Documents, Accounts and Records and Filing of Returns – Advanced Tax Laws and Practice Important Questions
Question 1.
Badrinath Filters Ltd., a registered supplier of industrial air filters, is required to send from Mumbai (Maharashtra), a consignment of parts of air Biters to be replaced under warranty at various client locations in Ahmedabad, Gujarat. The value of consignment declared in delivery challan accompanying the goods is ₹52,000.
Badrinath Filters Ltd. is of the view that since movement of goods to Gujarat is caused due to reasons other than supply, e-way bill is not mandatorily required to be generated in this case.
You are required to examine whether the a fore said view is correct.
Answer:
The goods to be moved to another State for replacement under warranty is not a ‘supply’. However, Rule 138(1) of the CGST Act, 2017, inter alia, stipulates that every registered person who causes movement of goods of consignment value exceeding ₹50,000:
- in relation to a supply; or
- for reasons other than supply; or
- due to inward supply from an unregistered person, shall, generate an electronic way bill (E-way Bill) before commencement of such movement.
CBIC vide Q9. of FAQs on E-way Bill has also clarified that even if the movement of goods is caused due to reasons others than supply [including replacement of goods under warranty], e-way bill is required to be issued. Thus, in the given case, since the consignment value exceeds ₹50,000, e-way bill is required to be mandatorily generated.
Therefore, the contention of Badrinath Filters Ltd. that e-way bill is not mandatorily required to be generated as the movement of goods is caused due to reasons other than supply, is not correct.
Question 2.
Amar Publishing House, registered under CGST Act, 2017 in Delhi is engaged in printing and selling of books as well as trading of stationery items. It has provided following information of a single consignment which is to be supplied to a person in Jaipur (Rajasthan):
(i) Value of exempted supplies of ₹12,000 and value of taxable supplies of ₹32,000 are indicated on tax invoice.
(ii) Value of goods to be sent to unregistered job worker on delivery challange having value of ₹16,000.
Note: All amounts given above are excluding GST.
Calculate the consignment value, for the purpose of generating e-way bill for Inter-State supply of goods. Take rate of tax on taxable goods of IGST @ 12%.
Legal provision explained in brief should form part of the answer.
Answer:
Determination of the value of consignment for E-way Bill
As per Rule 138 of the CGST Rules, 2017, Consignment value of goods shall be the value, determined in accordance with the provisions of section 15 of the CGST Act, 2017, declared in an invoice, a bill of supply or a delivery challan, as the case may be, issued in respect of the said consignment and also includes the central tax, State or Union territory tax, integrated tax and cess charged, if any, in the document and shall exclude the value of exempt supply of goods where the invoice is issued in respect of both exempt and taxable supply of goods.
Hence, according to the above rule, consignment value shall be:
| Particulars | Amount (₹) |
| Taxable value of supply | 32,000 |
| Add: IGST on taxable value of supply @ 12% on 32,000 | 3,840 |
| Add: Value of goods to be sent to job worker on delivery challan | 16,000 |
| Total value of consignment | 51,840 |
Question 3.
Briefly explain provisions related to e-way bill as per CGST Act, 2017; relating to:
(i) What is e-way bill and when it is being required? (1 Mark)
(ii) What is its validity period? (2 Marks)
Answer:
(i) E-way bill is an electronic way bill for movement of goods which is generated on the GSTN portal. It is required when a “movement” of goods is of more than ₹50,000 in value. A registered person cannot move goods without an e-way bill.
(ii) The validity period of e-way bill is tabulated as under:
| Distance | Validity Period |
| Upto 100 kms. | One day in case of other than over dimensional cargo or multimodal shipment in which atleast one leg involves transport by ship |
| For every 100 kms. or part thereof thereafter | One additional day in cases other than over dimensional cargo or multimodal shipment in which atleast one leg involves transport bv ship |
| Upto 20 kms. | One day in case of over dimensional cargo or multimodal shipment in which atleast one leg involves transport by ship |
| For every 20 kms. or part thereof thereafter | One additional day in case of over dimensional cargo or multimodal shipment in which atleast one leg involves transport by ship |
Question 4.
