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Bhagavad Gita : Soul is higher than intelligence (Text 42, Ch 3, Karma Yoga)

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Indriyani parany ahur indriyebhyah param manah
manasas tu para buddhir yo buddheh paratas tu sah

(Text 42, Ch 3, Karma Yoga)

Meaning:  The working senses are superior to dull matter; mind is higher than the senses; intelligence is still higher than the mind; and he (the soul) is even higher than the intelligence.

*** The senses are different outlets for the activities of lust. Lust is reserved within the body, but it is given vent through the senses. Therefore, the senses are superior to the body as a whole. These outlets are not in use when there is superior consciousness or divine consciousness. In divine consciousness the soul makes direct connection with the Supreme Personality of Godhead; therefore the hierarchy of bodily functions, as described here, ultimately ends in the Supreme soul.Bodily action means the functions of the senses, and stopping the senses means stopping all bodily actions. But since the mind is active, then even though the body may be silent and at rest, the mind will act-as it does during dreaming. But above the mind is the determination of the intelligence, and above the intelligence is the SOUL proper. If, therefore, the soul is directly engaged with the Supreme, naturally all other subordinates, namely, the intelligence, mind and senses, will be automatically engaged.

Bhagavad Gita: What impelled to sinful acts (Text 40, Ch 3, Karma Yoga)

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Indriyani mano buddhir asyadhisthanam ucyate
etair vimohayaty esa jnanam avrtya dehinam
(Text 40, Ch 3, Karma Yoga)

Meaning: The senses, the mind and the intelligence are the sitting places of this lust. Through them lust covers the real knowledge of the living entity and bewilders him.

*** Mind is the center of all the activities of the senses, and thus when we hear about sense objects the mind generally becomes a reservoir of all ideas of sense gratification; and as a result, the mind and the senses become the repositories of lust. Next, the intelligence department becomes the capital of such lustful propensities. Intelligence is the immediate next-door neighbor of the spirit soul. Lusty intelligence influences the spirit soul to acquire the false ego and identify itself with matter, and thus with the mind and senses. The spirit soul becomes addicted to enjoying the material senses and mistakes this as true happiness.

GST Sectoral Series: FAQ on Drugs & Pharmaceuticals business

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FAQ: Drugs & Pharmaceuticals

Question 1: Whether formulations cleared have to be assessed to GST under transfer price mechanism or on the basis of MRP printed on them?

Answer: The assessment of drugs and formulations under GST would be on the basis of transaction value at each level of supply with end to end ITC chain for neutralizing the GST paid at the procurement level.

Question 2: What are the requirements for clearance of physician samples distributed free of cost?

Answer: In case of clearance of physician samples distributed free of cost, the ITC availed on the said samples has to be reversed in view of the provisions under Section 17(5)(h) of the CGST Act, 2017.No tax is payable on clearance of physician samples distributed free of cost as the value of supply is zero and no credit has been availed.

Question 3: What is the procedure for movement of time expired medicines from the retail outlets to the manufacturer for destruction?

Answer: In such cases, the manufacturer may issue a credit note within the time specified in sub-section (2) of section 34 of the CGST Act, 2017 subject to the condition that the person returning the expired medicines reduces his ITC. Subsequently, when the time expired goods are destroyed, the manufacturer has to reverse his ITC on account of goods being destroyed. Where the goods are returned after the time limit specified in section 34(2) of the CGST Act, 2017, the registered person returning the goods shall issue a tax invoice, as it is a supply within the meaning of Section 7 of the CGST Act, 2017.


Question 4: How loan and licensee units carry out their operations in GST regime?

Answer: GST law does not have any special provision for loan and licensee units. Where the contract are in the nature of performance of job-work, these units can opt to follow the procedure laid down in section 143 of the CGST Act, 2017 i.e. the principal can send any inputs etc. to such units without payment of tax and the principal can clear the goods from the premises of such units if the principal declares these units as his additional place of business or where such units are themselves registered under section 25 of CGST Act, 2017.
Question 5: What is the treatment of clearances effected to Special Economic Zones?

Answer: The clearances effected to the SEZ are zero rated supplies in terms of Section 16 of the IGST Act, 2017. Accordingly, the supplier can claim refund of IGST paid on such supplies or clear the same under bond/ letter of undertaking and claim refund of the unutilised ITC.

Question 6: Whether SEZ unit located in a State requires a separate registration under GST?

