GST rate structure

India moved a step closer towards implementing the goods and services tax (GST) after the center and the states struck a consensus on the GST rate and it’s structure of the ambitious tax reform.

GST council rates sets at 5%, 12%, 18%, 28%. Plus some component of cess at 1%, 3%, 15% on some commodities falling under 28% rate.

We shall be sharing series of lists for different sectors. Here is the list for 31 products of Edible, Dairy Products & few FMCG sector products as under:

GST rate structure finalized on 1205 items,majority of items in 12% and 18% tax slabs
Dairy produce; bird’s eggs; natural honey; edible products of animal origin.
Skimmed milk powder,Natural Honey put up in a unit container and bearing a brand name , Cream, Yoghurt.
Butter and other fats (ghee, butter oil, etc.) Cheese.
Condensed milk
Edible vegetables, roots and tubers
Frozen or dried,Vegetables provisionally preserved  but unsuitable in that state for immediate consumption.
Edible fruit and nuts; peel of citrus fruit or melons
 All goods, other than dry fruits, in frozen state or preserved.
Dry fruits (cashew nuts, almonds,pistachios, Dates ,Raisins)
Coffee, tea, mate and spices
Coffee (roasted,decaffeinated) Tea (processed green leaves of tea) Mate,vanilla,Cinnamon and cinnamon-tree flowers, cloves, Ginger(other than fresh ginger).
Products of milling industry; malt; starches; wheat gluten
Cereal groats, meal and pellets, put up in unit container and bearing a registered brand name.
Oil seeds and oleaginous fruits, miscellaneous grains, seeds and fruit; industrial or medicinal plants; straw and fodder
All goods other than of seed quality
Lac; gums, resins and other vegetable saps and extracts
Natural gums, resins,heeng,Guar meal or guar gum refined split.
All goods not specified elsewhere,other than
Guar meal or guar
gum refined split.
Vegetable plaiting materials; vegetable products, not elsewhere specified or included
All goods not specified elsewhere, Vegetable materials of a kind used primarily for plaiting .
Indian katha
Animal and vegetable fats and oils and their cleavage products;prepared edible fats; animal or vegetable waxes
Soya bean  oil,Ground nut oil ,Olive oil,Palm oil,Sunflower seed oil,Coconut oil,mustard oil,whether or not refined, but not chemically modified
Animal fats and oils: Pig fat, Poultry fat,Fat and oil of fish whether or not refined but not chemically modified.
Vegetable waxes residues of fatty substances or animal or vegetable waxes .
Preparations of meat, of fish or of crustaceans, mollusks or other aquatic vertebrates
All Goods Sausages, juices, preparation or preservation of meat,Fish.
Sugar and sugar confectionery
Beet sugar, cane sugar, khandsari sugar,Palmyra sugar
Refined sugar containing added flavoring or coloring matter,sugar cubes ,lactose,maple syrup,glucose, dextrose,fructose, invert sugar, artificial honey,Sugar confectionery (excluding white chocolate and bubble/ chewing gum).
Molasses, Chewing gum bubble gum and white chocolate, not
containing cocoa .
Cocoa and cocoa preparations
Co coca beans,shells,paste
Cocoa butter, fat and oil,  Cocoa powder (not containing added sugar or sweetening matter)and Chocolates and other food preparations containing cocoa.
Preparations of cereals, flour, starch or milk; pastry cooks’ products
Mixes and dough’s for the preparation of bread, pastry and other baker’s wares, Pizza bread.
Preparations for infant use, Pasta,Corn Flakes.
1.Food preparation of floor containing less than 40% of cocoa.    2.Wafers Coated with Chocolate or containing chocolate
Preparations of vegetables, fruits, nuts or other parts of plants (pickle, jam )
Fruit juices, vegetable juices.
Jams, fruit jellies, fruit or nut purée and fruit or nut paste
Miscellaneous edible preparations
Roasted chicory, Coffee
Extracts, essences and concentrates of tea,Sauces,Soups ,Ice cream
Instant coffee, coffee aroma,Pan Masala
Fruit pulp or fruit juice based drinks Beverages containing milk
Ethyl alcohol,Vinegar
1.Other non-alcoholic beverages     2. Aerated waters, containing added sugar or other sweetening matter or flavoured.
Residues and waste from the food industries; prepared animal fodder
Flours,meals,residue of starch manufacturer.
Tobacco and manufactured tobacco substitutes
Tobacco leaves (under reverse charge)
All goods not specified elsewhere, other than biris.
Essential oils and resinoids perfumery, cosmetic or toilet preparations.
