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Introduction to Travel Agents
A travel agent serves as a mediator between travelers and service providers such as hotels, airlines, car rental companies and tour operators services include accommodation booking, rail and air ticket booking, sightseeing tours, cab pickup and drop and more. These services are commission-based and the commissions they earn are taxable and fall under the GST regime.
Their primary responsibility is to streamline the travel planning process for their clients by offering expert consultancy services and creating comprehensive travel packages.
Comparison between Tour Operators and Travel Agents
| Tour Operator | Travel Agent |
| A tour operator is an individual or company that organizes and manages vacations and vacation packages. | A travel agent is a professional or agency that sells vacation packages, acting as an intermediary between travelers and service providers. |
| The tour operator designs and provides the services. | Travel agencies purchase holiday packages from tour operators and sell them to tourists. |
| · A tour operator ensures that tourists enjoy the vacation packages they have booked. · Tour agents ensure that clients have a good time on their vacation. |
A travel agent works with clients to help them decide whether and which vacation to embark on. |
GST registration threshold limit for Travel Agents:
Every tour operator with a turnover exceeding Rs.20 lakhs in the previous financial year must have GST registration. For specific categories states, the maximum turnover threshold is Rs.10 lakhs.
| Aggregate Turnover | Registration Required |
| Surpasses Rs.20 lakh | Yes – For states in Normal Category |
| Surpasses Rs.10 lakh | Yes – For states in Special Category |
Chargeable Services of Travel Agents
The chargeable services provided by Travel Agents are as follows:
1. Air Ticket Booking
2. Hotel Booking
3. Services like Visa, Passport
4. Rail Ticket Booking
1. Air Travel Booking:
An 18% GST will apply to the commission received by an agent from the airline, as well as to the service charges collected from the customer.
As per rule 32(3) of CGST Act 2017, the GST rate on commission received from airlines is as follows:
| Particulars | GST Rate | Effective GST Rate |
| Domestic Air Ticket | 18% on 5% of the basic fare | 0.90% |
| International Air Ticket | 18% on 10% of the basic fare | 1.80% |
2. Hotel Booking:
GST will apply to bookings made through agents or intermediaries. Again, GST will be charged in two ways. Let's understand in detail to determine which type of GST will be applicable, i.e., IGST or CGST + SGST.
When the Agent receives a commission from the Hotel:
• If the Hotel is located in India (domestic), then the place of supply will be the hotel’s location.
• If the Hotel is located outside of India, the place of supply will be the Agent’s location.
| Location of Hotel | Place of Supply |
| India | location of the Hotel |
| Outside India | Agent’s location |
Example:
| Agent Location | Hotel Location | Place of Supply | Tax to be levied |
| Mumbai | Jaipur | Jaipur | IGST |
| Delhi | London | Delhi | CGST+SGST |
When the Agent receives a commission from Traveler:
• If a traveler is registered, then the place of supply will be the traveler’s location i.e. location of the service receiver.
• If the traveler has not registered, the location of the supply will be the Hotel.
Example:
| Agent Location | Traveler Registration Status | Traveler Location | Hotel Location | Place of Supply for Agent | Tax to be levied |
| Delhi | Registered | Indore | Udaipur | Indore | IGST |
| Delhi | Registered | Mumbai | Dubai | Mumbai | IGST |
| Delhi | Unregistered | Germany | Pune | Pune | IGST |
3. Services like Visa/Passport:
Visa and Passport services can be offered in two ways:
• Visa Statutory Authorities:
Charges levied by the Statutory Authorities for visas are exempted from GST when a customer approaches them directly.
• Visa Facilitation Centers:
Visas or passports obtained through facilitation centers or travel agents are taxable. When an air travel agent provides these services by adding their commission, they are taxable at 18% GST. The agent can claim an Input Tax Credit (ITC) on the GST paid to Visa Facilitation Centers.
4. Rail Ticket Booking:
A traveller has two options for booking a train ticket: through a rail travel agent or directly through the railways. If he books a ticket through a rail travel agent, GST at 18% will be applicable on the commission charged by the agent to the traveller. At the same time, railways do not pay any commission to the agent for the booking.
GST Rate and SAC Code on Travel Agents Services
| Explanation | SAC Code | GST Rate |
| Services provided by a tour operator to a foreign tourist in relation to a tour conducted wholly outside India. | 9985 | NIL |
| Supply of tour operators services. Explanation: "tour operator" means any person engaged in the business of planning, scheduling, organizing, arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport, and includes any person engaged in the business of operating tours. Reservation services for accommodation, cruises and package tours |
998552 | 5% |
| Renting of any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient. | 9966 | 5% |
| Supporting services in transport. | 9967 | 18% |
| Other travel arrangement and related services n.e.c | 998559 | 18% |
Disclaimer:-The information available on this website/ App is solely for informational purposes. We make no representation or warranties of any kind, express or implied about the accuracy, reliability, with respect to information and material or video available on website/APP, any reliance you place on such information is therefore strictly at your own risk. We are not liable for any consequence of any action taken by you relying on the material/information provided on this website.
