Consult MyTax's Knowledge Center

July 23, 2018

ITC for Capital Goods under GST

What are capital goods? Capital goods are assets that are used to produce other goods or services such as buildings, machinery, equipment, vehicles and tools etc. For example, commercial aircraft is a capital good because it is used by airlines to produce a service, transportation. As per Section 2(19) of the Central Goods and Services Tax (CGST) Act, 2017, unless the context otherwise requires, the term ‘capital goods’ means goods, the value of which is capitalized in the books of accounts of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business. Thus, Goods will be regarded as capital goods if the following conditions are satisfied: (a) The value of such goods is capitalized in the books of account of the person claiming input tax credit. (b) Such goods are used or intended to be used in the course or furtherance of business. Capital goods are depreciated over the course of their useful lives. The business calculates the depreciation value each year through accounting techniques such as depreciation, amortization and depletion. On every purchase, one is required to pay GST and later, one can claim Input Tax Credit on the GST paid on the purchases. However, if depreciation is charged on the GST paid while purchasing the capital asset, input tax credit cannot be claimed.  Input Tax Credit Rules in case of capital goods: Rule 8 of the ITC rules deals with ITC in case of capital goods. Capital Goods used only for Personal Use or for Exempted Sales Under this, no ITC is available and this has to be indicated in FORM GSTR-2. Also, the amount of ITC shall not be credited to the electronic credit ledger. A person has purchased a chair for his personal use. Therefore, he will not be […]
July 15, 2018

How To Migrate If Registered As Composition Dealer/ Supplier/ Seller?

  What is Composition Scheme? Composition Scheme is a simple scheme under GST for taxpayers whose turnover is less than Rs. 1.5 crore (less than 75 lakhs for North Eastern states). This scheme helps the small taxpayers to get rid of tedious GST formalities and pay GST at a fixed rate of turnover. The Businesses or dealers registered under this scheme are called compounding dealers or vendors and they are required to file fewer returns as compared to normal taxpayer. Turnover of all businesses registered with the same PAN should be considered to calculate turnover.  Who can opt for Composition Scheme? Following can opt for Composition Scheme – 1.     The person should be registered under GST. 2.     Aggregate turnover of the taxpayer must be less than ₹1.5 crore. For north- eastern states, it must be less than ₹75 lakhs. 3.     Only Suppliers of goods, Dealers, and Restaurants (not serving alcohol) can opt for composition scheme. Migration from Composition Scheme to Regular Scheme under GST A person registered under Composition scheme can switch to regular scheme in case of the following two situations: ·         When his/her turnover crosses₹50 lakhs (in special category states except Uttrakhand) and ₹75 lakhs (in rest of India). ·         When he voluntarily chooses to become a regular dealer even though his turnover does not cross the threshold limit. However, while switching from being a Composition dealer to the regular one, certain rules need to be adhered to and compliance requirements that of a Regular Dealer need to be followed. Let us understand the process to be followed by a person to switch from the composition to regular scheme. 1.     File an Intimation in Form GST CMP-04 A composition tax payer who wants to become a regular tax payer should file an intimation for withdrawal from the composition scheme inForm GST CMP-04. If he is switching from the […]
July 13, 2018

Reverse Charge Under GST

  What is Reverse Charge? Normally, under the GST regime, the supplier of goods or services pays the tax on supply. But in case of Reverse Charge, the receiver of goods/ services becomes liable to pay the tax. (Section 9(4) of CGST Act 2017) The purpose of applying reverse charge is to increase tax revenues, coverage and compliance from partly or unorganized sectors. When is Reverse Charge Applicable? 1.     In case an unregistered dealer supplies goods to a registered person, the GST will have to be paid directly by the receiver to the Government instead of the supplier. For this, the registered dealer has to do self-invoicing for the purchases made. For Inter-state purchases, the purchaser has to pay IGST and for Intra-state purchases, CGST and SGST have to be paid by the buyer. 2.     If an e-commerce operator supplies services, then reverse charge will be applicable to the e-commerce operator. He will be liable to pay GST. For example, UrbanClap provides services of plumbers, electricians, teachers, beauticians etc. UrbanClap is liable to pay GST and collect it from the customers instead of the registered service providers. 3.     Supply of certain goods and services specified by Central Board of Excise and Customs (CBEC) attract a reverse charge.  Time of Supply under Reverse Charge 1.     In case of Goods In case of supplies of goods, the time of supply shall be the earliest of the following dates: ·         the date of receipt of goods ·         the date of payment ·         the date immediately after 30 days from the date of issue of an invoice by the supplier ·         Date of entry in the books of account of the recipient. Illustration: Date of receipt of goods 15th September 2018 Date of invoice 1st October 2018 Date of entry in books of receiver 18th September 2018 The Time of supply of goods, in this case, will be 15th September 2018 2.     In case of Services […]
July 12, 2018

