Happy Republic Day…
Month: January 2019
Happy Pongal to all..
Happy Makara sankranthi to all…
GST: Return of time expired goods
GST : Return of Time Expired Goods
CBIC had issued a Circular No.72/46/2018-GST dated 26th October, 2018, stating the procedures to be followed when time expired drugs and medicines are returned back to manufacturer through supply chain. In the circular, two options/procedures are given. The same are:
- Return of the Time Expired Goods to be treated as fresh supply
- Return of time expired goods using credit note
The two options are discussed below:
- Return of the Time Expired Goods to be treated as fresh supply
In case the goods returned is destroyed by the manufacturer, the manufacturer is required to reverse the Input tax Credit (ITC ) availed on the return supply. ITC that need to be reversed in such scenario is the ITC availed on return supply and not ITC that is attributable to manufacture of such expired goods.
Illustration: Supposedly, manufacturer has availed ITC of Rs. 10/- at the time of manufacture of medicines valued at Rs. 100/-. At the time of return of such medicine on the account of expiry, the ITC available to the manufacturer on the basis of fresh invoice issued by wholesaler is Rs. 15/-. So, when the time expired goods are destroyed by the manufacturer he would be required to reverse ITC of Rs. 15/- and not of Rs. 10/-.
- Return of time expired goods by issuing credit note
As per sub-section (1) of Section 34 of the CGST Act the supplier can issue a credit note where the goods are returned back by the recipient. Thus, the manufacturer or the wholesaler who has supplied the goods to the wholesaler or retailer, as the case may be, has the option to issue a credit note in relation to the time expired goods returned by the wholesaler or retailer, as the case may be. As per law, there is no time limit for issuing of Credit Note. But, when it comes to adjustment of tax liability, the following scenarios may arise:
It is also clarified that, the circular will be applicable to other scenarios, where the goods are returned on account of reasons other than return of expired goods.
Disclaimer: Users are requested to verify the validity of content before taking informed decisions.
GST Exemption Limit Doubles…GST Council Decisions
The major decisions by GST Council in it’s 32nd meeting are as follows:
- GST Exemption limit increased to Rs.40 Lakhs from existing Rs.20 Lakhs for supplier of goods. The exemption limit of small states also increased to Rs.20 lakhs from existing Rs.10 lakhs. The Threshold for Registration for Service Providers would continue to be Rs 20 lakhs and in case of Special Category States at Rs 10 lakhs.The exemption limit is the threshold of annual turnover above which companies have to mandatorily register under the GST regime.
- Extended the composition scheme to traders from informal sector rendering services or mixed supplies with a turnover up to Rs 50 lakh. The composition rate for service providers in the informal sector has been pegged at 6 per cent.
- In the meeting today, the GST Council also decided to allow Kerala to levy a cess to cope up with the natural calamities it faced last year. The cess is applicable only on intrastate transactions.
- Two ministerial panels have been formed to take a closer look at real estate and uniformity of taxation on lottery or other issues arising out of lottery
- To ease compliance burden, a single annual return with quarterly tax payments has been introduced for the composition schemes.
- Free accounting and billing software will be made available to small assessees upto Rs.1.5 crore turnover.
- The limit of Annual Turnover in the preceding Financial Year for availing Composition Scheme for Goods shall be increased to Rs 1.5 crore. Special Category States would decide, within one week, about the Composition Limit in their respective States.
- The limit of composition schemes for goods has been raised to Rs.1.5 crore at 1% GST rate.
To see Press Release click the see below:
Happy New Year
Work is an integral part of our life and also a good source of happiness. That’s why I wish that your job bring you personal growth and career advancement, moral satisfaction, warm trustful relationships and wealth in the coming year. Happy New Year!
Karthik & Sunil 