Tooth powder, Agar batti and other odoriferous preparations which operate by burning.
Essential oils (Hair oil, Dentifrices -Toothpaste)
All goods not specified elsewhere:
Perfumes and toilet waters,Beauty or makeup preparations and preparations for the care of the skin (other than medicament),including sunscreen,Shampoos,Hair Cream,Dental Floss (like Listerine)Shaving cream, Personal deodorants and antiperspirants.
Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, modelling pastes, dental waxes and dental preparations with a basis of plaster.
Sulphonated castor oil, fish oil or sperm oil
Candles, tapers and the like
Soap,Artificial waxes and prepared waxes.
In the form of liquid or cream, Artificial waxes and prepared waxes. Polishes and creams, for footwear, furniture, floors,coachwork, glass or metal,dental wax.
Explosives; pyrotechnic products; matches; pyrophoric alloys; certain combustible preparations.
Handmade safety matches.
Propellant powders,Safety fuses,Matches .
Prepared explosives,Fireworks, Signalling flares,refilling cigarette or similar lighters.
Plastics and articles thereof.
Feeding bottles.
Primary polymers,Waste, parings and scrap, of plastics ,all goods including canes of plastics ,Tubes, pipes and hoses, and fittings therefor, of plastics ,Self-adhesive plates,sheets, film, foil, etc.of plastics,Other plates, sheets, film foil, etc. of plastics,Tableware, kitchenware, other household articles and Hygiene or toilet articles, of plastics,PVC Belt Conveyor .
Floor coverings of plastics,Baths, shower baths,sinks, wash basins, bidets.
Rubber and articles thereof.
Toy balloons made of natural rubber latex,bicycles,cycle -rickshaws and three wheeled powered cycle rickshaws.
Latex Rubber Thread,Surgical rubber gloves or medical examination rubber gloves ,Nipples of feeding bottles .
Synthetic rubber and factice derived fromoils,Reclaimedrubber,Waste,parings and scrap of rubber,Compounded rubber,Tubes,pipes and hoses of vulcanised rubber,Hot water bottles,Ice bags,Articles of apparel and clothing accessories,                       Erasers
New pneumatic tyres, of rubber used in motor cars, buses or lorries, aircraft, motor cycles etc,Floor coverings and mats,rubber boats or dock fenders, air mattress.
Umbrellas, sun umbrellas, walking-sticks, seat-sticks, whips, riding crops and parts thereof
Umbrellas and sun umbrellas,Walking sticks.
Glass and glassware
Globes for lamps and lanterns, Founts for kerosene wick lamps, Glass chimneys for lamps and lanterns
Spectacles, other waste and scrap of glass,Carboys,bottles, flasks, jars, pots.
Articles of iron or steel
Pencil sharpeners,Utensils,Kerosene burners, kerosene stoves and wood burning stoves of iron or steel.
Aluminium and articles thereof
Utensils, Table or kitchen or other household articles of aluminium.
Aluminium waste and scrap,Aluminium powders and flakes,Aluminium bars, rods and profiles.Aluminium wire. Aluminium plates, sheets and strip, of a thickness exceeding 0.2 mm. Aluminium tubes and pipes, Aluminium tube or pipe fittings.
Doors, windows and their frames and thresholds for doors,. All goods other than utensils i.e. sanitary ware and parts thereof.
Tools, implements, cutlery, spoons and forks of base metal; parts thereof of base meta
Pencil sharpeners and blades thereof,Knives with cutting blades,Paper knives.
Razors and razor blades,Other articles of cutlery .
Clocks and watches and parts thereof
Braille watches
Clocks with watch movements,Other clocks.
Wristwatches, pocket watches and other watches, including stop-watches.
Musical instruments; parts and accessories of such articles
Automatic pianos; harpsi-chords and other keyboard stringed instruments Other string musical instruments (for example, guitars).
Toys, games and sports requisites; parts and accessories thereof
Sports goods other than articles and equipment’s for general physical exercise. Toys like tricycles, scooters, pedal cars etc.
Electronic Toys like tricycles, scooters, pedal cars etc
Video games consoles and Machines Festive, carnival or other entertainment articles, including,conjuring tricks and novelty jokes.

Therefore with the help of this article we have tried bringing to you an analysis of how GST rate has impacted those who deal in items as under

  • Edible products,
  • Dairy products
  • & FMCG products

& accordingly one can evaluate his/her position as a result of this change.

