GST Laws Manual – Acts, Rules and Forms (3rd Edition) by Bloomsbury India Professional

Contents at a glance About the authors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii Table of contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi

PART A GST AT-A-GLANCE Chapter A1 Chapter A2

GST in India – At-a-glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-3 Compliance chart with limitation periods under GST. . . . . . . . . . . . . . . . . . . . . . A2-1 PART B

CENTRAL GST ACT AND RULES Chapter B1 Chapter B2 Chapter B3

Central Goods and Services Tax Act, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B1-3 Central Goods and Services Tax Rules, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . B2-1 CGST Notifications (Non-tariff) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B3-1 PART C

IGST ACT AND RULES Chapter C1 Chapter C2 Chapter C3

The Integrated Goods and Services Tax Act, 2017 . . . . . . . . . . . . . . . . . . . . . . . . C1-3 Integrated Goods and Services Tax Rules, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . C2-1 IGST Notifications (Non-tariff). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C3-1 PART D

GST (COMPENSATION TO STATES) ACT AND RULES Chapter D1 Chapter D2 Chapter D3

The Goods and Services Tax (Compensation to States) Act, 2017. . . . . . . . . . . . D1-3 Goods and Services Tax Compensation Cess Rules, 2017 . . . . . . . . . . . . . . . . . . D2-1 Compensation Cess Notifications (Non–tariff). . . . . . . . . . . . . . . . . . . . . . . . . . . D3-1 PART E

GST FORMS List of Forms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-2 GST Forms Templates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-9

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PART F

IMPORTANT LEGISLATIONS Chapter F1 Chapter F2 Chapter F3

Amended/Inserted Articles by the Constitution (101st Amendment) Act, 2016 . . F1-3 Taxation Laws (Amendment) Act, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F2-1 CENVAT Credit Rules, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F3-1 PART G

PRESS RELEASES Chapter G

Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-3 PART H

CIRCULARS Chapter H1 Chapter H2 Chapter H3

Circulars – GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H1-3 Circulars – IGST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H2-1 Circulars – Compensation Cess. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H3-1 PART I

ORDERS Chapter I1 Chapter I2 Chapter I3

Orders – GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I1-3 Order – Central Tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I2-1 Order – Union Territory Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I3-1 PART J

FAQs AND GST FLYERS Chapter J1 Chapter J2

CBEC FAQs on GST as on 1st January 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-3 GST Flyers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-3

Table of contents About the authors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii Contents at a glance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix

PART A GST AT-A-GLANCE Chapter A1 GST in India – At-a-glance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-3 1.1 GST – Meaning and its scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-3 1.2 Legislative Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-3 1.3 Taxable event and charging provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-4 1.4 Rates of GST, Import & Export. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-6 1.5 Exemptions and exempt supplies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-7 1.5.1 Power to grant exemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-7 1.6 Meaning and Scope of the term “Supply”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-7 1.6.1 Scope of supply (Section 7 & 8 of the GST Act). . . . . . . . . . . . . . . . . . . . . A1-7 1.6.2 Inter-State supply vs. Local Supply and Place of Supply (Section 7 to 13 of the IGST Act). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-9 1.6.3 Time of supply (Section 12 & 13 of the GST Act). . . . . . . . . . . . . . . . . . . A1-10 1.6.4 Value of supply (Section 15 of the GST Act). . . . . . . . . . . . . . . . . . . . . . . A1-12 1.7 Threshold Limit for registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-13 1.7.1 Exemption limit (Sec 22 of the GST Act). . . . . . . . . . . . . . . . . . . . . . . . . . A1-13 1.7.2 When threshold limit is not applicable (Sec 24 of the GST Act). . . . . . . . A1-13 1.8 Taxable Persons & Registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-14 1.8.1 Taxable person [Sec 2(107) of the GST Act]. . . . . . . . . . . . . . . . . . . . . . . A1-14 1.8.2 Who is liable for registration mandatorily under GST [Sec 22(1) of the GST Act]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-15 1.8.3 Who is not liable to take registration? (Sec 23 of the GST Act). . . . . . . . . A1-15 1.8.4 Agriculturist [Section 2(7) of the GST Act]. . . . . . . . . . . . . . . . . . . . . . . . A1-15 1.8.5 Time limit for taking registration [Section 25(1)] . . . . . . . . . . . . . . . . . . . A1-15 1.8.6 Voluntary Registration under GST [Section 25(3)] . . . . . . . . . . . . . . . . . . A1-16 1.9 Composition Scheme [Section 10]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-16 1.10 Output Tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-17 1.10.1 Meaning of output tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-17 1.10.2 Steps for computation of output tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-17 1.11 Input Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-18 1.11.1 Input tax credit in the GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-18 1.11.2 Restrictions in claiming ITC [Sec 16 of the GST Act]. . . . . . . . . . . . . . . . A1-19 xi

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1.12 1.13

1.14

1.15

1.16

1.17

1.18

1.19

1.20

1.21 xii

1.11.3 Non creditable goods/services/supplies [Sec 17(5)]. . . . . . . . . . . . . . . . . . A1-19 1.11.4 Utilization of credit [Sec 49(5)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-21 Job Work [Section 19, 143 of the GST Act] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-21 Tax Invoice, Bill of Supply, Debit/Credit Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-22 1.13.1 Who is required to issue tax invoice or bill of supply or receipt voucher or delivery challan?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-22 1.13.2 Contents of tax invoice (Rule 46 of the GST Rules) . . . . . . . . . . . . . . . . . A1-23 1.13.3 Circumstances when a debit note or credit note is issued (Sec 34 of the GST Act). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-24 Accounts and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-24 1.14.1 Maintenance of Accounts and Records (Sec 35 of the GST Act). . . . . . . . A1-24 1.14.2 Retention of Accounts and Records (Sec 36 of the GST Act) . . . . . . . . . . A1-25 Returns under the GST (Chapter IX of the GST Act). . . . . . . . . . . . . . . . . . . . . . . . . A1-26 1.15.1 Types of returns or reports and periodicity. . . . . . . . . . . . . . . . . . . . . . . . . A1-26 1.15.2 Other features of the Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-28 Payment of Tax (Section 49 of the GST Act) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-29 1.16.1 Broad features. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-29 1.16.2 Payments to be made in the GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-29 1.16.3 Persons liable to pay GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-29 1.16.4 Modes of payment of GST, generally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-30 Tax Deduction at Source (TDS) (Section 51) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-30 1.17.1 Persons may be required to deduct TDS. . . . . . . . . . . . . . . . . . . . . . . . . . . A1-30 1.17.2 Rates of TDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-30 1.17.3 When to deduct TDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-30 1.17.4 Obligations of deductor of TDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-31 Tax Collection at Source (TCS) (Section 52) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-31 1.18.1 Time of collection of TCS and its value. . . . . . . . . . . . . . . . . . . . . . . . . . . A1-31 1.18.2 Rates of TCS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-32 1.18.3 Obligations of collector of TCS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-32 1.18.4 Matching of TCS with supplies by the supplier. . . . . . . . . . . . . . . . . . . . . A1-32 Supplier of online information and database access or retrieval services located outside India to specified person in the taxable territory (OIDAR) (Section 14 of the IGST Act). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-33 1.19.1 Applicability of the provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-33 1.19.2 Meaning of “online information and database access or retrieval services” (OIDAR). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-33 1.19.3 Role of intermediary who arranges the services. . . . . . . . . . . . . . . . . . . . . A1-33 1.19.4 Registration, payment of tax and returns . . . . . . . . . . . . . . . . . . . . . . . . . . A1-34 Refund (Section 54 & 55 of the GST Act). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-34 1.20.1 Circumstances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-34 1.20.2 Time limit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-35 1.20.3 Procedure for claiming refund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-36 Assessment and Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-36

