GST Guide with Ready Reckoner (2nd edition)

IGST

SGST

August 2017

GST Guide with Ready Reckoner

SECOND EDITION

Rakesh Garg LLB, FCA | Sandeep Garg CMA, FCA Highlights • GST at-a-glance including check-lists on various compliance provisions, due dates, non-creditable supplies, penalties and offences, GST Forms at glance, etc covering the vital provisions of almost the entire Act • Detailed commentary on various provisions through illustrations, tables and graphs • Contentious issues arising from the enacted CGST/SGST/IGST Laws have been discussed in the respective chapters • Articles amended/inserted by the Constitution (101st Amendment) Act, 2016 • Complete text of the notified CGST Act/Rules, IGST Act/Rules, GST (Compensation to States) Act/Rules along with important circulars and press releases • Covers HSN Code-wise GST Tariff – Goods and Services

Bloomsbury India Professional

CGST

UTGST

Contents at a glance About the authors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi Table of contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv PART A

AT A GLANCE Chapter A-1

GST in India – At-a-glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Chapter A-2

Compliance chart with limitation periods under GST. . . . . . . . . . . . . . . . . . . . . . . . 41

Chapter A-3

GST Transition – Time limits and limitation periods . . . . . . . . . . . . . . . . . . . . . . . . 53

Chapter A-4

Reverse Charge under GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Chapter A-5

Non-creditable goods/services and supplies under GST. . . . . . . . . . . . . . . . . . . . . . 65

Chapter A-6

Returns under GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Chapter A-7

Penalties and offences under GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Chapter A-8

GST, a “One Nation One Tax”– Critical study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

Chapter A-9

Seamless Input Tax Credit in GST– Exceptions – Critical Study. . . . . . . . . . . . . . . 81

Chapter A-10 GST Forms - At -a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 PART B

COMMENTARY Chapter B-1

Pre-GST Indian indirect tax structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

Chapter B-2

GST – concept, features and advantages and Constitutional Amendment . . . . . . . 105

Chapter B-3

Taxes or duties subsumed in the GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

Chapter B-4

GST Council and its functions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

Chapter B-5

Whether a person is liable to pay GST − steps . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133

Chapter B-6

Key definitions under the GST and Goods vs. Services . . . . . . . . . . . . . . . . . . . . . 135

Chapter B-7

Supply – meaning, time and valuation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187

Chapter B-8

Concept of IGST - Inter-state supply and Intra-state supply. . . . . . . . . . . . . . . . . . 217

Chapter B-9

Imports, Zero-rated supplies and Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239

Chapter B-10 Levy, Reverse Charge, Rates, Exemptions and Threshold limit. . . . . . . . . . . . . . . 255 Chapter B-11 Input tax credit and input service distributor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279 Chapter B-12 Composition levy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307 Chapter B-13 Job work – special provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317 xiii

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Chapter B-14 E-commerce, TCS & supply of online data– special provisions. . . . . . . . . . . . . . . 323 Chapter B-15 Registration, Amendment and Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333 Chapter B-16 Returns under the GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373 Chapter B-17 Payment of tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413 Chapter B-18 Tax deduction at source. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425 Chapter B-19 Refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 431 Chapter B-20 Invoice, accounts and records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 457 Chapter B-21 Assessment, audit & determination of tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 483 Chapter B-22 Collection of tax & Recovery and Liability in certain cases. . . . . . . . . . . . . . . . . . 495 Chapter B-23 Inspection, search & survey. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513 Chapter B-24 Inspection of goods in movement, Confiscation and e-way bill. . . . . . . . . . . . . . . 523 Chapter B-25 Penalties and prosecution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527 Chapter B-26 Appeal, advance ruling and Anti-profiteering provisions . . . . . . . . . . . . . . . . . . . . 537 Chapter B-27 Transitional provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 549 Chapter B-28 Miscellaneous provisions and GST in other countries. . . . . . . . . . . . . . . . . . . . . . . 601 Chapter B-29 Industry – impact and transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 611 Chapter B-30 GST Network. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 627 PART C

LEGISLATION I. II. III. IV. V. VI. VII.

Amended/Inserted Articles by the Constitution (101st Amendment) Act, 2016 . . 633 Central GST Act and Rules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 645 The Delhi Goods and Services Tax Act, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . 885 IGST Act and Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 901 GST (Compensation to States) Act and Rules. . . . . . . . . . . . . . . . . . . . . . . . . . . . 929 Important GST Forms to be used by the Taxpayers. . . . . . . . . . . . . . . . . . . . . . . . 945 Important Press Releases and Circulars. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1147 PART D

HSN CODE-WISE GST TARIFF – GOODS Precautions and safeguards - HSN Code-wise tariff for Goods. . . . . . . . . . . . . . . . . . . . . . . . . . . 1176 HSN Code-wise Tariff for goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1179 PART E

HSN CODE-WISE GST TARIFF – SERVICES Precautions and safeguards - HSN Code-wise tariff for Services . . . . . . . . . . . . . . . . . . . . . . . . . 1396 Part E: SAC code wise GST Tariff – Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1397 Scheme of Classification of Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1459 xiv

Table of contents About the authors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi Contents at a glance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii PART A

AT A GLANCE Chapter A-1 GST in India – At-a-glance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.1 GST – Meaning and its scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.2 Legislative Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.3 Taxable event and charging provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 1.4 Rates of GST, Import & Export. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 1.5 Exemptions and exempt supplies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 1.5.1 Power to grant exemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 1.6 Meaning and Scope of the term “Supply”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 1.6.1 Scope of supply (Section 7 & 8 of GST Act). . . . . . . . . . . . . . . . . . . . . . . . . . . 8 1.6.2 Inter-State supply vs. Local Supply and Place of Supply (Section 7 to 13 of IGST Act). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 1.6.3 Time of supply (Section 12 & 13 of GST Act). . . . . . . . . . . . . . . . . . . . . . . . . 10 1.6.4 Value of supply (Section 15 of GST Act). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 1.7 Threshold Limit (Basic Exemption) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 1.7.1 Exemption limit (Sec 22 of GST Act). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 1.7.2 When threshold limit is not applicable (Sec 24 of GST Act). . . . . . . . . . . . . . 12 Taxable Persons & Registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 1.8 1.8.1 Taxable person [Sec 2(107) of GST Act]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 1.8.2 Who is liable for registration mandatorily under GST [Sec 22(1) of GST Act]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 1.8.3 Who is not liable to take registration? (Sec 23 of GST Act). . . . . . . . . . . . . . 13 1.8.4 Agriculturist [Section 2(7) of GST Act]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 1.8.5 Time limit for taking registration [Section 25(1)] . . . . . . . . . . . . . . . . . . . . . . 14 1.8.6 Voluntary Registration under GST [Section 25(3)] . . . . . . . . . . . . . . . . . . . . . 14 1.9 Composition Scheme [Section 10]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 1.10 Output Tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 1.10.1 Meaning of output tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 1.10.2 Steps for computation of output tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 1.11 Input Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 1.11.1 Input tax credit in the GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 1.11.2 Restrictions in claiming ITC [Sec 16 of GST Act]. . . . . . . . . . . . . . . . . . . . . . 17 xv

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1.12 1.13

1.14

1.15

1.16

1.17

1.18

1.19

1.20

xvi

1.11.3 Non creditable goods/services/supplies [Sec 17(5)]. . . . . . . . . . . . . . . . . . . . .

1.11.4 Utilization of credit [Sec 49(5)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Job Work [Section 19, 143 of GST Act] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tax Invoice, Bill of Supply, Debit/Credit Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.13.1 Who is required to issue tax invoice or bill of supply or receipt voucher or delivery challan?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.13.2 Contents of tax invoice (Rule 46 of the GST Rules) . . . . . . . . . . . . . . . . . . . .

1.13.3 Circumstances when a debit note or credit note is issued (Sec 34 of the GST Act). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accounts and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.14.1 Maintenance of Accounts and Records (Sec 35 of the GST Act). . . . . . . . . . .

1.14.2 Retention of Accounts and Records (Sec 36 of the GST Act) . . . . . . . . . . . . .

Returns under the GST (Chapter IX of the GST Act). . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.15.1 Types of returns or reports and periodicity. . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.15.2 Other features of the Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.15.3 Returns process flow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.15.4 Matching process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Payment of Tax (Section 49 of the GST Act) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.16.1 Broad features. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.16.2 Payments to be made in the GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.16.3 Persons liable to pay GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.16.4 Modes of payment of GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tax Deduction at Source (TDS) (Section 51) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.17.1 Persons may be required to deduct TDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.17.2 Rates of TDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.17.3 When to deduct TDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.17.4 Obligations of deductor of TDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tax Collection at Source (TCS) (Section 52) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.18.1 Time of collection of TCS and its value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.18.2 Rates of TCS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.18.3 Obligations of collector of TCS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.18.4 Matching of TCS with supplies by the supplier. . . . . . . . . . . . . . . . . . . . . . . .

Supplier of online information and database access or retrieval services located outside India to specified person in the taxable territory (OIDAR) (Section 14 of IGST Act). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.19.1 Applicability of the provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.19.2 Meaning of “online information and database access or retrieval services” (OIDAR). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.19.3 Role of intermediary who arranges the services. . . . . . . . . . . . . . . . . . . . . . . .

1.19.4 Registration, payment of tax and returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Refund (Section 54 & 55 of the GST Act). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.20.1 Circumstances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Time limit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.20.2 1.20.3 Procedure for claiming refund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18 18 18 19 19 20 21 21 21 23 23 23 23 24 25 25 25 26 26 27 27 27 27 27 27 28 28 29 29 29

30 30 30 30 31 31 31 32 33

1.21

1.22 1.23 1.24 1.25

Table of contents

Assessment and Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.21.1 Meaning of assessment and scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.21.2 Audit (Sec 65 of the GST Act). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.21.3 Specific provisions for determination of tax. . . . . . . . . . . . . . . . . . . . . . . . . . .

1.21.4 Special Audit (Section 66 of the GST Act). . . . . . . . . . . . . . . . . . . . . . . . . . . .

E-way bill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Advance ruling (Section 95 of the GST Act). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Appeals (Chapter XVIII of the GST Act) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Information returns (Section 150 of the GST Act) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.25.1 Who is required to file information return? . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.25.2 What type of information may be asked in the return?. . . . . . . . . . . . . . . . . . .

1.25.3 Penalty for non-furnishing of information return [Section 123 of GSTÂ Act]. .

1.25.4 Penalty for non-furnishing of information return. . . . . . . . . . . . . . . . . . . . . . .

33 33 34 35 36 37 37 38 39 39 40 40 40

Chapter A-2 Compliance chart with limitation periods under GST. . . . . . . . . . . . . . . . . . 41 Chapter A-3 GST Transition – Time limits and limitation periods . . . . . . . . . . . . . . . . . .

3.1 Action points after the Appointed Day (AD). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.2 Stock holding periods as on Appointed Day (AD) for claiming input tax credit . . . . . . .

3.3 Time Limits of removal/dispatch before the Appointed Day (AD) (in case of return of goods after the AD). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

53 53 54

Chapter A-4 Reverse Charge under GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.1 Reverse Charge in respect of goods under sec 9(3) of the GST Act and 5(3) of the IGST Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.2 Reverse Charge in respect of services under sec 9(3) of the GST Act and 5(3) of the IGST Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.3 Reverse Charge in respect of goods and services under sec 9(4) of the GST Act and 5(4) of the IGST Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

57

55

57 58 62

Chapter A-5 Non-creditable goods/services and supplies under GST. . . . . . . . . . . . . . . . 65 5.1 Non creditable goods/services/supplies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Chapter A-6 Returns under GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.1 Types of returns or reports and periodicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.2 Person-wise returns and periodicity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.3 Simple Return in Form GSTR-3B for July & August 2017. . . . . . . . . . . . . . . . . . . . . . .

67 67 69 69

Chapter A-7 Penalties and offences under GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.1 Penalties under GST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.2 Offences under GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.2.1 Nature of acts regarded as offences (Sec 132). . . . . . . . . . . . . . . . . . . . . . . . .

7.2.2 Quantum of punishment for offences stated in (A) (Sec 132) . . . . . . . . . . . . .

71 71 74 74 75

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Chapter A-8 GST, a “One Nation One Tax”– Critical study. . . . . . . . . . . . . . . . . . . . . . . . 77 8.1 Structure of GST in India. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 8.2 Is GST really a “One Nation One Tax”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 Chapter A-9 Seamless Input Tax Credit in GST– Exceptions – Critical Study. . . . . . . . . 81 Chapter A-10 GST Forms - At -a Glance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 Central Goods and Services Tax Forms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 State Goods and Services Tax Forms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 PART B

COMMENTARY Chapter B-1 Pre-GST Indian indirect tax structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 1.1 Framework of Constitution of India in respect of taxation. . . . . . . . . . . . . . . . . . . . . . . . 95 1.2 Main indirect taxes or duties in India pre-GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 1.3 Customs duty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 1.4 Excise duty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 1.5 Service tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 1.6 State value added tax (VAT) or central sales tax (CST). . . . . . . . . . . . . . . . . . . . . . . . . . . 99 1.6.1 Value added tax (VAT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 1.6.2 Enactment of the Central Sales Tax Act, 1956 (CST Act) . . . . . . . . . . . . . . . 101 1.7 Other important indirect taxes or duties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 1.8 Shortcomings of the pre-GST structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 Chapter B-2 GST – concept, features and advantages and Constitutional Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.1 What is GST and why GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

101st Constitutional Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.2 2.2.1 Statement of Objects & Reasons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.2.2 Insertion of new Article 246A – Simultaneous powers to levy GST. . . . . . .

2.2.3 Insertion of new Article 269A – Levy of integrated GST. . . . . . . . . . . . . . . .

2.2.4 Distribution of IGST and CGST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.2.5 Creation of GST Council – Article 279A. . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.2.6 Other amendments in the Constitutions. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.3 Features of Indian GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.4 Illustration on GST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.5 Illustrations on GST [As given in the first discussion paper] . . . . . . . . . . . . . . . . . . . . .

2.5.1 In relation to supply of goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.5.2 In relation to supply of services – Illustration . . . . . . . . . . . . . . . . . . . . . . . .

2.6 Pre-GST indirect tax structure versus GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.7 Advantages of GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.8 FAQs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xviii

105 105 106 106 107 107 108 108 109 110 113 115 115 115 116 121 122

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Chapter B-3 Taxes or duties subsumed in the GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.1 Taxes or duties subsumed in GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.2 Taxes or duties not subsumed in GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.2.1 GST has not subsumed the following central taxes/duties. . . . . . . . . . . . . . .

3.2.2 GST has not subsumed the following state taxes/duties. . . . . . . . . . . . . . . . .

3.3 Special status of tobacco and its products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.4 FAQs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

123 123 124 124 124 124 126

Chapter B-4 GST Council and its functions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.1 What is GST Council. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.2 Manner of decision by the GST Council. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.3 Role and functions of the GST Council. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.4 Meetings of the GST Council and its conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

127 127 127 128 129

Chapter B-5 Whether a person is liable to pay GST − steps . . . . . . . . . . . . . . . . . . . . . . . 133 Chapter B-6 Key definitions under the GST and Goods vs. Services . . . . . . . . . . . . . . .

6.1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.2 General interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.3 Definitions relating to Goods, Services, Business, etc. . . . . . . . . . . . . . . . . . . . . . . . . . .

6.3.1 Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.3.2 Actionable claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.3.3 Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.3.4 Money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.3.5 Input . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.3.6 Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.3.7 Telecommunication service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.3.8 Input service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.3.9 Capital Goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.3.10 Motor vehicle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.3.11 Voucher. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.3.12 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.3.13 Manufacture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.3.14 Job work. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.3.15 Works contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.3.16 Electronic commerce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.3.17 Deemed Exports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.3.18 Online information and database access or retrieval services . . . . . . . . . . . .

6.4 Definitions relating to Person (Supplier, Recipient, etc). . . . . . . . . . . . . . . . . . . . . . . . .

Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.4.1 6.4.2 Family. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.4.3 Taxable person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.4.4 Registered person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.4.5 Non-resident taxable person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

135 135 136 139 139 141 142 143 143 144 144 144 145 145 145 146 149 149 150 151 151 151 152 152 153 153 153 154 xix

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6.6

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6.4.6 Casual taxable person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.4.7 Supplier. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.4.8 Recipient. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.4.9 Principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.4.10 Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.4.11 Agriculturist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.4.12 Associated enterprise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.4.13 Business vertical. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Electronic commerce operator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.4.14 6.4.15 Input Service Distributor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.4.16 Special Economic Zone developer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.4.17 Intermediary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.4.18 Non-taxable online recipient. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Definitions relating to Supply, Export, Import, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.1 Supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.2 Taxable supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.3 Non-taxable supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.4 Exempt supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.5 Intra-State supply of goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.6 Intra-State supply of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.7 Continuous supply of goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.8 Continuous supply of services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.9 Inward supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.10 Outward supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.11 Composite supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.12 Mixed supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.13 Principal supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.14 Zero rated supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.15 Place of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.16 Export of goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.17 Export of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.18 Import of goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.19 Import of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.20 Customs frontiers of India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.21 Special Economic Zone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.22 Continuous journey. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.5.23 Removal of goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Definitions relating to place, address, location, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.6.1 Principal place of business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.6.2 Place of business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.6.3 Location of the supplier of services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.6.4 Location of the recipient of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fixed establishment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.6.5

154 154 155 155 155 156 157 158 159 159 160 160 161 161 162 162 162 162 163 163 163 163 164 164 164 165 165 165 165 166 166 166 166 166 167 167 167 168 168 168 168 169 169

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6.6.6 Usual place of residence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.6.7 Address on record. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.6.8 Address of delivery. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Definitions relating to Computation of Turnover, Tax, etc . . . . . . . . . . . . . . . . . . . . . . .

