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Hussshhhh! No GST on the Advances received for the Goods from 15th November!

CA Umesh Sharma 
on 20 November 2017

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Arjuna (Fictional Character): Krishna, Government brought certain new changes in GST from 15th November. Which is the biggest change in that?

Krishna (Fictional Character): Arjuna, Earlier as per GST law, tax was to be paid on the advances received and it was to be adjusted after the invoice was issued. But now, as per the notification issued on 15th November, there is provision that no need to pay GST on the advances received against the supply of goods. Earlier, from 13th October to 15th November, if the aggregate turnover of the taxpayer is less than Rs.1.5 Crore, then the GST on advances was not liable to pay. But now because of this, all the taxpayers got a big relief. But still, the service providers are liable to pay GST on advances received.

Arjuna: Krishna, is there any change for the service providers?

Krishna: Arjuna, there are changes in the registration for the service providers. The service providers whose aggregate turnover is less than Rs. 20 Lakh is not liable to take registration. In this, inter-state service providers and e-commerce service providers are also included. It means for them also registration under GST is not require if their aggregate turnover is less than Rs. 20 Lakh.

Arjuna: Krishna, what are the changes made for restaurant owners?

Krishna: Arjuna, one of the biggest challenges is Input tax credit. The government has reduced the rate of tax for them, but there Input tax credit is taken out. In case of restaurants, if the room tariff is less than Rs. 7500 then, 5% GST will be levied on them but no ITC will be available. Similarly, if the room tariff is more than Rs. 7500 and in case of outdoor catering, 18% GST will be levied on them and ITC will be allowed to them.

Arjuna: Krishna, the provisions of RCM are being made applicable to the Supply of raw cotton. Will you give certain information relating to this?

Krishna: Arjuna, From 13th October, the provisions of RCM were postponed. But from 15th November the provisions of RCM are being made applicable to supply of Raw cotton. The provision relating to that is, the supply of Raw cotton by an agriculturist is liable to pay GST. But the tax on it will be paid by the recipient registered person on RCM basis.

Arjuna: Krishna, what are the other changes made in GST?

Krishna: Arjuna, there are changes in the late fees. For the Form GSTR 3B of October month, the late fees for nil returns are Rs. 10 for CGST and Rs. 10 for SGST. As well as for other returns late fees are Rs. 25 for CGST and Rs. 25 for SGST.

Arjuna: Krishna, what lesson the taxpayer should take from GST?

Krishna: Arjuna, it was very much difficult for the taxpayers to pay tax on advances. But due to this provision, it becomes easier. It means, the complicated provisions of the GST are reducing.


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