1.22 1.23 1.24 1.25

1.26 1.27 1.28

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1.21.1 Meaning of assessment and scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-36 1.21.2 Audit (Sec 65 of the GST Act). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-37 1.21.3 Specific provisions for determination of tax. . . . . . . . . . . . . . . . . . . . . . . . A1-38 1.21.4 Special Audit (Section 66 of the GST Act). . . . . . . . . . . . . . . . . . . . . . . . . A1-39 E-way bill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-40 Interest under the GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-41 Penalty under the GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-42 Offences under GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-46 1.25.1 Nature of acts regarded as offences (Sec 132). . . . . . . . . . . . . . . . . . . . . . A1-46 1.25.2 Quantum of punishment for offences stated in Para 1.25.1 (Sec 132). . . . A1-47 Advance ruling (Section 95 of the GST Act). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-47 Appeals (Chapter XVIII of the GST Act) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-48 Information returns (Section 150 of the GST Act) . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-50 1.28.1 Who is required to file information return? . . . . . . . . . . . . . . . . . . . . . . . . A1-50 1.28.2 What type of information may be asked in the return?. . . . . . . . . . . . . . . . A1-51 1.28.3 Penalty for non-furnishing of information return [Section 123 of the GST Act]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-51 1.28.4 Penalty for non-furnishing of information return. . . . . . . . . . . . . . . . . . . . A1-51

Chapter A2 Compliance chart with limitation periods under GST. . . . . . . . . . . . . . . A2-1 PART B

CENTRAL GST ACT AND RULES Chapter B1 Central Goods and Services Tax Act, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . B1-3 Index of sections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B1-3 Text of the CGST Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B1-10 Chapter B2 Central Goods and Services Tax Rules, 2017 . . . . . . . . . . . . . . . . . . . . . . . . B2-1 Index of rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B2-1 Text of the CGST Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B2-8 Chapter B3 CGST Notifications (Non-tariff). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B3-1 Index of CGST Notifications (Non-tariff) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B3-1 Text of CGST Notifications (Non-tariff). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B3-6

PART C

IGST ACT AND RULES Chapter C1 The Integrated Goods and Services Tax Act, 2017. . . . . . . . . . . . . . . . . . . . C1-3 Index of sections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C1-3 Text of the IGST Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C1-5

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Chapter C2 Integrated Goods and Services Tax Rules, 2017. . . . . . . . . . . . . . . . . . . . . . C2-1 Chapter C3 IGST Notifications (Non-tariff). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C3-1 Index of IGST Notifications (Non-tariff). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C3-1 Text of the IGST Notifications (Non-tariff) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C3-2 PART D

GST (COMPENSATION TO STATES) ACT AND RULES Chapter D1 The Goods and Services Tax (Compensation to States) Act, 2017. . . . . D1-3 Index of sections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D1-3 Text of the GST (Compensation to States) Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D1-4 Chapter D2 Goods and Services Tax Compensation Cess Rules, 2017. . . . . . . . . . . . D2-1 Chapter D3 Compensation Cess Notifications (Non–tariff) . . . . . . . . . . . . . . . . . . . . . D3-1 1/2017 [G.S.R. 700(E) dated 28th June, 2017] Appointing the 1st day of July 2017 as the date on which all the provisions of the Goods and Services Tax (Compensation to States) Act, 2017 shall come into force. . . . . . . . . . . . . . . . . . . . . . D3-1 2/2017 [G.S.R. 820(E) dated 1st July, 2017] Notifying the Goods and Services Tax Compensation Cess Rules, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D3-1 PART E

GST FORMS List of Forms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-2 GST Forms Templates: Composition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-9 Registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-17 Input Tax Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-84 Accounts & Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-94 Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-96 GST Practioner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-156 Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-166 Refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-177 Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-208 Audit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-228 Advance Ruling. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-232 Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-237 Transition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-255 E-Way Bill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-263 Invoice Reference. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-269 Inspection and Search. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-271 Demand and Recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-279 xiv

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Compounding of Offence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-306 PART F

IMPORTANT LEGISLATIONS Chapter F1

Amended/Inserted Articles by the Constitution (101st Amendment) Act, 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F1-3

Chapter F2

Taxation Laws (Amendment) Act, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . F2-1

Chapter F3

CENVAT Credit Rules, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F3-1 PART G

PRESS RELEASES Chapter G Press Releases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-3 Index of Press Releases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-3 Text of the Press Releases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-6 PART H

CIRCULARS Chapter H1 Circulars – GST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H1-3 Index of Circulars – GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H1-3 Text of the Circulars – GST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H1-6 Chapter H2 Circulars – IGST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H2-1 01/2017 Clarification on Inter-state movement of various modes of conveyance, carrying goods or passengers or for repairs and maintenance . . . . . . . . . . . . . . . . . . . H2-1 01/2017 Clarification on supply of satellite launch services by ANTRIX Corporation Ltd. . . . H2-3 Chapter H3 Circulars – Compensation Cess. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H3-1 01/2017 Clarification regarding applicability of section 16 of the IGST Act, 2017, relating to zero rat-ed supply for the purpose of Compensation Cess on exports. . . . H3-1 PART I

ORDERS Chapter I1 Orders – GST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I1-3 01/2017 Extension of time limit for filing intimation for composition levy under sub-rule (1) of rule 3 of the CGST Rules, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I1-3 02/2017 Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017. . . . . . . I1-3 xv

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03/2017 Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 117 of the Central Goods and Services Tax Rules, 2017 . . . . . . . I1-4 04/2017 Extension of time limit for intimation of details of stock held on the date preceding the date from which the option for composition levy is exercised in FORM GST CMP-03. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I1-4 05/2017 Extension of time limit for intimation of details of stock held on the date preceding the date from which the option for composition levy is exercised in FORM GST CMP-03. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I1-5 06/2017 Extension of time limit for submitting application in FORM GST REG-26. . . . . . . . . I1-5 07/2017 Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 117 of the Central Goods and Services Tax Rules, 2017 . . . . . . . I1-6 08/2017 Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017. . . . . . . I1-6 09/2017 Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 117 of the Central Goods and Service Tax Rules, 2017 . . . . . . . . I1-7 10/2017 Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017. . . . . . . I1-7 11/2017 Extension of time limit for intimation of details of stock held on the date preceding the date from which the option for composition levy is exercised in FORM GST CMP-03. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I1-8 01/2018 Extension of date for submitting the statement in FORM GST TRAN-2 under rule 117(4)(b)(iii) of the Central Goods and Service Tax Rules, 2017. . . . . . . . I1-8 Ministry of Finance Department of Revenue (Central Board of Excise and Customs) (Tax Research Unit) …….. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I1-9 Incidence of GST on providing catering services in train. . . . . . . . . . . . . . . . . . . . . . . I1-9 Chapter I2 Order – Central Tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I2-1 01/2017 To remove difficulties in implementing provisions of composition scheme. . . . . . . . . I2-1 Chapter I3 Order – Union Territory Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I3-1 01/2017 To remove difficulties in implementing provisions of composition scheme. . . . . . . . . I3-1 PART J

FAQS Chapter J1 CBEC FAQs on GST as on 1st January 2018 . . . . . . . . . . . . . . . . . . . . . . . . . J1-3 1. Overview of Goods and Services Tax (GST). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-4 2. Levy of and Exemption from Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-13 3. Registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-18 4. Meaning and Scope of Supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-28 5. Time of Supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-33 6. Valuation in GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-37 7. GST Payment of Tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-40

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8. Electronic Commerce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-45 9. Job Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-48 10. Input Tax Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-51 11. Concept of Input Service Distributor in GST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-57 12. Returns Process and matching of Input Tax Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-59 13. Assessment and Audit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-65 14. Refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-70 15. Demands and Recovery. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-77 16. Appeals, Review and Revision in GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-82 17. Advance Ruling. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-85 18. Settlement Commission [Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-89 19. Inspection, Search, Seizure and Arrest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-89 20. Offences, Penalties, Prosecution and Compounding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-100 21. Overview of the IGST Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-107 22. Place of Supply of Goods and Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-110 23. GSTN and Frontend Business Process on GST Portal . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-115 24. Transitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J1-125 Chapter J2 GST Flyers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-1 Chapter One Registration under GST Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-3 Chapter Two Cancellation of Registration in GST . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-7 Chapter Three The Meaning and Scope of Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-10 Chapter Four Composite Supply and Mixed Supply. . . . . . . . . . . . . . . . . . . . . . . . . J2-14 Chapter Five Time of Supply in GST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-19 Chapter Six GST on advances received for future supplies. . . . . . . . . . . . . . . . . . . J2-24 Chapter Seven Concept of Aggregate Turnover in GST . . . . . . . . . . . . . . . . . . . . . . . J2-28 Chapter Eight Non-resident taxable person in GST . . . . . . . . . . . . . . . . . . . . . . . . . . J2-29 Chapter Nine Casual taxable person in GST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-31 Chapter Ten Input Service Distributor in GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-36 Chapter Eleven Composition Levy Scheme in GST. . . . . . . . . . . . . . . . . . . . . . . . . . . J2-39 Chapter Twelve Reverse Charge Mechanism in GST . . . . . . . . . . . . . . . . . . . . . . . . . . J2-44 Chapter Thirteen Tax Invoice and other such instruments in GST . . . . . . . . . . . . . . . . . J2-49 Chapter Fourteen Accounts and Records in GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-58 Chapter Fifteen Credit Note in GST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-62 Chapter Sixteen Debit Note in GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-65 Chapter Seventeen Electronic Cash/Credit Ledgers and Liability Register in GST. . . . . . J2-67 Chapter Eighteen Electronic Way Bill in GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-71 Chapter Ninteen Input Tax Credit Mechanism in GST. . . . . . . . . . . . . . . . . . . . . . . . . . J2-77 Chapter Twenty Transition Provisions under GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-82 Chapter Twenty One Integrated Goods and Services Tax Act. . . . . . . . . . . . . . . . . . . . . . . . J2-86 Chapter Twenty Two Compensation cess in GST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-94 Chapter Twenty Three Imports in GST Regime. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-96 Chapter Twenty Four Zero Rating of Supplies in GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-103

