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On 21st July 2017 India bought out its most significant reforms in taxation by implementing GST (Goods and Services Tax). A GST Council was formed for framing rules and regulations governing GST compliance in India. This council is headed by Union Finance Minister of India. The Council has been very responsive to the difficulties faced by traders and have been coming up with reforms making it easy for the traders to comply with GST regulations. To understand the changes of the council meetings we need to understand the structuring of GST Registration and filing in the beginning

Old Rules

  • GST Registration Criteria

It was compulsory for any trader with an annual turnover of INR 20 Lac or more to register for GST. If you are providing service to other than your home state it was mandatory to get registration irrespective of your revenue. If you are selling products on e-commerce platform it was compulsory to get GST registration even if your annual revenue has not crossed INR 20 Lac. These rules made it compulsory for almost all traders to get GST Registration and consequently follow the complex filing process.

  • GST Filing

Govt. envisaged 3 parts of filing and had 3 deadlines every month for the traders to follow. The sales and purchase details were to be filed through GSTR-1 before the 10th day of every month. Input credits as entered by vendors (recipients) was to be updated by the department through GSTR-2 which can be edited by the traders between the 11th and 15th day of every month. Then a final form GSTR-3 which was updated by the department was to be approved by traders either with or without editing between the 16th and 20th day of every month.

Due to some technical difficulties, the govt., could not come up with the forms GSTR-1,2 and 3 on time for the first filing of GST returns. Hence Govt. had to come up with an intermediate form called GSTR-3b in which the traders had to declare their sales and purchases for the month and pay the outstanding GST for the month before 20th day of every month. Govt. extended the deadline for other forms to be filed.

This created lots of confusion and the compliance burden on small traders was extremely high which created chaos in small traders community. The collective feeling of the trading community was that of confusion and desperation since compliance for GST rules created a heavy financial burden on them.

Rules proposed in October 2017

GST council on its 22nd meeting on October 6, 2017, implemented few landmark reforms which went a long way in simplifying the compliances for GST.

  • GST Registration Criteria 

For a service sector it was made optional to go for GST Registration until they reach a revenue of Rs.20 Lac irrespective of them having sales in states other than their home state. The council also made it optional for traders having inter state sales through e-commerce platform only. They also increased the maximum limit for composition registration from annual turnover of 75 Lacs to 1 Crore

  • GST Filing

Council proposed a quarterly filing for GST registered firms with annual turnover less than 1.5 crores. These firms constitute around 90% of the GST registered entities and hence provided great relief to small traders. Govt. Proposed a monthly filing of GSTR-3B (which was to be scrapped eventually) and make GST payment to govt. The returns through GSTR-1, 2 and 3 was to be made quarterly for these small firms. However, different last dates for different forms and heavy penalty still continued to create lot of confusion and financial burden on these small traders

New Rules 

The meeting on May 04 2018 has proposed a returns filing methodology which can be considered as future ready. The council has also taken a decision to implement these changes in 2 phases to avoid any confusion and inconvenience to traders

  • GST Filing

Initially for the next 6 months, until the new software gets ready the current system of GSTR-3B (Monthly) and GSTR-1 (Quarterly for small firms). After 6 months, the seller will upload the invoices in GSTN portal which needs to be acknowledged by the buyer. This enables the buyer to get input credit. If there is any gap in the tax paid and credit claimed, the buyer will be notified and the buyer will have to correct the excess claim made, if any.  This phase is proposed to be in place for only 6 months after implementation.

After this by around June 2019, there will  be facility for the sellers to upload the invoice on the portal on real time so that the input credit for the buyer is not stuck. In both the second and third phases, taxpayers will have to file details of total turnover in case of business-to-consumer transactions. For business-to-business transactions, a four-digit Harmonised System of Nomenclature (HSN) code would have to be mentioned besides all invoice and turnover details.

