Latest Blogs from SBS and Company LLP

    Composition Scheme Under GST

    1. What is Composition Scheme under GST?

    Composition scheme under GST is an optional levy provided to the manufacturers, traders and Restaurants to opt for composition scheme whose aggregate turnover in the previous financial year does not exceed Rs. 100 Lakhs which leads to reduction of compliances for small scale businesses i.e. maintenance of books of accounts, issuance of invoices, furnishing of returns etc and to pay a fixed percentage of turnover as tax in lieu of paying taxes at higher rate. In case of suppliers located in special category states, the turnover limit to opt for composition scheme is Rs. 75 lakhs. 

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    Input Tax Credit Under GST

    1. What is Input Tax Credit under GST?

    GST is a value added tax where the tax paid by a supplier on all goods or services procured for further supply of goods or services by him shall be available as input tax credit (ITC), which shall be used to pay the GST collected on goods or services supplied by him. The difference between the GST collected and the ITC shall be paid in cash. ITC is defined to mean CGST, SGST and IGST paid including tax paid under reverse charge on supplies received by a tax payer. 

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    Goods and Services Tax

    1. Applicability of this document: This document on GST is applicable to all Micro, Small and Medium Enterprises having turnover up to Rs. 1.5 Crore. 


    1. Levy of GST:
      1. Brief about GST: GST stands for Goods and Services Tax. It is introduced to subsume multiple indirect taxes both at centre and state level. The current duties namely Central Excise, Service Tax, Additional Excise Duties, Additional Customs Duties, Value Added Tax, Octroi, Entertainment Tax and Luxury Tax are being subsumed into one tax namely GST. Hence, after its introduction, GST and customs duty will form the indirect taxes. GST is a destination based consumption tax. Hence, the state where a supply of goods and services are consumed will receive the corresponding GST paid.

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    Valuation Under GST

    1. Overall Scheme of Valuation under GSTThe value of supply of goods or services or both shall in general be the transaction value i.e. the price actually paid. In cases where consideration is non-monetary or supplies between related persons, offices/units of same entity located in different states, value shall be determined in the prescribed manner. Further, in case of certain notified supplies, the value shall be determined in the manner as prescribed.

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    1. What are inter-state and intra-state supplies under GST? What is their relevance?

    GST is a levy on supply of goods or services. To levy GST, supplies are categorised in two viz inter-state supplies (supplies from one state to another) and intra-state supplies (supplies within the state). In case of inter-state supplies, the Central Government will levy Integrated Tax under IGST Act, 2017 and in case of intra-state supplies, Central Government will levy Central Tax under CGST Act, 2017 and State Tax under SGST Act, 2017.

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