Gst applicability during transition

your liabilities on 400000 because as per service tax rule point of taxation as , basis of invoice raised or payment received which ever is earlier . you have received 100000 on the month of june- 17. as per service tax rule of point of taxation, your liabilities arrised on moth of june-17. now your total consideration is 500000 out of 100000 fall in service tax and 400000 under GST. because 100000 transaction is before GST implemented. I also send the details for your reference.

Transitional Provisions in Certain Cases under GST

The GST Law has an entire chapter on transition provisions. Learn more about the provisions related to works contract, ISDs, and goods lying with agents.

Updated on Jun 09, 2017 - 06:48:14 PM

GST implementation on 1st July 2017 will usher in a new India. Businesses are worried about the transition processes and the provisions applicable on shifting from the VAT/excise regime to the new GST regime. Here we cover a few transitional provisions in certain cases under GST.

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Works Contracts
Continuous Supply of Goods/Services
Distribution of Service Tax Credit by Input Service Distributor
VAT Paid on Goods Lying with Agents to be Allowed as Credit
How will Long Term Construction / Works Contracts be affected?

The goods/services supplied after the appointed day in pursuance of a works contract entered into before to the appointed day shall be liable to GST.

Case 1

Mr. B has entered into a contract with Care Constructions Ltd. to build an office building on 1st June 2017. Care Constructions has supplied materials and services on 20th June 2017 for which the payment was received on 25th June 2017.

No GST will apply on materials supplied on 20th June 2017 as it was before GST implementation.

Case 2

Care Constructions Ltd. supplies goods on 15th July 2017. Will GST apply?

GST will apply on this as supply was after GST rollout, even though the contract was signed before GST.

Case 3

Care Constructions has supplied materials and services on 20th June 2017 and issued an invoice for it on 20th June. Payment is made on 27th July 2017. Will GST apply in this case?

GST will not apply as the supply was made before GST implementation. Also, the time of supply is 20th June (date of issue of invoice) which is before GST implementation.

Transition Provisions for Works Contract to GST

Both service tax and VAT apply to works contract because a works contract incorporates both goods (iron bars, cement) and services (labourers, engineers).

ITC will be available on the proportion of supply on which VAT or service tax has been paid before GST implementation date but the supply is made after the appointed day.

The taxpayer must submit a declaration electronically in FORM GST TRAN-1 furnishing the details within a period of ninety days of the appointed day.

Example-

Care Constructions has received advance payment from XYZ Ltd. to construct a blast furnace on 27th June for which it issued invoice. It supplied materials and services on 5th July 2017. Will GST apply in this case?

GST will not apply as the supply was made before GST implementation.

Also, XYZ Ltd. can claim ITC on the supply made on 5th July provided it submits a declaration electronically in FORM GST TRAN-1 furnishing the details within 90 days from 1st July.

Also, the time of supply is 20th June (date of issue of invoice) which is before GST implementation.

Continuous Or Periodic Supply of Goods/Services

For the continuous supply of goods/services, GST will not be payable on the supply after GST implementation where the consideration for the supply has been received before the appointed day AND the tax has already been paid under the earlier law.

It is immaterial whether the consideration for supply has been paid fully or partly.

Case 1

Mr. S supplies goods to Mr. B on a continuous basis. Mr. S. sent goods worth Rs. 1,00,000 on 15th July for which Mr. B made an advance payment on 27th June. Will GST apply?

GST will not apply to these goods as payment has already been received before GST implementation and tax was applied according to the earlier law.

Case 2

Based on above scenario, Mr. B had paid only Rs. 50,000 as an advance in June.

GST will still not apply as the tax was applied on basis of earlier law. It does not matter if the consideration was partly paid.

Case 3
Mr. B makes entire payment of 1,00,000 on 17th July.

GST will be applicable as consideration is received after GST implementa

Is there any specific clause in the GST Act / Rules related to that? I tried to find . But not sucessful.