Know about Trademark

Trademark As per the Trade Marks Act, 1999; a Trademark is defined as a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging, and combination of colours. A mark can include a device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any such combination. Trademarks that are similar or identical to an existing registered trademark cannot be registered. A Trademark cannot be applied for registration if it is offensive, generic, deceptive, not distinctive, contains specially protected emblems, etc.  The Controller General of Patents Designs and Trademarks, Ministry of Commerce and Industry, Government of India has registered trademarks after verifying the application and documents. The Trademark Law, 2002 suggests 45 Classes under which trademarks should be registered. The Trademarks Registry is responsible for registration of trademarks in the country, to provide protection of the trademark of various goods and services and to prevent fraudulent use of the mark. The major function of the registry is to register trademarks which qualify for registration based upon the Act and rules. When a Trademark is applied for registration the owner can use the symbol ™ with the product or service. Types of Trademarks The different types of trademarks that can be registered are:- Product Trademarks: Trademarks attached to identify the business’s products. Service Trademarks: These are used to identify the services of the entity. For instance, the trademark for network and broadcasting service. They help advertise the service provided. Collective Trademarks: These trademarks are registered in the name of groups or organizations. They help people associate members with the group during commercial activities. Certification Trademarks: These are certifying trademarks which help people […]
July 10, 2018

Export Of Goods and Services Under GST

Export of Goods and Services : Export of Goods and Services occur from India to other countries against monetary consideration. Export of Goods : Export means taking goods or services from India to another country against some monetary consideration. As per section 2 (18) of Customs Act, 1962, “Export of goods “means taking goods out of India to a place outside India.  Export of Services : As per IGST Act Section 2(6) “Export of services” means the supply of any service when – 1.     The supplier of service is located in India; 2.     The recipient of service is located outside India; 3.     The place of supply of service is outside India; 4.     The payment for such service has been received by the supplier of service in convertible foreign exchange; 5.     The supplier of service and the recipient of service are not merely establishments of a distinct person by Explanation 1 in Section 8 of IGST Act, 2017.  Supplies which do not form part of Export of goods or services 1.     Where the place of supply of service is within India but to a person located outside India. 2.     Where the consideration for the supply of services is received in Indian currency or in such a currency other than convertible currency. 3.     Where services are supplied to the foreign branch  How are exports treated under GST law? Under the GST regime, export of goods or services has been treated as: 1.     Inter-State supply – Export is treated as Inter-state supply under GST and IGST is charged on export. 2.     Zero rated supply – Exports are treated as Zero Rated supplies i.e. there is no tax or duty imposed on the export of goods or services either at the input stage or at the final product stage. According to Sec.16 (1) IGST ACT,Zero rated supply means any of the following supplies of goods or services or both, […]
July 10, 2018

Know All About Copyrights

Copyright : Copyright is a bundle of rights given by the law to the creators of literary, dramatic, musical and artistic works and the producers of cinematographic films and sound recordings. Intellectual Property in India : Intellectual property refers to creations of the mind: inventions; literary and artistic works; and symbols, names and images used in commerce. Intellectual Property rights are covered by the laws governed by Patents, Trademarks and Copyrights and Designs. These laws protect the holder of Intellectual property rights from third-party encroachment of these rights. It also allows them to exercise various exclusive rights over their intellectual property.  Intellectual property is divided into two categories: Industrial Property includes patents for inventions, trademarks, industrial designs and geographical indications, and; Copyright is a bundle of rights given by the law to the creators of literary, dramatic, musical and artistic works and the producers of cinematographic films and sound recordings.  The scope and duration of protection provided under copyright law varies with the nature of the protected work. Copyright can be taken for the following works: Artistic work – ‘Artistic Work’ means a painting, sculpture, a drawing, an engraving or photograph. Dramatic work – ‘Dramatic Work’ includes any piece for recitation, choreographic work or entertainment. Literary Work – The term ‘Literary Work’ refers to any literary writings, as well as computer programs, tables, compilations and computer databases. Musical work – ‘Musical work’ means a work consisting of music and includes any graphical notation of such work, but does not include any words or any action intended to be sung, spoken or performed with the music. Works covered by copyright include, but are not limited to: novels, poems, plays, reference works, newspapers, advertisements, computer programs, databases, films, musical compositions, choreography, paintings, drawings, photographs, sculpture, architecture, maps and technical drawings. Rights related to copyright include those of performing artists […]
July 4, 2018