6.7.1 Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.7.2 Aggregate turnover. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.7.3 Turnover in a State. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.7.4 Output tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Input tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.7.5 6.7.6 Input tax credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.7.7 Market value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.7.8 Tax period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Definitions relating to Returns, Invoice, Documents, Records, etc. . . . . . . . . . . . . . . . .

Definitions relating to Tax, Cess, Acts, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Definitions relating to Assessment, Audit, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.10.1 Assessment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.10.2 Audit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Definitions relating to Professionals and Practitioners . . . . . . . . . . . . . . . . . . . . . . . . . .

Definitions relating to GST Authorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Definitions relating to State, Territory, Government, etc. . . . . . . . . . . . . . . . . . . . . . . . .

6.13.1 Government. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.13.2 Local authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.13.3 State. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.13.4 Union Territory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.13.5 India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Goods vs. Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.15.1 Why distinction is required. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.15.2 Meaning of the term “goods”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.15.3 Meaning of the term “services” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.15.4 Intangible property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.15.5 Matters specified in Schedule II – Goods (or) Service. . . . . . . . . . . . . . . . . .

170 170 170 170 170 172 172 173 174 174 174 175 175 176 177 177 177 178 178 179 180 180 180 180 181 181 182 182 182 183 184 185

Chapter B-7 Supply – meaning, time and valuation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.1 Meaning of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.1.1 Meaning of the term “supply”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.1.2 Whether an activity is “supply of goods” or supply of service” -Matters listed in Schedule II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.1.3 Activities or transactions which shall be treated neither as supply of goods nor as supply of services - Schedule III. . . . . . . . . . . . . . . .

7.1.4 Powers of the government in respect of supply . . . . . . . . . . . . . . . . . . . . . . .

7.1.5 Composite or mixed supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

187 187 187 188

6.7

6.8 6.9 6.10

6.11 6.12 6.13

6.14 6.15

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7.1.6 7.1.7

7.2

7.3

7.4

7.5

xxii

Meaning of the term “consideration”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Whether supply by an individual, who is not engaged in business, also falls within the definition?. . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.1.8 Whether “supply” includes supply without the profit motive, such as, sale of scrap by transport corporation to reduce space?. . . . . . . . . .

7.1.9 Whether the term “supply” includes stock transfer within the entity?. . . . . .

7.1.10 Whether stock transfer (of goods) within the same entity will be taxable as “goods” or as “service”? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Can “recipient of supply” be treated as “supplier?. . . . . . . . . . . . . . . . . . . . .

7.1.11 7.1.12 What is “continuous supply”?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.1.13 What is “outward supply” and “inward supply”?. . . . . . . . . . . . . . . . . . . . . .

Time of supply of goods – when taxable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.2.1 Time of supply of goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.2.2 Time of supply of vouchers, by whatever named called. . . . . . . . . . . . . . . . .

7.2.3 Supply relating to interest, late fee or penalty . . . . . . . . . . . . . . . . . . . . . . . .

7.2.4 Where time of supply could not be determined in accordance with earlier provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Time of supply of services – when taxable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.3.1 Time of supply in case of services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.3.2 Time of supply of services subject to reverse charge. . . . . . . . . . . . . . . . . . .

7.3.3 Time of supply of vouchers, by whatever named called. . . . . . . . . . . . . . . . .

7.3.4 Special provision in relation to the “associated enterprises” . . . . . . . . . . . . .

7.3.5 Supply relating to interest, late fee or penalty . . . . . . . . . . . . . . . . . . . . . . . .

7.3.6 Where time of supply could not be determined in accordance with earlier provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Change in rates of tax – Goods or Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.4.1 Time of supply of goods and/or services in case of change in rate of tax (CRT) of supply of goods and/or services. . . . . . . . . . . . . . . . . . .

Value of supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.5.1 Value of taxable supply for levy of GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.5.2 When are two persons stated to be related to each other? . . . . . . . . . . . . . . .

7.5.3 Inclusion of amounts while determining transaction value . . . . . . . . . . . . . .

7.5.4 Exclusion of discounts while determining transaction value. . . . . . . . . . . . .

7.5.5 When is a person required to refer the Valuation Rules?. . . . . . . . . . . . . . . .

7.5.6 Value of supply where supply is for a consideration not wholly in money – Rule 27 of the GST Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.5.7 Value of supply taking place between related persons or the distinct persons (inter-unit supply) – Rule 28. . . . . . . . . . . . . . . . . . . . . . . . .

7.5.8 Value of supply made or received through an agent – Rule 29 . . . . . . . . . . .

7.5.9 Manner of valuation prescribed in Rules 30 & 31. . . . . . . . . . . . . . . . . . . . .

7.5.10 Manner of valuation in specified activities – Rule 32. . . . . . . . . . . . . . . . . . .

7.5.11 Value of supply of services in case of pure agent – Rule 33. . . . . . . . . . . . . .

Exchange rate of currency, other than INR – Rule 34 . . . . . . . . . . . . . . . . . .

7.5.12

197 197 198 198 198 198 199 200 200 200 202 203 203 203 203 205 205 205 206 206 206 206 207 207 208 209 210 210 210 211 212 212 213 215 216

Table of contents

7.5.13

Value of supply is inclusive of GST – Rule 35. . . . . . . . . . . . . . . . . . . . . . . . 216

Chapter B-8 Concept of IGST - Inter-state supply and Intra-state supply. . . . . . . . . . .

8.1 Erstwhile indirect tax structure – Inter-state transactions. . . . . . . . . . . . . . . . . . . . . . . .

8.1.1 Features of Central Sales Tax Act, 1956 (CST Act). . . . . . . . . . . . . . . . . . . .

8.1.2 Tax on Import of goods into India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.1.3 Tax on import of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.2 IGST model for inter-state transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Meaning of the term “IGST” and its need . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.2.1 8.2.2 Features of the “IGST” mechanism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.2.3 Supply of goods or services in the course of inter-state trade or commerce.

8.2.4 Supply of goods or services within the state. . . . . . . . . . . . . . . . . . . . . . . . . .

8.2.5 Supplies in territorial water [Sec 9 of the IGST Act]. . . . . . . . . . . . . . . . . . .

8.2.6 Illustration – Computation of inter-state GST (IGST). . . . . . . . . . . . . . . . . .

8.3 Determination of place of supply (POS) of Goods and situs. . . . . . . . . . . . . . . . . . . . . .

8.3.1 Supply of goods other than supply of goods imported into, or exported from India. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.3.2 Supply of goods imported into, or exported from India [Section 11]. . . . . . .

8.4 Determination of place of supply (POS) of services and situs . . . . . . . . . . . . . . . . . . . .

8.4.1 Supply of services where the location of supplier of service and the location of the recipient of service (both) are in India. . . . . . . . . . . . . . .

8.4.2 Supply of services where location of supplier or location of the recipient is outside India [Section 13] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.5 Taxation of import of goods and services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.6 Transfers of goods/services to branch/agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.7 FAQs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

217 217 217 218 219 219 219 220 220 221 222 222 223

Chapter B-9 Imports, Zero-rated supplies and Exports. . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.1 Import of goods and services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.1.1 Import of goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.1.2 Import of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.1.3 Taxation on import of goods and services . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.1.4 High seas sale of goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.2 Zero rated supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.2.1 Meaning of zero-rated supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.2.2 Eligibility of input tax credit or refund on zero-rated supply [Sec 16 of the IGST Act]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.3 Export of goods and services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.3.1 Export of goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.3.2 Export of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.3.3 Deemed export . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9.3.4 Export under GST – Refund and procedure. . . . . . . . . . . . . . . . . . . . . . . . . .

9.4 Supply of goods and/or services to SEZ unit/developer. . . . . . . . . . . . . . . . . . . . . . . . .

239 239 239 239 240 245 247 247

225 227 227 227 232 235 235 236

247 248 248 248 248 249 253

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Chapter B-10 Levy, Reverse Charge, Rates, Exemptions and Threshold limit. . . . . . . . .

10.1 Levy and collection of GST (Incidence of Tax). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.1.1 Levy of GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.1.2 Levy of compensation cess. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.1.3 Collection of GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.2 Rates of GST in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.3 RNR –Meaning, Determination and Globally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.3.1 Meaning of Revenue Neutral Rate (RNR). . . . . . . . . . . . . . . . . . . . . . . . . . .

10.3.2 Determination of RNR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.3.3 Factors for determination of RNR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.3.4 Success of GST – Depends upon ideal RNR . . . . . . . . . . . . . . . . . . . . . . . . .

10.4 Exemptions and exempt supplies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.4.1 Power to grant exemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.4.2 Meaning of exempted supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.4.3 Meaning of non-taxable supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.4.4 Notification Nos. of CGST and IGST Rate:. . . . . . . . . . . . . . . . . . . . . . . . . .

10.4.5 Clarifications in respect of exemptions:. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.5 Non-taxable persons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.5.1 Who is a taxable person? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.5.2 Agriculturist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.6 Zero rated supply and export of goods and services. . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.7 Threshold limit for registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.7.1 Threshold limit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.7.2 When the threshold limit is not applicable?. . . . . . . . . . . . . . . . . . . . . . . . . .

10.8 Calculation of output tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.8.1 Meaning of output tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.8.2 Liability of the principal and agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.8.3 Steps for computation of output tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.9 FAQs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

255 255 255 265 266 266 268 268 268 269 269 270 270 270 271 271 271 273 273 274 275 275 275 276 276 276 277 277 278

Chapter B-11 Input tax credit and input service distributor . . . . . . . . . . . . . . . . . . . . . . . .

11.1 Meaning of input tax credit (ITC). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.2 Meanings of capital goods, input and input service. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.2.1 Meaning of “capital goods” – [Section 2(19)]. . . . . . . . . . . . . . . . . . . . . . . .

11.2.2 Meaning of “input” – [Section 2(59)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.2.3 Meaning of “input service” – [Section 2(60)]. . . . . . . . . . . . . . . . . . . . . . . . .

11.3 ITC during the transition period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.4 Conditions & restrictions in claiming of input tax credit (ITC) [Section 16/17]. . . . . . .

Section 16(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.4.1 Conditions for claiming ITC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.4.2 Manner of claiming ITC [Section 16(1)] . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.4.3 Overall time limit for claiming ITC [Section 16(4)] . . . . . . . . . . . . . . . . . . .

11.4.4 Restrictions in claiming ITC [Section 17] . . . . . . . . . . . . . . . . . . . . . . . . . . .

279 279 281 281 281 281 282 282 282 282 284 284 285

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11.5 11.6

11.7 11.8 11.9

11.10

Table of contents

11.4.5 Banking Co., Financial Institutions and NBFC . . . . . . . . . . . . . . . . . . . . . . .

11.4.6 Recovery of ITC wrongly taken. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Non-creditable goods or services [Section 17(5)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ITC in special circumstances [Section 18]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.6.1 Eligible for ITC on stock to a taxable person, who has applied for registration mandatorily for the first time. . . . . . . . . . . . . . . . . . . . . . . . .

11.6.2 Eligible for ITC on stock to a taxable person, who has applied for registration voluntarily under section 25(3) . . . . . . . . . . . . . . . . . . . . . . .

Eligibility for ITC on stock of a person who ceases to pay tax 11.6.3 under composition levy and pays tax under regular scheme . . . . . . . . . . . . .

11.6.4 Eligibility for ITC on stock where an exempt supply becomes taxable supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.6.5 Manner prescribed for claiming ITC in Para 11.6.1 to 11.6.4 above [Rule 40(1) of the GST Rules]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.6.6 Eligibility of ITC where there is a change in the constitution of a registered taxable person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.6.7 Payment equivalent to the ITC if the outward taxable supplies subsequently become exempt absolutely . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.6.8 Payment equivalent to the ITC where the taxable person switches over from regular scheme to composition scheme. . . . . . . . . . . . . .

11.6.9 Payment equivalent to the ITC where the registration is cancelled under sec 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.6.10 Supply of capital goods on which ITC has been claimed earlier. . . . . . . . . .

Goods transferred for job-work [Section 19]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Utilization of credit [Section 49(5)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Input service distributor (ISD) [Section 20, 21] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.9.1 Purpose of ISD mechanism. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.9.2 Who is input service distributor? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.9.3 Obligations for registration and filing of return. . . . . . . . . . . . . . . . . . . . . . .

11.9.4 Conditions/restrictions and procedure for distribution of credit [Section 20(2) read with Rule 39 of the GST Rules]. . . . . . . . . . . . . . . . . . .

11.9.5 Manner of distribution of credit [Section 20(1) read with Rule 39 of the GST Rules] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.9.6 Manner of recovery of credit excess distributed. . . . . . . . . . . . . . . . . . . . . . .

FAQs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter B-12 Composition levy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12.1 Scope and features of the composition levy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12.1.1 Who can opt for the composition levy? . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12.1.2 Who cannot opt for the composition levy?. . . . . . . . . . . . . . . . . . . . . . . . . . .

12.1.3 Rate of composition levy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12.2 Conditions and restrictions under the composition levy. . . . . . . . . . . . . . . . . . . . . . . . .

12.2.1 Conditions and restrictions Specified in the GST Act . . . . . . . . . . . . . . . . . .

290 291 291 293 294 294 294 295 296 296 297 298 298 299 299 300 301 301 301 302 302 305 305 305 307 307 307 308 309 310 310 xxv

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12.2.2 Conditions and restrictions specified in the GST Rules [Rule 5]. . . . . . . . . .

Procedure to opt for the composition levy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12.3.1 Procedure to opt for composition levy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Input tax credit on switch over to composition levy. . . . . . . . . . . . . . . . . . . . . . . . . . . .

12.4.1 Reversal of input tax credit where the taxable person switches over from regular method to composition levy. . . . . . . . . . . . . . . . . . . . . . . .

12.4.2 Eligibility of the input tax credit where a taxable person, who was paying tax under the composition levy, starts paying tax under the regular method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Validity of the composition levy [Rule 6]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cancellation of permission or registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

310 311 311 312

Chapter B-13 Job work – special provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13.1 Who is “job-worker” and “principal” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13.1.1 Meaning of ‘job work’ and ‘job worker’. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13.1.2 Whether the term ‘job work’ includes ‘composite contract’. . . . . . . . . . . . . .

13.1.3 Meaning of principal for the purposes of these provisions. . . . . . . . . . . . . . .

13.1.4 Treatment of job work as ‘service’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13.2 Privileges available to the principal and restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . . .

13.2.1 Input tax credit on inputs and capital goods sent for job work [Sec 19] . . . .

13.2.2 Special procedure for removal of goods under sec 143. . . . . . . . . . . . . . . . .

13.2.3 Supply of goods by the principal from the place of job worker. . . . . . . . . . .

13.2.4 Manner of dispatch and return prescribed in rule 45 of GST Rules: . . . . . . .

13.2.5 Supply of waste or scrap. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13.3 Job-worker. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13.3.1 Whether a job-worker is required to obtain registration?. . . . . . . . . . . . . . . .

13.3.2 Whether goods, directly supplied from the job-worker’s premises, will be included in the aggregate turnover of job worker?. . . . . . .

317 317 317 318 318 318 318 318 319 320 321 321 322 322

Chapter B-14 E-commerce, TCS & supply of online data– special provisions. . . . . . . . .

14.1 E-commerce. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14.1.1 Meaning of ‘e-commerce’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14.1.2 Omission of the term ‘Aggregator’ in the GST Act. . . . . . . . . . . . . . . . . . . .

14.1.3 Activities of the e-commerce operator [ECO] . . . . . . . . . . . . . . . . . . . . . . . .

14.1.4 Threshold limit for registration - Not applicable to ECO. . . . . . . . . . . . . . . .

14.1.5 When the ECO itself be deemed as supplier. . . . . . . . . . . . . . . . . . . . . . . . . .

14.2 Procedure for registration or cancellation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14.2.1 Registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14.2.2 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14.3 Collection of tax (TCS) by e-commerce operators . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14.3.1 Time of collection of TCS and its value. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14.3.2 Rate of TCS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14.3.3 Other obligations of the e-commerce operators. . . . . . . . . . . . . . . . . . . . . . .

323 323 323 324 324 325 325 325 325 326 326 326 327 327

12.3 12.4

12.5 12.6

xxvi

312

313 314 315

322

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14.3.4

14.4

Claim of credit for the amount of TCS deposited by the ECO by the concerned supplier [Sec 52(7) of the GST Act] . . . . . . . . . . . . . . . . . . . . 328 14.3.5 Matching of details filed by the ECO with that of filed by the supplier [Sec 52(8) to (11) of the GST Act read with Rule 78 & 79 of the GST Rules] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328 14.3.6 Powers of the proper officer to issue notice upon the ECO [Sec 52(12) to (14) of the GST Act]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329 14.3.7 Whether there could be any other penalties on ECO? . . . . . . . . . . . . . . . . . . 329 Special provision for payment of tax by a supplier of online information and database access or retrieval services (OIDAR) located outside India to specified person in the taxable territory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330 14.4.1 Applicability of the provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330 14.4.2 Meaning of “online information and database access or retrieval services”. 330 14.4.3 Role of intermediary who arranges the services. . . . . . . . . . . . . . . . . . . . . . . 330 14.4.4 Registration and payment of tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331 14.4.5 Filing of return [Rule 64]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331 14.4.6 Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331 14.4.7 Officers empowered to grant registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . 332

Chapter B-15 Registration, Amendment and Cancellation . . . . . . . . . . . . . . . . . . . . . . . . .

