Direct Tax Services
Audit
Consulting
ESG Advisory
RBI Services
SEBI Services
IRDA Registration
FEMA Advisory
Compliances
IBC Services
VCFO Services
Growing
Developing
ME-1
ME-2
EU-1
EU-2
SE
Others
Select Your Location
Chapter XX of the Central Goods and Service Tax Act, 2017 provides the provisions for Transition to GST of taxpayers already registered under any existing indirect tax laws.
The Act states that all the existing taxpayers having a permanent account number are to be migrated to GST and a certificate of GST registration to be issued. However this transition is on a provisional basis, and to make it final, certain required conditions are to be fulfilled. Only after completing all those documentation formalities and providing all other required information, the registration procedure is completed and a distinct GSTIN is issued. Let’s discuss a few items and their transition to GST a little more in detail.
Table of Contents
Taxes paid on inward supplies can be deducted from the taxes paid on outward supplies to calculate actual tax liability. This deduction is known as Input Tax Credit. Transition arrangements regarding this Input Tax Credit are provided in Section 140 of the Act. Under the GST law, all invoices are required to be uploaded online.
The Act provides that all the registered taxpayers under GST can claim the Input Tax Credit except for those who have opted for the Composition Scheme under Section 10 of the Act. Such taxpayers can transfer input credit claimed under any old law to their electronic credit ledger.
These taxpayers are entitled to get the credit equal to CENVAT credit carried forward in the return furnished by them for the period ending immediately preceding the appointed date, i.e. 1st July 2017. However, they will only be allowed to take forward this credit if the following conditions are satisfied:
In addition to the above carried forward amount, a taxpayer is also allowed to get in their electronic credit ledger the credit of unveiled CENVAT credit in respect of capital goods not carried forward in the return furnished under the existing laws.
Taxpayers registered under the GST, who were not liable to be registered under the existing laws, or were engaged in manufacture/provision of exempted goods/services, we’re providing works contract service and were availing of the benefit of Notification No. 26/2012—Service Tax, was a first stage or second stage dealer or a registered importer or a depot of a manufacturer can avail the credit for eligible duties in respect of inputs held in stock and inputs contained in semi-finished or finished goods, subject to the following conditions, namely:
As of now, we discussed the duty or taxes on input held in stock or input service received on or before the appointed date. But what if they are received after the appointed date, and the duty or tax on them is paid by the supplier under the existing laws. In such a case, the taxpayer will be allowed a credit for such tax or duty under GST only if the invoice or any other duty or tax-paying document of the same was recorded in the books of account of such person within a period of thirty days from the appointed day.
Section 142 of the Act covers the provisions relating to job work for the transition to GST. First, we have to understand what job work means here. Job work means when any input/ semi-finished goods/ finished goods which were received/ processed/ manufactured are removed from the place of business to any other premises or to a job worker for further processing, testing, repair, reconditioning or any other purpose in accordance with the provisions of existing law, and are returned to the same place after such work is done.
If the said input/ semi-finished goods/ finished goods are removed prior to the appointed day and they are returned to the said place on or after the appointed day, no tax shall be payable if the following conditions are satisfied:
On the other hand, the manufacturer can in accordance with the provisions of the existing law, transfer the said goods to the premises of any registered person on the payment of the tax. He can also export the same without the payment of tax as exports are zero-rated.
However, if the said goods are not returned to the premises within the specified time limit, the ITC will be recovered back by the taxing authority.
Update: The last date of GST Migration and procedures for the transition to GST are long passed, and now anybody required to be registered under the laws will have to go for fresh GST Registration.
Read our article: GST on Legal Services in India: A Complete Outlook
Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.
Many investors use fixed deposits as their primary investment vehicle. Investors with a high-ri...
The main idea of CDS, which was initially to give banks a way to transfer credit exposure, has...
Black money has been the subject of heated political debate in India for a long time. Successiv...
The Apex Court pronounced a judgement in the case titled Tata Motors Vs The Brihan Mumbai Elect...
Since economies are moving towards digitalisation and making it feasible to conduct transaction...
The Alternative Investment Funds (AIFs) Pro-rata and Pari-Passu Rights Proposal Consultation Pa...
The Financial Action Task Force, i.e. FATF (the Force), is the global money laundering and terr...
Advance tax refers to the payment of the tax liability before the end of the relevant financia...
On 11.12.15, the Hon’ble Delhi High Court (HC) pronounced a landmark judgement in the case ti...
Money laundering can be defined as the process of illegal concealment of the origin of money ob...
Are you human?: 5 + 1 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
GST has impacted every other business sector in India, including the service sector. Banking is one of the biggest...
30 Jan, 2021
The registration window under GST will be closed on 15th June 2017. Earlier the GST registration facility was tempo...
16 Jun, 2017
Red Herring Top 100 Asia enlists outstanding entrepreneurs and promising companies. It selects the award winners from approximately 2000 privately financed companies each year in the Asia. Since 1996, Red Herring has kept tabs on these up-and-comers. Red Herring editors were among the first to recognize that companies such as Google, Facebook, Kakao, Alibaba, Twitter, Rakuten, Salesforce.com, Xiaomi and YouTube would change the way we live and work.
Researchers have found out that organization using new technologies in their accounting and tax have better productivity as compared to those using the traditional methods. Complying with the recent technological trends in the accounting industry, Enterslice was formed to focus on the emerging start up companies and bring innovation in their traditional Chartered Accountants & Legal profession services, disrupt traditional Chartered Accountants practice mechanism & Lawyers.
Stay updated with all the latest legal updates. Just enter your email address and subscribe for free!
Chat on Whatsapp
Hey I'm Suman. Let's Talk!