Theory of E- Way Bill Under GST

What is an E- Way Bill? E- Way Bill or Electronic Way Bill is an electronic document, generated for transport of goods of more than ₹50,000 anywhere in India except Delhi. For movement of goods within Delhi, E- way bill is generated for goods whose value is more than ₹1 lakh. The E- Way Bill is generated online irrespective of whether the transportation of goods is inter- state or intra- state. It can also be generated or cancelled through SMS, Android App and by Site-to-Site Integration (through API). E- Way bill generated in any state shall be valid in every state and UTs. When an E- Way Bill is generated, a unique E- Way Bill number (EBN) is allocated and is made available to the supplier, recipient, and the transporter. Who should generate an E- Way Bill? Under GST regime, an E-way Bill is required to be generated by – · Registered Person – E- Way Bill must be generated for transport of goods of more than₹50,000 to or from a Registered Person. a)     When a registered person causes the movement of goods as a consigner (i.e. buyer) or consignee (i.e. seller) in his own vehicle or hired vehicle or railways or by air or by ship, then either the registered person or the recipient has to generate the E- Way Bill in form GST EWB- 01 electronically on the common portal after furnishing information in Part B of form GST EWB- 01. b)     Where a registered person causes the movement of goods and hands over to the transporter for transportation by road, but the E- way bill is not generated, then it is the responsibility of the transporter to generate the E- way bill. The registered person shall first furnish the information relating to the transporter in Part B of form GST EWB- 01. After that the […]
June 24, 2018

What Are The Offences And Penalties In GST ?

  What is an Offence under GST? Under GST, an offence is a breach of the provisions of GST Rules and GST Act. GST Act list 21 offences in section 122, chapter XVI. The following are the Offence under GST  : 1.      Supplying goods/ services without invoice or with incorrect/ false invoice. 2.      Issuing an invoice without the supply of goods/ services. 3.      Failing to pay collected TCS to the Government for a period exceeding 3 months. 4.      Collecting TCS in contravention of the law, but failing to submit to the Government for a period exceeding 3 months. 5.      Non deduction/ lower deduction of TDS or not depositing the TDS to the Government under section 51. 6.       Non collection/ lower collection of TCS or non­-payment of TCS to the Government under section 52. 7.      Claiming Input Tax Credit without the actual receipt of Goods and Services. 8.      Obtaining/ claiming a refund of CGST or SGST by fraud. 9.      Taking/ distributing Input Tax Credit in violation of the rules. 10.  Furnishing false information while registering under GST. 11.  Furnishing fake accounts/ documents or filing fake returns to evade tax. 12.  Not registering under GST despite being liable to pay tax. 13.  Providing false information at the time of applying for registration and other proceedings. 14.  Preventing any officer from discharging his duties. 15.  Transporting goods without proper documents. 16.  Suppressing sales to evade tax. 17.  Failing to maintain all the accounts/ books required by the law. 18.  Supplying/ transporting goods liable to confiscation. 19.  Issuing invoice using GSTIN of another taxable person. 20.  Destroying/ tampering any material evidence 21.  Tampering/ disposing goods that have been seized/ detained/ attached.  When any of the above offence is committed by a company, the officer- in- charge, as well as the company will be held liable for such an offence. In case, offence is committed by an HUF, LLP or a Trust, then the Karta, partners and […]
June 27, 2018

What Is The Refund Process In GST?

