GST for Manufacturers in India

Goods and Services tax is expected to be rolled out between April 2017 – September 2017. If you are a manufacturer in India, You might be preparing for the transition from Excise to GST. This post gives a quick headsup on what is to come and what needs to be attended while you move to GST from Central Excise and VAT.

GST for Manufacturers

Current Taxes Vs. GST

”“ If you are a manufacturer or trader, currently your input tax can be adjusted on VAT only. Service Tax paid cannot be claimed as an input. However in the unified tax system, you can claim credit for all services, purchases and manufactured goods (as supply replaces service, sale and manufacture as a tax event)

”“ GST can make compliance easier as it subsumes multiple taxes and makes the point of taxation less ambiguous. Adoption of Cloud Accounting Software like Reach will make it super easy for compliance.

As a manufacturer, the key thing to note is that the point of levy of GST is on supply (not on manufacture) and hence it not only simplifies the process, it also makes the documentations easy.

How to move from Excise to GST

  • If you are registered with Central excise and have a valid PAN, you will automatically be migrated to GST
  • A Provisional Certificate of Registration will be issued in GST REG-21
  • You have to submit and apply for Registration by submitting REG-20 Form within 6 months
  • After submission, you will be issued a Final Registration Certificate in REG-06

Which is the best GST Software to use for Manufacturers?

As all the Tax Filings will have to be done electronically, its important to choose your accounting software wisely.

  • Tally

Tally is the old fashioned legacy software of India. Though its widely used, It has disadvantages of not being on the cloud and compromises security. If you are considering a GST software, It will be wise to move to a Cloud based Accounting System which has the capabilities to manage a manufacturing business

  • Reach Accountant

Reach is the only Online Accounting Software with GST Capabilities and ability to give you features specific to manufacturing enterprises. To get a quick demo of our product, you can Visit www.reachaccountant.com

 

What are the Changes to the Excise Rule 11 Invoice under GST?

Rules for the Tax Invoice under GST

  • For Goods, The Tax Invoice should be issued at the time of removal of goods or delivery which ever is earlier
  • For Services, The Tax Invoice should be issued within 30 days of supply of service
  • Three copies of the Tax Invoice should be printed
    • One for recipient
    • Duplicate for Transporter
    • Triplicate for Supplier
  • The following details should be displayed in the Tax Invoice
    • The Tax Invoice should have unique serial numbers (number or Alpha numeric)
    • The State Name and State Code Should be mentioned
    • GST Identification Number should be displayed
    • HSN Code for the product/ service needs to be mentioned
    • Taxable value after deducting discount should be displayed
    • The State GST, Central GST and Integrated GST should be shown seperately
    • If the supply is meant for export, the following details should also be mentioned
      • Supply meant for Export on payment of IGST/ on bond without payment of IGST
      • Number and Date of ARE-1 (application for removal for export)

 

What Returns have to be filed under GST by Manufacturers?

Date Return
10th GSTR-1
11th GSTR-2A
15th GSTR-2
20th
GSTR-1A
GSTR-3
GST-ITC1
GSTR-3A
31st Dec GSTR-9

 

What will happen to the balance of input tax credit pending currently?

You are allowed to carry forward the balance CENVAT credit (provided it is allowed as input under GST). To avail the credit, make sure the ER-1 or ER-3 form reflects the value of CENVAT.

Can I transfer the input on Closing Stock of Rawmaterials, Work in Progress and Finished Goods?

Yes. You can transfer the input credit from your CENVAT or VAT held on your closing stock if the following conditions are satisfied:

  • The closing stock should be held in the form of Raw materials, Work-in-progress or Finished Goods and intended to be used in taxable supplies
  • The benefit of the credit should be passed on in the way of reduced prices to the recepient
  • You should be eligible to claim input tax credit under GST
  • You should have proof of Invoices or tax paying documents for the current credit and these documents should be less than 12 months old
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