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INDIRECT TAX EXPRESS
Volume 17, Issue 2
Business Processes for Returns under GST
The committees comprising of officers from the Central Government, as well as the State
Governments, have been constituted for the drafting of Model CGST, SGST and IGST laws,
and GST business processes of registration, refunds, returns and payments. The basic
features of business process for GST on returns emerging from this report are as follows:-
Method, Types & Frequency of Returns:-
There will be common e-return for CGST, SGST, IGST and Additional Tax.
Every registered person is required to file a return for the prescribed tax period (including
No returns will be required to be filed by Government entities / PSUs , etc. not dealing in
GST supplies or persons exclusively dealing in exempted / Nil rated / non–GST goods or
Casual/Non-Resident Taxpayers will be required to file returns only for the period for
which they have obtained registration within a period of seven days after the date of
expiry of registration.
The filing may be done either directly or by using Applications developed by accounting
companies / IT companies which will interact with GST System using APIs or through
Facilitation Center (FC)
The periodicity of return for different categories of taxpayers is as follows:
Sl. No. Return Description To be filed by
1 GSTR-1 Outward supplies made by taxpayer (other than
compounding taxpayer and ISD)
10th of the next month
2 GSTR-2 Inward supplies received by a taxpayer (other
than a compounding taxpayer and ISD
15th of the next month
3 GSTR-3 Monthly return (other than compounding
taxpayer and ISD)
20thof the next month
4 GSTR-4 Quarterly return for compounding Taxpayer 18th of the month next to
5 GSTR-5 Periodic return by Non-Resident Foreign
Last day of registration
6 GSTR-6 Return for Input Service Distributor (ISD) 15th of the next month
7 GSTR-7 Return for Tax Deducted at Source 10th of the next month
8 GSTR-8 Annual Return By 31st December of next
Steps for Return Filing:-
The taxpayer will upload the final GSTR-1 return form either directly through data entry
at the GST Common Portal or by uploading the file containing the said GSTR- 1 return
form through Apps within due date.
GST Common Portal (GSTN) will auto-draft the provisional GSTR-2 of taxpayer based
on the supply invoice details reported by the counter-party taxpayer (supplier) on a near
F r o m t h e E d i t o r i a l T E A M
Inside this issue:
Subramaniam, said on
“Constitutionally petrol and
other petroleum products
will be within the GST
system. But it would be out
of the GST dispensation
after its implementation for
Outlining priorities for
the New Year, finance
minister Arun Jaitley also
said on 27.12.2015 that
passage of the controversial
GST Bill and ease of doing
business with India will be
the top priorities of the
Narendra Modi government
F o r t n i g h t l y e-n e w s l e t t e r f r o m m / s D A VA&
As s o c i a t e s, C h a r t e r e d Ac c o u n t a n t s
Purchasing taxpayer will accept / reject/ modify such auto-drafted provisional GSTR-2
Taxpayers will have the option to do reconciliation of inward supplies with counterparty
taxpayers (suppliers) during the next 7 days by following up with their counterparty
taxpayers for any missing supply invoices in the GSTR-1.
After finalizing their GSTR-1and GSTR-2 by using online facility at Common Portal or
using GSTN compliant off-line facility in their accounting applications, taxpayers will pay
the amount as shown in the draft GSTR-3 return by debiting the ITC ledger and cash
ledger and mention the debit entry No. in the GSTR-3 return and would submit the same.
Revision of Returns:- There would be no revision of returns. All unreported invoices of
previous tax period would be reflected in the return for the month in which they are
proposed to be included. The interest, if applicable will be auto populated.
Non-filing, late-filing and short-filing of return
In case of failure by the taxpayer to submit periodic returns, a defaulter list will be
generated by the IT system by comparing the return filers with the registrants database
and send the notice to all non-filers.
E-Return will be allowed to be uploaded even in case of short payment for the limited
purpose of having the information about self-assessed tax liability even though not paid.
The invoice matching and inter-governmental fund settlement would, however, take place
only after the full tax has been paid.
Annual Return:- All the normal taxpayers would be required to submit Annual Return.
This return to be filed annually is intended to provide 360 degree view about the activities of
the taxpayer. This statement would provide a reconciliation of the returns with the audited
financial statements of the taxpayer.