15.1 Need for registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.1.1 Why does one require registration? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.2 Format of registration number (GSTIN). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.3 Existing registered persons-Transitional provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.3.1 Liability for registration for existing registered persons. . . . . . . . . . . . . . . . .

15.3.2 Points/Issues regarding migration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.3.3 Information and documents required to enroll with GST. . . . . . . . . . . . . . . .

15.3.4 What will be the procedure of migration of registration to GST? [Rule 24 of the GST Rules] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.4 Types of registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.5 Mandatory registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.5.1 Liability for mandatory registration mandatorily under GST – Threshold limit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.5.2 Meaning of aggregate turnover for the purpose of threshold limit. . . . . . . . .

15.5.3 Circumstances when threshold limit is not applicable. . . . . . . . . . . . . . . . . .

15.5.4 Time limit for taking registration [Section 25(1)] . . . . . . . . . . . . . . . . . . . . .

15.5.5 Persons not liable for registration [Section 23]. . . . . . . . . . . . . . . . . . . . . . .

15.5.6 Registration is required in every state/UT separately. . . . . . . . . . . . . . . . . . .

15.5.7 Separate registrations for multiple business verticals in the same state/UT. .

15.6 Procedure for registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.6.1 Application for registration [Rule 8(1) of the GST Rules]. . . . . . . . . . . . . . .

15.6.2 Documents required for registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

333 333 333 333 334 334 334 336 336 338 339 339 340 341 341 342 342 343 343 343 344

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15.6.3

15.7

15.8

15.9

15.10

15.11

15.12

15.13

15.14 15.15 15.16

xxviii

Persons authorised to sign or verify through electronic verification code application for registration . . . . . . . . . . . . . . . . . . . . . . . . .

15.6.4 Procedure for registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.6.5 All places of businesses are to be declared at the time of registration. . . . . .

15.6.6 Whether separate enrolment is required with Central and State authorities under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.6.7 Whether small dealers or dealers having no IT infrastructure have any system for facilitation? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Voluntary registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.7.1 Circumstances when voluntary registration may be obtained . . . . . . . . . . . .

15.7.2 Procedure for voluntary registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Registration by department (Suo-moto registration). . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.8.1 Circumstances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.8.2 Procedure for registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.8.3 Effective date for registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Input service distributor (ISD). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.9.1 Requirements for registration by ISD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.9.2 Procedure for registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Casual taxable person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.10.1 Who is casual taxable person? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.10.2 Procedure for registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.10.3 Process for registration/extension. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Non-resident. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.11.1 Who is non-resident person?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.11.2 Procedure for registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.11.3 Process for registration/extension. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unique Identity Number (UIN) by UN Bodies etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.12.1 Who is required UIN?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.12.2 Process for registration/extension. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.13.1 Job Worker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.13.2 SEZ Developer/SEZ Unit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.13.3 Supply from Territorial Waters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.13.4 Grant of registration to a person supplying online information and data base access or retrieval (OIDAR) services from a place outside India to a non-taxable online recipient. . . . . . . . . . . . . . . . . . . . . . . .

15.13.5 Grant of registration to persons required to deduct tax at source (TDS) or to collect tax at source (TCS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Effective date of Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consequences of not applying for registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amendment of registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.16.1 Circumstances for amendment of registration . . . . . . . . . . . . . . . . . . . . . . . .

15.16.2 Procedure for amendment of registration. . . . . . . . . . . . . . . . . . . . . . . . . . . .

344 345 349 350 350 350 350 351 351 351 351 351 352 352 352 352 352 352 353 353 353 354 354 355 355 355 355 355 356 356

356 356 356 357 357 357 358

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Table of contents

Cancellation of registration and revocation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.17.1 Circumstances for cancellation of registration. . . . . . . . . . . . . . . . . . . . . . . .

15.17.2 Procedure for cancellation of registration. . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.17.3 Revocation of the cancellation order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.18 FAQs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.19 Forms as per GST Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annexure: Documentation/Information for migration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

359 359 360 362 362 365 366

Chapter B-16 Returns under the GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373 16.1 Purpose of returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373 16.2 Persons responsible for filing returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373 16.2.1 Whether there are separate returns for SGST, CGST, etc?. . . . . . . . . . . . . . . 373 16.2.2 Persons liable to file returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374 16.3 Types of returns or reports and periodicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374 16.4 Person-wise returns and periodicity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376 16.5 Other features of returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377 16.6 Returns process flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377 16.7 Returns for outward supplies [GSTR–1]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378 16.7.1 Persons liable to furnish GSTR-1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378 16.7.2 Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378 16.7.3 Return structure for export / SEZ supplies and deemed export supply . . . . . 380 16.7.4 Credit/debit notes [Section 34]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381 16.7.5 Advances received against a supply to be made in future [Section 12 & 13].381 16.7.6 Can the taxable person submit the GSTR-1 details before the due date?. . . . 381 16.7.7 Whether value for each transaction will be fed? What shall be the value if there is no consideration?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381 16.7.8 Rectification of return. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382 16.7.9 Information availability to Recipients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382 16.7.10 Corrections by Recipients & Acceptance. . . . . . . . . . . . . . . . . . . . . . . . . . . . 382 16.8 Returns for inward supplies [GSTR–2]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383 16.8.1 Process flow of form GSTR-2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383 16.8.2 Persons liable to furnish GSTR-2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383 16.8.3 Components of form GSTR-2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383 16.8.4 Corrections by Recipients & Acceptance. . . . . . . . . . . . . . . . . . . . . . . . . . . . 385 16.8.5 Input tax credit claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385 16.8.6 Inputs/Capital goods received from Overseas or from SEZ units . . . . . . . . . 385 16.8.7 Stating HSN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386 16.8.8 Inward supplies from unregistered suppliers [Section 9(4) of the GST Act / 5(4) of the IGST Act]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386 16.8.9 Rectification of return. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386 16.9 Monthly Return [GSTR – 3] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386 16.9.1 Persons liable to furnish GSTR-3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386 16.9.2 Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 387 xxix

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16.10

16.11

16.12

16.13

16.14

16.15

16.16

16.17

16.18 16.19 16.20 16.21

16.22 xxx

16.9.3 Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Simple Monthly return [GSTR – 3B] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.10.1 Simple monthly return (GSTR-3B) for the months July and August 2017 . .

16.10.2 Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Quarterly return by composition taxpayers [GSTR–4]. . . . . . . . . . . . . . . . . . . . . . . . . .

16.11.1 Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.11.2 Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Non-resident foreign taxpayer [GSTR–5]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.12.1 Meaning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.12.2 Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.12.3 Due date and form of return. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.12.4 Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ISD Return [GSTR–6]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.13.1 Meaning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.13.2 Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.13.3 Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TDS Return [GSTR – 7] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.14.1 Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.14.2 Return submission and TDS certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.14.3 Whether TDS certificates are to be uploaded?. . . . . . . . . . . . . . . . . . . . . . . .

16.14.4 Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Return by e-commerce operator (ECO) [GSTR–8]. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.15.1 Requirement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.15.2 Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.15.3 Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Inward supplies details by persons having UIN [GSTR–11]. . . . . . . . . . . . . . . . . . . . . .

16.16.1 Return submission. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.16.2 Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.16.3 Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annual Return [GSTR–9] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.17.1 Liability to submit annual return. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.17.2 Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annual return for composition taxpayers [GSTR–9A]. . . . . . . . . . . . . . . . . . . . . . . . . .

Annual statement for e-commerce operator [GSTR–9B] . . . . . . . . . . . . . . . . . . . . . . . .

Acknowledgement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ITC (Input tax credit) eligibility & matching . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.21.1 Provisional eligibility of ITC [Sec 41]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.21.2 Matching of ITC [Sec 42]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.21.3 Illustration [Section 42] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.21.4 Matching, reversal and reclaim of reduction in output tax liability [Section 43 read with Rule 73]. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.21.5 Matching process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Revision of return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

389 390 390 391 392 392 392 394 394 394 394 395 395 395 395 396 397 397 397 397 397 398 398 398 399 399 399 399 399 400 400 400 401 402 402 403 403 403 405 405 406 407

16.23

16.24 16.25 16.26 16.27 16.28

16.29 16.28

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Non-filers, late filers & short filers of returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 407 16.23.1 Non-filers & late return filers [Section 46]. . . . . . . . . . . . . . . . . . . . . . . . . . . 407 16.23.2 Short filers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408 First return. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408 Final return. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409 Late fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409 Extension of filing dates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410 Methods of uploading the returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410 16.28.1 How the returns can be uploaded? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410 16.28.2 Whether scanned copies of invoices are to be uploaded along with returns?.410 Signing of returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411 FAQs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411

Chapter B-17 Payment of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17.1 Broad features . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17.2 Nature of taxes to be paid under GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17.3 Who is liable for payment of GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17.4 Methods of payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17.5 Modes of payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17.6 Payment of GST - Other points. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17.6.1 Sequence of discharge of dues [Section 49(8)]. . . . . . . . . . . . . . . . . . . . . . . .

17.6.2 Is pre-registration of credit card necessary in the GSTN portal for the GST payment?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17.6.3 Payment of tax in installments [Section 80 read with Rule 158 of GST Rules]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17.6.4 Identification number for each transaction [Rule 88]. . . . . . . . . . . . . . . . . . .

17.6.5 Date of deposit of the tax dues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17.6.6 Can payment of Over the Counter (OTC) exceed INR 10,000/-? . . . . . . . . .

17.6.7 Whether mandate form needs to be generated for payment by way of NEFT/RTGS? [Rule 87(5) of the GST Rules] . . . . . . . . . . . . . . . . . .

17.7 Role of the banks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17.7.1 What is role of banks in the GST regime? . . . . . . . . . . . . . . . . . . . . . . . . . . .

17.7.2 What is an E-FPB?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17.8 Basic features of challans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17.8.1 Who can generate challans?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17.8.2 Process of generation of challans [Rule 87 of the GST Rules]. . . . . . . . . . . .

17.8.3 Challan identification number (CIN) and its relevance . . . . . . . . . . . . . . . . .

17.8.4 What would happen if payment is made but CIN is not generated? [Rule 87(8) of the GST Rules]. . . . . . . . . . . . . . . . . . . . . . . . . . .

17.9 Tax wrongly deposited – IGST v CGST/SGST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17.9.1 From inter-state supply to intra-state supply. . . . . . . . . . . . . . . . . . . . . . . . .

17.9.2 From intra-state supply to inter-state supply. . . . . . . . . . . . . . . . . . . . . . . . .

17.10 FAQs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

413 413 413 414 414 418 418 418 419 419 419 420 420 420 420 420 421 421 421 421 422 422 423 423 423 423 xxxi

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GST payment formats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424

Chapter B-18 Tax deduction at source . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18.1 Tax deduction at source (TDS) [Section 51]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18.2 Who is required to deduct TDS?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18.3 Rate of TDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18.4 When to deduct TDS? Is there any basic exemption?. . . . . . . . . . . . . . . . . . . . . . . . . . .

18.5 Which goods or services are covered?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Obligations or responsibilities of the deductor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18.6 18.7 Procedure for TDS registration or cancellation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18.7.1 Registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18.7.2 Cancellation [Rule 22 of the GST Rules]. . . . . . . . . . . . . . . . . . . . . . . . . . . .

18.8 Amendment of TDS Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18.8.1 Circumstances for amendment of registration . . . . . . . . . . . . . . . . . . . . . . . .

18.8.2 Procedure for amendment of registration. . . . . . . . . . . . . . . . . . . . . . . . . . . .

18.9 How will the amount of TDS be utilized by the supplier?. . . . . . . . . . . . . . . . . . . . . . .

18.10 What would happen if there is excess or erroneous deduction? [Sec 51(8) of the GST Act]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18.11 Penalties on deductor for various defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18.12 Transitional provisions in respect of TDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

425 425 425 426 426 426 426 427 427 427 428 428 428 429

Chapter B-19 Refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.1 Refund - Features. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.1.1 Meaning of refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.1.2 Grounds of refund and the appropriate form . . . . . . . . . . . . . . . . . . . . . . . . .

19.1.3 Time Limit for claiming refund [Section 54(1), (2), (3)]. . . . . . . . . . . . . . . .

19.1.4 Refund of unutilized input tax credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.1.5 Furnishing of documentary evidence to claim refund [Section 54(4)]. . . . . .

19.1.6 Refund less than INR 1,000/- [Section 54(14)] . . . . . . . . . . . . . . . . . . . . . . .

19.2 Refund due to inverted tax structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.2.1 Persons entitled for refund [Section 54(3)]. . . . . . . . . . . . . . . . . . . . . . . . . . .

19.2.2 Determination of amount of refund [Rule 89(5)]. . . . . . . . . . . . . . . . . . . . . .

19.2.3 Procedure for claiming refund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.2.4 Time limit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.2.5 Manner of allowing refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.2.6 Disposal of refund application: Refer Para 19.13 to 19.15. . . . . . . . . . . . . . .

19.3 Refund to Exporters of goods and/or services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.3.1 Export of goods and services - Zero-rated supply . . . . . . . . . . . . . . . . . . . . .

19.3.2 Furnishing of bond or letter of undertaking. . . . . . . . . . . . . . . . . . . . . . . . . .

19.3.3 Circumstances when exporters are not eligible for refund. . . . . . . . . . . . . . .

19.3.4 Bond v. Letter of undertaking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.3.5 Provisional refund to exporter of goods or services. . . . . . . . . . . . . . . . . . . .

19.3.6 Refund of IGST paid on goods exported out of India (Rule 96) . . . . . . . . . .

431 431 431 431 432 432 433 433 433 433 435 435 436 436 436 436 436 436 437 437 438 439

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19.3.7 19.3.8

19.4

19.5

19.6

19.7

19.8

19.9 19.10

19.11 19.12

19.13 19.14

Refund of IGST paid on export of services out of India. . . . . . . . . . . . . . . . .

Refund of input tax credit in relation to export of goods or services under bond or Letter of Undertaking . . . . . . . . . . . . . . . . . . . . . . . .

19.3.9 Time limit [Limitation period]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.3.10 Disposal of refund application: Refer Para 19.13 to 19.15. . . . . . . . . . . . . . .

Refund related to supply to SEZ developer/SEZ unit. . . . . . . . . . . . . . . . . . . . . . . . . . .

19.4.1 Supply to SEZ unit/developer - Zero-rated supply. . . . . . . . . . . . . . . . . . . . .

19.4.2 Furnishing of bond or letter of undertaking. . . . . . . . . . . . . . . . . . . . . . . . . .

Filing of application for refund along with documents . . . . . . . . . . . . . . . . .

19.4.3 19.4.4 Determination of amount of refund [Rule 89(4)]. . . . . . . . . . . . . . . . . . . . . .

19.4.5 Time limit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.4.6 Disposal of refund application: Refer Para 19.13 to 19.15. . . . . . . . . . . . . . .

Refund in case of deemed export of goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.5.1 Meaning deemed export. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.5.2 Filing of application along with documents to claim refund . . . . . . . . . . . . .

19.5.3 Time limit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.5.4 Disposal of refund application: Refer Para 19.13 to 19.15. . . . . . . . . . . . . . .

Refund to United Nation Organisations, embassies, diplomats, and other persons notified under sec 55. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.6.1 Entitlement of claiming refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.6.2 Submission of returns [Section 25(9) read with Rule 82]. . . . . . . . . . . . . . .

19.6.3 Procedure of claiming refund [Rule 95]. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.6.4 Time limit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Refund to casual or non-resident taxable persons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.7.1 Procedure of claiming refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.7.2 Disposal of refund application: Refer Para 19.13 to 19.15. . . . . . . . . . . . . . .

Tax wrongly deposited – IGST v CGST/SGST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.8.1 Circumstances arising refund – Tax wrongly paid. . . . . . . . . . . . . . . . . . . . .

19.8.2 Filing of application to claim refund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.8.3 Time limit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.8.4 Disposal of refund application: Refer Para 19.13 to 19.15. . . . . . . . . . . . . . .

Refund of IGST paid on supply of goods to outbound tourist. . . . . . . . . . . . . . . . . . . . .

Other refunds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.10.1 Nature of refunds and application and documents to be submitted . . . . . . . .

19.10.2 Time limit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Self-declaration or Certificate by the Chartered Accountant or the Cost Accountant. . .

Disposal of refund application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.12.1 Acknowledgement of refund claim application (Rule 90). . . . . . . . . . . . . . .

19.12.2 Time limit for disposal of refund claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.12.3 Order sanctioning refund [Section 54(5) read with Rule 92, 93]. . . . . . . . . .

19.12.4 No refund order except as per Sec 54(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Withhold/Deduct the refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interest on delayed refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

440 440 442 442 443 443 443 443 444 444 444 444 444 445 445 445 445 445 446 446 446 447 447 447 447 447 447 448 448 448 448 448 449 449 450 450 451 451 452 452 452

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19.15

Consumer welfare fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19.15.1 Circumstances when amount of refund shall be credited to the Consumer Welfare Fund, but to be paid to applicant. . . . . . . . . . . . . . . . . . .

19.15.2 Utilization from the Consumer Welfare Fund [Rule 97] . . . . . . . . . . . . . . . .

FAQs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

GST refund formats. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

453

Chapter B-20 Invoice, accounts and records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tax invoice and its contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20.1 20.1.1 What is the tax invoice?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20.1.2 Tax invoice v. bill of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20.1.3 Contents of tax invoice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20.1.4 Indication of amount of tax on the tax invoice [Section 33]. . . . . . . . . . . . . .

