In view of the ground-breaking nature of GST, it is expected to have a revolutionary impact on business.Here are a few key points:
For existing credit:
GST is also expected to have an impact on transitional provisions for carry-forwarding existing credit. For example, the existing service provider will be allowed to carry forward the credit shown in the returns furnished under service tax as on 30 th June 2017, provided all credit shown in the books of account is reflected in the return.
For Debit Notes / Credit Notes for old supplies:
GST will not be payable for supplies after 1st July 2017 if the consideration is received and tax is paid on such date. No GST is payable on taxable services where tax became due under old law. For e.g. Advance received prior to 1-07- 2017. With effect from 1st July 2017, if a debit note or a supplementary invoice is issued for increase in price of goods or services supplied earlier, then GST is to be levied.
Impact on Valuation
Value for levy of GST is transaction value and GST will be levied as last item on invoice and thus, the Concept of Pure Agent is to continue with certain conditions. Also, GST not applicable for Discounts offered on the Invoices. However, discounts extended after supply of the goods are allowed only if they are established in terms of the agreement existing at the time of supply. It must be remembered in this context that computation of the discount is to be specifically linked to the relevant purchase invoice. A few more key points are:
Impact on GST Credit
How will the provisions of the law impact the GST credit? Here are a few salient points:
Debit note/credit note
Debit Note and Credit note is to be mandatorily issued as per the GST Law. Credit note is to be issued when the taxable value or tax is charged in excess or goods return or where services supplied are found to be deficient. No credit note will be issued for renegotiation of the service value but debit note is to be raised for increase in value of service and tax. Moreover,
The following are some of the important aspects related to tax invoice / debit note and credit:
If the customer is Business (B2B), then he is required to:
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