UNIT-3
Time of supply, GST network and
technology
Introduction- time of supply-forward charge, Reverse
charge, residuary, special charges Time of supply of
service- forward charge, reverse charge, Vouchers,
Residuary, Special charges. Problems on determination
of time of supply. GST NETWORK: Structure, Vision
and Mission, Powers and Functions, Goods & Service Tax
Suvidha Providers (GSP): Concepts, Framework and
Guidelines and architecture to integrate with GST system-
GSP Eco system.
Time of supply: means the point in time when
goods/services are considered supplied'. When the
seller knows the 'time', it helps him identify due date
for payment of taxes. CGST/SGST or IGST must be
paid at the time of supply. Goods and services have a
separate basis to identify their time of supply.
Forward charge,: Forward charge mechanism under
GST is when GST is charged in the sales invoice
by the supplier, same is collected from purchaser
and finally deposited to govt. This is the common
term of tax that where tax is payable by the
service provider or by the seller of goods is
called as Forward Charge.
Reverse Charge Mechanism is the process of payment
of GST by the receiver instead of the supplier
Reverse charge:
Reverse Charge means the liability to pay tax is on the
recipient of supply of goods or services instead of the
supplier of such goods or services in respect of
notified categories of supply.
Two types of reverse charge scenarios mentioned in the law.
The first one is dependent on the nature of the supply and
the nature of the supplier. This is covered under section 9 (3)
of the CGST/ SGST (UTGST) Act and section 5 (3) of the
IGST Act. The second one taxable supply made by the
unregistered person to a registered person covered under
section 9 (4) of the CGST/SGST (UTGST) Act and section 5
(4) of the IGST Act.
Voucher sales, in the context of Goods and Services tax (GST), refer to
the timing of tax liability when dealing with vouchers. The time of supply, and
thus the point at which GST is applicable for voucher sales, is determined as
follows:
Goods
For goods, the time of supply for voucher sales is the date of issue if the supply
is identifiable or the date of redemption if the supply isn't identifiable at the
time of issue.
Services
Similarly, for services, the time of supply for voucher sales is the date of issue if
the supply is identifiable or the date of redemption.
In essence, if the specifics of what will be provided in exchange for the voucher
(the goods or service) are known when the voucher is issued, the tax point is
the date of issue. If the specifics are not known until the voucher is used, the
tax point is the date of redemption.
Residuary,
As per the residual method, where the value of supply of
goods or services or both cannot be determined under the
cost method, the same shall be determined using
reasonable means consistent with the principles and general
provisions of the Goods and Services Tax law.
One example of the residual method is valuation on the basis of
per unit when the cost of manufacturing can not be determined in
principle. The number of man hours required to complete a job can
be another example of such valuation method.
In case of supply of vouchers the time of supply is-
(a) The date of issue of the voucher, if the supply can be identified
at that point. OR
(b) The date of redemption of the voucher, in all other cases.
Special charges time of supply of service:
Time of supply means the point in time when
goods/services are considered supplied'. When the
seller knows the 'time', it helps him identify due date for
payment of taxes.
Place of supply is required for determining the right tax
to be charged on the invoice, whether IGST or
CGST/SGST will apply.
GST NETWORK:
Goods and Services Tax Network (GSTN) is a nonprofit
non-government company, which will provide shared IT
infrastructure and service to both central and state
governments including tax payers and other
stakeholders. The Frontend services of registration, Returns
and payments to all taxpayers will be provided by GSTN.
GSTN stands for Goods and Services Tax Network. It is a not
for profit section 8 company, established primarily to assist
the rollout and implementation of GST and to act as the
nodal agency to assist in terms of IT infrastructure and
services to the Central, State Governments, taxpayers and
general public.
Structure of GSTN
Private players own a 51% share in the GSTN, and the government
owns the rest. The authorized capital of the GSTN is Rs 10 crore
(US$1.6 million), of which 49% of the shares are divided equally
between the Central and State governments, and the remaining is
with private banks.
The GSTN has also been approved for a non-recurring grant of Rs
315 crores. The contract for developing this vast technological
backend was awarded to Infosys in September 2015. The GSTN is
chaired by Mr Navin Kumar, an Indian Administrative Service
servant, who has served in many senior positions with the Govt. of
Bihar and the Central Govt.
