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On 21st July 2017 India bought out its most significant reforms in taxation by implementing GST (Goods and Services Tax). A GST Council was formed for framing rules and regulations governing GST compliance in India. This council is headed by Union Finance Minister of India. The Council has been very responsive to the difficulties faced by traders and have been coming up with reforms making it easy for the traders to comply with GST regulations. To understand the changes of the council meetings we need to understand the structuring of GST Registration and filing in the beginning

Old Rules

  • GST Registration Criteria

It was compulsory for any trader with an annual turnover of INR 20 Lac or more to register for GST. If you are providing service to other than your home state it was mandatory to get registration irrespective of your revenue. If you are selling products on e-commerce platform it was compulsory to get GST registration even if your annual revenue has not crossed INR 20 Lac. These rules made it compulsory for almost all traders to get GST Registration and consequently follow the complex filing process.

  • GST Filing

Govt. envisaged 3 parts of filing and had 3 deadlines every month for the traders to follow. The sales and purchase details were to be filed through GSTR-1 before the 10th day of every month. Input credits as entered by vendors (recipients) was to be updated by the department through GSTR-2 which can be edited by the traders between the 11th and 15th day of every month. Then a final form GSTR-3 which was updated by the department was to be approved by traders either with or without editing between the 16th and 20th day of every month.

Due to some technical difficulties, the govt., could not come up with the forms GSTR-1,2 and 3 on time for the first filing of GST returns. Hence Govt. had to come up with an intermediate form called GSTR-3b in which the traders had to declare their sales and purchases for the month and pay the outstanding GST for the month before 20th day of every month. Govt. extended the deadline for other forms to be filed.

This created lots of confusion and the compliance burden on small traders was extremely high which created chaos in small traders community. The collective feeling of the trading community was that of confusion and desperation since compliance for GST rules created a heavy financial burden on them.

Rules proposed in October 2017

GST council on its 22nd meeting on October 6, 2017, implemented few landmark reforms which went a long way in simplifying the compliances for GST.

  • GST Registration Criteria 

For a service sector it was made optional to go for GST Registration until they reach a revenue of Rs.20 Lac irrespective of them having sales in states other than their home state. The council also made it optional for traders having inter state sales through e-commerce platform only. They also increased the maximum limit for composition registration from annual turnover of 75 Lacs to 1 Crore

  • GST Filing

Council proposed a quarterly filing for GST registered firms with annual turnover less than 1.5 crores. These firms constitute around 90% of the GST registered entities and hence provided great relief to small traders. Govt. Proposed a monthly filing of GSTR-3B (which was to be scrapped eventually) and make GST payment to govt. The returns through GSTR-1, 2 and 3 was to be made quarterly for these small firms. However, different last dates for different forms and heavy penalty still continued to create lot of confusion and financial burden on these small traders

New Rules 

The meeting on May 04 2018 has proposed a returns filing methodology which can be considered as future ready. The council has also taken a decision to implement these changes in 2 phases to avoid any confusion and inconvenience to traders

  • GST Filing

Initially for the next 6 months, until the new software gets ready the current system of GSTR-3B (Monthly) and GSTR-1 (Quarterly for small firms). After 6 months, the seller will upload the invoices in GSTN portal which needs to be acknowledged by the buyer. This enables the buyer to get input credit. If there is any gap in the tax paid and credit claimed, the buyer will be notified and the buyer will have to correct the excess claim made, if any.  This phase is proposed to be in place for only 6 months after implementation.

After this by around June 2019, there will  be facility for the sellers to upload the invoice on the portal on real time so that the input credit for the buyer is not stuck. In both the second and third phases, taxpayers will have to file details of total turnover in case of business-to-consumer transactions. For business-to-business transactions, a four-digit Harmonised System of Nomenclature (HSN) code would have to be mentioned besides all invoice and turnover details.

If the seller fails to pay the tax, the tax authorities will recover it from the seller, unlike in the current system where the buyer is asked to reverse the credit availed along with interest. If the seller is untraceable, the tax will be recovered from the buyer following due course of law. In case of missing invoices, the buyer will not be able to avail the credit.



SMEs are stuck in the GST  spider web, why? The regime is simply undergoing changes every now and then, the lack of not having a accounting and secretarial advisory is putting pressure on these businesses. This blog intends to make life easier for these guys, New Rules in the GST Game that Businesses should know.

As per 22nd GST Council meeting of 6th October 2017:

Lesser burden of compliance for small businesses

  • The government has recognised hardship faced by small businesses with turnover of within Rs 1.5cr, by delaying their return filing compliance to once a quarter from once a month. Taxes will be paid quarterly.
  • Small businesses will also have to file monthly returns for three months – July, August, and September – and the switchover to quarterly filing will happen from the cycle starting October 1.


Relief for Service Providers

  • Exemption from Registration for a service provider if the aggregate turnover is less than Rs. 20Lacs (10 Lacs in special category state except for J&K) even if they are making inter-state supplies of services.
  • Services provided by a GTA to an Unregistered person shall be exempted from GST.
  • TDS/TCS provisions shall be postponed till 31.03.2018.
  • Small businesses will also have to file monthly returns for three months – July, August, and September – and the switchover to quarterly filing will happen from the cycle starting October 1.


Relief for Exporters

  • Refund cheques for July exports will be processed by Oct 10 and refund cheques for August exports will be processed by Oct 18.
  • Every exporter will now get an e-wallet. In the e-wallet, there would be a notional amount for credit. The refund they will eventually get will be offset from that amount. The e-wallet will be introduced from April next year.
  • Merchant exporters will pay a nominal 0.1% GST applicable on exports to enable their suppliers to claim ITC.



Composition Scheme changes

  • Person otherwise eligible for availing the composition scheme and are providing any exempt services shall now be eligible for the composition scheme.
  • Eligibility of composition scheme raised to INR 1 crore.
  • Traders will pay 1%, manufacturers 2% and restaurants 5% under the composition scheme.
  • Due date of FORM GSTR-4 for the quarter July-September, 2017 is extended to 15th November 2017


Under consideration 

  • Finance Minister Arun Jaitley announced that a group of ministers will relook tax on AC restaurants. GST for AC restaurants may become cheaper from 18% to 12%. A group of ministers has been formed to devise the mechanism. The GoM will submit its report in 14 days.
  • GoM will also make the composition scheme more attractive

Next meeting of the council will take place in Guwahati on 9-10 November.