Answer: The SEZ unit located in a State is treated as a business vertical distinct from other units located in the State outside the SEZ [first proviso to Rule 8 of the CGST Rules, 2017 read with Section 25 of the CGST Act, 2017]. Hence, separate registration is required to be obtained for the unit located in SEZ. 

Question 7: Whether ISD registration is required to be obtained separately?

Answer: In terms of second proviso to Rule 8 of the CGST Rules, 2017 read with Section 25 of the GST Act, 2017, every person being an Input Service Distributor has to make a separate application for registration.

Question 8: What is the transitional credit that can be availed on the existing stocks held by a registered person under GST, who was not required to be registered under the existing law?

Answer: In terms of Rule 117(4) of the CGST Rules, 2017 (transitional provisions) read with Section 140(3) of the CGST Act, 2017, a registered person who was not registered under the existing law and who is not in possession of any document evidencing payment of central excise duty in respect of the goods held in stock, shall be allowed credit at the rate of sixty per cent on such goods which attract central tax at the rate of nine per cent or more and forty per cent for the other goods of the central tax applicable on supply of such goods after 01st July 2017 and the said amount shall be credited in the electronic credit ledger after the central tax payable on such supply has been paid. In case where integrated tax is paid, the amount of ITC would be at the rate of thirty per cent and twenty per cent respectively of integrtaed tax. This facility is available for a maximum period of 6 months from the appointed day (i.e. upto 31st December, 2017) or till the goods are sold out, whichever is earlier.

Question 9: Whether a manufacturer can avail deemed credit in respect of transitional stocks on the appointed day in respect of the stocks for which duty paying document is not available?

Answer: In terms of the proviso to Section 140(3) of the CGST Act, 2017, the manufacturer is not eligible to avail deemed credit in respect of transitional stocks, for which duty paying document is not available. Such credit is not available in case of SGST except where VAT was payable on the basis of MRP.


Question 10: Whether deemed credit is available in respect of goods purchased from tax free zones?

Answer: The deemed credit in terms of Rule 117(4) of the CGST Rules, 2017 (transitional provisions) read with Section 140(3) of the CGST Act, 2017 would be available in respect of the goods, which were not unconditionally exempt from the whole of the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985 or were not nil rated in the said Schedule. As the goods purchased from tax free zones were exempted from duty payment under a Notification issued under Section 5 of the Central Excise Act, 1944 and not Nil rated in the First Schedule to the Central Excise Tariff Act, 1985, the deemed credit would be available in respect of such goods held in stock on the appointed day.

Question 11: What is the obligation cast on the Registered Person in case of purchases from Unregistered Person?

Answer: In terms of Section 9(4) of the CGST Act, 2017 read with Section 31(3) ibid, the Registered Person procuring the taxable supplies from an Unregistered Supplier has to raise invoice and pay GST on reverse charge basis in respect of such supplies.


Question 12: What is the treatment of supplies made from erstwhile tax free zones?

Answer: Since GST is a destination based consumption tax with seamless transfer of ITC credit, no exemptions are accorded to supplies made by erstwhile tax free zones. Accordingly, the goods cleared from erstwhile tax free zones would be subjected to GST from the appointed day (01st July, 2017).

Question 13: What is the effect of non-payment of consideration in respect of taxable supplies received by the recipient?

Answer: If the recipient fails to pay to the supplier the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, the amount of input tax credit availed proportionate to the amount of consideration not paid would be added to his output tax liability along with interest thereon. The ITC so reversed can be reclaimed by the recipient after payment of consideration along with tax payable there on subsequently. This provision is not applicable in respect of deemed supplies made without consideration in terms of Schedule I to the CGST Act, 2017.

Question 14: Whether separate sequence numbers can be maintained for invoices issued by the Registered Person in respect of supplies made under GST?

Answer: In terms of Rule 46(b) of the CGST Rules, 2017 single or multiple series of invoices can be raised by the Registered Person for the supplies made under GST as long as such invoice numbers are unique for a financial year.

Question 15: Which is the document required to be issued by the Registered Person for supply of goods from one premises to another premises under the same registration number?

Answer: In terms of Rule 55(1)(c) of the CGST Rules, 2017 such movements have to be effected under the cover of a delivery challan along with any other document that may be prescribed in lieu of the e-way bill.

Question 16: Whether discounts can be claimed as an abatement from the price for assessing GST?

Answer: In terms of Section 15(3) of the CGST Act, 2017, the value of supply for charging GST shall not include any discount which is given before or at the time of the supply if such discount has been duly recorded in the invoice issued in respect of such supply. The value of supply shall also not include any discount which is given after the supply has been effected, if such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices and ITC attributable to such discount has been reversed by the recipient of the supply.


