Things to Remember While Transitioning to GST


    Here are a few things to remember while transitioning to GST:

    Migrate to GST

    Taxpayers registered under Excise/VAT/service tax must enrol under GST. On enrollment, they will be provided with a GST certificate of registration on a provisional basis with the GSTIN. 

    New Registration under GST

    Here are the categories that come under the new registrations for GST:

    Tax on Goods or Services Supplied after GST

    One way to interpret tax on goods or services supplied after GST is by looking at the rules surrounding the taxation point. If the point of taxation for a good or service is before GST is implemented, it will be subject to taxation according to the previous laws, and GST will not apply. Conversely, any portion of a supply with a point of taxation after implementing GST will be subject to taxation under the GST regulations.

    Carrying Forward ITC

    Under the GST system, businesses will be able to carry forward any CENVAT credit or VAT credit that they have in stock. However, if integrated tax has been paid on such goods (for example, Central Sales Tax), the amount of credit that can be claimed will be limited to 30% for goods that are subject to 18% GST or higher. The available input tax credit (ITC) for other goods will be limited to 20%.

    Returning Goods

    When transitioning to the Goods and Services Tax (GST) system in India, it’s important to remember several key points. One such point pertains to the treatment of returned goods.

    Firstly, if goods are returned after the GST has been implemented and tax invoices have been issued, the return will be treated as a supply of goods under the GST regulations. The supplier will be required to issue a credit note to the recipient, which will be adjusted against the supplier’s tax liability.

    Secondly, the credit note will be issued under the previous tax laws if the goods are returned before GST is implemented. It will be adjusted against the supplier’s tax liability under those laws.

    It’s important to note that the input tax credit claimed by the recipient on the returned goods will also be adjusted accordingly under the GST system. Additionally, any tax already paid on the returned goods will be refunded to the supplier in accordance with the GST rules.

    Composition Scheme

    The Composition Scheme is a special tax scheme under the GST system in India, designed for small taxpayers. Under this scheme, eligible taxpayers are allowed to pay a fixed percentage of their turnover as GST instead of the regular GST rates. The composition rate varies depending on the nature of the business and can range from 0.5% to 5% of the turnover. However, businesses availing of this scheme are not eligible for input tax credits and are required to file quarterly returns instead of monthly returns. This scheme is applicable for persons with a turnover of up to Rs. 50 lakhs. 


    The above are a few points that must be noted while transitioning to GST. Businesses must also be prepared to adapt their accounting and invoicing systems to comply with the GST regulations. By staying updated and taking the necessary steps, businesses can ensure a smooth and successful transition. 

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