Zebra, a registered supplier, runs a general store in Ludhiana, Punjab. Some of the goods sold by him are exempt whereas some are taxable. You are required to advise him on the following issues:
(a) Whether Zebra is required to issue a tax invoices in all cases, even if he is selling the goods to the end consumers?
(b) Zebra sells some exempted as well as taxable goods valuing ₹5,000 to a school student. Is he mandatorily required to issue two separate GST documents?
(c) Zebra wishes to know whether it’s necessary to show tax amount separately in the tax invoices issued to the customers. Advise Accordingly?
Answer:
(a) No, he is not required to issue tax invoice in all cases.
As per Section 31(1) of the CGST Act, 2017, every registered person supplying taxable goods is required to issue a ‘Tax invoice’.
Section 31 (3)(c) of the CGST Act, 2017 stipulates that every registered person supplying exempted goods is required to issue a bill of supply instead of tax invoice. Further, Rule 46A of the CGST Rules, 2017 provides that a registered person supplying taxable as well as exempted goods or services or both to an unregistered person may issue a single ‘invoice-cwm-bill of supply’ for all such supplies. However, as per section 31(3)(b) of the CGST Act, 2017 read with rule 46 of the CGST Rules, 2017,
(i) a registered person may not issue a tax invoice if: Value of the goods supplied < ₹200,
(ii) the recipient is unregistered; and
(iii) the recipient does not require such invoice. Instead, such registered person shall issue a Consolidated Tax Invoice for such supplies at the close of each day in respect of all such supplies.
(b) As per rule 46A of the CGST Rules, 2017, where a registered person is supplying taxable as well as exempted goods or services or both to an unregistered person, a single “invoice-cum-bill of supply” may be issued for all such supplies. Thus, there is no need to issue a tax invoice and a bill of supply separately to the school student in respect of supply of the taxable and exempted goods respectively.
(c) As per section 33 of the CGST Act, 2017 read with rule 46(m) of the CGST Rules, 2017, where any supply is made for a consideration, every person who is liable to pay tax for such supply shall prominently indicate in all documents relating to assessment, tax invoice and other like documents, the amount of tax which shall form part of the price at which such supply is made.
Hence, Zebra has to show the tax amount separately in the tax invoices issued to customers.
Question 5.
Explain the provisions of the CGST Act, 2017 relating to issuance of Credit Note in the context of CGST. What is its impact on GST liability in this regard?
Answer:
Issuance of Credit Note
Section 34(1) of CGST Act, 2017 reveals that where one or more tax invoices have been issued for supply of goods or services or both, and
(i) Taxable value charged in the tax invoice is found to exceed the taxable value in respect of such supply; or
(ii) Tax charged in invoice is found to exceed the tax payable in respect of such supply; or
(iii) Where goods supplied are returned by the recipient; or
(iv) Where goods or services or both supplied are found to be deficient registered supplier of goods and services or both may issue one or more credit note to recipient of such supply.
Impact of issuance of Credit Note
As per section 34(2) of the CGST Act, 2017, provides that the details of credit note should be declared in the return for the month during which such credit note has been issued but not later than
(i) September following the end of the financial year in which such supply was made or
(ii) the date of furnishing of the relevant annual return, whichever is earlier and the tax liability shall be adjusted in such manner as may be prescribed. However, such reduction in output tax liability of the supplier shall not be permitted, if the incidence of tax and interest on such supply has been passed on to any other person.
Question 6.
Determine with reason, whether the following statements are true or false with reference to provisions of GST law:
(i) “A registered person shall issue separate invoices for taxable and exempted goods when supplying both taxable as well as exempted goods to an unregistered person”.
(ii) “A Non-banking financial company (NBFC) can issue a consolidated tax invoice at the end of every month for the supply made during that month”.
(iii) “It is mandatory to issue a tax invoice in case a registered person has opted for composition levy scheme”.
Answer:
(i) The given statement is false.