Question 17: What are the relevant provisions for movement of transitional goods lying at the premises of contract manufacturer on or after appointed day?

Answer: The procedure for movement of transitional goods lying at the premises of Contract Manufacturers/Loan Licencee is governed by the provisions under Section 141(1), (2) & (3) of the CGST Act, 2017.

Bhagavad Gita : What impelled to sinful acts?(Text 39, Ch 3, Karma Yoga)

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Avrtam jnanam etena jnanino nitya-vairina
kama rupena kaunteya duspurenanalena ca

(Text 39, Ch 3, Karma Yoga)

Meaning: Thus wise living entity’s pure Consciousness becomes covered by his eternal enemy in the form of lust, which is never satisfied and which burns like fire.

***According to Manu-smrti, lust cannot be satisfied by any amount of sense enjoyment, just as fire is never extinguished by a constant supply of fuel.
Advancement of material civilization on the basis of sense gratification means increasing the duration of the material existence of a living entity.Therefore lust is the symbol of ignorance by which the living entity is kept within the material world.

GST Notification-08/08/2017_Extension of time period/due date for July/Aug 2017 Return ( GSTR-1, GSTR-2, GSTR-3, GSTR-3B)

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1.      Seeks to extend time period for filing of details of outward supplies in FORM GSTR-1 for months of July and August.(18/2017-Central Tax,dt. 08-08-2017)

Sl. No.
Month
Time period for filing of details of outward supplies in FORM GSTR-1
(1)
(2)
(3)
1
July, 2017
1st   to 5th  September, 2017
2
August, 2017
16th  to 20th  September, 2017.
2.      Seeks to extend time period for filing of details of inward supplies in FORM GSTR-2 for months of July and August.(19/2017-Central Tax,dt. 08-08-2017)

Sl. No.
Month
Time period for filing of details of outward supplies in FORM GSTR-2
(1)
(2)
(3)
1
July, 2017
6th to 10th   September, 2017
2
August, 2017
21st to 25th September, 2017.
3.      Seeks to extend time period for filing of details in FORM GSTR-3 for months of July and August (20/2017-Central Tax,dt. 08-08-2017)

Sl. No.
Month
Time period for filing of details of outward supplies in FORM GSTR-3
(1)
(2)
(3)
1
July, 2017
11th  to 15th  September, 2017
2
August, 2017
26th to 30th  September, 2017.
4.      Seeks to introduce date for filing of GSTR-3B for months of July and August (21/2017-Central Tax,dt. 08-08-2017)

Sl. No.
Month
Time period for filing of details of outward supplies in FORM GSTR-3B
(1)
(2)
(3)
1
July, 2017
20th  August, 2017
2
August, 2017
20th September, 2017.

GST: Aggregate Turnover & Margin Scheme in GST (CBEC explains concept of aggregate turnover and margin Scheme under GST)

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CBEC explains concept of aggregate turnover and margin Scheme under GST

Aggregate Turnover in GST

1. Turnover, in common parlance, is the total volume of a business.

The term ‘aggregate turnover’ has been defined in GST law as under:

“Aggregate turnover” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess.

2. The aggregate turnover is a crucial parameter for deciding the eligibility of a supplier to avail the benefit of exemption threshold of Rs. 20 Lakhs [Rs. 10 Lakhs in case of special category States except J & K] and for determining the threshold limit for composition levy. Let us dissect the definition in small parts to understand the meaning clearly. There are certain terms used in the definition which need a bit of elaboration.


3. It may be noted that the inward supplies on which the recipient is required to pay tax under Reverse Charge Mechanism (RCM) does not form part of the ‘aggregate turnover’. The law stipulates certain supplies like, Goods Transport Agency services, services received from outside India, to name a few, where the recipient of service is made to pay the tax. The value of such supplies on which tax is paid, would not form part of the ‘aggregate turnover’ of recipient of such supplies. However, the value of such supplies would continue to be part of the ‘aggregate turnover’ of the supplier of such supplies.

4. The second element of value which would not be included in the ‘aggregate turnover’ is the element of central tax, state tax, union territory tax and integrated tax and compensation cess.

5. The value of exported goods/services, exempted goods/ services, inter-state supplies between distinct persons having same PAN would be added to ‘aggregate turnover’.