Read our Analysis of GST impact on Textile industry


http://GST rates for products & services

GST Rates for General Products



Treatment of Imports in GST

Import GST for importers shall bring bonanza! Read as under: to know how

As GST will subsume Countervailing Duty(CVD) and Special Additional Duty (SAD), however Basic Customs Duty (BCD) will continue to levy in the import bills.

Below are some GST implications under import:-

Import will be like an Inter-State Supply – Import into India will be considered as Inter-State supply and accordingly will attract IGST tax along with Basic Custom Duty and other surcharges. The person in whose name Bill of Entry is made shall be getting clearance of goods & accordingly he is liable to avail credit of IGST.

Import of Services – In GST any services which are received from outside India, the tax liability arising from such transaction will be on the Service Recipient. This is similar to the current provision of reverse charge, wherein service receiver is required to pay tax and file return & then only can claim that as Input.

Transaction value based valuation-Under GST, liability of GST in maximum cases will be determined based on the transaction value.

The transaction value


a)Taxes charged under other Law

b)Any amount for which supplier is liable to pay Incidental expenses Interest or late fees. (This is to be notified more, to be continue… )

c)Any taxes, duties, cess, fees & charges levied under any other law, If charged separately by the supplier to the recipient . (Though it is tough to determine practically what else has been charged beyond invoice).


CGST/IGST/SGST/UTGST/Compensation Act.

Refund of Duty: Under the new law, IGST paid during import will be available as a credit, which means credit benefit of SAD & CVD will be available now to all. While at present refund of SAD is only allowed.

High Sea Sales:  In present tax structure, high sea sales is exempt. As per proposed GST model no such exemption would be available and each supply would be liable to tax.

Which means that now the person who will be taking clearance of goods will have to pay,

Firstly, the duties of BCD & IGST at custom port

Secondly, IGST involvement due to transaction b/w buyer & seller on high sea sales.

That will lead to double taxation, therefore we believe that there will be some exemptions expected here going on wards. (To be continue…)


The levy of taxes and treatment of taxes in case of imports and exports largely remain the same under GST in comparison with the existing laws.

In case of an importer, full input credit will be available on the IGST paid on imports and additional input credit will be available on the GST paid on all types of inputs used or intended to be used in the course of or for the furtherance of business.

Similarly, in the case of an exporter, refund will be given on the tax paid on all inputs used in the course of business.

Hence, overall costs of import and export are expected to reduce under GST and compliance is expected to become easier with the convergence of multiple tax laws into one law.

Cheers! GST would decrease the cost of imports due to free flow of credit chain.


Implication of GST on Imports

Written by:

Poonam Kanwar

(GST Associate)


Consequences of non compliance in GST

If there is a GST non compliance then the tax law requires strict action against tax offenders. Such GST non compliance actions are very strict unlike the current tax laws.

The GST non compliance will lead to following:

  • Interest, (Yet to be notified)
  • Monetary penalties &
  • Prosecution.

Here we will examine some of the monetary penalties and prosecution provided under the CGST Act.

Late Fees

Offense Late fee
A person fails to furnish details of outward or inward supplies, monthly return or final return by the due date . Rs 100 per day while the failure continues, subject to a maximum of Rs 5,000 rupees.
A person fails to furnish the annual return by the due date (31st December of next FY) Rs 100 per day while the failure continues, subject to a maximum of quarter percent of the person’s turnover in the state where he/she is registered
Deductor fails to furnish TDS certificate to Deductee within 5 days of credit to govt. Rs 100 per day, subject to max of Rs 5,000

Offenses that may attract prosecution

1. Supplying goods and/or services without issuing an invoice or issuing an incorrect or false invoice
2. Issuing an invoice without supplying goods and/or services
3. Collecting tax  and Collecting tax in contravention (like unjust enrichment) of law but failing to remit it to the government within 3 months of the due date
4. Failing to deduct tax or deposit the tax with the government
5. Taking full or partial input tax credit without actual receipt of goods and/or services
6. Obtaining a refund of tax by fraud
7. Distributing an input tax credit other than in the manner prescribed
8. Falsifying or substituting financial records, producing fake accounts and/or documents, or furnishing a false return
9. Failing to obtain registration (if registration is required)
10. Furnishing false information during registration
11. Transporting taxable goods without documents (like e-way bills)
12. Suppressing turnover leading to evasion of tax
13. Failing to maintain books of accounts and documents
14. Failing to furnish information to CGST/SGST officers or furnishing false information
15. Supplying and/or storing goods which one has reason to believe are liable for confiscation
16. Issuing an invoice or document by using the identification number of another person
17. Tampering with material evidence
18. Tampering with any goods that have been detained, seized, or attached.
Rs 10000 or the amount of tax involved, whichever is greater.

