receipt and voucher in Aster Billing

What should a taxpayer do when he receives money against Invoice already raised?

The taxpayer is required to issue a Receipt Voucher.  Also when a registered person receives an advance, the registered person is required to issue a receipt voucher. This voucher is the proof that payment has been received.

A supplier of services is also required to calculate GST on the advance received and pay it to the government.

Note: A supplier of goods is not required to pay GST on advances.

For example –

Mr. A entered into a contract with B to supply some services worth Rs 20 lakh. GST applicable to these services is 18%. An advance of Rs 10 lakh is given by B to A

As advance is received by Mr. A, he will have to issue a Receipt Voucher of Rs 10 lakh.

A will also have to pay GST as follows –

Total GST Payable – Rs 10 lakh X 18% = Rs 152542                                                                                            100% + 18%                        

Amount of CGST @ 9%  = Rs 76271

Amount of SGST @ 9%  = Rs 76271

Format of Receipt Voucher –

The format of Receipt Voucher has been provided by the CGST Rules, 2017:

1. Name, address, and GSTIN of the supplier
2. Serial number
3. Date of its issue
4. Name, address and GSTIN or Unique Identity Number, if registered, of the recipient
5. Description of goods or services
6. Amount of advance taken
7. Rate of tax (central tax, State tax, integrated tax, Union territory tax or cess)
8. Amount of tax charged in respect of taxable goods or services (central tax, State tax, integrated tax, Union territory tax or cess)
9. Place of supply along with the name of State and its code, in case of a supply in the course of inter-State trade or commerce
10. Whether the tax is payable on reverse charge basis
11. Signature or digital signature of the supplier or his authorised representative:

Exceptions for issue of Receipt Voucher –

1. When at the time of receipt of advance the rate of tax is not determinable, the tax will have to be paid at 18%
2. When during receipt of advance the nature of supply is not determinable the nature of supply shall be deemed to be interState supply.

HSN code

What is HSN Code?

The Harmonized Commodity Description and Coding System generally refers to “Harmonized System of Nomenclature” or simply “HSN”. It is a multipurpose international product nomenclature developed by the World Customs Organization (WCO). It first came into effect in 1988. How does HSN code work?It has about 5,000 commodity groups, each identified by a six-digit code, arranged in a legal and logical structure. It is supported by well-defined rules to achieve uniform classification.Why is HSN important?The main purpose of HSN is to classify goods from all over the World in a systematic and logical manner. This brings in a uniform classification of goods and facilitates international trade.HSN WorldwideThe HSN system is used by more than 200 countries and economies for reasons such as:Uniform classificationBase for their Customs tariffsCollection of international trade statisticsOver 98% of the merchandise in international trade is classified in terms of the HSN.Harmonized System of Nomenclature number for each commodity is accepted by most of the countries. The HSN number remains same for almost all goods. However, HSN number used in some of the countries varies little, based on the nature of goods classified.HSN in IndiaIndia is a member of World Customs Organization(WCO) since 1971. It was originally using 6-digit HSN codes to classify commodities for Customs and Central Excise. Later Customs and Central Excise added two more digits to make the codes more precise, resulting in an 8 digit classification.Understanding the HSN CodeThe HSN structure contains 21 sections, with 99 Chapters, about 1,244 headings, and 5,224 subheadings.Each Section is divided into Chapters. Each Chapter is divided into Headings. Each Heading is divided into Sub Headings.Section and Chapter titles describe broad categories of goods, while headings and subheadings describe products in detail.For example:Handkerchiefs made of Textile matters 62.13.90First two digits (62) represent the chapter number for Articles of apparel and clothing accessories, not knitted or crocheted.Next two digits (13) represent the heading number for handkerchiefs.Finally, last two digits (90) is the product code for handkerchiefs made of other textile materials.India has 2 more digits for a deeper classification.If the handkerchiefs are made from a man-made fibre, then the HSN code is 62.13.90.10.If the handkerchiefs are made from silk or waste from silk., then the HSN code is 62.13.90.90.Services Accounting Code (SAC) in GSTLike goods, services are also classified uniformly for recognition, measurement and taxation. Codes for services are called Services Accounting Code or SAC.

inventory management in Aster Billing

Why Inventory Management?

Inventory Management involves activities which allow an entity to have a better control over various inventory items from the time goods are received to the point of sale.This is more critical for the manufacturers or retailers dealing with perishable stock which has a short expiry period. Some of the important benefits to an entity from a good inventory management include No Stock out, avoidance of overstocking of goods, cost saving, minimum working capital needed etc. To know more and simplify your inventory managemnt,

What is Goods and Services Tax (GST)

 What is Goods and Services Tax (GST)?

GST is a single uniform indirect tax which was introduced to replace Central and State indirect taxes such as VAT, CENVAT, and others. GST applies on all types of businesses, small or large. This makes it one of the greatest tax reforms in the country. The entire nation will follow a unified tax structure.

As the name suggests, GST will be applicable on both goods and services and India will follow a dual system of GST to keep both the Centre and State independent of each other. The GST council will be headed by the Union Finance Minister and it will consist of various State Finance Ministers. GST will be devised as a four-tiered tax structure with tax slabs of 5%, 12%, 18%, and 28% for various different categories of products and services. 0% rate is kept for most essential goods such as rice, wheat.

