Handling Sales with care under GST

 by CA. Sandeep Choudhary

The following points need to be taken care of while selling goods in GST regime:

1. Buyer Registered or Not

If your buyer is registered, take his GSTIN (Registration Number) and mention it in the Tax Invoice.

Ask the buyer (called 'recipient' under GST) to check GSTIN twice. Preferably, ask him to put his initials in your copy of invoice as proof of checking his GSTIN. Your recipient cannot take input tax credit unless you mention his GSTIN correctly. In monthly return GSTR - 1, Bill-wise details are required for every supply to Registered person.

If recipient is unregistered, Tax Invoice is mandatory for supply above Rs. 200/-. For smaller sales, you may prepare an invoice for the daily aggregate of such small sales.

You need to mention name and address of unregistered recipient in Tax Invoice if supply exceeds Rs. 50,000/-. However, bill-wise details are not required for supplies to Unregistered persons (except in certain cases discussed later).

2. Intra- state or interstate

If goods will move outside the state, charge IGST. Else, charge CGST and SGST.

In case of interstate supply above Rs. 2.5 lakh to Unregistered person, Bill-wise details are required in monthly GSTR-1. This is in addition to bill-wise details for all supplies to Registered persons (whether intra- state or interstate).

3. HSN code and Tax Rates

Make sure you know the HSN Code (classification) and tax rate of each item. Feed them in your accounting system and mention in Tax Invoice.

Similarly, if you levy additional charges (such as Packing charges, loading charges, delivery charges, transportation, transit insurance etc.), mention their SAC code. Note that such charges are fully taxable as supply of service.

4. E-way Bill

You need a e-way bill for movement of goods above Rs. 50,000/-. E-way bill is mandatory for sale within the state also.

To generate e-way bill, file Part A of Form GST INS-01 providing details of the goods as well as recipient on GSTN portal. Then, file Part B of Form GST INS-02 providing details of the transporter.

GSTN will then generate e-way bill. It is valid for a small period (1day for distance less than 100 km).

E-waybill is required in case of supply by a Composite Dealer also. E-waybill is required whether the goods are taxable or exempt. Even if there is no sale but goods are moved (transfer to godown, job work, etc.), e-way bill is required.
E-way bill may be generated by transporter or recipient also.

5. Tax Invoice

You need 3 copies of Tax Invoice:
a.     Original for Recipient
b.     Duplicate for Transporter
c.      Triplicate for Supplier

No threshold is prescribed, so duplicate for transporter will be required for very small sales also.

Debit Note/Credit Note may be issued for any modification in Tax Invoice.

Transporter must carry a copy of the Tax Invoice and e-way bill/EBN.

Note: In case of Composite Dealer or supply of Exempted Goods, there will be a Bill of Supply in place of Tax Invoice.

6. Payments received

If you have received any advance, you need to pay tax on such advance and to issue a Receipt Voucher. Further, the recipient has to reverse input tax credit if he does not pay you within 180 days. Thus, it is desirable to maintain payment records on bill-to-bill basis.

7. Monthly GSTR-1

This return has to be submitted monthly by 10th of next month. It contains the following bill-wise details:

a. All supplies to Registered persons.

b. Interstate supply above Rs.  2.5 lakhs to unregistered person.

c. All supplies through any e-commerce site.

Further, the following are also required:
a. Supplies to unregistered persons aggregated as per tax slab and state (bill-wise details not required).

b. Advances received and tax on such advance.

c. Debit Notes and Credit Notes

d. Tax invoice Serial number used from... to...

After you upload GSTR-1 by 10th, your registered recipient may point out any error or omission by 15th. You can accept or reject the same by 17th.

If you don't accept such claim, the department will pursue both parties for the mismatch. It will deny credit to the recipient while trying to collect tax from you.

There is no provision for revised return. However, corrections required can be mentioned in next monthly return in separate tables provided for this purpose.

After GSTR-1 is filed by 10th, there are 2 more monthly returns: GSTR-2 for inward supplies and GSTR-3 for tax payment by 20th. Your recipient's Input Tax Credit is finalized only when after GSTR-3 is submitted. These returns will be discussed separately in another post.