20.1.5 Time of issuance of tax invoice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20.1.6 Time and manner of issue of revised invoice. . . . . . . . . . . . . . . . . . . . . . . . .

20.1.7 Contents of the revised invoice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20.1.8 Issuance of invoice & payment voucher in case of reverse charge [Sec 31(3)(f), (g) read with rule 52] . . . . . . . . . . . . . . . . . . . . . . . . . .

20.1.9 Whether issuance of tax invoice is mandatory even for petty amount?. . . . .

20.1.10 Manner of issuance of tax invoice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20.2 Bill of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20.2.1 Who is required to issue bill of supply and under what circumstances? . . . .

20.2.2 Contents of bill of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20.2.3 Whether issuance of bill of supply is mandatory even for petty amount?. . .

20.3 Receipt voucher in case of advance collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20.4 Delivery Challan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20.5 Credit and debit notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20.5.1 Circumstances when a debit note or credit note is issued. . . . . . . . . . . . . . . .

20.5.2 Time limit of declaration of credit/debit note in the return [Section 34(2), (4)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20.5.3 Contents of a debit or credit note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20.6 Tax invoice in case of input service distributor (ISD). . . . . . . . . . . . . . . . . . . . . . . . . . .

20.7 Tax invoice in case of banks, financial institution & NBFC. . . . . . . . . . . . . . . . . . . . . .

20.8 Tax invoice in case of goods transport agency (GTA). . . . . . . . . . . . . . . . . . . . . . . . . . .

20.9 Tax invoice in case of passenger transportation service . . . . . . . . . . . . . . . . . . . . . . . . .

20.10 Prohibition of unauthorised collection of tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20.11 Accounts and records - maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20.11.1 Nature of accounts, records and documents to be maintained. . . . . . . . . . . .

20.11.2 Where to keep and/or maintain accounts and records . . . . . . . . . . . . . . . . . .

20.11.3 How to maintain accounts and records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20.11.4 Obligations of registered persons towards the Proper Officer . . . . . . . . . . . .

20.12 Generation and maintenance of electronic records. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20.13 Accounts and records by custodian of goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

457 457 457 457 458 459 460 463 463

19.16 19.17

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453 454 454 455

464 465 465 465 465 466 467 467 468 470 470 471 471 472 472 473 473 473 474 474 477 478 479 479 479

Table of contents

20.13.1 Owner or operator of warehouse or godown or transporter. . . . . . . . . . . . . .

20.13.2 Records by a person having custody over goods [Rule 56(17)]. . . . . . . . . . .

Audit of accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accounts and records - retention. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

479 480 481 481

Chapter B-21 Assessment, audit & determination of tax . . . . . . . . . . . . . . . . . . . . . . . . . . .

21.1 Self-assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21.2 Provisional assessment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Scrutiny of returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21.3 21.4 Assessment of non-filers of returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21.5 Assessment of unregistered persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21.6 Summary assessment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21.7 Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21.8 Determination of tax short/not paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21.8.1 Specific provisions for determination of tax. . . . . . . . . . . . . . . . . . . . . . . . . .

21.8.2 General provisions for determination of tax [Section 75] . . . . . . . . . . . . . . .

21.9 Special Audit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

483 483 484 485 486 487 487 488 490 490 492 493

Chapter B-22 Collection of tax & Recovery and Liability in certain cases . . . . . . . . . . . .

22.1 Tax collected but not paid to the government. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22.2 Tax wrongfully collected and paid to government. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Recovery proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22.3 22.3.1 Initiation of recovery proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22.3.2 Modes of recovery of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22.3.3 Recovery by sale of goods under the control of proper officer [Rule 144] . .

22.3.4 Recovery by sale of movable and immovable property [Rule 147]. . . . . . . .

22.3.5 Disposal of proceeds of sale of goods and movable or immovable property [Rule 154]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22.4 Payment of tax and other amount in instalments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22.5 Transfer of property to be void in certain cases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22.6 Tax to be first charge on property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22.7 Attachment in certain cases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22.7.1 Provisional Attachment [Sec 83] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22.7.2 Attachment of debts and shares, etc. [Rule 151] . . . . . . . . . . . . . . . . . . . . . .

22.7.3 Attachment of property in custody of courts or Public Officer [Rule 152]. .

22.7.4 Attachment of interest in partnership [Rule 153]. . . . . . . . . . . . . . . . . . . . . .

22.8 Continuation and validation of certain recovery proceedings. . . . . . . . . . . . . . . . . . . . .

22.9 Prohibitions upon the officers and facilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22.9.1 Prohibition against bidding or purchase by officer [Rule 148]. . . . . . . . . . .

22.9.2 Prohibition against sale on holidays [Rule 149] . . . . . . . . . . . . . . . . . . . . . .

22.9.3 Assistance by police [Rule 150]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22.10 Liability to pay in certain cases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22.10.1 Nature and extent of the liability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

495 495 496 496 496 496 499 499

20.14 20.15

501 502 502 503 503 503 504 504 504 504 505 505 505 505 506 506

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22.10.2 22.10.3 22.10.4 22.10.5 25.10.6

Transfer of business [Section 85]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Liability of partners of the firm. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Liability of a member in the case of H.U.F.. . . . . . . . . . . . . . . . . . . . . . . . . .

Discontinuance, dissolution and re-constitution. . . . . . . . . . . . . . . . . . . . . . .

Liability of a director at the time of recovery proceedings. . . . . . . . . . . . . . .

510 511 511 512 512

Chapter B-23 Inspection, search & survey. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23.1 Inspection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The appropriate authority to make the inspection. . . . . . . . . . . . . . . . . . . . . .

23.1.1 23.1.2 Circumstances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23.1.3 Powers of the officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23.1.4 No authority to collect cheques at the time of survey. . . . . . . . . . . . . . . . . . .

23.1.5 Reason to believe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23.2 Access to business premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23.2.1 The appropriate authority to access to business premises . . . . . . . . . . . . . . .

23.2.2 Powers of the officers and circumstances. . . . . . . . . . . . . . . . . . . . . . . . . . . .

23.2.3 Obligations and duties of person in charge of business premises. . . . . . . . . .

23.3 Search and seizure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23.3.1 The appropriate authority to authorize search & seizure . . . . . . . . . . . . . . . .

23.3.2 Circumstances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23.3.3 Period for retention of documents or books. . . . . . . . . . . . . . . . . . . . . . . . . .

23.3.4 Procedure to be followed at the time of seizure. . . . . . . . . . . . . . . . . . . . . . .

23.3.5 Powers of the proper officer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23.3.6 Rights of the person-To take copies of documents seized . . . . . . . . . . . . . . .

23.3.7 Release of goods on provisional basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23.3.8 Release of perishable or hazardous nature goods [Rule 141]. . . . . . . . . . . . .

23.3.9 Return of goods where no notice is served. . . . . . . . . . . . . . . . . . . . . . . . . . .

23.3.10 Disposal of goods in specified circumstances. . . . . . . . . . . . . . . . . . . . . . . . .

23.3.11 Making of inventory of the seized goods. . . . . . . . . . . . . . . . . . . . . . . . . . . .

23.3.12 Applicability of the Code of Criminal Procedure. . . . . . . . . . . . . . . . . . . . . .

23.3.13 Validity of documents seized during illegal search. . . . . . . . . . . . . . . . . . . . .

23.4 Inspection of goods in movement & validation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23.5 Powers to summon to produce documents/things. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23.6 Powers to arrest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23.6.1 Power of arrest– Circumstances and quantum of punishment. . . . . . . . . . . .

23.6.2 Appearance before the magistrate within 24 hours. . . . . . . . . . . . . . . . . . . . .

23.6.3 Applicability of the provisions of the Code of Criminal Procedure. . . . . . . .

23.7 Officers of other Departments to assist proper officer. . . . . . . . . . . . . . . . . . . . . . . . . . .

23.8 Powers to make sample purchases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23.9 Applicability of CGST provisions to IGST Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

513 513 513 513 514 514 514 515 515 515 515 516 516 516 517 517 517 517 518 518 518 518 519 519 519 519 520 520 520 521 521 521 522 522

Chapter B-24 Inspection of goods in movement, Confiscation and e-way bill . . . . . . . . 523 24.1 Inspection of goods in movement (Sec 68 of the GST Act) . . . . . . . . . . . . . . . . . . . . . . 523

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24.2 24.3

Table of contents

E-way bill (Rule 138 of the GST Rules). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Confiscation of goods and/or conveyances and fine . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24.3.1 Detention, seizure and release of goods and conveyances in transit [Sec 129 of the GST Act]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24.3.2 Circumstances when goods and/or conveyances can be confiscated [Section 130 of the GST Act]. . . . . . . . . . . . . . . . . . . . . . . . . . . .

24.3.3 Is there any penalty in addition to confiscation of goods?. . . . . . . . . . . . . . .

24.3.4 Can confiscation be avoided by paying any fine or compounding amount?. .

523 523

Chapter B-25 Penalties and prosecution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25.1 Penalties under the GST Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25.1.1 Defaults and amount of penalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25.1.2 General disciplines related to penalty [Section 126] . . . . . . . . . . . . . . . . . . .

25.1.3 Power to impose penalty in certain cases [Section 127]. . . . . . . . . . . . . . . . .

25.1.4 Power to waive penalty or fee or both [Section 128]. . . . . . . . . . . . . . . . . . .

25.2 Offences under the GST Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25.2.1 Offences and the punishment/fine. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25.2.2 Liability of officers and certain other persons [Section 133]. . . . . . . . . . . . .

25.2.3 Cognizance of offences [Section 134] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25.2.4 Presumption of culpable mental state [Section 135]. . . . . . . . . . . . . . . . . . . .

25.2.5 Relevancy of statements under certain circumstances [Section 136]. . . . . . .

25.2.6 Offences by companies, firms, etc [Section 137]. . . . . . . . . . . . . . . . . . . . . .

25.2.7 Compounding of offences [Section 138] . . . . . . . . . . . . . . . . . . . . . . . . . . . .

527 527 527 530 531 531 531 531 533 533 533 534 534 535

Chapter B-26 Appeal, advance ruling and Anti-profiteering provisions. . . . . . . . . . . . . .

26.1 Appeals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26.1.1 Nature and scope of the Appellate Authorities under the GST. . . . . . . . . . . .

26.1.2 Condition for filing of appeal – Pre-deposit. . . . . . . . . . . . . . . . . . . . . . . . . .

26.1.3 No right of appeal or non-appealable decisions and orders. . . . . . . . . . . . . .

26.1.4 Disposal of appeal by the Appellate Authority [Section 107]. . . . . . . . . . . . .

26.1.5 Revisional Authority [Section 108] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26.1.6 Constitution of Appellate Tribunal and Benches thereof [Section 109]. . . . .

26.1.7 Disposal of appeal by the Appellate Tribunal [Section 113] . . . . . . . . . . . . .

26.2 Advance ruling. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26.2.1 Nature and scope of the Advance Ruling Authority. . . . . . . . . . . . . . . . . . . .

26.2.2 Questions to be referred to the Advance Ruling Authority. . . . . . . . . . . . . . .

26.2.3 Application to the Advance Ruling Authority [Rule 104] . . . . . . . . . . . . . . .

26.2.4 To whom Ruling Authority is binding [Section 103]. . . . . . . . . . . . . . . . . . .

26.2.5 Procedure on receipt of application and disposal [Section 98]. . . . . . . . . . . .

26.2.6 Time limit of filing and disposal of appeal by the applicant or the GST Officer [Section 100 & 101 read with Rule 106]. . . . . . . . . . . . . . .

26.2.7 Orders of Appellate Authority [Section 101] . . . . . . . . . . . . . . . . . . . . . . . . .

26.2.8 Rectification of advance ruling [Section 102] . . . . . . . . . . . . . . . . . . . . . . . .

537 537 537 539 539 540 541 542 542 543 543 544 544 544 544

523 524 525 525

545 545 546

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26.3

26.2.9 Powers of Authority and Appellate Authority [Section 105] . . . . . . . . . . . . . 546 Anti-profiteering measure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 546

Chapter B-27 Transitional provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.1 Existing taxpayers- registration on the appointed day under the Central and the State Acts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.1.1 Liability for registration of existing registered persons in GST. . . . . . . . . . .

27.1.2 Format of GST Registration Number [Rule 10(1)]. . . . . . . . . . . . . . . . . . . . .

Points/Issues regarding migration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.1.3 27.1.4 Information and documents required to enroll with GST. . . . . . . . . . . . . . . .

27.1.5 Procedure of migration of registration to GST [Rule 24]. . . . . . . . . . . . . . . .

27.1.6 FAQ Released by CBEC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.2 Eligibility of unutilized/unavailed input tax credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART A - Central GST Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.2A.1 Carried over amount of Cenvat in the returns on the appointed day– Section 140(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.2A.2 Unavailed Cenvat on capital goods on the appointed day– Section 140(2). .

27.2A.3 Unavailed Cenvat on inputs held in stock on the appointed day– Section 140(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.2A.4 Unavailed/Unclaimed CENVAT on inputs held in stock on the appointed day– Section 140(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.2A.5 Inputs/Input services received after the appointed day (In transit) – Section 140(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.2A.6 Paying tax at fixed rate/amount under the existing law and paying GST under regular scheme– Section 140(6). . . . . . . . . . . . . . . . . . . .

27.2A.7 Distribution of Cenvat by input service distributor (ISD) – Section 140(7). .

27.2A.8 Transfer of unutilized credit by taxable person having centralized registration – Section 140(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.2A.9 Availing Cenvat Credit in certain cases - Section 140(9). . . . . . . . . . . . . . . .

PART B − State GST Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.2B.1 Carried over amount of input tax credit in the returns on the appointed day – Section 140(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.2B.2 Unavailed VAT on capital goods on the appointed day – Section 140(2). . . .

27.2B.3 Unavailed VAT on inputs held in stock on the appointed day – Section 140(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.2B.4 Unavailed/Unclaimed ITC on inputs held in stock on the appointed day – Section 140(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.2B.5 Inputs received after the appointed day (In transit) – Section 140(5). . . . . . .

27.2B.6 Paying tax under composition scheme on appointed day and paying GST under regular scheme – Section 140(6) . . . . . . . . . . . . . . . . . . .

27.2B.7 Input tax credit reversed prior to the appointed day – Section 142(5). . . . .

xxxviii

549 549 549 550 550 551 551 553 558 558 558 559 560 566 567 569 570 571 572 573 573 575 576 578 579 580 581

Table of contents

27.2B.8 Tax paid on goods or capital goods lying with agents as on the appointed day to be allowed as credit – Section 142(14). . . . . . . . . . . . . . . . 581 27.3 Output Tax, Revision of Returns and Return of Goods . . . . . . . . . . . . . . . . . 582

27.4

PART A − Central GST Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.3A.1 Return of goods in GST regime - Section 142(1). . . . . . . . . . . . . . . . . . . . . .

27.3A.2 Revision of price – Supplementary invoice or debit/credit note raised in GST– Section 142(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.3A.3 Treatment of the amount recovered or refunded pursuant to revision of returns– Section 142(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.3A.4 Treatment of long term construction/works contracts - Section 142(10). . . .

27.3A.5 Taxability of supply of goods or services – Section 142(11). . . . . . . . . . . . .

27.3A.6 Goods sent on approval basis are returned or rejected, on or after appointed day – Section 142(12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

582 582

PART B − State GST Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.3B.1 Return of taxable goods in GST regime, which were also taxable in existing law – Section 142(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.3B.2 Revision of price – Supplementary invoice or debit/credit note raised in GST – Section 142(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.3B.3 Treatment of amount recovered or refunded pursuant to revision of returns – Section 142(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.3B.4 Treatment of long term construction/works contract – Section 142(10) . . . .

27.3B.5 Taxability of supply of goods or services – Section 142(11). . . . . . . . . . . . .

27.3B.5.1 Supply of goods – VAT leviable. . . . . . . . . . . . . . . . . . . . . . . . . .

27.3B.5.2 Supply of services – Service tax leviable . . . . . . . . . . . . . . . . . . .

27.3B.5.3 Supply of goods and services after the appointed day. . . . . . . . . .

27.3B.5.4 Transition Rules [Rule 118 of the DGST Rules]. . . . . . . . . . . . . .

27.3B.6 Goods sent on approval basis are returned or rejected, on or after appointed day – Section 142(12). . . . . . . . . . . . . . . . .

Job work. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

585

PART A − Central GST Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.4A.1 Removal of inputs for job work before the appointed day and return of goods after that day − Section 141(1) . . . . . . . . . . . . . . . . . . . . . . .

27.4A.2 Removal of semi-finished goods for job work before the appointed day and return of goods after that day – Section 141(2) . . . . . . . .

27.4A.3 Removal of finished goods to carry certain processes before the appointed day and return of goods after that day − Section 141(3). . . . . . . .

582 583 583 584 584

585 586 586 587 587 587 587 587 588 588 588 588 588 589 590

PART B − State GST Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 591 27.4B.1 Dispatch of inputs for job work before the appointed day and return of goods after that day − Section 141(1) . . . . . . . . . . . . . . . . . . . . . . . 591

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27.5

27.4B.2 Dispatch of semi-finished goods for job work before appointed day and return of goods after that day − Section 141(2). . . . . . . . . . . . . . . . 592 27.4B.3 Dispatch of finished goods to carry certain processes before the appointed day and return of goods after that day − Section 141(3). . . . . . . . 592 Refund Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 593 PART A − Central GST Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.5A.1 Disposal of refund claims filed before/on/after the appointed day – Section 142(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.5A.2 Disposal of refund claims in respect of export – Section 142(4). . . . . . . . . .