The Indian textile industry is pivotal to the country's economic development, significantly contributing to employment, GDP and export promotion. As one of India's oldest industries, it ranks second only to agriculture in providing both skilled and unskilled employment. Since the introduction of the GST law, the GST rates on clothing have undergone several revisions due to the industry's complex tax structure.
GST rate for garments, accessories and clothing
Chapter 61 of the HSN code covers apparel and knitwear, while Chapter 62 addresses clothing and accessories that are not crocheted. For items in either category with a taxable value not exceeding Rs.1000 per piece, a 5% GST applies. According to Schedule II of Chapter 62, a 12% GST is levied on all clothing and accessories with a retail value exceeding Rs.1000.
GST on clothing and accessory items
Chapter 63 of the HSN code, titled "Other made-up textile articles, sets, worn clothing and worn textile articles; rags," encompasses a variety of textile products such as curtains, bed sheets, used clothing and other textiles. The GST rate for items in this chapter depends on the retail price: a 5% GST applies if the sale price is less than Rs.1000 and a 12% GST is levied if the sale price exceeds Rs.1000.
The GST Council has established GST rates for all commodities based on HSN codes, an international system for classifying goods in global trade. In accordance with the HSN classification, the GST rates for commodities like cotton, yarn, silk, wool and nylon vary widely, ranging from 0% to 5%, 12%, 18% and up to 28%. These products are categorized under different chapters of the HSN code.
GST rate for cotton
Cotton is categorized under Chapter 52 of the HSN code. Consequently, items made of cotton, such as Gandhi topi and khadi yarn, are exempt from GST. All other cotton and cotton-related products are subject to a 5% GST.
• Cotton
• Cotton waste
• Cotton-based thread used for sewing
• Cotton yarn, other than khadi yarn
• Cotton fabrics
GST rate for wool
Chapter 51 of the HSN code classifies wool, fine or coarse animal hair, horsehair yarn and woven cloth. Waste wool or fine or coarse animal hair, as well as coarse or fine animal hair that has not been carded or combed are exempt from GST.
The following items are subject to a 5% GST rate:
• Garnetted stock of wool or fine or coarse animal hair, shoddy wool
• Wool and fine or coarse animal hair, carded or combed
• Yarn of wool or animal hair
• Fabrics of wool or animal hair
GST rate for Nylon and artificial fibres
Nylon and other artificial fibres are classified under Chapter 54 of the HSN code, along with synthetic filaments and similar synthetic textile materials. Items in this chapter are taxed at either 5%, 12% or 18%. Textile fabrics made from man-made fibres are subject to a 5% GST.
GST rates for clothing and apparel
| Items | HSN CODES | GST Rate | Conditions |
| Knitted clothing and accessories | 61 | 5% | If the taxable value is less than ₹1000 |
| Garments and accessories that are not knit or that were produced mechanically | 62 | 5% | If the taxable value is less than ₹1000 |
| Clothing and apparel irrespective of how they have been made | 61 & 62 | 5% | If the taxable value is equal to or exceeds ₹1000 |
| Other textile-based products (for example bed sheets and curtains) | 63 | 5% | If the taxable value is equal to or exceeds ₹1000 |
| 63 | 12% | If the taxable value is equal to or exceeds ₹1000 |
FAQ’s
Q1. What is the GST rate on clothes?
Ans. The GST rate on clothes varies depending on the type of garment. However, most clothes are taxed at 5% GST.
Q2. What is the GST rate for T-shirts?
Ans. T-shirts with a sale value not exceeding Rs. 1000 per piece attract a 5% GST, while those exceeding Rs. 1000 per piece attract a 12% GST.
Q3. What is the HSN code and GST rate for garments?
Ans. The HSN code and GST rate of a garment depends on its price and specifications.
Q4. What is the new GST rate on readymade garments?
Ans. Readymade garments of sale value not exceeding Rs.1000 per piece attract 5% GST, while those exceeding Rs.1000 per piece attract 12% GST.
Q5. What is the HSN code and GST rate for labour charges?
Ans.
| Particulars | HSN Code | GST Rate |
| 9988 | Job work in relation to Textiles and textile products falling under Chapter 50 to 63 in the First Schedule to the Customs Tariff Act, 1975 (51of 1975) | 5 % |
| 9988 | Services by way of job work other than above | 12% |
Q6. What is the HSN code for Tailoring services?
Ans. The HSN code for tailoring services is 9988 and the GST rate is 5%.
Q7. What is the GST rate & HSN Code on sarees?
Ans. Sarees are taxed at a GST rate of 5% under HSN code 5208 to 5212.
Q8. What is the HSN code for unstitched suits or dress material?
Ans. The HSN code for dress material is 5208 to 5212, and the GST rate is 5%.
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There might be cases, where taxpayers have deposited the tax before the due date of filing GST Return. So, in this case, will the taxpayer liable for the interest or not?
This is a very critical issue and we shall understand this issue by the Madras High Court Ruling in the case of Eicher Motors Limited v. the Superintendent of GST and Central Excise.
