The following presentation focuses on Composition Scheme under GST, how Registration under composition scheme is to be done, invoicing, filing of returns and how is to be paid under this scheme.

1. 20th April, 2018
GST Internal Session Series
Day 5

2. Topics Covered
• Composition Scheme
• Registration
• Invoicing
• Returns
• Payment of Tax

3. AGGREGATE TURNOVER

4. Aggregate Turnover: Section 2(6)
All
taxable
Supplies
All
exempt
supplies
Exports
of
Goods/
Services
Interstate
supply of
persons
having
same PAN
Aggregate
Turnover
Exclusions:
• Value of inward supplies on which tax is payable by a
person on reverse charge basis
• CGST, SGST, UTGST, IGST, Compensation Cess
To be
computed on
all-India basis

5. COMPOSITION SCHEME

6. Composition Levy (S. 10)
• Aggregate Turnover not exceeding Rs. 1 Crore may opt for this scheme. [Rs. 75
Lakh in special category states]
• Restrictions:
– Shall not provide any service (except restaurants)
– Shall not engage in supplies not leviable to tax.
– Shall not provide any inter-state outward supply of goods (can receive)
– No outward supply through e-commerce operator
– Not a manufacturer of goods as notified (ice-cream, pan masala, tobacco
and tobacco substitutes)
• Validity of Composition Levy:
– Remains valid so long as he satisfies the conditions of a composition
dealer.
– Such registration shall lapse the day on which the aggregate turnover
during the FY exceeds the specified limit.

7. Rate of Composition Levy
S.No. Category of Registered Persons Rate of Tax
1.
Manufacturers, other than manufacturers of
such goods as may be notified by the
Government
half per cent. of the turnover in
the State or Union territory
2.
Suppliers making supplies referred to in clause
(b) of paragraph 6 of Schedule II
two and a half per cent. of the
turnover in the State or Union
territory
3.
Any other supplier eligible for composition
levy under section 10 and the provisions of
this Chapter
half per cent. of the turnover of
taxable supplies of goods in the
State or Union territory

8. REGISTRATION

9. Registration under GST
CHAPTER VI (Section 22-30) of the CGST Act, 2017 and Chapter VI
of the CGST Rules, 2017 (Rule 8-26) deals with Registration under
GST.
Liability to register:
Supplier – aggregate turnover in a FY > Rs. 20 Lakh – in every state
from where he makes a taxable supply.
For the purpose of registration, “aggregate turnover” includes all
supplies made by the taxable person, whether on his own account,
or on behalf of his principal(s).

10. Persons not liable for registration (S. 23)
Agriculturist – to the extent
of supply of produce out of
cultivation of land.
Any person making only
exempt supplies/ supplies
not leviable to tax under
GST.
Any other person/ category
of persons as notified by the
government.

11. Compulsory Registration (S. 24)
• Persons making inter-state supplies
• Casual taxable persons making taxable supply;
• Persons who are required to pay tax under reverse charge;
• Person who are required to pay tax under sub-section (5) of section 9;
• Non-resident taxable persons making taxable supply;
• Persons who are required to deduct tax under section 51, whether or not separately registered
under this act;
• Persons who make taxable supply of goods or services or both on behalf of other taxable persons
whether as an agent or otherwise;
• Input service distributor, whether or not separately registered under this act;
• Persons who supply goods or services or both, other than supplies specified under sub-section (5)
of section 9, through such electronic commerce operator who is required to collect tax at source
under section 52;
• Every electronic commerce operator;
• Every person supplying online information and database access or retrieval services from a place
outside India to a person in India, other than a registered person; and
• Such other person or class of persons as may be notified by the government on the
recommendations of the council.

12. Other Provisions
• Section 25: Procedure for Registration
• Section 26: Deemed Registration
• Section 27: Special Provisions relating to CTP/
NRTP
• Section 28: Amendment of Registration
• Section 29: Cancellation of Registration
• Section 30: Revocation of cancellation of
registration

13. Other important points
• Distinct Person: S. 25(5)
• Voluntary Registration: S. 25(3)
• Unique Identity Number: S. 25(9)

14. TAX INVOICE

15. Invoice
“S. 2(66) “invoice” or “tax invoice” means the tax invoice referred to in
section 31;”
CHAPTER VII (Section 31-34) of the CGST Act, 2017 and Chapter VI of the
CGST Rules, 2017 (Rule 46-55A) deals with Tax Invoice, Credit Note and Debit
Note.
In case of Goods In case of Services
Issue an invoice, with prescribed
particulars, before or at the time
of,—
(a) removal of goods for supply to
the recipient, where the supply
involves movement of goods; or
(b) delivery of goods or making
available thereof to the recipient, in
any other case,
Issue an invoice, with prescribed
particulars, before or after the
provision of service but within a
prescribed period.

