Zero Rated supply means

  • Export of goods or Services or both or
  • Supply of Goods or Services to  or both to a Special Economic Zone developer or a Special Economic Zone unit.

In Zero Rated supply the GST rate will be Zero and Input Tax Credit can be availed by the Taxpayer.

Input Tax Credit on Zero Rated Supply : 

Subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services Tax Act, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply.

Refund of Credit In case of Zero Rated Supply: 

A registered person making zero rated supply shall be eligible to claim refundunder either of the following options, namely:––
(a) he may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilised input tax credit; or
(b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and  claim refund of such tax paid on goods or services or both supplied,

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Goods and Services Tax (GST) has come into force from 1st July 2017 by abolishing Indirect Taxes like Excise Duty, VAT , CST and Service Tax. Earlier business are required to take registration under these taxes separately and are required to file return and maintain records. Now there is only one Indirect Tax i.e. GST . Business are required to take only one registration of GST.

Step by Step Procedure for GST Registration  :

Step 1: Visit //www.gst.gov.in/ and Select Taxpayer

Step 2: Fill the required information like State in Which registration is sought, District, Legal name of Business, PAN number, Mobile Number and Email Id.

Step 3: Provide OTP and validate , System will create Temporary Reference Number (TRN) and will be sent to you on email and Mobile Number.

Step 4: Login with TRN number and OTP on email/Mobile

Step 5: New Application form will be displayed , fill required details like

  • Business Details
  • Address of Business: upload Supporting Documents
  • Details of existing Registration like , Company Registration, LLP Registration , Partnership Registration and upload supporting Documents
  • Provide details of proprietor/ partners/ Directors/ Designated Partners/Authorized Signatory and upload Photograph
  • Provide details of Goods and Services of your business
  • Provide  details regarding type of Business: Retailer/ wholesale/ Manufacturer/ Service Provider/ Work Contract
  • Upload Details regarding Bank Account of business and Upload supporting Documents
  • Provide details of specific ward and services tax area
  • Provide state specific tax information , if any

Step 6 : Sign and Submit the Application, Once application for GST Registration is submitted , you will receive ARN on registered email id and Mobile Number.

Step 7: Track Status of application with ARN

Step 8: Receipt of Certificate or Clarification from Department, if any clarification is sought than resubmit the Application from available on GSTN portal.

Fastlegal Provide Online GST Registration Support All over India   , if you need any help feel free place your requirements here

 

GST Rates Fastlegal

Normally most of the services under GST is Covered under GST rate of 18% but there are some services where GST Rate are fixed at NIL rate , 5% 12% and 28% also.

In 5% Services of Transport Agency and selling of space for  Advertisement in Print Media are included-

List of all Services at 5% GST Rate : 

  1. Transport of passengers by rail in first class or air conditioned coaches with Input Tax Credit of Services.
  2. Transport of passengers, by-
    • (a) air conditioned contract carriage other than motorcab;
    • (b) air conditioned stage carriage;
    • (c) radio taxi – With No Input Tax Credit 
  3. Transport of Passengers by air in economy class with Input Tax credit of Input Services
  4. Transport of passengers, by air, embarking from or terminating in a Regional Connectivity Scheme Airport with Input Tax credit of Input Services. 
  5. Renting of motorcab where the cost of fuel is included in the consideration charged from the service recipient without ITC.
  6. Transport of goods by rail with Input Tax credit of Input Services. 
  7. Transport of goods in a vessel with Input Tax credit of Input Services. 
  8. Services of goods transport agency (GTA) in relation to transportation of goods [including used household goods for personal use] without ITC.
  9. Leasing of aircrafts by a scheduled airlines for scheduled operations with Input Tax credit of Input Services. 
  10. Selling of space for advertisement in print media.
  11. Supply of tour operators services  without ITC.
  12. Services by way of job work in relation to-
    • (a) Printing of newspapers;
    • (b) Textile yarns (other than of man-made fibres) and textile fabrics;
    • (c) Cut and polished diamonds; precious and semi-precious stones; or plain and studded jewellery of gold and other precious metals, falling under Chapter of HSN;
    • (d) Printing of books (including Braille books), journals and periodicals;
    • (e) Processing of hides, skins and leather falling under Chapter 41 of HSN.