Court: Madras High Court
Case: Eicher Motors Limited vs. Superintendent of GST and Central Excise
Judgment Date: January 2, 2024
Background of the case: In this case, the petitioner could not file GSTR-3B for the month of July 17 due to some technical glitches and since Section 39(10) of CGST Act disables an assessee from filing returns for the subsequent period if the returns for the previous tax period are not furnished. This resulted in delayed filing of subsequent tax periods from August to December 2017.
The petitioner had deposited the balance liability in the e-cash ledger within the due date for each month of filing the GSTR-3B. However, the department had issued a recovery notice for interest (as per section-50 of CGST Act) on account of delayed payment of tax to the Government.
Petitioner’s Contentions:
Though there was a delay in filing the returns, the entire tax amount has been deposited in time to the Government without any delay.
Deposits made into ECL (Electronic cash ledger) are considered as payments to the Government.
After depositing the funds, these funds belong to the Government and can be used by them without waiting for the GSTR-3B filing.
Respondent’s Contentions:
Deposit of tax in Electronic Cash Ledger would not amount to payment of tax and would be tantamount to failure to remit GST in time, for which interest liability would be attracted i.e. Electronic Cash Ledger deposits are not considered tax payments until debited through GSTR-3B filing.
Taxpayers can apply for refund of unused Electronic Cash Ledger balances. Hence, it will not be considered as tax payments until debited.
Court Observations:
• Section 39(7) of the CGST Act mandates tax payment before the last date of GSTR-3B filing.
Extract the provisions of Section 39(7) of the Act :
“39. (7) Every registered person, who is required to furnish a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (5), shall pay to the Government the tax due as per such return not later than the last date on which he is required to furnish such return.”
• Interest liability arises only if the tax amount is deposited after the due date.
• The payment of tax to the account of Government, the filing of GSTR-3B is immaterial, which means either with or without filing of monthly returns, the tax can be remitted to the Government.
Ruling :
Court ruled in favour of Eicher Motors.
Since, Eicher Motors deposited the tax amounts in the Electronic cash ledger within the due dates. Therefore, no interest liability will arise despite the delayed filing of GSTR-3B.
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Introduction:
If a person is registered under the Composition scheme and now converts from the Composition to the Normal scheme, they shall be entitled to take credit of input tax in respect of inputs held in stock, inputs contained in semi-finished or finished goods held in stock, and on capital goods on the day immediately preceding the date of conversion.
In the case of inputs, the tax invoice should not be more than one year old. In the case of capital goods, ITC can be claimed for tax invoices that are not more than one year old. For capital goods, ITC is reduced at the rate of 5% per quarter or part of the quarter.
For Example:
In the Case of Inputs, Semi-finished Stock, and Finished Goods: If a person converts from the Composition scheme to the Normal scheme on 24.08.2023, ITC can be claimed on the stock held in the form of inputs, semi-finished stock, and finished goods on the preceding date, 23.08.2023. However, as of 24.08.2023, GST paid in respect of such stocks with invoices that are more than one year old cannot be availed as ITC.
In the Case of Capital Goods: As of 01.04.2020, capital goods were purchased at the cost of Rs. 100,000 with GST paid of Rs. 18,000 (i.e., at the rate of 18%). Assume conversion from the Composition scheme to the Normal scheme on 24.08.2023. In such a case, ITC can be claimed in the following manner:
| For F.Y. 2020-21 | 20% ( 4 Quarter*5%) |
| For F.Y. 2021-22 | 20% ( 4 Quarter*5%) |
| For F.Y. 2022-23 | 20% ( 4 Quarter*5%) |
| For F.Y. 2023 -24 | 10 % ( 2 quarter*5%) |
| Total | 70 % |
| Total ITC | Rs.18000 |
| Less : ITC to be reduced i.e. 70% | Rs.12600 (18000*70%) |
| Net ITC available | Rs. 5400 |
In the case of capital goods, Rs. 5,400 ITC is availed.
Form Used for Transferring ITC:
The ITC-01 form is filed by the taxpayer to claim ITC.
Time Limit to File ITC-01 Form:
The ITC-01 form must be filed within 30 days from the date of conversion from the Composition scheme to the Normal scheme.
It is important to file the ITC-01 form timely to claim ITC. If the ITC-01 form is not filed within the stipulated time, ITC cannot be availed.
Example: You are registered under the Composition scheme. As of 12/12/2023, you opt out of the Composition scheme and file the CMP-08 form. In this case, you must file the ITC-01 form within 30 days from 12/12/2023, i.e., by 10/01/2024.
Disclaimer:-The information available on this website/ App is solely for informational purposes. We make no representation or warranties of any kind, express or implied about the accuracy, reliability, with respect to information and material or video available on website/APP, any reliance you place on such information is therefore strictly at your own risk. We are not liable for any consequence of any action taken by you relying on the material/information provided on this website.
If certain targets are achieved, discounts are given after sales and promotional schemes are run by distributors. However, the taxability of these Incentives, Discounts and Schemes under GST are complex.
What are Incentive, Discount and Schemes?
