The uploaded data will be shared with the E-way bill and GST system.

E-invoice Downloading: The portal will send the digitally-signed JSON along with IRN

and QR code back to the seller. The invoice will also be sent to the buyer on their registered

email id.

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CONCEPT OF REVERSE CHARGE MECHANISM

Reverse charge is a mechanism where the recipient of the goods or services is liable to pay Goods and

Services Tax (GST) instead of the supplier. The concept of Reverse Charge Mechanism is incorporated under

GST, but in GST regime Government has notified not only supply of certain services but also supply of certain

goods under RCM. The objective of Reverse Charge Mechanism is to widen the scope of levy of tax on

unorganized sectors and give exemption to specific class of supplier of goods/services and import of services.

• Statutory provision of Reverse Charge Mechanism

As per the Provision of Section 2(98) of the CGST Act, 2017 has defined the term “Reverse Charge” and the

same is reproduced as follows:

“Reverse charge” means the liability to pay tax by the recipient of supply of goods or services or both instead

of the supplier of such goods or services or both under sub-section (3) or sub-section (4) of Section 9, or under

sub-section (3) or sub-section (4) of Section 5 of the Integrated Goods and Services Tax Act.

• When is a Reverse Charge Applicable?

There are two type of reverse charge scenarios provided in law: -

First is dependent on the nature of supply and/or nature of supplier. This scenario is covered by section 9 (3)

of the CGST/SGST (UTGST) Act and section 5 (3) of the IGST Act.

As per the provisions of section 9(3) of CGST / SGST (UTGST) Act, 2017 and section 5(3)of IGST Act, 2017, the

Government may, on the recommendations of the Council, by notification, specify categories of supply of goods

or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or

services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for

paying the tax in relation to the supply of such goods or services or both.

Second scenario is covered by section 9 (4) of the CGST/SGST (UTGST) Act and section 5 (4) of the IGST Act

where taxable supplies by any unregistered person to a registered person is covered.

As per provision of Section 9(4) of CGST / SGST (UTGST) Act, 2017 and Section 5(4) of IGST Act, 2017 provides

that the tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to

a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions

of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of

such goods or services or both.

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• Manner of GST payment under Reverse Charge Mechanism

According to the provisions of GST law, the person supplying the goods must mention in the tax invoice

whether tax is payable under the reverse charge mechanism.

Here are some points to remember while making GST payment under reverse charge:

1. A recipient of services can avail ITC on the tax amount paid under reverse charge on goods and services only if such goods or services are used for the purpose of business or furtherance of business.

2. A composition dealer, falling under reverse charge, is ineligible to claim any credit of tax paid. Also, the dealer will have to pay tax at the normal rates and not at the composition rates.

3. GST compensation cess will be applicable to the tax payable or paid under the reverse charge mechanism.

NOTE: The ITC is availed by recipient cannot be used towards payment of output tax on goods or services, the payment of tax under reverse charge only on cash.

• Goods and services on which RCM is applicable

GOODS SERVICES

Cashew Nuts Any services supplied by any person who is located in a non-taxable territory to any person other than non-taxable online recipient

Bidi Wrapper Leaves, Tobacco Leaves GTA Services Silk Yarn Legal Services by advocate Lottery Services by arbitral tribunal to a business entity Raw cotton Services provided by way of sponsorship Supply of Lottery Certain services provided by the Central Government,

State Government, UT or Local authority Used vehicles, seized and confiscated goods, old and used goods, waste and scrap

Services by director of company or a body corporate

Services by insurance agent Services by recovery agent Services by a person located in non-taxable territory

by way of transportation of goods by a vessel from a place outside India

Transfer or permitting the use or enjoyment of copyright

Radio taxi or transport services provided through e commerce

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CLARIFICATION REGARDING GST RATE & CLASSIFICATION (GOODS)

CIRCULAR NO.163/20/21

Applicability of GST on fresh and dried fruits and nuts

1. It was clarified that fresh fruits & nuts would cover fruits and nuts which are meant to be supplied in

the state as plucked or even chilled.

2. Fresh fruits & nuts do not qualify as fresh if frozen or intentionally dried

3. Exemption from GST is only for fresh fruit & nuts.

Applicability of GST on Tamarind Seeds

Tamarind seeds and other seeds falling under heading 1209 will attract 5% GST if not supplied for

sowing

Clarification of Definition Of Copra

The heading 0801 covers coconut fresh and dried but excludes Copra thus it will be charged at 5%

Applicability of GST on Pure Henna Powder & Leaves

1. Heena powder & Heena leaves having no additives will fall under heading 14049090 and will attract

5% GST

2. Mehendi paste in cones falling under heading 1404 & 3305 will attract 5% GST

Applicability of GST on Scented Sweet Supari & Flavoured Coated Illachi

Scented Sweet supari and flavoured coated illachi will fall under heading 2106

Applicability of GST on Brewers spent Grain, Dried Distillers Grains with Soluble (DDGS)and other such

residues

As per the Explanatory Notes to the HSN, heading 2303 Brewers spent grain(BSG), Dried distillers

grain with soluble (DDGS) and other such residues are classified under heading 2303, attracting GST at

the rate of 5%

Scope of GST rate on all Pharmaceuticals falling under 3006

1. It was clarified that entry 65 of Schedule II of notification No. 1/2017- Central Tax (Rate) covers all

goods as specified in Chapter Note 4 and Chapter Note 4 in turn covers all goods covered under

Heading 3006.

