Gst change over
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
15 July 2017
A company is so unit having turnover of more than 1.5 correct,will the company fall under central or state department.
15 July 2017
There is not concept of State department or central department in GST. Once your get registered you can check your jurisdiction in you GST login.
VK
VK
Querist : Anonymous
Querist :
Anonymous
(Querist)
19 July 2017
Thanks,
One more query ,if a Company has manufactured a machine which 90 % work in progress in the month of June and balance 10% has been completed within Ist week of July,that particular machine has been sold out in the month of July.My query is how the Company will avails in put credit on Central purchase done in the month of June,when input credit CST was not allowed by the consumer.
A.K.Bose.
One more query ,if a Company has manufactured a machine which 90 % work in progress in the month of June and balance 10% has been completed within Ist week of July,that particular machine has been sold out in the month of July.My query is how the Company will avails in put credit on Central purchase done in the month of June,when input credit CST was not allowed by the consumer.
A.K.Bose.
26 July 2024
Let's address your queries one by one:
### **1. GST Jurisdiction Based on Turnover**
For a company with a turnover of more than ₹1.5 crore, the GST jurisdiction (Central or State) is determined based on the nature of the supply and the location of the business:
- **Central Tax**: The Central Goods and Services Tax (CGST) is applicable on transactions where the supply of goods or services falls under the central jurisdiction, including interstate transactions.
- **State Tax**: The State Goods and Services Tax (SGST) is applicable on transactions where the supply is within the same state.
#### **Central vs. State Department:**
- **State Jurisdiction**: Typically, for most business operations, the State GST Department handles compliance and audit.
- **Central Jurisdiction**: Businesses with turnovers above ₹1.5 crore or those engaged in interstate transactions might also fall under the jurisdiction of the Central GST authorities.
In practice, both CGST and SGST will be applicable for intrastate transactions, and the Central GST Department handles CGST-related issues, while the State GST Department handles SGST-related issues.
### **2. Availing Input Tax Credit (ITC) for Work in Progress**
Regarding the ITC for work in progress (WIP) and input credit for CST (Central Sales Tax) transactions:
**Situation**:
- **Machine Work in Progress**: 90% completed in June, 10% completed in July.
- **Machine Sold**: In July.
- **Input Credit**: Central purchase done in June, CST was not allowed previously.
**Handling Input Tax Credit (ITC)**:
1. **ITC on Input Goods**:
- **When to Claim**: You can claim ITC on inputs used in the manufacture of goods that are sold, irrespective of whether the goods were in progress at the time of input purchase.
- **Invoice Date**: The input credit should be claimed in the GST return of the period in which the goods were purchased and the input invoice was received.
2. **CST and GST Transition**:
- **Transition from CST to GST**: Since CST was not allowed as input credit under the old regime, but GST allows input credit, you need to ensure the transition from CST to GST is appropriately handled.
- **Input Credit Availability**: Under GST, you can claim input credit on goods purchased for manufacturing even if the final product is sold in a subsequent period.
3. **Filing Returns**:
- **GSTR-1/GSTR-3B**: Ensure that your GSTR-1 and GSTR-3B filings reflect the correct ITC claims. For the machine sold in July, you should ensure that the ITC on inputs used in the manufacture of this machine is correctly reflected in the return for the period in which the inputs were purchased.
4. **Documentation**:
- **Maintain Records**: Ensure all supporting documents are maintained, including purchase invoices, manufacturing records, and sale invoices.
- **Reconciliation**: Perform reconciliation to ensure that ITC claimed corresponds to the input supplies used in the production of the final product.
### **Conclusion**
1. **GST Jurisdiction**: The company will be under both Central and State GST Departments depending on the nature of transactions and their turnover.
2. **Claiming ITC**: For the machine that was completed in July, you can claim input credit on the purchases made in June. Ensure that the claim is made correctly in the GST returns for the period of purchase and that all supporting documentation is in place.