Incentive –
Rewards or bonuses are provided by the supplier to dealers to encourage them to achieve specific targets. For example, if during the month a dealer sells goods worth Rs. 10,00,000, then a Rs. 50,000 bonus is given to the dealer or Rs. 50,000 is reduced in the next purchase.
Discount –
Normally, a discount is given at the time of sale; such a discount is called a trade discount. This discount is offered to every customer, but after the sale, to recover payment, the company offers a cash discount. For example, after the sale, if payment is made within 30 days, an additional 2% discount is given.
Schemes –
Suppliers offer schemes to motivate dealers to increase sales. For example, 'Buy One, Get One Free' offers and coupons are provided. These coupons can be used for future payments.
Taxability of Incentives, Discounts and Schemes
• As per Section 15(3) of CGST Act 2017 if any discount is given before or at the time of sale and such discount is recorded in an invoice, then in that case the discount is not included in value of supply.
• If after the sale any discount is given and such discount is as per terms of agreement and linked to relevant invoice and input tax credit as is attributable to the discount on the basis of document issued by the supplier has been reversed by the recipient of the supply then in that case discount is not included in value of supply.
• If the discount is given after sale and not known at the time of supply then such discount is included in value of supply.
GST treatment in case of Incentive
Case 1 – If Credit note issued within the time limit as per CGST Act 2017.
Then in such case the supplier will issue a credit note and the recipient (buyer) will reverse the Input Tax credit (ITC).
Case-2 If Supplier issues Financial Credit Note -
In that case if the supplier issued a financial credit note without GST adjustment, then there is no need for GST reversal to the recipient (buyer).
FAQs on Incentives, Discounts and Schemes Earned by Dealers
Q.1 What is the HSN/SAC code of Incentive, Discount and Schemes?
Ans. HSN/SAC codes depend on the nature of the goods or services. Discounts fall under the main category of goods or services being sold.
• In the case of goods - Same HSN code as the main product.
• In the case of services- Same SAC code as the main service.
Q.2 Is discount included in the value of supply?
Ans. If any discount is given before or at the time of sale and such discount is recorded in the invoice then in that case the discount is not included in value of supply.
Disclaimer:-The information available on this website/ App is solely for informational purposes. We make no representation or warranties of any kind, express or implied about the accuracy, reliability, with respect to information and material or video available on website/APP, any reliance you place on such information is therefore strictly at your own risk. We are not liable for any consequence of any action taken by you relying on the material/information provided on this website/APP.
Topic Covers:
1. Applicability
2. Disabilities fall under Section 80U
3. Conditions to be Satisfied
4. Quantum of Deduction
5. Revision of Medical Certificate
Individual taxpayers who are suffering from disability can benefit from section 80U of the income tax act.
Applicability:
A resident individual (irrespective of citizenship). NRI cannot take benefit of this section. This deduction can be claimed by the taxpayer for himself.
Disabilities fall under Section 80U
The following disabilities are covered under section 80U of the Income Tax Act:
• Autism
• Cerebral palsy
• Blindness
• Low vision
• Leprosy cured
• Hearing impairment
• Locomotor disability
• Mental retardation
• Mental illness
Conditions to be Satisfied:
Assessee is a disabled individual: The assessee, at any time during the previous year, must be certified by a medical authority as a person with a disability.
Report: The assessee must furnish a copy of the certificate issued by the medical authority in the prescribed form along with the return of income for the relevant assessment year.
Quantum of Deduction:
Assessee suffering from severe disability (80% or more disability): ₹1,25,000
Assessee suffering from a disability (40% or more but less than 80% disability): ₹75,000
Deduction under this section is irrespective of the actual expenditure incurred, making it a statutory deduction.
Revision of Medical Certificate:
If the extent of disability requires reassessment after a specified period in the existing certificate, the assessee must obtain a new certificate from the medical authority and furnish it with the return of income.
Note:
If the taxpayer opts for the new tax regime, a deduction under section 80U is not allowed.
Deduction under Section 80U is available for the disabled assessee, whereas deduction under Section 80DD is for dependant disabled relatives.
New ITR forms commencing from the FY 23-24 require more details like:
• Nature of disability
• Date of filing Form 10-IA
• Acknowledgment number of the Form 10-IA
• UDID number (If available)
Disclaimer:-The information available on this website/ App is solely for informational purposes. We make no representation or warranties of any kind, express or implied about the accuracy, reliability, with respect to information and material or video available on website/APP, any reliance you place on such information is therefore strictly at your own risk. We are not liable for any consequence of any action taken by you relying on the material/information provided on this website/APP.
