GST Computation

Chapter 1: GST Basics

Introduction

• Goods & Service Tax (GST)
• Why was GST implemented in India?
• Genesis of GST in India
• Types of GST
• Output Tax and Input Tax in GST
• Charge of GST
• Definitions
• Goods and Services
• Classification of Goods and Services (HSN & SAC)
• Harmonized System of Nomenclature (HSN)
• Services Accounting Code (SAC)

Supply under GST

• Supply (Taxable Event)
• Schedule I
• Related Party Transactions under GST
• Schedule II & III
• Schedule II (Goods & Services)
• Schedule III (Not a Supply)
• Meaning of Taxable Person
• Kinds of Supply
• There are various kinds of Supply

Registration

• GST Registration
• Turnover Limits for Regular Registration
• GSTIN (GST Registration Number)
• Difference Between GSTIN and GSTN
• Composition Scheme
• Who can opt for Composition Scheme?
• Who cannot opt for Composition Scheme?
• Threshold Limits of Turnover for Composition Scheme
• Conditions for Availing Composition Scheme
• Rate of Tax under Composition Scheme

Valuation & Tax Rate

• GST Tax Rates
• Valuation under GST

Case Study

• Case Studies

Assignment

• Assignment

Chapter 2: GST Invoice Preparation

Introduction

• Meaning of Invoice
• What is Tax Invoice?
• What is Bill of Supply?
• Difference between Tax Invoice and Bill of Supply
• Provisions relating to Tax Invoice
• What is e-invoicing?
• Applicability
• Process to Issue E-Invoice
• Format of e-Invoice

Issue of Invoice

• Issue of Tax Invoice
• Particulars of Tax Invoice
• Format or Example of Tax Invoice
• Particulars of Bill of Supply
• Format of Bill of Supply

Time of Supply

• Time of Supply
• Time of Supply (TOS) of Goods
• Time of Supply (TOS) for Services

Place of Supply

• Place of Supply
• Importance of Place of Supply
• Place of Supply of Goods
• ‘Bill to Ship to’ Situation
• Place of Supply of Service

e-Invoicing

• e-Invoicing
• Some Facts about e-Invoicing
• Process of Generating e-Invoice
• Steps to use the IRP Portal
• Step 1 – Login to the IRP (e-invoicing) Portal
• Step 2 – Upload the JSON File
• Step 3 – Print
• Cancellation of e-Invoice
• e-Invoicing Simulation Portal
• Here is your chance to go to the e-Invoicing Simulation Portal (Replica of the original Government Portal) and try it yourself completely.

Input Tax Credit

• Input Tax Credit (ITC)
• How Input Tax Credit Works?
• Condition to Claim Input Tax Credit
• Other Important Points on ITC
• How to Avail Input Credit
• Order of Utilization of Input Tax Credit (ITC)
• Blocked Credits / Credit Reversal

Interest under GST

• Interest under GST
• When is the Interest Payable
• Rate of Interest
• How to Compute Interest
• FAQs

Case Study 1

• Case Study 1

Case Study 2

• Case Study 2

Case Study 3

• Extract of Purchase Register
• Extract of Expense Register

Case Study 4

• GST Set-off
• Let us learn how the GST set-off works with the help of a case study.

Assignment 1

• Assignment 1

Assignment 2

• Assignment 2

Chapter 3: Debit Note & Credit Note

Introduction

Debit Note (DN) and Credit Note (CN) are important commercial documents used to adjust the value of a tax invoice under GST. These documents help businesses correct errors, account for returned goods, price revisions, or other changes after the original invoice has been issued. Proper use of Debit Notes and Credit Notes ensures accurate tax reporting and compliance with GST regulations.

This chapter explains the meaning, purpose, format, and legal provisions relating to Debit Notes and Credit Notes under GST. It also covers the time limits for issuing these documents, practical case studies, and assignments to strengthen your understanding.

Topics Covered

• Debit Notes (DN) and Credit Notes (CN)
• General Accounting Parlance
• Credit Note and Debit Note under GST
• What is Credit Note?
• What is Debit Note?
• Time Limit to Issue Debit Note or Credit Note

Issue of Credit Note

A Credit Note is issued by the supplier when the taxable value or GST charged in the original invoice is more than the actual amount payable. It is commonly used for sales returns, post-sale discounts, or correction of excess tax charged.

