Guide to GST on Services - (HSN Code wise taxability of all services) by Bloomsbury India Professional

Guide to GST on Services

(HSN Code wise taxability of all services)

Rakesh Garg LLB, FCA | Sandeep Garg CMA, FCA HIGHLIGHTS • 360 degree overview of the GST provisions on services • Detailed HSN code (Activity) wise commentary on services in 25 chapters • Separate chapters on exempt Government and Agriculture Services • Comprehensive discussion on important GST concepts for services • Complete text of CGST Act/Rules, IGST Act/Rules along with Services Rates/Exemptions & Scheme of Classification

Bloomsbury India Professional

2018

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

CONCEPTS OF GST (SERVICES) Chapter A-1

Preamble . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-1

Chapter A-2

Meaning of Service and key definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-1

Chapter A-3

Supply – Meaning and Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-1

Chapter A-4

Time of supply of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A4-1

Chapter A-5

Value of supply of services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A5-1

Chapter A-6

Place of supply of services – Inter-state supply and Intra-state supply. . . . . . . . . A6-1

Chapter A-7

Levy, Rates and Exemptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A7-1

Chapter A-8

Reverse Charge and Deemed Supplier. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A8-1

Chapter A-9

Composition levy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A9-1

Chapter A-10 Input tax credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A10-1 Chapter A-11 Input service distributor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A11-1 Chapter A-12 Imports, zero-rated supplies and export of services. . . . . . . . . . . . . . . . . . . . . . . A12-1 Chapter A-13 Registration, Amendment and Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-1 Chapter A-14 Casual Taxable Person & Non-resident Taxable Person. . . . . . . . . . . . . . . . . . . A14-1 Chapter A-15 Job work. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A15-1 Chapter A-16 E-commerce, TCS & supply of online data– Special provisions. . . . . . . . . . . . . A16-1 Chapter A-17 Tax deduction at source. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A17-1 Chapter A-18 Invoice, Accounts and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A18-1 Chapter A-19 Refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-1 Chapter A-20 Interest, penalties and offences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A20-1 PART B

HSN CODE WISE GUIDE ON SERVICES Chapter B-1

Works contract & construction service (other than complex construction) [HSN 9954-Part I]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B1-1

Chapter B-2

Complex and housing construction [HSN 9954-Part II ]. . . . . . . . . . . . . . . . . . . . B2-1 xi

Guide to GST on Services (HSN Code wise taxability of all services)

Chapter B-3

Services in wholesale and retail trade [HSN 9961, 9962]. . . . . . . . . . . . . . . . . . . B3-1

Chapter B-4

Accommodation, foods and beverage service [HSN 9963]. . . . . . . . . . . . . . . . . . B4-1

Chapter B-5

Passengers transport, tour operators and travel booking agents [HSNÂ 9964, 9985]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B5-1

Chapter B-6

Goods transport service including GTA [HSN 9965] . . . . . . . . . . . . . . . . . . . . . . B6-1

Chapter B-7

Supporting service in transport sector [HSN 9967]. . . . . . . . . . . . . . . . . . . . . . . . B7-1

Chapter B-8

Postal & courier services [HSN 9968]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B8-1

Chapter B-9

Banking and financial related services [HSN 9971] . . . . . . . . . . . . . . . . . . . . . . . B9-1

Chapter B-10 Insurance services [HSN 9971]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B10-1 Chapter B-11 Real estate services and renting of immovable property [HSN 9972]. . . . . . . . . B11-1 Chapter B-12 Lease & Rental services [HSN 9966 & 9973]. . . . . . . . . . . . . . . . . . . . . . . . . . . B12-1 Chapter B-13 Legal services by the Advocates and the Arbitral Tribunal [HSN 9982]. . . . . . . B13-1 Chapter B-14 Professional, advertising, accounting, auditing and consultancy services [HSN 9982, 9983] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B14-1 Chapter B-15 Advertising Services [HSN 9983]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B15-1 Chapter B-16 Telecommunication, Broadcasting and Information Supply [HSN 9984]. . . . . . B16-1 Chapter B-17 Support services [HSN 9985, 9986] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B17-1 Chapter B-18 Maintenance, repair and installation services [HSN 9987]. . . . . . . . . . . . . . . . . B18-1 Chapter B-19 Job work, Printing and Manufacturing services [HSN 9988, 9989]. . . . . . . . . . B19-1 Chapter B-20 Public administration and social security services [HSN 9991] . . . . . . . . . . . . . B20-1 Chapter B-21 Education service [HSN 9992] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B21-1 Chapter B-22 Medical, Health care and Social care service [HSN 9983, 9993]. . . . . . . . . . . . B22-1 Chapter B-23 Charitable, Religious and similar Services by Trusts, Associations, etc [HSN 9993, 9995, 9999, etc]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B23-1 Chapter B-24 Recreational, cultural and sporting, domestic and other services [HSNÂ 9996 to 9998]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B24-1 Chapter B-25 Other services [HSN 9969, 9981, 9994, 9999]. . . . . . . . . . . . . . . . . . . . . . . . . . B25-1 Chapter B-26 Exempt Services by and to the Government, Local Authorities, etc. . . . . . . . . . B26-1 Chapter B-27 Services relating to Agriculture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B27-1 PART C

LEGISLATION Chapter C-1

Central Goods and Services Tax Act, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C1-1

Chapter C-2

Central Goods and Services Tax Rules, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . C2-1

Chapter C-3

Integrated Goods and Services Tax Act, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . C3-1

Chapter C-4

Integrated Goods and Services Tax Rules, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . C4-1

xii

Contents at a glance

Chapter C-5

GST Rates on Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C5-1

Chapter C-6

Exemptions in the GST â&#x20AC;&#x201C; Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C6-1

Chapter C-7

Compensation Cess Rates and Exemption on Services. . . . . . . . . . . . . . . . . . . . . C7-1

Chapter C-8

Scheme of Classification of Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C8-1

xiii

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

CONCEPTS OF GST (SERVICES) Chapter A-1 Preamble . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-1 1.1 Brief Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-1 1.2 Goods and Services Tax (GST). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-3 1.3 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-4 1.4 Ascertaining taxability of output services – Steps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-5 Chapter A-2 Meaning of Service and key definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . A2-1 2.1 Definitions relating to Goods, Services, Business, etc. . . . . . . . . . . . . . . . . . . . . . . . . . A2-1 2.1.1 Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-1 2.1.2 Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-1 2.1.3 Money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-4 2.1.4 Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-5 2.2 Definition of Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-5 2.3 Other key definitions not discussed in forthcoming Chapters. . . . . . . . . . . . . . . . . . . . A2-8 2.3.1 Address of delivery - Sec 2(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-8 2.3.2 Address on record - Sec 2(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-9 2.3.3 Agent - Sec 2(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-9 2.3.4 Aggregate turnover - Sec 2(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-9 2.3.5 Agriculturist - Sec 2(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-10 2.3.6 Associated enterprise - Sec 2(12). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-10 2.3.7 Business vertical - Sec 2(18). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-10 2.3.8 Casual taxable person - Sec 2(20). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-11 2.3.9 Consideration - Sec 2(31). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-11 2.3.10 Exempt supply - Sec 2(47). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-13 2.3.11 Fixed establishment - Sec 2(50). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-13 2.3.12 Input Service Distributor - Sec 2(61). . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-14 2.3.13 Location of the recipient of services - Sec 2(70) . . . . . . . . . . . . . . . . . . . . A2-14 2.3.14 Location of the supplier of services - Sec 2(71). . . . . . . . . . . . . . . . . . . . . A2-15 2.3.15 Market value - Sec 2(73). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-15 2.3.16 Non-resident taxable person - Sec 2(77). . . . . . . . . . . . . . . . . . . . . . . . . . . A2-15 2.3.17 Non-taxable supply - Sec 2(78) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-15

Guide to GST on Services (HSN Code wise taxability of all services)

2.4

2.3.18 Person - Sec 2(84). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-16 2.3.19 Place of business - Sec 2(85) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-16 2.3.20 Principal - Sec 2(88). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-17 2.3.21 Principal place of business - Sec 2(89). . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-17 2.3.22 Recipient - Sec 2(93) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-17 2.3.23 Registered person - Sec 2(94). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-17 2.3.24 Supplier - Sec 2(105) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-18 2.3.25 Taxable person - Sec 2(107). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-18 2.3.26 Taxable supply - Sec 2(108). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-18 2.3.27 Turnover in a State - Sec 2(112). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-18 2.3.28 Usual place of residence - Sec 2(113). . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-18 2.3.29 Continuous journey - Sec 2(3) of the IGST Act. . . . . . . . . . . . . . . . . . . . . A2-19 2.3.30 Intermediary - Sec 2(13) of the IGST Act. . . . . . . . . . . . . . . . . . . . . . . . . A2-19 2.3.31 Non-taxable online recipient - Sec 2(16) of the IGST Act. . . . . . . . . . . . . A2-19 2.3.32 Special Economic Zone - Sec 2(19) of the IGST Act. . . . . . . . . . . . . . . . . A2-19 2.3.33 Special Economic Zone developer - Sec 2(20) of the IGST Act . . . . . . . . A2-20 Goods vs. Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-20 2.4.1 Why distinction is required. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-20 2.4.2 Meaning of the term “goods”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-20 2.4.3 Meaning of the term “services” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-21 2.4.4 Intangible property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-21 2.4.5 Matters specified in Schedule II – Goods (or) Service. . . . . . . . . . . . . . . . A2-22

Chapter A-3 Supply – Meaning and Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-1 3.1 Meaning of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-1 3.1.1 Meaning of the term “supply”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-1 3.1.1.1 Significance of the term “inclusive” . . . . . . . . . . . . . . . . . . . . . . A3-2 3.1.1.2 Scope of the “supply” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-2 3.1.1.3 Essentials of the term “supply”. . . . . . . . . . . . . . . . . . . . . . . . . . A3-3 3.1.2 Supply between the joint venture/AOP and members thereof. . . . . . . . . . . A3-7 3.1.3 Sharing of expenditure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-9 3.2 Supply without consideration – Schedule I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-9 3.3 Whether an activity is “supply of goods” or supply of service” -Matters contained in Schedule II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-13 3.3.1 Transfer of ‘titles’ or ‘right to use’ in goods. . . . . . . . . . . . . . . . . . . . . . . . A3-14 3.3.2 Lease or letting of land or building. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-16 3.3.3 Treatment or process to another person’s goods. . . . . . . . . . . . . . . . . . . . . A3-18 3.3.4 Transfer of business assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-19 3.3.5 Renting of immovable property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-22 3.3.6 Construction of complex etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-24 3.3.7 Temporary transfer of intellectual property right (IPR). . . . . . . . . . . . . . . A3-25 3.3.8 Development, design, etc of IT software . . . . . . . . . . . . . . . . . . . . . . . . . . A3-26 xvi

3.4 3.5 3.6 3.7 3.8 3.9

Table of contents

3.3.9 Refrainment, tolerance an act, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-30 3.3.10 Transfer of the right to use goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-31 3.3.11 Works contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-34 3.3.12 Supply of food and beverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-35 3.3.13 Supply of goods by any unincorporated association. . . . . . . . . . . . . . . . . A3-35 3.3.14 Taxability under the erstwhile Indirect tax laws vs GST. . . . . . . . . . . . . . A3-36 Activities or transactions which shall be treated neither as supply of goods nor as supply of services - Sec 7(2) read with Schedule III. . . . . . . . . . . . . . . . . . . . . A3-36 Powers of the government in respect of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-40 Composite or mixed supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-41 Composite works contract in respect of movable goods: . . . . . . . . . . . . . . . . . . . . . . A3-43 Continuous supply of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-45 “Outward supply” and “Inward supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-46 Issues and FAQ in respect of Supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-46 3.9.1 Whether supply by an individual, who is not engaged in business, also falls within the definition?. . . . . . . . . . . . . . . . . . . . . . . . . . A3-46 3.9.2 Whether supply of services without consideration, such as, demo classes, free servicing during warranty come within the definition of “supply”?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A3-46 3.9.3 Whether the term “supply” includes supply of good/services from HO to branches and inter-branches of the same PAN? . . . . . . . . . . . A3-46 3.9.4 “Supply” in the case of co-operative society . . . . . . . . . . . . . . . . . . . . . . . A3-47 3.9.5 Whether following activities are covered under “supply” or not?. . . . . . . A3-48

