GST Migration From VAT, Excise & Service Tax

  • Blog|GST & Customs|
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  • By Taxmann
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  • Last Updated on 8 June, 2021

It is now clear that the long wait for GST is over and barring unforeseen circumstances, GST will be implemented on 1-7-2017.

Trade now does not have much time to get ready. The immediate action that is required is in respect of transitory provisions.

Switch over to GST Registration: 

Taxable Persons who are paying service tax, State Vat or Central Excise are required to migrate to GST. Many of the existing taxable persons have already migrated to GST Registration. Those who have not migrated should obtain a provisional GST Registration number as soon as possible. They should get single provisional registration for each State even if they have multiple units/branches/ divisions within one State.

Those taxable persons whose annual turnover is below Rs 20 lakhs but are presently paying tax are required to migrate to GST and then apply for cancellation. In fact, if they do not submit any further details, the registration will automatically get canceled. They should file a tax return as per their present registration for the period ending 30-6-2017.

Precautions while filing return for June 2017: 

The taxable persons should file tax returns up to date for the month ending June 2017. Great caution is required to file this return since if the input tax credit available is not properly reflected in the return, there will be a financial loss.

As far as possible, a taxable person should utilize the available Cenvat Credit and Input Tax credit of State Vat to the maximum possible extent. Only the minimum amount should be paid in cash. This will ensure that issues relating to carrying forward of credit.

Carry forward of input tax credit during switchover: 

Manufacturers and service providers may have unutilized Cenvat credit as of 30-6-2017. Similarly, dealers and traders may have an unutilized input tax credit of State Vat as of 30-6-2017. They should file their return for the period up to 30-6-2017. The balance credit as per this return can be carried forward as follows – 

    1. Cenvat credit return will be carried forward as CGST 
    2. State Vat credit will be carried forward as SGST. They have to file returns electronically in the prescribed form within ninety days.

Other Preparations for GST bill: 

GST Rules state the required contents of tax invoice. The present invoice should be suitably modified to comply with the requirements.

Dealers opting for a composition scheme should prepare a Bill of Supply instead of a Tax Invoice.

 

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