  What is GST Refund? GST Payment is refunded when the GST paid is more than the GST Liability. Under the GST regime, the Government provides a hassle- free refund process. The GST Refund process is online and less time consuming. When it can be claimed? There are many situations where GST Refund can be claimed. Some of these are – 1.     Exports (including deemed exports) of goods/ and services. 2.     Accumulation of ITC due to output tax being nil or exempted from tax 3.     Excess payment of tax due to omission or misinterpretation 4.     Finalization of provisional assessment 5.     Refund of GST paid by foreign or international tourists 6.     Refund of GST paid on purchases made by Embassies or UN bodies 7.     Accumulation of credit due to the output tax being lesser than input tax. 8.     Refund of pre- deposit 9.     Supplies to SEZ units 10.   Refund arising on account of decree, order or judgment of the Appellate Tribunal or court. How is GST Refund calculated? Let’s take an example – Mr. Bhatia’s GST liability for the month of September is ₹40,000. But due to mistake, Mr. Bhatia made a GST payment of ₹4 lakhs. Now Mr. Bhatia has made an excess GST payment of ₹3, 60,000 which can be claimed as a refund by him within 2 years from the date of payment. What is the time limit for claiming the refund? The time limit for claiming a refund is 2 years from the relevant date. The relevant date is different for every situation – SITUATION   RELEVANT DATE Excess payment of tax due to omission or mistake   Date of payment of tax Deemed exports of goods/ and services i.e., goods or services supplied to SEZ or 100% EOU   Date of filing return Goods exported through air or sea   Date on which ship or aircraft leaves India Goods carried […]
June 27, 2018

How GST Payments Should Be Made?

GST Payments : After filing GSTR- 1 and GSTR- 2, the business needs to file GSTR- 3 and make GST Payments. Every registered dealer shall reduce his Input Tax Credit (ITC) from the Outward Tax Liability to compute the total GST Payments needed. Under the GST regime, the tax payment is mainly classified into 3 categories – 1. CGST – Paid to the Central Government on an intra-state sale (E.g.: Within Punjab) 2. SCGT – Paid to the State Government on an intra-state sale (E.g.: Within Punjab) 3. IGST – Paid to the Central Government on an inter-state sale (E.g.: Punjab to Karnataka). In addition, certain categories of registered dealers need to make these payments – 1. Tax Deductable at Source (TDS) – A process in which tax is deducted by the person before making the payment to the supplier. 2. Tax Collected at Source (TCS) –This is only for E- commerce operators. When an ‘Electronic Commerce Operator’ receives payment (which is consideration by another person for a supply made by someone else), he must collect TCS at the rate to be notified (this rate will not exceed 1%) and pay it to the Government. 3. Interest, fees, penalty or any other payment Who is liable for GST Payments? Following persons, required to pay GST – 1. A Registered supplier of goods and services. 2. Registered dealer under Reverse Charge Mechanism (RCM). 3. E-commerce operator requires to collect and pay TCS 4. Dealers deducting TDS When should GST Payment be made? After filing GSTR- 1 and GSTR- 2, the registered dealer needs to file GSTR- 3 and make GST payments. What are E- Ledgers? E- Ledgers or Electronic Ledgers are statements of cash and Input tax credit maintained electronically on GST Portal. There are mainly 3 types of Electronic Ledgers […]
June 23, 2018
gst return

How Can You File The GST Return ?

   What is a GST Return? Every registered dealer or business has to mandatorily file a GST Return monthly, quarterly or/and annually based on the type of business.   GST Return is a document containing details – Purchases Sales GST collected on sales (Output GST) GST paid on purchases (Input tax credit) Taxpayers of all types have to file GST Return electronically with the income tax authorities of India which is used to calculate tax liability. All registered businesses have to file three monthly returns and one annual return. Once you have manually entered the details of one monthly return – GSTR- 1, the other two returns – GSTR- 2, GSTR- 3 will automatically derive information from GSTR – 1 filed by you.  Different types of GST Return applicable under the GST Law Return Form   Particulars Time period Due date GSTR-1 Details of outward supplies of taxable goods and/or services effected          Monthly   10th of the next month GSTR-2 Details of inward supplies of taxable goods and/or services effected claiming input tax credit.          Monthly   15th of the next month GSTR-3 Monthly return on the basis of finalization of details of outward supplies and inward supplies along with the payment of amount of tax.          Monthly   20th of the next month GSTR-3B Provisional return for the months of July 2017 to June 2018          Monthly   20th of the next month GSTR-4 Return for compounding taxable person/composition supplier          Quarterly   18th of the month succeeding quarter   GSTR-5 Return for non-resident taxable person.          Monthly   20th of the next month GSTR-5A Return for Non-resident persons providing OIDAR services          Monthly   20th of the next month GSTR-6 Return for Input Service Distributor          Monthly   13th of the next month GSTR-7 Return for authorities deducting tax at source. […]
June 20, 2018
capt gns

Wondering What Are Capital Gains?