16. Manner of issuing Invoice
• The invoice shall be prepared in triplicate, in case of supply of goods, in the following
manner–
a) the original copy being marked as ORIGINAL FOR RECIPIENT;
b) the duplicate copy being marked as DUPLICATE FOR TRANSPORTER; and
c) the triplicate copy being marked as TRIPLICATE FOR SUPPLIER.
• The invoice shall be prepared in duplicate, in case of supply of services, in the following
manner:
a) The original copy being marked as ORIGINAL FOR RECIPIENT; and
b) The duplicate copy being marked as DUPLICATE FOR SUPPLIER.
• The serial number of invoices issued during a tax period shall be furnished electronically
through the Common Portal in FORM GSTR-1.

17. Contents of Tax Invoice
Particulars required to be maintained in the tax invoice: (Rule 46 CGST Rules, 2017)
a. Name, address, GSTIN of supplier
b. A serial No. in multiple series containing alphabets/numerals/special characters/hyphen/dash and slash/ any unique
combination.
c. Date of issue of such invoice
d. Name, address, GSTIN or UIN, if registered of recipient.
e. If the recipient is un-registered and value of taxable supply is Rs. 50,000 or more---Name and address of recipient,
Address of delivery, Name of state and its code. (However, in case of exports name and address of recipient, address of
delivery and name of the country of destination should be mentioned instead of details mentioned in point e.)
f. Name and address of the recipient and the address of delivery, along with the name of the State and its code, if such
recipient is un-registered and where the value of the taxable supply is less than fifty thousand rupees and the recipient
requests that such details be recorded in the tax invoice;
g. HSN codes of goods or Accounting code of services.
h. Description of Goods or Services.
i. Quantity in case of Goods and unit or unique quantity code.
j. Total value of supply of goods or services or both.
k. The value taking in account the discount or abatement if any.
k. Rate of tax (CT, ST, IT, UT, or Cess)
l. Amount of tax charged
m. Place of supply along with name of state, in case of a supply in course of inter state trade or commerce.
n. Address of delivery where same is different from place of supply
o. If tax is paid on reverse charge basis.
p. Signature/digital sign of supplier or his representative

18. Invoice for Export
• In case of export sale and export leasing, the invoice
shall carry the following endorsement:
“SUPPLY MEANT FOR EXPORT ON PAYMENT OF
INTEGRATED TAX” or
“SUPPLY MEANT FOR EXPORT UNDER BOND OR
LETTER OF UNDERTAKING WITHOUT PAYMENT OF
INTEGRATED TAX”
• The invoice, instead of the details of the state (along
with code), shall provide the name of the country of
destination.

19. Invoice for Composition Levy
• In case of supply by a composition dealer, the
invoice shall carry the following endorsement:
“COMPOSITION TAXABLE PERSON, NOT ELIGIBLE
TO COLLECT TAX ON SUPPLIES”

20. Continuous Supply of Services
Under Section 2(33) of CGST Act, 2017, “continuous supply of services” means a supply of
services which is provided, or agreed to be provided, continuously or on recurrent basis,
under a contract, for a period exceeding three months with periodic payment obligations
and includes supply of such services as the Government may, subject to such conditions, as
it may, by notification, specify.
Time of supply in case of a continuous supply shall be:
i. Where the due date of payment is ascertainable from the contract, on or before
due date of payment as per the contract; or
ii. When not (i), before or at the time of actual receipt of payment; or
iii. Where payment is linked to the completion of an event, on or before completion
of event.

21. Contd…
In case of Continuous Supply of Services: [Section 31(5)]
i. Where the due date of payment is ascertainable from the contract, on or before
due date of payment as per the contract; or
ii. When not (i), before or at the time of actual receipt of payment; or
iii. Where payment is linked to the completion of an event, on or before completion
of event.

22. Contd…
For a registered person liable to pay ta
under RCM
Issue an invoice in respect of
goods/ services received from
an unregistered supplier - on
the date of receipt of goods or
services or both
issue a payment voucher at
the time of making payment
to the supplier.