27.5A.3 Disposal of refund claims in respect of services not provided – Section 142(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.6

PART B − State GST Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.5B.1 Disposal of refund claims filed before/on/after the appointed day – Section 142(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.5B.2 Disposal of refund claims in respect of export – Section 142(4). . . . . . . . . .

Assessment, adjudication, Appeal, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART A − Central GST Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.6A.1 Disposal of claims of Cenvat credit filed through appeal, revisions, review, etc. under the existing law– Section 142(6)(a) . . . . . . . . .

27.6A.2 Disposal of recovery of Cenvat credit filed through appeal, revisions, review, etc. under the existing law − Section 142(6)(b). . . . . . . . .

27.6A.3 Finalization of proceedings relating to output duty or tax liability initiated before the appointed day – Section 142(7). . . . . . . . . . . . .

27.6A.4 Treatment of the amount recovered or refunded in pursuance of assessment or adjudication proceedings – Section 142(8). . . . . . . . . . . . . . .

27.7 27.8 27.9 27.10

xl

PART B − State GST Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27.6B.1 Disposal of claims of input tax credit filed through appeal, revisions, review, etc. under the existing law – Section 142(6)(a). . . . . . . . .

27.6B.2 Disposal of recovery of input tax filed through appeal, revisions, review, etc. under the existing law – Section 142(6)(b). . . . . . . . . . . . . . . . .

27.6B.3 Disposal of proceedings relating to output tax liability initiated before/on/after the appointed day – Section 142(7). . . . . . . . . . . . . . . . . . . .

27.6B.4 Treatment of the amount recovered or refunded in pursuance of assessment or adjudication proceedings – Section 142(8). . . . . . . . . . . . . . .

Deduction of tax at source (TDS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Import of services made on or after the appointed day – Section 21 of IGST ACT. . . .

To Conclude. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Authors’ observations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

593 593 593 594 594 594 595 595 595 595 595 596 596 596 596 597 597 597 598 598 599 600

Table of contents

Chapter B-28 Miscellaneous provisions and GST in other countries . . . . . . . . . . . . . . . .

28.1 Appearance by authorised representative [Section 116]. . . . . . . . . . . . . . . . . . . . . . . . .

28.1.1 Who can be authorised representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28.1.2 Disqualifications of an authorised representative. . . . . . . . . . . . . . . . . . . . . .

28.2 Information returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28.3 Drawal of samples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28.4 Taking assistance from an expert. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28.5 GST compliance rating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28.6 Publication of information about the persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28.7 Rounding off of taxes, etc. (Section 170) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28.8 GST in Other Countries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28.8.1 GST in Australia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28.8.2 GST/HST in Canada. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28.8.3 GST in Singapore. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28.8.4 Indirect taxes in UK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28.8.5 GST or VAT rate globally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

601 601 601 602 602 603 603 604 604 604 604 605 607 608 609 610

Chapter B-29 Industry – impact and transition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.1 India’s GST Model. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.2 Impact – generally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.3 Impact on various sectors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.3.1 Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.3.2 Traders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.3.3 Manufacturers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.3.4 Works contractors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.3.5 Leasing companies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.3.6 Intangible goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.3.7 Exempted units. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.3.8 Power sector. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.3.9 Telecommunication. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.3.10 Alcohol for human consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.3.11 Petroleum and petroleum products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.3.12 International trade. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.3.13 Service providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.3.14 Event managers and hotels. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.3.15 Land and real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29.4 Transition issues for the industry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

611 611 612 615 615 615 617 618 619 620 620 620 621 622 622 622 623 624 624 625

Chapter B-30 GST Network. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30.1 What is GST Network. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30.2 Mandate of GST Network. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30.3 Functions of GST Network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30.4 Services by GST Network. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

627 627 627 628 628

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30.5 30.6 30.7 30.8 30.9

Managed service provider (MSP) for GSTN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Functions and role of stake-holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Taxpayers and GSTN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Government authorities and GSTN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30.9.1 Concept of GST eco-system. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30.9.2 Whether information filed on the GST common portal will remain confidential & secure? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

629 629 631 631 632 632 632

PART C

LEGISLATION I.

Amended/Inserted Articles by the Constitution (101st Amendment) Act, 2016 . . 633 Amended/Inserted Articles by the Constitution (101st Amendment) Act, 2016. . . . . . . . . . 635

II.

Central GST Act and Rules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 645 The Central Goods and Services Tax Act, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 647 Central Goods and Services Tax Rules, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 789

III.

The Delhi Goods and Services Tax Act, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 885 The Delhi Goods and Services Tax Act, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 887

IV.

IGST Act and Rules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 901 The Integrated Goods and Services Tax Act, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 903 Integrated Goods and Services Tax Rules, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 927

V.

GST (Compensation to States) Act and Rules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 929 The Goods and Services Tax (Compensation to States) Act, 2017. . . . . . . . . . . . . . . . . . . . 931 Goods and Services Tax Compensation Cess Rules, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . 943

VI.

Important GST Forms to be used by the Taxpayers. . . . . . . . . . . . . . . . . . . . . . . . . . 945

VII. Important Press Releases and Circulars. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Press Releases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Circulars. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1147 1149 1163 1173

PART D

HSN CODE-WISE GST TARIFF – GOODS Precautions and safeguards - HSN Code-wise tariff for Goods. . . . . . . . . . . . . . . . . . . . . . . . . . . 1176 HSN Code-wise Tariff for goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1179

xlii

Table of contents

PART E

HSN CODE-WISE GST TARIFF – SERVICES Precautions and safeguards - HSN Code-wise tariff for Services . . . . . . . . . . . . . . . . . . . . . . . . .

Service Accounting Code-wise GST Tariff – Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part E: SAC code wise GST Tariff – Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Scheme of Classification of Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1396 1395 1397 1459

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Part A At-A-Glance

GST Guide with Ready Reckoner, 2e

Chapter A-1 Chapter A-2 Chapter A-3 Chapter A-4 Chapter A-5 Chapter A-6 Chapter A-7 Chapter A-8 Chapter A-9 Chapter A-10

2

Chapter A-1

GST in India – At-a-glance .................................................................................... 3 Compliance chart with limitation periods under GST .......................................... 41 GST Transition – Time limits and limitation periods........................................... 53 Reverse Charge under GST .................................................................................. 57 Non-creditable goods/services and supplies under GST ...................................... 65 Returns under GST ............................................................................................... 67 Penalties and offences under GST........................................................................ 71 GST, a “One Nation One Tax”– Critical study .................................................... 77 Seamless Input Tax Credit in GST– Exceptions – Critical Study ........................ 81 GST Forms - At -a Glance .................................................................................. 85

Chapter A-1

GST in India – At-a-glance

Chapter A-1

GST in India – At-a-glance

Since, States’ GST Acts are mirror image of the CGST Act, 2017, therefore, in this chapter, sections of CGST Act and SGST Act have been referred as sections of GST Act, unless separate reference of sections in CGST Act and SGST Act is otherwise required.

1.1

GST – Meaning and its scope

(1)

The term “GST” stands for “Goods and Services Tax”, and is a comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at the national level.

(2)

Its main objective is to cover most of the indirect tax levies into a single tax, replacing multiple tax levies, overcoming the limitation of current indirect tax structure, and creating efficiencies in the tax administration.

(3)

GST may be defined as a tax on supply of goods and services, which is leviable at each point of sale of goods or provision of service, where the seller of the goods or provider of services may claim the credit of input tax which he has paid while purchasing the goods or procuring the services.

(4)

GST has brought in its scope all goods and services, except specified petroleum products and alcoholic liquor for human consumption, for levy of GST.

(5)

GST on the supply of following goods shall be levied with effect from such date(s) as may be notified by the government on the recommendations of the Council -

(6)



Petroleum crude,



High speed diesel,



Motor spirit (commonly known as petrol),



Natural gas, and

Aviation turbine fuel.  It extends to whole of India except Jammu and Kashmir. However, Jammu & Kashmir GST Act has also enacted effective from 6 July 2017 and provisions have been made to integrate the J&K GST Act with GST Acts of rest of India.

1.2 (1)

Legislative Framework

The Constitution (101stAmendment) Act, 2016 has conferred concurrent taxing powers on the Union as well as the States (including Union territory with Legislature) to make laws for levying GST on every transaction of supply of goods or services or both.

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Chapter A-1

(2)

Parliament has exclusive power to make laws with respect to GST where supply of goods and/or services takes place in the course of inter-State trade or commerce.

(3)

In accordance with Art. 279A of the Constitution of India, the President constituted the Goods and Services Tax Council (GST Council, in short) on 15 September 2016 with the following members:

(4)

(5)

(a)

The Union Finance Minister … Chairperson

(b)

The Union Minister of State in charge of Revenue or Finance … Member

(c)

The Minister in charge of Finance or Taxation or any other Minister nominated by each State Government … Members

The GST Council shall make recommendations to the Union and the states on, interalia, following matters (i)

the taxes, cesses and surcharges levied by the Centre, the States and the local bodies which may be subsumed under GST;

(ii)

the goods and services that may be subjected to or exempted from GST;

(iii)

the date on which the GST shall be levied on petroleum crude, high speed diesel, motor sprit (commonly known as petrol), natural gas and aviation turbine fuel;

(iv)

model GST laws, principles of levy, apportionment of IGST and the principles that govern the place of supply;

(v)

the threshold limit of turnover below which the goods and services may be exempted from GST;

(vi)

the rates including floor rates with bands of GST;

Name of legislation and controlling authority

Name of the legislation

To be administered by

Scope of taxation

Central GST Act

Central Government

State GST Act, e.g., Delhi GST Act, U.P. GST Act, Haryana GST Act, Kerala GST Act, and so on

Respective State Government

Every supply of goods and/or services within the state/UT, i.e. Intra-state supplies

UT GST Act

Central Government

IGST Act

Central Government

(6)

There has been uniformity in various SGST Acts and the CGST Act.

1.3 CGST/SGST (1)

4

Inter-state supplies

Taxable event and charging provisions Sec 9

IGST

Sec 5

CGST and SGST shall be levied on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption and specified petroleum products.

Chapter A-1

GST in India – At-a-glance

(2)

IGST shall be levied on all inter-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption and specified petroleum products.

(3)

GST on reverse charge basis •

The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the CGST/SGST/IGST on which shall be paid on reverse charge basis by the recipient of such goods or services or both.

•

The GST in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient. Intra-state supplies of goods and/or services upto INR 5,000 from any or all the suppliers in a day has been exempted from reverse charge vide notification no. 08/2017 (Central Tax-Rate) dated 28 June 2017.

List of such goods/services is given in the Chapter A-4.

(4)

Specified e-commerce operators – Deemed suppliers The Government may, on the recommendations of the Council, by notification, specify categories of services, the tax on supplies of which shall be paid by the electronic commerce (e-commerce, in short) operator, if such services are supplied through it, as if he is the supplier liable for paying the tax in relation to the supply of such services.

These provisions are similar to present provisions applicable under the service tax where the aggregator, such as, Uber, Ola, etc., are, instead of the individual service provider, deemed as supplier of service.

In exercise of the powers, the Government has notified following services under section 9(5) of the Act vide notification no. 17/2017 (Central Tax-Rate) dated 28 June 2017: (i)

Services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle; and

(ii) services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, except where the person supplying such services through electronic commerce operator is liable for registration under sec 22(1) of the GST Act. (5)

Levy of compensation cess •

The Goods and Services Tax (Compensation to States) Act, 2017 (Compensation Cess Act, in short), provides for payment of compensation to the States for loss of revenue arising on account of implementation of the goods and services tax for a period of 5 years.

•

Compensation cess shall be levied on inter-state and local supply of goods or services or both.

•

Cess shall be levied on the specified goods and the rates stated in Schedule to the Act, which mainly comprises pan masala, tobacco and its products, coal, specified motor cars and aerated waters.

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1.4 (1)

(2)

(3)

Chapter A-1

Rates of GST, Import & Export

As per Art. 279A of the Constitution of India, the GST Council shall make recommendations to the Union and the States on (a)

goods and services that may be subjected to, or exempted from GST;

(b)

rates including floor rates with bands of GST;

(c)

any special rate or rates for a specified period, to raise additional resources during any natural calamity or disaster.

Maximum rates of GST GST shall be levied at such rates, as may be notified by the Government on the recommendations of the Council. However, the maximum rates would be as under: •

CGST – 20%

•

SGST – 20%

•

IGST – 40%

GST Rates – In relation to levy of tax on supply of goods, there is 6 tier rate-structure: uncut diamonds, bullions/jewellery, Lower, Lower-Standard, Standard and Luxury (0.25, 3, 5, 12, 18, 28).

In relation to taxation of services, there is 3 tier rate-structure: 12, 18, 28.

Following are the notifications issued in this regard:

Nature

CGST Notification No.

Goods – Tax rate

• • •

Services – Tax rate

IGST Notification No.

1/2017-Central Tax (Rate) • dated 28 June 2017, Corrigendum dated 30 June • 2017 and 12 July 2017 • 18/2017-Central Tax (Rate) dated 30 June 2017

1/2017-Integrated Tax (Rate) dated 28 June 2017, Corrigendum dated 30 June 2017 16/2017-Integrated Tax (Rate) dated 28 June 2017

11/2017-Central Tax (Rate) dated 8/2017-Integrated Tax (Rate) dated 28 28 June 2017 June 2017, Corrigendum dated 30 June 2017 Compensation cess Notification No.

1/2017-Compensation Cess (Rate) dated 28 June 2017, Corrigendum dated 30 June 2017 2/2017-Compensation Cess (Rate) dated 28 June 2017, Corrigendum dated 01 July 2017 (4)

6

HSN (Harmonized System of Nomenclature) codes have been used for classifying the goods and services under the GST regime.

Chapter A-1

(5)

GST in India – At-a-glance

Import of goods and services has been treated as inter-state supplies and would be subject to IGST in addition to the applicable customs duties (BCD). This IGST would be levied in lieu of CVD and SAD; and shall be available as input tax credit for further transactions.

IGST on goods imported into India shall be levied and collected in accordance with the provisions of sec 3 of the Customs Tariff Act, 1975 on the value as determined under the said Act at the point when duties of customs are levied on the said goods under sec 12 of the Customs Act, 1962.

(6)

Zero-rated supply •

As per sec 2(24) of the IGST Act, zero-rated supply shall have the meaning assigned to it under sec 16 of the IGST Act.

•

As per sec 16 of the IGST Act, zero rated supply” means any of the following taxable supply of goods and/or services, namely: (a)

export of goods and/or services or both; or

(b)

supply of goods and/or services or both to a SEZ developer or an SEZ unit.

1.5 1.5.1

Power to grant exemption CGST/SGST

(1)

Exemptions and exempt supplies

Sec 11

IGST

Sec 6

By way of Notification Where the Government is satisfied that it is necessary in the public interest so to do, it may, on the recommendations of the Council, by notification, exempt generally, either absolutely or subject to such conditions as may be specified therein, goods or services or both of any specified description from the whole or any part of the tax leviable thereon with effect from such date as may be specified in such notification. Following are the notifications issued in this regard: -

Nature

CGST Notification No.

GoodsExemptions

2/2017-Central Tax (Rate) dated 2/2017-Integrated Tax (Rate) dated 28 28 June 2017 June 2017 Corrigendum dated 12 July 2017

ServicesExemptions

12/2017-Central Tax (Rate) dated 9/2017-Integrated Tax (Rate) dated 28 28 June 2017 June 2017

(2)

IGST Notification No.

By way of special order in exceptional cases Where the Government is satisfied that it is necessary in the public interest so to do, it may, on the recommendations of the Council, by special order in each case, under

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circumstances of an exceptional nature to be stated in such order, exempt from payment of tax any goods or services or both on which tax is leviable.

(3)

Explanation to notification or special order already issued The Government may, if it considers necessary or expedient so to do for the purpose of clarifying the scope or applicability of any notification of exemption or special order issued, insert an Explanation in such notification or order, as the case may be, by notification at any time within one year of issue of the notification/order. Every such Explanation shall have effect as if it had always been the part of the first such notification or order, as the case may be.

1.6

Meaning and Scope of the term “Supply”

1.6.1 Scope of supply (Section 7 & 8 of GST Act) (1) Supply includes all forms of supply (goods and/or services) such as, sale, transfer, barter, exchange, license, rental, lease, or disposal. It also includes agreeing to supply.

(2) Supply should be made for a consideration; and in the course or furtherance of business.

However, in case of import of services, even ‘in the course or furtherance of business’ is not required.

Thus, there should be something in return which the person supplying will obtain from recipient. It is not important that what is received in return is ‘money’; it can be money’s worth.

(3) It involves delivery of goods and/or services to another person or agreement thereof.

Transfer of property in goods from the supplier to recipient is not necessary.

(4) Branches of the same person have been considered as distinct persons. Multi-State Entities have to take care of transfer value.

(5) Certain supplies which are even without consideration have also been included in the definition of the term “Supply”, as specified in Schedule I of CGST/SGST Act, as under: (a) Permanent transfer/disposal of business assets where input tax credit has been availed on such assets.

For example, transfer of business asset by the partnership firm to its retiring partner in settlement of his dues. (b) Supply of goods and/or services between related persons when made in the course or furtherance of business, (c) Supply of goods or services between distinct persons as specified in section 25 (from one unit to another, both having same PAN) when made in the course or furtherance of business.

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GST in India – At-a-glance

However, gifts not exceeding INR 50,000/- in value in a financial year by an employer to an employee shall not be treated as supply of goods or services or both. (d)

Supply of goods by a principal to his agent where the agent undertakes to supply such goods on behalf of the principal.