RCM postponed

RCM applicable for the purchases from the unregistered dealer shall be suspended till 31.03.2018.


No GST on advance receipts for businesses with turnover under INR 1.5cr

Taxpayers having annual turnover upto 1.5 Crore shall not be required to pay GST at the time of receipt of advances on account of supply of goods.


Significant rate changes

  • GST on unbranded Ayurvedic medicines has been reduced from 12% to 5%.
  • Tax rate for man-made yarn has been reduced to 12% from 18%. The decision will have an effect on textiles.
  • GST rate on many job work items reduced from 12% to 5%. GST rate on some stationery items, diesel engine parts also reduced to 18% from the earlier 28%.
  • GST on khakra and unbranded namkeen has been reduced from 12% to 5%. Tax on zari work has been reduced from  12% to 5%.
  • 35% abatement on old leasing contract of vehicle
  • Printing Job work rate revised from 12% to 5%



  • E-way bill has been deferred to 1stApril 2018
  • Relief for jewellers as no need to furnish PAN card on jewellery purchase of more than Rs 50,000. The amount of jewellery purchase for which KYC will be required will be determined later.
  • 35% abatement on old leasing contract of vehicle
  • Due date of GSTR-6 (filed by an input service distributor) for the months of July, August and September 2017 has been extended to 15.11.2017


Central Tax Rate Notification (28.06.2017)

  • Most of the goods are kept at the same rates as announced by the GST councilearlier but rough or non industrial unworked diamond or precious stones will be charged CGST at the rate of 0.125%.
  • List of goods exempt from CGST. No change in the list.
  • Oil, gas, coal and petroleum licenses and sub-contract licenses and leases will be charged GST at the rate of 2.5%.
  • The person liable to deduct TDS as per the GST law supplying intrastate goods or services to an unregistered person would be exempt from CGST.
  • Cashew nuts, not shelled or peeled, Bidi wrapper leaves (tendu), Tobacco leaves, silk yarn, Supply of lottery would have reverse charge applicable under GST.
  • Refund of the unutilized ITC would not be provided in the case of the tax on output being lower than the tax on inputs for certain goods mainly related to the textile and railways.
  • The supply of goods by CSD to unit run canteens and authorized customers and supply of goods by the unit run canteens to the authorized customers.
  • 50% of the tax paid on inward supplies of goods by the CSD for further supply to unit run canteens or authorized customers can be claimed as refund under GST.
  • Person liable to deduct TDS as per the GST law supplying intra goods or services to an unregistered person would be exempt from CGST.
  1. Intrastate supply of second hand goods by a registered person who deals in selling second hand goods to an unregistered person would be exempt from CGST.


News on GST Act

The entire framework of GST is based on GST Act. It was devised by the GST Council, which is a committee consisting of the Union Finance Minister (Chairperson), the Union Minister of State, the minister in-charge of finance or taxation or any other minister nominated by each State Government.


E-Way Billing

The GST provision, requiring any good more than Rs 50,000 in value to be pre-registered online before it can be moved, is likely to kick in from October after a centralised software platform is ready, a top official said. 

The provision, called the e-way bill, would be implemented after infrastructure for smooth generation of registration and its verification through hand-held devices with tax officials is ready. 


The GST is a constitutional amendment, and any change in the law will also affect the rules therein. Rules for invoicing, rules for penalty, rules defining the point of taxation – these are just some of the examples of any rule change in the model law. We at Wazzeer will be happy to help you out, experience Wazzeer virtual advisory system, let’s connect!




The main reason to implement GST was to abolish the cascading effect on tax, with GST there is only  simplified and cost saving system as procedural cost reduces due to uniform accounting for all types of taxes. Only three type of account; CGST, SGST & IGST have to be maintained. GST implications are observed on almost all sectors, through this blog we would be looking into the Impact of GST on Trading Sector. 

  1. For Wholesalers:

The wholesale market is fundamental to extending the reach of goods and services to the interiors of the country, especially the rural markets. Most wholesalers operate in cash transactions because of which there is a good chance that some transactions are not accounted for, which was previously a concern but ceases to be one under GST.

Given below are the main advantages that GST brings to wholesalers.

  • Transparent tax management: The introduction of technology into the taxation system can be a blessing in disguise, an opportunity to bring about transparency in tax management. Rather than relying on cash transactions, wholesalers will now get an opportunity to go digital. They will also be able to avail the facility of input tax credit. Input tax credit is where the businessman will be able to claim tax on all input goods and/or services.
  • Financial streamlining: Because the entire supply value chain including tax flows will be on GST records, wholesalers will be better connected to retailers and suppliers. This will make it easier to process payments and get tax returns in a timely manner, thereby improving the cash flows of traders. A reliable positive cash flow will help build confidence in the new regime, by making working capital available and aiding opportunities to grow the business.
  • Reorganization of supply chain: GST will enable high visibility and streamlining of the supply chain, providing wholesalers with a transparent view of supply movements. This will aid business efficiency in the long run.
  • Ease of borrowing through digital lending: Because financial and tax transactions will now be recorded in the GST system, even small traders will have digital records of their company finances and credit status. These digital records will act as a ready reckoner of information when a trader opts for a loan. Financial institutions and online lenders like Capital Float can now easily assess the loan eligibility of small traders such as Kirana owners by accessing this data, and provide them quick and easy loans. Borrowing funds online and doing business will now be easier.
  1. For Retailers:

Almost 92% of the retail sector in India is unorganized, operating in cash payments. They are, essentially, the tangible representation of FMCG multinationals to end-consumers; yet they are challenged by chronic issues such as the lack of technology enablement and low operating margins. A majority of the retail market consists of “kirana stores”, which are often the smallest link of the trade chain.

Here are the benefits of the new taxation system for retailers.

  • Input tax credit facility: As mentioned for wholesalers, retailers too would be able to claim taxes paid for input products and services availed. This will present a cost advantage to retailers.
  • Ease of entry into the market: The market is expected to become more business-friendly due to the clarity of processes related to procurement of raw materials and better supply logistics. This is a good opportunity for new suppliers, distributors and vendors to enter the market. The registration process has also become very clear under the GST, aiding entry into the market.
  • Retailer empowerment through information availability: Small retailers often do not have complete visibility into their stock receipts, payments, etc. and are forced to blindly rely on the word of the supplier. GST will streamline these supply and cost challenges and empower the retailer with readily available information through digital systems.
  • Better borrowing opportunity: The retailer scope for business growth can be increased by increasing the retailers’ access to finance.