2. What are the indirect taxes that GST has replace?

Designed as a uniformed tax for the entire nation, it will replace the following indirect taxes earlier levied by the Centre and the State:

(i) Taxes levied and collected by the Centre:

a. Central Excise duty

b. Additional Duties of Customs (commonly known as CVD)

c. Special Additional Duty of Customs (SAD)

d. Service Tax

AND

(ii) Taxes levied and collected by the State:

a. State VAT

b. Central Sales Tax

c. Entertainment and Amusement Tax (except when levied by the local bodies)

d. Taxes on lotteries, betting and gambling

3. What is the framework that the GST  follows?

Like other countries such as Canada and Brazil, India will follow the dual form of GST. At the intra-state level, where goods and services are sold within the state, CGST (Central Goods and Services Tax) and SGST (State Goods and Services Tax) will be levied.

When selling goods and services into other states (inter-state sales), IGST (Integrated Goods and Services Tax) will be levied. Importing goods will come under IGST as it will be considered as inter-state supply. Imported goods will also attract basic customs duty.

Exports and supplies to SEZ, however, will be zero-rated.

4. Benefits of GST

As mentioned earlier, GST will unify taxation system in the entire nation. This will help in removal of the cascading tax effect. Cascading effect refers to tax to be paid on a tax. Under GST, this will no longer happen as the unified tax will bring the entire indirect tax system under one umbrella.

Another important benefit is that under GST, the input tax credit can be availed on both goods and services, which eliminates the cascading effect.

GST will also unify the returns and compliances as there will no separate VAT and service tax.

Read our article to know all the benefits of GST.

5. Who are the taxable persons under GST?

Short answer is a person who carries out any business at any place in India and who is registered or required to be registered under the GST Act.  Amongst others, GST registration is mandatory for:

a. Any business whose turnover in a financial year exceeds Rs 20 lakhs (Rs 10 lakhs for North Eastern and hill states)

b. An input service distributor 

c. An E-commerce operator or aggregator

d. A person who supplies via e-commerce aggregator

Here is a complete list of taxable persons under GST.

6. What is a GSTIN?

GSTIN refers to the unique GST identification number that every business will be allotted. Every taxpayer will be allotted a state-wise, PAN-based 15-digit Goods and Services Taxpayer Identification Number (GSTIN). Also, note that having PAN is mandatory for register under GST.

Registering under GST is quite simple and is explained in simple steps in our article. 

7. What is Reverse Charge?

Usually, when the supplier supplies goods, the tax is levied upon the supplier. In certain cases, the tax is levied upon the buyer of the goods. This is called reverse charge as the chargeability of tax gets reversed.

This is not new under GST, as under the previous VAT regime, the reverse charge existed, but only on services. Now, under GST, it will be applicable on goods as well.  

8. What happens to mixed supply and composite supply under GST?

Under GST, this new concept of mixed supply and composite supply has been introduced. This will cover all supplies made together, whether the supplies are not related or not. This concept is some what similar to the bundled services which were there earlier. Only the concept of mixed supply is entirely new.

Let us look at these in detail.

Composite supply refers to a supply that comprises of 2 or more goods or services which are bundled and supplied together. Out of these, only one item can be of principal supply, however, these items cannot be supplied separately. Here is where the concept of composite supply comes in.

For example, when goods are packed, and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply. Insurance, transport cannot be done separately if there are no goods to supply. Thus, the supply of goods is the principal supply.

A mixed supply is when 2 or more individual supplies of goods or services are made together with each other by a taxable person, for a single price. Each of these items can be supplied separately and is not dependent on any other.

For example, a supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drink and fruit juices, supplied for a single price is a mixed supply. All can be sold separately. Since aerated drinks have the highest GST rate of 28%, aerated drinks will be treated as principal supply.

Read our article on mixed and composite supply to understand better.

9. What is continuous supply?

When goods and services are offered or supplied periodically (that is every fortnight or every month, etc.), and payments are also made periodically, it is called a continuous supply.

For example, a telecom and internet provider will provide continuous supply as it is provided for a long time and also the payments are done every month or quarterly.

10. What is a compliance rating?

The GST compliance rating is a performance rating that is given to all registered taxpayers. This rating tells you how complaint the supplier will be with respect to GST provisions. This gives an option for the buyer to choose the seller based on the GST compliance rating.

EWAY BILLING @ ASTER BILLING

What is an eWay Bill?

EWay Bill is an electronic waybill for movement of goods to be generated on the eWay Bill Portal. A GST registered person cannot transport goods in a vehicle whose value exceeds Rs. 50,000 (Single Invoice/bill/delivery challan) without an e-way bill that is generated on ewaybillgst.gov.in Alternatively, Eway bill can also be generated or cancelled through SMS, Android App and by site-to-site integration through API. When an eway bill is generated, a unique Eway Bill Number (EBN) is allocated and is available to the supplier, recipient, and the transporter.  

2.When Should eWay Bill be issued?

  eWay bill will be generated when there is a movement of goods in a vehicle/ conveyance of value more than Rs. 50,000( either each Invoice or in (aggregate of all Invoices in a vehicle/ Conveyance)# )  –

• In relation to a ‘supply’
• For reasons other than a ‘supply’ ( say a return)
• Due to inward ‘supply’ from an unregistered person

For this purpose, a supply may be either of the following:

• A supply made for a consideration (payment) in the course of business
• A supply made for a consideration (payment) which may not be in the course of business
• A supply without consideration (without payment)In simpler terms,  the term ‘supply’ usually means a:

1. Sale – sale of goods and payment made
2. Transfer – branch transfers for instance
3. Barter/Exchange – where the payment is by goods instead of in money

Therefore, eWay Bills must be generated on the common portal for all these types of movements. For certain specified Goods, the eway bill needs to be generated mandatorily even if the Value of the consignment of Goods is less than Rs. 50,000:

1. Inter-State movement of Goods by the Principal to the Job-worker by Principal/ registered Job-worker***,
2. Inter-State Transport of Handicraft goods by a dealer exempted from GST registration