GST Rate : CGST+SGST

Every person applying for Registration under GST is required to submit following Documents at GST comman portal :

1. Photographs (wherever specified in the Application Form) (a) Proprietary Concern – Proprietor (b) Partnership Firm / LLP – Managing/Authorized/Designated Partners (personal details of all partners are to be submitted but photos of only ten partners including that of Managing Partner are to be submitted) (c) HUF – Karta (d) Company – Managing Director or the Authorised Person (e) Trust – Managing Trustee (f) Association of Persons or Body of Individuals –Members of Managing Committee (personal details of all members are to be submitted but photos of only ten members including that of Chairman are to be submitted) (g) Local Authority – CEO or his equivalent (h) Statutory Body – CEO or his equivalent (i) Others – Person in Charge

2. Constitution of Business: Partnership Deed in case of Partnership Firm, Registration Certificate/Proof of Constitution in case of Society, Trust, Club, Government Department, Association of Persons or Body of Individuals, Local Authority, Statutory Body and Others etc.

3. Proof of Principal Place of Business: (a) For Own premises – Any document in support of the ownership of the premises like latest Property Tax Receipt or Municipal Khata copy or copy of Electricity Bill. (b) For Rented or Leased premises – A copy of the valid Rent / Lease Agreement with any document in support of the ownership of the premises of the Lessor like Latest Property Tax Receipt or Municipal Khata copy or copy of Electricity Bill. (c) For premises not covered in (a) & (b) above – A copy of the Consent Letter with any document in support of the ownership of the premises of the Consenter like Municipal Khata copy or Electricity Bill copy. For shared properties also, the same documents may be uploaded. (d) For rented/leased premises where the Rent/lease agreement is not available, an affidavit to that effect along with any document in support of the possession of the premises like copy of Electricity Bill. (e) If the principal place of business is located in an SEZ or the applicant is an SEZ developer, necessary documents/certificates issued by Government of India are required to be uploaded.
4 Bank Account Related Proof: Scanned copy of the first page of Bank passbook or the relevant page of Bank Statement or Scanned copy of a cancelled cheque containing name of the Proprietor or Business entity, Bank Account No., MICR, IFSC and Branch details including code.

5 Authorization Form:- For each Authorised Signatory mentioned in the application form, Authorization or copy of Resolution of the Managing Committee or Board of Directors.

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Any person who wants to pay tax under GST composition Scheme is required to Apply for composition levy on GST Comman Portal.

For Dealers who migrated from VAT and Services Tax : Once after getting provision registration users have to apply within 30 days from the appointed date ( Date on which Act came into force ) in FORM GST CMP 01.

New Registration :  At the time of Filing new Registration Application user have to opt for payment of tax under Section 10 of CGST Act, 2017 , So Section 10 is required to be selected.

What is Composition Levy :

Composition Levy is an option provided to small business enterprises whose aggregate turnover in preceding financial year did not exceed fifty Lakh rupees may opt to pay tax at much lower rates of

-half percent (0.5%)  ,

-one percent in case manufacturer, and

2.5% in case of person engaged in supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration.

Who can apply for Composition Levy : 

Any Person who satisfies above conditions may opt for composition levy :

(a) he is neither a casual taxable person nor a non-resident taxable person;

(b) the goods held in stock by him on the appointed day have not been purchased in the course of inter-State trade or commerce or imported from a place outside India or received from his branch situated outside the State or from his agent or principal outside the State

(c) the goods held in stock by him have not been purchased from an unregistered person and where purchased, he pays the tax under sub-section (4) of section 9;

(d) he shall pay tax under sub-section (3) or sub-section (4) of section 9 on inward supply of goods or services or both received from un-registered persons;

(e) he was not engaged in the manufacture of goods as notified under clause (e) of sub-section (2) of section 10, during the preceding financial year;

(f) he shall mention the words “composition taxable person, not eligible to collect tax on supplies” at the top of the bill of supply issued by him; and

(g) he shall mention the words “composition taxable person” on every notice or signboard displayed at a prominent place at his principal place of business and at every additional place or places of business.