However, like any new reform, there are certain challenges that need to be addressed. We see that both retailers and wholesalers must manage the following eventualities of GST implementation.

–  Higher costs of input services: Input services such as manpower, legal, professional services, auditor services, travel expenses, etc. will now be taxed at 18% as against the earlier bracket of 15%, leading to higher costs to the wholesaler.

– Additional costs to upgrade technology: Many wholesalers, especially rural ones, are not technology-savvy and will need to rely on help from their supplier companies to undergo a technological transformation. This means that supplier companies may need to increase commissions for wholesalers, an added cost to the company, or wholesalers and retailers themselves will need to invest in new systems, incurring additional expenses.

  1. For Importers and Exporters
  • Imports Taxation: Every import will be treated as an interstate supply, and will be subject to Integrated Goods and Services Tax (IGST) along with Basic Customs Duty (ranging between 5% and 40% depending on the good imported). This implies that IGST will be levied on any imported item, based on the value of the imported goods and any customs duty chargeable on the goods (say 10%). IGST is a combination of SGST (say 9%) and CGST (say 9%).

             Thus, imports taxation is an added tax liability for retailers who import goods or services.

  • Exports Taxation: Exports will be treated as zero-rated supply, i.e., no GST will be charged on exports. This is in line with the “Make in India” campaign that aims to make India a global manufacturing hub, for which exports are important.
  • Import of Services: The new clause of import of services places the onus of tax payments on the service receiver when the services are provided by a person residing outside India. This mechanism is called reverse charge and will apply in certain scenarios. For example, if the assesse has no physical presence in the taxable area, then the representative of the assesse will be required to pay tax. In the absence of representation, the assesse has to appoint a representative who will be liable to pay GST. Another example is when a registered dealer is buying goods or services from an unregistered dealer. In this case, the registered dealer will have to pay the tax on supply.
  • Need for restructuring working capital: A major shift is that GST is based on “transaction value” rather than MRP. In the old system, CVD was charged as a percentage of the MRP. Under GST, IGST will be charged as a percentage of the transaction value. This will affect the cash reserves of retailers and wholesalers, and they will need to reassess their working capital needs.

On the whole, GST is expected to bring domestic players at par with large multinational corporations due to the renewed import and export norms and the rules for FMCG suppliers. This is a good sign for Indian trade and exports in general, and thus the implementation of GST shows promise to propel India onto the international trade arena.

  1. Impact on Traders

Positive Impact on Traders

  1. No dispute good Versus Service:

In present regime of tax structure, the big issue is whether the transaction amount to sale of good or service. Though this dispute still may arise from view of time/place of supply from good or time/place of supply of services as both are separately given. However, net impact is neutral, on either of them needs to pay GST.

  1. Composition levy Increased

In current regime of taxation the limit under Composition Scheme is 40 lakhs whereas under GST it is increased up to 50 Lakhs. It is beneficial as 10 lakhs in turnover is a big thing from trader point of view.

  1. Credit of Excise Duty and Service tax:

In current regime of taxation then a trader is not eligible to take credit of input service as well as the Excise duty. However, in GST regime he will be eligible to take all credits and it will make positive impact on trader.

  1. No Margin to Disclose

Currently a trader who wants to pass on the CENVAT Credit of excise duty needs to obtain dealer registration and have to disclose the margin. But now this is no more relevant as trader is eligible to take credit as well as no requirement of separate dealer registration.

  1. No Reversal of Credit on goods sent for stock transfer

Currently as stock transfer is not liable to Vat as well as CST hence, credit pertains to goods sent to stock transfer needs to be reversed. However, in GST Regime stock transfer got made taxable, hence No reversal of credit is required.

  1. Credit of CST

In current regime of tax, on inter- state purchases CST paid became the cost to the trader as the Credit was not available whereas under GST regime it will be available as IGST Credit.

Negative Impact on Traders

  1. Stock transfer made taxable

In current regime of tax, stock transfer are not taxable on being made available “Form F” where as in current regime stock transfer made taxable. Due to this Warehouse decision to be taken more appropriately.

  1. No Form “C”

In current regime of tax, on being made available the Form C, CST rates charged at the rate of 2% instead of 14.5% which is local tax rate, however in GST regime interstate will be taxed at standard rate i.e IGST.

  1. Goods sent to job work are taxable

In current regime of tax, the goods sent for job work are not liable to CST on being made available of Form “H” whereas in Current GST regime it became taxable.

  1. Increased burden of Compliances

Instead of 4/12 Returns (state wise vary), now a trader needs to file 37 returns in year and much more compliances.

5. Impact on Manufacturers

Positive Impact on Manufacturers

  1. One Tax

In present structure of tax, there is various kind of taxes such as excise duty, Service tax, VAT, Entry tax, Central Sales Tax etc. But in GST regime there is only one tax i.e GST however, there will be three parts such CGST, SGST, IGST. This is measure relief for the manufacturer.

  1. Rate of tax

In current tax regime the consumer pays approximately 25-26% more than the cost of production due to excise duty (at 12.5%) and value added tax (almost 14.5%).In GST, goods may become cheaper marginally which a good sign for manufacture to compete with international market. The Impact of rate of tax depends on industry wise, but mostly it is beneficial.

  1. No Concept of Manufacture

In Non-GST regime the biggest litigation and issues are whether the transaction amount to manufacture or not. The interpretation related to term “Manufacture” will no more be relevant. It may result in ease of doing business without having litigation about the process.

  1. Reduction In Cost

In GST regime there will be reduction in cost of production as credit will be eligible of tax on purchases made from interstate purchases and no cascading effect. Hence, a manufacturer need not take the decision regarding purchase from point of view of tax implication as credit is eligible on all purchases.    

  1. Minimization of Classification issues

In current regime of tax there are numerous issues on classification of goods due to separate rates on different goods and exemptions on certain goods. But in regime of GST there shall be minimization of classification issues due to uniform rate and less expected exemptions.