Nil GST Rate on Water and Water Base Product
1. Water other than aerated, mineral, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed containers.
2. Non-alcoholic Toddy.
3. Neera including date and palm neeras.
GST on water-based products with 5% GST
1. Ice and Snow.
GST on Water and Water based products with 12% GST
1. Mineral water packed in 20 litres bottles
2. Aerated waters
3. Coconut water when put up in a container
4. Non-alcoholic beer (other than tender coconut water)
5. Soya milk drinks, whether or not sweetened or flavoured
6. Beverages containing milk
GST on Water and Water based products with 18% GST
1. Mineral waters and aerated waters
2. Non-alcoholic beer
GST Rate on Water and Water Based Product with 28% GST
1. Aerated waters, Lemonade containing added sugar or other sweetening matter or flavoured.
2. Fruit pulp or fruit juice-based drinks [Carbonated Beverages of Fruit Drink or Carbonated Beverages with Fruit Juice]
HSN Code and GST rate of Water Base product -
| HSN Code | Description of Goods | GST Rate % |
| 2201 10 10 | Mineral waters and aerated waters : Mineral waters (Drinking water packed in 20 litres bottles) | 12% |
| 2201 10 10 | Mineral waters and aerated waters : Mineral waters (other than Drinking water packed in 20 litres bottles) | 18% |
| 2201 10 20 | Mineral waters and aerated waters : Aerated waters (Drinking water packed in 20 litres bottles) | 12% |
| 2201 10 20 | Mineral waters and aerated waters : Aerated waters ( other than Drinking water packed in 20 litres bottles) | 18% |
| 2201 90 10 | Other : Ice and snow | 5% |
| 2201 90 90 | Other: Water [other than aerated, mineral, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container] and Non-alcoholic Toddy, Neera including date and palm neera | 0% |
| 2201 90 90 | Other : Other | 18% |
| 2202 10 10 | Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured : Aerated waters | 28% |
| 2202 10 20 | Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured : Lemonade | 28% |
| 2202 10 90 | Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured : Other | 28% |
| 2202 91 00 | Other: Non-alcoholic beer (other than tender coconut water [and caffeinated beverages]) | 12% |
| 2202 91 00 | Other: Non-alcoholic beer | 18% |
| 2202 99 10 | Other : Soya milk drinks, whether or not sweetened or flavoured | 12% |
| 2202 99 20 | Fruit pulp or fruit juice based drinks [other than Carbonated Beverages of Fruit Drink or Carbonated Beverages with Fruit Juice] |
12% |
| 2202 99 20 | Fruit pulp or fruit juice based drinks [Carbonated Beverages of Fruit Drink or Carbonated Beverages with Fruit Juice] |
28% |
| 2202 99 30 | Other : Beverages containing milk | 12% |
| 2202 99 90 | Other : Other (other than tender coconut water [and caffeinated beverages]) | 18% |
| 2209 00 10 | Vinegar and substitutes for vinegar obtained from acetic acid : Brewed vinegar | 18% |
| 2209 00 20 | Vinegar and substitutes for vinegar obtained from acetic acid : Synthetic vinegar | 18% |
| 2209 00 90 | Vinegar and substitutes for vinegar obtained from acetic acid : Other | 18% |
FAQ,s on Water and Water Based Products
Q.1 What is the GST rate on Mineral water?
Ans. If Mineral water is packed in 20 litres bottles then the GST rate is 12%.
Q.2 What is the GST rate on Ice and Snow?
Ans. 5 % GST charge on Ice and Snow.
Q.3 What is the GST rate on Fruit pulp or fruit juice- based drinks ?
Ans. Carbonated beverages that contain fruit pulp or fruit juice, such as fruit drinks or carbonated beverages with fruit juice, are subject to a GST charge of 28%.
Q.4 What is the GST rate on water ?
Ans. Water other than aerated, mineral, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container charge are subject to GST @ Nil rate (zero).
Disclaimer:-The information available on this website/ App is solely for informational purposes. We make no representation or warranties of any kind, express or implied about the accuracy, reliability, with respect to information and material or video available on website/APP, any reliance you place on such information is therefore strictly at your own risk. We are not liable for any consequence of any action taken by you relying on the material/information provided on this website/APP.
Topic Covers:
1. Important Documents Required for Filing ITR
2. Documents are Required to Claim a Deduction u/s 80C to 80U
3. Documents are Required for Income from House Property
4. Do I Need to Attach the Document with the Income Tax Return?
Important Documents Required for Filing ITR?
As per the source of the income of the taxpayer requirement of documents differs. But, there are some mandatory documents for every taxpayer, irrespective of income sources. Following is a list of common documents that are required to file a return of Income.
1. PAN Card
Basic and Mandatory document..
2. Aadhaar Card
Aadhaar card details are mandatory according to Section 139AA of the Income Tax Act, individuals need to provide his/her while filing the returns.
It helps to verify the income tax return through an OTP.
3. Form 16
Taxpayers having income from salary receives Form 16 from the employer. Form 16 consists of two parts, Part A and Part B. Part-A provides the details of
i. tax deducted by the employer during the financial year,
ii. PAN and
iii. TAN details of the employer.
Part B of the form consists breakup of income and TDS calculations like gross salary breakup, exempt allowances, perquisites, etc.
4. Bank Account details and bank statement
From this financial year, it is mandatory to disclose all active bank accounts are in the ITR form.
Bank account details like
i. bank name,
ii. account number,
iii. IFSC,
Out of all accounts, one account should be selected as primary to get a tax refund by electronic transfer to such account. This account must also be validated on the portal to receive the refund.
Information of the interest earned on a savings account, fixed deposits, etc, during a financial year are required to file an ITR. And Bank statements provides all such information.
