GST is a comprehensive tax structure introduced to eliminate the cascading effect of various taxes like Central Excise Duty, Service Tax, Sales Tax, Entertainment Tax, Luxury Tax, Additional Customs Duty etc.
Taxpayers who are already registered under VAT or service tax are also required to register under GST. Every entity that is registered under the previously imposed indirect taxes will get a certificate of registration on the provisional basis. This certificate issued would be valid for a period of 6 months. GST registration is mandatory for businesses whose turnover are more than Rs. 20 Lakhs per annum. The businesses whose turnover are less than Rs. 50 Lakhs may opt for Composition Scheme or they can also voluntarily register themselves under GST.
According to GST model law, all invoices must be uploaded online. Under GST, the process of deduction, payment, and refund of indirect taxes would be all processed online.
As per the GST law, returns filed under the previous law for the period prior to July 1, 2017, can claim for income tax credit. The amount claimed will be transferred to the Electronic Credit Ledger.
Following conditions must be satisfied by the existing dealers for claiming CENVAT Credit for the input held in stock, semi-finished or finished goods:
Input Tax Credit can only be claimed by manufacturers or dealers upon those goods on which tax has been already paid under the previous law. Credits are only available if the tax paying documents have been recorded in the accounts of the taxpayer within 30 days of the appointed day. The 30-day extension may only be authorized by the competent authority, on provision of genuine reasons for the cause of the delay.
There are few conditions which must be achieved to avail input output tax credit. The conditions as required are:
Any pending refund on claims which is due from the amount of CENVAT credit, tax or any interest paid before the appointed day was disposed-off as per the previous goods and service taxation law.
If some inputs or semi-finished goods have been removed from the factory before the appointed date for further processing, repairing, testing or for similar purposes and have been received on or after the appointed date then no tax shall be levied.
The non-taxation criteria shall be applicable if the following conditions are satisfied:
In case if any finished goods had been removed without payment of duty for carrying out tests or other processes like repairing etc. no tax shall be payable if the following conditions are satisfied:
Transition provisions will be applicable if the services are received prior to the appointed date and invoices are received on or after the appointed date. Input Service Distributor (ISD) will be eligible to distribute input output tax credit under GST. Taxpayers who are registered with composition scheme under the current tax regime are allowed take credit of input which is held in stock, semi finished goods or finished goods on the day immediately preceding the date from which he opts to be taxed as a regular taxpayer, subject to various conditions.