  1. Speedy Movement of Goods

In GST Regime of tax structure there will be minimization of trade barriers, such as filing of way bills/entry permits. Compliance under entry tax will be abolished. There is much compliance in current regime on interstate movements or locally such as way bills, statutory forms etc which lead to slow movements of goods whereas this concept is going to be abolished though check points will still be eligible.

  1. CENVAT Credit

In regime of present tax, the manufacturer is unable to utilize the credit of Central Sales tax and VAT provided output is charged under Composition Scheme, which becomes the cost for him. But in Regime of GST, a manufacturer will be eligible to take Credit of SGST (VAT) as well as IGST (CST) on the purchases. There will be seamless flow of Credit in GST.  

  1. Valuation of Samples

In current law goods removed on sample basis, tax needs to pay by adopting the nearest aggregate value. However, in GST regime, time up to six months is granted to decide whether the good sold on sample basis has been approved or not which beneficial thing for manufacturer. However, after 6 months tax needs to be paid if the same is still in process of approval.

  1. State Wise Registration

Generally it has been observed that many manufacturers have two premises of factory within same locality or in same state and they are liable to take separate registration for each factory. But in GST Regime, registration has to be taken state wise and not factory wise. This will abolish the difficulties which have been faced due to separate registration.

  1. No assessment by multiple tax authorities

Generally, manufacturers are facing many difficulties in handling the assessments done by the Separate authorities for VAT, Service Tax, Central Excise, CST, etc. In GST regime it is expected that assessment will be done by State authorities for SGST, Central Authorities for CGST, and Interstate authorities for IGST.

  1. Electronic Mode for Forms

In current regime of tax there is very much manual filing of documents such as initial declaration, Numbering of Invoices etc. But in GST regime there will be less manual filing of documents and more through electronic mode. Further, the communication with department also could be through electronic mode.

Negative Impact on Manufacturers

  1. Time of Supply

In current regime of tax the time of duty on manufacture attracts at the time of removal where as in GST regime it will earliest of the four such as (Date of Issue of Invoice, Date of Payment, Date of Removal, Debit in the books of Receiver).

  1. Increase in Working Capital

In GST regime of tax, stock transfer has been made taxable, which requires the huge working capital because the realization of tax going to be on final supply tills that It may block the capital.

  1. No Credit of Petroleum Product

Petroleum Product has been kept out of GST hence; the tax paid on Petroleum Product is not eligible as credit and same became the cost. Each industry requires the Petroleum Product such as Fertilizer Industry, Power Sector, and Logistic Sector etc.

  1. Introduction of Reverse Charge on Goods

 In current regime of tax structure there was reverse charge on specified services but in case of GST even the reverse charge will be applicable on goods.

  1. Post supply Discount

If the discount has to be given post supply than it must be known to both the parties at the time of supply or pre-supply and the proof of being known is the clause of discount must be there either in contract or agreement or offer etc.

  1. Matching Concept of Returns

In current regime, if the tax has been made the purchaser to supplier then he is eligible to take the Credit it is immaterial whether the same has been credited to Central Government by the supplier or not. But in GST Regime, the matching concept if tax credit will be there, if credits pertaining to supplier does not match with purchaser than it will not be accepted in return unless it is rectified by both the parties.

  1. Denial of CENVAT Credit on purchases made from unorganized/unregistered Person

In GST regime if the goods have been purchased from the register person then only credit will be given otherwise the credit will not be allowed.

  1. No Compliance of “C” and “F” Forms

As stock transfer has been made taxable in GST Regime hence Concept of “F” Forms is no more relevant and IGST has been levied on all inter-state purchases or sale and credit will be allowed, hence No Concept of form “F” is relevant.

  1. Increase in Compliance-burden

There is going to be huge compliance burden in GST Regime such as 37 returns for one office in a year.


à Point of Caution

In the GST regime, compliance in general and Input Tax Credit in particular will be dependent on invoice level information – as invoice matching will be the key to avail the correct Input Tax Credit. One of the genuine concerns hitting the trader under GST, will be the scenario of non-payment of tax by his supplier. As per the GST law, a recipient will get his due ITC, only if his supplier has uploaded all the correct sales invoices, which is matched and acknowledged by the recipient; and, any missing purchase invoices uploaded by the recipient are also similarly matched and acknowledged by the supplier. In short, if a supplier chooses to default, this will lead to loss of Input Tax Credit for the trader. Ideally, this will lead to ‘compliant’ traders not dealing with ‘non-complaint’ ones – but at the cost of a one-time loss of tax credit. However, traders can potentially avoid such scenarios, by effective vendor management in advance – identifying vendors who will be compliant, and keeping a watch out for credit rating before doing business with any entity.

In the current regime, stock transfers are not taxable – provided Form F is furnished, VAT is not charged. However, input VAT credit is reversed at a certain percentage (4% in most states), and the rest is available as credit to the trader. In the GST regimestock transfer will become a taxable event. While the tax paid will be available fully as credit and also, there will be no need for credit reversals – this will have an impact on the working capital. This is because, for the tax paid on the date of the stock transfer, the ITC is available only when the stock is liquidated by the receiving branch. Thus, in case the logistics planning is poor, leading to overstocking at branches, working capital will be blocked for a long time – a direct challenge for SMEs who operate with thin working capital. With the seamless availability of credit on inter-state purchase and effective removal of state business boundaries going forward, there could be a potential reduction in the number of branches / warehouses – as they would exist solely for operational reasons rather than for compliance. This could lead to reduction in stock transfers, which will of course nullify the impact of stock transfer on the working capital of a trader.

Compliance activity for a trader will seemingly go up under GST – 4 VAT returns per year (quarterly) in some states to 12 VAT returns per year (monthly) in some, will be replaced effectively by 37 returns per year (3 monthly and 1 annual) in the GST regime. However, if we analyze the current compliance activity – it is usually submission of monthly returns via forms, followed by submission of annexures with details of sales / purchase transactions to calculate the correct Input Tax Credit. Thus, the activity per say remains the same, even when GST comes in. However, the depth at which the activity will be done will be more under GST, as all transactions will need to be matched and filed accurately for the right compliance to happen, and the right Input Tax Credit to be availed. The complexity only increases if one has operations across states, since each state will require a separate registration. Service providers are bound to bear the brunt of this change as they shift from a centralized service tax regime to a decentralized supply of services under GST. Traders, will thus need to invest in the right GST software and technology to ensure that the work gets done accurately, yet timely – which of course, will entail additional costs.