(e)

Supply of goods by an agent to his principal where the agent undertakes to receive such goods on behalf of the principal.

(f)

Import of services by a taxable person from a related person or from his other establishments outside India, in the course or furtherance of business.

(6)

Schedule II of GST Act comprises various circumstances and situations when the activity shall either be considered as supply of goods or as service.

(7)

Schedule III comprises various activities or transactions, which shall neither be considered as supply of goods nor as services.

(8)

The GST Act has also defined composite supply and mixed supply and manner of determining their tax liability.

1.6.2 • •

• •

Inter-State supply vs. Local Supply and Place of Supply (Section 7 to 13 of IGST Act) IGST Act formulates the principles when a supply of goods or services or both shall be treated as inter-state supply or intra-state (local) supply.

Generally, subject to other provisions in respect of place of supply, where “location of the supplier” and “place of supply” are in different states/UT, it is inter-state supply; and if within the same state or UT, it is intra-state or local supply.

Local supply shall be subject to (CGST + SGST); whereas inter-state supply shall be subject to IGST. Framework of Place of Supply provisions:

Place of supply of goods

Place of supply of services

Section 10: Goods other than supply of goods Section 12: Services where the location of imported into, or exported from India supplier of service and the location of the recipient of service is in India Section 11: Goods imported into, or exported from India

Section 13: Services where the location of the supplier or the location of the recipient is outside India

Place of supply in case of goods, in general, in B2B Transactions: Where supply involves movement of goods, whether between two parties or in case of “bill to ship to” transactions, the place of supply would generally be the billing address of the recipient, irrespective of shipping address in the different State, except where supply

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between two persons terminates in a state other than the state where place of business of the recipient is located. Thus, if supplier is located at Delhi, and the billing address is also in Delhi, the supplier will charge (CGST + SGST); and if the billing address is, say, in Haryana, the supplier will charge IGST.

Place of supply in case of services, in general, in B2B Transactions: Supply made to

Registered Person

Location of Recipient

Other Person

Address on Record exists

Other Cases

Location of Recipient

Location of Supplier

However, the major exceptions are supply of immovable property (such as, construction, renting, hotels, etc.) and right to admission (such as, cinema halls, IPL/ cricket matches, etc.) where the place of supply would be at the place where immovable property is located or where the event is held, as the case may be.

Thus, in the cases of hotels and admission to events, since the location of property and the place of supply coincide, the supplier would only charge (CGST + SGST), even if the recipient is located outside the state or even if the recipient comes from outside the State for receiving the service.

1.6.3 Time of supply (Section 12 & 13 of GST Act) (1) In case of supply of goods (other than taxable on reverse charge), time of supply (i.e. taxable event) shall generally be earliest of the following: (a) Date of issuance of invoice by the supplier; (b) Last date on which supplier is required to issue invoice in terms of sec 31; (c) Date of receipt of payment/ advance by supplier (earliest of date of entry in accounts books or credit date in the bank).

(2) In case of supply of services (other than taxable on reverse charge), time of supply (i.e. taxable event) shall be: (a) If the invoice under sec 31(2) is issued –

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Chapter A-1

(b) (3)

GST in India – At-a-glance

(i)

Within time: Earliest of date of issuance of invoice OR Date of receipt of payment/ advance by supplier (earliest of date of entry in accounts books or credit date in bank);

(ii)

Not within time: Earliest of date of provision of service OR Date of receipt of payment/ advance by supplier (earliest of date of entry in accounts books or credit date in bank);

Other cases: date on which the recipient shows the receipt of services in his books of account.

In case of supply of goods/services on reverse charge basis, time of supply shall generally be earliest of the following: (a)

the date of the receipt of goods (not applicable in case of services);

(b)

the date on which the payment is made (earliest of credit date in the books of accounts or debit date in the bank account); or

(c)

the date immediately following 30 days in case of goods, and 60 days in case of services, from the date of issue of invoice by the supplier.

If it is not possible to determine time of supply as above, then the time of supply shall be the date of entry in books of account of the recipient of supply.

1.6.4 Value of supply (Section 15 of GST Act) (i) Value of supply is, generally, the transaction value, i.e., the price actually paid or payable for the said supply of goods and/or services, where supplier and recipient are not related, and • the price is the sole consideration for the supply.

• (ii) Value of supply includes the amount which has been incurred by the receiver, reimbursements, free of charge supplies, royalties/license fees as condition of sale, incidental expenses, subsidies linked to price (other than by the central/state government) late fee, interest, penalty for late payment, post supply discount subject to conditions and all taxes other than GST levies. (iii) Discount given after supply is permitted to be excluded if it is linked to the invoice in terms of an agreement entered into at or before the time of such supply and also, ITC credit for the same has been reversed by the recipient. (iv) The value of the supply of goods or services or both between distinct persons (branch with same PAN) or related persons, other than where the supply is made through an agent, shall,(a) be the open market value of such supply; (b) if open market value is not available, it shall be the value of supply of goods or services of like kind and quality; (c) if value is not determinable under clause (a) or (b), it shall be the value as determined in accordance with the GST Rules.

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However, where the recipient is eligible for full input tax credit, the value declared in the invoice shall be deemed to be the open market value of goods or services. In other words, in such cases, invoice value shall be accepted.

1.7 1.7.1 S. No.

Threshold Limit (Basic Exemption)

Exemption limit (Sec 22 of GST Act) States

Amount of Aggregate Turnover in a Financial Year

(a)

States/UTs barring specified in Sl. No. (b) below

INR 20 lakhs

(b)

Special category states – comprising of 11 states viz. Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.

INR 10 lakhs

“Aggregate turnover” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, non-taxable supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis; but excludes CGST, SGST, IGST, UTGST and Cess. [Sec 2(6)] Moreover, exempt supplies include non-taxable supplies, i.e. alcoholic liquor for human consumption, petroleum products, etc.

Further, for the purpose of sec 22, turnover made on behalf of principals would be included in the turnover of agents. Furthermore, the supply of goods, after completion of job-work, by a registered job worker shall be treated as the supply of goods by the principal referred to in section 143, and the value of such goods shall not be included in the aggregate turnover of the registered job-worker.

1.7.2 When threshold limit is not applicable (Sec 24 of GST Act) The threshold limit is not applicable in the following cases: (i) Persons making any inter-state taxable supply; (ii) Casual taxable persons making taxable supply; (iii) Persons who are required to pay tax under reverse charge; (iv) Persons required to pay tax under sec 9(5) [where tax shall be paid by the e-commerce operator]; (v) Non-resident taxable persons making taxable supply;

12

Chapter A-1

(vi)

GST in India – At-a-glance

Persons who are required to deduct TDS under sec 51, whether or not separately registered under this Act;

(vii) Persons who supply goods and/or services on behalf of other taxable persons whether as an agent or otherwise; (viii) Input service distributor, whether or not separately registered under the Act; (ix)

Persons who supply goods and/or services, other than supplies made under sec 9(5), through electronic commerce operator, who is required to collect tax at source (TCS) under sec 52;

(x)

Every e-commerce operator;

(xi)

Every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered person; and

(xii) Such other person or class of persons as may be notified by the government on the recommendations of the Council.

1.8

Taxable Persons & Registration

1.8.1

Taxable person [Sec 2(107) of GST Act] “Taxable person” means a person who is registered under the GST Act, or  liable to be registered under sec 22 or sec 24 of the GST Act. 

1.8.2

Who is liable for registration mandatorily under GST [Sec 22(1) of GST Act] Every supplier shall be liable to be registered in the state or union territory, from  where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds INR 20 lakhs [INR10 lakhs in the Special Category States] Other persons to whom threshold limit does not apply [discussed in earlier paras  in this chapter]

1.8.3 Who is not liable to take registration? (Sec 23 of GST Act) The person is not liable for registration if he is: (a) engaged exclusively in the business of supplying goods and/or services that are either not liable to tax (such as, specified petroleum products, alcoholic liquor for human consumption, etc.) (Or) are wholly exempt from tax under GST Act or under IGST Act; or (b) an agriculturist to the extent of supply of produce out of cultivation of land; or

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(c)

Chapter A-1

category of persons as notified by the government, on the recommendations of the Council.

In exercise of the powers conferred by sec 23(2), the Central Government has notified that the persons who are only engaged in making supplies of taxable goods or services or both, the total tax on which is liable to be paid on reverse charge basis by the recipient of such goods or services or both under section 9(3) of the Act as the category of persons exempted from obtaining registration under the aforesaid Act. Thus, if the entire tax is paid by the recipient for specified services (such as, advocates or goods transport operators) in terms of sec 9(3) of the Act, the supplier of these services is not liable for registration under the Act.

1.8.4 Agriculturist [Section 2(7) of GST Act] “Agriculturist” means an individual or a Hindu Undivided Family who undertakes cultivation of land – (a) by own labour, or (b) by the labour of family, or (c) by servants on wages payable in cash or kind or by hired labour under personal supervision or personal supervision of any member of family.

1.8.5 Time limit for taking registration [Section 25(1)] Within 30 days from the date on which the person becomes liable.

However, a casual taxable person or a non-resident taxable person shall apply for registration at least 5 days prior to the commencement of business.

1.8.6 Voluntary Registration under GST [Section 25(3)] The person, who is not liable to obtain registration mandatorily, may register voluntarily. All provisions of GST shall be applicable after registration.

1.9

Composition Scheme [Section 10]

(1)

Small taxpayers with an aggregate turnover in a financial year up to the specified limit of INR 75 Lakhs, shall be eligible for composition levy. However, in the case of nine states, the limit shall be INR 50 Lakh. These states are: (i) Arunachal Pradesh (ii) Assam (iii) Manipur (iv) Meghalaya (v) Mizoram (vi) Nagaland (vii) Sikkim (viii) Tripura, and (ix) Himachal Pradesh.

(2)

Composition levy is not available to the person if: (a)

14

he is engaged in the supply of services other than supplies referred to in clause 6(b) of Schedule II (i.e. restaurant services serving food and non-alcoholic drinks);

Chapter A-1

GST in India – At-a-glance

(b)

he is engaged in making any supply of goods which are not leviable to tax under this Act [the phrase used in this clause is similar to the definition of nontaxable supply under sec 2(78) of the Act]. Non-taxable supplies are specified petroleum products and alcoholic liquor for human consumption, etc.;

(c)

he is engaged in making any inter-State outward supplies of goods;

(d)

he is engaged in making any supply of goods through an e-com operator required to collect TCS under sec 52; or

(e)

he is a manufacturer of notified goods.

In exercise of these powers, in respect of the following commodities, the manufacturer cannot opt for the composition levy:

No.

Classification (Tariff item/Chapter)

Description

1

2105 00 00

Ice cream and other edible ice, whether or not containing cocoa

2

2106 90 20

Pan masala

3

24

Tobacco and manufactured tobacco substitutes

(3)

Rate of composition levy

S.No. Nature of Supplier

(i)

(ii)

(iii)

Rate of Levy (% of the Turnover in the State) CGST SGST Total Manufacturer, other than manufacturers of 1% 1% 2% such goods as may be notified by the government Suppliers making supplies in respect of food 2.5% 2.5% 5% with service (e.g. caterers, restaurants, dhabas) referred to in clause (b) of paragraph 6 of Sch II Any other suppliers eligible for composition 0.5% 0.5% 1% levy

1.10 Output Tax 1.10.1

Meaning of output tax CGST/SGST

Sec 2(81)

IGST

Sec 2(18)

“Output tax” in relation to a taxable person, means the GST chargeable under the respective GST Act on taxable supply of goods or services or both, made by the supplier or by his agent, and excludes tax payable by him on reverse charge basis.

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1.10.2 Steps for computation of output tax (1) First determine the rate of tax applicable to the goods and/or services supplied vis-à-vis their HSN; (2) Then determine the aggregate turnover under each of the following statutes for every state where having GSTIN(a) IGST (b) CGST (c) SGST (3) Then determine the aggregate turnover of taxable supplies under each statute in the following categories(a) Goods wise – Rate of tax-wise (b) Service wise – Rate of tax-wise (4) Multiply the respective turnover with the applicable rate of tax.

1.11 Input Tax 1.11.1 Input tax credit in the GST (1) Input tax credit has been defined under sec 2(62) read with sec 2(63) of the GST Law. As per the combined reading of these provisions, ITC in relation to a registered person means and includes ITC means and includes

ITC excludes

(i) CGST, SGST, IGST and UTGST; (ii) IGST charged on import of goods; (iii) Reverse charges under the CGST/SGST/ IGST/ UTGST Acts

Tax paid under composition levy under sec 10

(2)

(3)

16

Input tax credit – Sec 16(1) •

Every registered person shall,

•

subject to such conditions and restrictions as may be prescribed, and

•

in the manner specified in sec 49,

•

be entitled to take credit of input tax,

•

charged on any supply of goods or services or both to him,

•

which are used or intended to be used in the course or furtherance of his business, and

•

said amount shall be credited to electronic credit ledger of such person.

In relation to the eligibility of ITC, the government has not made any distinction amongst inputs, capital goods and input services. Further, claim of input tax credit on all goods, services and capital goods is available in one go.

Chapter A-1

(4)

GST in India – At-a-glance

Summary of input tax credit in GST:

1.11.2 Restrictions in claiming ITC [Sec 16 of GST Act]

• S. No.

In GST, taxability of sale/service will also determine the eligibility of input tax credit, which may be as under: Nature of Supply

Availability of Input Tax

1

Taxable supply

Yes

2

Exempt supply

No

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S. No.

Nature of Supply

Availability of Input Tax

3

Non-taxable supply

No

4

Zero rated supply

Yes

1.11.3 Non creditable goods/services/supplies [Sec 17(5)] Please refer Chapter A-5 of this book.

1.11.4

Utilization of credit [Sec 49(5)]

IGST Credit

CGST Credit

SGST Credit

YES: To the followings, in the stated order: • Payment of IGST, • Payment of CGST, • Payment of SGST, • Payment of UTGST.

YES: To the followings, in the stated order: • Payment of CGST, • Payment of IGST. NO: • Payment of SGST • Payment of UTGST

YES: To the followings, in the stated order: • Payment of SGST, • Payment of IGST. NO: • Payment of CGST • Payment of UTGST

1.12 Job Work [Section 19, 143 of GST Act] (1)

As per sec 143(1), “principal” means a registered person sending taxable goods for job work. Thus, sec 143 is NOT applicable to “unregistered taxable person”

(2)

Facilities to the principal

(3) (4)

•

To send any inputs/capital goods to a job worker for job work without payment of tax,

•

To send inputs/capital goods subsequently from one job worker to another job worker without payment of tax,

To claim ITC on goods transferred to job worker.

• Sec 143 is optional. Principal may supply goods to job worker after charging of GST. Sec 143 enables the principal to send taxable goods to a job worker (and also to another job-worker therefrom) without payment of tax, subject to•

(5)

18

Intimation, and

certain conditions, as may be prescribed.

• If the benefit under sec 143 is availed, the principal shall be responsible and accountable for all the transactions between him and the job worker

Chapter A-1

GST in India – At-a-glance

(6)

If inputs are not received within 1 year (capital goods in 3 years), it shall be deemed as supply in the hands of the principal on the day when goods were originally sent.

(7)

The challan issued by the principal to the job worker shall contain the details specified in rule 55.

(8)

The details of challans in respect of goods dispatched to a job worker or received from a job worker or sent from one job worker to another during a quarter shall be included in FORM GST ITC-04 furnished for that period on or before the 25th day of the month succeeding the said quarter. [Rule 45 of CGST Rules]

1.13 Tax Invoice, Bill of Supply, Debit/Credit Notes 1.13.1

Who is required to issue tax invoice or bill of supply or receipt voucher or delivery challan?

Key Documents

(i) Invoice/Tax Invoice  Every registered person shall issue a tax invoice for supply of – o taxable goods, or o taxable services.  The expression “tax invoice” also includes any revised invoice issued by supplier in respect of a supply made earlier.  Tax invoice is not required to be issued if value of goods/ services supplied is less than INR 200 except when requested by the recipient.

However, consolidated tax invoice shall be issued at the end of the day.

(ii) Bill of Supply  Instead of a invoice, a bill supply shall issued in following cases:

tax of be the

o A registered person supplying exempted goods/services, or o A registered paying tax under composition scheme.  Individual bill of supply is not required to be issued if value of goods/ services supplied is less than INR 200 except when requested by the recipient.

Further,

any

(iii) Receipt Voucher

(iv) Delivery Challan

 On receipt of advance payment with respect to any supply of goods or services, registered person shall issue a receipt voucher, evidencing receipt of such payment.

In the following cases, goods may be supplied on the basis of delivery challan: -

 Where, after receipt of advance, subsequently no supply is made and no tax invoice is issued in pursuance thereof, the said registered person may issue to the person who had made the payment, a refund voucher against such payment.

(a) Supply of liquid gas where the quantity at the time of removal from the place of business of the supplier is not known, (b) Transportation goods for job work,

of

(c) Transportation of goods for reasons other than by way of supply, or (d) Such other supplies as may be notified by the Board.

tax

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invoice/any other similar document issued under any other Act for the time being in force in respect of any non-taxable supply shall be treated as bill of supply.

•

Central/State Government may specify the categories of services in respect of which any other document issued in relation to the supply shall be deemed to be a tax invoice, subject to prescribed conditions.