Chapter A-4 Time of supply of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A4-1 4.1 Time of supply of services – When taxable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A4-1 4.1.1 Time of supply in case of services subject to forward charge . . . . . . . . . . . A4-1 4.1.2 Time of supply of services subject to reverse charge. . . . . . . . . . . . . . . . . . A4-3 4.1.3 Time of supply of vouchers, by whatever named called. . . . . . . . . . . . . . . . A4-3 4.1.4 Special provision in relation to the “associated enterprises” . . . . . . . . . . . . A4-7 4.1.5 Supply relating to interest, late fee or penalty . . . . . . . . . . . . . . . . . . . . . . . A4-8 4.1.6 Where time of supply could not be determined in accordance with earlier provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A4-8 4.1.7 FAQs in respect of time of supply of services . . . . . . . . . . . . . . . . . . . . . . . A4-8 4.2 Change in rates of tax of Services – Sec 14 of the GST Act. . . . . . . . . . . . . . . . . . . . . A4-9 4.2.1 Time of supply of services in case of change in rate of tax (CRT) of supply of services – Summarised. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A4-9 4.2.2 Summary of provisions contained in sec 14 in respect of supply of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A4-10 Chapter A-5 Value of supply of services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A5-1 5.1 Value of supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A5-1 5.1.1 Value of taxable supply for levy of GST. . . . . . . . . . . . . . . . . . . . . . . . . . . A5-1 5.1.2 When are two persons stated to be related to each other? . . . . . . . . . . . . . . A5-2 xvii

Guide to GST on Services (HSN Code wise taxability of all services)

5.1.3 5.1.4 5.1.5 5.1.6

5.2

5.3 5.4 5.5 5.6 5.7

Inclusion of amounts while determining transaction value . . . . . . . . . . . . . A5-2 Exclusion of discounts while determining transaction value. . . . . . . . . . . . A5-6 When is a person required to refer the Valuation Rules?. . . . . . . . . . . . . . . A5-7 Value of supply where supply is for a consideration not wholly in money – Rule 27 of the GST Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A5-7 5.1.7 Value of supply taking place between related persons or the distinct persons (inter-unit supply) – Rule 28. . . . . . . . . . . . . . . . . . . . . . . . A5-8 5.1.8 Manner of valuation prescribed in Rules 30 & 31. . . . . . . . . . . . . . . . . . . . A5-8 Manner of valuation in specified activities – Rule 32. . . . . . . . . . . . . . . . . . . . . . . . . . A5-9 5.2.1 Valuation of supplies at the option of the supplier [Rule 32(1)]. . . . . . . . . . A5-9 5.2.2 Supply in relation to foreign currency & money changing [Rule 32(2)] . . . . A5-9 5.2.3 Supply in relation to booking of air tickets by travel agents [Rule 32(3)]. . . . A5-10 5.2.4 Supply in relation life insurance business [Rule 32(4)]. . . . . . . . . . . . . . . A5-10 5.2.5 Other supplies as specified below [Rule 32(6), (7)]. . . . . . . . . . . . . . . . . . A5-10 Value of supply of services in case of pure agent – Rule 33. . . . . . . . . . . . . . . . . . . . A5-11 Exchange rate of currency, other than INR – Rule 34. . . . . . . . . . . . . . . . . . . . . . . . . A5-13 Value of supply is inclusive of GST – Rule 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A5-14 Advertisement services to Government etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A5-14 FAQs in respect of value of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A5-22

Chapter A-6 Place of supply of services – Inter-state supply and Intra-state supply. . . A6-1 6.1 IGST model for inter-state transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A6-1 6.1.1 Meaning of the term “IGST” and its need . . . . . . . . . . . . . . . . . . . . . . . . . . A6-1 6.1.2 Features of the “IGST” mechanism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A6-2 6.1.3 Supply of services in the course of inter-state and intra-state trade or commerce. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A6-3 6.1.4 Supplies in territorial water [Sec 9 of the IGST Act]. . . . . . . . . . . . . . . . . . A6-4 6.2 Determination of place of supply (POS) of goods and services . . . . . . . . . . . . . . . . . . A6-4 6.3 Determination of place of supply (POS) of services where the location of supplier of service and the location of the recipient of service (both) are in India and situs [Sec 12 of IGST Act]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A6-9 6.3.1 General provision - Sec 12(2) [other than sec 12(3) to 12(14)] of the IGST Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A6-9 6.3.2 Other provisions - Section 12(3) to (14) of the IGST Act . . . . . . . . . . . . . A6-10 6.4 Determination of place of supply (POS) of services where location of supplier or location of the recipient is outside India [Section 13]. . . . . . . . . . . . . . . . A6-24 6.4.1 General provision- Section 13(2) [other than sec 13(3) to 13(13)] of the IGST Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A6-25 6.4.2 Exception provisions - Section 13(3) to (13) of IGST Act. . . . . . . . . . . . . A6-25 6.5 Place of supply – Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A6-38 6.5.1 Section 12 vs Section 13 - Instances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A6-38 6.5.2 Taxability of service [After ascertaining LOS and POS]. . . . . . . . . . . . . . A6-39 6.5.3 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A6-40 xviii

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Chapter A-7 Levy, Rates and Exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A7-1 7.1 Levy and collection of GST (Incidence of Tax) u/s 9(1) of the GST Act and 5(1) of the IGST Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A7-1 7.2 Levy of compensation cess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A7-2 7.3 Rates of GST in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A7-3 7.3.1 Framework of GST Rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A7-3 7.3.2 GST Rates of services â&#x20AC;&#x201C; 12%, 18% and 28%. . . . . . . . . . . . . . . . . . . . . . . . A7-3 7.3.3 Rules of interpretation in the Customs Tariff. . . . . . . . . . . . . . . . . . . . . . . . A7-3 7.4 Exemptions and exempt supplies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A7-5 7.4.1 Power to grant exemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A7-5 7.4.2 Meaning of exempted supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A7-6 7.4.3 Meaning of non-taxable supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A7-6 7.4.4 Various terms defined in Para 2 of the exemption notification no. 12/2017-CTR dated 28 June 2017 in relation to services. . . . . . . . . . . . . . . A7-6 7.4.5 Clarifications in respect of exemptions:. . . . . . . . . . . . . . . . . . . . . . . . . . . A7-16 7.5 Non-taxable persons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A7-21 7.5.1 Who is a taxable person? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A7-21 7.5.2 Agriculturist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A7-22 7.6 Zero rated supply and export of goods and services. . . . . . . . . . . . . . . . . . . . . . . . . . A7-22 7.7 Calculation of output tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A7-23 7.7.1 Meaning of output tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A7-23 7.7.2 Steps for computation of output tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A7-23 7.8 Transfers of services to branch/agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A7-23 7.9 Supply of old and used motor vehicle. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A7-25 Chapter A-8 Reverse Charge and Deemed Supplier. . . . . . . . . . . . . . . . . . . . . . . . . . . . A8-1 8.1 Reverse Charges u/s 9(3) of the GST Act and 5(3) of the IGST Act. . . . . . . . . . . . . . . A8-1 8.1.1 Scope and manner of Reverse Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A8-1 8.1.2 Reverse Charge in respect of services under the CGST/SGST/IGST Act. . . . . A8-2 8.1.2.1 Goods transport agency (GTA) . . . . . . . . . . . . . . . . . . . . . . . . . . A8-2 8.1.2.2 Advocate including Senior Advocate and Arbitral Tribunal. . . . A8-6 8.1.2.3 Sponsorship. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A8-11 8.1.2.4 Services by government or local authority . . . . . . . . . . . . . . . . A8-13 8.1.2.4A Renting of immovable property services by Government (Inserted vide Notification No. 3/2018 dated 25.01.2018 w.e.f. 25.01.2018). . . . . . . . . . . . . . . . . . . . . A8-23 8.1.2.5 Services by director. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A8-23 8.1.2.6 Insurance agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A8-25 8.1.2.7 Recovery agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A8-26 8.1.2.8 Author, music composer, photographer, artist, or the like. . . . . A8-28 8.1.2.9 Members of Overseeing Committee constituted by the RBI (Inserted vide Notification No. 33/2017 dated 13.10.2017 w.e.f. 13.10.2017). . . . . . . . . . . . . . . . . . . . . . . . . . A8-31 xix

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8.1.3

8.2

8.3

Reverse Charge in respect of services only under the IGST Act (in addition to services specified in Para above). . . . . . . . . . . . . . . . . . . . . A8-33 8.1.3.1 Service supplied by a person located in a non-taxable territory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A8-33 8.1.3.2 Transportation of goods by a vessel from outside India up to the customs station - Service supplied by a person located in a non-taxable territory. . . . . . . . . . . . . . . . . . A8-36 8.1.4 Taxability under sec 9(3) of supplier of exempted goods/services receiving taxable supplies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A8-39 8.1.5 Whether threshold limit is applicable for reverse charge. . . . . . . . . . . . . . A8-39 8.1.6 Manner of payment of reverse charge payment. . . . . . . . . . . . . . . . . . . . . A8-39 8.1.7 Compliances in respect of supplies under reverse charge mechanism. . . . A8-40 Reverse Charges u/s 9(4) of the GST Act and 5(4) of the IGST Act. . . . . . . . . . . . . . A8-41 8.2.1 Applicability of reverse charge on receipts from unregistered suppliers. . A8-41 8.2.2 Inter-state procurement from unregistered suppliers . . . . . . . . . . . . . . . . . A8-41 8.2.3 Exemption u/s 9(4) from paying reverse charge. . . . . . . . . . . . . . . . . . . . . A8-43 8.2.4 Manner of payment of reverse charge payment and claiming input tax credit – Refer Para 8.1.6 of this Chapter. . . . . . . . . . . . . . . . . . . A8-44 8.2.5 Compliances in respect of supplies under reverse charge mechanism. . . . A8-44 Specified e-commerce operators – Deemed suppliers u/s 9(5) of the GST Act and 5(5) of the IGST Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A8-45

Chapter A-9 Composition levy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A9-1 9.1 Scope and features of the composition levy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A9-1 9.1.1 Who can opt for the composition levy? . . . . . . . . . . . . . . . . . . . . . . . . . . . . A9-1 9.1.2 Service providers, who can opt for the composition levy. . . . . . . . . . . . . . . A9-3 9.1.3 Rate of composition levy for service providers . . . . . . . . . . . . . . . . . . . . . . A9-3 9.2 Conditions and restrictions under the composition levy. . . . . . . . . . . . . . . . . . . . . . . . A9-3 9.2.1 Conditions and restrictions Specified in the GST Act . . . . . . . . . . . . . . . . . A9-3 9.2.2 Conditions and restrictions specified in the GST Rules [Rule 5]. . . . . . . . . A9-4 9.3 Procedure to opt for the composition levy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A9-5 9.3.1 Procedure to opt for composition levy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . A9-5 9.4 Input tax credit on switch over to composition levy. . . . . . . . . . . . . . . . . . . . . . . . . . . A9-7 9.4.1 Reversal of input tax credit where the taxable person switches over from regular method to composition levy. . . . . . . . . . . . . . . . . . . . . . . A9-7 9.4.2 Eligibility of the input tax credit where a taxable person, who was paying tax under the composition levy, starts paying tax under the regular method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A9-9 9.5 Validity of the composition levy [Rule 6]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A9-10 9.6 Cancellation of permission or registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A9-11 9.7 FAQs by CBEC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A9-11