(h) whose aggregate turnover in preceding financial year did not exceed fifty Lakh rupees

filing of Returns opting for composition Scheme : Under composition dealer is required to file quarterly and one Anuual Return.

Tax Under Composition Scheme :

Suppose you are a normal trader falling under tax slab of 0.5% than if your annual turnover is Rs. 40 lakh than you are required to pay Rs. 20000 as GST.

Intimation for composition levy :

Every year dealer is required to file fresh intimation on GST Comman Portal otherwise he has to pay tax as par normal provisions of the Act.

Place a Request for Online GST Support from Fastlegal Team Members :

What is Composition Levy : 

Composition Levy is an option provided to small business enterprises whose aggregate turnover in preceding financial year did not exceed fifty Lakh rupees may opt to pay tax at much lower rates of

-half percent (0.5%)  ,

-one percent in case manufacturer, and

2.5% in case of person engaged in supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration.

 

Update: This limit of fifty lakh has been revised to Rs. 75 lakhs. Traders who have below 75 lakh trunover will have to pay 1 per cent tax , manufacturers will have to pay 2% while restaurant business will have to pay 5% if they opt to go for the composition scheme under GST.

 

GST Under Composition Levy ( Section 10 of CGST Act, 2017 ):

(1) Notwithstanding anything to the contrary contained in this Act but subject to the provisions of sub-sections (3) and (4) of section 9, a registered person, whose aggregate turnover in the preceding financial year did not exceed fifty lakh rupees, may opt to pay, in lieu of the tax payable by him, an amount calculated at such rate as may be prescribed, but not exceeding,–– (a) one per cent. of the turnover in State or turnover in Union territory in case of a manufacturer, (b) two and a half per cent. of the turnover in State or turnover in Union territory in case of persons engaged in making supplies referred to in clause (b) of paragraph 6 of Schedule II, and (c) half per cent. of the turnover in State or turnover in Union territory in case of other suppliers, subject to such conditions and restrictions as may be prescribed: Provided that the Government may, by notification, increase the said limit of fifty lakh rupees to such higher amount, not exceeding one crore rupees, as may be recommended by the Council.

(2) The registered person shall be eligible to opt under sub-section (1), if:— (a) he is not engaged in the supply of services other than supplies referred to in clause (b) of paragraph 6 of Schedule II; (b) he is not engaged in making any supply of goods which are not leviable to tax under this Act; (c) he is not engaged in making any inter-State outward supplies of goods; (d) he is not engaged in making any supply of goods through an electronic commerce operator who is required to collect tax at source under section 52; and (e) he is not a manufacturer of such goods as may be notified by the Government on the recommendations of the Council: Provided that where more than one registered persons are having the same Permanent Account Number (issued under the Income-tax Act, 1961), the registered person shall not be eligible to opt for the scheme under sub-section (1) unless all such registered persons opt to pay tax under that sub-section.

(3) The option availed of by a registered person under sub-section (1) shall lapse with effect from the day on which his aggregate turnover during a financial year exceeds the limit specified under sub-section (1).

(4) A taxable person to whom the provisions of sub-section (1) apply shall not collect any tax from the recipient on supplies made by him nor shall he be entitled to any credit of input tax.

(5) If the proper officer has reasons to believe that a taxable person has paid tax under sub-section (1) despite not being eligible, such person shall, in addition to any tax that may be payable by him under any other provisions of this Act, be liable to a penalty and the provisions of section 73 or section 74 shall, mutatis mutandis, apply for determination of tax and penalty.

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