23. Payment Voucher and its contents
• Payment voucher (Rule 53 CGST Rules, 2017) shall contain the following particulars
mainly:
a) Name, address and GSTIN of the supplier if registered;
b) A serial no. In multiple series containing alphabets/numerals/special
characters/hyphen/dash and slash/ any unique combination
c) Date of its issue;
d) Name, address and GSTIN of the recipient;
e) Description of goods or services;
f) Amount paid;
g) Rate of tax (CT, ST, IT, UT, or cess)
h) Amount of tax payable in respect of taxable goods or services (CT, ST, IT, UT, or cess)
i) Place of supply along with the name of state and its code, in case of a supply in the
course of inter-state trade or commerce; and
j) Signature or digital signature of the supplier or his authorised representative.

24. Contents of “Receipt Voucher”
The receipt of voucher evidencing the advance payment shall contain the following details:
a. Name, address and GSTIN of the supplier;
b. A consecutive serial number containing alphabets or numerals or special characters -hyphen
or dash and slash symbolized as “-” and “/”respectively, and any combination thereof, unique
for a financial year
c. Date of its issue;
d. Name, address and GSTIN or UIN, if registered, of the recipient;
e. Description of goods or services;
f. Amount of advance taken;
g. Rate of tax (central tax, state tax, integrated tax, union territory tax or cess);
h. Amount of tax charged in respect of taxable goods or services (central tax, state tax,
integrated tax, union territory tax or cess);
i. Place of supply along with the name of state and its code, in case of a supply in the course of
inter-state trade or commerce;
j. Whether the tax is payable on reverse charge basis; and
k. Signature or digital signature of the supplier or his authorized representative.

25. Issuance of ‘Refund Voucher’
• On receipt of advance payment in respect to any supply of goods or
services or both the registered person issues a receipt voucher.
• But when no supply is made and no tax invoice is issued, the registered
person may issue to the person who made the payment, a refund
voucher against such payment.
• Refund voucher is issued under Rule 51 of CGST Rules, 2017.

26. Contents of Refund Voucher
Refund voucher shall contain the following particulars mainly:
a) Name, address and GSTIN of the supplier;
b) A serial no. In multiple series containing alphabets/numerals/special
characters/hyphen/dash and slash/ any unique combination
c) Date of its issue;
d) Name, address and goods and services tax identification number or unique identity
number, if registered, of the recipient;
e) Number and date of receipt voucher issued in accordance with the provisions of Rule
50;
f) Description of goods or services in respect of which refund is made;
g) Amount of refund made;
h) Rate of tax (CT, ST, IT, UT, or cess)
i) Amount of tax paid in respect of such goods or services (CT, ST, IT, UT, or cess)
j) Whether the tax is payable on reverse charge basis; and
k) Signature or digital signature of the supplier or his authorised representative.

27. Contents of Revised Tax Invoice, Credit or Debit Notes
Such an invoice shall contain the following particulars: (Rule 53, CGST Rules 2017)
(a) The word “revised invoice”, wherever applicable, indicated prominently;
(b) Name, address and GSTIN of the supplier;
(c) Nature of the document;
(d) A consecutive serial number containing alphabets or numerals or special characters -hyphen
or dash and slash symbolized as “-” and “/”respectively,, and any combination thereof, unique
for a financial year
(e) Date of issue of the document
(f) Name, address and GSTIN or UIN, if registered, of the recipient;
(g) Name and address of the recipient and the address of delivery, along with the name of state
and its code, if such recipient is un-registered;
(h) Serial number and date of the corresponding tax invoice or, as the case may be, bill of supply;
(i) Value of taxable supply of goods or services, rate of tax and the amount of the tax credited or,
as the case may be, debited to the recipient; and
(j) Signature or digital signature of the supplier or his authorized representative.

28. RETURNS

29. Returns under GST
Covered under Chapter IX of the CGST Act, 2017 (Sections 37–48) and Chapter VIII of the
CGST Rules, 2017 (Rules 59–84).
Sections
Section 37: Furnishing details of Outward Supplies
Section 38: Furnishing details of Inward Supplies
Section 39: Furnishing of returns
Section 40: First Return
Section 41: Claim of ITC & provisional acceptance
Section 42: Matching, reversal & reclaim of ITC
Section 43: Matching, reversal & reclaim of reduction in output tax liability
Section 44: Annual Return
Section 45: Final Return
Section 46: Notice to return defaulters
Section 47: Levy of Late fee
Section 48: Goods and Services tax practitioners

30. Reasons For Filing Returns
• Procure information relating to input tax credit
from returns of supplier to that of recipient,
• Invoice level information matching and auto-
reversal of input tax credit in case of mismatch.
• The returns mechanism is designed to assist the
taxpayer to file returns and avail ITC.

