MAHARASHTRA STATE ELECTRICITY DISTRIBUTION CO. LTD – Implementation of Goods & Services Tax (GST) in MSEDCL- General Awareness

All  Superintending Engineers, O&M and Civil Circles, MSEDCL.

Sub : Implementation of Goods & Services Tax (GST) in MSEDCL- General Awareness .

As we are all aware, the GST will be implemented w.e.f. 1st of July, 2017. Taxes which will be subsumed in GST are:

  1. Taxes currently levied and collected by the Centre:

a. Central Excise duty

b. Duties of Excise (Medicinal and Toilet Preparations)

  1. Additional Duties of Excise (Goods of Special Importance)
  2. Additional Duties of Excise (Textiles and Textile Products)
  3. Additional Duties of Customs (commonly known as CVD)
  4. Special Additional Duty of Customs (SAD)
  5. Service Tax
  6. Central Surcharges and Cesses so far as they relate to supply of goods and services
  7. State taxes that would be subsumed under the GST are:
    1. State VAT
    2. Central Sales Tax
    3. Luxury Tax
    4. Entry Tax (all forms)
    5. Entertainment and Amusement Tax (except when levied by the local bodies)
    6. Taxes on advertisements g. Purchase Tax
  8. Taxes on lotteries, betting and gambling
  9. State Surcharges and Cesses so far as they relate to supply of goods and services .

Some basic information on the GST, which will help us manage these changes that the GST will bring upon us, is provided below

Following are some requirements which are to be complied due to GST Law:

Invoice Rules : The Government has issued Invoice Rules which prescribe various information to be mentioned on an Invoice, Debit Note & Credit Note under GST. The Invoices submitted by all vendors need to be as per GST requirements. It is to be noted that an Invoice which does not contain required details as per GST shall not be accepted.(lnvoice Rules Copy Attached)

Vendor Master: Vendor master of all existing vendors will be replaced with new registration no called GSTIN. The GSTIN should be updated in Vendor master of ERP. It will be state-wise PAN­ based  15-digit  number.

  • The first two digits of this number will represent the state code as per Indian Census 2011
  • The next ten digits will be the PAN number of the taxpayer
  • The thirteenth digit will be assigned based on the number of registration within a state
  • The fourteenth digit will be Z by default
  • The last digit will be for check code

Eg. MSEDCL GSTIN Number is 27AAECM2933K1ZB.

Tax Codes: There will be a new set of tax codes defined for GST. The tax codes for GST are Central Goods and Service Tax (CGST), State Goods and Service Tax (SGST), Integrated Goods and S ervice Tax (IGST). GST slabs rate are 5%, 12%, 18% & 28%. Example of existing and GST taxes a pplication is given in attached annexure 1.

GST RATE SCHEDULE FOR GOODS & SERVICES as approved by GST Council
CGST 2.50% 6% 9% 14%
SGST 2.50% 6% 9% 14%
IGST 5% 12% 18% 28%

Material Master Updation :

HSN Code – all Material items have to be associated with the Harmonized System of Nomenclature (HSN) for all the taxes. Currently, HSN codes are known as Excise Tariff Codes, and the reporting under GST is based on HSN codes.

:SAC Code – Services accounting codes are associated with the supply of services, and they are similar to service categories in the current service tax regime.

Purchases from Unregistered Dealers: For Purchases and Services from unregistered dealers GST will be applicable under Reverse Charge Mechanism (RCM) & MSEDCL have to pay the tax liability which costs to the company . Hence, the purchases and services shall be restricted from registered dealers.

Savings Area : One of the key aspect of GST regime is removal of cascading impact of Taxes which is expected to lead a reduction in cost of procurement . It is important to analyse the irnpact of such savings/additional credit which may accrue to the suppliers/service providers. It is e>

  1. Any direct tax savings like- Excise, CST, Entry Tax, Octroi to be automatically  removed from material  cost.
  2. Ask all your suppliers and service providers to be GST registered and hence pass benefit of GST fully in
  3. Any other benefit.

Reconciliation Sales & Purchase: Supplies declared by the supplier in his GST returns would be directly available to Purchaser. In case of any mismatch in supplier sales returns and Purchasers purchase register declared by the provider and recipient, the GST Network (GSTN) would automatically provide a mismatch report. The mismatch needs to be corrected  by the next month in which the same is notified. If mismatch is not corrected, the credit availed would reduce automatically and there would be interest obligation as well on the recipient (Purchaser) . Probable errors may include for mismatch are like Invoice not uploaded in time and Invoice uploaded incorrectly. Hence, booking of Invoices in correct manner is necessary to avoid future consequences .

Amendments in Agreements: All terms and conditions pertaining to various taxes of Excise, Service Tax, VAT, etc; shall be changed into GST. Hence it may be amended as GST w ith applicable rate, due care need to be taken for ongoing contracts . Head office is in the process of defining terms and conditions of the various contracts issued in respect of GST act.

 

!Return Form What to file Date Of Returns
 

GSTR- 1

Details of Sale of taxable goods and/or services effected  

10th of the next month

 

GSTR-2

Details of Purchases of taxable goods and/or services.  

15th of the next month

 

GSTR-3

Monthly return on the basis of finalization of details of Sale and Purchases along with the payment of amount of tax .  

20th of the next month

 

GSTR-9

 

Annual Return

31st December of next financial year

 

Filling of Returns: the various returns are required to be furnished under the new GST law are as follows :

The above returns will be filled at Head Office level centrally consolidating the data available in SAP. Further, the payments of the GST in respect of all the offices in Maharashtra will be made centrally at H.O. based on the Invoices booked by the field offices in SAP.

Payments of Existing Taxes : MSEDCL offices has to pay and clear all liabilities up to June 30,2017 to the Government for all existing Taxes like Service Tax, VAT, etc. which are subsumed under GST as per earlier practice on prescribed dates.

We are sure together we can ensure a successful transition to GST Act. In case you have any query please feel free to get in touch through Email on taxcell.msedcl@gmail.com

Please note that the above guidelines are only for the purpose of implementation of GST on priority. However, the rules and regulations as per GST law will prevail over the guidelines .

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About Ritesh Pothan

Ritesh Pothan, is an accomplished speaker and visionary in the Solar Energy space in India. Ritesh is from an Engineering Background with a Master’s Degree in Technology and had spent more than a decade as the Infrastructure Head for a public limited company with the last 9 years dedicated to Solar and Renewable Energy. He also runs the 2 largest India focused renewable energy groups on LinkedIn - Solar - India and Renewables - India
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