In addition failure of an electronic commerce operator to furnish all required information could lead to penalties of up to 25,000 rupees.

The period of imprisonment of a prosecuted person will depend on the amount of tax evaded:

Type of Offence Amount of tax evaded/ ITC wrongly availed/utilized/refund wrongly taken Period of maximum imprisonment & fine
Certain offenses specified in the Act > 5 crore 5 yrs and fine (Non-bailable)
Certain offenses specified in the Act > 2 crore up to Rs 5 crore 3 yrs and fine
Any other offense > 1 crore up to Rs 2 crore 1 yr and fine
Commits/ assists in the commission of certain specified offenses 6 months and/or fine
Repetition of offense
(i.e. second & every subsequent offense)
5 yrs and fine

For cases where there is no intention of fraud or tax evasion,  An offender not paying tax or making short-payments has to pay a penalty of 10% of the tax amount due subject to a minimum of Rs.10,000.

A penalty is also prescribed for offenses where the person is Indirectly involved in any evasion and party to evasion or fails to attend summons or produce necessary documents. In such cases, the penalty would be up to Rs.25,000

A penalty (Residuary penalty) of up to 25,000 rupees applies to any offense of the GST law that lacks a specifically prescribed penalty


Confiscation of goods or conveyance:

Certain offenses will lead to both a penalty and the confiscation of goods and/or conveyances. The penalty will be 10,000 rupees or an amount equal to the tax evaded, whichever is higher.

These GST non compliance are:
• Failing to account for the goods on which a person is liable to pay tax
• Supplying or receiving goods in contravention of any provisions or rules, with the intent to evade payment of tax
• Supplying any goods liable to tax without registering
• Using a conveyance to deliver taxable goods in breach of any provisions or rules

Conclusion for GST Non Compliance:

Various trade organizations argue that the government should tackle GST non compliance with soft hands initially, rather than with imprisonment, since non compliance could be erroneous rather than intentional. We believe & even GST has respected the thought, that if GST non compliance happens erroneously then this law has given ample room for minimal penalty.  Though the burden of proof always lies on the assesses.


Written by:

Poonam Kanwar

(GST Associate)

Much Awaited part of GST is released: It's now time for business to evaluate their business according to these GST tax rate

Much Awaited part of GST is released: GST tax rate for Goods & Services are announced

From list of 1211 items, GST tax rate for 1205 goods is released & it looks that it’s time for the businesses to evaluate their cut over planning and formulate their pricing strategies in view of the transition to GST.

Overall the announcement has been positive & looks well thought of, by putting commonly used products under 5, 12 or 18% slab which in existing scenario was up to 22-24%. For ex: Products like Hair oil, toothpaste, soaps were charged at 22-24% rate which has been reduced to 18%.

We have tried to share as under 2 areas of key importance regarding GST tax rate for goods & services :

A ) What is in the list of item wise tax rates for us?

  1.  Milk and curd will continue to be exempt from taxation in GST too.
  2.  Mithai or sweets will attract 5 per cent levy.
  3.  Daily-use items like sugar, tea, coffee (barring instant coffee) and edible oil will attract the lowest tax rate of 5 per cent, almost the same as current incidence.
  4. Prices of wheat and rice, will come down as they will be exempt from GST if not packed in container & not branded too.
  5. Aerated drinks like Coke, Pepsi, 7 up, Mazza etc.and cars will be in the 28 per cent bracket.
  6. All the category of cars whether small, mid size or large will attract common rate of 28% but cess will vary in each category. Small size will have 1 per cent cess, mid-sized cars will attract 3 per cent and luxury cars 15 per cent.
  7. Aerated drink will have cess of 12% over & tax rate of 28%.
  8. White goods like ACs and refrigerators will fall in the 28 per cent tax slab.
  9. Motor Cycles with > 350 cc  engine shall also pay cess of 3 % over the tax rate of 28%.
  10. Life-saving drugs have been kept at 5 per cent rate.

In the overall basket, it looks that item wise tax rate has been reduced in GST for majority of items.

