Distributors GST Handbook

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Contents Introduction to GST Basics of GSTTaxes under GSTApplicability of GSTGSTINRates of Marico GoodsComposition schemeInput Tax CreditASP, GSTN, GSPGST Compliance Impact on Distributor Transition Stock Sales Return Invoice format Claims2

Glossary of terms GST-Goods and Service TaxCGST- Central Goods and Service TaxSGST-State Goods and Service TaxIGST-Integrated Goods and Service TaxGSTN-Goods and Service Tax NetworkGSP-GSTN Suvidha ProviderASP- Application Service ProviderGSTR-Goods and Service Tax ReturnITC-Input Tax CreditHSN-Harmonised system of nomenclatureSAC- Service Accounting Code3

Basics of GSTWHAT IS GST ?APPLICABLILITYGST is acomprehensive valueadded tax on SUPPLYof goods and servicesOn SUPPLY of goodsor services (asagainst manufacture,sale or provision ofservice) made for aconsiderationDESTINATIONBASED TAX Levied wheregoods and servicesare consumed Exports are nilrated Imports aretaxed.OUT OF GST Alcohol for humanconsumption Electricity Real EstateDUAL GST Central GST levied andcollected by the CentreState GST levied andcollected by the StatesIGST-Levied for interstate TransactionPETROLEUMPRODUCTSDiesel, Petrol, CrudeOil, Natural Gas,Aviation Turbine FuelMay be brought toGST by notification4

Taxes under GSTPresentTaxRegimeWithin thesame StateFor OutsideState SuppliesCGST SGSTIGST/UGSTVATPurchase TaxSurcharge/CessEntry Tax &Octroi Luxury TaxCST ImportBCD IGST ExportNil Rated No GSTBCDNil RatedCVDSADAdditionalDuty Excise Duty and Service Tax subsumed under CGST Toll Tax, Taxes on land & building, electricity duty are NOT subsumed in GST5

Does GST apply to Me?Turnover 20L/ 10L(SpecialStates*)Inter StateSupplierAgents/Personacting on behalfof supplier* Special States: Arunachal Pradesh,Assam, J&K, Manipur, Meghalaya,Mizoram, Nagaland, Sikkim, Tripura,Himachal Pradesh and UttarakhandPaying tax onReverse ChargeNon ResidentTaxable PersonCasual TaxablePerson6

Know your GSTIN15 digit alpha- numeric registration no22State CodeExisting Excise/ST Assessees 5AAAAA0000A1ZPermanent Account Number (PAN)Entity Noof the samePAN holderin a stateAlphabet‘Z’ bydefault Check sumdigitValid PAN holders will get Provisional IDsOne Provisional ID per StateMultiple locations in 1 State to be registered asAdditional PlacesFilling PAN and Contact details for OTP verificationUploading documentsVerification by officer within 3 working daysCertificate of RegistrationNewRegistrationsLink to check GSTIN stration-status7

Marico GSTINsSrNoStateSrGSTN Registration no. hBihar5StateGSTN Registration no.14Andhra ra16AAACM7493G1ZA19Delhi07AAACM7493G1Z97Assam ab03AAACM7493G1ZH10Assam - Unit IAssam - UnitIIWest and05AAACM7493G1ZD839

Rates of GST on Marico GoodsSaltEdible OilsPlain OatsMedikar28 %Body LotionBio Oils28%18%18%18%Livon & HairCreamSet Wet5%ReviveHair OilFoods12%5%5%0%CNO28%28%

Composition SchemeIneligible forComposition Scheme 20LacsAggregateTurnoverService ProviderInter State SupplierImporter/ ExporterSupplies Goods out ofGST 75LacsRates of Tax onTurnoverIf aggregate turnover is more than 20 Lacsbut less than 75 Lacs (50 Lacs for NEStates), the dealer has an option to go intoComposition Scheme. Lower Tax RatesNo need to issue TaxInvoiceLesser Compliance – 4Quarterly and 1Annual ReturnNo detailed recordsManufacturer – 2%Other Supplier – 1% Can NOT avail InputTax CreditCannot charge tax oninvoicePenalty for wronglyopting CompositionScheme10

Input Tax Credit(ITC)WhatisITC?Input credit means at the time of paying tax on output,you can reduce the tax you have already paid on inputs.Tax to be Paid Output Tax – Input Tax CreditUsed for furtherance of businessMust have a tax invoice of purchasesShould have received the goods/servicesTax charged has been paid to the governmentSupplier has filed GST returnPayment to vendor within 180 daysPriorityOrder ofUtilizationof eriaforavailingITCNo Input Credit on Staff Welfare Works Contract onimmovableProperty Purchase from11composition dealer