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Chapter A-10 Input tax credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A10-1 10.1 Meaning of input tax credit (ITC) and related terms. . . . . . . . . . . . . . . . . . . . . . . . . . A10-1 10.2 Meanings of capital goods, input and input service. . . . . . . . . . . . . . . . . . . . . . . . . . . A10-3 10.2.1 Meaning of “capital goods” – [Section 2(19)]. . . . . . . . . . . . . . . . . . . . . . A10-3 10.2.2 Meaning of “input” – [Section 2(59)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . A10-3 10.2.3 Meaning of “input service” – [Section 2(60)]. . . . . . . . . . . . . . . . . . . . . . . A10-3 10.3 Eligibility and Conditions for claiming of input tax credit (ITC) [Sec 16]. . . . . . . . . A10-3 10.3.1 Conditions for claiming ITC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A10-4 10.3.1A Can a person claim ITC of CGST/SGST paid or incurred in other State . . . . A10-7 10.3.2 Manner of claiming ITC [Section 16(1)] . . . . . . . . . . . . . . . . . . . . . . . . . . A10-9 10.3.3 Utilization of credit [Section 49(5)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A10-9 10.3.4 Overall time limit for claiming ITC [Section 16(4)] . . . . . . . . . . . . . . . . . A10-9 10.4 Eligibility and Conditions in claiming of input tax credit (ITC) [Sec 17]. . . . . . . . . A10-10 10.4.1 Restrictions in claiming ITC [Section 17] . . . . . . . . . . . . . . . . . . . . . . . . A10-10 10.4.1.1 Where goods/services are used partly for the purpose of business and partly for other purposes . . . . . . . . . . . . . . . . A10-10 10.4.1.2 Where the goods/services are used for effecting partly for taxable supplies (including zero-rated supplies) and partly for exempt supplies (including non-taxable supplies). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A10-10 10.4.1.3 Manner of determination of ITC in respect of inputs and input services under sec 17(1), (2) - Rule 42 of the GST Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A10-11 10.4.1.4 Manner of determination of ITC in respect of capital goods under sec 17(1), (2) - Rule 43 of the GST Rules. . . . . . A10-14 10.4.2 Banking Co., Financial Institutions and NBFC . . . . . . . . . . . . . . . . . . . . A10-16 10.4.3 Recovery of ITC wrongly taken. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A10-17 10.5 Non-creditable goods or services (Blocked Credit) [Section 17(5)]. . . . . . . . . . . . . A10-17 10.6 ITC in special circumstances [Section 18]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A10-35 10.6.1 Eligible for ITC on stock to a taxable person, who has applied for registration mandatorily for the first time. . . . . . . . . . . . . . . . . . . . . . A10-36 10.6.2 Eligible for ITC on stock to a taxable person, who has applied for registration voluntarily under section 25(3) . . . . . . . . . . . . . . . . . . . . A10-36 10.6.3 Eligibility for ITC on stock of a person who ceases to pay tax under composition levy and pays tax under regular scheme . . . . . . . . . . A10-37 10.6.4 Eligibility for ITC on stock where an exempt supply becomes taxable supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A10-37 10.6.5 Manner prescribed for claiming ITC in Para 10.6.1 to 10.6.4 above [Rule 40(1) of the GST Rules]. . . . . . . . . . . . . . . . . . . . . . . . . . . . A10-38 10.6.6 Eligibility of ITC where there is a change in the constitution of a registered taxable person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A10-39 10.6.7 Payment equivalent to the ITC if the outward taxable supplies subsequently become exempt absolutely . . . . . . . . . . . . . . . . . . . . . . . . . A10-39 xxi

Guide to GST on Services (HSN Code wise taxability of all services)

10.6.8

10.7

Payment equivalent to the ITC where the taxable person switches over from regular scheme to composition scheme. . . . . . . . . . . A10-40 10.6.9 Payment equivalent to the ITC where the registration is cancelled under sec 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A10-41 10.6.10 Supply of capital goods on which ITC has been claimed earlier. . . . . . . A10-41 Goods transferred for job-work [Section 19]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A10-42

Chapter A-11 Input service distributor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A11-1 11.1 Purpose of ISD mechanism. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A11-1 11.2 Who is input service distributor?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A11-2 11.3 Obligations for registration and filing of return. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A11-2 11.4 Conditions/restrictions and procedure for distribution of credit [Section 20(2) read with Rule 39 of the GST Rules]. . . . . . . . . . . . . . . . . . . . . . . . . . A11-3 11.5 Manner of distribution of credit [Section 20(1) read with Rule 39 of the GST Rules]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A11-6 11.6 Manner of recovery of credit excess distributed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . A11-7 Chapter A-12 Imports, zero-rated supplies and export of services. . . . . . . . . . . . . . . . A12-1 12.1 Import of goods and services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A12-1 12.1.1 Import of goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A12-1 12.1.2 Import of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A12-2 12.1.3 Taxation on import of goods and services . . . . . . . . . . . . . . . . . . . . . . . . . A12-2 12.2 Zero rated supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A12-8 12.2.1 Meaning of zero-rated supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A12-8 12.2.2 Eligibility of input tax credit or refund on zero-rated supply [Sec 16 of the IGST Act]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A12-8 12.3 Export of services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A12-10 12.3.1 Export of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A12-10 12.3.2 Export under GST – Refund and procedure. . . . . . . . . . . . . . . . . . . . . . . A12-11 12.4 Supply of services to SEZ unit/developer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A12-15 Chapter A-13 Registration, Amendment and Cancellation . . . . . . . . . . . . . . . . . . . . . . A13-1 13.1 Need for registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-1 13.1.1 Why does one require registration? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-1 13.2 Format of registration number (GSTIN). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-1 13.3 Types of registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-2 13.4 Mandatory registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-2 13.4.1 Liability for mandatory registration under the GST – Threshold limit. . . . A13-2 13.4.2 Meaning of aggregate turnover for the purpose of threshold limit. . . . . . . A13-4 13.4.3 Circumstances when threshold limit is not applicable. . . . . . . . . . . . . . . . A13-4 13.4.4 Time limit for taking registration [Sec 25(1)]. . . . . . . . . . . . . . . . . . . . . . . A13-5 13.4.5 Persons not liable for registration [Sec 23]. . . . . . . . . . . . . . . . . . . . . . . . . A13-6 13.4.6 Registration is required in every state/UT separately. . . . . . . . . . . . . . . . . A13-8 13.4.7 Separate registrations for multiple business verticals in the same state/UT. . . A13-8 xxii

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13.5

Procedure for registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-8 13.5.1 Application for registration [Rule 8(1) of the GST Rules]. . . . . . . . . . . . . A13-8 13.5.2 Documents required for registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-9 13.5.3 Persons authorised to sign or verify through electronic verification code application for registration . . . . . . . . . . . . . . . . . . . . . . . A13-9 13.5.4 Procedure for registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-10 13.5.5 All places of businesses are to be declared at the time of registration. . . A13-13 13.5.6 Whether separate enrolment is required with Central and State authorities under GST?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-13 13.5.7 Whether small dealers or dealers having no IT infrastructure have any system for facilitation? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-14 13.6 Voluntary registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-14 13.6.1 Circumstances when voluntary registration may be obtained . . . . . . . . . A13-14 13.6.2 Procedure for voluntary registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-14 13.7 Registration by department (Suo-moto registration). . . . . . . . . . . . . . . . . . . . . . . . . A13-14 13.7.1 Circumstances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-15 13.7.2 Procedure for registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-15 13.7.3 Effective date for registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-15 13.8 Input service distributor (ISD). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-15 13.8.1 Requirements for registration by ISD. . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-15 13.8.2 Procedure for registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-15 13.9 Casual taxable person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-16 13.9.1 Who is casual taxable person? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-16 13.9.2 Procedure for registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-16 13.9.3 Process for registration/extension. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-16 13.10 Non-resident. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-17 13.10.1 Who is a non-resident person?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-17 13.10.2 Procedure for registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-17 13.10.3 Process for registration/extension. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-18 13.11 Unique Identity Number (UIN) by UN Bodies etc. . . . . . . . . . . . . . . . . . . . . . . . . . A13-19 13.11.1 Who requires UIN?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-19 13.11.2 Process for registration/extension. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-19 13.12 Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-19 13.12.1 Job Worker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-19 13.12.2 SEZ Developer/SEZ Unit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-20 13.12.3 Supply from Territorial Waters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-20 13.12.4 Person required to deduct tax at source (TDS). . . . . . . . . . . . . . . . . . . . . A13-20 13.12.5 Person supplying online information and data base access or retrieval (OIDAR) services from a place outside India to a nontaxable online recipient. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-20 13.12.6 Person required to collect tax at source (TCS). . . . . . . . . . . . . . . . . . . . . A13-20 13.13 Effective date of Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-20 13.14 Consequences of not applying for registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-21 xxiii

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13.15

Amendment of registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-21 13.15.1 Circumstances for amendment of registration . . . . . . . . . . . . . . . . . . . . . A13-21 13.15.2 Procedure for amendment of registration. . . . . . . . . . . . . . . . . . . . . . . . . A13-22 13.16 Cancellation of registration and revocation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-23 13.16.1 Circumstances for cancellation of registration. . . . . . . . . . . . . . . . . . . . . A13-23 13.16.2 Procedure for cancellation of registration. . . . . . . . . . . . . . . . . . . . . . . . . A13-24 13.16.3 Revocation of the cancellation order . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-26 13.17 FAQs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-27 13.18 FAQ by CBEC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-28 Annexure 1: Documentation/Information for migration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13-31 Chapter A-14 Casual Taxable Person & Non-resident Taxable Person. . . . . . . . . . . . A14-1 14.1 Casual Taxable Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A14-1 14.1.1 Who is casual taxable person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A14-1 14.1.2 Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A14-2 14.1.3 Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A14-4 14.1.4 Refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A14-4 14.2 Non-resident Taxable Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A14-5 14.2.1 Who is non-resident taxable person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A14-5 14.2.2 Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A14-5 14.2.3 Input tax credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A14-5 14.2.4 Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A14-6 14.2.5 Refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A14-6 Chapter A-15 Job work. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A15-1 15.1 Who is “job-worker” and “principal” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A15-1 15.1.1 Meaning of ‘job work’ and ‘job worker’. . . . . . . . . . . . . . . . . . . . . . . . . . . A15-1 15.1.2 Whether the term ‘job work’ includes ‘composite contract’. . . . . . . . . . . . A15-2 15.1.3 Meaning of principal for the purposes of these provisions. . . . . . . . . . . . . A15-2 15.1.4 Treatment of job work as ‘service’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A15-2 15.2 Privileges available to the principal and restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . A15-2 15.2.1 Input tax credit on inputs and capital goods sent for job work [Sec 19] . . A15-2 15.2.2 Special procedure for removal of goods under sec 143. . . . . . . . . . . . . . . A15-3 15.2.3 Supply of goods by the principal from the place of job worker. . . . . . . . . A15-4 15.2.4 Manner of dispatch and return prescribed in rule 45 of the GST Rules. . . A15-4 15.2.5 Supply of waste or scrap. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A15-5 15.3 FAQs on Job-worker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A15-6 15.3.1 Whether a job-worker is required to obtain registration?. . . . . . . . . . . . . . A15-6 15.3.2 Whether goods, directly supplied from the job-worker’s premises, will be included in the aggregate turnover of job worker?. . . . . A15-6 15.3.3 If the principal and job-worker are located in difference states, will the service by job-worker be treated as inter-state supply? What is the threshold limit for registration?. . . . . . . . . . . . . . . . . . . . . . . . A15-6 xxiv