Time of Supply of Services under GST Explained Updated on Jun 09, 2017 - 08:38:59 PM Point of taxation means the point in time when goods have been deemed to be supplied or services have been deemed to be provided. The point of taxation enables us to determine the rate of tax, value, and due dates for payment of taxes. The liability to pay CGST / SGST will arise at the time of supply as determined for goods and services. There are separate provisions for time of supply for goods and time of supply for services. To read about time supply of goods please click here. The liability to pay CGST / SGST on the services shall arise at the time of supply as determined by GST provisions. How to determine time of supply The time of supply of services shall be the earlier of the following dates:- (a) The date of issuing invoice (or the last day by which invoice should have been issued) OR (b) The date of receipt of payment -whichever is earlier If the supplier of taxable service receives an amount up to Rs. 1000 rupees in excess of invoice amount, the time of supply for the extra amount shall be the date of issue of invoice (at the option of the supplier). For clauses (a) and (b)- The supply shall be assumed to have been made to the extent it is covered by the invoice or the payment (as the case may be). For clause (b)- the date of receipt of payment shall be earlier of- (i) The date on which he entered the payment in his books OR (ii) The date on which the payment is credited to his bank account Example: Date of invoice 15th May 2018 Date of receipt of payment 10th July 2018 Date when supplier recorded receipt in books 11th July 2018 Time of supply will be 15th May 2018 Time of supply under reverse charge Reverse charge means the liability to pay tax is by the recipient of goods/services instead of the supplier. In case of reverse charge, the time of supply shall be the earliest of the following dates— (a) The date of payment OR (b) The date immediately after SIXTY (60) days from the date of issue of invoice by the supplier (30 days for goods) If it is not possible to determine the time of supply under (a), (b) or (c), the time of supply shall be the date of entry in the books of account of the receiver of service. For clause (a)- the date of payment shall be earlier of- 1. The date on which the recipient entered the payment in his books OR 2. The date on which the payment is debited from his bank account When supplier is located outside India In case of ‘associated enterprises’, where the supplier of service is located outside India, the time of supply shall be- (a) the date of entry in the books of account of the receiver OR (b) The date of payment -whichever is earlier Example for reverse charge: 1. Date of payment 15th July 2018 2. Date of invoice 1st July 2018 3. Date of entry in books of receiver 18th July 2018 Time of supply of service 15th May 2018 If for some reason time of supply could not be determined supply under (a), (b) or (c) then it would be 18th July 2018 i.e., date of entry in books Time of supply for vouchers In case of supply of vouchers, the time of supply is- (a) The date of issue of voucher, if the supply can be identified at that point OR (b) The date of redemption of voucher, in all other cases When time of supply cannot be determined If it is not possible to determine the time of supply by the above provisions, then it will be- 1. The date on which a periodical return has to be filed OR 2. The date on which the CGST/SGST is paid, in any other case. In GST regime, the tax collection event will be earliest of the dates as given above. The various events like issuing invoice/making payment in case of supply of goods /services or completion of event-in case of supply of service triggering the tax levy, confirms that the Government wants to ensure tax is collected at the ear

142. Miscellaneous transitional provisions. [1] Where any goods on which duty, if any, had been paid under the existing law at the time of removal thereof, not being earlier than six months prior to the appointed day, are returned to any place of business on or after the appointed day, the registered person shall be eligible for refund of the duty paid under the existing law where such goods are returned by a person, other than a registered person, to the said place of business within a period of six months from the appointed day and such goods are identifiable to the satisfaction of the proper officer: Provided that if the said goods are returned by a registered person, the return of such goods shall be deemed to be a supply. [2] [a] where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or services or both is revised upwards on or after the appointed day, the registered person who had removed or provided such goods or services or both shall issue to the recipient a supplementary invoice or debit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act such supplementary invoice or debit note shall be deemed to have been issued in respect of an outward supply made under this Act; [b] where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or services or both is revised downwards on or after the appointed day, the registered person who had removed or provided such goods or services or both may issue to the recipient a credit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act such credit note shall be deemed to have been issued in respect of an outward supply made under this Act: Miscellaneous transitional provisions. Provided that the registered person shall be allowed to reduce his tax liability on account of issue of the credit note only if the recipient of the credit note has reduced his input tax credit corresponding to such reduction of tax liability. [3] Every claim for refund filed by any person before, on or after the appointed day, for refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section [2] of section 11B of the Central Excise Act, 1944: Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse: Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act. [4] Every claim for refund filed after the appointed day for refund of any duty or tax paid under existing law in respect of the goods or services exported before or after the appointed day, shall be disposed of in accordance with the provisions of the existing law: Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse: Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act. [5] Every claim filed by a person after the appointed day for refund of tax paid under the existing law in respect of services not provided shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section [2] of section 11B of the Central Excise Act, 1944. [6]

142. Miscellaneous transitional provisions. [1] Where any goods on which duty, if any, had been paid under the existing law at the time of removal thereof, not being earlier than six months prior to the appointed day, are returned to any place of business on or after the appointed day, the registered person shall be eligible for refund of the duty paid under the existing law where such goods are returned by a person, other than a registered person, to the said place of business within a period of six months from the appointed day and such goods are identifiable to the satisfaction of the proper officer: Provided that if the said goods are returned by a registered person, the return of such goods shall be deemed to be a supply. [2] [a] where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or services or both is revised upwards on or after the appointed day, the registered person who had removed or provided such goods or services or both shall issue to the recipient a supplementary invoice or debit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act such supplementary invoice or debit note shall be deemed to have been issued in respect of an outward supply made under this Act; [b] where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or services or both is revised downwards on or after the appointed day, the registered person who had removed or provided such goods or services or both may issue to the recipient a credit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act such credit note shall be deemed to have been issued in respect of an outward supply made under this Act: Miscellaneous transitional provisions. Provided that the registered person shall be allowed to reduce his tax liability on account of issue of the credit note only if the recipient of the credit note has reduced his input tax credit corresponding to such reduction of tax liability. [3] Every claim for refund filed by any person before, on or after the appointed day, for refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section [2] of section 11B of the Central Excise Act, 1944: Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse: Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act. [4] Every claim for refund filed after the appointed day for refund of any duty or tax paid under existing law in respect of the goods or services exported before or after the appointed day, shall be disposed of in accordance with the provisions of the existing law: Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse: Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act. [5] Every claim filed by a person after the appointed day for refund of tax paid under the existing law in respect of services not provided shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section [2] of section 11B of the Central Excise Act, 1944. [6]