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Chapter Twenty Five Chapter Twenty Six Chapter Twenty Seven Chapter Twenty Eight Chapter Twenty Nine Chapter Thirty Chapter Thirty One Chapter Thirty Two Chapter Thirty Three Chapter Thirty Four Chapter Thirty Five Chapter Thirty Six Chapter Thirty Seven Chapter Thirty Eight Chapter Thirty Nine Chapter Forty Chapter Forty One Chapter Forty Two Chapter Forty Three Chapter Forty Four Chapter Forty Five Chapter Forty Six Chapter Forty Seven Chapter Forty Eight Chapter Forty Nine Chapter Fifty Chapter Fifty One

xviii

Deemed Exports in GST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-106 Pure Agent Concept in GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-110 Job Work under GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-113 Works Contract in GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-116 Valuation in GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-121 Margin Scheme in GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-127 Provisional Assessment in GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-128 Returns in GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-131 Statement of Outward Supplies (GSTR-1) in GST. . . . . . . . . . . . . . J2-137 Refunds under GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-143 Refund of Integrated Tax paid on account of zero rated supplies. . . . . . J2-153 Refund of unutilised Input Tax Credit (ITC). . . . . . . . . . . . . . . . . . . J2-158 Advance Ruling Mechanism in GST. . . . . . . . . . . . . . . . . . . . . . . . . J2-166 Goods Transport Agency in GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-173 GST on Charitable and Religious Trusts. . . . . . . . . . . . . . . . . . . . . . J2-178 GST on Education Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-183 GST on Co-operative Housing Societies. . . . . . . . . . . . . . . . . . . . . . J2-190 Online Information Data Base Access and Retrieval (OIDAR) Services in GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-194 GST Practitioners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-200 National Anti-Profiteering Authority in GST. . . . . . . . . . . . . . . . . . . J2-203 Benefits of Goods and Services Tax (GST). . . . . . . . . . . . . . . . . . . . J2-207 Special Audit in GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-209 TDS Mechanism under GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-211 TCS Mechanism under GST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-214 Inspection, Search, Seizure and Arrest. . . . . . . . . . . . . . . . . . . . . . . . J2-216 Appeals and Review Mechanism under GST . . . . . . . . . . . . . . . . . . J2-219 Recovery of Tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J2-225

Part A GST At-a-glance

A1-1

GST Laws Manual: Acts, Rules and Forms, 3e

A1-2

Chapter A1

GST in India – At-a-glance

Chapter A1

GST in India – At-a-glance

Since States’ GST Acts/Rules are almost mirror image of the CGST Act/Rules, 2017; therefore, in this chapter, sections/rules of CGST Act/Rules and SGST Act/Rules have been referred as sections/rules of GST Act/Rules, unless specific reference 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 (101st Amendment) 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. A1-3

GST Laws Manual: Acts, Rules and Forms, 3e

Chapter A1

(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)

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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.

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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. List of such goods/services is given at the end of this Chapter in Appendix.

•

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 (no inter-state) 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 TaxRate) dated 28 June 2017. However, reverse charge payments for all (i.e. intra/inter-state) supplies under sec 9(4) of the GST Act and 5(4) of the IGST Act have been exempted for the period from 13.10.2017 to 31.03.2018 vide Notification no. 38/2017-CT-Rate dated 13.10.2017 and Notification no. 32/2017-IT-Rate dated 13.10.2017. The said date has further been extended to 30.06.2018.

(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. [(iii) Services by way of house-keeping, such as plumbing, carpentering etc, except where the person supplying such service through electronic commerce operator is liable for registration under sec 22(1) of the GST Act.]1 1

Inserted vide Notification No. 23/2017 (CT-Rate) dated 22 August 2017 w.e.f. 22 August 2017.

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(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.

1.4 (1)

(2)

(3)

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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.

(4)

HSN (Harmonized System of Nomenclature) codes have been used for classifying the goods and services under the GST regime.

(5)

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

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GST in India – At-a-glance

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

Exemptions and exempt supplies

Power to grant exemption CGST/SGST

Sec 11

IGST

Sec 6

(1)

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.

(2)

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 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 the 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. A1-7

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(2)

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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. Certain entities, dealing in Skimmed milk powder or concentrated milk, subject to conditions, have been exempted on supply of goods to distinct persons vide Notification No. 30/2017-IT (Rate) dated 22 Sep 2017.

(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 the GST 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 sec 25 of the GST Act (from one unit to another, both having same PAN) when made in the course or furtherance of business. 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 the 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.

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1.6.2 • •

• •

GST in India – At-a-glance

Inter-State supply vs. Local Supply and Place of Supply (Section 7 to 13 of the 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 Section 12: Services where the of goods imported into, or exported location of supplier of service and the from India location of the recipient of service is in India Section 11: Goods imported into, or Section 13: Services where the exported from India 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 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.

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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 the GST Act) (1) As per sec 12(2) of the GST Act, 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; (or) last date on which the supplier is required to issue the invoice in terms of sec 31(1); (b) Date of receipt of payment by the supplier (earliest of date of entry in the books of accounts or credit date in the bank account). However, relaxation has been given under sec 12(2) and 14 of the GST Act to the registered persons, other than composition taxpayers, to pay tax in respect of outward supply of goods at the time of issuance of invoice (and not at the time of receipt of advance); as under: S.No 1 1A

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Nature of persons Time of supply From 13 Oct. 2017 to 14 Nov. 2017 [Notification No. 40/2017â&#x20AC;&#x201C;CT dated 13 Oct. 2017] Registered persons, in respect of Time of supply shall be earliest of outwards supply of goods, the following dates:

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GST in India – At-a-glance

S.No

Time of supply (a) Date of issuance of invoice by the supplier; or (b) Last date on which the supplier is required to issue the invoice in terms of sec 31(1).

Other registered persons (other than Time of supply shall be earliest of 1A), in respect of outwards supply the following dates: of goods (a) Date of issuance of invoice by the supplier (or) Last date on which he is required to issue invoice in terms of sec 31(1); (b) Date of receipt of payment by the supplier (earliest of date of entry in the books of accounts or credit date in the bank account). 15 Nov. 2017 onward [Notification No. 66/2017–CT dated 15 Nov.2017] All registered persons, in respect of As stated at S. No. 1A above outwards supply of goods, except those who opted for the composition levy under sec 10 of the Act

2 2A

(2)

Nature of persons (a) whose aggregate turnover in the preceding financial year did not exceed INR 1.5 Cr. or whose aggregate turnover in the year in which such person has obtained registration is likely to be less than INR 1.5 Cr., and (b) who did not opt for the composition levy under sec 10

Registered persons, in respect of outwards supply of goods, opted for the composition levy.

As stated at S. No. 1B above

In case of supply of services (other than taxable on reverse charge), time of supply (i.e. taxable event) shall be: (a)

(b)

If the invoice under sec 31(2) is issued – (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.

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(3)

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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 the 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 â&#x20AC;˘ the price is the sole consideration for the supply. â&#x20AC;˘ (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. 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.

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1.7 1.7.1 S. No.