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Chapter A-16 E-commerce, TCS & supply of online data– Special provisions . . . . . A16-1 16.1 E-commerce. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A16-1 16.1.1 Meaning of ‘e-commerce’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A16-1 16.1.2 Omission of the term ‘Aggregator’ in the GST Act. . . . . . . . . . . . . . . . . . A16-1 16.1.3 Activities of the e-commerce operator [ECO] . . . . . . . . . . . . . . . . . . . . . . A16-2 16.1.4 Threshold limit for registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A16-3 16.1.5 When the ECO itself be deemed as supplier. . . . . . . . . . . . . . . . . . . . . . . . A16-3 16.2 Collection of tax (TCS) by e-commerce operators . . . . . . . . . . . . . . . . . . . . . . . . . . . A16-4 16.2.1 Time of collection of TCS and its value. . . . . . . . . . . . . . . . . . . . . . . . . . . A16-4 16.2.2 Rate of TCS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A16-5 16.3 Procedure for registration or cancellation and obligations of TCS. . . . . . . . . . . . . . . A16-6 16.3.1 Registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A16-6 16.3.2 Obligations of the e-commerce operators. . . . . . . . . . . . . . . . . . . . . . . . . . A16-6 16.3.3 Claim of credit for the amount of TCS deposited by the ECO by the concerned supplier [Sec 52(7) of the GST Act] . . . . . . . . . . . . . . . . . . A16-7 16.3.4 Matching of details filed by the ECO with that of filed by the supplier [Sec 52(8) to (11) of the GST Act read with Rule 78 & 79 of the GST Rules] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A16-7 16.3.5 Powers of the proper officer to issue notice upon the ECO [Sec 52(12) to (14) of the GST Act]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A16-8 16.3.6 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A16-8 16.3.7 Whether there could be any other penalties on ECO? . . . . . . . . . . . . . . . . A16-8 16.4 Special provision for payment of tax by a supplier of online information and database access or retrieval services (OIDAR) located outside India to specified person in the taxable territory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A16-9 16.4.1 Applicability of the provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A16-9 16.4.2 Meaning of “online information and database access or retrieval services” [Sec 2(17) of the IGST Act] . . . . . . . . . . . . . . . . . . . . . . . . . . . . A16-9 16.4.3 Meaning of “non-taxable online recipient”. . . . . . . . . . . . . . . . . . . . . . . . A16-12 16.4.4 Who is responsible for payment of tax and role of intermediary who arranges the services?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A16-12 16.4.5 Registration and payment of tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A16-13 16.4.6 Filing of return [Rule 64]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A16-14 16.4.7 Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A16-14 16.4.8 Officers empowered to grant registration. . . . . . . . . . . . . . . . . . . . . . . . . A16-14 Chapter A-17 Tax deduction at source . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A17-1 17.1 Tax deduction at source (TDS) [Section 51]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A17-1 17.2 Who is required to deduct TDS?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A17-1 17.3 Rate of TDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A17-2 17.4 When to deduct TDS? Is there any threshold limit? . . . . . . . . . . . . . . . . . . . . . . . . . . A17-2 17.5 Which services are covered?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A17-3 17.6 Obligations or responsibilities of the deductor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A17-3 xxv

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17.7

17.8

17.9 17.10 17.11

Procedure for TDS registration or cancellation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A17-4 17.7.1 Registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A17-4 17.7.2 Cancellation [Rule 22 of the GST Rules]. . . . . . . . . . . . . . . . . . . . . . . . . . A17-4 Amendment of TDS Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A17-5 17.8.1 Circumstances for amendment of registration . . . . . . . . . . . . . . . . . . . . . . A17-5 17.8.2 Procedure for amendment of registration. . . . . . . . . . . . . . . . . . . . . . . . . . A17-5 How will the amount of TDS be utilized by the supplier?. . . . . . . . . . . . . . . . . . . . . A17-6 What would happen if there is excess or erroneous deduction? [Sec 51(8) of the GST Act]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A17-6 Penalties on deductor for various defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A17-7

Chapter A-18 Invoice, Accounts and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A18-1 18.1 Tax invoice and its contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A18-1 18.1.1 What is the tax invoice?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A18-1 18.1.2 Tax invoice vs. bill of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A18-1 18.1.3 Contents of tax invoice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A18-2 18.1.4 Indication of amount of tax on the tax invoice [Section 33]. . . . . . . . . . . . A18-3 18.1.5 Time of issuance of tax invoice in case of supply of service. . . . . . . . . . . A18-4 18.1.6 Time and manner of issue of revised invoice. . . . . . . . . . . . . . . . . . . . . . . A18-5 18.1.7 Contents of the revised invoice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A18-6 18.1.8 Issuance of invoice & payment voucher in case of reverse charge [Sec 31(3)(f), (g) read with rule 52] . . . . . . . . . . . . . . . . . . . . . . . . A18-6 18.1.9 Whether issuance of tax invoice is mandatory even for petty amount?. . . A18-7 18.1.10 Manner of issuance of tax invoice in case of supply of services . . . . . . . . A18-8 18.2 Bill of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A18-8 18.2.1 Who is required to issue bill of supply and under what circumstances?. . . . . A18-8 18.2.2 Contents of bill of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A18-8 18.2.3 Whether issuance of bill of supply is mandatory even for petty amount?. . . . A18-9 18.2A Invoice cum Bill of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A18-9 18.3 Receipt voucher in case of advance collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A18-10 18.4 Delivery Challan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A18-11 18.5 Credit and debit notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A18-12 18.5.1 Circumstances when a debit note or credit note is issued. . . . . . . . . . . . . A18-12 18.5.2 Time limit of declaration of credit/debit note in the return [Section 34(2), (4)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A18-13 18.5.3 Contents of a debit or credit note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A18-13 18.6 Tax invoice in case of input service distributor (ISD). . . . . . . . . . . . . . . . . . . . . . . . A18-14 18.7 Tax invoice in case of banks, financial institution & NBFC. . . . . . . . . . . . . . . . . . . A18-15 18.8 Tax invoice in case of goods transport agency (GTA). . . . . . . . . . . . . . . . . . . . . . . . A18-15 18.9 Tax invoice in case of passenger transportation service . . . . . . . . . . . . . . . . . . . . . . A18-16 18.10 Prohibition of unauthorised collection of tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A18-16 18.11 Accounts and records - maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A18-16 18.11.1 Nature of accounts, records and documents to be maintained. . . . . . . . . A18-16 xxvi

18.12 18.13

18.14 18.15 18.16

Table of contents

18.11.2 Where to keep and/or maintain accounts and records . . . . . . . . . . . . . . . A18-20 18.11.3 How to maintain accounts and records. . . . . . . . . . . . . . . . . . . . . . . . . . . A18-21 18.11.4 Obligations of registered persons towards the Proper Officer . . . . . . . . . A18-21 Generation and maintenance of electronic records. . . . . . . . . . . . . . . . . . . . . . . . . . A18-22 Accounts and records by custodian of goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A18-22 18.13.1 Owner or operator of warehouse or godown or transporter. . . . . . . . . . . A18-22 18.13.2 Records by a person having custody over goods [Rule 56(17)]. . . . . . . . A18-23 Audit of accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A18-23 Accounts and records - retention. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A18-24 FAQ by CBEC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A18-24

Chapter A-19 Refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-1 19.1 Refund - Features. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-1 19.1.1 Meaning of refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-1 19.1.2 Grounds of refund and the appropriate form . . . . . . . . . . . . . . . . . . . . . . . A19-1 19.1.3 Time Limit for claiming refund [Section 54(1), (2), (3)]. . . . . . . . . . . . . . A19-2 19.1.4 Refund of unutilized input tax credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-2 19.1.5 Furnishing of documentary evidence to claim refund [Section 54(4)]. . . . A19-3 19.1.6 Refund less than INR 1,000/- [Section 54(14)] . . . . . . . . . . . . . . . . . . . . . A19-3 19.1.7 Manual filing of refund application and processing (Rule 97A) . . . . . . . . A19-3 19.2 Refund due to inverted tax structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-3 19.2.1 Persons entitled for refund [Section 54(3)(a)] . . . . . . . . . . . . . . . . . . . . . . A19-4 19.2.2 Determination of amount of refund [Rule 89(5)]. . . . . . . . . . . . . . . . . . . . A19-4 19.2.3 Procedure for claiming refund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-5 19.2.4 Time limit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-5 19.2.5 Manner of allowing refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-5 19.2.6 Disposal of refund application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-5 19.3 Refund to Exporters of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-6 19.3.1 Export of services - Zero-rated supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-6 19.3.2 Furnishing of bond or letter of undertaking. . . . . . . . . . . . . . . . . . . . . . . . A19-6 19.3.3 Circumstances when exporters are not eligible for refund. . . . . . . . . . . . . A19-7 19.3.4 Bond v. Letter of undertaking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-7 19.3.5 Provisional refund to zero-rated supply of services. . . . . . . . . . . . . . . . . . A19-7 19.3.6 Refund of IGST paid on export of services out of India [Rule 96] . . . . . . A19-8 19.3.7 Refund of input tax credit in relation to export of services under bond or Letter of Undertaking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-9 19.3.8 Eligibility date and Limitation period. . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-12 19.3.9 Disposal of refund application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-12 19.4 Refund related to supply to SEZ developer/SEZ unit. . . . . . . . . . . . . . . . . . . . . . . . A19-12 19.4.1 Supply to SEZ unit/developer - Zero-rated supply. . . . . . . . . . . . . . . . . . A19-12 19.4.2 Furnishing of bond or letter of undertaking. . . . . . . . . . . . . . . . . . . . . . . A19-13 19.4.3 Filing of application for refund along with documents . . . . . . . . . . . . . . A19-13 19.4.4 Determination of amount of refund [Rule 89(4)]. . . . . . . . . . . . . . . . . . . A19-14 xxvii

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19.5

19.6

19.7

19.8 19.9

19.10 19.11 19.12

19.4.5 Time limit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-14 19.4.6 Disposal of refund application: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-14 Refund to casual or non-resident taxable persons. . . . . . . . . . . . . . . . . . . . . . . . . . . A19-14 19.5.1 Procedure of claiming refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-14 19.5.2 Disposal of refund application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-15 Tax wrongly deposited – IGST v CGST/SGST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-15 19.6.1 Circumstances arising refund – Tax wrongly paid. . . . . . . . . . . . . . . . . . A19-15 19.6.2 Filing of application to claim refund . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-15 19.6.3 Eligibility date and Limitation period. . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-15 19.6.4 Disposal of refund application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-16 Other refunds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-16 19.7.1 Nature of refunds and application and documents to be submitted . . . . . A19-16 19.7.2 Eligibility date and Limitation period. . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-16 Self-declaration or Certificate by the Chartered Accountant or the Cost Accountant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-17 Disposal of refund application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-18 19.9.1 Acknowledgement of refund claim application (Rule 90). . . . . . . . . . . . A19-18 19.9.2 Time limit for disposal of refund claim . . . . . . . . . . . . . . . . . . . . . . . . . . A19-19 19.9.3 Order sanctioning refund [Section 54(5) read with Rule 92, 93]. . . . . . . A19-19 19.9.4 No refund order except as per Sec 54(8) . . . . . . . . . . . . . . . . . . . . . . . . . A19-20 Withhold/Deduct the refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-20 Interest on delayed refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-21 Proper Officer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A19-21

Annexure: Extracts of Circular No. 17/17/2017-GST, dated 15th November 2017. . . . . . . . . . A19-22 Chapter A-20 Interest, penalties and offences. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A20-1 20.1 Interest under GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A20-1 20.2 Penalties under GST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A20-2 20.3 Offences under GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A20-6 20.3.1 Nature of acts regarded as offences (Sec 132). . . . . . . . . . . . . . . . . . . . . . A20-6 20.3.2 Quantum of punishment for offences stated in Para 20.3.1 (Sec 132). . . . A20-6 PART B