àPoint of Contention

For traders on e-commerce platforms, GST certainly brings cost reductions in the form of availability of input credit and the levy of a single tax on supplies across the nation. It is expected that it will be easier to do business in the GST regime with greater clarity on the treatment of e-commerce transactions and uniformity in the taxes levied. However, traders must also be prepared for the impact on their cash flows – due to tax collection at source (TCS) by e-commerce operators, non-compliance by their vendors and payment of taxes on a monthly basis. Most importantly, compliance activities will also increase for e-commerce traders in the GST regime due to mandatory registration; in short, they cannot opt for composition levy even if their aggregate turnover is less than INR 75 Lakhs. Awareness of the compliance requirements under GST, proper training of resources to handle these requirements and use of technology to make all this easier will ensure that e-commerce traders can capitalize on the new era of e-commerce in India.

Under VAT, on purchases made from unregistered dealers, the recipient (registered dealer) of goods has to pay a tax called Purchase Tax. Under GST, the same concept has been retained by the Government under the name of Reverse Charge – primarily to ensure, that the tax is collected on the sale of goods or supply of services from various unorganized sectors. Under this, the liability to pay tax rests with the recipient. This is applicable on specific supply of goods and services, specified by the Government. However, a person liable to pay taxes under reverse charge mechanism will require mandatory registration.

In the GST regime – while, there will be a minimization of trade barriers as the corresponding taxes would have been subsumed under GST, the implementation of the same will be easier said than done. Under GST, a registered person who intends to initiate a movement of goods of value exceeding INR 50,000 will need to generate an e-Way bill. While the intent is to unify the Indian market and assist smooth flow of goods, the entire process is cumbersome. It requires participation by the supplier, the transporter and even the recipient – who has to communicate his acceptance or rejection of the consignment covered by the e-way bill within a short span. Thus, there is a fair chance that whatever savings are generated by virtue of reduced inventory costs, may get evaporated while covering compliance and associated technology implementation costs. However, once the initial barriers have been crossed and with greater adoption of technology, the current logistical complications are expected to reduce over a period of time. As such, the government has decided to stall the implementation of e-way bill, till the systems are ready, as per the recent notifications.


The introduction of the Goods and Services Tax will be a very noteworthy step in the field of indirect tax reforms in India. By merging a large number of Central and State taxes into a single tax, GST is expected to significantly ease double taxation and make taxation overall easy for the industries. For the end customer, the most beneficial will be in terms of reduction in the overall tax burden on goods and services. Introduction of GST will also make Indian products competitive in the domestic and international markets. . However, technology will surely be a game-changer in this regard, as this will be the only way the compliance burden of GST can be effectively absorbed, translating into more business benefits for the Indian trader. Last but not least, the GST, because of its transparent character, will be easier to administer. Once implemented, the proposed taxation system holds great promise in terms of sustaining growth for the Indian economy.



The fact is, yes, when dealing with a vendor who is not GST registered, you need to pay GST for unregistered dealer on supply under Reverse Charge Mechanism. Reverse charge means the liability to pay tax is by the recipient of goods/ services instead of the supplier. Reverse charge may be applicable for both services as well as goods. if Unregistered dealer selling goods/services to a Registered dealer then reverse charge will apply and registered dealer will be liable to pay GST on supply. Good part is the registered dealer is eligible to claim credits later.

As a rule, any supplier is liable to pay GST under the GST Act. However, there are certain instances where a recipient of goods or services is liable to pay GST on reverse charge basis. There are two scenarios under which GST is payable on reverse charge basis:

1.     Reverse charge mechanism applicable to supply of certain specified goods or services

2.     Reverse charge mechanism applicable in case of purchases made from unregistered supplier

Section 9 (4) of the CGST/SGST(UTGST) Act and section 5 (4) of the IGST Act cover the cases of reverse charge in case of taxable supplies by any unregistered person to a registered person. These sections provide that the tax in respect of the supply of taxable goods and/or services by an unregistered supplier to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

Accordingly, whenever a registered person procures supplies from an unregistered supplier, he needs to pay GST on reverse charge basis. However, supplies where the aggregate value of such supplies of goods or services or both received by a registered person from any or all the unregistered suppliers is less than five thousand rupees in a day are exempted.

Any amount payable under reverse charge shall be paid by debiting the electronic cash ledger. In other words, reverse charge liability cannot be discharged by using input tax credit. However, after discharging reverse charge liability, credit of the same can be taken by the recipient, if he is otherwise eligible.

Non-GST registered vendor in normal circumstances, the supplier for goods is required to pay the GST. However, to prevent the tax evasion by the vendor who are unregistered, the government has burdened the Recipient (GST Registered) of goods to add GST in their purchase from Non- GST registered vendor. Exemption-  The government has provided an exemption of Rs. 5000. It means if the value of supply from unregistered user does not exceed Rs. 5000/-, it is not required to pay GST for such unregistered vendor. Reverse Charge- The GST paid by the Recipient on its purchase from non-registered can be claimed under reverse charge mechanism as input credit if such good/services are being used by them for business purpose. If you are claiming credit under reverse charge, you are required to register under GST, irrespective of the fact, whether you reach the threshold limit for GST registration (which is Rs. 20 Lakhs).

Wazzeer is vouched by Entrepreneurs as the most reliable Legal and Accounting Partner. We would be super excited to help you. Let’s Connect! 🙂



Since GST got rolling, we have been facing interesting questions on GST, in fact, some of them where hilarious, (comment below if you want me to share them on the next blog), well, on a serious note, 76% of the queries that we received was ‘How is filing of GST Returns actually done?’ This article is for you guys who want this answer real bad, someone who thinks time for googling and going through long PDFs is not his thing.

Under GST, a regular taxpayer needs to furnish monthly returns and one annual return. There are separate returns for a taxpayer registered under the composition scheme, non-resident taxpayer, taxpayer registered as an Input Service Distributor, a person liable to deduct or collect the tax (TDS/ TCS) and a person granted Unique Identification Number. It is important to note that a taxpayer is NOT required to file all types of returns. In fact, taxpayers are required to file returns depending on the activities they undertake.

