Save the GST by the normal method of conservation as described by many tax professionals. For ages, we know different planning concept to save the income tax, but now what about the new tax regime GST (goods and service tax). How inflow of trade out the firm can be expanded, how might I build my advantages and diminishing liabilities towards the GST division?
So, to solve these queries, there are some techniques/ measures, which can be used to save the GST without any fraud or tax evasion.
Variation in Investments
By accomplishing increasing Inter-State buys, you will pay IGST on your purchase, which has an extremely favourable position that, because IGST ITC can be set off with CGST Liability and also SGST liability after you set off your IGST Liability.
Read Also: The Complete Meaning of SGST, IGST, CGST with Input Tax Credit Adjustment
But if you do Intra State purchase, then there is a drawback that, SGST ITC can be set off against SGST Liability and IGST Liability only and CGST ITC can be set off against CGST Liability and IGST Liability only. Thus, if you are looking to save the GST liability then give preference to Inter-State goods/products in the place of Intra State products.
And if you are in the manufacturing sector, then it will be suitable to set up the manufacturing plant in one state/union territory and then makes sales depot at different state/ union territory.
| Input Tax Credit | Set off against Liability |
| CGST (Central GST) | CGST and IGST (in that order) |
| SGST (State GST) | SGST and IGST (in that order) |
| IGST (Integrated GST) | IGST, CGST and SGST (in that order) |
Accept Sales Payment as Deposits
As per section 2 (31) of CGST Act, 2017, considering the connection to the supply of products or administrations incorporates:-
- i)According to the section, any payment made, or about to be made, whether in cash or credit, in regard of, because of, or for the actuation of, the supply of merchandise or administrations, regardless of whether by the beneficiary or by some other individual, however, should exclude any sponsorship given by the Central Government or a State Government
ii) The fiscal estimation of any demonstration or restraint, regardless of whether willful, in regard of, because of, or for the instigation of, the supply of products or administrations, whether by the beneficiary or by some other individual yet should exclude any appropriation given by the Central Government or a State Government. - Given that a store, in regard to the supply of merchandise or benefits or both should not be considered as an installment made for such supply unless the provider applies the store as though for the said supply
- Even the indirect tax, whether in past or present, takes after the guideline of Expense Policy to require Indirect Tax on the provider of products, administrations, or both.
- Already offices have tried endeavors to require Indirect Tax on Investment Policies likewise, however, their endeavors are extremely restricted on it. It was due to the constitutional hype, to take after different arrangements of the demonstration which are available for the present in the constraint.
- But now, there are no standards that have been confined by GST Council to charge notional enthusiasm on stores taken by the supplier of merchandise or benefits or both, as it was available in Rule 6 of Excise Valuation Rules, 2000 and Rules predominant in different State VAT Laws administration.
- Application of section 41(4) of Income Tax Act, 1961: Section 41(4) deals with the write off of Bad Debts. Account-holders from whom people have taken stores and are exceptional suppose for over 5 years or increasingly or notwithstanding crossing as far as possible specified in Limitation Act, 1963, IT division can’t compel the assessee to discount the same from the books of the assessee on the supposition that such borrowers are remarkable for more than day and age said in Limitation Act, 1963. Unless the assessee himself discount the obligations from his books, division can’t drive the assessee to discount the same from his books.
- Application of Limitation Act, 1963: According to the Limitation Act, 1963, liability recovery has a limitation period of only 3 yrs. But as per the Limitation Act, 1963 has no significance in GST on the transaction valuation and its taxability thereof, on the sum due from clients despite the fact that the due is remarkable for a time of over 3 years moreover.