HSN CODE WISE GUIDE ON SERVICES Chapter B-1 Works contract & construction service (other than complex construction) [HSN 9954-Part I]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B1-1 1.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B1-1 1.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B1-9 1.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B1-12 1.3.1 Meaning of “goods” [Sec 2(52) of the GST Act]. . . . . . . . . . . . . . . . . . . . B1-12 1.3.2 Meaning of “works contract” [Sec 2(119) of the GST Act]. . . . . . . . . . . . B1-12 xxviii

Table of contents

1.3.3

Meaning of “original work” [Para 2(zs) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . 1.3.4 Meaning of “Government”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3.5 Meaning of “Local Authority” [Sec 2(69) of the GST Act]. . . . . . . . . . . . 1.3.6 Meaning of “State” [Sec 2(103) of the GST Act]. . . . . . . . . . . . . . . . . . . . 1.3.7 Meaning of “Union Territory” [Sec 2(114) of the GST Act] . . . . . . . . . . . 1.3.8 Meaning of “Governmental Authority” [Para 2(zf) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . 1.3.9 Meaning of “Governmental Entity” [Para 2(zfa) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . 1.4 Taxability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4.1 What is works contract, in general?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4.2 Taxability under the erstwhile indirect tax regime. . . . . . . . . . . . . . . . . . . 1.4.3 Taxability in GST regime. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4.4 Construction contracts, when related to immovable property . . . . . . . . . . 1.4.5 Two separate and divisible contracts: One for supply of goods and other for service – Whether works contract. . . . . . . . . . . . . . . . . . . . . 1.4.6 Sub-contracting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4.7 Free supplies made by the recipient (e.g., FOC material) . . . . . . . . . . . . . 1.4.8 Pure service contracts to the government. . . . . . . . . . . . . . . . . . . . . . . . . . 1.4.9 Supply between the joint venture/AOP and members thereof. . . . . . . . . . 1.5 Build-Operate -Transfer (BOT) Projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5.1 Models of Public-Private Participation (PPP). . . . . . . . . . . . . . . . . . . . . . 1.5.2 Nature and types of BOT contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5.3 Parties to the BOT contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5.4 Role of the sponsors/concessionaire /operator. . . . . . . . . . . . . . . . . . . . . . 1.5.5 Taxability - Clarification under the Service Tax on BOT contracts - Circular No. 151/2/2012-ST; F.No.332/13/2011-TRU dt. 10.2.2012 (also Para 6.2.5 of S.T. Education Guide-2012 by CBEC – For reference). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5.6 Build Operate and Transfer (BOT) Annuity and Hybrid Annuity Model (HAM) Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5.7 Contracts with the executing agencies. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6 Value of service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6.1 Value of service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6.2 Fines or liquidated damages payable to the Government or the Local Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6.3 Taxability of other charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6.4 Abatement is not allowed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6.5 Composition Scheme is not available. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7 Place of supply (POS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.8 Time of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.9 Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

B1-12 B1-12 B1-13 B1-13 B1-13 B1-13 B1-14 B1-14 B1-14 B1-14 B1-15 B1-15 B1-18 B1-21 B1-22 B1-23 B1-24 B1-25 B1-25 B1-26 B1-28 B1-28

B1-29 B1-30 B1-31 B1-31 B1-31 B1-31 B1-32 B1-32 B1-33 B1-33 B1-34 B1-34 xxix

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1.10 1.11 1.12 1.13

Input tax credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Maintenance of records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transition provisions – On-going projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

B1-36 B1-39 B1-40 B1-42

Chapter B-2 Complex and housing construction [HSN 9954-Part II]. . . . . . . . . . . . . . . B2-1 2.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B2-1 2.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B2-8 2.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B2-9 2.3.1 Meaning of “goods” [Sec 2(52) of the GST Act]. . . . . . . . . . . . . . . . . . . . . B2-9 2.3.2 Meaning of “works contract” [Sec 2(119) of the GST Act]. . . . . . . . . . . . . B2-9 2.3.3 Meaning of “original work” [Para 2(zs) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . . B2-9 2.3.4 Meaning of “residential complex” [Para 2(zzb) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . B2-10 2.3.5 Meaning of “single residential unit” [Para 2(zze) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . B2-10 2.3.6 Meaning of “Government”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B2-10 2.3.7 Meaning of “Local Authority” [Sec 2(69) of the GST Act]. . . . . . . . . . . . B2-10 2.3.8 Meaning of “State” [Sec 2(103) of the GST Act]. . . . . . . . . . . . . . . . . . . . B2-10 2.3.9 Meaning of “Union Territory” [Sec 2(114) of the GST Act] . . . . . . . . . . . B2-10 2.3.10 Meaning of “Governmental Authority” [Para 2(zf) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . B2-11 2.3.11 Meaning of “Governmental Entity” [Para 2(zfa) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . B2-11 2.4 Taxability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B2-11 2.4.1 Taxability under the erstwhile indirect tax regime. . . . . . . . . . . . . . . . . . . B2-11 2.4.2 Taxability in GST regime. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B2-12 2.4.3 Rates of tax (In general; other than concessional rate to specified activities). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B2-13 2.4.4 Pure labour contracts pertaining to a single residential unit - Exempt. . . . B2-15 2.5 Joint Development Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B2-15 2.5.1 Stage 1 – Transfer of land or development rights by the land owner. . . . . B2-15 2.5.2 Various sharing models under the joint development agreement. . . . . . . . B2-17 2.5.2.1 Model 1: Share of profits from the projects. . . . . . . . . . . . . . . . B2-17 2.5.2.2 Model 2: Fixed sum or % on the consideration charged to buyers of units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B2-17 2.5.2.3 Model 3: Allotting free units out of constructed space to land owner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B2-17 2.5.3 Dept.’s clarifications on Construction Services provided in the Real Estate Sector – Deemed deduction in joint development agreement.B2-19 2.5.4 Redevelopment (including slum rehabilitation). . . . . . . . . . . . . . . . . . . . . B2-19 2.5.5 Development and sale of “plot of land”. . . . . . . . . . . . . . . . . . . . . . . . . . . B2-21 xxx

Table of contents

2.5.6

2.6

2.7 2.8 2.9

2.10 2.11

2.12

FAQs on GST in respect of Construction of Residential Complex by Builders/Developers “Media & Entertainment Sectoral Group” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Value of service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6.1 Value of service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6.2 Taxability of other charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6.3 Applicability of provisions relating to composite and mixed supply. . . . . 2.6.4 Abatement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6.5 Composition Scheme not available. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Time of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Place of supply (POS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Input tax credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9.1 Proportionate input tax credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9.2 Blocked input tax credit under sec 17(5) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9.3 FAQs on GST in respect of Construction of Residential Complex by Builders/Developers “Media & Entertainment Sectoral Group”:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Maintenance of records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transition provisions – On-going projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.11.1 Transition provisions in respect of complex construction . . . . . . . . . . . . . 2.11.2 FAQs on GST in respect of Construction of Residential Complex by Builders/ Developers (Clarification by “Media & Entertainment Sectoral Group”). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

B2-21 B2-24 B2-24 B2-25 B2-25 B2-27 B2-27 B2-27 B2-28 B2-29 B2-29 B2-30

B2-30 B2-31 B2-32 B2-32

B2-33 B2-35

Chapter B-3 Services in wholesale and retail trade [HSN 9961, 9962]. . . . . . . . . . . . . . 3.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3.1 Meaning of “goods” [Sec 2(52) of the GST Act]. . . . . . . . . . . . . . . . . . . . . 3.3.2 Meaning of “agent” [Sec 2(5) of the GST Act] . . . . . . . . . . . . . . . . . . . . . . 3.3.3 Meaning of “intermediary” [Para 2(zl) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . . 3.3.4 Meaning of “agricultural produce” [Para 2(d) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . . 3.3.5 Meaning of “agricultural produce marketing committee or board” [Para 2(e) of the Notification No.12/2017-CT (Rate), dated 28 June 2017] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3.6 Terms not defined – Definitions picked up from erstwhile section 65 of the Finance Act [up to 30.06.2012] - For reference . . . . . . . . 3.4 Taxability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4.1 Scope of HSN 9961 and 9962. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4.2 Agricultural produce - Meaning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

B3-1 B3-1 B3-2 B3-2 B3-2 B3-3 B3-3 B3-3

B3-3 B3-3 B3-4 B3-4 B3-5 xxxi

Guide to GST on Services (HSN Code wise taxability of all services)

3.5

3.6 3.7 3.8

3.4.3 Services by agents/brokers including sub-brokers. . . . . . . . . . . . . . . . . . . . B3-5 3.4.4 No threshold limit of registration for agents. . . . . . . . . . . . . . . . . . . . . . . . . B3-6 3.4.5 Sale by auction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B3-6 3.4.6 Broker. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B3-6 3.4.7 Reimbursement of expenses – Pure agent . . . . . . . . . . . . . . . . . . . . . . . . . . B3-7 Sale through e-commerce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B3-8 3.5.1 Meaning of ‘e-commerce’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B3-8 3.5.2 Activities of the e-commerce operator [ECO] . . . . . . . . . . . . . . . . . . . . . . . B3-8 3.5.3 Threshold limit for registration, tax collection at source (TCS), etc . . . . . . B3-9 Manner of valuation in supply to agents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B3-9 3.6.1 Value of supply made or received through an agent – Rule 29 . . . . . . . . . . B3-9 Place of supply (POS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B3-10 Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B3-11

Chapter B-4 Accommodation, foods and beverage service [HSN 9963]. . . . . . . . . . . . . B4-1 4.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B4-1 4.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B4-6 4.3 Accommodation service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B4-7 4.3.1 Scope and taxability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B4-7 4.3.2 Bundle services provided by hotel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B4-8 4.3.3 Meaning of “declared tariff” [Para 2(w) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . . B4-9 4.3.4 Place of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B4-12 4.3.5 Booking of hotels/accommodation through intermediary/agent. . . . . . . . . B4-12 4.3.6 Booking of hotels by an e-commerce company. . . . . . . . . . . . . . . . . . . . . B4-15 4.4 Food and beverage service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B4-16 4.4.1 Terms not defined – Definitions picked up from erstwhile section 65 of the Finance Act [up to 30.06.2012] – For reference. . . . . . . B4-16 4.4.2 Taxability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B4-16 4.4.3 Restaurant services and outdoor catering through common kitchen . . . . . B4-18 4.4.4 Place of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B4-19 4.5 Time of supply in transition period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B4-19 4.6 Input tax credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B4-20 4.7 Composition levy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B4-21 4.8 Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B4-21 4.9 GST Rates – A Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B4-22 Chapter B-5 Passengers transport, tour operators and travel booking agents [HSN 9964, 9985] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

xxxii

B5-1 B5-1 B5-8 B5-9

Table of contents

5.3.1

5.4

5.5 5.6

5.7

5.8

Meaning of “aircraft” [Para 2(f) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . . B5-9 5.3.2 Meaning of “tour operator” [Para 2(zzm) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . B5-10 5.3.3 Meaning of “vessel” [Para 2(zzo) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . B5-10 5.3.4 Meaning of “metered cab” [Para 2(zp) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . B5-10 5.3.5 Meaning of “e-rickshaw” [Para 2(za) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . B5-10 5.3.6 Meaning of “contract carriage” [Para 2(t) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . B5-10 5.3.7 Meaning of “inland waterway” [Para 2(zi) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . B5-11 5.3.8 Meaning of “stage carriage” [Para 2(zzh) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . B5-11 5.3.9 Meaning of “intermediary” [Para 2(zl) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . B5-11 5.3.10 Meaning of “continuous journey” [Sec 2(3) of the IGST Act]. . . . . . . . . . B5-12 Taxability of various passenger transport services . . . . . . . . . . . . . . . . . . . . . . . . . . . B5-12 5.4.1 Taxability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B5-12 5.4.2 Time of supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B5-16 5.4.3 Value of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B5-16 5.4.4 Issuance of Invoice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B5-17 5.4.5 Place of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B5-17 Services provided on board a conveyance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B5-20 Air travel agent (ATA). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B5-21 5.6.1 Value of supply in relation to booking of air tickets by travel agents [Rule 32(3) read with sec 15(5)]. . . . . . . . . . . . . . . . . . . . . . . . . . . B5-21 5.6.2 Determination of tax by air travel agents. . . . . . . . . . . . . . . . . . . . . . . . . . B5-22 5.6.3 Can a travel agent act as principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B5-23 5.6.4 Airline consolidator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B5-23 5.6.5 Travel agent acts as intermediary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B5-23 5.6.6 Travel agent acts as principal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B5-24 5.6.7 Incentives received by Air Travel Agent (ATA) from companies providing computer reservation system (CCRS) . . . . . . . . . . . . . . . . . . . . B5-25 5.6.8 Visa and passport assistance to the passenger. . . . . . . . . . . . . . . . . . . . . . . B5-25 5.6.9 Place of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B5-26 Rail tickets reservation service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B5-27 5.7.1 Commission from an Indian Railway Company. . . . . . . . . . . . . . . . . . . . . B5-27 5.7.2 Commission from Foreign Railway Company. . . . . . . . . . . . . . . . . . . . . . B5-27 5.7.3 Service charges from passenger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B5-27 Car rental Booking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B5-28 xxxiii