All the returns are to be filed online. Returns can be filed using any of the following methods:

  1. GSTN portal ( )
  2. Offline utilities provided by GSTN (GST Network)
  3. GST Suvidha Providers (GSPs) – If you are already using the services of ERP providers such as Tally, SAP, Oracle etc., there is a high likelihood that these ERP providers would provide inbuilt solutions in the existing ERP systems

Mandatory Documents that you will need to file is Goods and Services Tax Identification Number (GSTIN)

Monthly Returns:


What: Monthly outward supplies of Goods or Services are to be filed. Required information:
  • Aggregate turnover of the taxpayer for the immediate preceding financial year and first quarter of the current financial year
  • Invoice-level information pertaining to the tax period should be reported for all supplies
  • Information related to exports out of India (optional)
  • Information related to Supplies to SEZ unit/ and SEZ developer (optional)
  • Information about shipping bill (optional)
  • Information relating to advances would be submitted only if the invoice has not been issued.
  • Summary of supplies effected against a particular HSN code
Who: All GST registered individuals and businesses
When: 10th of the month succeeding the relevant tax period
How: GSTR -1 form


What: Monthly Statement of Inward supplies of Goods or Services. Required Information:
  • Invoice-level inward supply information, rate-wise, pertaining to the tax period reported by supplier in GSTR-1 (w.r.t autogenerated on GSTR-2A)
  • Inward supplies other than those attracting reverse charge
  • Inward supplies other those attracting reverse charge
  • Invoices added by recipient tax payer
  • Import of Goods/Capital Goods from outside India as well as supplied by an SEZ Unit
  • Bill of Entry information including six digits port code and seven digits bill of entry number of the recipient
  • TDS and TCS credit would be auto-populated if not raise an inquiry.
  • Information of advance paid pertaining to reverse charge supplies and the tax paid on it
  • Summary of supplies effected against a particular HSN code
Who: All GST registered individuals and businesse
When: 15th of the month succeeding the relevant tax period
How: GSTR -2 Form


What: Monthly Return for a normal taxpayer is to be filed. GSTR 3 can be generated only when GSTR-1 and GSTR- 2 of the tax period have been filed. Required information:
  • Electronic liability register
  • Electronic cash ledger
  • Electronic credit ledger of taxpayer
  • Invoices, debit/credit notes, advances paid and adjustments made out of tax paid on advances earlier.
Who: All GST registered individuals and businesse
When: 20th of the month succeeding the relevant tax period
How: GSTR -3 Form

GSTR – 5

What: Monthly Return for a non-resident taxpayer. Required Information:
  • Details of import of goods, bill of entry wise and taxpayer has to specify the amount of ITC eligible on such import of goods.
  • Bill of Entry information including six digits port code and seven digits bill of entry number of recipient
  • Invoice-level information, rate-wise, pertaining to the tax period separately for goods and services.
Who: All Non Resident Tax Payer
When: 20th of the month succeeding the relevant tax period or within 7 days from the last date of the registration
How: GSTR -5 Form

GSTR – 6

What: Monthly Return for an Input Service Distributor (ISD) Required information:
  • Information will flow from GSTR- 2A
  • Mismatch liability between GSTR-1 and GSTR-6 will be added to ISD and further ISD taxpayer has to issue ISD credit note
Who: Input Service Distributor
When: 10th of the month and before 13th of the month succeeding the tax period.
How: GSTR – 6 Form


What: Monthly Return for authorities deducting tax at source Required Information:
  • TDS
  • Liabilities
Who: Tax Deductor
When: 10th of the month succeeding the relevant tax period
How: GSTR -7 Form


What: Monthly Statement for E-Commerce Operator depicting supplies effecting through it. An e-commerce operator can file GSTR- 8 only when full TCS liability has been discharged.

  • Tax Collected at source
  • Electronic cash ledger
  • Details with supplier’s GSTR-1 (which will be generally done automatically)
Who: E-Commerce Operato
When: 10th of the month succeeding the relevant tax period
How: GSTR -8 Form


Quarterly Filing:

GSTR – 4

What: Quarterly Return
Who: Taxable Person opting for Composition Levy
When: Composition Levy 18th of the month succeeding the quarter
How: GSTR -4


Annual Filing:

GSTR – 9

What: Annual return. Required Information:
  • Electronic liability register
  • Electronic cash ledger
  • Electronic credit ledger of taxpayer
Who: Registered Person other than an ISD, TDS/TCS Taxpayer, Casual Taxable Person and Non-resident Taxpayer
When: 31st December of succeeding year
How: GSTR -9 Form

GSTR -10

What: Final Return
Who: Taxable Person whose registration has been surrendered or cancelled
When: Within three months of the date of cancellation or date of order of cancellation, whichever is later.
How: GSTR -10 Form

Wazzeer is vouched by Entrepreneurs as the most reliable Legal and Accounting Partner. We would be super excited to help you. Let’s Connect! 🙂








E-commerce is a rapidly growing market currently valued at $30 billion and there is no stopping it. This rise and expansion of e commerce business paved the way for small suppliers to earn a little extra money and expanding customer base by selling their goods online. With GST in force, a few regulations that could significantly change the modus operandi of such small suppliers is what I am going to talk in this article, which will act as a reminder of GST for Suppliers on E-commerce Platforms.

As per GST Law, ‘electronic commerce’ shall mean the supply or receipt of goods and / or services, or transmitting of funds or data, over an electronic network, primarily the internet, by using any of the applications that rely on the internet, like but not limited to e-mail, instant messaging, shopping carts, Web services, Universal Description, Discovery and Integration (UDDI), File Transfer Protocol (FTP), and Electronic Data Interchange (EDI), whether or not the payment is conducted online and whether or not the ultimate delivery of the goods and/or services is done by the operator.

