GST - Goods and Service Tax

• Registration needs to be obtained in every state from where a taxable supply of goods and or services is being made. The Government has initiated the process of migration of the existing tax payers to GST and is issuing provisional ids and passwords to every tax payer registered under current Indirect Tax legislations.
• Accordingly, if you are an existing tax payer (Excise Duty, VAT or Service Tax), we would request you to obtain the necessary registrations in a timely manner and make them available to IndusInd Bank Limited (‘IBL’) as soon as possible to enable us to update your records.
• In case of multiple GST registrations (state-wise / business verticals), we request you to kindly update IBL of the same along with the relevant place of business for the purpose of invoicing / billing.
• To enable us to issue GST compliant invoices on a timely basis, we request you to share with us the details of your GST Registration Numbers. You may please visit GST portal available on our website for updation of your GSTIN or you may also visit nearest branch to furnish your GSTIN.

We are pleased to have you as a valued customer and we sincerely look forward to continuing our business relationship in the future, refer below FAQs for any queries.

• GST is applicable on supply of goods or services as against the current regime which levies excise duty/ VAT/ service tax on the manufacturer or sale of goods or provision of services respectively.
• It is a destination based consumption tax which means that tax will accrue to the State or Union territory where the goods or services are consumed.
• GST is levied by both the federal and state or provincial governments whereby a Central Goods and Services Tax (‘CGST’) and a State Goods and Services Tax (‘SGST’) / Union Territory Goods and Service Tax (‘UTGST’) respectively will be levied on the taxable value of every transaction of supply of goods and services.
• In respect of Intra-State (within the state/ union territory) supplies both CGST and SGST/ UTGST shall be levied with CGST Portion payable to Central Government and SGST Portion payable to respective state. In respect of Inter-State (across the state) supplies, Integrated Goods and Service Tax (‘IGST’) shall be levied and collected by centre.
• Every assesse will be assigned a state-wise PAN-based Goods and Services Taxpayer Identification Number (GSTIN) which will have 15 digits. Structure of GST Identification Number is as below:
  • First two digits of GSTIN will represent the state code. Each state has a unique two digit code like “27” for Maharashtra and “10” for Bihar
  • The next ten digits of GSTIN will be the PAN number of the taxpayer
  • 13th and 14th digit indicates the number of registrations an entity has within a state for the same PAN
  • The last digit will be a check code which will be used for detection of errors
  • The provisional GSTIN obtained by the assesse, shall be the final GSTIN.

Illustration:

For example, if a legal entity has single or one registration only within a state then GSTIN will be “27ABACK2785P01R”

• GST shall apply to all the services barring few which shall be notified by the Government on recommendation of GST Council (refer exemption module)
• Government on recommendation of GST Council shall notify list of exempted goods and services which would be common for the Centre and States (refer exemption module)
• The GST Act applies to the whole of India except Jammu and Kashmir. Thus, supplies made to/from Jammu and Kashmir will need to be treated separately. Where a supply is made to Jammu and Kashmir and location of supplies is outside Jammu and Kashmir then IGST will apply.
• Assesse with an aggregate turnover of less than INR 20 Lakhs will be exempt from taking registration under GST. For the purpose of above mentioned threshold limit, turnover shall be calculated on an all India basis.
• Eligible assesse can opt for composition scheme. Assesse whose turnover in the preceding financial year is less than INR 50 lakhs are eligible to opt for composition scheme under the CGST Act.
• Tax payers shall be allowed to take credits of taxes paid on inputs and utilize the same for payment of output tax subject to conditions as prescribed under Input Tax Credit Rules
• Exports shall be treated as Zero-rated supplies. The exporter shall have an option to pay output tax and claim refund or export under bond without tax and claim refund of ITC.
• Import of goods and services shall be treated as inter-state supplies and would subject to IGST in addition to the applicable custom duties.
• IGST paid on imports shall be available as ITC for further transactions.
• GST rates on goods as well as services for Financial Sector have been specified in the module pertaining to Rates, HSN and SAC.
• In relation to a Banking Company, the following aspects need to be taken into considerations:
  • Every state shall be considered as a distinct person under GST, therefore a Bank operating in many states will have registration in each state;
  • Separate compliances would need to be undertaken for each registration;
  • Specific provisions are applicable to a banking Company for availment and reversal of credit;
  • The details to be captured in an invoice issued by a Banking Company has been relaxed.
  • As per Section 150 of the Central Goods and Service Tax Act, 2017 an additional information return may need to be filed by a Banking Company.

Readers are requested to note that the FAQ and other information relating to Goods and Service Tax, placed below, have been compiled by IndusInd Bank based on our understanding of the law and rules thereunder. These shall not be construed as our advice to our client(s) or any other reader. IndusInd Bank strongly recommends that a client or anyone who needs actionable information relating to GST may read the law and regulations themselves or get the assistance from professional advisors / experts in the field. The information provided herein below are not binding on IndusInd Bank and anyone acting on the information furnished herein is deemed to act on his/her own volition.