5. Form 26AS and AIS/TIS
Form 26AS gives details of the taxes deposited against the PAN of the taxpayer. These provide the details of gross income and tax deducted or collected on it.
AIS: Annual Information Statement (AIS) is a comprehensive view on the information of income of taxpayers from the various sources.
TIS: Taxpayer Information Summary (TIS) is a category-wise aggregated information summary for a taxpayer. It shows information under various categories like Salary, Interest, Dividend, etc.
6. Tax Saving Investments
If the taxpayer invested in any tax-saving schemes like tax-saving FDs, ELSS, etc., He must have the relevant documents at the time of filing ITR.
7. Capital Gains Details
If a taxpayer has capital gain or loss by the sale of shares, mutual funds, securities, or property. This gain or loss must be disclosed in the ITR. The documents like share capital gain statements, property sale deeds, etc. can help to calculate the income.
8. Rental Income
Income from house or property, should be disclosed in the ITR.
9. Foreign Income
The documents for any income earned in or from a foreign country during a job deployment or for part of the year should be furnished with your tax consultant to help you claim the benefit of tax credits and DTAA. The documents for any foreign income need to be arranged with the employer or contractor.
10. Dividend Income
Taxpayers receives dividend income on the investment of shares or mutual funds and this should be reported in the income tax return.
Documents are Required to Claim a Deduction u/s 80C to 80U
The following documents are important and should be compiled by the taxpayer to claim the deduction:
1. Home Loan Statement
Taxpayer who has taken a home loan from financial institutions like banks, NBFC etc., should collect the statement for the last financial year. To provide the information of repayment of the loan and take deduction in the appropriate clause.
2. School fee receipt for tuition fees
The tuition fee i.e. fee paid for education in India is allowed as a deduction under section 80C of the Income Tax Act. Taxpayer must have fees receipts to claim deduction under this section. The deduction is not allowed for bus fee, amount paid for food to the educational institute.
3. Contribution to PPF, Life Insurance Premium Receipts
Contributions to PPF, investments in LIC, tax saving FD, etc. are eligible for deduction under section 80C, aggregate deduction of Rs.1.5 lakhs can be claimed in this section.
4. Donation Receipts
Donations made to the trust or charitable institute which qualify for deduction @ 50% or 100% u/s 80G required donation receipts to claim the deduction.
5. Details of Medical Insurance
Premium paid for the health insurance policy can be claimed as deduction u/s Section 80D. This policy can be taken for self, spouse, children, and parents.
Deduction can be claimed for medical expenditures up to Rs 50,000 For senior citizens' parents that are not covered in medical policy.
6. Education loan
Taxpayer can claim a deduction under section 80E of interest paid on education loan. This loan can be taken for higher studies of self, spouse, or children.
Documents are Required for Income from House Property
The following details are required to disclose income from house property:
(a) Address of Property
(b) Ownership details Or Co-owner details
(c) Rent agreement, if any for Rental income details etc
(d) Interest certificate for home loan
(e) Pre-Construction Interest Details if any
(f) Municipal Tax Receipts
Do I Need to Attach the Document with the Income Tax Return?
Taxpayers must file income tax returns in online mode. And documents are not required to be attached with ITR. However, it is advisable to keep the documents safe for 7 years on the basis of which taxpayer has disclosed his income and claim deductions. This will be helpful if the return is taken for scrutiny by the income tax department.
Disclaimer:-The information available on this website/ App is solely for informational purposes. We make no representation or warranties of any kind, express or implied about the accuracy, reliability, with respect to information and material or video available on website/APP, any reliance you place on such information is therefore strictly at your own risk. We are not liable for any consequence of any action taken by you relying on the material/information provided on this website/APP.
In order for any business to thrive, it often relies on various promotions such as trade discounts, volume discounts, freebies, special offers, and more, which are made possible with the support of taxpayers.Discounts play an integral role in business operations. Offering trade discounts, cash discounts, and post-sale discounts are common practices in the business world. Businesses offer trade discounts to boost sales, cash discounts to expedite payment collection and post-sale discounts when specific targets are met or as part of promotional schemes facilitated by distributors.
These measures are essential for organizations to capture market share, attract new customers and boost profits. While meeting these business requirements, taxpayers must also ensure compliance with all relevant laws and stay updated on any legal changes.
Discounts under GST regime
Section 15 of the CGST Act 2017, which is reproduced below, deals with the provision of discounts:
“The value of the supply shall not include any discount which is given:
(a) before or at the time of the supply if such discount has been duly recorded in the invoice issued in respect of such supply; and
(b) After the supply has been effected, if –
(i) Such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices, and
(ii) Input tax credit as is attributable to the discount on the basis of a document issued by the supplier has been reversed by the recipient of the supply.”
The logical inference drawn from a plain reading of the above provision is:
Discounts mentioned on the face of the invoice can be reduced from the taxable value of the supplied goods. Even if discounts are not specified on the invoice, they can still be reduced from the taxable value if the following conditions are satisfied:
i) The discount is established through an agreement made before the supply, wherein both the supplier and the recipient have agreed upon the discount terms.
ii) Discount is associated with a specific supply invoice.
iii) The recipient or buyer of the supply is required to reverse the Input Tax Credit (ITC) attributable to the discount.