Threshold Limit for registration

Exemption limit (Sec 22 of the 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 the GST Act) The threshold limit is not applicable in the following cases: (i) Persons making any inter-state taxable supply; With effect from 13 Oct 2017, the Government has exempted all service providers from obtaining registration even if the service provider is providing inter-State supplies, provided that his aggregate turnover on all India basis is less than INR 20/10 Lakh. (ii) Casual taxable persons making taxable supply; Exemption has been given to certain casual taxable persons making inter-State taxable supplies of specified handicraft goods under this clause. (iii) Persons who are required to pay tax under reverse charge; It may be noted that this clause refers to reverse charge under sec 9(3) of the GST Act and not sec 9(4) of the said Act since sec 9(4) becomes applicable only when the person is registered. It means that if a unregistered person is making outward supplies to

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another unregistered person, then, the latter does not become liable to be registered by virtue of this clause. Moreover, w.e.f. 13.10.2017, the provisions of sec 5(4) of the IGST Act and 9(4) of the GST Act are not applicable till 31.03.20181. The said exemption has further been extended upto 30.06.2018. (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; (vi) Persons who are required to deduct TDS under sec 51, whether or not separately registered under this Act; Provisions of sec 51 have not been made operational. (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; With effect from 15 Nov 20172, the Government has exempted all service providers from obtaining registration even if the service provider is providing supply of service through an electronic commerce operator, who is required to collect tax at source under sec 52 of the Act (other than supplies specified under sec 9(5) of the Act), provided that his aggregate turnover on all India basis is less than INR 20 lakh (INR 10 Lakhs in Special Category States except Jammu and Kashmir) in a financial year. (x) Every e-commerce operator; Provisions of sec 52 for e-com operators required to collect TCS have not been made operational (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 1.8.1

1 2

Taxable Persons & Registration

Taxable person [Sec 2(107) of the 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. 

Vide Notification No. 32/2017 – IT (Rate) and Notification No. 31/2017 CT (Rate) both dated 13 October 2017. Vide Notification No. 65/2017 – Central Tax dated 15 Nov 2017.

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1.8.2

GST in India – At-a-glance

Who is liable for registration mandatorily under GST [Sec 22(1) of the 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 the 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 the GST Act or under the IGST Act; or (b) an agriculturist to the extent of supply of produce out of cultivation of land; or (c) 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 the 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.

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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 (1)

(2)

No. 1 2 3 1

Composition Scheme [Section 10]

Small taxpayers with an aggregate turnover in a financial year up to the specified limit of INR 100 Lakhs (to be increased to INR 150 Lakh, as decided by GST Council on 10 Nov 2017), shall be eligible for composition levy. However, in the case of nine states, the limit shall be INR 75 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. With effect from 13 Oct. 2017, if a person, who makes supplies of goods and/or services referred to in clause (b) of paragraph 6 of Schedule II of GST Act (i.e supply of food/ beverage in restaurant, etc.) and/or also receives exempt services including interest or discount receipts (through extending deposits, loans or advances), he will not be ineligible for the Composition Scheme under Section 10, subject to the fulfilment of all other conditions specified therein. Further, in computing his aggregate turnover in order to determine his eligibility for composition scheme, such interest or discount receipts and value of supply of any exempt services shall not be taken into account.1 The GST Council in its meeting held on 10 Nov. 2017 has decided that supply of services by the composition taxpayer up to INR 5 Lakh will be allowed by exempting the same. Composition levy is not available to the person if: (a) 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); (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: Classification (Tariff Description item/Chapter) 2105 00 00 Ice cream and other edible ice, whether or not containing cocoa 2106 90 20 Pan masala 24 Tobacco and manufactured tobacco substitutes

Inserted vide CGST (Removal of Difficulties) Order, 2017; Order No. 1/2017-CT dated 13.10.2017.

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(3)

GST in India – At-a-glance

Rate of composition levy (with effect from 1 Jan. 2018)

S.No. Nature of Supplier (i) (ii)

(iii)

Manufacturer, other than manufacturers of such goods as may be notified by the government Suppliers making supplies in respect of food with service (e.g. caterers, restaurants, dhabas) referred to in clause (b) of paragraph 6 of Sch II Any other suppliers eligible for composition levy

CGST 0.5% of the turnover in the State 2.5% of the turnover in the State

Rate of Levy SGST 0.5% of the turnover in the State 2.5% of the turnover in the State

Total 1% of the turnover in the State 5% of the turnover

0.5% of the turnover of taxable supplies of goods in the State

1% of the turnover of taxable supplies of goods in the State

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.

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.

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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; Tax paid under composition levy (ii) IGST charged on import of goods; (iii) Reverse charges under the CGST/SGST/ IGST/ under sec 10 UTGST Acts (2)

(3) (4)

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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. Summary of input tax credit in GST:

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GST in India – At-a-glance

1.11.2 Restrictions in claiming ITC [Sec 16 of the GST Act]

In GST, taxability of sale/service will also determine the eligibility of input tax credit, which may be as under:

• S. No.

Nature of Supply

Availability of Input Tax

Taxable supply

Yes

Exempt supply

Non-taxable supply

Zero rated supply

Yes

1.11.3

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

Sl. No. Goods/services/supplies 1 All motor vehicle and conveyance

• • • • •

Exceptions other (i) When they are used for making the following taxable supplies • Further supply of such vehicles or conveyance • Transportation of passengers • Imparting training on driving, flying, navigating such vehicles/ conveyance (ii) When they are used for Transportation of goods Food and beverages Where such inward supply of goods/services of Outdoor catering a particular category is used by a registered person for making an outward taxable supply: Beauty treatment Health services − of the same category of goods or services or Cosmetic and plastic surgery both, or − as an element of a taxable composite or mixed supply

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Sl. No. Goods/services/supplies Exceptions 3 Membership of a club, health and fitness centre 4 • Rent-a-cab (A) Where the government notifies services • Life insurance which are obligatory for an employer to provide to its employees under any law for • Health insurance the time being in force. (B) Same as stated at Sl No. 2 in this table 5 Travel benefits extended to employees on vacation such as leave or home travel concession 6 Works contract services when supplied Where it is an input service for further supply of for construction of immovable property, works contract service other than plant and machinery. [also see notes below this table] 7 Goods or services or both received by a taxable person for construction of an immovable property on his own account, other than plant and machinery, even when used in course or furtherance of business. [also see notes below this table] 8 Goods/services on which tax has been paid under sec 10 as composition levy 9 Goods/services received by a non- Goods imported by him resident taxable person 10 Goods/services used for personal consumption 11 • Goods lost, stolen, destroyed, written off, or • Goods disposed of by way of gift or free samples. 12 Any tax paid in terms of sec 74, 129 or 130. • Section 74 deals with determination of tax not paid or short paid or erroneously refunded ITC wrongly availed or utilized by reason of fraud, etc. • Section 129 deals with payment of tax at the time of detention, seizure and release of goods and conveyances in transit. • Section 130 deals Confiscation of goods and/or conveyances and levy of penalty.

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Sl. No. Goods/services/supplies Exceptions Notes: The word “construction” includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalization, to the said immovable property. ‘Plant and Machinery’ means apparatus, equipment, machinery fixed to earth by foundation or structural support that are used for making outward supply and includes such foundation and structural supports but excludes (i) land, building or any other civil structures; (ii) telecommunication towers; and (iii) pipelines laid outside the factory premises.

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 the GST Act] (1) (2)

(3) (4)

(5) (6) (7)

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” Facilities to the principal 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 toIntimation, 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 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. The challan issued by the principal to the job worker shall contain the details specified in rule 55. A1-21

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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 the GST 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

(ii) Bill of Supply

(iii) Receipt Voucher

(iv) Delivery Challan

 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.

 Instead of a tax invoice, a bill of supply shall be issued in the following cases: 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 tax invoice/any other similar document issued under any other Act for the time being in force in respect of any nontaxable supply shall be treated as bill of supply.

 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.  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.

In the following cases, goods may be supplied on the basis of delivery challan: (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 of goods for job work, (c) Transportation of goods for reasons other than by way of supply, or (d) Such other supplies as may be notified by the Board.

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GST in India – At-a-glance

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); (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.

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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; • 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)]. A1-24

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GST in India – At-a-glance

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.

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. •

(2)

(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)

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.

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

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proceeding or investigation, or for the period specified records under sec 36(1), whichever is later. â&#x20AC;˘

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.