Central Government, vide Notification Nos. 27/2015-ST & 26/2015-
CE (N.T.) both dated 18.12.2015, has extended the due date for
depositing service tax and excise duty payable by the assessees in the
Union Territory of Puducherry (except Mahe &Yanam) for the month of
November’2015, to 20.12.2015 and due date of filing excise return for
the month of November’2015 to 31st December’2015.
Central Government, vide Notification No. 46/2015-CE, dated
16.12.2015 increased the Basic Excise Duty rates on Petrol and Diesel
(both unbranded and branded) w.e.f 17.12.2015.
Central Government, vide Notification No 143/2015- Customs (N.T.)
dated 15.12.2015, notified 'Fireworks' under Section 110 (1A) of
Customs Act, 1962 for disposal of seized goods.
CBEC vide Notification No. 145/2015-Customs (N.T.) dated
18.12.2015 included Powarkheda, District Hoshangabad in the state of
Madhya Pradesh as Inland Container Depots for unloading of imported
goods and loading of export goods.
CBEC vide Notification No. 146/2015-Customs (N.T.) dated
23.12.2015 appointed the Principal Commissioner of Customs (Import),
Inland Container Depot, Tughlakabad to act as a Common Adjudicating
Authority for certain show cause notices.
NOTIFICATIONS & CIRCULARS
1. State whether true or false: ‘Service of collecting
or providing news by Press Trust of India is exempt
under service tax’.
2. What is the amount of general penalty prescribed
for contravening the provisions of Cenvat Credit
3. What is the method of valuation in case of captive
consumption of goods as per Central Excise
Valuation Rules, 2005?
(Please mail your replies with your name and mail id to
(The first 3 correct answers will be published in the next
issue with name & mail id of the sender.)
ANSWER TO LAST FORTNIGHT’S QUIZ
Reply to Q1- 01.04.2015
Reply to Q2–Yes
Reply to Q3– Rs. 2 crores
Reply given by:
1. Manish Sachdeva, firstname.lastname@example.org
2. Chirag Bhotika, email@example.com
3. Pritish Kumar Agarwal, firstname.lastname@example.org
Q U I Z ! !!
To meet higher
for the next financial
year, mainly on account
of the seventh pay
recommendations and the
pay pension plan, the
Centre could raise
the service tax rate by up
to two percentage points
in the coming Union
1. Mangalore Refinery & Petrochemicals Ltd Vs C.C.E & S.T., Mangalore [2015 (40) S.T.R 1093 (Tri-Bang.)]
Issue: - Whether penalty can be imposed on public sector undertaking for mala fide intent to avail Cenvat Credit?
Decision-The Hon’ble CESTAT held that the entire Cenvat credit was availed by the appellant by reflecting the same in the statutory
records as also in the monthly returns filed by them. Otherwise also, the appellant is a public sector undertaking and there can be no
mala fide intend on their part to avail the irregular and non-available credit. There being no positive on the part of the assesse to show
that there was any suppression or misstatement with any mala fide intend, the demand is barred by limitation and therefore, penalty
imposed upon the appellant is also set aside.
2. Vishal Pipes Ltd Vs Commissioner of Central Excise, Noida [ 2015 (40) S. T. R. 1091 (Tri. Del)]
Issue: - Whether telephone installed at residence in individual name of Managing Director and Directors can be
considered as input service for the purpose of availing Cenvat credit?
Decision- The Hon’ble Delhi CESTAT held that even if telephones are installed at residence of Managing Director and
Directors of the appellant company and are in individual name, the facts remain that it is appellant company which
benefits and as such, this service has to be treated as service in relation to the business of the appellant company. In view
of this, the impugned order disallowing the Cenvat credit in respect of the telephone installed at the residence of the
Managing Director and the director of the appellant company is not sustainable.
3. Commissioner Of Central Excise, Mumbai-IV Vs Fitrite Packers [2015 (324) E.L.T. 625 (S.C.)]
Issue: - Whether process of printing on duty-paid paper as per design and specifications of customers with logo and
name of products in colorful form amounts to manufacture?
