GST Impact on last Service Tax Return ST-03

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GST Impact on last Service Tax Return ST-03

Dream of Central Government will finally come true as GST Council has granted approval to CGST, IGST SGST, UTGST and Compensation law.These laws have been approved by the cabinet. So once again GST will become a matter of discussion for all industries.

We will busy doing filing of service tax return for the financial year of 2016-2017 as the last date for filing for second half yearly service tax return i.e ST-03 is 25th April’ 2017.

This service tax return will be the last service tax return before implementation of Goods and Services Tax .Government would be implementing Goods and Services Tax in the month of July’ 2017. Therefore service tax return for the period Oct’ 2016 to Mar’ 2017 would be very important considering the impact of implementation of GST.

By the virtue of GST implementation, closing balances of Cenvat credit would become very important as GST shall transit in the middle of the year, therefore, this service tax return would be last service tax return i.e.  ST-03 which would have to be filed on or before 25th April’ 2017.

Before filing the service tax return. Closing balance of Services There are some important points on which we should be very clear closing balance of each & every service must be frozen and matched with account ledger Cenvat Credit: Secondly, Input credit balance is also a very important element in transit of GST.

Eligible Invoices regarding input credit, whether pertaining to RCM or normal must be enter in respective ledger as well as if possible we should set up one cut off for input credit so that when we go for GST than there should not be any confusion on balance transfer from service tax return to GST.

Input Credit of Krishi Kalyan Cess will be considered on same footage as in case of Cenvat Credit.

Input Credit of education cess and secondary and higher education cess:- Utilization of the accumulated balance of Education Cess and SHE Cess has been a sensitive issue and a topic for discussion among the assessees and the consultants.

This will also create a doubts in the minds of the assessees as regards the fate of their Cenvat balance after implementation of the unified tax reform, GST. Therefore input credit of education cess and secondary and higher education cess is major issue in GST as CBEC has not issued any guideline regarding ulitization of Education cess and secondary and higher education cess against output liability.

We hope that this confusion will resolve before implementation of Goods and Services Tax . Adjustment of Rule 6 (3) & Rule 6

(4): According to the Rule 6 (3) & Rule 6 (4), we can set off service tax output liability with excess amount of service tax paid or advance service tax paid. If possible all such adjustment should be completed in this return. In conclusion, while filing service tax return for this year we must consider all aspect with regard to the implementation of Goods and Services Tax so that we will not have any confusion while implementing  GST in our organisation.

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