PROJECT TITLE: “A COMPARATIVE STUDY

OF GST RETURN – ESSENTIALS TO AVAIL

INPUT TAX CREDIT”.

Abhinav Raj
CIMP
Finance Intern at ITC Limited (TM&D), Patna Branch.
 ITC LIMITED

Hotel ITD FBD

PCP ESPB TM&D

 DISTRIBUTION

Factory

K2 MOVEMENT

K1 MOVEMENT W.S.P(Warehouse
Service Providers)

K3 MOVEMENT

W.D(Wholesale
Distributor)

K4 MOVEMENT

Retailers
 CHANNELS

General Trade Modern Trade Institutional Channel E-Commerce

(Normal Distribution) (Super Market, Mall (Canteen CRPF etc) (Flipkart, Amazon
etc) etc)
 TDS

TDS (Tax Deducted at Source)

• Direct tax deducted by the payer and paid to the government
• Deducted amount belongs to the government
• Delayed deposit leads to interest charges
• TDS deposit due by 7th day of the subsequent month

TDS Return:-
• Quarterly statement of TDS transactions
• Includes deductor and deductee's PAN, TDS paid, and challan details
 TDS

Section Nature of transaction Threshold Limit (Rs) TDS Rate

194 C Payment to contractor/sub- Single Transaction Rs. 30,000 &

contractor:
Aggregate Transaction Rs. 1,00,000.

a). Individuals/HUF 1%

b). Others 2%

194 J Any sum paid by way of free for Rs. 30,000 10%

professional services.

194 Q Payments for the purchase of Rs. 50,00,000 0.10%

goods.
• TDS 194C requires deducting 1% TDS on payments to contractors/sub-contractors exceeding Rs 30,000
(single transaction).
• TDS 194J covers fees for professional/technical services, applying a 10% TDS above Rs 30,000 per year.
• TDS 194Q applies to buyers of goods, mandating them to deduct tax at 0.1% remittance exceeding Rs 50
lakh per year.
 TYPES OF INTEREST / PENALTY ON TDS
1. Interest on TDS deducted but not Deposited timely:
QUARTER PERIOD LAST DATE
• Due date: 7th of the subsequent month. OF FILING
• Penalty: 1.5% per month on the TDS amount. 1st Quarter 1st April to 30th 31st July
June
• Applies from the due date to the actual deposit date.
2nd Quarter 1st July to 30th 31st October
• Even a single day delay is considered a full month for interest calculation. September
3rd Quarter
2. Interest on Late deduction of TDS: 1st October to 31st January

31st December
• Applies when TDS is not deducted at the time of payment. 4th Quarter 1st January to 31st May

• Penalty: 1% per month on the TDS amount. 31st March

• Calculated from the date TDS should have been deducted to the actual deduction date.
3. Late Fees on Delayed filing of TDS Return :
• Due date: Last day of the subsequent month.
• Penalty: Rs. 200 per day of delay, capped at the total TDS deposited.
4. Additional Penalty:
• Section 271H of Income Tax Act: Penalty of Rs. 10,000 to Rs. 1,00,000 for non-filing, late filing, or wrong filing of TDS
return (may be waived under certain conditions).
 GST

GST (Goods and Services Tax):

• Indirect tax on the supply of goods and services in India.
• Replaced multiple indirect taxes (VAT, excise duty, service tax) for a unified tax system.
• Applies to manufacturers, service providers, and retailers.
• GST is paid by consumers, but it is remitted to the government by the business selling the goods and services.
• The tax is included in the final price and paid by consumers at the point of sale and passed to government by the
seller.
• Tax rate depends on the product/service category (e.g., 0%, 5%, 12%, 18%).
 TYPES OF GST IN INDIA
Understanding GST Components: GST is not a single tax, but a combination of two or three components depending on the
nature of the transaction (intra-state or inter-state).

1. State Goods and Services Tax (SGST):

• Charged by the state government.
Intra-State
• Revenue collected by the state where the transaction occurs.
Transactions
(Within a State)
2. Central Goods and Services Tax (CGST):
• Charged by the central government.
• Revenue collected by the central government.

3. Integrated Goods and Services Tax (IGST):

• Leviable on inter-state transactions and imports/exports.
• Combined rate encompassing both CGST and SGST rates.
• Revenue shared between central and state governments as per GST law.

4. Union Territory Goods and Services Tax (UTGST):

• Levied by Union Territories on transactions within their borders.
• Functions similarly to SGST in terms of payment and distribution.

 Key takeaway: The type of GST applicable depends on the location of the supplier and recipient (intra-state vs. inter-
state) and whether the transaction involves international trade.
 GSTR-1: STATEMENT OF OUTWARD SUPPLIES
1. What is it?
• A monthly or quarterly return filed by most registered taxpayers under GST.
• Reports details of all outward supplies (sales made) during the tax period.

2. Who needs to file it?

Every registered taxable person.

3. What information is included?

• Details of outward supplies of goods and services made during the tax period.
• This includes information like:
Invoice number, Value of supply, Tax rate, HSN/SAC code (product/service classification code).

4. How is it filed?
• Electronically submitted on the GST portal.

5. When is it due?
• Usually by the 11th day of the month following the tax period.
• Exact due date can vary depending on the taxpayer's registration state and filing frequency (monthly/quarterly).

6. Importance:
• Filing GSTR-1 is crucial for claiming Input Tax Credit (ITC) by other taxpayers.
• Mismatches between GSTR-1 and GSTR2B (purchase details reported by suppliers) can lead to denial of input tax credit.
 GSTR-2B
1. What is it?
• GSTR 2B is an auto-drafted document that will act as an Input Tax Credit (ITC) statement for taxpayers.