If both the supplier and the recipient of the goods or services are aware of the discount before the supply, the supplier's GST liability would be reduced, meaning GST would not be charged on the discount.
There will be no distinction in GST treatment between trade discounts and cash discounts. If a discount is provided before or at the time of supply and is separately mentioned on the invoice, it will not be included in the value of the supply.
Types of Discount and GST Implications:
In the world of trade and commerce, various types of discounts, known by different names, are offered both before and after the time of supply.
The broad categories of discounts observed across industries include:
1. Discounts are given before or at the time of sale, also known as pre-supply discounts, in-bill discounts or trade discounts.
2. Discounts given after the sale are also known as post-supply discounts or off-bill discounts.
After-sale discounts come in various types, such as:
• Cash discount or early payment discount
• Bulk discount or quantity discount
• Turnover discount
Analysis of GST Implications on various Discounts
Pre-supply discounts/ In-bill discounts/Trade discounts:
In common parlance, trade discount generally refers to the discount given at the time of sale of goods or provision of services.
According to section 15(3)(a) of the CGST Act 2017, if a discount is provided before or at the time of sale and is properly documented in the invoice, it is not included in the taxable value. Since GST is levied on the taxable value, there will be no GST applicability on the discount.
Example- Mr. X sold goods worth Rs.10,000 and offered a discount of Rs.1,000 at the time of sale. If this discount is correctly recorded in the invoice, it will not be included in the transaction value and GST will not be applicable on the discount.
| Particular | Amount |
| Sale value | Rs. 10000 |
| Less Discount | Rs. 1000 |
| Transaction value | Rs. 9000 |
Post-supply discounts/ Off-bill discounts:
These discounts are provided by issuing credit notes after the sale of goods or provision of services. According to Section 15(3)(b) of the CGST Act 2017, if a discount is given after the supply and the following condition is fulfilled, then such discount is not added to the taxable value, and GST is not applicable on that discount.
The condition is as follows:
• Such discount is established through an agreement made at or before the time of such supply, and
• Such discount is established through an agreement made at or before the time of such supply, and
• Based on the documents issued by the supplier, the recipient of the supply is required to reverse the input tax credit related to the discount.
Example- Mr. X sold goods to Mr. Y with an agreement that if Mr. Y purchases goods worth more than Rs 10 lakh between April and June 2024, then Mr. X will allow a discount of 10%. The sales figures for the relevant quarter were received in July 2024, confirming that Mr. Y was eligible for the discount as agreed upon. In this scenario, since the discount terms were agreed upon before the supply and the discount is being provided after the sale, GST will not be applicable on the value of the discount. Consequently, Mr. Y will need to reverse the Input Tax Credit (ITC) attributed to the GST on the discount amount.
GST implication on Cash Discount:
If a cash discount is allowed as a normal trade practice through an agreement made at or before the supply and relevant invoices can be traced, the supplier can deduct it from the transaction value provided that the recipient reverses the relevant Input Tax Credit.
However, if this discount is provided on an ad-hoc basis to prevent bad debts and recover underlying dues, it will not be eligible to be reduced from the transaction value. In this case, this amount will not be considered as a discount.
Seasonal Discount:
Seasonal discounts are offered during the off-season to boost sales of seasonal products. During this period, discounts are provided to clear surplus stock at discounted prices.
Example: Sale of woollen sweaters by clothing retailers at discounted prices during summer.
These discounts are generally given on the invoice value at the time of supply and are eligible for bill discount. However, these can also be given as discount after supply in the form of cash discounts / bulk discounts / turnover discounts etc.
Taxability of seasonal discount:
If a seasonal discount is offered before the sale of goods, GST will not be applicable on it. This is because the value of the discount will be deducted from the supply amount, and it will be clearly recorded on the invoice.
If a seasonal discount is provided after the sale of goods, the applicability of GST depends on whether the conditions of Section 15(3) are satisfied for that specific transaction.
FAQ’s
Q-1: What is the HSN code for discount on sales?
Ans.There is no specific HSN code for discounts on sales. Discounts are not separately classified under HSN codes. If discounts like Trade discounts, quantity discounts etc. are given before or at the time of the supply, GST will not be applicable on such trade/Quantity discount.
Q-2: What is the SAC code for discount on sales?
Ans.There is no specific SAC code for discounts on sales. Discounts are not separately classified under SAC codes. If discounts like Trade discount, quantity discount etc. are given before or at the time of the supply, GST will not be applicable on such trade/Quantity discount.
Q-3: What is the HSN code for rebate and discount?
Ans. There is no specific HSN code for rebates and discounts. They are not separately classified under HSN codes.
Q-4: Is Input Tax Credit (ITC) available on business promotion expenses?
Ans. Yes, Input Tax Credit (ITC) is available on business promotion expenses if they are incurred in the course or furtherance of business and are not specifically restricted under GST laws.
Q-5: What is the turnover discount?