If the seller fails to pay the tax, the tax authorities will recover it from the seller, unlike in the current system where the buyer is asked to reverse the credit availed along with interest. If the seller is untraceable, the tax will be recovered from the buyer following due course of law. In case of missing invoices, the buyer will not be able to avail the credit.


What is an e-way bill?

GST e-way bill is an electronic bill which will be required for the movement of goods from one place to another. The bill can be generated from the GSTN portal and every registered taxpayer must require this e-way bill along with the goods transferred

When an e-way bill is generated a unique e-way bill number (EBN) is allocated and is available to the supplier, recipient, and the transporter.

When is e-Way Bill required?

Every registered person moving goods of consignment value exceeding Rs. 50,000/- in relation to:

  1. Supply (sale of goods, branch transfers, etc.)
  2. Reasons other than supply (e.g. returns)
  3. due to inward supply from unregistered dealer,

must furnish information thereto in Part A of Form GST EWB-01 before commencement of such movement.

The government has notified the e-way bill keeping some items of mass consumption out of its ambit.  However, this list does not include electronic items.

Source: Sec 164 of CGST – Power of Govt. to make rules ; E-way bill rules vide notification No. 272017 – 30.08.2017

What are the documents and devices to be carried by a person-in-charge of a conveyance? 

(1) The person in charge of a conveyance shall carry — (a) the invoice or bill of supply or delivery challan, as the case may be; and (b) a copy of the e-way bill or the e-way bill number, either physically or mapped to a Radio Frequency Identification Device (RFID) embedded on to the conveyance in such manner as may be notified by the Commissioner.

(2) A registered person may obtain an Invoice Reference Number from the common portal by uploading, on the said portal, a tax invoice issued by him in FORM GST INV-1, and produce the same for verification by the proper officer in lieu of the tax invoice and such number shall be valid for a period of thirty days from the date of uploading.

(3) Where the registered person uploads the invoice under sub-rule (1), the information in Part A of FORM GST INS-01 shall be auto-populated by the common portal on the basis of the information furnished in FORM GST INV-1. (4) The Commissioner may, by notification, require a class of transporters to obtain a unique RFID and get the said device embedded on to the conveyance and map the e-way bill to the RFID prior to the movement of goods.

(5) Notwithstanding anything contained clause (b) of sub-rule (1), where circumstances so warrant, the Commissioner may, by notification, require the person-in-charge of conveyance to carry the following documents instead of the e-way bill: (a) tax invoice or bill of supply or bill of entry; or (b) a delivery challan, where the goods are transported other than by way of supply.

What kind of verification of documents and conveyances?

(1) The Commissioner or an officer empowered by him in this behalf may authorise the proper officer to intercept any conveyance to verify the e-way bill or the e-way bill number in physical form for all inter-State and intra-State movement of goods.
(2) The Commissioner shall get RFID readers installed at places where verification of movement of goods is required to be carried out and verification of movement of vehicles shall be done through such RFID readers where the e-way bill has been mapped with RFID.
(3) Physical verification of conveyances shall be carried out by the proper officer as authorized by the Commissioner or an officer empowered by him in this behalf: Provided that on receipt of specific information of evasion of tax, physical verification of a specific conveyance can also be carried out by any officer after obtaining necessary approval of the Commissioner or an officer authorized by him in this behalf.

What is covered in Inspection and verification of goods?

(1) A summary report of every inspection of goods in transit shall be recorded online by the proper officer in Part A of FORM GST INS – 03 within twenty four hours of inspection and the final report in Part B of FORM GST INS – 03 shall be recorded within three days of the inspection.
(2) Where the physical verification of goods being transported on any conveyance has been done during transit at one place within the State or in any other State, no further physical verification of the said conveyance shall be carried out again in the State, unless specific information relating to evasion of tax is made available subsequently.

What are the facilities for uploading information regarding detention of vehicle?

Where a vehicle has been intercepted and detained for a period exceeding thirty minutes, the transporter may upload the said information in FORM GST INS- 04 on the common portal.