Where a registered person is supplying taxable as well as exempted goods or services or both to an unregistered person, a single “invoice- cnm-bill of supply” may be issued for all such supplies.
(ii) The given statement is true.
A non-banking financial company is allowed to issue a consolidated tax invoice or any other document in lieu thereof for the supply of services made during a month at the end of the month.
(iii) The given statement is false.
A registered person paying tax under the provisions of section 10 of CGST Act, 2017 (composition levy) is required to issue, instead of tax invoice, a “bill of supply” containing the specified particulars in the prescribed manner.
Question 7.
Explain the accounts and records required to be maintained by registered person under GST law.
Answer:
Every registered person is required to self-assess the taxes payable and furnish a return for each tax period (i.e. the period for which return is required to be filed).
The compliance verification is done by the department through scrutiny of returns, audit and/or investigation. Thus, the compliance verification is to be done through documentary checks rather than physical controls. This requires certain obligations to be cast on the taxpayer for keeping and maintaining accounts and records.
As per section 35(1) of the CGST Act, 2017:
Every registered person is required maintain a true and correct account of the following:
(a) Production or manufacture of goods
(b) Inward and outward supply of goods or services, or both
(c) Stock of goods
(d) Input tax credit availed
(e) Output tax payable and paid
(f) Any other particulars deemed necessary
The above records must be maintained at each place of business registered under GST. In addition, the rules (Le. Rule 56(1) of the CGST Rules, 2017) also provide that the registered person shall keep and maintain records of –
(a) Goods or services imported or exported or
(b) Supplies attracting payment of tax on reverse charge along with the relevant documents, including invoices, bills of supply, delivery chal- lans, credit notes, debit notes, receipt vouchers, payment vouchers, refund vouchers and e-way bills.
Rule 56(2) of the CGST Rules, 2017 states that every registered person, other than a person paying tax under section 10, shall maintain the accounts of stock in respect of goods received and supplied by him.
It means the above records are not required to be maintained by a supplier opting for composition levy.
Question 8.
What are the documents required to be prepared by the recipient of supplies from an unregistered person as per GST law?
Answer:
(i) A registered person who is liable to pay tax under reverse charge shall issue an invoice in respect of goods or services or both received by him from the supplier who is not registered on the date of receipt of goods or services or both;
(ii) A registered person who is liable to pay tax under shall issue a payment voucher at the time of making payment to the supplier.
Question 9.
Explain the procedure of furnishing details of outward supplies and of (revision for rectification of errors and omissions as per CGST Act, 2017.
Answer:
Due date:
Every Registered taxable person (other than an Input Service Distributor, a non-resident taxable person and a person paying tax under section 10 (composition scheme) or section 51 (TDS) or section 52 (TCS) by e-commerce operator) shall furnish electronically details of outward supplies of goods or services or both effected during the tax period by 10th of the month succeeding the tax period.
2. Contents: Details of outward supplies will include invoice relating to zero rated supplies, inter-State supplies, intra-State supplies, Goods/Services return, Exports, Supplementary invoices, debit notes and credit notes.
3. No revision, but, rectification allowed in subsequent returns:
Once return is filed/uploaded it cannot be revised. The mechanism of filing revised returns for any correction of errors/omissions has been done away with. The rectification of errors/omissions is allowed in the subsequent returns. However, no rectification is allowed after furnishing the return for the month of September following the end of the financial year to which such details pertain, or furnishing of the relevant annual return, whichever is earlier.
Question 10.
Who are required to file Annual Return under CGST Act, 2017? Also explain the time limit for filing such return. Is there any requirement of furnishing of the audited annual accounts?
Answer:
(i) Person liable to file annual return: Every registered person, other than an Input Service Distributor, a person paying tax under section 51 or Section 52, casual taxable person and a non-resident taxable person, shall furnish an annual return for every financial year electronically in such form and manner as may be prescribed.
(ii) Due date is 31st Dec. after end of year: Annual return shall be filed on or before the 31 st day of December following the end of such financial year.