Capital Gains : Capital Gains are the profit that a person realizes when he sells the capital asset for a price higher than its purchase price. The transfer of capital asset must be made in the previous year. Income from capital gains is classified as “Short Term Capital Gains” and “Long Term Capital Gains”. A capital asset includes: (a) Any kind of property held by a taxpayer, whether or not connected with business or profession. (b) Any securities held by a FII(foreign institutional investor ) which has invested in such securities. Capital Gains include any property held by the taxpayer, except the following: Stock in trade. Consumable stores or raw materials held for the purpose of business or profession. personal effects, that is, movable property (including wearing apparel and furniture) held for personal use by the taxpayer or any member of his family dependent on him, but excludes— (a) jewellery(ornaments made of gold, silver, platinum or any other precious metal or any alloy containing precious metal) (b) archaeological collections; (c) drawings; (d) paintings; (e) sculptures; or (f) any work of art. Agricultural Land in India, not being a land situated in various specifications specified by the Income Tax Department in this behalf. 6.5 percent Gold Bonds, National Defense Gold Bonds and Special Bearer Bonds. Gold Deposit bonds under Gold Deposit Scheme. Types Of Capital Gains : 1)Short term:  Any asset owned by an individual (taxpayer) for less than 3 years since the date of transfer/ownership is termed as a short term capital asset. This duration should be less than 12 months in case of shares. Capital gain earned by an individual by means of transfer of a short term capital asset is termed as short term capital gain. 2)Long term: Any asset owned by an individual (taxpayer) for more than 3 […]
June 20, 2018

All About HSN Code Under GST

   What is HSN Code? Harmonized System of Nomenclature (HSN) : A multipurpose product nomenclature developed by the World Custom Organizations (WCO). It first came into effect in 1988 with a purpose to classify more than 5000 products all over the World in a systematic manner. Over 98% of the goods in international trade are classified in terms of the HSN. HSN number is adopted by almost 200 countries which remain same for almost all goods. However, HSN Code used in some of the countries varies a little, based on the nature of goods classified. It is a six digit uniform code supported by well- defined rules to achieve uniform classification.  Why is HSN Code important? The main aim of HSN Code is to classify products from all over the World in a systematic and logical manner. It is a set of well defined rules, used to identify the tax rate applicable to a product in a country. And it also helps in determining the quantity of product exported or imported in an out of a country and the movement of goods across the World. Also, it removes the need to upload detailed description of goods which not only saves time but also makes filing easier. HSN in India : Since 1971, India is a member of World Customs Organization. It has been using6- digit HSN codes since 1986 to classifygoods for Customs and Central Excise. Customs and Central Excise, later, added two more digits to make the codes more precise, resulting in an eight-digit classification. Under GST, the registered dealers need to adopt 2, 4, or 8 digit HSN codes for their goods, depending on their turnover. Previous year turnover shall be considered to find out the number of HSC digits to be used. HSN codes must be mentioned in every tax invoice, issued […]
June 20, 2018

Taxation Of Gifts Received By An Individual

Taxation of gifts : Indians have a custom of gifting people things, whether it by on an occasion, festival or otherwise. The Taxation of gifts is a very important section, whether the gift is in cash(monetary gift ) or otherwise. As per income tax act. Taxation of gifts received are in the hands of recipient under the head of other Sources. There is no there is no Taxation of gifts for the donor. In case of an individual or Hindu Undivided Family (HUF), If the following conditions are satisfied then any sum of money received without consideration (i.e., monetary gift may be received in cash, cheque, draft, etc.) by the individual/ HUF will be charged to tax, normally under the head of “ Income from other sources”: Sum of money received without consideration. The aggregate value of such sum of money received during the year exceeds Rs. 50,000. That is , a sum of monetary gift  that exceeds Rs 50,000 will be taxable. This is subject to the following exemptions that are fully exempt from paying tax: Money received from relatives. Relative for this purpose means: In case of an Individual Spouse of the individual; Brother or sister of the individual; Brother or sister of the spouse of the individual; [As amended by Finance Act, 2018] Brother or sister of either of the parents of the individual; Any lineal ascendant or descendent of the individual; Any lineal ascendant or descendent of the spouse of the individual; Spouse of the persons referred to in (b) to (f). Any sum of money received from the above persons as a gift will be exempted from tax. Monetary gifts received from friends or any other persons other than the above mentioned, will be charged to tax if it exceeds Rs50,000. 2. In case of […]
June 14, 2018

