Sell an E-way bill of final consumers

The e-way account is a document that the person handling the transport/vehicle must deliver if the value of a product it has is more than Rs. 50,000. Under certain circumstances, the end user may also need to create an electronic account. In this article, we will look at cases where consumers/citizens need to create an e-mail account and steps to create the same.

1)  What conditions are necessary when a consumer is required to create an electronic account?

In cases where products higher than Rs. 50,000 has been transferred by the owner of the vehicle (provided that the consumer’s consumer is unlisted), he must submit a bill for the transfer of such goods. The consumer can enter the vehicle number in Part B of the Form GST EWB-01. If the person who transfers the product is an unlisted person or natural citizen, he may either request that the supplier has created an e-account or he can create himself by signing in to the citizen’s portal.

2) A step to creating an e-way bill by citizens

Step-1: Visit e-way bill portal

E way bill portal

 

Step-2: Go to “Registration” and select “E-way account for citizens”

E-way bill for Citizens

 

Step 3: Click “Create New EWB” to create an e-way account

 

Generate New EWB

Step 4: Fill out the basic information in the application for login and click “Continue to Bill Generation”

Bill Generation

  • The first step requires the consumer to fill out the basics such as:
    • State (Duties) – Must be in respect of Address as mentioned
    • Name – Enter the legal name (Mandatory)
    • PAN
    • Email and mobile phone number
    • Complete Consumer Address
  • We can also note that all information here (excluding email and PAN) is mandatory and must be filled with the consumer in order to create an e-mail.
  • The consumer needs to request an OTP that will be sent to a mobile phone and must be verified on the same screen.
  • After following the above information, the consumer can click ‘Continue calculating a generation’ after being marked with a statement.

Step 5: Fill out the details of the items that are transported along with vehicle information.

  • In the screen that appears, select the transaction type as internal or provided
    • If the transaction type is lending, then information from “From” will be automatically based on information that is entered, in the previous step.
    • If the transaction type is internal, then the above component (‘To’) will be automatically.

details of the items

  • Mandatory fields in the ‘To’ section are:
    • GSTIN of whom the goods are transferred to -This will be “URP” if the person is an unlisted taxpayer
    • PIN and state of the person to whom products are sent
  • Product information such as product name, HSN, taxable value (including CGST, SGST, IGST fraction), mode of transport, approximate distance and vehicle number must be filled in.

Item details’ section

Part B: component consists of the vehicle information to be registered.

1)  Approximately distance (to ensure e-mail account value)

2)  Method of transport

3)   Vehicle number

  • The above options are different for different types of transactions. The transaction type to create an e-mail account can be as follows:

1) Export and internal demand – contains the following categories, supply, export, employment, SKD / CKD, the recipient does not know, for personal use, exhibitions or purchases, graphs and others.

Step 6: After completing this information, click ‘Send’. E-way account with a unique e-way account number gets a picture.

3)  Upgrading, printing and invalidating an e-way bill

e-way bill update

 

After a bill has been received and the vehicle’s number needs to be updated/revised, help the following steps to update the same:

  • The consumer must enter the mobile phone number and
  • E-way account number of the one created in the previous step and established OTP.

This step will further lead to a screen that requires us to enter the new vehicle number.

The same steps mentioned above (ie mobile phone number and electronic account number) can be used to print the e-road account from the portal and to cancel the e-account.

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What is a composite dealer in GST?

GST Act requires multiple compliances in relation to tax payment, tax return filing, invoicing etc. However, the dealers that work at a smaller level may have a limited turnover and may not have the required resources to comply with the complicated provisions. Thus, the composition scheme has been introduced to minimize the burden of tax compliance for small taxpayers. The dealer who opts for Composition Scheme u/s 10 of CGST Act is known as a Composite dealer.

The scheme is available to those whose aggregate turnover in a financial year does not exceed Rs.75,00,000. However, the scheme is available only to the supplier of goods and not a supplier of services (except restaurant service). It is also not available to persons who supply goods outside the state. This scheme is optional.

What are the Benefits of the Composition Scheme?

  1. Minor compliance (return, maintenance of books for records, issuing invoices)
    Limited tax liability
  2. High liquidity as taxes are at a lower rate
  3. The dealer has to pay a fixed percentage of turnover as tax and need not worry about complicated tax calculations.
  4. They have to file quarterly returns and not monthly returns like a normal taxpayer.

What are the drawbacks of the Compilation Scheme?

  1. A limited territory of the business. The dealer is not allowed to perform interstate transactions
  2. No entry Tax credit available to the composition dealers
  3. The taxpayer will not have the right to deliver released goods or goods through an e-commerce portal.
  4. The dealer cannot go for the inter-state supply of goods.
  5. The dealer is not entitled to Input Tax Credit.
  6. The dealer cannot charge GST in their invoice and thus cannot recover the tax from the buyer.

1) Who can opt for Composition Scheme?

  • Businesses with annual turnover up to Rs 1.0 crore* can opt for composition scheme.
  • Turnover of all businesses with same PAN has to be added up to calculate turnover for the purpose of composition scheme.
  • Only Manufacturers of goods, Dealers, and Restaurants (not serving alcohol) can opt for composition scheme.
  • The threshold limit for opting into a composition scheme is recommended for an increase to Rs. 1.5 crores but yet to be notified

2) What is the tax rate applicable to the distributor of the compositions?

Please use the chart below to understand the tax rate on turnover applicable:

Tax Rate

3) Is it obliged to pay taxes under the Reverse Collection Mechanism covered by the Compilation Scheme?