â&#x20AC;˘

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 S. N.

Types of returns or reports and periodicity Return/ledger Nature of return

Original Due date

GSTR-11

Details of outward supplies of goods and/or 10th of the next month services

GSTR- 1A

Details of outward supplies as added, Auto generated at corrected or deleted by the recipient common portal.

GSTR-22

Details of inward supplies of goods and/or 15th of the next month [See Note 1] services

GSTR-2A

Details of inward supplies made available to Auto generated at the recipient on the basis of Form GSTR-1 common portal furnished by the supplier

GSTR-33

Monthly return on the basis of finalization of 20th of the next details of outward supplies and inward month [See Note 1] supplies along with the payment of amount of tax

GSTR-3A

Notice to Return Defaulters who fails to Within 15 days of furnish return under sec 39/ 44/45/52 (sec 46) due date

GSTR-3B4

Simplified Monthly Return

20th of the next month

Other than composition taxpayer, non-resident taxable person, person deducting TDS under sec 51 & collecting TCS under sec 52, ISD and person under sec 14 of IGST Act for OIDAR services. Other than composition taxpayer, non-resident taxable person, person deducting TDS under sec 51 & collecting TCS under sec 52, ISD and person under sec 14 of IGST Act for OIDAR services. Other than composition taxpayer, non-resident taxable person, person deducting TDS under sec 51 & collecting TCS under sec 52, ISD and person under sec 14 of IGST Act for OIDAR services. Other than composition taxpayer, non-resident taxable person, person deducting TDS under sec 51 & collecting TCS under sec 52, ISD and person under sec 14 of IGST Act for OIDAR services.

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S. N.

GST in India â&#x20AC;&#x201C; At-a-glance

Return/ledger Nature of return

Original Due date

GSTR-4

Quarterly return for composition taxpayer 18th of the month under sec 10 next to quarter

GSTR-4A

Details of inward supplies made available to Auto generated at the recipient registered under composition common portal. scheme on the basis of Form GSTR-1 furnished by the supplier

GSTR-5

Periodic return by non-resident foreign See Note 2 taxpayer

GSTR-5A

Monthly return by person under sec 14 of 20th of the next IGST Act (i.e. OIDAR services) month

GSTR-6

Return for Input Service Distributor (ISD)

GSTR-6A

Details of inward supplies made available to Auto generated at the ISD recipient on the basis of Form common portal. GSTR-1 furnished by the supplier

GSTR-7

Return for person deducting tax at source

10th of the next month

GSTR-7A

TDS Certificate

5 days of depositing TDS

GSTR ITC-1

Communication of acceptance, discrepancy Not specified in the or duplication of input tax credit claim Rules.

GSTR-8

Details of supplies effected through e- 10th of the next commerce operator and the amount of tax month collected under sec 52(1)

GSTR-91

Annual Return

GSTR-9A

GSTR-9B

Simplified Annual return by composition taxable persons registered under sec 10 31st December of Electronic commerce operator required to next FY collect TCS under sec 52

GSTR-9C

Reconciliation Statement

GSTR-10

Final Return

13th of the next month

See Note 3

Other than a composition taxpayer, casual taxable person, non-resident taxable person, person deducting TDS under sec 51 & collecting TCS under sec 52 and ISD.

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Return/ledger Nature of return

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Original Due date

GSTR-11

ITC ledger of tax payer

Continuous

Cash ledger of tax payer

Continuous

Tax ledger of tax payer

Continuous

Details of inward supplies to be furnished Quarterly basis or by a person having UIN otherwise as and when required to file by proper officer (as specified in the Return format)

First Return along with GSTR – 1/2 shall be filed till the end of the month in which registration has been granted. (Sec 40) Note 1:

The GST Council in its meeting held on 10 Nov 2017 decided that the time period for filing GSTR-2 and GSTR-3 for the months of July, 2017 to March 2018 would be worked out by a Committee of Officers.

Note 2:

Within 20 days after the end of a calendar month or within 7 days after the last day of the validity period of registration, whichever is earlier.

Note 3:

Within 3 months of the date of cancellation or date of cancellation order, whichever is later.

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. o All taxpayers would file return in Form GSTR-3B along with payment of tax by 20th of the succeeding month.

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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; GSTN - Single point interface for challan generation; • Anytime, anywhere, through the specified 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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Modes of payment of GST, generally 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) Provisions contained in sec 51 of the Act in relation to TDS have not come in force. In the 26th Meeting of the GST Council held on 10 March 2018, it has been decided that registration and operationalization of TDS provisions shall be postponed till 30.06.2018.

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

(ii)

SGST

(iii)

IGST

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. â&#x20AC;&#x153;Value of supplyâ&#x20AC;? means amount indicated in the invoice excluding tax. TDS is required to be deducted on all taxable goods and/or services.

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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. (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 – the contract value, • rate of deduction, • amount deducted, • amount paid to the appropriate government, and • such particulars as may be prescribed in this behalf. • (d) 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.

1.18 Tax Collection at Source (TCS) (Section 52) Provisions contained in sec 52 of the Act in relation to TCS have not come in force. In the 26th Meeting of the GST Council held on 10 March 2018, it has been decided that registration and operationalization of TDS provisions shall be postponed till 30.06.2018.

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. A1-31

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Rates of TCS S.N.

Act

Rate of TDS (of the net value of taxable supplies)

(i)

CGST

(ii)

CGST

(iii)

IGST

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 the 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: (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;

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(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. Where inputs are taxable at a higher rate of tax as compared to rate of tax on output • supplies (other than nil rated or fully exempt supplies). 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. A1-34

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•

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. •

Τhe 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.

•

Α 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.

•

Α 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;

•

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.

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Ιn 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. Form GST RFD-01A has been notified to claim the refund manually1. Also, numbers of circulars have been issued detailing the process of Manual filing and processing of refund claims in respect of zero-rated supplies. 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.

Rules 97A inserted vide Notification No. 55/2017 – CT dated 15 Nov 2017.

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GST in India – At-a-glance

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. • A1-37

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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 o

1.21.3 S.No. (1) 1

input tax credit wrongly availed or utilised, or amount erroneously refunded.

Specific provisions for determination of tax Particulars (2)

Section 73 (3)

Main Reason for Tax default other than fraud or service of show any willful-misstatement or cause notice suppression of facts to evade tax (SCN) in Form GST DRC-01 Circumstances/De Sec 73(1): - Any tax has not been paid faults or short paid, or tax has been - any erroneously refunded, or - where input tax credit has been wrongly availed or utilized (hereinafter stated as “tax default”)

Section 74 (4)

Tax default due to fraud or any willful-misstatement or suppression of facts to evade tax Sec 74(1): - Any tax has not been paid or short paid, or tax has been - any erroneously refunded, or - where input tax credit has been wrongly availed or utilized (hereinafter stated as “tax default”)

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 prior to the time limit specified sec 73 (10) for issuance of order in sec 74 (10) for issuance of order

Service a statement

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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) 5

GST in India – At-a-glance

Particulars (2)

Section 73 (3)

Issuance of order Sec 73(9): After considering the Sec 74(9)/74(11): After representation in Form GST considering the representation after DRC–06, PO shall determine in Form GST DRC–06, PO determination

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.

Section 74 (4)

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.

Time limit for Sec 73(10): 3 years from the due Sec 74(10): 5 years from the issuance of order date for filing of annual return due date for filing of annual

for the financial year to which the tax not/short paid or ITC wrongly availed or utilised relates to, or within 3 years from the date of erroneous refund.

Rectification order, if any

return for the financial year to which the tax not/short paid or ITC wrongly availed or utilised relates to, or within 5 years from the date of erroneous refund. of Any rectification of the order, in accordance with the provisions of sec 161, shall be made by the proper officer in Form GST DRC-08.