Credit Notes and Debit Notes Under GST

Credit Notes and Debit Notes: It is mandatory for a registered dealer or business to issue a tax invoice to its customers for the sale of goods and/ or services. However, there can be some situations during the course of trade or commerce where original tax invoice needs amendment. These situations can be – The supplier has mistakenly declared a value which is more/ less than the actual value of goods and services provided. The tax rate, declared higher/ lower by the supplier, than what is applicable for the kind of goods and services provided. The quantity received by the recipient is less/ more than the demanded. The quality of the goods is not up to customer’s level of expectation. Any other similar case In order to revise these errors in the invoices, Credit Notes and Debit Notes is issued by the supplier or the customer. The seller as a response or acknowledgement to the Debit Note issues a Credit Note The buyer issues a Credit Note as an acknowledgement of the receipt of Debit Note What is a Credit Note? A credit Note : issued by the supplier– When tax charged in the GST invoice : found to exceed the actual tax charged in respect of goods and/or services supplied. When the taxable value in the GST invoice : found to exceed the actual taxable value in respect of supply of goods and services. Where the goods and/ or services are returned, or, Where the goods and/ or services : found to be deficient or not as per satisfaction of the buyer. What is a Debit Note? A credit Note : issued by the supplier– When tax charged in the GST invoice is less than the actual tax charged in respect of goods and/or services supplied. When the taxable […]
June 5, 2018

Things to Keep in Mind For GST Registration

Under GST Regime: Every organization whose turnover exceeds ₹20 lakhs (₹10 lakhs for North east and hill states) has to register as a regular taxable person. It is mandatory for every business involved in the buying and selling of goods and services to do GST Registration. If any organization fails to do GST Registration or carries on the business without GST Registration, it has to pay heavy penalties for this offence.  Entities without GST Registration would not be allowed to collect GST from its customers and claim Input tax credit of GST paid by them.  Who should register for GST? Business with turnover above the threshold limit of ₹20 lakhs (₹10 lakhs for North east and hill states like Jammu & Kashmir,  Himachal Pradesh, Uttarakhand)  Individuals registered under the earlier GST law (i.e., Excise, VAT, Service Tax etc.) Casual taxable person Non-Resident taxable person Agents of a supplier & Input service distributor Person paying tax under the reverse charge mechanism Person who supplies via e-commerce aggregator Every e-commerce aggregator Person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person GST Registration Process : GST Registration is a tedious process which involves submission of many business details and documents. Go to official GST Portal –[source] Under the services tab, choose Services > Registration > New Registration. On the registration page, enter all the relevant details including state, PAN number, mobile number and email address in Part-A of Form GST REG-01 of GST Registration. After entering the details, click ‘proceed’. You will receive two OTPs – one on the mobile and other on the email address. That OTP will be valid only for 10 minutes. After OTP Verification, you will receive a Temporary Reference Number. Afterwards receiving the TRN, fill Part-B of Form GST REG-01 duly signed, […]
June 14, 2018

Details on Issuing GST Invoice to Customers

GST Invoice :  As a GST registered business or a dealer, you are required to issue GST Invoice to your customers for sale of goods and/ or services. An Invoice, also known as bill, is a list of goods and services provided to the customers. It also contains relevant information regarding goods and services, the amount due for payment etc. GST Invoice must be generated either electronically through computer or manually by hand. GST Invoice is an important document that records the time of supply of goods and/or services. Without GST invoice, a registered person cannot claim the benefit of input tax credit. Thus, it is very important to issue a GST invoice without any error which adversely affect both the customer and the supplier. Mandatory Fields required in GST Invoice : No specific format is prescribed by the Government of India for a GST Invoice. However, following contents are mandatory to be mentioned in a GST Invoice – Name and address of the supplier GSTIN of the supplier Invoice Number Invoice date Customer name and address Customer GSTIN (if registered) If the customer is not registered and the value is more than ₹50,000, then the invoice should carry:  Name and address of the customer  Address of delivery,  State name and state code Place of supply HSN code/ SAC code of goods Item details i.e. description, quantity (number), unit (meter, kg etc.), Total value of supply of goods/ services Taxable value and discounts Rate and amount of taxes i.e. CGST/ SGST/ IGST Whether GST is payable on reverse charge basis Signature of the supplier  When should a GST invoice be issued? The GST Act has prescribed the time limit to issue GST tax invoices to customers. The time of issuing the GST invoice depends upon whether it is supply of goods or […]
June 6, 2018

What Are The Leave Travel Allowance ?