The list of exemptions in GST has been substantially trimmed as compared to the existing regime, with only 7% of total items indicated to be kept nil-rated.

This will broaden the tax base & also some new sectors have been introduced to tax compliance.

B) Which Goods are exempt under GST?

  1. Live Animals other than live horses.
  2. Meat and edible meat offal, except the one’s frozen & kept in unit container.
  3. Fish, crustaceans, molluscs & other aquatic invertebrates. These are all Aquatic species.
  4. Dairy produce excluding flavored milk ; bird’s eggs; natural honey; edible products of animal origin, not elsewhere specified
  5.  Products of animal origin, not elsewhere specified or included
  6. Live trees and other plants
  7. Fresh Edible vegetables, roots and tuber, except the frozen & container ones.
  8. Fresh Edible fruit and nuts; peel of citrus fruit or melons, except the frozen & container ones.
  9. Coffee, tea & spices of seed quality , not roasted & processed
  10. Cereals, other than the ones contained in a container & bearing a registered trade name
  11. Products of milling industry; malt; starches; inulin; wheat gluten,  other than the ones contained in a container & bearing a registered trade name.
  12. Vegetable plaiting materials like betel leaves; vegetable products, not elsewhere specified or included
  13. Sugar and sugar confectionery, gur (jaggery)
  14. Preparations of cereals, flour, starch or milk; pastry cooks’ products
  15. Miscellaneous edible preparations, like prasadam supplied by religious places
  16. Beverages, spirit and vinegar, other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized water sold in sealed container, alcohol.
  17. Residues and waste from the food industries; prepared animal fodder.
  18. Salt; sulphur; earths and stone; plastering materials, lime and cement.
  19. Pharmaceutical products i.e. human blood & it’s component , All type of contraceptives.
  20. Fertilisers: Organic manure, other than put up in unit containers and bearing a brand name.
  21. Essential oils and resinoids like kumkum, bindi, alta.
  22. Miscellaneous chemical products: Municipal waste, sewage sludge, clinical waste.
  23. Plastics and articles thereof
  24. Rubber and articles thereof
  25. Fire Wood and articles of wood, wood charcoal used for fuel.
  26. Paper and paperboard; articles of paper pulp, of paper or of paperboard: Judicial, Nonjudicial stamp papers, Court fee stamps when sold by the Government Treasuries or Vendors authorized by the Government, Postal items, like envelope, Post card etc., sold by Government
  27. Printed books, newspapers, pictures and other products of the printing industry, manuscripts, typescripts and plans.
  28. Ceramic products: Earthen pot & clay lamps
  29. Glass and glassware: Bangles (except those made from precious metals)
  30. Tools, implements, cutlery, spoons and forks of base metal; parts thereof of base metal: Agricultural implements manually operated or animal driven.
  31. Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof: Hand loom
  32. Aircraft; spacecraft and parts thereof: Spacecraft (including satellites) and suborbital and spacecraft launch vehicles
  33. Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof: Hearing aids
  34. Musical instruments; parts and accessories of such articles: Indigenous handmade musical instruments
  35. Project imports, laboratory chemicals, passengers’ baggage, personal importation, ship stores: Passenger baggage.


Therefore this is essential for the businesses, so they can evaluate. Accordingly undertake cut over planning and formulate their pricing strategies in view of the transition to GST.

Recommended References:

Item wise rates under 98 categories

GST Service wise tax rates

Services where only Service Recipient will pay tax

Tax rates for Dairy, Consumables & FMCG Products

Written By

Bhawana Joshi

Chartered Accountant, GST Consultant

About us: I am the co-founder of GST Insights. Our consultancy & solutions are focused on GST, based on industry requirements. To know more refer

How to apply for new registration under GST ?

Every person liable to obtain Registration in GST under schedule V shall apply for registration within 30 days from from the date on which he became liable for registration.

  1. Application for registration: Every person  before applying for registration declare his PAN,Mobile No.,E-Mail address.
  2. Validation: Verification of details of PAN(through database of CBDT),Mobile(through OTP),E-mail address(through OTP)
  3. ARN: After verification ARN (application reference no.)communicated.
  4. Filing of Form GST REG-01:Using reference no. duly signed application form along with required documents shall be submitted.
  5. Form GST REG-02 Issuance of acknowledgement
  6. Temporary ID for NR & casual taxable person: NR taxable person & casual taxable person shall be given temporary ID for payment of advance tax during the period for which registration is sought.Valid for a period of registration or  90 days whichever is earlier. Extension period may be granted for a further period of 90 days.
  7. Who is a Casual Taxable Person under GST?