If you have specific complexities or need precise guidance, consulting with a GST professional or tax advisor can help address any specific nuances and ensure compliance with the GST laws.
### **1. GST Jurisdiction Based on Turnover**
For a company with a turnover of more than ₹1.5 crore, the GST jurisdiction (Central or State) is determined based on the nature of the supply and the location of the business:
- **Central Tax**: The Central Goods and Services Tax (CGST) is applicable on transactions where the supply of goods or services falls under the central jurisdiction, including interstate transactions.
- **State Tax**: The State Goods and Services Tax (SGST) is applicable on transactions where the supply is within the same state.
#### **Central vs. State Department:**
- **State Jurisdiction**: Typically, for most business operations, the State GST Department handles compliance and audit.
- **Central Jurisdiction**: Businesses with turnovers above ₹1.5 crore or those engaged in interstate transactions might also fall under the jurisdiction of the Central GST authorities.
In practice, both CGST and SGST will be applicable for intrastate transactions, and the Central GST Department handles CGST-related issues, while the State GST Department handles SGST-related issues.
### **2. Availing Input Tax Credit (ITC) for Work in Progress**
Regarding the ITC for work in progress (WIP) and input credit for CST (Central Sales Tax) transactions:
**Situation**:
- **Machine Work in Progress**: 90% completed in June, 10% completed in July.
- **Machine Sold**: In July.
- **Input Credit**: Central purchase done in June, CST was not allowed previously.
**Handling Input Tax Credit (ITC)**:
1. **ITC on Input Goods**:
- **When to Claim**: You can claim ITC on inputs used in the manufacture of goods that are sold, irrespective of whether the goods were in progress at the time of input purchase.
- **Invoice Date**: The input credit should be claimed in the GST return of the period in which the goods were purchased and the input invoice was received.
2. **CST and GST Transition**:
- **Transition from CST to GST**: Since CST was not allowed as input credit under the old regime, but GST allows input credit, you need to ensure the transition from CST to GST is appropriately handled.
- **Input Credit Availability**: Under GST, you can claim input credit on goods purchased for manufacturing even if the final product is sold in a subsequent period.
3. **Filing Returns**:
- **GSTR-1/GSTR-3B**: Ensure that your GSTR-1 and GSTR-3B filings reflect the correct ITC claims. For the machine sold in July, you should ensure that the ITC on inputs used in the manufacture of this machine is correctly reflected in the return for the period in which the inputs were purchased.
4. **Documentation**:
- **Maintain Records**: Ensure all supporting documents are maintained, including purchase invoices, manufacturing records, and sale invoices.
- **Reconciliation**: Perform reconciliation to ensure that ITC claimed corresponds to the input supplies used in the production of the final product.
### **Conclusion**
1. **GST Jurisdiction**: The company will be under both Central and State GST Departments depending on the nature of transactions and their turnover.
2. **Claiming ITC**: For the machine that was completed in July, you can claim input credit on the purchases made in June. Ensure that the claim is made correctly in the GST returns for the period of purchase and that all supporting documentation is in place.
If you have specific complexities or need precise guidance, consulting with a GST professional or tax advisor can help address any specific nuances and ensure compliance with the GST laws.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Off Market debit and credit transaction
- Itr 1 processing
- Showing Gift from relative in ITR for this year
- ITR returnFY25-26
- ITR selection for salaries and capital gain less than L
- Form 10E u/s 89(1). Need clarification because experts opinions differ !!!!
- Share accounting-->fifo - capital gain - period as per fifo?
- Short Term Capital gain on shares bought and sold after 2018 onwards
- ITR 2 Short Term gain & Long term gain
- INCOME TAX ON REDEVELOPEMENT OF FLAT
- ITR 1: Details for showing Exempt Income
- Gst invoice numbering and delivery challan numbering
- Sales amount in Gstr1
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
- Tax amount diff in Gstr1 and 3B in tax compare reports
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