LTA : Leave Travel Allowance (LTA) is one of the common element of compensation, adopted by employers to remunerate employees due to the tax benefits, attached to it. An LTA is the remuneration, paid by an employer for Employee’s travel in the country, when he is on leave with the family or alone, after retirement or termination of his service, exempt from tax. If you are traveling by Air : The amount that will be eligible for exemption will be Economy class fare of the national carrier( Air India) by shortest route or the amount spent whichever is less. If you are traveling by Rail :  AC First class fare by shortest route or the amount spent whichever is less. Where places of origin of Journey and destination are connected by rail & journey is performed by any other mode of transport The amount deducted will be the AC First class fare by shortest route or the amount spent whichever is less. Where places of origin of Journey and destination : not connected by rail :- a)In case where a recognized public transport exists in the route. – First class or deluxe class fare by the shortest route or the amount spent, whichever is less. b) No recognized public transport exists. – AC First class rail fare by Shortest route or the amount spent whichever is less.        This Exemption’s limitations: Limited to the actual traveling cost incurred. The tax exemption is not valid for the “costs-incurred” during the entire trip. It might include expenses such as food expenses, shopping expense and other expense. LTA exemption is not available for more than two children of an individual born after October 01, 1998. Therefore, any number of children born before 1st October, 1998 can avail this benefit. Also, in case of multiple births after one child , […]
June 5, 2018

GST: Made Fun and Simplified

GST : In the past few months we all have heard a lot of a new face, the fresh superstar of the bollywood of taxation that rocked and shocked the entire nation for like the whole year. Yes that’s GST. This brand new hero has rose and shone above all over the history of taxation of the nation pretty dramatically. Kicking backs the khans like Excise, Octroi and VAT. Struggling for over 16 years, finally got its big break in the super hit, directed by the PM. To all of your concern, GST as we should know is an Indirect tax which eliminated many other Indirect taxes. It is comprehensive, multi staged and destination based. Multiple Stages:  There is a lot of change-in-possession or we can say change-in-hand of the product from the producer to final consumer. These stages are; Raw materials dealer Manufacturer (Primary) Packaging Labeling Whole-seller Retailer Final consumer GST : imposed on each of the above stages individually. Hence, called a multi staged tax. Destination Basis:  To make this clear, let’s take an example of a soft-drinks dealer from Maharashtra trying to sell their product in Gujarat. Now, an obvious question arises that whether the tax imposed would go to Maharashtra government, Gujarat government and State government or to the centre. The Gujarat government receives the tax collected since the tax levied is at the point of consumption. There was a phenomenon taking place earlier before the imposition of GST , known as ‘Tax Cascading’. That briefly means overlapping of various taxes one over another and enormously raising the product cost. GST cuts off this too. A few more word in the praise its praise; Unitizing whole taxation system. Removing cascading of taxes. Easy accessibility. Higher registration threshold. Small business composition schemes. Simpler online procedure. Lesser compliance. […]
June 4, 2018

Wondering About GST ? Here is Overall GST Overview

   What is GST? On 1st July, 2017, Government of India announced a new tax which dismantled all the other taxes that were levied on the sale of goods and services. This new tax, known as GST, is one of the biggest tax reforms India has witnessed after Independence. The acronym GST stands for Goods and Services Tax. It is an indirect tax levied in India on the supply of goods and services. The agenda behind the introduction of GST was – “One Nation, One Indirect tax”. Thus, it is one indirect tax for the entire country which has subsumed all the other indirect taxes such as sales tax, excise tax, VAT, cess tax, entertainment tax, service tax etc. So, now taxpayers have to pay only one type of tax – GST. GST is one simple and consumer- friendly tax collected by the Government of India from the Businesses and individual citizens. GST is paid by the final consumers, but remitted to the Government by the businesses dealing in goods and services. The seller adds the GST to the price of the product, and the customer, who buys that product, pays the product price plus GST. This portion of GST is then collected by the seller and paid to the Government. France was the first country to implement the GST tax system in 1954. Since then almost 160 countries have adopted this tax regime, such as, Canada, Australia, Singapore, U.K., Monaco, Italy, Spain, South Korea, Brazil, Vietnam, etc. Need of GST: Earlier, the Indian tax regime was riddled with various indirect taxes levied by the Central Government and the State Government. Thus, the tax regime was very complex and complicated which led to various bad business practices such as tax evasion. To overcome this challenge, GST came into picture with an ideal of […]
May 25, 2018
What is Personal Financial Planning

What is Personal Financial Planning ??