ASP, GSTN, GSPApplicationService Provider(ASP)GSTN SuvidhaProvider(GSP) Accounting, Invoicingand other software's enable businessesto comply with GST Bridge between ASP/business and GSTN Fees depend onmarket forces Match sales andpurchase invoices tosettle tax credits Having ASP is optional. File GST returnsGST Network(GSTN) Not for profit private co.Shareholding of GOI, Govt ofStates, UTs, Fin Institutions Mandate Manageinfrastructure for GSTimplementation 34 GSPs notified Having GSP iscompulsory12

GST ComplianceMonthlyQuarterlyGSTR 4Return forCompositionDealersBy 18th ofsucceedingquarterMiscellaneousGSTR 9Annual ReturnBy 31stDecember ofnext FYGSTR 10Final ReturnWithin 3months ofcancellation ofRCGSTR 6Return for Input Service Distributor13

Consequences of Non ComplianceLate Fees and InterestMonthly/ Quarterly Returns: Rs 100/ per day for every day subjectto a maximum of Rs 5000/Annual Return : Rs 100/ per day for every day subject to a maximumof 0.25% of aggregate turnover* Interest on total tax due – Rate to be notifiedCancellation of RegistrationRegular Dealer : Returns not furnished for 6 consecutive monthsComposition Dealer : Returns not furnished for 3 consecutivequartersPenalty : Rs 10,000/- or 100% of Amount of Tax evadedImprisonment of term ranging from 1 year to 5 years dependingon tax evaded with slab ranging from 50 Lakhs to 250 Lakhs14

What has changed ?Points ofDifferencesPresent Tax (VAT)ApplicabilityOn sale of goodsOn Supply – Sale, Exchange,Transfer, Rental etc.InvoiceMatchingNot monitored extensivelyInvoices of supplier and recipientNEED TO MATCHInput TaxCreditAvailable based on returnsCan be availed ONLY WHENINVOICES ARE MATCHED andSELLER PAYS TAX LIABILITYInput TaxNot able to claim on allbusiness expensesAvailable for ALL INWARD suppliesused for furtherance of businessInter StateTransactionsCST imposed which CentralGovt collects and gives tosupplying stateIGST to apply which goes to thedestination StateStock TransferNo tax if declaration inForm F filedIGST payable on inter state StockTransferInteraction withGovernmentOnce a quarter or monthMinimum of 3 times EVERY MONTH(for regular dealers)Return RevisionAllowed currentlyGSTNo scope of revising return15

Credit of Inventory on 30th JuneCNO/Plain Oats/Edible OilsNo credit as theyare presentlyexempt.Deo & Hair GainNo credit as they arepresently subject toState Excise.Other BrandsTake credit @ 60% (if GST rate - 18%) or40%(if GST 18%%) of CGST charged on NRvalue. For eg Hair Oils is at18% CGST rate ,so under CGST you can claim credit of5.4%(60% of 9%(CGST rate for GSTcategory of 18%))VAT Credit : Carry forward VAT credit (as per last return) as SGSTCriteria Regular registered dealer under GSTGoods intended to be used in taxable supplySupplies should be eligible for credit under GSTNeed to file declaration of stock in prescribed form within 90days of GST GO-LIVE16

Sales Return after 30th JuneDistributorDistributorSale between 1st Jan’17 to 30th June’17Return on or after 1st July’17Retailer will show this as saleto distributor and chargeGST. Distributor to book asPurchase.Sale between1stJan’17 to30thJune’17Registered RetailerUnregistered RetailerANDReturn between 1st July’17 to 31st Dec’17Distributor to claim refundof taxes paid on original saleRetailer not to chargeGST on return* In case, sale is before 1st Jan’17 or return is after 31st Dec’17, distributor is not17eligible for refund of originally paid taxes.

Formats of InvoicesTax InvoiceUnique Invoice No (Consecutive)Supplier GST no.Recipient GST no.HSN CodeReceiptVoucherFor receipt of advancefrom the customerGST applicable on advanceon the date of its receiptTaxable ValueGST RateGST AmountRevised Invoice/ Debit orCredit NoteFor purchase fromunregistered dealersvFor Reverse ChargesuppliesPaymentVoucherUnique Dr/Cr Note No (Consecutive)Supplier GST no.Recipient GST no.Sl No and Date of Original InvoiceTaxable ValueGST RateGST AmountBill ofSupplySupply of exemptedgoodsSupplier paying tax underComposition SchemeNo tax amount18

Distributor Claims No change from existing practiceClaims forGoods IncentivesBrand VisibilityFreight claimsSubsidies. Change from current practice.Through Service Invoices** The rate of GST for services would be 18%Claims forServicesExisting process willcontinue for L&D19

Become GST Ready !We are here tohelp you !customer.gst@marico.com20


2 Contents Introduction to GST Basics of GST Taxes under GST Applicability of GST GSTIN Rates of Marico Goods Composition scheme Input Tax Credit ASP, GSTN, GSP GST Compliance Impact on Distributor Transition

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