1.13.2 Contents of tax invoice (Rule 46 of the GST Rules) Tax invoice shall be issued by the supplier containing the following details:(a) Name, address and GSTIN of the supplier; (b) A consecutive serial number, not exceeding 16 characters, in one or multiple series, containing alphabets or numerals or special characters hyphen or dash and slash symbolised as “-” and “/” respectively, and any combination thereof, unique for a financial year; (c) Date of its issue; (d) Name, address and GSTIN/Unique ID Number, if registered, of recipient; (e) Name and address of the recipient and address of delivery, along with the name of State and its code, if such recipient is unregistered and where the taxable value of supply is INR 50,000/- or more; (f) name and address of the recipient and the address of delivery, along with the name of the State and its code, if such recipient is un-registered and where the value of the taxable supply is less than INR 50,000/- and the recipient requests that such details be recorded in the tax invoice (g) HSN code of goods or services (Vide Notification No. 12/2017 (Central Tax) dated 28 June 2017, the registered person shall mention ‘Nil’ number of digits of HSN code for aggregate turnover in the preceding financial year upto INR 1.5 cr., ‘2’ digits between INR 1.5 cr. and INR 5 cr. and ‘4’ digits if the said turnover excceds INR 5 cr.); (h) Description of goods or services; (i) Quantity in case of goods and unit or Unique Quantity Code thereof; (j) Total value of goods or services; (k) Taxable value of goods or services taking into account discount or abatement, if any; (l) Rate of tax (CGST, SGST, UTGST, Cess or IGST); (m) Amount of tax charged in respect of taxable goods or services (CGST, SGST, UTGST, Cess or IGST);

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(n)

Place of supply along with the name of State, in case of a supply in the course of interstate trade or commerce;

(o)

Place of delivery where the same is different from place of supply;

(p)

Whether the tax is payable on reverse charge;

(q)

The word “Revised Invoice”, as the case may be, indicated prominently, where applicable along with the date and invoice number of the original invoice; and

(r)

Signature or digital signature of the supplier or his authorized representative.

1.13.3 •

•

• • • • •

Circumstances when a debit note or credit note is issued (Sec 34 of the GST Act) Where a tax invoice has been issued, and o the taxable value and/or tax charged in that tax invoice is found to exceed the taxable value and/or tax payable in respect of such supply; or o where the goods supplied are returned by the recipient; or o where goods or services or both supplied are found to be deficient, then the taxable person, who has supplied such goods and/or services, may issue to the recipient a credit note.

Where a tax invoice has been issued and the taxable value and/or tax charged in that tax invoice is found to be less than the taxable value and/or tax payable in respect of such supply, then the taxable person, who has supplied such goods and/or services, may issue to the recipient a debit note.

Credit notes & debit notes shall contain the prescribed particulars. Otherwise, these notes may not be considered for adjustment of tax liability.

Credit notes and debit notes must have serial number and date of the corresponding tax invoice or, as the case may be, bill of supply against which the same are being issued.

Credit notes and debit notes must be accepted by the recipient to validate the claim of reduction in output tax by the issuer of such notes.

No credit note shall be issued if incidence of tax/interest on such supply has been passed on to any other person.

Debit note includes supplementary invoice.

1.14 Accounts and Records 1.14.1 Maintenance of Accounts and Records (Sec 35 of the GST Act) (1) Every registered person shall keep and maintain, at his principal place of business, a true and correct account of the following: Production or manufacture of goods; • Inward supply of goods and/or services; • 21

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•

Outward supply of goods and/or services

•

Stock of goods;

•

Input tax credit availed;

•

Output tax payable and paid; and

•

Such other particulars as may be prescribed in this behalf.

•

The term “principal place of business” means the place of business specified as the principal place of business in the certificate of registration [Sec 2(89)].

•

As per sec 2(85), the term “Place of Business” includes (a)

Place from where the business is ordinarily carried on, and includes a warehouse, a godown or place where a taxable person stores goods, and provides/receives goods/services;

(b)

Place where a taxable person maintains his books of account;

(c)

A place where a taxable person is engaged in business through an agent, by whatever name called.

•

(2)

Registered assesses may keep and maintain such accounts and other particulars in the electronic form in the manner as may be prescribed.

Multiple places of business: As per Rule 56(7) of the GST Rules, every registered person shall keep the books of account at the principal place of business and books of account relating to additional place of business mentioned in his certificate of registration. Therefore, it appears that records of additional places can be kept at the principal place of business.

(3)

Every owner or operator of warehouse or godown or any other place used for storage of goods, irrespective of whether he is a registered taxable person or not, shall maintain records of consigner, consignee and other relevant details of the goods as may be prescribed

(4)

The Commissioner has been empowered to notify a class of taxable persons to maintain additional accounts or documents for such purpose as may be specified.

Relaxation by the Commissioner: If any class of taxable persons is not in a position to keep and maintain accounts in accordance with the provisions of this section, the commissioner may permit such class of taxable persons to maintain the accounts in such manner as may be prescribed.

(5)

(6)

22

Except when goods are lost, stolen, destroyed, written off or disposed of by way of gift or free samples, if the registered taxable person fails to account for the goods and/or services in his books of account, the proper officer shall determine the amount of tax payable on the goods and/or services that are not accounted for, as if such goods and/or services had been supplied by such person and in this regard, the provisions of sec 73 or 74, as the case may be, shall apply, mutatis mutandis, for determination of such tax.

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1.14.2 Retention of Accounts and Records (Sec 36 of the GST Act) Every assessee shall retain the prescribed books of accounts and other records until the • expiry of 72 months (6 years) from the due date of filing of Annual Return for the year pertaining to such accounts and records.

In case an appeal or revision or any other proceeding is pending before any Appellate • Authority or Revisional Authority or Tribunal or Court or is under investigation for an offence under Chapter XIX, then the assessee shall retain the books of account and other records pertaining to the subject matter of such appeal or revision or proceeding or investigation for a period of one year after final disposal of such appeal or revision or proceeding or investigation, or for the period specified records under sec 36(1), whichever is later.

Such accounts and documents, where maintained manually, shall be kept at every • related place of business mentioned in the certificate of registration and where maintained digitally, shall be accessible at every related place of business.

Proper electronic back-up of records of current year including earlier years, shall be • maintained and preserved in such manner that, in the event of destruction of such records due to accidents or natural causes, the information can be restored within reasonable period of time.

1.15 Returns under the GST (Chapter IX of the GST Act) 1.15.1 Types of returns or reports and periodicity Please refer Chapter A-6 of this book.

1.15.2 Other features of the Returns Return shall be filed for each GSTIN; • If a person has more than one TIN in one state, he shall file multiple returns; • • Filing of return o The filing of return shall be only through online mode; o Facility of offline generation and preparation of returns shall be available but offline returns shall have to be uploaded before the due date.

Return without payment of self-assessed tax • o The return may be filed; however, such return shall be treated as an invalid return; o Not to be taken into consideration for matching of invoices and for intergovernmental fund settlement among states and the centre.

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Returns process flow GSTR-1 Returns of Outward Supplies

Captures the transaction level details of the outward supplies of a tax payer

GSTR-2

Forms the basis for the statement of details of the inward supplies of all suppliers

Returns of Inward Supplies

Freezing of outward and inward supplies of every tax payer  Calculation of tax liability  Payment in the Monthly Return i.e. GSTR-3 GSTR-3 Monthly Return

Time Flow (GSTR-1/2) SUPPLIER

GSTR-1 Returns of Outward Supplies

Accept or reject modifications GSTR-1 Amended after accepted changes

24

RECIPIENT Part A-GSTR-2A/GSTR4A/GSTR-6A

Early uploading of invoices shall be allowed  Submission of return by 10th of next month

Able to see the invoices uploaded by their suppliers Available for amendment after 10th of next month

Inward Supplies made available on the basis of GSTR-1 after 10th of next month

GSTR-1A Inward supplies added/corrected/del eted by recipient made available to be filed on or before 17th of the next month

Final GSTR-2 Submission on or before th 15 of the next month Final GSTR-4 Submission on or before 18th of month next to quarter Final GSTR-6 Submission before 13th of the next month

Addition/correction/dele tion of invoices -From 11th to 15th of the next month -From 11th to 18th of month next to quarter (composition) -From 11th to 13th of the next month (ISD)

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1.15.4 Matching process • ITC claim matching ITC claim matching after submission of GSTR-3 GST-ITC-1A: Mismatches of current tax period

GST-ITC-1A: Mismatches of earlier tax period

GST-ITC-1A: Duplicate Claims of ITC

ITC claim in GSTR-2 > Output tax in GSTR-1

Invoices/Debit Notes accepted w/o amendment in GSTR2A/GSTR-2 by Recipient + Valid Return by Supplier

Rectification by Recipient/ Supplier

•

Addition to Current Month Output tax Liability of GSTR-3

No Yes

ITC Claim < = Output Tax paid

No

Yes

Addition to Next Month Output tax Liability of GSTR-3

ITC matching

Output Tax Liability Reduction Matching Output Tax Liability Reduction matching after submission of GSTR-3 GST-ITC-1A: Mismatches of current tax period Liability Reduction claim> Admitted by Recipient Credit Notes Accepted w/o amendment in GSTR-2A/GSTR-1 by Recipient + Valid Return by Recipient

GST-ITC-1A: Mismatches of earlier tax period

Rectification

by Recipient/ Supplier Yes

Reduction claim < = ITC admitted on such Credit Note by Recipient + Valid Return by Recipient

GST-ITC-1A: Duplicate Claims of Liability reduction

No No

Addition to Current Month Output tax Liability of GSTR-3

Yes Matching

Addition to Next Month Output tax Liability of GSTR-3

1.16 Payment of Tax (Section 49 of the GST Act) 1.16.1 Broad features Electronic online payment process – Paperless, and no use of manually prepared • challan;

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•

GSTN - Single point interface for challan generation;

•

Any time, anywhere mode of payment of tax;

•

Faster remittance of tax revenue to the government account;

•

Speedy accounting and reporting;

•

Electronic reconciliation of all receipts;

•

Ease of payment - Four modes including Net Banking, Credit Card (CC)/Debit Card (DC), NEFT/RTGS and Over the Counter (OTC);

•

Common challan form with auto-population features;

•

Use of single challan and single payment instrument;

•

Common set of authorized banks;

•

Payment through any bank;

•

Common accounting codes.

1.16.2 Payments to be made in the GST Central GST (CGST) • State GST (SGST); • Integrated GST (IGST); • UT GST (UTGST) • Cess • Tax deducted at source (TDS); • Tax collected at source (TCS); • Interest, penalty, fees and any other payment.

• 1.16.3 Persons liable to pay GST Supplier of goods/service including those paying tax under composition; • Imports and other specified/notified supplies  the liability may be casted on the • recipient under the reverse charge mechanism unless assessed under Customs Law; Third person (say, in the case of e-commerce operator responsible for TCS or • government department responsible for TDS).

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1.16.4

GST in India – At-a-glance

Modes of payment of GST Modes of Payment

Mode II Over the Counter (pay upto INR 10,000) per challan per tax period subject to exceptions in cash/cheque/DD

Mode I Internet Banking including Credit/Debit Card through Auth. Banks

Mode III RTGS/ NEFT

Payment Acceptance by Dept. officers in enforcement cases ONLY

1.17 Tax Deduction at Source (TDS) (Section 51) 1.17.1 Persons may be required to deduct TDS (a) A department or establishment of the Central or State Government, or (b) Local authority, or (c) Governmental agencies, or (d) Such persons or category of persons as may be notified, by the Central or a State Government on the recommendations of the Council.

1.17.2

Rates of TDS

S.N.

Act

Rate of TDS (on the payment made or credited to supplier)

(i)

CGST

1%

(ii)

SGST

1%

(iii)

IGST

2%

1.17.3 When to deduct TDS The deductor is required to deduct TDS if the total value of such supply under a contract exceeds INR 2.5 lakhs. “Value of supply” means amount indicated in the invoice excluding tax.

TDS is required to be deducted on all taxable goods and/or services.

1.17.4 Obligations of deductor of TDS (a) Every deductor is liable for registration under the GST Law. Further, threshold limit shall not apply to the deductor of TDS.

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(b)

He shall pay the TDS deducted to the government by the 10th day of the month succeeding the month in which TDS was deducted by debiting the electronic cash ledger maintained; and the electronic tax liability register shall be credited accordingly.

(c)

He shall issue TDS certificate in Form GSTR-7A, to the deductee within 5 days of crediting the amount so deducted to the Government, mentioning therein –

(d)

•

the contract value,

•

rate of deduction,

•

amount deducted,

•

amount paid to the appropriate government, and

such particulars as may be prescribed in this behalf.

• He shall submit monthly return of TDS in Form GSTR 7 return by the 10th day of the month succeeding the month in which TDS was deducted, electronically on the Common Portal either directly or through Facilitation Centre.

(e)

Details of tax deducted at source by the deductor shall be made available to the deductee in Part C of Form GSTR-2A electronically and the said deductee may include the same in Form GSTR-2.

(f)

Deductor is not required to submit Annual Return in Form GSTR 8.

(g)

The provisions of sec 51 are yet to be notified, which means that the deductor, until notified, is not required to deduct TDS on the specified contract value.

1.18 Tax Collection at Source (TCS) (Section 52) 1.18.1 Time of collection of TCS and its value Every electronic commerce operator (ECO), not being an agent, shall collect an amount • calculated at the specified percentage of the net value of taxable supplies made through it where the consideration with respect to such supplies is to be collected by the operator.

• “Net value of taxable supplies” shall mean Aggregate value of taxable supplies of goods or services made during any month, other than services notified under sec 9(5), by all registered taxable persons through the ECO ( Aggregate value of taxable supplies returned to the suppliers during the said month.

TCS would not be collected where notification is issued under sec 9(5). Under this category, electronic commerce operator shall be responsible for depositing the tax on ‘radio taxi’ or ‘passenger transport services’ provided through him.

TCS shall not be applicable where goods are supplied by the ECO on its own account.

• • The provisions of sec 52 are yet to be notified, which means that the collector, until notified, is not required to collect TCS.

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1.18.2

GST in India – At-a-glance

Rates of TCS S.N.

Act

Rate of TDS (of the net value of taxable supplies)

(i)

CGST

1%

(ii)

CGST

1%

(iii)

IGST

2%

1.18.3 Obligations of collector of TCS (a) TCS shall be paid within 10 days from the end of the month in which the collection is made; (b) ECO shall furnish a statement of outward supplies of goods/services (including returns thereof), electronically, giving the details of the amounts collected during the calendar month within 10 days from the end of the month in which the collection was made; (c) The statement in Form GSTR-8, shall contain details of amounts collected, supplierwise in respect of all supplies effected through the website/url of the ECO during the calendar month. (d) ECO shall furnish an annual statement in Form GSTR-9B, electronically, containing the details of outward supplies of goods or services or both effected through it.

1.18.4 Matching of TCS with supplies by the supplier (a) Amount so remitted by the ECO shall be treated as if it is amount of tax paid by the concerned supplier and shall reflect in the supplier’s electronic cash ledger.

The expression ‘concerned supplier’ means the supplier of goods/services making supplies through the ECO. (b) Concerned supplier shall claim credit of the amount collected and reflected in the statement of the ECO furnished, in the manner prescribed. (c) Details of the supplies furnished by the e-commerce operator would be compared with the corresponding outward supplies reflected by the concerned supplier in his valid monthly return. If the details do not match, discrepancy shall be communicated to both, the e-commerce operator and the concerned supplier. (d) After communication, if discrepancy is not rectified by the supplier in his valid return or the ECO in his statement for the month in which discrepancy is communicated, the same shall be added to the output tax liability of concerned supplier where the value of outward supplies furnished by the ECO is more than the value of outward supplies furnished by the supplier, in his return for the month succeeding the month in which the details of discrepancy are made available and such addition to the output tax liability and interest payable thereon shall be made available to the supplier electronically.

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1.19 Supplier of online information and database access or retrieval services located outside India to specified person in the taxable territory (OIDAR) (Section 14 of IGST Act) 1.19.1 Applicability of the provisions Sec 14 of the IGST Act fastens the liability to pay tax upon the supplier of service located in a non-taxable territory supplying online information and database access or retrieval services to non-taxable online recipient. Thus, the provisions have three essentials: (i) Supplier of service is located in a non-taxable territory; (ii) Supplier is supplying online information and database access or retrieval services; and (iii) Service is received by the non-taxable online recipient in India.

1.19.2 Meaning of “online information and database access or retrieval services” (OIDAR) OIDAR means services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention, and impossible to ensure in the absence of information technology and includes electronic services, such as,(a) Advertising on the internet; (b) Providing cloud services; (c) Provision of e-books, movie, music, software and other intangibles via telecommunication networks or internet; (d) Providing data or information, retrievable or otherwise, to any person, in electronic form through a computer network; (e) Online supplies of digital content (movies, television shows, music, etc.); (f) Digital data storage; and (g) Online gaming.

1.19.3 Role of intermediary who arranges the services Where the supplier of service is located in a non-taxable territory, and • provision of such service is arranged or facilitated by an intermediary located in the • non-taxable territory, then such intermediary shall be deemed to be supplying such services to the non-taxable • online recipient.

• However, if the intermediary satisfies all the following conditions, he shall not be deemed as supplier of service:

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(a)

the invoice or customer’s bill or receipt issued or made available by such intermediary taking part in the supply clearly identifies the service in question and its supplier in non-taxable territory;

(b)

the intermediary neither collects or processes payment in any manner nor is responsible for the payment between the non-assessee online recipient and the supplier of such services;

(c)

the intermediary involved in the supply does not authorise delivery;

(d)

the general terms and conditions of the supply are set by the service provider; and not by the intermediary.

1.19.4 Registration, payment of tax and returns For the purpose of payment of IGST, the supplier of the said services shall take a single • registration under a Simplified Registration Scheme, as may be prescribed by submitting an application for registration, duly signed or verified through EVC, in Form GST REG-10.