(iii) Persons liable to Audit: Audit report to be furnished along with reconciliation statement:
Every registered person who is required to get his accounts audited in accordance with the provisions of sub-section (5) of section 35 shall furnish, electronically, the annual return under sub-section (1) along with a copy of the audited annual accounts and a reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year with the audited annual financial statement, and such other particulars as may be prescribed.
Question 11.
Briefly discuss the provisions related to Levy of late fee as per section 46 of CGST Act, 2017 on a person who fails to furnish the details I of outward or inward supplies required under section 37, 38, 39 or 45 of CGST Act, 2017.
Answer:
As per section 47 of CGST Act, 2017 read with notification No. 64/2017-Central Tax and 4/2018-Central Tax, any registered person who fails to furnish the return under section 37 or 38 or 39 or 45 of CGST Act, 2017 shall pay the late fees of ₹25 for every day during which such failure continues and ₹10 in case of nil return subject to a maximum of ₹5,000.
As per Central Government notifications the late fees has been reduced to ₹25 for every day during which such failure continues and ₹10 in case of nil return subject to a maximum of ₹5,000
Note: ₹25/₹10 is late fees in CGST Act, equal late fees shall be charged under respective SGST Act of the state.
Question 12.
State the Form Number and the due date for its filing under CGST Act, 2017 of the return by:
(i) a composition scheme taxable person
(ii) a registered person deducting tax at source
(iii) an input service distributor.
Answer:
| Tax Payer | Form No.to be filed | Due date of Filing Return |
| Composition scheme taxable person | GSTR-4 | 30th April of the month following the end of such financial year |
| Registered person deducting tax at source | GSTR-7 | 10th of next month |
| Input Service Distributor | GSTR-6 | 13th of next month |
Question 13.
What is form GSTR 3B? What are its features? Who is exempt from filing GSTR 3B?
Answer:
1. GSTR-3B is a monthly self-declaration that has to be filed by a registered dealer.
The features of GSTR-3B are given below:-
– A separate GSTR-3B must be filed for each GSTIN
– Tax liability of GSTR-3B must be paid by the last date of filing GSTR-3B for that month
– GSTR-3B cannot be revised
2. Every person who has registered for GST must file the return GSTR-3B including nil returns. However, the following Registered Persons do not have to file GSTR-3B:
– Input Service Distributors & Composition Dealers
– Suppliers of OIDAR
– Non-resident taxable person
Question 14.
Mr. X, a registered person in Mumbai has made outward supplies of taxable goods as under:
Mr. X has become liable for registration on 1st October, 2018. He was granted registration on 1st January, 2019.
(I) Supplies made from 1st April, 2018 to 30th September, 2018 ₹19,50,000
(II) Supplies made from 1st October, to 31st December, 2018 ₹8,00,000
(III) Supplies made from 1st January, 2019 to 31st January, 2019 ₹2,00,000
The first return furnished by Mr. X is for the month of January, 2019. What is the taxable turnover to be declared in the return filed for January, 2019?
Answer:
As per section 40 of the CGST Act, 2017 every registered person who has made outward supplies in the period between the date on which he become liable to registration till the date on which registration has been granted shall declare the same in the first return furnished by him after grant of registration. Hence taxable turnover to be declared by Mr. X for January 2019 is
(₹8,00,000 + ₹2,00,000) = ₹10,00,000.
Question 15.
I am a non-resident taxable assessee. What are the returns to be furnished by me?
Answer:
A non-resident taxable assessee is liable to file FORM GSTR-5 for furnishing the monthly details of inward and outward supplies, debit/credit notes, tax paid details, details of closing stock and refund claimed, if any. The return should be furnished by 20th of the month succeeding the tax period, or within 7 days from the last day of the validity of registration, whichever is earlier.
Question 16.
How will a person desirous of becoming a GST Practitioner apply and whether a GST Practitioner need to register separately under GST?
