GST: Has relaxation been provided for traders to lower compliance burden?

To reduce burden of compliances under GST, you can explore the option of opting for composition levy

I am a trader dealing in a variety of low-value goods, with an annual turnover of about Rs 65 lakh. I believe there are stringent compliance and reporting requirements under the goods and services tax (GST). Has any relaxation been provided for traders to lower the compliance burden?

The GST law provides an option for suppliers having annual turnover of Rs 75 lakh or less to opt for payment of tax under composition levy. This envisages relatively-less cumbersome requirements. For instance, a supplier who has opted for this scheme is required to file a quarterly return, as against a monthly return. Also, such a supplier is not required to provide invoice-wise details of supplies made. In case of composition levy, tax (at a lower percentage of 0.5 per cent or one per cent or 2.5 per cent) is payable on the total turnover depending on the nature of supply.

A supplier opting for such a scheme cannot avail an input tax credit on procurements. Also, the supplier cannot charge tax from the buyer. To reduce the expected burden of compliances under GST, you can explore the option of opting for composition levy. But, it is important that you fulfil the other conditions prescribed. 

We are having an unregistered depot, for which we have not taken excise registration. Customers start raising demand for excisable invoice to be entitled full credit during migration in GST. We, at present, have some stock at the depot. Kindly advise us whether an excise registration taken now will entitle us to issue the excisable invoice for the stock already there. 

In specified transaction, you can explore the possibility of obtaining registration as a first stage dealer under the central excise law. The law permits a seller (who is not a manufacturer) to transfer the Cenvat credit of excise duty, in respect of goods procured by such a seller from a manufacturer.  For this purpose, the seller has to obtain a registration as first stage dealer under the central excise law and issue an excise invoice in favour of the buyer. There is no specific restriction under excise law which restricts the first stage dealer from transferring the Cenvat credit for goods which have been procured by him prior to the date of obtaining such registration.  

If you obtain registration as first stage dealer under central excise law, you should be able to transfer the Cenvat credit by issuing an excise invoice in favour of your customer. 

Alternatively, you can also explore the possibility of availing the benefit of recently proposed amendments in the Cenvat Credit Rules. According to such proposed amendment, a manufacturer who has cleared duty-paid goods prior to the effective date of GST implementation can issue a credit transfer document (CTD) to a person not registered under the central excise law.  Based on such CTD, the buyer should be eligible to claim input tax credit of the central excise duty charged by the manufacturer, under the GST regime.  However, you are advised to follow the conditions prescribed in this regard.
 

The writer is tax partner, PwC India. Aditya Khanna, associate director, PwC contributed to this column. The views expressed are experts’ own. Send your queries to yourmoney@bsmail.in