Compliance for Suppliers:

  • Tax Deduction at Source: As per GST law, E commerce aggregators/portals/ operators are responsible under the GST law for deducting and depositing tax at the rate of 1% from each of the transaction. Thus dealers/traders selling goods/services online would get the payment after deduction of 2% tax.
  • Compulsory Registration– The exemption limit of 20 lakhs(10 lakhs for hilly states as notified under GST) does not apply to E commerce Suppliers. E-commerce Suppliers are mandatory required to be registered under GST. Thus, All the traders/dealers selling goods/services online have to get themselves registered under GST even if their turnover is less than 20 Lakhs for claiming the tax deducted by E-commerce operators.
  • Tax Credit: Any tax paid by Operator in his monthly return will be treated as Tax paid by Supplier and hence he can take its credit in electronic cash ledge.
  • Double Entry System of Book Keeping: All the sellers are required to submit a monthly statement of outward supplies in his valid return for the same calendar month or any preceding calendar month. This statement must match monthly statement (containing inter alia, the details of the amount collected on behalf of each supplier in respect of all supplies of goods and/or services) furnished by e-commerce operator of outward supplies of goods and/or services through it, during a calendar month.
          If any discrepancy is found and not rectified by the supplier in his return for the month in which discrepancy is communicated will get added to the output liability of the said supplier, in the succeeding calendar month and he will be required to pay tax along with interest.
  • Complicated Paper Work: in order to avoid above-mentioned discrepancy a huge amount of paperwork is created, making it difficult for both the e-commerce operator and the supplier to comply with the tax department. Failing to comply can lead to a penalty of Rs. 25,000, which is a significant burden for a small supplier.

Additional Time Window granted to suppliers:

E-commerce sector is granted a time window to comply for GST. Thus as of now, Operators are not required to deduct TDS till a date which will be notified later. This additional time is given to Suppliers to get themselves registered under GST.

Wazzeer has been helping suppliers like yourself in smooth GST migration without causing any adverse effect in the supply chain. ‘Get a Wazzeer’ to do GST Registration for you 🙂


One nation, one tax! That is the concept of the new indirect tax passed by the Rajya Sabha. The Goods and Services Tax is one indirect tax for the whole nation, which will make India a unified and common market. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. It will be levied at every stage of the product distribution chain by giving the benefit of Input Tax Credit (ITC) of the tax remitted in the previous stages. Therefore, the final consumer will bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all previous stages. GST will replace all Central level taxes such as excise, service tax, customs duty as well as state level taxes like VAT, CST, entertainment tax among others. The impact on the food Processing Businesses:
  • With the latest information suggesting that the minimum GST rates will be 18% on all products.
  • Alcoholic beverages have been excluded from GST and they will be taxed separately.
  • Implementation of the GST is said to increase the prices of agricultural goods. However, the products will be able to reach the consumer faster due to state-level taxes such as Octroi and entry taxes which will significantly reduce the time and hassle of transporting goods across state borders.
  • GST will also favor the National Agricultural Market on merging all the different taxation on agricultural goods will improve the marketing and virtual market growth.
  • Because GST is a consumption tax, it will be levied only when food products are sold by the manufacturer and not when they are manufactured.
  • The Confederation of Indian Industries (CII) has also in its representation called for a zero rate tax on products which have a rate of up to Rs. 10/- and Rs. 20/-. It also demanded that all packaged material used as inputs by the food processing industry should have a zero-percent rate.

Impact on Restaurants and Food Joints:

Service tax liability with the credit of input VAT on goods consumed will get submerged into GST and irrespective of goods and services, the credit of input will be available for adjustment against the output liability. This will further optimize the working capital of these restaurants and consumers can expect the superior quality of goods and services.

You know how we Wazzeerians are particular about satisfying your business needs, be it Fortune 100 or upcoming Fortuner one thing that forms the pattern is your value for quality and transparency. We would love to hear from you, anytime. Let’s connect!

Infrastructure and Construction Sector is no doubt the most important pillars of Developing Economy. In absence of it, no resources can be extracted, no goods and services can be transferred from one place to other as no business is made in open grounds.

What’s been happening so far?

When it comes to taxation, Infrastructure and Construction Sector, generally, face a lot of complexities. Tax is levied at every stage separately, by the Centre and the State, at varying rates i.e. 10.5% / 6% / 4.5% for service tax and different rates by different States, on the value of construction services.

What are the implications of GST on this sector?
  1. Overview
  • Under the GST system, the tax will be charged only on the value added at each stage by the sub-contractors, main contractors and developers or builders.
  • It is a single tax collected at multiple value additions with a full set-off for taxes paid earlier in the value chain by subcontractors and main contractors.
  • The inter-credit of different taxes paid in the current regime be a service tax, VAT, CST, etc. to Centre or States are not allowed and thus becomes a part of the cost on the suppliers. Thus, under GST the final buyer/client will bear only the GST charged by the last person i.e. developer or builder.
  • GST clearly defines WORKS CONTRACTS as service. Thus, there is:
    1. Simplified treatment of works contracts, since there would be no multiplicity of taxes.
    2. Ease in contract structuring as there will be no requirement to divide contracts into material and service portion, as the entire contract would be treated as service. This would be relevant for onshore services contracts entered with project owners undertaking supply of both goods and services.
  1. Effect on Raw Materials
Most of the Construction projects are carried out using following materials:
MaterialCurrent RegimeNew GST regime Probable Tax %
Excise %VAT %
Wires(all types)12.5518
  Also, the input credit available to manufacturers of these products would increase, and if passed on to the end customers, is likely to result in lower prices. The benefit to other projects will be affected on the basis of ability to offset the input credit of these items with the output tax.
  1. Effect on basis of Construction Project:
Many real estate projects are developed in a way where the land owner gets a fixed amount of flats in lieu of the transfer of land development rights to the developer. It is known as Joint Development Agreement. barter exchanges are covered in the definition of supply, the law is still vague about the transfer of land rights. The other one is Work Contractor EPC Contracts.  

Joint Development Agreement ModelWork Contracts or EPC Contracts
Cost goes Up if land barter comes in the ambit of Supply.No credit can be taken on goods and services in the execution of Work Contract. Similar to the current tax regime.
Capital Lockup (long interval between transfer and ability to set off.Increases the cost since work contracts specifically defined as Supply
Input Credit on Material consumed, Lower cost of Materials (As mentioned in above table)Lower Input material Cost reduces the Overall price. Though Not a significant difference.
  1. Road, Rail and Airport Projects
  • Exemption from paying service tax yet liable to pay input tax and service tax to transporter as well as states.
  • No improvement in tax credit liability due to Section 17 (4) (c)
  • However, for power projects and operational power units that enjoy certain exemptions, will have a negative effect since electricity is outside the ambit of GST and input tax is a cost.
  1. Compliance Ease
Finally, the benefit of GST will be the ease of compliance that it would offer. Elimination of multiple taxes and tax laws is a certainty. However, “Engineering, Procurement, and Construction” (EPC) contracts spread across multiple states would require contractors to register in multiple states including their site offices due to ?place of supply? concept. Further, all the site offices will require technological upgradations since input credit would be available only after an online reconciliation of tax invoices is done.