  • A component dealer must pay a tax under the Reverse Collection Mechanism whenever applicable.
  • The rate applicable to the supply is the rate at which the GTS is to be paid. This means that the rate according to the composition scheme should not be used for the purpose of reverse collection.
  • Also, no ITC is available for a tax paid under a reverse charge for a dealer of a composition.

4)  I buy goods from an unregistered dealer. Do I need to pay tax?

  • A normal rate tax should be paid for purchase by an unregistered dealer only for the months of July and August 2017. Since September, there is no need to pay taxes on these procurements.
  • ITC is not available for a tax paid under a reverse charge.

5)  Do I need to pay IGST interstate purchases by attracting a reverse charge?

  • IGST should not be paid by the dealer to the composition. The dealer is obliged to pay tax under a reverse charge, the import of a service or the purchase from an unregistered dealer must pay only CGST and SGST.

6) How should the Tax amount be calculated?

A composition dealer is required to pay tax at a specific rate on total sales. Also, the dealer has to pay tax under reverse charge on specified purchases, purchase form unregistered dealer and import of services.

This means that Total GST Payable =

Tax on supplies (net of advance and goods returned)

+ Tax on B2B transactions where Reverse Charge is applicable

+ Tax on B2B purchases from Unregistered suppliers

+ Tax on Import of Services

The rate of Tax on transactions under Reverse Charge, purchase from an unregistered dealer and import of services will be at normal rates, i.e. the rates applicable to the supplies. Rates under Composition Scheme are applicable only to sales of a composition dealer.

7) What are the conditions for using the input credits of shares that lie at the time of transition?

The following are the conditions that must be decided by the taxpayer to use the credits for entry at the time of the transition from the scheme for drawing in a normal scheme:

  • Input or merchandise will be used to be taxed.
  • The CENVAT loan could be required in the previous model, but could not claim to be under the compilation scheme.
  • ITC has the right to use it under the GTS regime.
  • The taxpayer has invoices of input taxes paid for those goods.
  • Invoices should not be older than 1 year from 1 July 2017 (ie not dated before 1 July 2016)

8) What are the returns for the Composer Distributor?

  • A taxable person is obliged to submit only one report, that is, GSTR-4 on a quarterly basis and an annual return to FORM GSTR-9A.
  • Also, automatically prepared details are not available for the composer dealer for the fourth and ninth months of September – October and October – December. This means that all sales details should be entered manually by the Composition Dealer.

9) What will happen if you cancel the composition scheme in the middle of the year?

When a dealer selects a compiled scheme, all normal rules apply from the date of removal.

For example, the dealer is selected from the composition on October 15, 2017. This means that the dealer will have to submit two GSTR-4 for July-September and October (15 days). The dealer will also have to submit GSTR-1, GSTR-2 and GSTR-3 for the period from October 2017 (sale from October 15 to the end of the month)

 

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Misconceptions on TDS – Tax deducted at source

Misconceptions about TDS (Tax denied at source)

I recently published articles on TDS for periodic deposits and TDS for the withdrawal of the EPF. I received lots of TDS comments/questions about the amount of the source. I have noticed that there are many misconceptions about TDS.
Many investors think that TDS refusal completely removes their tax liability. Another misrepresentation is – “Without TDS means, without a tax obligation“.

What is TDS?

The tax amount of the source or TDS is a tax collection process from the tax department. This involves collecting revenue at the very source of income. It is an essentially indirect tax collection method that combines the concepts of “pay as you earn” and “collect as you earned.”

Example: You reserve a bank fixed deposit for Rs 3 Lakh for 1 year @ 10% per annum. You will earn an income of interest of 30,000 pounds per year. The bank will deduct TDS at a rate of 10%, for example, 3,000 rubles (10% from 30,000 rubles) and deposits of 3,000 rubles with the income tax department (on behalf of you). The bank issues you a TDS certificate (Form 16A) that reflects this refusal.

Misconceptions about TDS

No TDS means any tax liability

For example – If an employee withdraws his EPF money before 5 years of service and if the amount of withdrawal is less than 30,000 Rs, then the TDS is not applicable.

But this does not mean that the withdrawal is tax exempt. It is only that there is no need for the employer (Deductor) to subtract the TDS of these types of withdrawals. However, the obligation to pay taxes (if any) to this amount of EPF lies with the employee.

TDS selection completely removes the tax liability

  • It is a mistaken opinion that, if the employer takes away the TDS, you do not have to worry about filing your tax return. Your employer takes TDS only on income from a salary, and you may have income from other sources, and you must include those in the tax returns.
  • Another misconception is – “No additional income tax will be payable if taxes are already deducted (TDS) of income“. In fact, depending on the nature of the income, the TDS rates vary. For salaries, employers adjust the rate so that the employee’s entire tax liability is deducted by the end of the year. On a fixed deposit interest, banks charge TDS to 10 per cent. But if the deposit holder does not provide his permanent account number, the bank’s tax deductible at 20 per cent.

TDS and Income tax Slab

 

  • Most of the older citizens submit a Form 15H template to avoid TDS. In many cases, older citizens feel if they do, they are not obliged to pay taxes. But if you have two or three fixed deposits in separate banks and submit a Form 15G or 15H form to all banks, you will need to pay a tax if the total interest rate on all fixed deposits exceeds the income limit.

Latest TDS Rates FY 2018-19 (AY 2019-20) 

Below are the latest TDS rates applied for the financial years 2018-19.

Latest TDS Rates Chart For Financial Year

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