Decision- The Hon’ble Supreme Court held that GI paper was meant for wrapping and this end use remained the same even
after printing. However, whereas blank paper could be used as wrapper for any kind of product, after the printing of logo
and name of the specific product of Parle thereupon, the end use was now confined to only that particular and specific
product of the said particular company/customer. The printing, therefore, is not merely a value addition but has now been
transformed from general wrapping paper to special wrapping paper. In that sense, end use has positively been changed as
a result of printing process undertaken by the assessee. We are, therefore, of the opinion that the process of aforesaid
particular kind of printing has resulted into a product, i.e., paper with distinct character and use of its own which it did not
bear earlier. Thus, the ‘test of no commercial use without further process’ would be applied as in the case of Servo-Med
Industries. Hence, process of printing on duty-paid paper as per design and specifications of customers with logo and
name of products in colorful form amounts to manufacture.
4. Purolator India Ltd. Vs Commissioner Of Central Excise, Delhi-III [2015 (323) E.L.T. 227 (S.C.)]
Issue: - Whether cash and volume discount are allowable as deduction when the same was stipulated in the sale
agreement between the assessee and its buyers and known at, or prior to, clearance of goods?
Decision- The Hon’ble Supreme Court held “transaction value” as defined in sub-clause (3)(d) of Section 4 has to be read
along with the expression “for delivery at the time and place of removal”. It is clear, therefore, that what is paramount is
that the value of the excisable goods even on the basis of “transaction value” has only to be at the time of removal, that is,
the time of clearance of the goods from the appellant’s factory or depot as the case may be. The expression “actually paid
or payable for the goods, when sold” only means that whatever is agreed to as the price for the goods forms the basis of
value, whether such price has been paid, has been paid in part, or has not been paid at all. The basis of “transaction value”
is therefore the agreed contractual price. Further, the expression “when sold” is not meant to indicate the time at which
such goods are sold, but is meant to indicate that goods are the subject matter of an agreement of sale. Therefore, as cash
discount is something which is “known” at or prior to the clearance of the goods, being contained in the agreement of sale
between the assessee and its buyers, and must therefore be deducted from the sale price in order to arrive at the value of
excisable goods “at the time of removal”.
Editor Editorial Team
CA Narayan Kr. Agarwal Ms Stuti Tibrewal
Ms Richa Keshari
Ms Nikita Sultania
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FREQUENTLY ASKED QUESTIONS
“Year’s end is neither
an end nor a beginning
but a going on, with all
the wisdom that
experience can instill
- Hal Borland
Team Indirect Tax
Express wishes all its
readers a very Happy
Query 1: M/s XYZ Pvt Ltd supplied cranes on hire to M/s ABC Pvt Ltd. These cranes
will be used for construction of dams by M/s ABC Pvt Ltd. under the initiative of
Central Government which is exempt under Mega Exemption Notification 25/2012-ST
dated 20.06.2012. Whether exemption will also be applicable for supply of crane on hire,
used for providing exempt service?
Reply by e-newsletter team: The serial no. 12 of Mega Exemption Notification No. 25/2012-
ST dated 20.06.2012 provides exemption to services provided to government for construction
of canal, dam or other irrigation works. However, as per section 66F(1) of The Finance Act,
1994, "Unless otherwise specified, reference to a service (herein referred to as main service)
shall not include reference to a service which is used for providing main service. For
example, Service provided by RBI is exempt. This does not mean that any agency services
provided by other banks to RBI are also exempt. Therefore, hiring of crane for construction of
dam shall be taxable, even if it is used in providing exempt service.
Query 2: M/s ABC Pvt Ltd has been subjected to audit upto FY 2013-14. Whether it can
be selected for detailed manual scrutiny of ST-3 for FY 2014-15?
Reply by e-newsletter team: As per para 4.3.6 of revised guidelines issued by CBEC in
relation to Detailed Manual Scrutiny of Service Tax Returns Vide Circular No. 185/04/2015-
ST dated 30.06.2015, “the assessee who have been selected for audit or have been audited
recently (in the past three year) should not be taken for detailed scrutiny. However, the Chief
Commissioner may direct detailed manual scrutiny of an assessee’s return who has paid
service tax (cash + cenvat) more than Rs. 50 lakh in certain specific cases. In no event should
an assessee be subjected to both audit and detailed manual scrutiny”. Therefore, if M/s ABC
Pvt Ltd has been subjected to audit for FY 2013-14, it cannot be selected for detailed manual
scrutiny of ST-3 for FY 2014-15.
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