Answer:
A person desirous of becoming GST practitioner has to submit an application in the Form GST PCT-1. The application shall be scrutinized and, if found eligible, the GST practitioner certificate shall be granted in the form GST PCT-2. If the aggregate turnover of the GST practitioner crosses the prescribed threshold limit, he will need to register as a normal taxpayer.
Question 17.
How can a taxpayer search for a GST Practitioner?
Answer:
There is functionality on the dashboard of the registered person on the GST Portal wherein he can get the contact details of all GST Practitioners in a State, district and Pin code wise.
Question 18.
What are the documents required for registering as a GST Practitioner?
Answer:
Documents required for registration as a GST practitioner
Enrolment type (Central or State application),
Bar Council Membership Proof – For Advocates
Date of enrolment,
Photograph (JPEG-100kb),
date of enrolment,
Valid e-mail id,
Valid Phone number,
Membership number and valid up to,
Name of university/institute,
Office address proof, A digital signature,
Year of passing, and
Qualification proof:
Certificate of Practice – For Chartered Accountant, Company Secretary, Cost and Management Accountant, Bar Council Membership Proof – For Advocates.
Question 19.
What is the difference between a taxpayer and a GST practitioner?
Answer:
A taxpayer is a person registered under GST Act for the purpose of filing returns, payment of tax, availing input tax credit and other compliances. Such a person is defined as a ‘taxable person’ under GST Act. He is a person who carries on any business at any place in India and who is registered or required to be registered under the GST Act. Any person who engages in economic activity including trade and commerce is treated as taxable person.
On the contrary, a GST practitioner is a person registered as a GST professional under GST Act. A taxpayer may authorise a GST practitioner to furnish monthly/quarterly/annual returns and information, on his behalf, to the government. The manner of approval of GST practitioners, the manner of removal, eligibility and qualification, roles and responsibilities and other conditions relevant for the functioning of a GST Practitioner have been prescribed in rules 24 and 25 of the Return Rules. A taxable person can add a GST practitioner to his GST Portal, to allow such a person to make compliance under GST on his behalf.
Documents, Accounts And Records And Filing Of Returns Notes
- Sections involved are as follows:
a. Documents: 31, 32, 33 & 34 of CGST Act.
b. Accounts and Records: 35 & 36 of CGST Act.
c. Filing of Returns: 37 to 48 of CGST Act. - Tax Invoice under GST: Contents, Time limit for issuance of invoice for goods as well as services in usual cases.
- Concept of continuous supply of goods as well as continuous supply of services and time of issuance of invoice in those cases.
- Goods sent on approval – invoice requirements.
- Concept of Bill of supply and Invoice-cum-Bill of supply
- Concept of Revised Tax Invoice
- No Tax Invoice/Bill of supply if the value of supply is less than ? 200 and supply is to unregistered recipient and recipient does not require such invoice (Include details of such supply in Consolidated Tax Invoice/ Bill of supply made at the close of the day).
- Invoice requirements in case of reverse charge.
- Relaxation from issuance of tax invoice in respect of notified services: Insurers, Banks, Passenger transporters and multiplex screen exhibiting films (No need to mention the address of the customer and serial number in their invoices keeping in view large number of transactions).
- Provisions relating to Receipt Voucher
- Provisions relating to Refund Voucher
- Provisions relating to Credit Notes and Debit Notes
- Prohibition of unauthorized collection of tax.
- E-Way Bill: concept, benefits, when required to generate, who is required to generate, cancellation, validity period, documents and devices to be carried by Person-in-charge of a conveyance.
- Accounts and other records: Need for maintenance, List of records, Place of maintenance Audit of accounts, period of retention, and manner of maintenance of accounts.
- *Period of retention of accounts (Usual cases): Accounts to be kept for 72 months from the due date of furnishing of Annual Return
- *Period of retention of accounts (Pertaining to the subject matter of appeal, etc.): To be kept for the period of one year after final disposal of such appeal, etc., or for 72 months from the due date of furnishing of annual return, whichever period expires later.
- Returns: Form Nos., content, who is required to file, and due date of filing.
- GST Practitioners.
- Obligation to furnish Information Return.