CSD AFD Online Registration Process 2024CANTEEN STORES DEPARTMENT MANUAL
FOR
UNIT RUN CANTEEN
TAXES
✓GOODS AND SERVICES TAX (GST)
Introduction
10.1 Goods and Services Tax, India‟s biggest tax reform was implemented by GoI replacing the complex multiple indirect tax structure wef 01 July 2017 covering the entire ambit of Goods and Services except liquor, petroleum products and electricity. It is a destination based tax on consumption of goods and services. It is levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as setoff. In a nutshell, only value addition is taxed and burden of tax is to be borne by the final consumer. The tax accrues to the taxing authority which has jurisdiction over the place of consumption which is also termed as place of supply.
10.2 There are five types of GST rates and these are Nil rated, 5%, 12%, 18% and 28% (3% on Gold Jewellery). On some goods, the Compensation Cess is also levied. Harmonised System Nomenclature (HSN) Code are used for classifying goods under GST regime. GST has replaced the following indirect taxes of Central, State and Local levies: (i) Taxes levied and collected by the Centre prior to GST implementation:
(a) Central Excise duty.
(b) Duties of Excise (Medicinal and Toilet Preparations).
(c) Additional Duties of Excise (Goods of Special Importance).
(d) Additional Duties of Excise (Textiles and Textile Products).
(e) Additional Duties of Customs (commonly known as CVD)
(f) Special Additional Duty of Customs (SAD).
(g) Service Tax
(h) Central Surcharges and Cesses so far as they relate to supply of goods and services.
(ii) Taxes collected by the State prior to GST implementation:
(a) State VAT.
(b) Central Sales Tax.
(c) Luxury Tax.
(d) Entry Tax (all forms).
(e) Entertainment and Amusement Tax (except when levied by the local bodies)
(f) Taxes on advertisements.
(g) Purchase Tax
(h) State Surcharges and Cesses so far as they relate to supply of goods and services.
Applicability of GST on CSD operations
10.3 The GST is equally applicable to entire range of items provided by CSD except Liquor. All CSD Depots are required to be registered under GST under single PAN. The MoF and GST Council have partly exempted GST to CSD through refund mechanism. CSD is having a 50% exemption in all forms of GST i.e. CGST, SGST, IGST and UTGST pan India. The major highlights of exemption are as follows:
(a) Supply of goods by CSD to the URCs or to authorized customers or Supply of goods by URCs to authorized customers is 50% exempted from GST. Please refer appendix 10 A.
(b) Canteen Stores Department shall be entitled to claim a refund of fifty per cent of the applicable taxes paid by it on all inward supplies of goods received by it for the purposes of subsequent supply of such goods to the Unit Run Canteens or to the authorized customers of the CSD.
10.4 The same can be described as under:
(a) 50% GST is exempted and the remaining GST is added in the whole sale price of the item for URCs. The sale from URC to customer is totally exempt from GST.
(b) Implementation of GST has lead to uniformity in rates of not only general goods pan India but also similar rates for two/four wheelers pan India with marginal difference in rates due to transit insurance and freight charges and other formalities that varies from state to state, thus, making it convenient for CSD clientele to purchase a vehicle anywhere without drawing a comparison of rates at all places.
(c) In addition, the rate of white goods is also same across all dealers in India.
10.5 CSD is required to make payment of entire amount of GST and applicable Compensation Cess to Suppliers but is required to charge only 50% of GST rate and full Compensation Cess from customers. The balance 50% of GST is to be obtained from Govt through refund mechanism by filing appropriate returns.
Computation of Retail Rate
10.6 Upon implementation of GST, the prices of general stores were reworked out by removing Freight Inward and Insurance which were earlier charged to customers. This has led to reduction in prices of all the items by 1.10%.