6. Last but not the least, such turnover is to be calculated by taking together the value in respect of the activities carried out on all-India basis.

7.The aggregate turnover is different from turnover in a State. The former is used for determining the threshold limit for registration as well as eligibility for Composition Scheme. However, the composition levy would be calculated on the basis of turnover in the State.

Margin Scheme in GST


Normally GST is charged on the transaction value of the goods. However, in respect of second hand goods, a person dealing is such goods may be allowed to pay tax on the margin i.e. the difference between the value at which the goods are supplied and the price at which the goods are purchased. If there is no margin, no GST is charged for such supply. The purpose of the scheme is to avoid double taxation as the goods, having once borne the incidence of tax, re-enter the supply and the economic supply chain.


Valuation of Second Hand Goods:

As per Rule 32(5) of the CGST Rules, 2017, where a taxable supply is provided by a person dealing in buying and selling of second hand goods i.e., used goods as such or after such minor processing which does not change the nature of the goods and where no input tax credit has been availed on the purchase of such goods, the value of supply shall be the difference between the selling price and the purchase price and where the value of such supply is negative, it shall be ignored.

The proviso to the above rule further provides that in case of the purchase value of goods repossessed from a unregistered defaulting borrower, for the purpose of recovery of a loan or debt shall be deemed to be the purchase price of such goods by the defaulting borrower reduced by five percentage points for every quarter or part thereof, between the date of purchase and the date of disposal by the person making such repossession.

In this regard, Notification No.10/2017-Central Tax (Rate) New Delhi, dated 28th June, 2017 exempts intra-State supplies of second hand goods received by a registered person, dealing in buying and selling of second hand goods and who pays the central tax on the value of outward supply of such second hand goods as determined under sub-rule (5) of rule 32 of the CGST Rules, 2017, from any unregistered supplier, from the whole of the central tax levied under the CGST Act, 2017. Similar exemptions are also there in respective SGST Acts.

Illustration:

For instance, a company say M/s FirstSource Ltd, which deals in buying and selling of second hand cars, purchases a second hand Maruti Celerio Car of March, 2014 make (Original price Rs. 5 lakhs) for Rs. 3 lakhs from an unregistered person and sells the same after minor furbishing in July, 2017 for Rs. 3,50,000/-. The supply of the car to the company for Rs. 3 lakhs shall be exempted and the supply of the same by the company to its customer for Rs. 3.5 lakhs shall be taxed and GST shall be levied. The value for GST purpose shall be Rs. 50000/-, i.e.the difference between the selling and the purchase price of the company.

In case any other value is added by way of repair, refurbishing, reconditioning etc., the same shall also be added to the value of goods and be part of the margin.

If margin scheme is opted for a transaction of second hand goods, the person selling the car to the company shall not issue any taxable invoice and the company purchasing the car shall not claim any ITC.




Bhagavad Gita : What impelled to sinful acts (Text 36, 37, 38 Ch 3, Karma Yoga)

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Arjuna uvaca:
Atha kena prayukto yam papam carati purusah
anicchann api varsneya balad iva niyojitah
(Text 36, Ch 3, Karma Yoga)

Meaning: Arjuna said: O descendant of Vrsni(divine), by what is one impelled to sinful acts, even unwillingly, as if engaged by force?

*** A living entity, as part and parcel of the Supreme, is originally spiritual, pure, and free from all material contaminations. Therefore, by nature he is not subject to the sins of the material world. But when he is in contact with the material nature, he acts in many sinful ways without hesitation, and sometimes even against his will.

Kama esa kridha esa rajo-guna-samudbhavah
mahasano maha-papma viddhy enam iha vairinam
(Text 37, Ch 3, Karma Yoga)

Meaning:
The Supreme Personality of Godhead said:
It is lust only, Arjuna, which is born of contact with the material mode of passion and later transformed into wrath, and which is the all -devouring sinful enemy of this world.

*** When a living entity comes in contact with the material creation, his eternal love for divine is transformed into lust, in association with the mode of passion. Then again, when lust is unsatisfied, it turns into wrath; wrath is transformed into illusion, and illusion continues the material existence.

The origin of everything is the supreme Brahman. Therefore the origin of lust is also in the Supreme. If therefore, lust is transformed into love for the Supreme, or transformed into divine consciousness-desiring everything for divine-then both lust and wrath can be spiritualized.

Dhumenavriyate vahnir yathadarso malena ca
Yatholbenavrto garbhas tatha tenedam avrtam
(Text 38, Ch 3, Karma Yoga)

Meaning: As fire is covered by smoke, as a mirror is covered by dust, or as the embryo is covered by the womb, the living entity is similarly covered by different degrees of this lust.