31. Returns Applicable On Date
General
GSTR 3B
(Monthly)
GSTR 1
Composition
GSTR 4
(Quarterly)
ISD
GSTR 6
(Monthly)
NRTP
GSTR 5
For RP having agg.
turnover less than
1.5 Cr. – Quarterly
For RP having agg.
turnover more than
1.5 Cr. - Monthly
Monthly
OR
Within 7 days after
the last day of
registration

32. PAYMENT OF TAX

33. Payment of Tax
Chapter X (Sections 49-53) of the CGST Act, 2017 and Chapter IX of
the CGST Rules 2017 (Rules 85-88).
Sections
Section 49: Payment of Tax, Interest, Penalty and other amounts
Section 50: Interest on delayed payment of tax
Section 51: Tax deduction at Source
Section 52: Collection of tax at Source
Section 53: Transfer of ITC

34. Contd…
Electronic Credit Ledger Electronic Cash Ledger
• Payment of interest, penalty, late fee
can be discharged only through this
ledger.
• Deposit to this ledger can be made
directly.
• ITC credited to this ledger
• Tax liability can be discharged from
this ledger.
• No entry can be directly made to this
ledger.

35. Order of Preference for using ITC relating to different
taxes i.e. IGST/ CGST/ SGST – Section 49(5)
• The taxable person may have ITC on account of various taxes such as IGST/
CGST/ SGST – following is the table that summaries the order of
preference for using the credit available on account of different taxes
Type of
credit
First
preference
Second
preference
Third
preference
Comments
IGST IGST CGST SGST
Credit of IGST can be used for
payment of IGST/ CGST/ SGST
CGST CGST IGST -
Credit pertaining to CGST cannot
be used for payment of SGST
SGST SGST IGST -
Credit pertaining to SGST cannot
be used for payment of CGST

36. Payment of Output Tax Liability
• Payment of tax to be made before furnishing the return u/s 39, within 20 days before
the end of the month.
• The assesse shall be required to generate a challan in Form GST PMT-06 on the
common portal for depositing amount towards payment of tax, interest, penalty, fees
or any other amount.
• Utilizing ITC for the fulfillment of Tax liability:
– IGST: After the IGST input tax credit is used for payment of IGST then the
remaining ITC can be used to pay tax liability under CGST and SGST.
– CGST: The CGST input tax credit cannot be used to pay the SGST liability but can be
used to pay the liability under CGST.
– SGST: The SGST input tax credit cannot be used to pay the CGST liability but can be
used to pay the liability under SGST.
• Deposits shall be made through Internet Banking through authorised banks; or Credit
card or Debit card through the authorised bank; or NEFT or RTGS from any bank; or
Over the Counter payment through authorised banks for deposits up to ten thousand
rupees per challan per tax period, by cash, cheque or demand draft.

37. Contd…
• The challan generated shall be valid for a period of 15 days.
• On successful credit of deposit to government account, a challan
identification number will generated.
• Where no challan identification is generated although the bank A/c of the
assesse has been debited then in such a case he shall be required to file
Form GST PMT-07.
• Where the payment is made by way of National Electronic Fund Transfer or
Real Time Gross Settlement mode from any bank, the mandate form shall be
generated along with the challan on the common portal and the same shall
be submitted to the bank from where the payment is to be made which shall
be valid for a period of 15 days from the date of generation of challan.
• Payment for output liability for TDS, TCS, reverse charge mechanism or
composition levy shall be made from deposit in electronic cash ledger only.

38. Invoice Level Matching
• Under GST Law, sale and purchase will be matched and
verified at invoice level from returns furnished by seller and
purchaser.
• Thus, it is very important that each detail of purchase invoice
is captured properly by Dealer / Distributor.
• Until and unless the invoices are matched no dealer will be
able to claim input tax credit.

39. Details to be matched
Rule 69 of the CGST Rules, 2017:
 GSTIN of the Supplier
 GSTIN of the recipient
 Invoice/ debit note number
 Invoice/ debit note date
 tax amount

40. Contd…
Interest on delayed payment of tax
Levy of interest on delayed payment of tax @ 18%
Interest to be calculated from the day succeeding the day on which tax
was due to be paid.
Interest on undue/ excess claimed ITC
Interest on undue/ excess reduction in output tax liability
@ 24%

41. THANK YOU
Contact us:
Pawan Arora
Joint Partner
ALA Legal, Advocates & Solicitors
pawan@alalegal.in | +91-88000-91636
Website: www.alalegal.in | Blog: www.gstlawindia.com