HOW TO RAISE INVOICE IN CASE OF MARGIN SCHEME UNDER 8/2018 CGST RATE NOTIFICATION

[SOPL SOPL]

Dear Sir

Supplier want to avail the notification 8/2018 cgst rate.

Supplier has not availed ITC at the time of purchase of motor vehicles.

Tax rate on purchase -- 28%

Tax rate as per notification is 18%

Purchase value -- 150

Sale value -- 120

Wdv value -- 105 (as on 31st March of last FY)

Wdv value -- 89.25 (as on date of sale)

What is the Gst taxable amount and tax amount ?

Kindly explain what figures you have considered for above calculation. Sale and Purchase is intra state transactions.

[Shilpi Jain]

There is a view that the WDV should be taken as per the last day of the last FY since that is what which has been claimed under IT Act.

If such a view is taken then the taxable value will be 120-105 on which the GST has to be charged.

[NARENDER YARRAGORLA]

I am agreeing with the Madam View

[SOPL SOPL]

Dear Shilpi Jain Madam

1. In this case i have to raise invoice for 120 + Gst 2.7 (i.e 18% on 15) . Percentage comes to 2.25%.This tax rate is not available in GSTR-1. How to file this invoice in GSTR-1 ?

According to me --

Option 1: 105 should be shown in 0% tax rate in B2B and 15 in 18% tax rate.

Option 2: Raising invoice for 15 @ 18% and raising commercial debit note without tax for 105.

I think first option is better since the entire transaction can be captured in one document.

Kindly provide your comments whether we can go with the option 1.

[shwetal oswal]

gst will be 5.535 (18% of margin i.e. 105-89.25).

[SOPL SOPL]

Any other comments with complete explanation.

[Shilpi Jain]

In the returns you will have to put taxable value as 15 only and not 120. RAte of tax will be 18%. Invoice value will be total amount that you will invoice him for.

AI Summary

Margin scheme invoicing: report tax on the margin as the taxable value, with GST at the applicable notified rate.
Treat taxable value under the margin scheme as the margin equal to sale price less the WDV taken as on the last day of the previous financial year; GST is charged at the notified rate on that margin, and returns should report only that taxable value while the invoice may show the total invoice amount.