Guide to GST on Services (HSN Code wise taxability of all services)

5.9 5.10 5.11

5.12 5.13 5.14

5.8.1 Travel agent acts as intermediary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.8.2 Travel agent acts as principal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Domestic / International Hotel Reservation Service. . . . . . . . . . . . . . . . . . . . . . . . . . Supply in relation to foreign currency & money changing [Rule 32(2)]. . . . . . . . . . . Tour operator. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11.1 Meaning of “tour operator” [Sec 2(zzm) of the Exemption Notification]. . . . 5.11.2 Rate of tax in relation to tour operator services and its conditions. . . . . . . 5.11.3 Pure agent tour operator. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11.4 Type of package tours provided by the tour operator. . . . . . . . . . . . . . . . . 5.11.5 Other services - Whether tour operator’s service. . . . . . . . . . . . . . . . . . . . 5.11.6 Place of supply – Tour is conducted in more than one state. . . . . . . . . . . . Tax invoice in case of passenger transportation service . . . . . . . . . . . . . . . . . . . . . . . Specified e-commerce operators – Deemed suppliers under sec 9(5) of the GST Act/ 5(5) of the IGST Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

B5-28 B5-28 B5-28 B5-29 B5-30 B5-30 B5-30 B5-31 B5-31 B5-33 B5-33 B5-34 B5-35 B5-36

Chapter B-6 Goods transport service including GTA [HSN 9965]. . . . . . . . . . . . . . . . . B6-1 6.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B6-1 6.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B6-7 6.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B6-7 6.3.1 Meaning of “goods carriage” [Para 2(zd) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . . B6-7 6.3.2 Meaning of “goods transport agency” [Para 2(ze) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . B6-8 6.3.3 Meaning of “courier agency” [Para 2(u) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . . B6-8 6.3.4 Meaning of “inland waterway” [Para 2(zi) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . . B6-8 6.3.5 Meaning of “Customs station” [Para 2(v) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . . B6-8 6.3.6 Meaning of “vessel” [Para 2(zzo) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . . B6-8 6.3.7 Meaning of “agricultural produce” [Para 2(d) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . . B6-9 6.3.8 Meaning of “consignment note”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B6-9 6.4 Applicability of Reverse Charge under sec 9(3) of the GST Act and 5(3) of the IGST Act on transport of goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B6-9 6.5 Transportation of goods by road - Taxability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B6-13 6.5.1 Liability of conveyance owner not issuing consignment note – GTA vs. GTO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B6-14 6.5.2 Incidental services provided by a GTA - Composite supply. . . . . . . . . . . . B6-18 6.5.3 Speed transport. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B6-18 6.5.4 Supply of goods on FOR basis along with transportation of goods. . . . . . B6-19 xxxiv

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6.5.4A Exemption to GTA Services – Hence RCM shall also not be applicable. . 6.5.5 Pecuniary exemption to GTA under Notification No. 12/2017. . . . . . . . . . 6.5.6 Exemption from registration u/s 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.6 Transportation of goods by Courier Agency - Taxability . . . . . . . . . . . . . . . . . . . . . . 6.7 Transportation of goods by Rail - Taxability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8 Transportation of goods by Air - Taxability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9 Transportation of goods by Vessel – Taxability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.10 Freight on Import and Export of Goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11 Place of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12 Input tax credit on GTA Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.13 Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.14 Tax invoice by GTA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.15 e-way bill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.15.1 Generation of e-way bill by the transporter . . . . . . . . . . . . . . . . . . . . . . . . 6.15.2 Documents to be carried by the person in charge of conveyance – Rule 138A(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.15.3 Carrying of other documents instead of e-way bill – Rule 138A(5). . . . . . 6.15.4 Obtain a unique RFID and embedding it on to conveyance – Rule 138A(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.16 Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

B6-19 B6-20 B6-21 B6-21 B6-21 B6-22 B6-22 B6-24 B6-25 B6-26 B6-27 B6-27 B6-29 B6-29 B6-31 B6-31 B6-31 B6-32

Chapter B-7 Supporting service in transport sector [HSN 9967]. . . . . . . . . . . . . . . . . . . B7-1 7.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B7-1 7.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B7-4 7.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B7-5 7.3.1 Meaning of “goods carriage” [Para 2(zd) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . . B7-5 7.3.2 Meaning of “goods transport agency” [Para 2(ze) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . B7-5 7.3.3 Meaning of “agricultural produce” [Para 2(d) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . . B7-5 7.3.4 Terms not defined – Definitions picked up from erstwhile section 65 of the Finance Act [up to 30.06.2012] – For reference. . . . . . . . B7-6 7.4 Taxability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B7-6 7.4.1 Scope of the category 9967 – Support transport services. . . . . . . . . . . . . . . B7-6 7.4.2 Rate of tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B7-7 7.4.3 Clearing and forwarding (C & F) agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . B7-7 7.4.4 Freight forwarder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B7-8 7.4.5 Customs House Agent (CHA). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B7-8 7.4.6 Storage and warehousing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B7-9 7.4.7 Airport services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B7-10 7.4.8 Port services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B7-11 7.5 Place of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B7-12 xxxv

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7.6

Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B7-14

Chapter B-8 Postal & courier services [HSN 9968]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3.1 Meaning of “courier agency” [Para 2(u) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . . 8.4 Taxability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.4.1 Services by Department of Post. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.4.2 Courier Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5 Place of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5.1 Place of supply in terms of sec 12 and 13 of the IGST Act . . . . . . . . . . . . . 8.5.2 Clarification Based upon Para 5.4.1 of ST Education Guide2012 - For reference. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5.3 Documents or goods are delivered abroad. . . . . . . . . . . . . . . . . . . . . . . . . . 8.5.4 Foreign documents or goods are delivered in India. . . . . . . . . . . . . . . . . . . 8.6 Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

B8-1 B8-1 B8-2 B8-3 B8-3 B8-3 B8-3 B8-3 B8-4 B8-4 B8-5 B8-5 B8-6 B8-6

Chapter B-9 Banking and financial related services [HSN 9971]. . . . . . . . . . . . . . . . . . B9-1 9.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B9-1 9.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B9-6 9.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B9-7 9.3.1 Meaning of “banking company” [Para 2(l) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . . B9-7 9.3.2 Meaning of “Reserve Bank of India” [Para 2(zza) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . B9-7 9.3.3 Meaning of “financial institution” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B9-7 9.3.4 Meaning of “non-banking financial company”. . . . . . . . . . . . . . . . . . . . . . . B9-8 9.3.5 Meaning of “Business facilitator or business correspondent” [Para 2(o) of the Notification No.12/2017-CT (Rate), dated 28 June 2017].B9-8 9.3.6 Meaning of “interest” [Para 2(zk) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . . B9-9 9.3.7 Meaning of “goods” [Sec 2(52) of the GST Act]. . . . . . . . . . . . . . . . . . . . . B9-9 9.3.8 Meaning of “money” [Sec 2(75) of the GST Act] . . . . . . . . . . . . . . . . . . . . B9-9 9.3.9 Meaning of “securities” [Sec 2(101) of the GST Act] . . . . . . . . . . . . . . . . . B9-9 9.4 Taxability of banks and financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B9-10 9.4.1 Whether all financial services are taxable in GST . . . . . . . . . . . . . . . . . . . B9-10 9.4.2 Services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount. . . . B9-10 9.4.3 Taxability of service charges or administrative charges or entry charges in addition to interest on a loan, advance or deposit. . . . . . . . . . . B9-11

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9.4.4

9.5

9.6 9.7

9.8 9.9 9.10 9.11 9.12

9.13

Invoice discounting or cheque discounting or any other similar form of discounting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.4.5 Services provided by banks or authorized dealers of foreign exchange by way of sale of foreign exchange to general public . . . . . . . . 9.4.6 Transactions entered into by banks in instruments like repos and reverse repos. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.4.7 Subscription to or trading in Commercial Paper (CP) or Certificates of Deposit (CD). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.4.8 Charges for late payment of dues on credit card outstanding. . . . . . . . . . . 9.4.9 Taxability of various receipts of the banks. . . . . . . . . . . . . . . . . . . . . . . . . 9.4.10 Clarification - Priority Sector Lending Certificates (PSLCs). . . . . . . . . . . Chit fund business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.5.1 Would a chit fund business come under ‘transaction only in money’?. . . 9.5.2 Meaning of “chit” and “foreman of chit” . . . . . . . . . . . . . . . . . . . . . . . . . 9.5.3 Taxability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxability of Transfer of right. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.6.1 Transfer of right to use goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Brokers and other securities related services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.7.1 Stock brokers and sub-brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.7.2 Forward contracts in commodities or currencies . . . . . . . . . . . . . . . . . . . . Manner of valuation in foreign currency & money changing. . . . . . . . . . . . . . . . . . . 9.8.1 Supply in relation to foreign currency & money changing [Rule 32(2)]. . Place of supply (POS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Registration and distinct person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Input tax credit (ITC) – Special Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.11.1 Proportionate availment of ITC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Issuance of invoice – Special provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.12.1 Time of issuance of invoice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.12.2 Consolidated tax invoice [Rule 54(2)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter B-10 Insurance services [HSN 9971] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3.1 Meaning of “General insurance business” [Para 2(zb) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . 10.3.2 Meaning of “insurance company” [Para 2(zj) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . 10.3.3 Meaning of “life insurance business” [Para 2(zn) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . 10.3.4 Meaning of “life micro-insurance product” [Para 2(zo) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . .

B9-11 B9-11 B9-11 B9-12 B9-12 B9-12 B9-13 B9-14 B9-14 B9-14 B9-14 B9-14 B9-14 B9-16 B9-16 B9-17 B9-18 B9-18 B9-19 B9-20 B9-20 B9-20 B9-21 B9-21 B9-21 B9-22 B10-1 B10-1 B10-6 B10-7 B10-7 B10-7 B10-7 B10-8 xxxvii

Guide to GST on Services (HSN Code wise taxability of all services)

10.3.5

Meaning of “Business facilitator or business correspondent” [Para 2(o) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B10-8 10.3.6 Meaning of “goods” [Sec 2(52) of the GST Act]. . . . . . . . . . . . . . . . . . . . B10-8 10.4 Manner of valuation in specified cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B10-8 10.4.1 Manner of valuation in specified activities – Rule 32. . . . . . . . . . . . . . . . . B10-8 Supply in relation to life insurance business [Rule 32(4)]. . . . . . . . . . . . . B10-9 10.5 Taxability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B10-9 10.5.1 Taxability of various types of insurance premiums . . . . . . . . . . . . . . . . . . B10-9 10.5.2 Delayed/Late fees or interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B10-10 10.5.3 Cheque dishonor charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B10-10 10.5.4 Other charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B10-10 10.5.5 Clarifications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B10-10 10.6 Reverse Charge – Insurance Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B10-10 10.7 Place of supply (POS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B10-11 10.8 Registration and distinct person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B10-12 10.9 Issuance of invoice – Special Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B10-12 Time of issuance of invoice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B10-12 10.10 Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B10-13 Chapter B-11 Real estate services and renting of immovable property [HSN 9972] . . . . B11-1 11.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B11-1 11.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B11-3 11.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B11-4 11.3.1 Meaning of “renting in relation to immovable property” [Para 2(zz) of the Notification No.12/2017-CT (Rate), dated 28 June 2017] . . . . . . . . . . B11-4 11.3.2 Entry Nos. 2 and 5 of Schedule II of the GST Act. . . . . . . . . . . . . . . . . . . B11-4 11.4 Taxability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B11-5 11.4.1 Meaning of “immovable property”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B11-5 11.4.2 Lease/Renting of vacant land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B11-5 11.4.3 Lease/Renting of Plant & machinery, permanently attached to earth. . . . . B11-5 11.4.4 When renting of immovable property is exempt . . . . . . . . . . . . . . . . . . . . B11-6 11.4.5 FAQs in relation to renting of immovable property. . . . . . . . . . . . . . . . . . B11-9 11.5 Reverse Charge – Renting by the Government. . . . . . . . . . . . . . . . . . . . . . . . . . . . . B11-11 11.6 Place of supply (POS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B11-12 11.7 Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B11-12 11.7.1 Whether a person is liable for registration in every such state where he has leased property? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B11-12 11.7.2 FAQ in respect of registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B11-14 11.8 Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B11-15 Chapter B-12 Lease & Rental services [HSN 9966 & 9973]. . . . . . . . . . . . . . . . . . . . . . . . B12-1 12.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B12-1

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12.2 12.3

Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B12-6 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B12-8 12.3.1 Meaning of “information technology software” [Para 4(v) of the Notification no. 11/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . B12-8 12.3.2 Meaning of “aircraft” [Para 2(f) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . B12-9 12.3.3 Meaning of “goods” [Sec 2(52) of the GST Act]. . . . . . . . . . . . . . . . . . . . B12-9 12.3.4 Meaning of “money” [Sec 2(75) of the GST Act] . . . . . . . . . . . . . . . . . . . B12-9 12.4 Taxability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B12-9 12.4.1 Temporary or permanent transfer or permitting the use or enjoyment of Intellectual Property (IP) right in respect of goods [Clause (i) and (ii) of entry no. 17]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B12-9 12.4.2 Meaning of the term “intellectual property right” . . . . . . . . . . . . . . . . . . B12-10 12.4.3 Would sale of pre-packaged or canned software be included in this entry?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B12-10 12.4.4 Is onsite development of software covered under this entry?. . . . . . . . . . B12-10 12.4.5 Customized development of software – Delivery to the client on media like a CD – Applicability of the TCS Judgment . . . . . . . . . . . . . . B12-11 12.4.6 ‘Lease’ v. ‘Rental’ v. ‘License’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B12-11 12.4.7 Transfer of right to use goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B12-11 12.4.8 Rate of compensation cess - Same rate of tax as on supply of like goods involving transfer of title in goods . . . . . . . . . . . . . . . . . . . . . B12-13 12.4.9 Exemption to hiring of motor vehicle. . . . . . . . . . . . . . . . . . . . . . . . . . . . B12-14 12.4.10 Transfer of copyright for exhibition of movies in Theatre or television. . B12-14 12.4.11 Overlapping in sub-clauses of entry no. 17 . . . . . . . . . . . . . . . . . . . . . . . B12-15 12.4.12 Overlapping in sub-clauses of entry no. 17 and 8/10–Lease of vehicle. . B12-15 12.4.13 Lease of self-propelled access equipment (Boom Scissors/Telehandlers). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B12-16 12.4.14 Motor vehicles purchased and leased before 1 July 2017. . . . . . . . . . . . . B12-17 12.5 Place of supply (POS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B12-17 12.6 Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B12-18 Chapter B-13 Legal services by the Advocates and the Arbitral Tribunal [HSN 9982]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.3.1 Meaning of “advocate” [Para 2(b) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . 13.3.2 Meaning of “senior advocate” [Para 2(zzd) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . 13.3.3 Meaning of “legal service” [Para 2(zm) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . .

B13-1 B13-1 B13-2 B13-2 B13-2 B13-3 B13-3 xxxix

Guide to GST on Services (HSN Code wise taxability of all services)

13.3.4

Meaning of “arbitral tribunal” [Para 2(i) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . 13.3.5 Meaning of “business entity” [Para 2(n) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . 13.4 Applicability of Reverse Charge under sec 9(3) of the GST Act and 5(3) of the IGST Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.5 Taxability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.6 Place of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.7 Exemption from registration under section 23. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.8 Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

B13-3 B13-3 B13-3 B13-5 B13-7 B13-8 B13-8

Chapter B-14 Professional, advertising, accounting, auditing and consultancy services [HSN 9982, 9983]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . B14-1 14.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B14-1 14.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B14-3 14.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B14-6 14.3.1 Terms not defined – Definitions picked up from erstwhile section 65 of the Finance Act, 1994 [up to 30.06.2012]. . . . . . . . . . . . . . . . . B14-6 14.4 Taxability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B14-8 14.4.1 Scope and rate of tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B14-8 14.5 Reverse Charge – Sponsorship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B14-8 14.6 Place of supply (POS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B14-9 14.7 Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B14-10 Chapter B-15 Advertising Services [HSN 9983]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.3.1 Meaning of “advertisement” [Para 2(a) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . 15.3.2 Meaning of “print media” [Para 2(zt) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . 15.3.3 Terms not defined – Definitions picked up from erstwhile section 65 of the Finance Act, 1994 [up to 30.06.2012]. . . . . . . . . . . . . . . 15.4 Taxability and scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.4.1 Scope of the advertisement service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Case Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.4.2 Production of TV Serials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.4.3 Printing, display/distribution of banners. . . . . . . . . . . . . . . . . . . . . . . . . . . Manufacturing sign boards, labels, stickers etc. by a manufacturer. . . . . . 15.4.4 Impact on taxability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.4.5 Services provided as principal vs. agent. . . . . . . . . . . . . . . . . . . . . . . . . . . 15.5 Advertisement services to Government, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

B15-1 B15-1 B15-1 B15-2 B15-2 B15-2 B15-2 B15-3 B15-3 B15-3 B15-4 B15-4 B15-4 B15-4 B15-5 B15-5

15.6 15.7

Table of contents

Place of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B15-14 Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B15-15

Chapter B-16 Telecommunication, Broadcasting and Information Supply [HSN 9984]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B16-1 16.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B16-1 16.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B16-1 16.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B16-3 16.3.1 Meaning of “telecommunication service” [Sec 2(110) of the GST Act]. . . . . B16-3 16.3.2 Meaning of “Online information and database access or retrieval services” [Para 2(zr) of the Notification No.12/2017-CT (Rate), dated 28 June 2017] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B16-3 16.3.3 Meaning of “non-taxable online recipient” [Sec 2(16) of the IGST Act]. . . . B16-3 16.3.4 Terms not defined – Definitions picked up from erstwhile section 65 of the Finance Act, 1994 [up to 30.06.2012]. . . . . . . . . . . . . . . B16-4 16.4 Taxability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B16-6 16.4.1 Taxability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B16-6 16.4.2 Telephony and other telecommunications services. . . . . . . . . . . . . . . . . . . B16-6 16.4.3 Internet telecommunications services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . B16-7 16.4.4 Rental charged by the Telecom service providers. . . . . . . . . . . . . . . . . . . B16-7 16.4.5 International in-bound roaming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B16-7 16.4.6 Inter-connect usage charges (IUC). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B16-8 16.4.7 Prepaid vouchers distribution network. . . . . . . . . . . . . . . . . . . . . . . . . . . . B16-8 16.4.8 Spectrum License Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B16-9 16.4.9 News agency services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B16-9 16.4.10 Broadcasting on television. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B16-10 16.5 Special provision for payment of tax by a supplier of online information and database access or retrieval services (OIDAR) located outside India to specified person in the taxable territory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B16-10 16.5.1 Applicability of the provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B16-10 16.5.2 Meaning of “online information and database access or retrieval services” [Sec 2(17) of the IGST Act] . . . . . . . . . . . . . . . . . . . . . . . . . . . B16-10 16.5.3 Who is responsible for payment of tax and role of an intermediary who arranges the services? . . . . . . . . . . . . . . . . . . . . . . . . . B16-13 16.5.4 Registration, payment of tax and filing of returns . . . . . . . . . . . . . . . . . . B16-14 16.6 Place of supply (POS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B16-14 16.7 Issuance of invoice – Special Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B16-17 16.8 Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B16-17 Chapter B-17 Support services [HSN 9985, 9986]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

B17-1 B17-1 B17-7 B17-9

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Guide to GST on Services (HSN Code wise taxability of all services)

17.3.1 17.3.2

Meaning of “goods” [Sec 2(52) of the GST Act]. . . . . . . . . . . . . . . . . . . . B17-9 Meaning of “intermediary” [Para 2(zl) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . B17-9 17.3.3 Meaning of “agricultural produce” [Para 2(d) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . B17-10 17.3.4 Meaning of “agricultural produce marketing committee or board” [Para 2(e) of Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B17-10 17.3.5 Terms not defined –Definations picked up from erstwhile section 65 of the Finance Act, 1994 [up to 30.06.2012] for reference. . . . . . . . . B17-10 17.4 Taxability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B17-12 17.4.1 Taxability and scope. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B17-12 17.4.2 Loading, unloading packing, storage or warehousing of agricultural produce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B17-12 17.4.3 Packaging service – HSN 99854. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B17-13 17.4.4 Events, exhibitions, conventions and trade shows organisation and assistance services – HSN 998596. . . . . . . . . . . . . . . . . . . . . . . . . . . B17-13 17.4.5 Custom milling of paddy – Intermediate process. . . . . . . . . . . . . . . . . . . B17-14 17.4.6 Support Services provided by the electricity distribution companies [HSN 99863]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B17-15 17.4.7 Taxability of Cost Petroleum - Clarification. . . . . . . . . . . . . . . . . . . . . . . B17-15 17.5 Place of supply (POS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B17-16 17.6 Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B17-17 Chapter B-18 Maintenance, repair and installation services [HSN 9987] . . . . . . . . . . . 18.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.3.1 Meaning of “goods” [Sec 2(52) of the GST Act]. . . . . . . . . . . . . . . . . . . . 18.4 Taxability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.4.1 Scope of HSN 9987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.4.2 Rate of tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.4.3 Meaning of ‘repair’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.4.4 Meaning of ‘maintenance’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.4.5 Annual Maintenance Contracts (AMC) . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.4.6 Installation service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.4.7 Free Servicing – Payment received from manufacturer/supplier. . . . . . . . 18.4.8 Can the person, installing or repairing goods, use his own material?. . . . . 18.4.9 Repair service involving substantial goods. . . . . . . . . . . . . . . . . . . . . . . . 18.4.10 Composite transaction of supply of goods and installation thereof. . . . . . 18.4.11 Clarification in respect of activity of bus body building. . . . . . . . . . . . . . 18.4.12 Clarification in respect of activity of tyre retreading . . . . . . . . . . . . . . . . .

