GST: What to do now and how to do ?

India is going to implement GST from 1st July, 2017. Everyone is confusing what to do now and how to do. In this regards, at this moment the most important things are .What to do the stock which is held on 30th June 2017

What to do now

  • Allocate your stock into quantitative details find HSN code (up to six digit) as well as Invoice wise also as on 30th June.
  • Get Account statement from your debtors and creditors and reconcile it
  • If there are any Mis-match in your VAT returns then correct it immediately and revised your returns
  • Collect all your “C” forms, “H” forms and “F” forms immediately
  • Finalize your books of account up to 30th June, 2017
  • Collect the tax documents of your closing stock and keep a Xerox copy of them in a separate file
  • Do the ageing of closing stock for 12 months
  • Create a manual to decide “PLACE OF SUPPLY” of your business supply
  • Classify your all kind of stock in different kind of rate wise
  • Keep ready HSN code wise list of all your Inward supply and Outward supply
  • Collect the GSTIN of all your vender and give your number to all your clients
  • Do complete analysis of your Profit and Loss account for attracting RCM provision
  • Keep final your Invoice format and keep ready your Bill Book according to new law
  • Update your System with fast internet,computers and accounting software with GST reportings.
  • Anti Profiting clause Pass profit to your customers
  • All your Inward supply must be from registered supplier
  • Keep in mind about the ITC credit sequence.
  • ITC must be reversed if invoice is not paid within 180 days. Interest is also payable on the same
  • ITC relating to supply commonly used for exempted as well as taxable supply- credit must be reversed proportionately
  • Two type of sales Invoices
    1 TAX Invoice: if supply is taxable
    2 Bill of Supply: if supply is exempted
  • Receipt of Advance, GST Payable
  • RCM: invoice and payment voucher must be issued while
  • Collection of late fee or Interest on account of delayed payment: GST apply on Interest/ late fee. Supplementary invoice must be issued
  • Issue of debit note/ credit note
  • Loading, unloading, local freight attract same rate as supply due to composite supply

HOW TO TAKE CREDIT OF CLOSING STOCK IN HELD ON 30TH JUNE 2017

For easy understanding we can divided all provisions into below parts.

REGISTRED UNDER CENTRAL EXCISE AND SERVICE TAX
REGISTRED UNDER VAT ONLY AND HAVING and DOESN’T HAVING STOCK OF EXCISE PAYING INVOICE

Now we understand all these in details.

REGISTRED UNDER CENTRAL EXCISE AND SERVICE TAX

  • Closing CENVAT will be opening ITC in GST
  • Credit must be allow in GST regime also
  • File GST TRAN-1 within 90 days
  • All returns of last 6 months must be
  • Central TAX Credit will be CGST, VAT Credit be SGST
  • Credit will only be used for payment of GST Tax, not interest or late fee
  • Timely collect your “C” forms and “H” forms

REGISTRED UNDER VAT ONLY AND HAVING STOCK OF EXCISE PAYING INVOICE

  • Not applicable for composition dealers
  • Any closing stock of having excise paying documents get 100% CGST Credit in Electronic Credit Ledger of CGST
  • Goods must be taxable in GST
  • These invoices are not older than 12 months

REGISTRED UNDER VAT ONLY AND DOESN’T HAVING STOCK OF EXCISE PAYING INVOICE

  • If GST is equal or more than 18% than 60% if CGST, 30% if IGST
  • If GST is less than 18% than 40% if CGST, 20% if IGST
  • Goods must be identifiable
  • GST TRAN-2 must be submitted for next 6 months
  • Goods must be sold within 6 months
  • After 6 months no Credit will be allow
  • Profit must be pass to customers.

EXAMPLE

IF GST RATE IS BELOW 18% and WE CHARGE CGST & SGST

SALE VALUE – 1000
CGST@6% – 60
SGST@6% – 60
TOTAL – 1120
CGST CREDIT
60 * 40% = 24

IF GST RATE IS 18% OR ABOVE 18% and WE CHARGE CGST & SGST

SALE VALUE – 1000
CGST@4% – 140
SGST@14% – 140
TOTAL – 1280
CGST CREDIT
140 * 60% = 84

IF GST RATE IS BELOW 18% and WE CHARGE IGST

SALE VALUE – 1000
IGST@12% – 120
TOTAL – 120
IGST CREDIT
120 * 20% = 24

IF GST RATE IS 18% OR ABOVE 18% and WE CHARGE IGST

SALE VALUE – 1000
IGST@28% – 280
TOTAL – 1280
CGST CREDIT
280 * 30% = 84