You know how we Wazzeerians are particular about satisfying your business needs, be it Fortune 100 or upcoming Fortuner one thing that forms the pattern is your value for quality and transparency. We would love to hear from you, anytime. Let’s connect!

With GST replacing most of the indirect tax especially VAT and Service Tax, it becomes necessary for existing suppliers (registered at respective tax authority) to migrate to GST at earliest. GST Registration is necessary to claim Input tax credit or to collect the tax from customers


Any supplier having an aggregate turnover of Rs. 20 Lakhs or more needs to be registered at State from where it makes a taxable supply of Goods and Services. This limit is Rs.10 Lakhs if the business is carried out in the North Eastern States including Sikkim.


Section 166 of Model GST law provides for Migration of existing taxpayers. Here existing taxpayer means assesses registered under any acts as specified, i.e.
  • Central Excise
  • Service Tax
  • State Sales Tax/VAT
  • Entry Tax
  • Luxury Tax and
  • Entertainment Tax (except levied by the local bodies).
Existing Taxpayers are legally required to register themselves at GST Platform.


The whole procedure of Migration can be divided into two parts:
  1. Issuance of Provisional ID &Password – In order to get your GST Number, you need to get a provisional Id and password. The government has digitized the whole procedure. For your provisional ID, you need to log in to the website of Automation of Central Excise and Service Tax using existing aces user id.
The ID is issued only to those persons who have PAN associated with their registration. Only one provisional ID is issued in case state and PAN associated with the business is same. Every person registered under Central Excise/ Service Tax is provided with GST Identification Number. This is a Provisional Registration.
  1. GST Registration: GST REG20 is required to be filled after receiving the provisional ID. A unique username and password are to be created using above provisional id and password at GST Registration Portal (
After username is created you need to upload supporting documents. After providing requisite details, and uploading necessary documents, it is required to be verified by the Authorized Signatory required to do so as per nature of the business. Once above steps are completed, Application Reference Number (ARN) is issued to the taxpayer in 15 minutes. Once an assessed has ARN he migrates to GST with A provisional Certificate issued to him in GST REG- 21. The Provisional Registration converts into GST registration if he is required to be registered under GST Act otherwise GST REG 24 is issued.

Documents Required for Migration:
  • Proof of Constitution of Business depending upon nature of the business.
  • Passport Photos and Details of Promoter/ Partner/ Director/ Karta
  • Proof of Appointment of Authorized Signatory and Photo
  • Address Proof of Principal Place of business and additional places if any
  • Details of Bank Accounts with statements or at least first page of statement
  • Details of Goods and Services Supplied
 All documents must not be more than 1mb and in Pdf format. Pictures shall be in JPEG with a max size of 100 KB. We will be glad to help you with the GST migration, let’s connect.

Business Registration, GST, GST, TAXATION

Did you know, VAT or the famous Value Added Tax was originally called as Sales Tax? This is an indirect applicable whenever there is goods and services sold by the company. This Tax is paid by the customer via producer to the state government. Business owner earning an annual turnover of more than Rs.5 lacs by supplying goods and services are liable for VAT registration.

VAT is levied both on local as well as imported goods. Similar goods and services are taxed equally and VAT is applicable at different stages of production. VAT made the game much fairer because now you will be taxed based on the type of goods and service rather than uniform rates. With VAT Registration, you will be saving on revenue which with previous sales tax regulations you possibly wouldn’t have.

Hey, but why should consumer pay for VAT?

VAT is a tax on consumption which is borne by consumers. It is applicable on 554 goods. VAT protects consumer from the cascading effect of the turnover tax which is tax on each sale with no credit for the tax paid at earlier stages.

Will I be taxed on capital input that I invest in my firm?

Look basically you have three tax variants:

1. Consumption variant-(not the capital that you invest is taxed, but the use of capital goods which produce consumer goods is taxed);

2. Income variant (depreciation on the goods is excluded);

3. Gross Product Variant (no exclusion, only goods that are used up currently are subtracted from the firm’s sale) And hence VAT payable = VAT on output (total value of sales) – VAT on input (purchases any paid by firm to produce)

Does the VAT in India differ from one state to another?

  • 0% VAT Rate:
For essential commodities like some of the goods like salt, Sugar etc.,
  • 1% VAT Rate:
For items, which tend to be highly expensive, like Gold, silver precious jewellery fall under this category of goods. Most Indian states have fixed VAT for these items at 1% of the amount.
  • 4-5% VAT Rate:
Most of the FMCG goods come under this category of VAT, like oil, coffee, medicines etc. is around 4-5% for most states in India.
  • General VAT Rate:
General VAT rates apply to goods which cannot be segregated and put under any of the above listed VAT categories. For goods like liquor, cigarettes etc. many governments charge high VAT rates of 12.5% or 14-15%.

When to file VAT Returns?

VAT Returns are filed every month or every quarter depending on the amount of VAT you pay. The normal rule is that if you pay less than Rs 15,000 for VAT every month, a VAT Return is to be filed every quarter. If your Input Tax is greater than your Output Tax you can carry over the difference as a credit to your next VAT Return. In certain circumstances, the VAT Commissioner may pay you any excess if he is satisfied that excess is a regular feature of your business.

What kind of proof do I have to show to the commissioner?

Haven’t you seen situations where, a small notice at billing counter at pizza hut stating that take food for free if no bill given?
Yep! That’s the best example, the seller should always have a copy of the bills to claim. For starting entrepreneurs, a Simplified Tax Invoice would be good enough that must include the following information:
  • Your name, address and TIN
  • Serial number of the invoice
  • Date of the invoice
  • Brief description of the goods and services supplied.
  • Total amount charged to the customer including VAT and
  • A clear statement that the price includes VAT.
To Read about the Process of VAT registration click here

To know the documents required for VAT registration click here

Startup entails complex procedures and many bureaucratic hurdles, entrepreneurs are better off using professional services. Hiring a virtual lawyer and virtual accountant can save time and help ensure that the process goes smoothly.

For any Legal and Accounting support, Happy to help you, let us talk at Wazzeer.