Ans. Turnover discount refers to the discount given by a supplier to the buyer based on the volume or value of purchases made by the buyer during a specified period.
Q-6: Is post-sale discount applicable under GST?
Ans. Yes, post-sale discounts are applicable under GST if they meet certain conditions as specified under the GST law.
Q-7: What is the transaction value in GST?
Ans. Transaction value is the price actually paid or payable for the supply of goods or services where the supplier and recipient of the supply are not related and the price is the sole consideration for the supply.
Q-8: What is the taxable value in GST?
Ans. Taxable value in GST is the value on which GST is levied. It includes all costs, expenses and taxes incurred by the supplier in relation to the supply of goods or services.
Q-9: What is the value of taxable supply under GST?
Ans. The value of taxable supply under GST is the transaction value of goods or services supplied, excluding taxes and other charges.
Q-10: How to calculate taxable value from the total invoice value?
Ans. Taxable value = Total invoice value - (Discounts + Other charges + Taxes)
Q-11: Is GST applicable on discount received?
Ans. No, GST is not applicable on the discount received by the recipient of goods or services.
Q-12: What is the purchase discount?
Ans. Purchase discount is a reduction in the price of goods or services offered by the seller to the buyer as an incentive for early payment or other reasons.
Q-13: Does MRP include GST?
Ans. Yes, the Maximum Retail Price (MRP) includes all taxes including GST.
Q-14: What is an upfront discount?
Ans. An Upfront discount is a discount given by the supplier to the buyer at the time of purchase.
Q-15: How to reduce GST from the total amount?
Ans. GST can be reduced from the total amount by subtracting the GST amount from the total invoice value.
Q-16: What is the sales discount?
Ans. Sales discount is a reduction in the price of goods or services offered by the seller to the buyer as an incentive for early payment or other reasons.
Disclaimer:-The information available on this website/ App is solely for informational purposes. We make no representation or warranties of any kind, express or implied about the accuracy, reliability, with respect to information and material or video available on website/APP, any reliance you place on such information is therefore strictly at your own risk. We are not liable for any consequence of any action taken by you relying on the material/information provided on this website.
A. Introduction:
Remittance made outside India requires reporting to the income tax department through various forms relevant to the transaction. Furnishing information to the department is mandatory to comply with the law. Relief from compliance is also provided under the Income Tax Act for specific transactions. In this article, we discuss about the cases where Form 15CA/CB is required to be filed when the remittance is made under LRS.
B. Liberalised Remittance Scheme (LRS) :
Liberalised Remittance Scheme, allows all resident individuals, including minors, to freely remit up to USD 2,50,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both. The Scheme is not available to corporates, partnership firms, HUF, Trusts etc.
One can remit money within the LRS limit of $2,50,000 per financial year, for the following:
a. Private visits to any country (except Nepal and Bhutan).
b. Gift or donation.
c. Going abroad for employment.
d. Emigration.
e. Maintenance of close relatives abroad.
f. Travel for business, or attending conferences, or specialised training, or meeting medical expenses, or check-up abroad, or for accompanying as an attendant to a patient going abroad for medical treatment.
Remittance beyond the prescribed limit requires prior approval of RBI.
C. Form 15CA and CB:
• Every person who is making payment to a non-resident (not being a Company), or to a Foreign Company is required to deduct tax if the sum is chargeable to Income Tax and these details are required to be furnished in Form 15CA.
• Form 15CA is required to be furnished before making such remittance by the person responsible for making the remittance. There are two modes to submit the form one is online and another is offline. In certain cases, certificate in Form 15CB is also required to upload with Form 15CA.
Two types of transactions where Form 15CA and CB is not required to be filed are:
1. Not taxable Remittance is made by an individual and does not require prior approval of RBI.
2. Not taxable Remittance is of the nature specified under the relevant purposes code as per RBI as per the list given under rule 37BB(3).
D. Transaction under LRS required to file Form 15CA/CB:
Transactions which do not fulfill the conditions of non-filing Form 15CA & CB as mentioned above. In other words following transactions are required to file Form 15CA
• Remittance taxable under the income tax act.
• Non-taxable but does not fulfill the above condition for not-filing Form 15CA.
E. Transaction under LRS not required to file Form 15CA and CB:
As per the Rule 37BB(3) of the income tax rules, remittance which is not chargeable to tax and where the approval of RBI is not required, Form 15CA is not required to be filed.
So following transactions under LRS up to the prescribed limit is not required to file Form 15CA.
Remittance within the LRS limit of $2,50,000 per financial year, one can remit money for the following:
a. Private visits to any country (except Nepal and Bhutan).
b. Gift or donation.
c. Going abroad for employment.
d. Emigration.
e. Maintenance of close relatives abroad.
f. Travel for business, or attending conferences, or specialised training, or meeting medical expenses, or check-ups abroad, or for accompanying as an attendant to a patient going abroad for a medical treatment.
F. Conclusion
It can be concluded that the liability to furnishing Form 15CA & CB not depends on the transaction falling under the LRS or not. Even though the transactions falls or fulfils the LRS conditions payer is required to file Form 15CA. one should deal with both the provisions separately.