  8. A person who occasionally supplies goods and/or services in a territory where GST is applicable but he does not           have a fixed place of business. Such a person will be treated as a casual taxable person as per GST.

Example: A person who has a place of business in Bangalore supplies taxable consulting services in Pune where           he has no place of business would be treated as a casual taxable person in Pune.

8. Who is a Non-Resident Taxable person under GST?

 When a non-resident occasionally supplies goods/services in a territory where GST applies, but he does not                  have a fixed place of business in India. As per GST, he will be treated as a non- resident taxable person. It is                  similar to above except the non-resident has no place of business in India.

List of documents:

Aadhaar Card,

PAN Card,


Constitution of tax payer,

Proof of principal/additional place of business,

Bank account related proof,

Authorization form.

Written by:

Poonam Kanwar

(GST Associate)

GST hit Amazon, Flip kart and likewise with: TCS and Other Compliance

  1.  Meaning of E-commerce and E-commerce operator :

Under Model of  GST ‘electronic commerce’ means supply of goods and/or services including digital products over digital or electronic network.

Under Model of GST ‘electronic commerce operator’ means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce.

     2.   Who are liable to Register in case of E-commerce?

Categories of person are as follows:

a) E-commerce operator who are required to collect tax (TCS) on the net invoice value after deducting commission and GST.

b) person who supply goods and/or services

c) every electronic commerce operator like Amazon,Flip kart,Snapdeal, irrespective of threshold limit

d) every person who supply online information and database access or retrieval services from a place outside India to a person in India.

     3. Levy and Collection of Tax:

Electronic commerce works as a channel or medium for supply of goods or services from supplier to buyer. Currently, most e-commerce companies like amazon , flip kart operating in India are acting as a marketplace, providing services such as marketing, technology support, warehousing and logistic support to the sellers

Existing Law:

 The concept of an “aggregator”, says e-commerce company must pay tax on services provided by service providers under the brand name of the e-commerce company. However, the sector strongly opposes the imposition of this levy as they stand on the view that vendor should comply all the provisions related to supply of goods and/or services and that no liability should accrue to e-commerce players.

View of judiciary in case of VAT on e-commerce:  In recent landmark case of Flipkart Internet (P.) Ltd. Versus State of Kerala [2015 (11) TMI 159 – KERALA HIGH COURT] , it was held that assesses who was an online service provider is not liable to pay any VAT liability and file returns as department’s view that the situs of the virtual shop can be traced to Kerala is legally flawed. The same view is upheld by Karnataka High Court.

Proposed GST Law:

But under Revised model GST law issue is still not resolved as  levy of tax on e-commerce players is still liable for the specified category of services to be notified. Tax shall be paid by the operator for all the services supplied through it like





As GST era proposed to have separate registration on a state-by-state basis, complying with this requirement of registration for separate states will create problems for this industry. No exception has been made in proposed law for centralized registration.

4.   TCS compliance for e-commerce sector:

E-commerce aggregators are made responsible under the GST law for deducting and depositing tax at the rate of 1% from each of the transaction. Any dealers/traders selling goods/services online would get the payment after deduction of 1% tax.

It is a significant change which would increase a lot of compliance and administration cost for online aggregators like Flipkart, snapdeal, amazon etc.

The TCS amount collected by the operator shall be paid to the account of the appropriate government within 10 days from the end of the month in which such collection is made.

For Example: Mr. Akash a is a trader who sells Electronic products online. He receives an order for Rs 10, 000 inclusive of tax and commission. Amazon charges a commission of Rs 200. Amazon would therefore need to deduct 1% tax (TCS) on the amount, excluding the money paid as commission (Rs. 200) and GST ( Rs. 1200 when GST @12%). Amazon would thus be deducting tax for Rs 86 (1% of Rs. 8600).

5. Filing of Return (GSTR-8) for operators:

E-commerce companies  will also have to file return(called as statement) and contains the following information:

a) Amount of TCS deducted

b) Outward supply of goods or services effected through operator

c) Return of goods or services through operator

TCS return has to be filed by the operator within 10 days after the end of each month containing above information.

6.   TCS credit to supplier

The amount shown by the operator in its monthly filed statement will be available as a credit to the supplier who has supplied the goods or services through such operator.