***Human form of life is a chance for the living entity to escape the entanglement of material existence. In the human form of life, one can conquer the enemy, lust, by cultivation of divine consciousness.

Bhagavad Gita : Discharge one’s prescribed duties (Text 35, Ch 3, Karma Yoga)

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Sreyan sva-dharmo vigunah para -dharmat sv-anusthitat
sva-dharme nidhanam sreyah para-dharmo bhayavahah
(Text 35, Ch 3, Karma Yoga)

Meaning: It is far better to discharge one’s prescribed duties, even though faultily, than another’s duties perfectly. Destruction in the course of performing one’s own duty is better than engaging in another’s duties, for to follow another’s path is dangerous.

GST FAQs Series 26: Input Tax Credit(ITC) under GST

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Frequently asked questions on Input Tax Credit(ITC) under GST ….Continue(Refer last post on link http://gstindia1.blogspot.in/2017/07/gst-faqs-series-25-input-tax-credititc.html 


Q 21. If input tax credit is allowed only in respect of goods or services or both for effecting taxable supplies, would it not lead to loss of input tax credit on exempt supplies when exported?

Ans. Zero-rated supplies have been covered within taxable supplies for the purpose of allowing input tax credit. The scope of zero-rated supply is provided in the Integrated Goods and Services Tax Act which includes even exempt supplies.

Q 22. Which of the following is included for computation of taxable supplies for the purpose of availing credit?
(a) Zero-rated supplies
(b) Exempt supplies
(c) Both

Ans. Zero rated supplies.


Q 23. Where goods or services received by a registered person are used partly for the
purpose of business and partly for other purposes, whether the input tax credit is
available to the person?

Ans. The input tax credit of goods or services or both attributable only to the purpose of business can be taken by registered person. The manner of calculation of eligible
credit would be provided by rules.


Q 24. A person paying tax under composition scheme crosses the composition threshold and becomes a regular taxable person. Can he avail ITC and if so from what date?

Ans. He can avail ITC in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock and on capital goods (reduced by prescribed
percentage points) on the day immediately preceding the date from which he ceases to be eligible for composition scheme. The manner of calculation of eligible credit would be provided by rules.


Q 25. Are there any special provisions in respect of banking companies?

Ans. A banking company or a financial institution including a non-banking financial company engaged in supply of specified services would either avail proportionate credit or avail 50% of the eligible input tax credit.

Q 26. Mr. A, a registered person was paying tax under composition scheme up to 30th July, 2017. However, w.e.f 31st July, 2017, Mr. A becomes liable to pay tax under regular scheme. Is he eligible for ITC?

Ans. Mr. A is eligible for input tax credit on inputs held in stock and inputs contained in semi-finished or finished goods held in stock and capital goods (reduced by such
percentage points as may be prescribed) as on 30th July, 2017.


Q 27. Mr. B applies for voluntary registration on 5th June, 2017 and obtained registration on 22nd June, 2017. Mr. B is eligible for input tax credit on inputs in stock as on…………..

Ans. Mr. B is eligible for input tax credit on inputs held in stock and inputs contained in semi-finished or finished goods held in stock as on 21st June, 2017. Mr. B cannot take input tax credit in respect of capital goods.


Q 28. What would happen to the input tax credit availed by a registered person who opts for composition scheme or where the goods or services or both supplied by him become wholly exempt?


Ans. The registered person has to pay an amount equal to the input tax credit in respect of stocks held on the day immediately preceding the date of exercise of option or date of exemption. In respect of capital goods, the payable amount would be calculated by reducing by a prescribed percentage point. The payment can be made by debiting electronic credit ledger, if there is sufficient balance in the credit ledger, or by debiting electronic cash ledger. If any balance remains in the credit ledger, it would lapse.

Q 29. Is there any restriction on period for availment of ITC?

Ans. In cases of new registration, change from composition to normal scheme, from exempt to taxable supplies, the concerned person cannot avail ITC after the expiry of one year from the date of issue of tax invoice relating to such supply.

Q 30. What happens where the details of inward supplies furnished by the recipient do not match with the outward supply details furnished by the supplier in his valid return?

Ans. In case of mismatch, the communication would be made to the both parties. If the mismatch is not rectified, then the amount will be added to the output liability of
recipient in the return for the month succeeding the month in which discrepancy is communicated.