  The Planning Process: All of us have a few goals set out for the years ahead, Financial planning is the process by which one can identify, prioritize and plan to achieve those financial goals by saving and investing the money wisely. In other words, financial planning is developing a personal road map, which shows the milestones as an indicator of investment which help us to achieve our final destination, which may be buying a home or a car, saving for child’s education, planning for retirement or protecting family against financial risks. To ensure that these goals become a reality, one has to plan consciously for these outcomes. Personal financial planning is needed because it helps us map out our financial future through the planning process. We can identify where we are standing and then looking where we want to go and once we’ve done this, it’s easy to make the plans to accomplish our financial goals. Why do we need it? Many people assume that personal financial planning is only for the rich people. However, it is not at all true. If you have a lot of money, planning can help you invest it wisely. And if your income is not adequate, you can still take steps to plan your financial activities which will lead to an improved lifestyle. Everyone including college graduates, single professionals, salaried employees, young married couples, single parents, mid- career married couples and senior corporate executives – needs a personal financial plan. Benefits of Personal Financial Planning: Financial Planning guides us to examine our current financial status. With personal financial planning, we learn to acquire, use and control our finances more efficiently which allows us to improve our standard of living. Managing the finances effectively also helps us understand the amount of money needed to pay […]
June 1, 2018

What is the Due Date for Filing Income Tax Return ?

FY 2017-18/AY 2018-19 : Due date of Filing Income Tax Return for FY 2017-18 (AY 2018-19) is 31st July 2018 for Individuals 30th September 2018 for Businesses (requiring audit) (This is Income Tax Return for the financial year 2017-18. Applicable for income earned from April 1st, 2017 to March 31st, 2018). Income Tax Return filing has begun for Financial Year 2017-18 (Assessment Year 2018-19) Let’s understand whether you require to file an Income Tax Return in India, for FY 2017-18 Mandatory Filing – In any of the following situations (as per the Income Tax Act) it is mandatory for you to file an income tax return in India: Your gross total income (before allowing any deductions under section 80C to 80U) exceeds Rs.2,50,000 in the FY 2017-18 This limit is Rs 3,00,000 for senior citizens ( who are more than 60 years old but less than 80 years old) or Rs 5,00,000 for super senior citizens (who are more than 80 years old) You are a company or a firm irrespective of whether you have income or loss during the financial year. If you want to claim an income tax refund. You want to carry forward a loss under a head of income. You have exempt long term capital gains from – sale of equity shares in a company OR sale of unit of equity oriented mutual funds, OR sale of unit of business trust, of more than Rs 2,50,000 in a financial year. Even though these gains are exempt from tax, such persons have to mandatorily file an income tax return. [effective FY 2016-17, AY 2017-18] Return filing is mandatory if you are a Resident individual and have an asset or financial interest in an entity located outside of India. (Not applicable to NRIs or RNORs) Or if you are a Resident […]
June 1, 2018

Taxable Income From House Property

What is House Property ? According to the Income Tax Authority of India, House Property consists of any building or land appurtenant thereto of which the assessee is the owner. The appurtenant lands may be in the form of a courtyard or compound forming part of the building. But such land is distinguishable from an open plot of land, which is not under this head but under the head “Income from Other sources” or “Business Income” as the case may be. Besides, “house property” it includes flats, shops, office space, factory sheds, agricultural land and farm houses. Further, house property includes all type of house properties, i.e., residential houses, godowns, cinema building, workshop building, hotel building, etc. For Example:- Mr. X has one big house. It includes vast open area within its boundaries. The house rent let out is Rs. 1,25,000 p.m, out of which rent of Rs. 50,000 p.m., attributable to the open land. In this case, entire rental income is taxable under the head house. Conditions For Taxing Income Under This Head Income from house property is taxable in the hands of its legal owner in whose name the property stands. “Owner” for this purpose means a person who can exercise the rights of the owner not on behalf of the owner but in his own right. A person entitled to receive income from a property in his own right is to be treated as its owner, even if no registered document is executed in his name. To be taxable, The property must consist of buildings and lands appurtenant thereto; The assessee must be the owner of such house property;  The property may be used for any purpose( but it should not be used by the owner for the purpose of any business or profession carried on by […]