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

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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 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 E-way rules 138 to 138D have come into force with effect from 1 April 2018 for inter-state supplies. For intra-state supplies, as per the GST Council, these rules will be implemented in all the states upto 1 June 2018 in a phased manner; and many states have already brought these rules in force. Question

Rule

Answer

138(1)

Every registered person, as a consignor or the recipient of supply as the consignee

Who is required mandatorily generate

Mode of transportation

138(2), (14)

Motorised conveyance including vessel, truck, ship, train and aircraft including own conveyance

Exemption from generation of e-way bill

138(14)

(i) Goods specified in Annexure, (ii) Monetary value of consignment – see (4) (iii) Transportation for clearance by Customs as specified in sub-rule (iv) Exemption granted in the GST Act

Monetary exemption

139(1)

50,000/-; except when goods are transported by principal to the Job-worker or when handicraft goods are transported

Nature of transaction

(i) In relation to supply; or (ii) For reasons other than supply; or (iii) Inward supply from unregistered person, when supplier is already known

Manner of generation, in general

Option 1- Registered person shall furnish information in Part A and in Part B and generate way bill

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value

for

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GST in India – At-a-glance

Question

Rule

Generation of eway bill Optional

Answer Option 2- Registered person shall furnish information in Part A and in Part B; and Road Transporter shall generate way bill In case of transport of goods by rail or vessel, e-way bill (Part A & Part B) shall be generated by the consigner/consignee. The Railway/Vessel Company shall not deliver the goods unless e-way bill is generated. 1. Where value is less than INR 50,000/2. Goods are transported by unregistered person

1.23 Interest under the GST [Notification No. 13/2017 – Central Tax, the 28th June, 2017] S.N.

Section

Interest Rate A. Interest payable BY the Person

Section 50(1) – Any person fails to pay the tax or any part thereof to the Government within the period prescribed, shall pay interest for the period for which the tax or any part thereof remains unpaid

18%

Section 50(3) – A taxable person who makes an undue or excess claim of input tax credit under sec 42(10) [reduction of ITC while matching qua recipient] or undue or excess reduction in output tax liability under sec 43(10) [reduction of output tax liability while matching qua supplier], shall pay interest on such undue or excess claim or on such undue or excess reduction, as the case may be

24%

B. Interest payable TO the Person 1.

Section 54(12) – Where a refund is withheld under sec 54(11), the taxable person shall, notwithstanding anything contained in sec 56, be entitled to interest, if as a result of the appeal or further proceedings he becomes entitled to refund

Section 56 – If any tax ordered to be refunded under sec 54(5) to any applicant, is not refunded within 60 days from the date of receipt of application under sec 54(1), interest shall be payable in respect of such refund from the date immediately after the expiry of 60 days from the date of receipt of application under the said sub-section till the date of refund of such tax

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S.N. 3.

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Section

Interest Rate

Proviso to section 56 – Where any claim of refund arises from an order passed by an adjudicating authority or Appellate Authority or Appellate Tribunal or court which has attained finality and the same is not refunded within 60 days from the date of receipt of application filed consequent to such order, interest shall be payable in respect of such refund from the date immediately after the expiry of 60 days from the date of receipt of application till the date of refund.

1.24 Penalty under the GST Please note that the following penalties have been specified under the CGST Act. In case of delay/default, equivalent amount of penalties would be levied under the SGST Act also. S.N. Default

Penalty

Section 10(5) – If a taxable person was not eligible to pay tax As per the under composition but opted the scheme under sec 10 provisions of sec 73 or 74

Section 47 – Registered person fails to furnish the details of outward under sec 37 (or) details of inward supplies sec 38 (or) returns under sec 39 (or) final return under sec 45 by the due dates [Forms GSTR-1, GSTR-2, GSTR-3]1 Where the total amount of central tax payable in the said return Late fee of INR 10/is nil for every day In other cases

Late fee of INR 25/for every day

Section 47 – Registered person fails to furnish the return in Form GSTR-3B by the due date for the month of Oct., 2017 onwards2 - Where the total amount of central tax payable in the said Late fee of INR 10/return is nil for every day - In other cases [Please note that late fee for the months from July to Sept. 2017 has been waived]

Substituted vide Notification No. 04/2018-CT dated 23 Jan. 2018

Substituted vide Notification No. 64/2017-CT dated 15 Nov. 2017

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Late fee of INR 25/for every day

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GST in India – At-a-glance

S.N. Default

Penalty

Section 44 read with 47 – Failure to furnish Annual Return

Section 51(4) – Failure to issue the TDS certificate to deductee Late fee of INR within 5 days of depositing the TDS 100/- for every day of default beyond 5 days; Maximum: 5,000/-

Section 52(14) – e-commerce operator who fails to furnish the Upto INR 25,000/information required by the notice served under sec 52(12) & provisions of sec 122

Section 73(9) – Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for any reason other than fraud or any willful misstatement or suppression of facts.

Section 74(5), (8), (11) - Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful- misstatement or suppression of facts -

Late fee of INR 100/- for every day of default; Maximum: 0.25% of turnover in the State/UT

INR 10,000 or 10% of the tax, whichever is higher

Payment of penalty before service of notice

15% of tax

Payment of penalty after service of notice

25% of tax

Payment of penalty after service of Order by the proper 50% of tax officer, after considering the representations

Section 122(1): If a taxable person – (i) supplies without issue of any invoice or issues an incorrect or false invoice; (ii) issues any invoice or bill without supply of goods/services in violation of the GST Laws; (iii) collects any amount as tax but fails to pay the same to the credit of the appropriate Govt. beyond a period of 3 months from the due date; (iv) collects any tax in contravention of the provisions of this Act but fails to pay the same to the credit of the Govt. beyond a period of 3 months from the due date; (v) fails to deduct the TDS, or deducts short amount, or fails

INR 10,000/or Amount equivalent to the tax default, whichever is higher

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Penalty

to pay to the amount deducted as tax; fails to collect TCS, or collects short amount, or where he fails to pay the amount collected as tax; (vii) takes and/or utilizes input tax credit without actual receipt of goods and/or services either fully or partially; (viii) fraudulently obtains refund of any CGST/SGST under this Act; (ix) Takes or distributes ITC in violation of GST Law; (x) falsifies or substitutes financial records or produces fake accounts/documents or furnishes any false information or return with an intention to evade payment of tax; (xi) fails to obtain registration; (xii) furnishes any false information with regard to registration particulars, either at the time of applying for registration, or subsequently; (xiii) obstructs or prevents any officer in discharge of his duties under the Act; (xiv) transports any taxable goods without the cover of specified documents; (xv) suppresses his turnover leading to evasion of tax; (xvi) fails to keep, maintain or retain books of account and other documents in accordance with GST Laws; (xvii) fails to furnish information/documents called for by a CGST/SGST officer or furnishes false information/ documents during any proceedings under this Act; (xviii) supplies, transports or stores goods which he has reason to believe are liable to confiscation under this Act; (xix) issues any invoice/document by using identification no. of another taxable person; (xx) tampers with, or destroys any material evidence; (xxi) disposes off or tampers with any goods that have been detained, seized, or attached under this Act. (vi)

Section 122(2)– Registered Taxable person who: • supplies any goods or services on which any tax has not been paid or short-paid or erroneously refunded; or • where the input tax credit has been wrongly availed or utilized -

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For any reason, other than the reason of fraud or any INR 10,000 or willful misstatement or suppression of facts to evade 10% of the tax due, tax whichever is higher

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GST in India – At-a-glance

S.N. Default -

Penalty For reason of fraud or any willful misstatement or INR 10,000 or suppression of facts to evade tax tax due, whichever is higher

Up to INR 25,000/Section 122(3) – Any person who – (i) aids or abets any of the offences by a taxable person which are set out in sec 122(1); (ii) deals with goods which he knows or has reason to believe are liable to confiscation; (iii) deals with supply of services which he knows or has reason to believe are in contravention of GST provisions; (iv) fails to appear pursuant to a summons; (v) fails to issue invoice as per the GST law; or (vi) fails to account for an invoice in his books of account.

Section 123 Failure to furnish information return under sec 150

INR 10,000/-; Section 124 Person covered under sec 150 – fails to furnish information In case of continuing offence – return or furnish false return willfully Further fine upto INR 100/- per day; Maximum- INR 25,000/-

Up to INR 25,000/Section 125 Any person who contravenes any provisions of the GST Act or the rules in respect of which no penalty is separately provided.

Penalty as per the Section 127 Where the proper officer is of the view that a person is liable to order issued by the a penalty and the same is not covered under any proceeding proper officer under sections 62, 63, 64, 73, 74, 129 or 130, he may issue an order levying such penalty after giving a notice.