(a) Pricing of General Stores. The pricing in GST regime is to be done as under, assuming Procurement Rate per case of Rs 4,574.10, Case Pack of 6, GST @ 12%, Compensation Cess –NIL, CSD/ URC profit at 6/5%:
| Sl No | Particulars | Rate | Value in Rs. |
| 1. | Procurement Rate | 4574.10 | |
| 2. | Discount | 0 | 00 |
| 3. | Landed Cost(1-2) | 4574.10 | |
| 4 | Additional cost of GST (50% of GST Rate) | 6% | 274.45 |
| 5. | Additional cost of Compensation Cess (On Landed Cost) | — | — |
| 6. | Total Purchase Cost (3+4+5) | 4848.55 | |
| 7. | CSD Profit (On Landed Cost) | 6% | 274.45 |
| 8. | Wholesale Cost Per Case (Rounded) | 5123.00 | |
| 9. | Wholesale Rate Per Unit | 853.83 | |
| 10. | Unit Price for URC Profit (Landed Cost+CSD Profit)/Case Pack | 808.09 | |
| 11 | URC Profit | 5% | 40.40 |
| 12. | Retail Rate Per Unit (9+11) | 894.23 | |
| 13. | Retail Rate Per Unit (Rounded) | 894.25 |
(b) Pricing of AFD goods. The pricing of AFD goods is to be done as under assuming Basic Price of Motor Car as Rs 6,00,000, Compensation Cess @ 3%, discount offered on Trade as Rs 1,000 and seasonal discount as Rs 2,000:
| Sl No | Particulars | Rate | Value in Rs. |
| 1 | Basic Price | 6,00,000 | |
| 2 | Disc on Trade (As per AFD)circular | 1,000 | |
| 3 | Special/ Seasonal Disc offered by Company/ Dealer | 2,000 | |
| 4 | Total Discount (2+3) | 3,000 | |
| 5 | Taxable Value (1-4) | 5,97,000 | |
| 6. | CSD Incidental Charges (on Taxable Value | 0.5% | 2,985 |
| 7. | Additional cost of GST (50% of GST Rate on Taxable Value) | 14% | 83,580 |
| 8. | Additional cost of Compensation Cess (3% on Taxable Value) | 3% | 17,910 |
| 9. | Selling Price to Customer ( 5+6+7+8) | 7,01,475 |
10.7 Some of the important provisions of GST are listed as under:
(a) Tax Deducted at Source (TDS). As per section 51, this provision is meant for Government and Government undertakings and other notified entities making contractual payments where total value of such supply under a contract exceeds Rs. 2.5 Lakhs to suppliers. While making any payments under such contracts, the concerned Government/authority shall deduct 1% of the total payment made and remit it into the appropriate GST account. For purpose of deduction of TDS, the value of supply is to be taken as the amount excluding the tax indicated in the invoice. This
means TDS shall not be deducted on the CGST, SGST or IGST component of invoice.
(b) Reverse Charge. Normally, the supplier of goods or services pays the tax on supply. In the case of Reverse Charge, the receiver becomes liable to pay the tax, i.e., the chargeability gets reversed. If a supplier who is not registered under GST, supplies goods to CSD ( registered under GST), then Reverse Charge would apply. This means that the GST will have to be paid directly by CSD to the Government instead of the supplier. An exemption notification has been issued which provide exemption from payment of tax, where the aggregate value of such supplies of goods or service or both received by a registered person from any or all the suppliers, who is or are not registered, do not exceed Rs. 5,000 in a day. In simple words, if the total value of inward supply of goods or services or both in a single day from one or more unregistered persons exceed Rs. 5000, then the registered person has to pay tax on total value under reverse charge. It is pertinent to note that the limit is not per supplier but from all such suppliers during the day. That means, if the value of inward supply from unregistered persons in a day is say Rs. 5100, then tax is payable on total Rs. 5100 and not on the excess i.e. Rs. 100.
(c) Tax Collection at Source (TCS). Section 206 C Sub- Section (1 F) of the Income Tax Act 1961 (Amended vide Finance Act 2016) states that the seller who receives consideration for sale of a motor vehicle exceeding ten lakh rupees, shall collect one per cent of the sale consideration as tax from the buyer. In this regard, It is clarified that TCS has to be collected from the customer if and only if the CSD selling price of the vehicle is Rs. 10.00 lakhs and above. CSD Depot being the last dealer will have to collect TCS and deposit with the IT Department.
CENTRAL SALES TAX
10.8 The Central Sales Tax (CST) is a levy of tax on sales, which are effected in the course of inter-State sale. CST charged in VAT regime on general stores is subsumed in GST. Hence, interstate sale made by CSD Depots to URCs will not attract CST. However, liquor is outside the purview of GST, hence sale of liquor made to interstate URCs will be loaded with CST. It will be necessary for such URC to register itself under the CST Act and issue Declaration Form C to the Depot from which the liquor is obtained. The CST act and the rules made there under by the Central Government should also, therefore, be carefully studied.
VALUE ADDED TAX
10.9 Value Added Tax (VAT) was a general consumption tax assessed on the value added to goods and services. It was general tax that applies, in principle, to all commercial activities involving the production and distribution of goods and the provision of services. It was consumption tax because it was borne ultimately by the final consumer. With the implementation of GST, VAT on sale of goods under the purview of GST has been ceased. It is charged as a percentage of prices which means that the actual tax burden is visible at each stage in the production and distribution chain.