Structure of GSTN
Shareholder Shareholding
Central Government 24.5%
State Governments & EC 24.5%
HDFC 10%
HDFC Bank 10%
ICICI Bank 10%
NSE Strategic Investment Co 10%
LIC Housing Finance Ltd 11%
Total 100%
The Empowered Committee of State Finance
Ministers (EC) was originally set up on 17th
July, 2000 by the Government of India with the Hon’ble
State Finance Ministers of West Bengal, Karnataka,
Madhya Pradesh, Maharashtra, Punjab, Uttar Pradesh,
Gujarat, Delhi and Meghalaya as members with an
objective to monitor the implementation of uniform
floor rates of sales tax by States and Union territories,
to monitor the phasing out of the sales-tax based
incentive schemes, to decide milestones and methods
of States to switch over to VAT and to monitor reforms
in the Central Sales Tax system existing in the country.
Structure of GSTN
Shareholder Shareholding
Central Government 24.5%
State Governments & EC 24.5%
HDFC 10%
HDFC Bank 10%
ICICI Bank 10%
NSE Strategic Investment Co 10%
LIC Housing Finance Ltd 11%
Total 100%
Vision and Mission:
Realizing the revenues in a fair, equitable,
transparent and efficient manner. -
Administering the Government's economic,
taxation and trade policies in a pragmatic
manner. - Facilitating trade and industry by
streamlining and simplifying GST processes
and helping Indian business to enhance its
competitiveness.
Functions of GSTN and its portal:
1. Functions relating to Tax Payers:
•Filing of registration application
•Filing of return
•reaction of challan for tax payment
2. Functions relating to Government
•Settlement of IGST payment (like a clearing house)
•Generation of business intelligence and analytics
3. Functions relating to Tax Officials
All statutory functions to be performed by tax officials under
GST like-
•(a) approval of registration,
•(b) assessment,
•(c) audit,
•(d) appeal,
•(e) enforcement etc.
Key Features GST Network (GSTN)
•Incorporated on 28.03.2013 as Section 25 private limited company with
authorized equity of Rs. 10 crore
•Strategic control to remain with Government
•Equity Holders
• Central Government – 24.5%
• EC and all States together – 24.5%
• Financial Institutions – 51%
•A section 25 private limited company with Strategic Control with the
Government
•To function as a Common Pass-through portal for taxpayers-
• submit registration application
• file returns
• make tax payments
•To develop back end modules for 25 States (MODEL –II)
•Infosys appointed as Managed Service Provider (MSP)
•Appointed 34 GST Suvidha Providers (GSPs) to develop simple applications to
be used by taxpayers for interacting with GSTN
•GSTN and GST Suvidha Providers (GSPs) to provide technology based assistance
Role or powers of GSTN in Payment of GST by
Taxpayers
•Under GST, all challans will have to be
prepared by taxpayers on the GST portal only.
This has been done to ensure that bank tellers
do not enter the wrong TIN number from
handwritten challans as happens sometimes
today. Once Challan is created with GSTIN,
name of taxpayer, amount under various tax
heads and sub-heads, the taxpayer has the
following two options to pay the tax:
• He can choose an online option under which, he
will have to choose one of the agency banks (i.e.
banks authorized by RBI to collect GST on their
behalf) from the dropdown menu and after that,
he will be taken to the website of the chosen bank
to make payment by providing a user ID and
password of the bank. After completion of
payment, he will be brought back to the GST
portal from where he can download the paid
challan, which is generated by GST System on
confirmation from the Bank.
• The other option of tax payment is to print the challan
and present the same in the relevant bank for ‘Over the
Counter Payment’ (OTC). The bank after realizing the
payment will transfer the money to RBI and send
confirmation of payment to GST Portal for accounting.
•At the end of the day, the GST portal will prepare a summary of
all payment confirmations received by it from Banks and share
the same with RBI and accounting authorities for
reconciliation. No tax money will ever come to GSTN in any
manner. GSTN will only get confirmation of payment from the
Banks.
GST Suvidha Provider (GSP) GST
Suvidha Provider is the web platform
used by companies to file GST
returns. It aids in GST compliance while
making it easier to streamline the data
for greater convenience and security for
registration, uploading invoices, filing
returns, etc.
Powers and Functions of GSTN
It handles the entire IT infrastructure crucial for GST operations,
including registration, tax filing, payments, and data maintenance.
GSTN aims to simplify tax compliance, reduce errors, and ensure
efficient administration across businesses, serving as the
technological backbone of India's GST regime.
Functions of GSTN
• Facilitate registration
• Computation of IGST and settlement
• File tax returns and submit to central and state authorities
• Integrate banking network with tax payment details
• Analyse tax payer's profile
• Manage computation engine of input tax credit
• Submit MIS reports to governments
maintenance. GSTN aims to
simplify tax compliance,
reduce errors, and ensure
efficient administration across
businesses, serving as the
technological backbone of
India's GST regime.
Functions of GSTN
• Facilitate registration
• Computation of IGST and
settlement
• File tax returns and submit
to central and state
authorities
