- I)REQUEST FOR GST REGISTRATION
As you would be aware that GST is slated to be implemented in India effective from 1 July 2017 (transition date), which will subsume majority of the current Indirect tax levies such as Central Excise, Service tax, State VAT, CST, Entry Tax, LBT/ Octroi, it is very important that we, the trade and industry, should familiarize ourselves and gear up for the single biggest Tax reform in India which will be transformational for our businesses.
In this regard, we wish to bring forth following vital points to your attention as they warrant early consideration and actions from all impacted.
GST Registration (Provisional)
A vendor is required to get itself registered if his aggregate turnover in a financial year exceeds twenty lakh rupees (ten lakhs in case of Arunachal Pradesh, Assam, Jammu & Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand). If the dealer is engaged in supply of goods in course of inter-state trade, the aforementioned threshold would not be applicable and the dealer would be required to register under GST irrespective of the turnover. In case of service providers having centralised registration and providing services from more than one location, would be required to obtain registration in the respective states from where the services are provided.
While provisional id and password have been allotted to the VAT/ Central Excise/ Service tax registrants, the process of uploading the application form along with the supporting documentation and submission of the GST enrolment application form has already started. It is crucial that you obtain the GSTIN (registration no. under GST) on a timely basis and intimate the same to us by sharing a scanned copy of the registration certificate once issued.
It is therefore requested to please share the GSTIN as soon as the same has been obtained and in case you do not wish to register yourself under GST, the same may be communicated to MahaGenco on timely basis. For your information, our Provisional ID is 27AAECM2935R1ZV. Request you to kindly note the same for your records and share your details accordingly.
Details of sales in the format specified would require to be uploaded on a monthly basis on the GSTN portal (due date of GSTR 1 for outward supplies is proposed to be 10th of the next month) by vendor. It should be ensured that correct details as required under GSTR returns are uploaded within the due date to enable Maha Genco to avail the Input tax credit of GST on time. Similarly, the GST return should be filed on the GSTN portal within due date and on a periodical basis (monthly, annually and any return as may be prescribed and within the due dates as may be prescribed)
Payment of GST
It shall be the responsibility of the vendor to pay off the GST liability on sale of goods and / or provision of services after claiming the input tax credit in respect of goods and services procured on a monthly basis within the specified due date (due date proposed to be 20th of next month), including liability under Reverse Charge Mechanism, if any.
Electronic matching of credits
One of the most significant feature of GST regime is electronic matching of credits on GST Network.
Every GST registered Supplier will be required to pay GST and file GST returns electronically, which would contain invoice level details. Details of input GST credit availed by Maha Genco as reported in the electronic GST return will be cross verified or matched with the details of GST paid and reported by the vendor and any mismatch will lead to loss of input GST credit to Maha Genco, which could also have working capital and cost implication.
Thus, it will be of utmost importance on part of Maha Genco & vendor to understand and comply with the requirements of electronic payment and invoice level reporting of taxes in the GST return in a timely and accurate manner for the recipient to realize the input GST credits.
Further, any mismatch in the GST return on account of differences in reporting a particular transaction shall be resolved mutually.
Invoices under GST (including Debit/Credit notes)
Under GST regime the invoices is to be issued in triplicate in case of supply of goods (i.e. original for recipient, duplicate for transporter and triplicate for supplier) and in duplicate in case of supply of services (i.e. original for recipient and duplicate for supplier).
Credit note / debit note to be issued by vendor should contain prescribed particulars and shall inter alia indicate respective invoices in relation to which the same has been issued. Further, it shall be the responsibility of vendor to disclose such debit/credit notes appropriately in the return of the month in which the same have been issued.
HSN / SAC Codes
Every GST registrant would be required to update the HSN/ SAC codes of the goods/services supplied for the purpose of return filing under GST. The list of HSN codes are available on the below site :- https://www.gst.gov.in/
The department has still not issued the list of SAC codes.
Every GST registrant will be assigned a rating on the basis of his level of compliance. Thus, non-compliance of Supplier will impact his rating and repeated instances of non-compliance may even result in denial of credit or black-listing of such Supplier. Therefore, it is important to understand the legal requirements concerning tax invoices, tax payments, return filing and comply with them all.
Dealers currently operating under the composition scheme under the current indirect tax regime should inform Maha Genco on their decision whether they would continue under GST as a composition dealer or would cease to opt for composition scheme.
Savings in Tax cost
GST regime will lead to availability of additional Indirect tax credits thereby reducing the cascading impact of current Indirect tax cost comprising but not limited to CST, LBT/ Octroi, Service tax for traders, VAT for Service providers. In order to fully realize the benefit of additional tax credits, it is pertinent to analyse the current applicable taxes, availability of credits vis-à-vis applicability of GST and input GST credits. Also, considering the anti-profiteering measures to be introduced and also as a condition to avail input GST credit, it is obligatory to pass on the benefit of additional tax credits to the customers by way of price reduction.
Review of Contracts/Purchase orders
In continuation to the above, it would be relevant to review the existing terms of our contract towards mutually agreeable amendments to the said terms, in order to factor the effects of the proposed GST legislation. In this regard, we request you to assess the expected impact of GST on the cost of your business operations and determine the consequent impact on pricing, if any.
Further, we shall communicate with you separately regarding Open purchase orders, if any, as on date of transition.
Let us work together to comply with all the requirements of GST and continue to strengthen our relationship.
We would separately reach out to you in coming weeks to discuss other important aspects of GST including transition provisions. Meanwhile, should you require any clarification/ support from our side, please do let us know.
- II) Details regarding GST registration of MSPGCL
- Name of the Customer: Maharashtra State Power Generation Co. Limited
- Contact details of MSPGCL: 022-26472131/ 4211 Ext. 3657, 2492
- PAN of MSPGCL: AAECM2935R
Provisional GSTIN number of MSPGCL: 27AAECM2935R1ZV
- From MSPGCL