Topics Covered

• Issue of Credit Note
• Format of Credit Note

Case Study 1

A practical case study explaining the use of a Credit Note in a real business scenario. It demonstrates how invoice adjustments are made when goods are returned or when the invoice value needs to be reduced under GST provisions.

Issue of Debit Note

A Debit Note is issued by the supplier when the taxable value or GST charged in the original invoice is less than the actual amount payable. It is generally issued due to price revisions, short billing, or additional charges discovered after the invoice has been issued.

Topics Covered

• Issue of Debit Note
• Format of Debit Note

Case Study 2

A practical case study demonstrating the use of a Debit Note for correcting undercharged invoices and recording additional tax liability under GST.

Assignment

Complete the assignment by identifying situations where Debit Notes and Credit Notes should be issued. Prepare the required GST documents in the prescribed format and explain the accounting treatment for each case.

Chapter 4: E-Way Bill

Introduction

An E-Way Bill is an electronic document required for the movement of goods under the Goods and Services Tax (GST) regime. It is generated through the E-Way Bill Portal before transporting goods whose value exceeds the prescribed limit. The system helps ensure transparency, prevents tax evasion, and enables smooth movement of goods across India.

This chapter explains the concept of the E-Way Bill, when it is required, who is responsible for generating it, the information needed for generation, and the step-by-step procedure for creating an E-Way Bill. It also covers Bill-to Ship-to transactions, FAQs, practical case studies, and assignments.

Topics Covered

• What is E-Way Bill?
• When does an E-Way Bill need to be generated?
• Who should generate an E-Way Bill?
• Details required to generate an E-Way Bill

Generate

The E-Way Bill can be generated online through the official E-Way Bill Portal by entering invoice details, transaction information, and transportation details. Each step must be completed accurately to ensure successful generation and compliance with GST regulations.

Steps Covered

• Steps to generate an E-Way Bill (EWB-01)
• Step 1: Visit and Login to the E-Way Bill Portal
• Step 2: Click on “Generate New” under the “E-Waybill” option
• Step 3: Update Transaction Details
• Meaning of the Sub-Types in the above step
• Step 4: Update Item Details
• Step 5: Update Transportation Details & Part B

Bill To Ship To

A Bill To Ship To transaction occurs when the invoice is issued to one person while the goods are delivered to another location or customer. GST provides specific rules for handling such transactions, and the E-Way Bill must be prepared correctly using the required details.

Topics Covered

• ‘Bill To Ship To’ Transactions
• How to deal with this in an E-Way Bill
• Case 1: Where the E-Way Bill is generated by ‘B’ and the required fields are filled in Part A of GST Form EWB-01

FAQs

This section answers the most commonly asked questions regarding the E-Way Bill system, including generation, cancellation, validity, transportation rules, and compliance requirements under GST.

Topics Covered

• Frequently Asked Questions (FAQ)

Case Study

A practical case study demonstrating the complete process of generating an E-Way Bill, handling transportation details, and ensuring GST compliance for the movement of goods.

Assignment

Complete the assignment by generating an E-Way Bill for the given business scenario, identifying the required details, selecting the correct transaction type, and explaining the steps followed during the process.

Chapter 5: Concept of RCM, TDS & TCS

Reverse Charge Mechanism (RCM)

The Reverse Charge Mechanism (RCM) is a system under GST where the responsibility to pay tax shifts from the supplier to the recipient of goods or services. It applies in specific cases notified under the GST Act, including supplies received from unregistered suppliers and certain notified goods and services. Understanding RCM helps businesses ensure proper tax payment and claim eligible Input Tax Credit (ITC).

This section explains the applicability of RCM, notified supplies, invoice requirements, time of supply, and the availability of Input Tax Credit under the reverse charge mechanism.