2. Entry 65 covers all goods falling under heading 3006, irrespective of the fact that such goods are

specifically mentioned in said entry.

3. Therefore, all goods falling under heading 3006 attract GST rate of 12% under entry 65 in the 12% rate

schedule.

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All Laboratory reagents & other Goods falling under Heading 3822

1. Entry No. 80 of Schedule II of notification No.1/2017- Integrated Tax (Rate) prescribes GST rate of

12% for “All diagnostic kits and reagents

2. Heading 3822 covers “Diagnostic or Laboratory Reagents, Certified Reference Materials

i. etc.

3. Thus It was accordingly clarified that concessional GST rate of 12% is applicable on all goods falling

under heading 3822

Requirement of Original/Import Essentiality Certificate, issued by DGH on each inter-state Stock

Transfer of goods imported at Concessional GST rate for Petroleum Operations

1. It was decided that the original/ import Essentiality certificate, issued by the Directorate General of

Hydrocarbons (DGH) is sufficient and there is no need for taking a certificate every time on inter-state

movement of goods within the same company / stock transfer so long as the goods are the same as

those imported by the company at concessional rate.

2. The importer is required to maintain records and should be able to establish nexus between the stock

transfer of goods and the description in the essentiality certificate

GST Rate applicable on External Batteries sold along with USP systems/ Inverter

1. It was clarified that external batteries and usp system are two distinctly identifiable items thus will

attract separate rate of GST.

2. External Batteries classified under heading 8507 will attract 28% GST (except lithium-ion battery)

3. USP/inverter classified under heading 8504 will attract 18% GST.

Applicability of GST Rate on Solar PV Power Projects

1. It was clarified that GST on specified Renewable Energy Projects can be paid in terms of the 70:30 ratio

for goods and services, respectively, for the period of 1st July, 2017 to 31st December, 2018, in the

same manner as has been prescribed for the period on or after 1st January, 2019, as per the

explanation in the Notification No.24/2018 dated 31st December, 2018.

2. However, it is specified that, no refunds will be granted if GST already paid is more than the amount

determined using this mechanism

Applicability of GST on Fibre Drums whether corrugated or non-corrugated

1. Corrugated boxes and cartons, falling under heading 4819 attracts GST at the rate of 12% (entry 122

of 12% rate schedule), while other cartons falling under this heading attracts GST at the rate of 18%.

2. Disputes had arisen as regards applicable GST on fibre drums, which is partially corrugated (as to

whether it is be treated as corrugated or otherwise)

3. It has been clarified that a uniform GST rate of 18% on all goods classifiable under heading 4819 (with

effect from 1st October,2021) will be applicable.

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CLARIFICATION REGARDING APPLICABLE GST RATE & EXEMPTION ON CERTAIN SERVICES

CIRCULAR NO. 164/20/21 - GST

Services by Cloud/ Central Kitchen

It was clarified that service provided by way of cooking and supply of food, by cloud kitchens/central

kitchens are covered under restaurant services and will attract GST of 5%

Supply of Ice-Cream by Ice Cream Parlors

It was clarified that where ice cream parlors sell already manufactured ice- cream and do not

cook/prepare ice-cream for consumption like a restaurant, it is supply of ice cream as goods and not as

a service, even if the supply has certain ingredients of service. Accordingly, it is clarified that ice cream

sold by a parlor or any similar outlet would attract GST at the rate of 18%.

Coaching services supplied by coaching institutes & NGO under the central sector scheme of

scholarship for students with disabilities

It was clarified that services provided by any institutions/ NGOs under the central scheme of

“Scholarships for students with Disabilities” where total expenditure is borne by the Government is

covered under entry 72 of notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017 and

hence exempt from GST.

Satellite Launch services provided by NSIL

It has been clarified vide Circular No. 2/1/2017-IGST dated 27.09.2017 that Place of Supply (PoS) of

satellite launch services supplied by ANTRIX Corporation Ltd to customers located outside India is

outside India and such supply which meets the requirements of section 2(6) of IGST Act, constitutes

export of service and shall be zero rated. If the service recipient is located in India, the satellite launch

services would be taxable.