Any person located in taxable territory, representing such supplier for any purpose in the • taxable territory, shall take a registration and pay IGST on behalf of the supplier.

Where the supplier does not have a physical presence in the taxable territory or does not • have a representative in the said territory, such supplier may appoint a person in the taxable territory for the purpose of paying IGST; and such person shall be liable to pay tax.

Every registered person providing online information and data base access or retrieval • services from a place outside India to a person in India other than a registered person shall file return in Form GSTR-5A on or before the 20th day of the month succeeding the calendar month or part thereof.

1.20 Refund (Section 54 & 55 of the GST Act) 1.20.1 Circumstances Under the GST, export and supply to SEZ developer/unit have been considered as zero• rated supplies. However, the inputs and input services shall be purchased only after payment of GST. Therefore, refund arises to the exporters/SEZ developers/units due to tax paid by them ono inputs and input services exported as such; or o inputs or input services used in the goods and/or services exported out of India.

Refund of balance in electronic cash ledger as defined under sec 49(6).

• Refund of unutilized input tax credit, subject to restrictions provided under sec 54(3) of • the GST Act.

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•

Where the taxpayer is a manufacturer and its inputs are taxable at a higher rate of tax as compared to finished goods/services.

•

Payment of pre-deposit amount as a condition for entertainment of appeal, which is ultimately allowed in the favour of the taxpayer: thus, resulting in refund of the predeposit amount.

•

Refund of tax paid on inward supplies to embassies, diplomats, etc. notified under sec 55.

•

Payment of tax wrongly as IGST in lieu of (CGST+SGST); or vice-a-versa subject to prescribed conditions. [Sec 19 of the IGST Act and Sec 77 of the GST Act].

•

Refund of tax paid on a supply which is not provided, either wholly or partially, and for which invoice has not been issued or where a refund voucher has been issued.

•

The IGST paid by tourist leaving India on any supply of goods taken out of India by him shall be refunded in the prescribed manner.

1.20.2 Time limit As per sec 54 of the GST Act, an application for refund of tax and/or interest shall be • made to the proper officer of IGST/CGST/SGST within 2 years from the relevant date in a prescribed form.

However, for the persons specified under sec 54(2), i.e. United Nation Organisations, embassies, etc., the period shall be 6 months from the last day of the quarter in which such supply was received.

Claim for refund of the balance in electronic cash ledger as defined under sec 49(6), can • be made in the monthly GST returns in prescribed manner.

The relevant date is critical to determine time within which the refund claim has to be • filed. If the refund claim is filed after the relevant date, the claim would be rejected at the threshold; and there is no provision in the Act to condone the delay in filing of refund claim.

• he person in charge of the conveyance carrying the export goods duly files an export manifest or an export report covering the number and the date of shipping bills or bills of export.

•

 declaration to the effect that the SEZ unit/developer has not availed the input tax credit of the tax paid by the supplier of goods or services or both, in a case where the refund is on account of supply of goods or services made to a SEZ unit/developer.

•

 statement showing the details of transactions considered as intra-State supply but which is subsequently held to be inter-State supply.

•

A statement showing the details of the amount of claim on account of excess payment of tax.

•

In respect of supplies to a SEZ unit/developer, the application for refund shall be filed by the supplier of goods after such goods have been admitted in full in the SEZ for authorized operations, as endorsed by the specified officer of the Zone;

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•

In respect of supplies to a SEZ unit/developer, the application for refund shall be filed by the supplier of services along with such evidence regarding receipt of services for authorized operations as endorsed by the specified officer of the Zone.

•

n respect of supplies regarded as deemed exports, the application shall be filed by the recipient of deemed export supplies.

1.20.3 Procedure for claiming refund Applicant shall file an application in Form GST RFD-1, electronically, through the • Common Portal either directly or from a Facilitation Centre.

Refund application has to be supported by prescribed documents evidencing facts that • the refund is due to the applicant.

Claim for refund relating to balance in the electronic cash ledger in terms of sec 49(6) • may be made through the return for the relevant tax period in Form GSTR-3, Form GSTR-4 or Form GSTR-7.

1.21 Assessment and Audit 1.21.1 Meaning of assessment and scope As per sec 2(11) of the GST Act, the term “assessment” means determination of tax liability under this Act and includes self-assessment, re-assessment, provisional assessment, summary assessment, and best judgment assessment.

1.21.1.1 Self-assessment (Section 59 of the GST Act) A registered taxable person shall undertake self-assessment of the taxes payable and furnish a return for each tax period as specified in sec 39, which deals with returns. Determination of tax liability is to be undertaken by the tax payer himself and stated in the return to be filed by him.

1.21.1.2 Re-assessment The term re-assessment has not been defined under the Act. In general, power to reopen the assessment should be exercised on the basis of materials in assessment record and not on the basis of mere change of opinion. Assessment cannot be reopened on the basis of materials already considered at the time of original assessment.

Mere change of opinion is not a reasonable ground for reassessment. Change of opinion would arise only in a case where reassessment is made on the same set of facts and with the same materials on record. If fresh materials are brought on record or if there was something to show that the dealer had concealed some material from the assessing officer, then the application of mind to new facts or materials by the assessing officer cannot be said to be mere change of opinion.

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1.21.1.3 Provisional assessment (Section 60 of the GST Act) Provisional assessment can be invoked by a taxable person by making a request/application to the proper officer; and such request may be made only under the following two circumstances(i) He is unable to determine the value of goods and/or services, or (ii) He is uncertain about the rate of tax applicable.

1.21.1.4 Summary assessment (Section 64 of the GST Act) Summary assessment is generally used in a tax legislation to denote ‘fast track assessment’ based on return filed by the assessee.

The proper officer must have sufficient ground or reason to believe that any delay in • assessment will adversely impact the interest of revenue.

The proper officer must have evidence in his possession that the person has incurred, or • is likely to incur, a liability to pay tax under this Act. 1.21.1.5 Best judgment assessment As per sec 62, the proper officer may apply best of his judgment where a registered taxable • person fails to file his return, which may pertain to any of the following category o Return for the tax period in case of a normal taxable person, o Return in case of a person opting for composition, o Final return at the time of cancellation of registration.

As per sec 63, the proper officer may also apply best of his judgment for the relevant tax • periods and issue an assessment order where o a taxable person fails to obtain registration even though liable to do so, or o whose registration has been cancelled under sec 29 but who was liable to pay tax.

1.21.2 Audit (Sec 65 of the GST Act) As per sec 2(13) of the GST Act, the term “audit” means • o examination of records, returns and other documents maintained or furnished by the registered person under this Act or rules made thereunder or under any other law for the time being in force, o to verify the correctness of turnover declared, taxes paid, refund claimed and input tax credit availed, and o to assess his compliance with the provisions of this Act or rules.

The Commissioner of CGST/SGST or any officer authorized by him, by way of general • or special order may undertake audit of the business transactions at o the place of business of the registered person, or o the Department’s office.

Intimation of audit will be issued to the taxable person at least 15 days in advance.

•

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•

The audit shall be completed within a period of 3 months from the date of commencement of audit; or under certain conditions, the extended period, which may be a further period not exceeding 6 months.

•

During the course of audit, the authorized officer may require the registered person,

•

(i)

to afford him the necessary facility to verify the books of account or other documents as he may require and which may be available at such place, and

(ii)

to furnish such information as he may require and render assistance for timely completion of the audit.

The proper officer may initiate proceeding for determination of tax under sec 73 or 74, levy of interest and/or penalty if the audit conducted reveals any evidence of o tax not paid or short paid, or o

input tax credit wrongly availed or utilised, or

o

amount erroneously refunded.

1.21.3 S.No. (1)

Specific provisions for determination of tax Particulars (2)

Section 73 (3)

Section 74 (4)

1

Main Reason for Tax default other than fraud or any Tax default due to fraud or any service of show willful-misstatement or willful-misstatement or cause notice suppression of facts to evade tax suppression of facts to evade tax (SCN) in Form GST DRC-01

2

Circumstances/De Sec 73(1): faults - Any tax has not been paid or short paid, or - any tax has been erroneously refunded, or - where input tax credit has been wrongly availed or utilized (hereinafter stated as “tax default”)

3

Time Limit for Sec 73(2): At least 3 months prior Sec 74(2): At least 6 months issuance of SCN to the time limit specified in sec prior to the time limit specified 73 (10) for issuance of order in sec 74 (10) for issuance of order

4

Service a statement

Sec 74(1): - Any tax has not been paid or short paid, or - any tax has been erroneously refunded, or - where input tax credit has been wrongly availed or utilized (hereinafter stated as “tax default”)

Sec 73(3),(4) and Sec 74(3),(4): Where SCN has been issued for any period, the Proper Officer (PO) may serve statement of tax default in Form GST DRC-02 for other periods provided grounds are same as stated in the SCN

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S.No. (1)

Particulars (2)

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Section 73 (3)

Section 74 (4)

5

Issuance of order Sec 73(9): After considering the after representation in Form GST determination DRC–06, PO shall determine the amount of tax, interest and penalty, which shall be equivalent to 10% of tax or INR 10,000/-, whichever is higher.

A summary of the order shall be uploaded electronically in Form GST DRC–07, which shall be treated as notice for recovery.

6

Time limit for Sec 73(10): 3 years from the due Sec 74(10): 5 years from the due issuance of order date for filing of annual return for date for filing of annual return the financial year to which the tax for the financial year to which not/short paid or ITC wrongly the tax not/short paid or ITC availed or utilised relates to, or wrongly availed or utilised within 3 years from the date of relates to, or within 5 years from erroneous refund. the date of erroneous refund.

Any rectification of the order, in accordance with the provisions of Rectification of sec 161, shall be made by the proper officer in Form GST DRC-08. order, if any

7

Sec 74(9)/74(11): After considering the representation in Form GST DRC–06, PO shall determine the amount of tax, interest and penalty.

Sec 74(11): If amount of tax along with interest and 50% penalty of tax is paid within 30 days of issuance of order, all proceedings (except u/s 132) shall be deemed to be concluded.

A summary of the order shall be uploaded electronically in Form GST DRC–07, which shall be treated as notice for recovery.

1.21.4 Special Audit (Section 66 of the GST Act) Special audit can be ordered in writing by any officer not below the rank of Assistant • Commissioner, (with the prior approval of the Commissioner), if such officer is of the view that o the value has not been correctly declared, or o the credit availed is not within normal limits.

The officer not below the rank of Assistant Commissioner, who has an adverse opinion • or suspicion on the above aspects, after commencement and before completion of any scrutiny, enquiry, investigation or any other proceedings under the Act (i.e., at any stage of proceedings), may direct a registered person to get his books of accounts audited. The provisions are applicable notwithstanding that the accounts of the registered person have been audited under any other provisions of this Act or any other law for the time being in force.

Direction for special audit shall be given after prior approval of the Commissioner.

• Audit shall be conducted by • 36

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•

GST in India – At-a-glance

o

the Chartered Accountant, or

o

the Cost Accountant.

The Auditor shall submit his report within 90 days (extendable to further 90 days).

1.22

E-way bill

As per Chapter XVI: E-Way Rules of the CGST Rules 2017, till such time as an E-way bill system is developed and approved by the Council, the Government may, by notification, specify the documents that the person in charge of a conveyance carrying any consignment of goods shall carry while the goods are in movement or in transit storage.

As per Frequently Asked Questions (FAQs), “The present system for E-way Bill in States to continue, till the E-Way Bill procedures are finalized”.

1.23 Advance ruling (Section 95 of the GST Act) (1)

As per sec 95 of the GST Act, ‘advance ruling’ means a written decision provided by the authority to an applicant on matters or on questions as enumerated in sec 97(2) or sec 100(1) of the Law.

(2)

The question on which the advance ruling is sought shall be in respect of (a)

Classification of any goods and/or services;

(b)

Applicability of a notification issued under provisions of the Act having a bearing on the rate of tax;

(c)

Principles to be adopted for the purposes of determination of value of the goods and/or services;

(d)

Admissibility of input tax credit of tax paid or deemed to have been paid;

(e)

Determination of the liability to pay tax on any goods and/or services under the Act;

(f)

Whether applicant is required to be registered under the Act;

(g)

Whether any particular thing done by the applicant with respect to any goods and/or services amounts to or results in a supply of goods and/or services, within the meaning of that term.

(3)

Application in Form GST ARA-1 shall be accompanied by a fee of INR 5,000/-.

(4)

Advance Ruling Authority will be located in every state.

(5)

Authority for advance ruling shall comprise of one member CGST and one member SGST. They shall be appointed by the central and state government respectively. Their qualification and eligibility condition for appointment shall be prescribed in the GST Rules.

(6)

Appeal in Form GST ARA-2 may be filed against the order by the applicant or CGST/SGST officer; filing fee is INR 10,000/-.

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(7)

Advance ruling shall be binding only on the applicant and on the jurisdictional tax authority of the applicant. Therefore, it is limited to the person who has applied for an advance ruling.

(8)

Advance ruling shall be binding till the period when the law, facts or circumstances supporting the original advance ruling have changed.

1.24 Appeals (Chapter XVIII of the GST Act) (1)

Any person aggrieved by any order or decision passed against him has the right to appeal. However, as per sec 120, some decisions/orders are not appealable.

(2)

Appellate levels in the GST Act

Appeal level

Appropriate appellate authority

Orders passed by

1st

Appellate Authority

Adjudicating Authority

2nd

Appellate Tribunal

Appellate Authority

3rd

High Court

Appellate Tribunal

4th

Supreme Court

High Court

(3)

Time limit of filing and disposal of appeal

S. N. A (i)

(ii) (iii)

(iv) B (i)

(ii) (iii)

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Nature of appeal Time limit Appeal to the Appellate Authority Appeal by the aggrieved 3 months from the date of person- Sec 107(1), (4) communication of the decision or order (Condonation - 1 month) Acknowledgment of filing of appeal Appeal/Application by the GST 6 months from the date of officer as per direction of the communication of the decision or Commissioner - Sec 107(2),(3) order (Condonation - 1 month) Order clearly indicating final amount of demand confirmed Appeal to the Appellate Tribunal Appeal by the aggrieved 3 months from the date of person - Sec 112(1), (6) communication of the decision or order (Condonation - 3 months) Acknowledgment of filing of Within 7 days of filing of appeal appeal Appeal/Application by the 6 months from the date of GST Officer as per direction of communication of the decision or

Form GSTAPL-01

GSTAPL-02 GSTAPL-03

GSTAPL-04

GSTAPL-05

GSTAPL-02 GSTAPL-07

Chapter A-1

S. N.

(iv)

(v)

(vi)

C

(4)

(5)

(6)

GST in India – At-a-glance

Nature of appeal the Commissioner - Sec 112(3), (4) Submission of a memorandum of cross objection by other party - Sec 112(5), (6) Disposal of appeal by the Appellate Tribunal - Sec 113(4) Issue of statement indicating final amount of demand confirmed by jurisdictional officer Appeal to the High Court - Sec 117(2)

Time limit order Within 45 days of the receipt of notice (Condonation – 45 days)

Form

GSTAPL-06

One year from the date of filing of appeal, wherever possible

-

-

GSTAPL-04

180 days from the date of receipt of order

GSTAPL-08

The Appellate Tribunal may, in its discretion, refuse to admit any such appeal where the tax or input tax credit involved or the difference in tax or input tax credit involved or the amount of fine, fee or penalty determined by such order, does not exceed INR 50,000/-. [Section 112(2)] Filing and restoration fee before the Appellate Tribunal: The fees for filing and restoration of appeal shall be INR 1000/- for every INR 1 Lakh of tax or input tax credit involved or the difference in tax or input tax credit involved or the amount of fine, fee or penalty determined in the order appealed against, subject to maximum of INR 25,000/-.

[Rule 110(5) of the GST Rules] Deposit of amount before filing of appeal (Stay Amount) No appeal before the Appellate Authority or the Appellate Tribunal, shall be filed, unless the appellant has paid– (a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and (b) In case of Appellate Authority - A sum equal to 10% of the remaining amount of tax in dispute, arising from the said order, in relation to which the appeal has been filed, and In case of Appellate Tribunal - a sum equal to 20% of the remaining amount of tax in dispute, in addition to amount paid before the Appellate Authority, arising from the said order, in relation to which the appeal has been filed.

1.25 Information returns (Section 150 of the GST Act) 1.25.1 Who is required to file information return?

Following persons may be required to furnish information return, within such time, in such form and manner, to such authority or agency as may be prescribed Taxable person, •

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• • • • • • • • • • • • • • •

Chapter A-1

Local authority or other public body or association, Department of VAT or central/state excise duty or customs duty, Income tax authority, Banking company, State Electricity Board or electricity distribution Co., Registrar or the sub-Registrar appointed under sec 6 of the Registration Act, 1908, Registrar under the Companies Act, 2013, Registering authority under the Motor Vehicles Act, 1988, Collector of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, Recognised stock exchange, A depository referred in the Depositories Act, 1996, An officer of the Reserve Bank of India, G.S.T. network, The person to whom UIN has been granted under sec 23(8), Any other person as may be specified.

1.25.2 What type of information may be asked in the return?

Information may relate to details of payment of tax, • details of transaction of goods or services, • transactions related to a bank account, • consumption of electricity, • transaction of purchase, sale or exchange of goods or property or right or interest in a • property.

1.25.3

Penalty for non-furnishing of information return [Section 123 of GST Act] INR 100/- for each day of the period during which the failure to furnish such return continues maximum upto INR 5,000/-.

1.25.4 Penalty for non-furnishing of information return INR 100/- for each day of the period during which the failure to furnish such return continues maximum upto INR 5,000/-.

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