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The fact is, yes, when dealing with a vendor who is not GST registered, you need to pay GST for unregistered dealer on supply under Reverse Charge Mechanism. Reverse charge means the liability to pay tax is by the recipient of goods/ services instead of the supplier. Reverse charge may be applicable for both services as well as goods. if Unregistered dealer selling goods/services to a Registered dealer then reverse charge will apply and registered dealer will be liable to pay GST on supply. Good part is the registered dealer is eligible to claim credits later.

As a rule, any supplier is liable to pay GST under the GST Act. However, there are certain instances where a recipient of goods or services is liable to pay GST on reverse charge basis. There are two scenarios under which GST is payable on reverse charge basis:

1.     Reverse charge mechanism applicable to supply of certain specified goods or services

2.     Reverse charge mechanism applicable in case of purchases made from unregistered supplier

Section 9 (4) of the CGST/SGST(UTGST) Act and section 5 (4) of the IGST Act cover the cases of reverse charge in case of taxable supplies by any unregistered person to a registered person. These sections provide that the tax in respect of the supply of taxable goods and/or services by an unregistered supplier to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

Accordingly, whenever a registered person procures supplies from an unregistered supplier, he needs to pay GST on reverse charge basis. However, supplies where the aggregate value of such supplies of goods or services or both received by a registered person from any or all the unregistered suppliers is less than five thousand rupees in a day are exempted.

Any amount payable under reverse charge shall be paid by debiting the electronic cash ledger. In other words, reverse charge liability cannot be discharged by using input tax credit. However, after discharging reverse charge liability, credit of the same can be taken by the recipient, if he is otherwise eligible.

Non-GST registered vendor in normal circumstances, the supplier for goods is required to pay the GST. However, to prevent the tax evasion by the vendor who are unregistered, the government has burdened the Recipient (GST Registered) of goods to add GST in their purchase from Non- GST registered vendor. Exemption-  The government has provided an exemption of Rs. 5000. It means if the value of supply from unregistered user does not exceed Rs. 5000/-, it is not required to pay GST for such unregistered vendor. Reverse Charge- The GST paid by the Recipient on its purchase from non-registered can be claimed under reverse charge mechanism as input credit if such good/services are being used by them for business purpose. If you are claiming credit under reverse charge, you are required to register under GST, irrespective of the fact, whether you reach the threshold limit for GST registration (which is Rs. 20 Lakhs).

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Introducing you to Ravi, whose main stream businesses was to sell designer dress materials at a local community. Ravi, seeing the positive response from the current customers, decided to scale the business, the famous “want to sell on Amazon and Flipkart” stuff. Ravi, little did he know that GST registration is a must have to sell on Amazon, which was taken by surprise. Being a micro business man, neither did he have any other registrations in place nor had an office, he was perplexed.

When Ravi reached out to us, on counsel application, he was clear that he wanted to scale up his business by selling online on Amazon, he already had a chat with seller support team from Amazon that GST registration would be a must, only question that he had was ‘’how to register and what is required’.

We helped Ravi in getting registration done seamlessly in a day. Ravi was happy to have the major hurdle removed. During the course of our discussion with Ravi, he had some good questions on GST, and this blog will help online sellers to get some clarity.

 “electronic commerce” means the supply of goods or services or both, including digital products over digital or electronic network and an “electronic commerce operator” means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce like Amazon.

 Amazon, does not have any threshold exemption under GST and is liable to be registered irrespective of the value of supply made by them. Amazon is required to collect an amount at the rate of one percent (0.5% CGST + 0.5% SGST) of the net value of taxable supplies made through it. The amount so collected is called as Tax Collection at Source (TCS).

Amazon would  make the collection during the month in which the consideration amount is collected from the recipient. The amount collected by Amazon is to be paid to the government within 10 days after the end of the month in which amount was so collected.

This amount of TCS paid by the Amazon to the government will be reflected in the GSTR-2 of the actual registered supplier (on whose account such collection has been made) on the basis of the statement filed by Amazon. The same can be used at the time of discharge of tax liability in respect of the supplies made by the actual supplier.