6] [a] every proceeding of appeal, review or reference relating to a claim for CENVAT credit initiated whether before, on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of existing law, and any amount of credit found to be admissible to the claimant shall be refunded to him in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section [2] of section 11B of the Central Excise Act, 1944 and the amount rejected, if any, shall not be admissible as input tax credit under this Act: Provided that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act; [b] every proceeding of appeal, review or reference relating to recovery of CENVAT credit initiated whether before, on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of existing law and if any amount of credit becomes recoverable as a result of such appeal, review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act. [7] [a] every proceeding of appeal, review or reference relating to any output duty or tax liability initiated whether before, on or after the appointed day under the existing law, shall be disposed of in accordance with the provisions of the existing law, and if any amount becomes recoverable as a result of such appeal, review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of duty or tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act. [b] every proceeding of appeal, review or reference relating to any output duty or tax liability initiated whether before, on or after the appointed day under the existing law, shall be disposed of in accordance with the provisions of the existing law, and any amount found to be admissible to the claimant shall be refunded to him in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section [2] of section 11B of the Central Excise Act, 1944 and the amount rejected, if any, shall not be admissible as input tax credit under this Act. [8] [a] where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes recoverable from the person, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act; [b] where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes refundable to the taxable person, the same shall be refunded to him in cash under the said law, notwithstanding anything to the contrary contained in the said law other than the provisions of sub-section [2] of section 11B of the Central Excise Act, 1944 and the amount rejected, if any, shall not be admissible as input tax credit under this Act. [9] [a] where any return, furnished under the existing law, is revised after the appointed day and if, pursuant to such revision, any amount is found to be recoverable or any amount of CENVAT credit is found to be inadmissible, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act; [b] where any return, furnished under the existing law, is revised after the appointed day but within the time

b] where any return, furnished under the existing law, is revised after the appointed day but within the time limit specified for such revision under the existing law and if, pursuant to such revision, any amount is found to be refundable or CENVAT credit is found to be admissible to any taxable person, the same shall be refunded to him in cash under the existing law, notwithstanding anything to the contrary contained in the said law other than the provisions of sub-section [2] of section 11B of the Central Excise Act, 1944 and the amount rejected, if any, shall not be admissible as input tax credit under this Act. [10] Save as otherwise provided in this Chapter, the goods or services or both supplied on or after the appointed day in pursuance of a contract entered into prior to the appointed day shall be liable to tax under the provisions of this Act. [11] [a] notwithstanding anything contained in section 12, no tax shall be payable on goods under this Act to the extent the tax was leviable on the said goods under the Value Added Tax Act of the State; [b] notwithstanding anything contained in section 13, no tax shall be payable on services under this Act to the extent the tax was leviable on the said services under Chapter V of the Finance Act, 1994; [c] where tax was paid on any supply both under the Value Added Tax Act and under Chapter V of the Finance Act, 1994, tax shall be leviable under this Act and the taxable person shall be entitled to take credit of value added tax or service tax paid under the existing law to the extent of supplies made after the appointed day and such credit shall be calculated in such manner as may be prescribed. [12] Where any goods sent on approval basis, not earlier than six months before the appointed day, are rejected or not approved by the buyer and returned to the seller on or after the appointed day, no tax shall be payable thereon if such goods are returned within six months from the appointed day: Provided that the said period of six months may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding two months: Provided further that the tax shall be payable by the person returning the goods if such goods are liable to tax under this Act, and are returned after a period specified in this sub-section: Provided also that tax shall be payable by the person who has sent the goods on approval basis if such goods are liable to tax under this Act, and are not returned within a period specified in this sub-section. [13] Where a supplier has made any sale of goods in respect of which tax was required to be deducted at source under any law of a State or Union territory relating to Value Added Tax and has also issued an invoice for the same before the appointed day, no deduction of tax at source under section 51 shall be made by the deductor under the said section where payment to the said supplier is made on or after the appointed day. Explanation.--For the purposes of this Chapter, the expressions "capital goods", "Central Value Added Tax [CENVAT] credit", "first stage dealer", "second stage dealer", or "manufacture" shall have the same meaning as respectively assigned to them in the Central Excise Act, 1944 or the rules made thereunder.