Section 129 - Release after detention or seizure of goods and conveyances in transit -

INR 100/day- MaxÏNR 5,000

Where the owner of the goods comes forward for payment of such tax and penalty o

Taxable Goods

100% of the tax or INR 25,000/-, whichever is less

Exempted goods

2% of the value of goods or INR A1-45

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Penalty 25,000/-, whichever is less

Where the owner of the goods does not come forward for payment of such tax and penalty o

Taxable Goods

50% of the value of goods (less) tax paid

Exempted goods

5% of the value of goods or INR 25,000/-, whichever is less

Section 130 Confiscation of goods or conveyance

As per the provisions of sec 122

1.25 Offences under GST 1.25.1

Nature of acts regarded as offences (Sec 132) Whoever commits any of following offences, shall be liable for prosecution

(a)

supplies any goods or services or both without issue of any invoice, in violation of the provisions of this Act or the rules made thereunder, with the intention to evade tax

(b)

issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilisation of input tax credit or refund of tax

(c)

avails input tax credit using such invoice or bill referred to in clause (b);

(d)

collects any amount as tax but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due;

(e)

evades tax, fraudulently avails input tax credit or fraudulently obtains refund and where such offence is not covered under clauses (a) to (d)

(f)

falsifies or substitutes financial records or produces fake accounts or documents or furnishes any false information with an intention to evade payment of tax due under this Act

(g)

obstructs or prevents any officer in the discharge of his duties under the Act

(h)

acquires possession of, or in any way concerns himself in transporting, removing, depositing, keeping, concealing, supplying, or purchasing or in any other manner deals with, any goods which he knows or has reasons to believe are liable to confiscation under this Act or the rules made thereunder

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Whoever commits any of following offences, shall be liable for prosecution (i)

receives or is in any way concerned with the supply of, or in any other manner deals with any supply of services which he knows or has reasons to believe are in contravention of any provisions of this Act or the rules made thereunder

(j)

tampers with or destroys any material evidence or documents

(k)

fails to supply any information which he is required to supply under this Actor the rules made thereunder or (unless with a reasonable belief, the burden of proving which shall be upon him, that the information supplied by him is true) supplies false information

(l)

attempts to commit, or abets the commission of any of the offences mentioned in clauses (a) to (k) of this section

1.25.2

Quantum of punishment for offences stated in Para 1.25.1 (Sec 132) Amount involved in relation to the offence

Punishment

(i)

Where amount of tax evaded exceeds INR 5 Imprisonment for a term which may crores extend to 5 years and fine, cognizable and non-bailable

(ii)

Where amount of tax evaded exceeds INR 2 Imprisonment for a term which may crores but does not exceed INR 5 crores extend to 3 years and fine, noncognizable and bailable

(iii) Where amount of tax evaded exceeds INR 1 Imprisonment for a term which may crore but does not exceed INR 2 crores extend to 1 years and fine (iv) Commits or abets in offences specified in para Imprisonment for a term which may (f), (g) & (j) above extend to 6 months and/or fine (v)

132(2) - Every subsequent conviction

Imprisonment for a term which may extend to 5 years and fine

1.26 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;

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(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/-.

(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.

(9)

Rule 107A for manual filing and processing of advance ruling has been inserted w.e.f. 15 Nov 2017.

1.27 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

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(3)

Time limit of filing and disposal of appeal

S. N. A (i) (ii) (iii)

(iv) B (i) (ii) (iii)

(iv)

(v) (vi)

C (4)

GST in India â&#x20AC;&#x201C; At-a-glance

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) Final Acknowledgment of Within 7 days of filing of appeal if filing of appeal prescribed documents submitted during 7 days Appeal/Application by the 6 months from the date of GST officer as per direction of communication of the decision or the Commissioner - order (Condonation - 1 month) Sec 107(2),(3) 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) communication of the decision or order (Condonation - 3 months) Final Acknowledgment of Within 7 days of filing of appeal if filing of appeal prescribed documents submitted during 7 days Appeal/Application by the 6 months from the date of GST Officer as per direction communication of the decision or of the Commissioner - order Sec 112(3), (4) Submission of a Within 45 days of the receipt of memorandum of cross notice (Condonation â&#x20AC;&#x201C; 45 days) objection by other party Sec 112(5) Disposal of appeal by the One year from the date of filing of Appellate Tribunal - appeal, wherever possible Sec 113(4) Issue of statement indicating final amount of demand confirmed by jurisdictional officer Appeal to the High Court - 180 days from the date of receipt of Sec 117(2) order

Form GSTAPL-01 GSTAPL-02 GSTAPL-03

GSTAPL-04

GSTAPL-05 GSTAPL-02 GSTAPL-07

GSTAPL-06

GSTAPL-04

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 A1-49

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(5)

(6)

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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 1,000/- 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 [sec 107(6)] or the Appellate Tribunal [112(8)], 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.

Where the appellant has paid the amount under sec 107(6), the recovery proceedings for the balance amount shall be deemed to be stayed till the disposal of the appeal before the Appellate Authority. [Sec 107(7)] Where the appellant has paid the amount as per sec 112(8), the recovery proceedings for the balance amount shall be deemed to be stayed till the disposal of the appeal before the Appellate Tribunal. [Sec 112(9)]

1.28 Information returns (Section 150 of the GST Act) 1.28.1 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, • 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, •

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• • • • • • •

GST in India – At-a-glance

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.

1.28.2 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. 1.28.3

Penalty for non-furnishing of information return [Section 123 of the GST Act] INR 100/- for each day of the period during which the failure to furnish such return continues maximum upto INR 5,000/-. 1.28.4 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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Appendix [Refer Para 1.3] (I)

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

Notification No. 4/2017 (Central Tax-Rate) dated 28 June 2017 w.e.f. 1 July 2017, Notification No. 4/2017 (Integrated Tax-Rate) dated 28 June 2017 w.e.f. 1 July 2017 as amended from time to time S. No.

(1) 1.

Tariff item, sub-heading, heading or Chapter (2) 0801

1404 90 10

3. 4.

2401 5004 to 5006

Description of supply of Goods (3) Cashew nuts, not shelled or peeled Bidi wrapper leaves (tendu) Tobacco leaves Silk yarn

Supplier of goods

Recipient of supply

(4) Agriculturist

(5) Any registered person

Agriculturist

Any registered person

Agriculturist Any registered person Any person who Any registered person manufactures silk yarn from raw silk or silk worm cocoons for supply of silk yarn 1 4A. 5201 Raw cotton Agriculturist Any registered person 5. Supply of lottery. State Government, Lottery distributor or Union Territory or selling agent. (*) any local authority (*) Explanation.- For the purposes of this entry, lottery distributor or selling agent has the same meaning as assigned to it in clause (c) of Rule 2 of the Lotteries (Regulation) Rules, 2010, made under the provisions of sub section 1 of section 11 of the Lotteries (Regulations) Act, 1998. 2 6. Any Chapter Used vehicles, Central Government, Any registered person. seized and State Government, confiscated goods, Union territory or a old and used local authority. goods, waste and scrap. 1 2

Inserted with effect from 15 Nov 2017, vide Notification no. 43/2017 â&#x20AC;&#x201C; CT (Rate) dated 14 Nov 2017. Inserted with effect from 13 Oct 2017, vide Notification no. 36/2017 â&#x20AC;&#x201C; CT (Rate) dated 13 Oct 2017.

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(II)

GST in India – At-a-glance

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

Notification No. 13/2017 dated 28 June 2017 w.e.f. 01.07.2017 and Notification No. 10/2017 dated 28 June 2017 w.e.f. 01.07.2017, as amended from time to time (A)

Under the CGST Act, SGST Act and the IGST Act

Sl. Category of Supply of Services Supplier of Recipient of Service No. service (1) (2) (3) (4) 1 Supply of services by a goods Goods (a) Any factory registered under transport agency (GTA) 1[who Transport or governed by the Factories has not paid IGST at the rate of Agency (GTA) Act, 1948; or (b) any society registered under 12% (or CGST+SGST @ 6% + 6%)] in respect of transportation the Societies Registration Act, of goods by road to the recipients 1860 or under any other law specified in column 4 for the time being in force in any part of India; or (c) any co-operative society “Goods transport agency” means any person who provides service established by or under any in relation to transport of goods law; or (d) any person registered under by road and issues consignment note, by whatever name called. the CGST Act or the IGST Act or the SGST Act or the UTGST Act; or body corporate (e) any established, by or under any law; or (f) any partnership firm whether registered or not under any law including association of persons; or (g) any casual taxable person; located in taxable territory.2 2 Services provided by an An individual Any business entity located in the individual advocate including a advocate taxable territory. senior advocate or firm of including a [The business entity located in the advocates by way of legal senior taxable territory who is litigant, services, directly or indirectly. advocate or applicant or petitioner, as the case Explanation.- “legal service” firm of may be, shall be treated as the 1 1

Vide Notification no. 22/2017 – CT (Rate) dated 22 Aug 2017. The person who pays or is liable to pay freight for the transportation of goods by road in goods carriage, located in the taxable territory shall be treated as the person who receives the service for the purpose of this notification. [vide Explanation to Notification no. 13/2017- Central Tax (Rate) dated 28 June 2017].

