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6 Things to Remember While Transitioning to GST Regime

Updated on: Oct 25th, 2022

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2 min read

This is a short list of things to remember, as well as basic provisions and laws while transitioning to GST.

Migration to GST

Every taxpayer registered under Excise/VAT/service tax will enroll on the Common Portal. On enrollment, he will get a provisional certificate of registration which will have the GSTIN.

New Registrations under GST

  • New business
  • Manufacturers with a turnover less than Rs. 1.5 crore (threshold under GST has been reduced to 20 lakhs)
  • Any trader with turnover below 20 lakhs and are selling online
  • Any trader having regular inter-state sales
  • Voluntary registrations are allowed

Taxability of goods/services supplied after GST

This can be understood through the point of taxation rules. If point of taxation of goods/services is before the GST implementation then it will be taxed under earlier law. GST will not be applicable. Any portion of any supply whose point of taxation is after GST implementation will be taxed under GST.

Carry forward ITC after Transitioning to GST

CENVAT Credit and VAT credit in stock will be available to be carried forward in GST. If integrated tax is paid on such goods (such as CST.) then amount of credit will be 30% for goods attracting 18% and above GST. ITC will be 20% for other goods.

Treatment of Goods Returned

(a) Removal: must be max 6 months before GST

(b) Return: Within 6 months from the GST implementation date

If the goods are not returned within time, the supplier will not be eligible for the tax refund. Same provisions are applicable for excise.

Composition scheme

Composition scheme is available for persons with turnover upto 50 lakhs. This is just a few pointers you must keep in mind when transitioning to GST. Do you have more questions on transition to GST? ClearTax has in-depth articles on transition to GST.

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