International Joint Ventures and Merger & Acquisitions
The new GST law to be rolled out on July 1 will bring many opportunities and changes in how you would conduct business in the coming times. Our team has compiled simple guidelines to make the transition smoother
The GST law has proposed the uniform rate of 28% on motor vehicles (except refrigerated motor vehicles) & its parts and compensation cess of 1%, 3% and 15% on small petrol cars, small diesel cars and other motor vehicles respectively. All types of motorcycles will attract 28% (compensation cess of 3% to apply on motorcycle above 350cc).
Under the GST law taxpayers need to consider the following key procedures and compliances:
S.no | Particular | Rules |
1. | Registration |
The person with INR2 million of aggregate turnover in a financial year is to register compulsorily under GST. However, in certain states, the limit is reduced to INR1 million. The taxpayers who are already registered under the current state or central taxes are migrated to the common portal and GST registration will be granted with a request to provide additional information, where required. |
2. | Invoice |
The taxpayer requires to issue the tax invoice at the time of supply of goods and services having information such as - name, address, GSTIN of the seller / service provider, address and GSTIN of the buyer/service recipient, date of invoice, value of goods/service, description of goods/service, rate and value of Central GST (CGST), State GST (SGST) or Integrated GST (IGST), signature, etc. |
3. | Input Credit |
The taxpayer can claim the Input Credit on the basis of the documents such as tax Invoice, a debit note, and a bill of entry. In case the payment has not been made within 180 days, the amount of input credit will be added to the output liability. The Input Credit can be utilized in the following manner:
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4. | Valuation |
TGST shall be calculated on the transaction value of goods or service or both where:
The Determination of Value of Supply Rules covers the cases where transaction value is not applicable. The said rules have specified the following concepts for determining the value to calculate the GST liability:
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The registered taxpayer is entitled to carry forward or claim various input credits at the time of transition. The taxpayer requires to submit an application in the prescribed form within sixty days. A person who is not registered in the present law but registered in the GST regime can claim input tax credit where documents evidencing payment of excise duty are not available. Such credit would be available as under:
Similar credit of SGST is available for VAT paid on the opening stock, where the opening stock is subjected to VAT only on the first sale in the State and subsequent sales exempted. The manner, quantum of eligible credit and applicable conditions are same as above.
Any claim of a refund filed by a taxpayer before or after the appointed day i.e., the date from which GST will be applicable, for refund of any amount of input credit, duty, tax or interest paid before the appointed day shall be disposed off in accordance with the provisions of the earlier law and any amount accruing there upon shall be paid in cash. If the amount of credit has been fully or partially rejected, the amount so rejected shall be lapsed.
In case of any appellate proceedings filed by a taxpayer relating to claim for input credit, duty, tax or interest initiated before, on or after the appointed day i.e., the date from which GST will be applicable, then such proceedings shall be disposed of in accordance with provisions of the earlier law. If any amount becomes admissible to the company, then such amount shall be paid in cash to it.
The following are the action plans to help companies in automobile sector comply with GST law and implement it seamlessly.
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