10.10 With the implementation of GST w.e.f. 01 July 2017, only VAT on liquor will continue to be loaded, as liquor is outside the purview of GST.
METHOD FOR CALCULATION OF VAT
| Sl. No. | Item | Amount Rs. |
| 1. | MANUFACTURER | |
| (a) Selling price of item including profit of manufacturer | 100.00 | |
| (b) VAT on selling price @12.5% | 12.50 | |
| (c) Selling price inclusive of VAT to CSD depot (1(a) + 1(b)) | 112.50 | |
| 2. | CSD DEPOT | |
| (a)Invoice price at CSD depot | 112.50 | |
| (b) VAT reflected in invoice | 12.50 | |
| (c) Purchase price of item (2(a) – 2(b)) | 100.00 | |
| (d) Profit @ 7% at CSD depot on purchase price (7% of 2(c)) | 7.00 | |
| (e) Selling price of item including profit at CSD depot | 107.00 | |
| (f) VAT on selling price at CSD depot (12.5% of 2(e)) | 13.37 | |
| (g) Selling price inclusive of VAT to URC (2(e) + 2(f)) | 120.37 | |
| (h) Offset claim by CSD (same as 2(b)) | 12.50 | |
| (i) Net VAT payable to the Govt. (2(f) – 2(b)) | 0.87 | |
| 3. | UNIT RUN CANTEENS | |
| (a) Invoice price at URC | 120.37 | |
| (b) VAT reflected in invoice | 13.37 | |
| (c) Purchase price of item (3(a) – 3(b)) | 107.00 | |
| (d) Profit @ 6% at URC on purchase price (6% of 3(c)) | 6.42 | |
| (e) Selling price of item including profit at URC | 113.42 | |
| (f) VAT on selling price URC (12.5% of 3(e)) | 14.17 | |
| (g) Selling price inclusive of VAT to customers (3(e) + 3(f)) | 127.59 | |
| (h) Offset claim by URC (same as 3(b)) | 13.37 | |
| (i) Net VAT payable to the Govt. (3(f) – 3(b)) | 0.80 |
STATE WISE LEVY (TAX) ON LIQUOR
| State/UT | Liquor |
| Gujarat, Jharkhand, Bihar, Tamil Nadu, | Exempted |
| Andaman | 10% |
| Uttar Pradesh | Exempted |
| West Bengal | Abolished(20% on MRP is charged as Additional Excise Duty) |
| Madhya Pradesh | 5% |
| Rajasthan | 3% |
| Karnataka | Exempted |
| Uttarachal | Exempted |
| Delhi | Exempted |
| Maharashtra | Exempted |
| Andhra Pradesh | Up to basic price of Rs. 500/- per case VAT on liquor exempted and above Rs. 500/- per case 70% VAT applicable. |
| Telangana | Up to basic price of Rs. 500/- per case VAT on liquor exempted and above Rs. 500/- per case 70% VAT applicable. |
| Kerala | 70% |
| Goa | 22% |
| Haryana | Exempted |
| Assam 4 | 0% on IMFL Rum Exempted |
| Himachal Pradesh | 2% |
| Punjab | 4.004% |
| Orissa | Exempted |
| Nagaland | 5% |
| J&K 3 | 1.5% (Addl Assessment Fee on sale value of Liquor) |
| Arunachal, Triputa, Manipur, Meghalaya, Mizoram, Daman, Pondicherry, Dadra & Nagar Haveli, Chandigarh, Sikkim |
Not Exempted Different Tax rates are applicable in different States/UT |
GST – General Stores & AFD Goods
10.11 Exemption from GST on supplies (sales) made by CSD to Unit Run Canteen and on supplies (sales) made by CSD or Unit Run Canteens to authorized customers.
10.12 Canteen Stores Department is entitled to claim a refund of fifty per cent of the applicable taxes paid by it on all inward supplies of goods received by it for the purposes of subsequent supply of such goods to the Unit Run Canteens or to the authorized customers of the CSD.
10.13 50% non refundable GST + 100% Compensation Cess is loaded in selling price.
Software for implementation of GST at URC
10.14 An advisory 14/2017 has been issued by DDGCS office vide their letter No. 96350/Q/DDGCS/Advisory/14-2017 dated 28/06/2017 placed as Appendix 10B for software implementation of GST.