Credit will be available to the supplier in his electronic cash ledger of the same amount which reflected in the statement filed by operator.


section 24 : Person liable to be register under GST

Section 2(45) : Definition of Electronic Commerce Operator

Section 2(44) : Definition of Electronic Commerce

clause X of Schedule V of Model GST Law :List of persons require registration

TCS under section 52 :TCS compliance

Section 52(4) : Filing of return

Written by:

Poonam Kanwar

(GST Associate)

Things you want to know about Bill of Supply in GST?

Who is required to issue Bill of Supply?

> A registered taxable person supplying

  • Zero Rated goods & services i.e. non taxable
  • Paying tax under the composition levy,

> A unregistered person who are not required to pay GST,

shall issue a Bill of Supply containing the prescribed particulars.

A bill of supply issued by the supplier shall contain the following information and details:

  1. Name, address and GSTIN of the supplier;
  2. A consecutive serial number containing only alphabets and/or numerals, unique for a financial year;
  3. Date of its issue;
  4. Name, address and GSTIN/ Unique ID Number, if registered, of the recipient;
  5. HSN Code of goods or Accounting Code for services;
  6. Description of goods or services;
  7. Value of goods or services taking into account discount or abatement, if any; and
  8. Signature of the supplier or his authorized representative

When Bill of Supply is not required

A registered taxable person may not be required to issue BOS, if the value of the goods or services supplied is less than Rs.200 only.

Consolidated Bill of Supply shall be prepared by the registered taxable person-

  1. At the end of each day,
  2. In respect of all supplies for value of less than rupees one hundred (Rs. 200),
  3. Consolidated BOS will only cover supplies where bill of supply has not been issued.

Difference between Tax Invoice and Bill of Supply in GST:

It is used for all types of Taxable Sales including exports It is used for all types of exempted sale or sales by composition dealer.

Taxes to be shown separately.

No taxes to be shown separately.

In case of Unregistered Buyer,

  • Name,
  • Address &
  • Place of Delivery

is compulsory required, if Invoice Value before taxes is > 50000

No such provision.
Input Tax Credit (ITC) can be claimed based on Tax Invoice Input Tax Credit (ITC) cannot be claimed based on BOS


Therefore Bill of Supply shall also be issued by non-registered person. The only scenario where not required to be issued, is when the amount of sale is < 200 per transaction.

Hence we recommend that non registered dealers shall obtain registration too in GST & if they cannot obtain the same due to compliance cost burden then always use Bill of Supply for sale of items in the prescribed format.

Reference: (POINT NO. 3)

Written By:

Pallavi Gupta, CA Trainee




Understanding Input Tax Credit in GST and why it may have drastic impact on companies

We all know that in businesses compliance s, the main objective is to obtain timely benefit of input tax credit or refund.

To understand the same in GST which is a brilliant move to put checks on fraudulent practices & drive businesses including small & medium business towards formal economy. Let’s take an example:

ABC Ltd. a manufacturer of cars purchased 30 tonnes of steel from DEF Ltd.

DEF Ltd. supplied steel & issued tax invoice on 14th May with GST of 100000

With this example let us understand the process of flow of input tax credit in GST:

  1. On 14th May ABC Ltd. received goods & services i.e. 1st condition of ITC is fiulfilled.
  2. On 10th June DEF Ltd. file GSTRN 1 Return for outward supply.
  3. From 11th June till 15th June ABC Ltd. will have visibility of their purchases through Form GSTR-2A & they can make modifications, if any & file GSTR 2.
  4. Now ITC is credited on provisional basis of 100000 to ABC Ltd.
  5. The ITC becomes final once tax payment is made by DEF Ltd. to government & ABC Ltd. has filed GSTR 3.
  6. The final acceptance of ITC will be communicated in Form GST MIS-1.

The major challenge in GST is to do with linkage of tax payment by a supplier, to the availability of credit by buyer. This is where services of Chartered Accountants & Financial tools shall be taken & solutions of reconciliation by linking transactions trail can be seen.

The reasoning of such linking as given by government & we have seen too: People are today participating in fraudulent  practices to take input tax credit when it is not due through non- existence invoices, fake invoices etc. Therefore it is only fair to put the risk back on the citizen. Let them do the self policing & avail benefit of ITC correctly.

To prevent fraudulent claims, either of non- existence invoices, or for amounts which are not as per the original invoice, the concept of invoice matching has been proposed in law. This will eliminate the fraud by one-o-one mapping of invoices, which was the real gap in VAT regime. It is clearly a brilliant move!