Ecommerce Operators who should collect TCS:

  • A supplier selling his products through a web site hosted by him
  • A Platform that purchases goods from different vendors and sells them under their own billing.
  • A Platform that acts as an online marketplace and enables E- commerce activities


Major Changes in the Taxation system regarding online marketplaces post GST Implementation:

  • Post GST, there will be standard tax rates for each product and tax arbitrage will not be possible, thus bringing e-retailers and offline sellers at par in terms of costing and pricing. 
  • While GST registration in normal circumstances is mandatory where turnover is INR20 Lakh or more, if a trader wishes to sell through online portals he needs to get registered irrespective of turnover.
  • Majority of the products sold online carry a return date of up to 30 days which translates into about 15 – 20 million transactions per month and the returns and refunds for these have to be done with utmost care. The returns are required to be filed monthly now by both parties and refund adjustment will need special attention impacting tax liability.
  • The output rate of tax could be higher for the company compared to the current service tax rate. However, the companies should have a higher credit pool than they do in the current regime, which could reduce the prices of their services.
  • Currently, e-commerce companies discharge their output service tax liability through centralised registration. But under GST, e-commerce companies would have to obtain registration in each state where they have their place of business, resulting in increased compliances.

Wazzeer is vouched by Entrepreneurs as the most reliable Legal and Accounting Partner. We would be super excited to help you. Let’s Connect! 🙂 


Business Registration, GST, GST, TAXATION

Did you know, VAT or the famous Value Added Tax was originally called as Sales Tax? This is an indirect applicable whenever there is goods and services sold by the company. This Tax is paid by the customer via producer to the state government. Business owner earning an annual turnover of more than Rs.5 lacs by supplying goods and services are liable for VAT registration.

VAT is levied both on local as well as imported goods. Similar goods and services are taxed equally and VAT is applicable at different stages of production. VAT made the game much fairer because now you will be taxed based on the type of goods and service rather than uniform rates. With VAT Registration, you will be saving on revenue which with previous sales tax regulations you possibly wouldn’t have.

Hey, but why should consumer pay for VAT?

VAT is a tax on consumption which is borne by consumers. It is applicable on 554 goods. VAT protects consumer from the cascading effect of the turnover tax which is tax on each sale with no credit for the tax paid at earlier stages.

Will I be taxed on capital input that I invest in my firm?

Look basically you have three tax variants:

1. Consumption variant-(not the capital that you invest is taxed, but the use of capital goods which produce consumer goods is taxed);

2. Income variant (depreciation on the goods is excluded);

3. Gross Product Variant (no exclusion, only goods that are used up currently are subtracted from the firm’s sale) And hence VAT payable = VAT on output (total value of sales) – VAT on input (purchases any paid by firm to produce)

Does the VAT in India differ from one state to another?

  • 0% VAT Rate:
For essential commodities like some of the goods like salt, Sugar etc.,
  • 1% VAT Rate:
For items, which tend to be highly expensive, like Gold, silver precious jewellery fall under this category of goods. Most Indian states have fixed VAT for these items at 1% of the amount.
  • 4-5% VAT Rate:
Most of the FMCG goods come under this category of VAT, like oil, coffee, medicines etc. is around 4-5% for most states in India.
  • General VAT Rate:
General VAT rates apply to goods which cannot be segregated and put under any of the above listed VAT categories. For goods like liquor, cigarettes etc. many governments charge high VAT rates of 12.5% or 14-15%.

When to file VAT Returns?

VAT Returns are filed every month or every quarter depending on the amount of VAT you pay. The normal rule is that if you pay less than Rs 15,000 for VAT every month, a VAT Return is to be filed every quarter. If your Input Tax is greater than your Output Tax you can carry over the difference as a credit to your next VAT Return. In certain circumstances, the VAT Commissioner may pay you any excess if he is satisfied that excess is a regular feature of your business.