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Sl. No. (1)

3 4 5

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Category of Supply of Services

Supplier of service (2) (3) means any service provided in advocates. relation to advice, consultancy or assistance in any branch of law, in any manner and includes representational services before any court, tribunal or authority Services supplied by an arbitral An arbitral tribunal to a business entity. tribunal. Services provided by way of Any person sponsorship to any body corporate or partnership firm. Services supplied by the Central Central Government, State Government, government, Union territory or local authority State to a business entity excluding, - government, (1) renting of immovable Union territory property, and or local (2) services specified belowauthority (i) services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than Central Government, State Government or Union territory or local authority; (ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport; (iii) transport of goods or passengers. Services supplied by the Central Central Government, State Government, Government, Union territory or local authority State by way of renting of immovable Government, property to a person registered Union territory under the GST Act. [with effect or local from 25 Jan 2018] authority Services supplied by a director of A director of a

Chapter A1

Recipient of Service (4) person who receives the legal services for the purpose of this notification]

Any business entity located in the taxable territory. Any body corporate or partnership firm located in the taxable territory. Any business entity located in the taxable territory.

Any person the GST Act.

registered

under

The company or a body corporate

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Sl. No. (1)

7 8

101

GST in India – At-a-glance

Category of Supply of Services

Supplier of Recipient of Service service (2) (3) (4) a company or a body corporate company or a located in the taxable territory. to the said company or the body body corporate corporate. Services supplied by an An insurance Any person carrying on insurance insurance agent to any person agent business, located in the taxable carrying on insurance business. territory. Services supplied by a recovery A recovery A banking company or a financial agent to a banking company or a agent institution or a non-banking financial institution or a nonfinancial company, located in the banking financial company. taxable territory. Supply of services by an author, Author or Publisher, music company, music composer, photographer, music producer or the like, located in the artist or the like by way of composer, taxable territory. photographer, transfer or permitting the use or enjoyment of a copyright artist, or the covered under sec 13(1) (a) of like the Copyright Act, 1957 relating to original literary, dramatic, musical or artistic works to a publisher, music company, producer or the like. Supply of services by the Members of Reserve Bank of India members of Overseeing Overseeing Committee to Reserve Bank of Committee India constituted by the Reserve Bank of India

Explanation.- For purpose of this notification, “Body Corporate” has the same meaning as assigned to it in section 2(11) of the Companies Act, 2013. A “Limited Liability Partnership” formed and registered under the provisions of the Limited Liability Partnership Act, 2008 shall also be considered as a partnership firm or a firm

Inserted with effect from 13 Oct 2017, vide Notification no. 33/2017 – CT (Rate) dated 13 Oct 2017.

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(B)

Under the IGST Act (in addition to services specified in Para (A) above)

Sl. No. (1) 1

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Category of Supply of Services

Supplier of service

Recipient of Service

(2)

(3)

(4)

In addition to services specified in Para (A) above Any service supplied by any person Any person located Any person located in the who is located in a non-taxable in a non-taxable taxable territory other than territory to any person other than non- territory non-taxable online recipient. taxable online recipient. Services supplied by a person located A person located in Importer, as defined in in non- taxable territory by way of non-taxable territory clause (26) of section 2 of transportation of goods by a vessel the Customs Act, 1962, from a place outside India up to the located in the taxable customs station of clearance in India. territory. (*) (**)

(*) Notification No. 8/2017- Integrated Tax (Rate) dated 28 June 2017 read with Corrigendum dated 30 June 2017 w.e.f. 1 July 2017 â&#x20AC;&#x153;4. Where the value of taxable service provided by a person located in non-taxable territory to a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India is not available with the person liable for paying integrated tax, the same shall be deemed to be 10% of the CIF value (sum of cost, insurance and freight) of imported goods.â&#x20AC;? (**)

Customs Valuation (Determination of Value of Imported Goods) Rules, 2017 Customs duty and the IGST are applicable on importation of goods from outside India on assessable value. The Customs Valuation (Determination of Value of Imported Goods) Rules, 2017 have been notified to arrive at the assessable value for the purpose of charging customs duty. Rule 10(2) of the said rule provides for inclusion of the cost of transport of the imported goods upto the place of importation. It makes clear that the IGST is applicable on freight whether by vessel or aircraft. [ Notification No. 91/2017Customs (N.T.) dated 26 Sep 2017]

(III)

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

[Reverse charge payments under sec 9(4) of the GST Act and 5(4) of the IGST Act have been exempted for the period from 13.10.2017 to 30.06.2018] Sl. No. (1) 1

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Category of Supply of Services

Supplier of service

(2) (3) Supply of taxable goods or services or Unregistered supplier both by a supplier, who is not registered, to a registered person

Recipient of Service (4) Registered person

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GST in India – At-a-glance

Exemption u/s 9(4) from paying reverse charge – (A)

From 1 July 2017 to 12 Oct 2017 •

Notification No. 8/2017 (Central Tax-Rate) dated 28 June 2017 w.e.f. 1 July 2017: Intra-state supplies of goods or services or both, received by a registered person from any unregistered supplier from the whole of the central tax leviable thereon under sec 9(4) of the CGST Act where the aggregate value of such supplies of goods or service or both received by a registered person from any or all the unregistered suppliers does not exceeds INR 5000/ - in a day.

•

Notification No. 9/2017 (Central Tax-Rate) dated 28 June 2017 w.e.f. 1 July 2017 Intra-State supplies of goods or services or both received by a deductor under section 51 of the said Act from any unregistered supplier from the whole of the central tax leviable thereon under sec 9(4) of the CGST Act, subject to the condition that the deductor is not liable to be registered otherwise than under sec 24(vi) of the said Act.

•

Notification No. 10/2017 (Central Tax-Rate) dated 28 June 2017 w.e.f. 1 July 2017 The Central Government, on the recommendations of the Council, hereby exempts intra-State supplies of second hand goods received by a registered person, dealing in buying and selling of second hand goods and who pays the central tax on the value of outward supply of such second hand goods as determined under sub-rule (5) of rule 32 of the Central Goods and Services tax Rules, 2017, from any supplier, who is not registered, from the whole of the central tax leviable thereon under sub-section (4) of section 9 of the Central Good and Services Tax Act, 2017

•

Notification No. 4/2017 (Compensation Cess-Rate) dated 20 July 2017 The Central Government, on the recommendations of the Council, hereby exempts intra-State supplies of second hand goods received by a registered person, dealing in buying and selling of second hand goods and who pays the goods and services tax compensation cess on the value of outward supply of such second hand goods as determined under sub-rule (5) of rule 32 of the Central Goods and Services Tax Rules, 2017, from any supplier, who is not registered, from the whole of the goods and services tax compensation cess leviable thereon under section 8 of the Goods and Services Tax (Compensation to States) Act, read with sub-section (4) of Section 9 of the Central Goods and Services Tax Act.

(B)

From 13 Oct 2017 to 30 June 2018 Notification No. 31/2017 (Central Tax-Rate) dated 13 October 2017 w.e.f. 13 October 2017 and Notification No. 32/2017 (Integrated Tax-Rate) dated 13 October 2017 w.e.f.

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13 October 2017, as amended from time to time â&#x20AC;&#x201C; Exemption of RCM for inter-state purchases of goods and/or services: The Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, has exempted the intra-state and interState supply of goods or services or both received by a registered person from any supplier, who is not registered, from the whole of the CGST/IGST leviable thereon under 9(4) of the CGST Act and 5(4) of the IGST Act, respectively. Further, the exemption contained in this notification shall apply to all registered persons till the 30 June 2018.

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