However GST has multiplied the compliance s & increased the waiting time for calling a “Transaction” to be complete. For eg:

In VAT scenario a transaction gets complete when goods/ service are delivered, invoice received & tax payment done.

In GST scenario both supplier & buyer has to coordinate so closely & clearly in order to call a transaction as complete because the conditions to call a “Transaction” as complete has to be fulfilled in coordination.

Therefore no longer a business can assume that  the transaction is “over” only by completing one limb of transaction, like payment of  ITC to govt. by supplier. One has to complete all the 4 major limb of a transaction to avail the benefit of ITC, which is the primary objective of such major compliance s in GST.

Though introduction of GST will lead to emergence of several market behaviors like

  • Some will refuse to pay the supplier until 30th of the following month, leading to abnormal increase in working capital needs for supplier.
  • Others will refuse the tax portion- leading to multi step transactions and increase in both working capital needs as well as cost of doing business.
  • Buyers will be asked for Bank Guarantees to cover the possible risks of suppliers.

Compliance Rating in GST will play a major role in knowing your supplier before you buy. The objective being, that since your input tax credit is dependent on the supplier therefore it is thoughtful if the buyer gets to see the rating of supplier as “good or poor”. Accordingly suppliers will be mindful of keeping there rating good & make tax payment on time as eventually not complying will lead to loosing business opportunity.


Therefore I conclude by saying that GST has tried to fill all loopholes of existing system & help in building healthy economy.

Recommended References:

ITC_Chapter V of CGST Act.



What are e-Way bills in GST & How are they going to make business easy ?

e-Way bills is the relaplacement of all the transportation bills like DS-T2 under VAT which were there in existing scenario.


The submission of way bill known as T2 form on line has to be done with the mutual coordination of the buyer and the seller. It is the buying registered dealer who has to use his user id to open the form from the web site,take the necessary information from the selling dealer and fill it. After filling the T2 completely the same has to be forwarded to the selling dealer,who has to carry a copy of it along with the vehicle carrying such interstate purchased goods. A consignment being received without T2 creates more problem to the buying dealer. Further such non issuance creates problem in creation of C forms.


The way bills obtained in the current VAT is notoriously used by VAT Authorities for restricting movement of goods across states.

Under GST there will be a free flow movement of goods, physical verification of the consignment can be done if there is any specific information relating to tax evasion or any other malpractice. Otherwise goods once verified can continue unimpeded through the rest of the journey.

Verifying officer needs to submit summary of inspection within 3 days of  verifying a consignment.

Transporters will have the right to upload queries on the GSTN portal if their vehicle is detained for more than 30 minutes without valid reason.

However one major challenge which has to be planned well on time in GST is strict timelines for validity of e-way bills. The validity has been calculated according to the distance travelled.

Valid for                     Distance

1 day                         Less than 100 km

3 days                      100 kms to 300 kms

5 days                      300 kms to 500 kms

10 days                    500 kms to 1000 kms

15 days                   1000 kms or more

What has to be watched for is that looking to the current state of road infra in some parts of India where both urban & rural area fall,  are these timelines possible to meet or not ?


Therefore business will now be able to access these goods without much interferance of VAT authorities because of free flow movement of goods & making ways bills totally digital & seamless in GST.

References bill in GST bill in GST

GST: Cost of Compliance is worth spending by SME’s & MSME’s to move towards an organized tax regime

It is estimated that there are about 65 lakh assessees of VAT, 26 lakh assessess under service tax and about 5 lakh central excise assessee . Most of them have started the compliance requirement for migrating to GST but there are still 30-40% which are yet to get migrated to the GST. Amongst those who have not started the migration to GST are mostly SME’s & MSME’s.

SMEs and MSMES will feel more heat because many of these small and medium-sized players either have not obtained registration in existing regime as “passing off the law” or if they have obtained registration there is no order or formal recording of correct stock details in books.

Now under GST we believe that such dealers who were passing off the law have to seek registration because GST has so clearly fixed the laws by making rules very separate & not integrated. However for availing the credits they have integrated the rules.

So one should brace for de-stocking as the deadline inches closer, Though intermittent and temporary in nature, there will be disruption for sure. It is expected to begin from the business to business (B2B) segment and trickle down to the business to consumer segment (B2C).

Therefore we believe GST is giving an opportunity for all level of businesses to participate in your own growth of business & on top of that growth of nation too with recorded numbers, which in current regime were in disguise.