It is further clarified that as the satellite launch services supplied by NSIL are similar to those supplied

by ANTRIX Corporation Ltd, the said circular No. 2/1/2017-IGST dated 27.09.2017, is applicable to

them.

GST on Overloading Charges at Toll Plaza

It is clarified that overloading charges at toll plazas would get the same treatment as given to toll

charges.

Renting of Vehicles to State Transport Undertaking & Local Authorities

1. It is clarified that the expression “giving on hire” in Sl. No. 22 of the Notification No. 12/2017-CT (Rate)

includes renting of vehicles.

2. Accordingly, services where the said vehicles are rented or given on hire to State Transport

Undertakings or Local Authorities are eligible for the said exemption irrespective of whether such

vehicles are run on routes, timings as decided by the State Transport Undertakings or Local Authorities

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and under effective control of State Transport Undertakings or Local Authorities which determines the

rules of operation or plying of vehicles .

Services by way of grant of minerals exploration and mining rights

It is clarified that it will fall under heading 997337 that covers licensing services for the right to use

mineral including its exploration and evaluation thus will be charged at 18% GST

Admission to indoor amusement park having rides etc

1. It is clarified that 28% rate [entry 34 (iiia)] applies on admission to a place having casino or race club

[even if it provides certain other activities] or admission to a sporting event like IPL.

2. On the other hand, Entry 34 (iii), having a rate of 18%, covers all other cases of admission to

amusement parks, or theme park etc or any place having joy rides, merry- go rounds, go- carting etc,

whether indoor or outdoor, so long as no access is provided to a casino or race club.

Services supplied by contract manufacturer to brand owners for manufacture of alcoholic liquor for

human consumption

1. It is clarified that the expression “food and food products” in the said entry excludes alcoholic

beverages for human consumption. As such, in common parlance also alcoholic liquor is not considered

as food.

2. Accordingly, services by way of job work in relation to manufacture of alcoholic liquor for human

consumption are not eligible for the GST rate of 5%

3. It will be prescribed under the said entry. GST Council recommended that such job work would attract

GST at the rate of 18%

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NOTIFICATIONS/CIRCULARS

Notification No.118/2021-Income Tax dated

01/10/2021

CBDT hereby amends the Income Tax Rules,1962 to

insert part J to 11UD and inserts 11UE for Specified

Conditions under explanation to fifth and sixth proviso

to explanation 5 to clause (i) of Sub Section (1) of

Section 9. Also inserts 11UF for manner of furnishing

undertaking under rule 11UE.

Notification No. 119/2021-Income Tax dated

11/10/2021

Central Government hereby exempts following class

of persons:

(i) A non-resident, not being a company

(ii) A foreign company

(iii) Non-resident, being an eligible foreign

investor

Subject to specified column from requirement of

furnishing a return of income under sub-section (1) of

section 139 of Income Tax Act from AY 2021-2022

onwards


13/10/2021

CBDT hereby makes the following rules namely

relaxation of Validation (section 119 of Finance Act

2012) Rules 2021.


12/10/2021

Central Government herby notifies in exercise of

power conferred by clause (46) of section 10 of

Income Tax act, 1962 for the purpose of said clause,

that Punjab State Electricity Regulatory Commission,

Chandigarh in respect of specified incoming arising to

the commission subject to certain conditions.


25/10/2021

The Central Government, in Consultation with the

Chief Justice of the High Court of Karnataka, herby

designates certain courts in the state of Karnataka a

special court for areas mentioned for the purposes of

section 84 of Black Money (Undisclosed Foreign

Income & Assets) and Imposition of Tax Act, 2015.


25/10/2021


Chief Justice of High Court of Bombay at Goa, herby

designates the court of Senior Civil Judge and Chief

Judicial Magistrate Panaji, Goa as the special court of

north Goa District and Senior Civil Judge and Chief

Judicial Magistrate Margao, Goa as the special court of

South Goa for the purposes of sub-section (1) of

section 280A of Income Tax Act, 1961 and section 84

of Black Money(Undisclosed Foreign Income & Assets)

and Imposition of Tax act, 2015.


25/10/2021


Chief Justice of the High Court of Manipur, herby

designates the court of Chief Judicial Magistrate,

Imphal East as Special Court for the state of Manipur

for the purposes of section 84 of Black Money

(Undisclosed Foreign Income & Assets) and Imposition

of Tax Act, 2015.

Circular No. 18/2021-Income Tax dated 25/10/2021

The Finance Act, 2015 inserted the following clause

(xvii) in sub-section 1 of section 36 of Income Tax act,

1961 to provide for deduction on account of the

amount of expenditure incurred by a co-operative

society engaged in the business of manufacture of

sugar.

Circular No. 19/2021-Income Tax dated 26/10/2021

The Finance Act provided Guidelines for guidance

under clause (23FE) of section 10 of the Income Tax

Act, 1961.

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For further updates:

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GST – Decoded

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