Finance Facts

GST has been implemented from 1st July. Many taxpayers have huge stock lying. So what should be done for stock lying on 30th June?

Up to 30 June, there are VAT, Excise, Service Tax laws but from 1st July GST has been implemented so what about the stock as on 30th June is the biggest question which everybody facing and it has created confusion among many. The goods on which VAT is levied as per existing law, in GST-VAT will be transformed to SGST. Similarly, now excise duty is levied on the manufacture, in GST excise duty will be transformed to CGST. Whether taxpayer will get a credit of stock lying on 30th June 2017 in GST or not let's discuss in detail!. The Following Question emerges in every mind???????????

Q1.If the taxpayer is registered under VAT Act, then how he will get set-off of the stock in GST?

1. If VAT is payable in the VAT return of 30th June 2017 i.e. taxpayer has taken the credit of inputs, then there is no question of taking credit.

2. If VAT is carry forward in the VAT return of 30th June 2017 i.e. excess tax credit is available, then the taxpayer will get the credit of that carry forwarded amount in SGST. Ex. If the taxpayer has a credit of Rs. 10,500 then it can be adjusted against SGST liability.

Q2. If any taxable person is registered under excise law, then how can he take set-off of stock in GST?

Ans: - It is also similar like VAT. If the taxpayer is registered under Excise Law then if in the Excise return of 30th June 2017, excise duty is payable then no question of set-off. But if excise duty is carrying forward then the taxpayer will get set-off against CGST. The taxpayer can also take the credit of not availed excise duty on capital goods in GST.

Q3. if any taxable person is not registered under excise law, then can he get set-off of stock in GST?

Ans: -  If a taxpayer is not registered under Excise law but he is registered in VAT law, then the credit of VAT can be taken against SGST but what about CGST. In this case, if the taxpayer has the excise invoice which is in stock, then in GST 100% credit is available. But if no excise duty charged on that bill, then credit will be given as per GST rates in the following manner:

1. If that stock covered in 18% or 28% in GST, then 60% of CGST can be availed as a credit of stock. Ex. If there is 18% rate of GST on Spare parts, then 5.4% credit (60% of 9% of CGST) is available against the stock held on 30th June.

2. If that stock covered in 5% or 12% in GST, then 40% of CGST can be availed as the credit of stock. Ex. If there is 12% rate of GST on any commodity, then 2.4% credit (40% of 6% of CGST) is available against the stock held on 30th June.
In GST taxpayer can use the above credit at the time of sale of goods. Further, the taxpayer will have to use this credit within six months.

Q4. What the taxpayer should do if he has to take credit of stock in GST?

Ans: - Taxpayer will have to file TRAN 1 & TRAN 2 form for claiming the credit of stock. In this form HSN wise details, its quantity, its rate, total value will have to be given. This information should be given to the government within 90 days. The credit of previous stock i.e. more than one-year-old stock is not available. It means if goods are purchased after 30th June 2016 then only credit can be taken.

Conclusion: -  Every trader should carefully understand these provisions of stock. Everyone should file revised return of VAT for the financial year 2016-17 if necessary after checking all books of accounts and then return of April to June to be filed. Taxpayer should reconcile the VAT, Excise returns with books of accounts and then only file the above form to the government⁠⁠⁠⁠

The whole idea of Limited Liability Partnership (LLP) is very common in India. This specific partnership pinpoints the fact that some partners in a partnership may have limited liabilities. Importantly, under LLP one partner is not responsible or liable for another partner's misconduct or in any negligence. One can definitely say, the idea of LLP is similar to that of stakeholders in a corporation.  

Interestingly, LLP is different from the idea of limited partnership. No doubt, LLP is a much advanced concept in the domain of business and considered to be a far better aspect that limited partnership. 

The whole procedure of registering for LLP in Delhi is simple. Let's not forget that registered office is mandatory along with two partners. As per the existing clause, both partners need to be residents of India. The advantage in this case is, one can use residential address as registered office address. 

The whole process of LLP registration can be categorized into 6 simple steps as follows.

Applying for Digital signature form (DSC): 

In this digitized era, signing the digital signature form is a must and all the partners have to sign it.

Applying for Director Identification Number (DIN):  

This is the next after signing the digital signature form. The state ministry of corporate affairs is the competent authority to deliver it timely. In other words, partners can apply it via ROC Delhi or MCA portal. 

 Applying for name approval: 

This is a small yet a significant step in the whole process of registering for LLP. Once the name in approved, the partners have truly proceeded and remaining formality has to be completed in quick time. There is no denying the fact that ROC Delhi will only approve the name if there is no other company with the same name or trademark.

 Applying for Registration:

This is virtually the most significant step. Getting the registration is actually having LLP registration done altogether.  No doubt, partners will have huge sigh of relief once this stage is covered.   

Getting registration certificate from Registrar of Companies (ROC): 

For Delhi, no doubt, this implies the state's ROC where the partners need to obtain the registration certificate.  Immediately, the partners need to open a current bank account with approved name by Delhi ROC. 

Drafting the LLP Agreement between the partners:

 In this step, the partners need to fill LLP Agreement to the Delhi ROC Office and they can do it via MCA Portal.  This LLP Agreement contains all the necessary details and terms and agreement regarding the partnership matters.

In this whole process of LLP registration in Delhi, partners need to have the following documents and essentials along with them.

•  2 copies of PAN card of the partners

•  For address of the partners they can furnish voter card or passport or AADHAR card or driving license.

•  3 colored passport size photographers are mandatory

•  As far address proof of the registered office is considered, the partners can opt to furnish mobile or telephone bill or cooking gas bill or water or Municipal Tax bill or House Tax bill. In all the cases, the bills shouldn't be preferably too old.  The partners should submit bills served within two months from the date of issuing.  No Objection Certificate (NOC) has to be furnished alongside without any delay. 

Final Tip Off

       Bookkeeping a Day keeps Bankruptcy Away!