What kind of proof do I have to show to the commissioner?

Haven’t you seen situations where, a small notice at billing counter at pizza hut stating that take food for free if no bill given?
Yep! That’s the best example, the seller should always have a copy of the bills to claim. For starting entrepreneurs, a Simplified Tax Invoice would be good enough that must include the following information:
  • Your name, address and TIN
  • Serial number of the invoice
  • Date of the invoice
  • Brief description of the goods and services supplied.
  • Total amount charged to the customer including VAT and
  • A clear statement that the price includes VAT.
To Read about the Process of VAT registration click here

To know the documents required for VAT registration click here

Startup entails complex procedures and many bureaucratic hurdles, entrepreneurs are better off using professional services. Hiring a virtual lawyer and virtual accountant can save time and help ensure that the process goes smoothly.

For any Legal and Accounting support, Happy to help you, let us talk at Wazzeer.


In recent times, India has been abuzz with criticism on its archaic taxation structure and there is push for a simpler, flat tax structure that will potentially do away with the complicated policy. As the next level policy reform in indirect taxation, Goods and services tax (GST) has taken a centre stage in this respect and is hoped to iron out the wrinkles in the existing tax system. Tax policies play an important role on the economy through their impact on both efficiency & equity and it’s high time India braced itself for a relook at the current status. What will GST achieve as a policy reform measure?

Economic union of India: The debate about India as one republic union versus a federation of states will be put to rest. Goods can easily move across the country with diffused state boundaries and that will encourage businesses to focus on pan-India operations.

Simpler tax structure: By merging all levies on goods and services into one, GST acquires a very simple and transparent character with less paperwork and reduction in accounting complexities. A simple taxation regime can make the manufacturing sector more competitive and save both money and time.

Uniform tax regime: With only one or two tax rates across the supply chain as against multiple tax structure at present, state specific advantages/disadvantages are gone. This provides a fair play ground for all stakeholders and focus can be brought in to efficiency rather than vantage points.

Greater tax revenues: A simpler tax structure can bring about greater compliance, thus increasing the number of tax payers and in turn tax revenues for the government. By removing cascading effect, layers of taxes and simplifying structures, the GST would encourage compliance, which is also expected to widen the tax base.

Competitive pricing: A cursory look at the retail price of any product manufactured in India reveals that the total tax component is roughly 25-30% of the cost of the product. GST will effectively mean that the tax paid by the final consumer will come down in most cases and will help in boosting consumption, which is again beneficial to companies.

Push to exports: With fall in production cost in domestic market, the competitiveness of Indian goods in international market will increase. This bodes well for exporters, who compete with global manufacturers which operate on very different cost structures.

It’s a summarization of an article in Economic Times. For more information, visit

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Every Service provider has to mandatorily apply for Service Tax registration if the turnover of the business in a year exceeds INR 9 lakhs, however if the turnover of the business is less than INR 9 lakhs annually then Service tax registration is optional at the option of the tax payer.

Procedure to get Trade License registration done – You need to apply for service tax registration by filling the form ST 1 which can be submitted online, the first time you need to create an account before filling the details in the ST 1 form. The account created shall be your permanent account for all matters related to service tax.

After logging into your account you need to fill the ST 1 form available there. After applying for service tax registration online you need to take a copy of acknowledgement slip, sign it and submit the hard copy of documents and ST 1 form to the authority, after which you will get Service tax registration number.

Post verification of all your documents by the authority you will receive your Service Tax registration certificate. Documents Required for Service Tax Registration
  • Company Incorporation certificate
  • MoA, AoA
  • PAN card of directors/ partners
  • Address proof of directors/ partners
  • Address proof of place of business
(If rent agreement, then it has to be supported by any utility bill)
  • Authorization letter
  • 4 photographs of proprietor/ partners/ directors
  • Bank Statement

Wazzeer is vouched by Entrepreneurs as the most reliable Legal and Accounting Partner. We would be super excited to help you. Let’s Connect! 🙂