2. Who needs to file it?

• GSTR-2B is not required to be filed by the taxpayer. It is an auto-drafted statement that is generated by the GST system based
on the information furnished by the suppliers.

3. What information is included?

GSTR-2B includes the following information:
• GSTIN of the supplier
• Invoice details (Invoice number, date, value, etc.)
• Taxable value
• Place of supply
• ITC available (IGST, CGST, SGST/UTGST)

4. How is it filed?
• GSTR-2B is not filed by the taxpayer. It is an auto-drafted statement generated by the GST system based on the information
provided by suppliers in their GSTR-1 returns.
5. When is it due?
• GSTR-2B is made available to taxpayers after the due date for filing GSTR-1 has passed for a particular tax period.
6. Importance?
• GSTR-2B plays a crucial role in the ITC reconciliation process and helps taxpayers claim accurate ITC amounts while filing
their GSTR-3B returns.
 GSTR-3B
1. What is it?
• GSTR-3B is a simplified summary return and the purpose of the return is for taxpayers to declare their summary GST
liabilities for a particular tax period and discharge these liabilities. A normal taxpayer is required to file Form GSTR-3B
returns for every tax period.

2. Who needs to file it?

• All regular taxpayers, including businesses with an annual turnover exceeding Rs. 5 crore.

3. What information is included?

• Outward supplies and their taxable values.
• Inward supplies liable to reverse charge.
• Eligible input tax credit (ITC) from GSTR-2A/2B.
• Tax liability (CGST, SGST/UTGST, IGST).
• Tax paid in cash or through ITC utilization.

4. How is it filed?
• Filed online through the GST portal (www.gst.gov.in) or through an approved GST Suvidha Provider (GSP).

5. When is it due?
• Due on the 20th of the following month for most states and union territories & Some states have different due dates.

6. Importance?
• Serves as the basis for claiming input tax credit.
 INPUT TAX CREDIT

1. What is it?
• Input Tax Credit (ITC) is a tax credit that businesses registered under the Goods and Services Tax (GST) regime can claim.
• It allows businesses to reduce their GST liability by offsetting the GST they paid on purchases against the GST they collect on
sales.

2. Who needs to file it?

• Only businesses registered under GST can claim ITC.
• The eligibility to claim ITC may vary depending on the type of business, nature of purchases, and compliance with GST
regulations.

3. What information is included?

• ITC is typically claimed through GST return filings (e.g., GSTR-3B).
• The specific information required may vary depending on the return form used, but generally includes details like: Supplier's
GST registration number, Invoice number and date, Tax rate and amount paid on the purchase.

5. When is it due?

• ITC can be claimed for a particular tax period while filing the GSTR-3B return, which is due on the 20th of the following
month (for most states/UTs).
 CIRCUMSTANCES WHEN INPUT TAX CREDIT (ITC) CANNOT BE AVAILED UNDER GST

1. Blocked Credit:
2. Missing or Defective Invoices:
• Goods/services for personal consumption or
• No valid tax invoice or debit note from
non-business use .
supplier.
• Specified items like motor vehicles, food, rent-
• Invoices without prescribed particulars.
a-cab, beauty treatment etc.

3. Exempt Supplies: 4. Supplies without payment of tax:

• ITC not available for inputs used for exempt • ITC is not available on goods or services
supplies. acquired from an unregistered supplier or a
• Restricted if used for both taxable and exempt supplier who has not paid the GST on such
supplies. supplies.

5. Non-Payment of Consideration:

• Payment not made to supplier within 180 days

of invoice.
 CHANNAL FINANCE / EDFS

COMPANY

TIE-UP WITH BANK(ICICI & SBI)

AGREED INTEREST RATE

WHOLESALE DISTRIBUTOR

FUND FLOW OR BUSINESS ENHANCE/GROWTH

 SALE

PURCHASE CLOSING STOCK

D&D

DAMAGE & DESTRUCTION (D&D)

Expire / Damaged (basically packaging)

GODOWN D&D MARKET D&D

 WD

Picked from market Sify report as sales return

Sify report as D&D

Report generated from our end (ITC Limited) for approval

Below 1% - NO Approval
PROCESS
1% to 2% - Branch Manager (B.M) (Approval Matrix (NTD))
(D&D)
2% to 3% - Deputy Manager (D.M)
Above 3% - National Sales Manager (N.S.M)

Received approval from respected approving authority

Communicate W.D for sending the stock for audit purpose

Auditor audits certificate for D&D verification

W.D flush off

W.D – Tax invoice for process

Same day scrap godown billing

 PROCESS OF NEW SELLING AGREEMENT (N.S.A)

STEP 1. Selection of N.S.A by marketing team.

STEP 2. Financial due diligence (F.D.D) by finance team.

STEP 3. Approval by Head of Sales(H.O.S).

STEP 4. Route approval by logistic team.

STEP 5. Creation of wholesale distributor by finance in SAP.

STEP 6. Approval & route mapping by M.D.M team / Central.

STEP 7. Ready for transaction.

 INSURANCE

GOOD DIGIT MAC INSURANCE (CG)

(N.T.D)
NO SURVEY SELF SURVEY SURVEYOR APPOINTMENT

Rs. 5,000 (C.G) Rs . 5000/- to 25,000/- Above 25,000/-

(W.S.P / ITC Limited W.S.P / ITC Limited
representative sign or damage representative / insurance
certificate (Mutual Basis). surveyor.

Rs. 10,000 (N.T.D) Rs. 10,000/- to 25,000/- Above 25,000/-

(W.S.P / ITC Limited W.S.P / ITC Limited
representative sign or damage representative / insurance
certificate (Mutual Basis). surveyor.

• Spot survey happens when accident, Theft , wet damage due to rain or lag/ short in
amount of goods occurred.
THANK YOU