Topics Covered

• Reverse Charge Mechanism (RCM)
• Applicability of RCM
• Supply from an Unregistered Supplier to a Registered Person
• Supply of Services through an E-Commerce Operator
• Supply of Notified Goods and Services under GST
• List of Services Notified under Section 9(3) of the CGST Act, 2017
• Invoice under RCM
• Time of Supply under Reverse Charge
• Time of Supply in case of Goods
• Time of Supply in case of Services
• Input Tax Credit (ITC) under RCM

Case Study 1

A practical case study demonstrating the application of the Reverse Charge Mechanism, calculation of GST liability, preparation of invoices, and claiming Input Tax Credit in accordance with GST provisions.

TDS under GST

Tax Deducted at Source (TDS) under GST requires specified government departments and notified entities to deduct tax while making payments to suppliers. The deducted amount is deposited with the Government and reflected in the supplier’s electronic cash ledger.

Topics Covered

• Tax Deducted at Source (TDS) under GST
• Who is liable to deduct TDS under GST?
• Rate of TDS under GST
• Registration Requirements for TDS Deductors
• Deposit of GST TDS and TDS Certificate

TCS under GST

Tax Collected at Source (TCS) under GST applies mainly to e-commerce operators who collect consideration on behalf of suppliers. The operator collects a prescribed percentage of tax and deposits it with the Government while complying with GST return filing requirements.

Topics Covered

• What is Tax Collected at Source (TCS) under GST?
• Who is responsible for collecting TCS under GST?
• TCS Rate
• Registration Requirements under TCS Provisions
• Due Dates for Depositing TCS
• Form to be Used for TCS Returns
• Complete Process of TCS Return
• E-Commerce Dilemma

Case Study 2

A practical case study explaining the calculation and compliance requirements of TDS and TCS under GST, including return filing and accounting treatment.

Assignment 1

Complete the assignment by identifying transactions where Reverse Charge Mechanism (RCM) applies and calculate the GST liability along with the eligible Input Tax Credit.

Assignment 2

Prepare a comparative analysis of TDS and TCS under GST, identify the applicable provisions for different business scenarios, and explain the compliance procedures with suitable examples.

Chapter 6: GST Computation

Introduction

GST Computation is the process of calculating the total Goods and Services Tax payable by a registered taxpayer after adjusting the available Input Tax Credit (ITC) against the Output GST liability. Accurate computation ensures timely tax payment, proper return filing, and compliance with GST laws.

This chapter explains the concepts of Output Tax, Input Tax Credit, Net GST Liability, GST payment procedures, challan creation, practical case studies, and assignments to help learners understand GST computation in a systematic manner.

Topics Covered

• GST Computation
• Transaction Value (GST Output)
• Input Tax Credit (ITC)
• Net Tax Payable = Output GST − Input GST

Computation

GST liability is computed by determining the Output GST on taxable supplies, deducting the eligible Input Tax Credit, and arriving at the Net GST Payable. Proper calculation helps businesses avoid interest, penalties, and filing errors.

Steps Covered

• Steps to Compute GST Liability
• Calculate the Transaction Value
• Determine the Applicable GST Rate
• Compute Output GST
• Adjust Eligible Input Tax Credit (ITC)
• Calculate the Net GST Payable

GST Payment

After computing the GST liability, taxpayers must pay the tax through the GST Portal using the Electronic Cash Ledger and Electronic Credit Ledger. Payments should be made within the prescribed due dates to avoid late fees and interest.

Topics Covered

• GST Payment
• GST Payment Process
• GST Payment Ledgers
• Process of Online Payment of GST

Challan Creation

A GST Challan is generated before making tax payments through the GST Portal. The challan contains details of the tax amount, payment mode, and other necessary information required for successful payment.

Steps Covered

• Create a Challan for Making Payments
• Step 1: Login to the GST Portal
• Step 2: Select Create Challan
• Step 3: Enter Tax Payment Details
• Step 4: Generate Challan and Complete the Payment

Case Study 1

A practical case study explaining the calculation of Output GST, eligible Input Tax Credit, and the Net GST Liability for a business transaction.

Case Study 2

A practical case study demonstrating GST payment through the GST Portal, challan generation, and ledger adjustment using a real-world business example.

Assignment 1

Calculate the GST liability for the given transactions by determining the Output GST, eligible Input Tax Credit, and the Net GST Payable.

Assignment 2

Prepare a GST payment challan for the given tax liability, explain the online payment process, and identify the ledger adjustments after successful payment.