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B18-1 B18-1 B18-2 B18-3 B18-3 B18-3 B18-3 B18-4 B18-4 B18-5 B18-5 B18-5 B18-6 B18-6 B18-6 B18-6 B18-7 B18-7

Table of contents

18.4.13

18.5 18.6 18.7

Clarification on Inter-state movement of various modes of conveyance, carrying goods or passengers or for repairs and maintenance. . . . B18-7 18.4.14 Clarification on Inter-state movement of rigs, tools and spares, and all goods on wheels (like cranes). . . . . . . . . . . . . . . . . . . . . . . . . . . . . B18-8 Place of supply (POS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B18-9 Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B18-9 Controversial issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B18-11

Chapter B-19 Job work, Printing and Manufacturing services [HSN 9988, 9989] . . . . B19-1 19.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B19-1 19.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B19-4 19.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B19-6 19.3.1 Meaning of “goods” [Sec 2(52) of the GST Act] . . . . . . . . . . . . . . . . . . . B19-6 19.3.2 Meaning of “job work” [Sec 2(68) of the GST Act] . . . . . . . . . . . . . . . . . B19-6 19.3.3 Meaning of “manufacture” [Sec 2(72) of the GST Act] . . . . . . . . . . . . . . B19-6 19.4 Taxability of job work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B19-6 19.4.1 Meaning of treatment or process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B19-7 19.4.2 Can the person also use his own goods during the process? . . . . . . . . . . . B19-7 Circular no. 38/12/2018-GST dated 26 March 2018 (Para 5) . . . . . . . . . . B19-7 19.4.3 Contract manufacturing/Support manufacturing . . . . . . . . . . . . . . . . . . . . B19-8 19.4.4 Clarification in respect of printing contracts . . . . . . . . . . . . . . . . . . . . . . . B19-9 19.4.5 Printing contracts and printing job work – To summarize . . . . . . . . . . . . . B19-9 19.4.6 Rates of tax on job works other than in relation to printing . . . . . . . . . . B19-10 19.4.7 Circular no. 27/01/2018-GST dated 4 Jan. 2018 – Publishing of books. . . . B19-11 19.4.8 Other clarifications by the CBEC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B19-11 19.5 Privileges available to the principal in respect of supply of goods for job work and restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B19-13 19.5.1 Facilities to the principal and the job worker. . . . . . . . . . . . . . . . . . . . . . B19-13 19.5.2 Input tax credit on inputs and capital goods sent for job work [Sec 19] . . . . B19-14 19.5.3 Special procedure for removal of goods under sec 143. . . . . . . . . . . . . . B19-15 19.5.4 Supply of goods by the principal from the place of job worker. . . . . . . . B19-16 19.5.5 Manner of dispatch and return prescribed in rule 45 of the GST Rules. . . . . B19-16 19.5.6 Supply of waste or scrap. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B19-17 19.5.7 Documents for movement of goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . B19-17 19.5.8 Liability to issue invoice, determination of place of supply and payment of GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B19-18 19.5.9 Availability of input tax credit to the principal and job worker. . . . . . . . B19-20 19.6 Registration by the Job-worker. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B19-20 19.6.1 Whether a job-worker is required to obtain registration?. . . . . . . . . . . . . B19-20 19.6.2 Whether goods, directly supplied from the job-worker’s premises, will be included in the aggregate turnover of job worker?. . . . B19-21 19.6.3 If the principal and job-worker are located in difference states, will the service by job-worker be treated as inter-state supply? What is the threshold limit for registration?. . . . . . . . . . . . . . . . . . . . . . . B19-21 xliii

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19.7 19.8 19.9

Place of supply (POS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B19-22 Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B19-22 Controversial issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B19-23

Chapter B-20 Public administration and social security services [HSN 9991]. . . . . . . 20.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.3.1 Meaning of “Government”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.3.2 Meaning of “Local Authority” [Sec 2(69) of the GST Act]. . . . . . . . . . . . 20.3.3 Meaning of “State” [Sec 2(103) of the CGST Act] . . . . . . . . . . . . . . . . . . 20.3.4 Meaning of “Union Territory” [Sec 2(114) of the GST Act] . . . . . . . . . . . 20.3.5 Meaning of “Business Entity” [Para 2(n) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . 20.4 Taxability and Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.4.1 Taxability and scope of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.5 Applicability of Reverse Charge under sec 9(3) of the GST Act and 5(3) of the IGST Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.6 Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chapter B-21 Education service [HSN 9992]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.3.1 Meaning of “educational institution” [Para 2(y) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . 21.3.2 Meaning of “approved vocational education course” [Para 2(h) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . 21.3.3 Meaning of “charitable activities” [Para 2(r) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . 21.4 Taxability of Output Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.4.1 Meaning of the term “education”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.4.2 Pre-school education and education up to higher secondary school or equivalent - clause (i) of Para 2(y). . . . . . . . . . . . . . . . . . . . . . . 21.4.3 Meaning of the term ‘education as a part of curriculum for obtaining a qualification recognized by any law’ in clause (ii) of Para 2(y). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.4.4 Meaning of the term ‘education as a part of an approved vocational education course’ in clause (iii) of Para 2(y). . . . . . . . . . . . . . . 21.4.5 Entrance exam fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.4.6 Lodging/boarding in hostels provided by educational institutions. . . . . . . 21.4.7 GST on college hostel mess fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.4.8 Educational Institutions run by charitable organizations. . . . . . . . . . . . . .

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B20-1 B20-1 B20-4 B20-5 B20-5 B20-5 B20-6 B20-6 B20-6 B20-6 B20-6 B20-7 B20-7 B21-1 B21-1 B21-4 B21-5 B21-5 B21-6 B21-6 B21-6 B21-6 B21-7

B21-7 B21-8 B21-8 B21-8 B21-9 B21-9

21.5

21.6

21.7

Table of contents

21.4.9 Virtual online distant teaching from foreign country – OIDAR Services. . . . B21-9 21.4.10 Franchisee/Joint Venture agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . B21-10 21.4.11 Composite and Mixed Supply in relation to education service . . . . . . . . B21-11 21.4.12 Taxability of other services in relation to education. . . . . . . . . . . . . . . . . B21-12 Taxability of Input Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B21-13 21.5.1 Exemption to input services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B21-13 21.5.2 Taxable input services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B21-14 Place of supply of education services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B21-15 21.6.1 If location of education institution and students are in India. . . . . . . . . . B21-15 21.6.2 If education institution or the student is located outside India. . . . . . . . . B21-15 Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B21-16

Chapter B-22 Medical, Health care and Social care service [HSN 9983, 9993] . . . . . . . B22-1 22.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B22-1 22.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B22-2 22.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B22-3 22.3.1 Meaning of “clinical establishment” [Para 2(s) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . B22-3 22.3.2 Meaning of “health care services” [Para 2(zg) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . B22-3 22.3.3 Meaning of “authorised medical practitioner” [Para 2(k) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . B22-3 22.4 Taxability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B22-4 22.4.1 Scope of taxability and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B22-4 22.4.2 Inclusion and exclusions in the term “healthcare services”. . . . . . . . . . . . B22-4 22.4.3 Meaning of clinical establishment [2(s) of the notification]. . . . . . . . . . . . B22-7 22.4.4 Meaning of the term “para-medics” in entry no. 74 of the exemption notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B22-8 22.4.5 Meaning of the term “recognized system of medicines” [used in the definitions of “Clinical Establishment” and “authorised medical practitioner”]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B22-8 22.4.6 Services provided by cord blood banks . . . . . . . . . . . . . . . . . . . . . . . . . . . B22-8 22.4.7 Sharing of infrastructure by hospitals with the doctors . . . . . . . . . . . . . . . B22-9 22.4.8 Hospital managed by charitable trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . B22-9 22.4.9 Franchisee/Joint Venture agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B22-9 22.4.10 Composite services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B22-10 22.4.11 Social care services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B22-14 22.5 Place of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B22-15 22.6 Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B22-15 Chapter B-23 Charitable, Religious and similar Services by Trusts, Associations, etc [HSN 9993, 9995, 9999, etc]. . . . . . . . . . . . . . . . . . . . . . . B23-1 23.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B23-1 23.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B23-3 xlv

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23.3

23.4

23.5 23.6

23.7 23.8

xlvi

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B23-5 23.3.1 Meaning of “person” [Sec 2(84) of the GST Act] . . . . . . . . . . . . . . . . . . . B23-5 23.3.2 Meaning of “business” [Sec 2(17) of the GST Act]. . . . . . . . . . . . . . . . . . B23-6 23.3.3 Supply of goods by any unincorporated association to its member [Clause 7 of Schedule II of the GST Act]. . . . . . . . . . . . . . . . . . . B23-6 23.3.4 Meaning of “charitable activities” [Para 2(r) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . B23-6 23.3.5 Meaning of “religious place” [Para 2(zy) of the Notification No.12/2017-CT (Rate), dated 28 June 2017. . . . . . . . . . . . . . . . . . . . . . . . B23-7 23.3.6 Meaning of “trade union” [Para 2(zzn) of the Notification No.12/2017-CT (Rate), dated 28 June 2017. . . . . . . . . . . . . . . . . . . . . . . . B23-7 23.3.7 Meaning of “general public” [Para 2(zc) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . B23-7 Taxability of Charitable Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B23-7 23.4.1 Meaning of ‘Charity’ and ‘Charitable’. . . . . . . . . . . . . . . . . . . . . . . . . . . . B23-7 23.4.2 Whether all services provided by an entity registered under sec 12AA of the Income Tax Act, 1961 are exempt?. . . . . . . . . . . . . . . . . B23-7 23.4.3 Donations and grants-in-aid to a charitable organization. . . . . . . . . . . . . . B23-8 23.4.4 Renting out of religious precincts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B23-9 Religious ceremony . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B23-9 General public. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B23-10 Religious place. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B23-10 23.4.5 Training or coaching in recreational activities. . . . . . . . . . . . . . . . . . . . . B23-10 23.4.6 Management of educational institutions by charitable trusts. . . . . . . . . . B23-11 23.4.7 Rental receipts from commercial property. . . . . . . . . . . . . . . . . . . . . . . . B23-11 23.4.8 Arranging yoga and meditation camp by charitable trusts. . . . . . . . . . . . B23-11 23.4.9 Hospital managed by charitable trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . B23-12 23.4.10 Running of public libraries by charitable trusts. . . . . . . . . . . . . . . . . . . . B23-12 23.4.11 Selling of space for advertisement in print media . . . . . . . . . . . . . . . . . . B23-13 23.4.12 Import of Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B23-13 23.4.13 GST on supply of goods by Charitable Trusts . . . . . . . . . . . . . . . . . . . . . B23-13 Taxability of Industry/Trade Associations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B23-13 Taxability of Associations and Societies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B23-14 23.6.1 Associations of persons (AOP) vs. Body of Individuals (BOI). . . . . . . . B23-14 23.6.2 Exemption to the associations and societies. . . . . . . . . . . . . . . . . . . . . . . B23-14 23.6.3 Collection of construction money by housing co-op societies from the members. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B23-15 23.6.4 Collection of various charges – whether exempt . . . . . . . . . . . . . . . . . . . B23-15 23.6.5 Interest earned by the society on deposits made by members . . . . . . . . . B23-16 23.6.6 Other services provided by associations. . . . . . . . . . . . . . . . . . . . . . . . . . B23-16 Place of supply of various activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B23-17 Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B23-17

Table of contents

Chapter B-24 Recreational, cultural and sporting, domestic and other services [HSN 9996 to 9998]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B24-1 24.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B24-1 24.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B24-3 24.3 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B24-6 24.3.1 Terms not defined – Definitions picked up from erstwhile section 65 of the Finance Act [up to 30.06.2012]. . . . . . . . . . . . . . . . . . . . B24-6 24.4 Taxability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B24-6 24.4.1 Taxability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B24-6 24.4.2 What is the entertainment event?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B24-7 24.4.3 What is the amusement facility?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B24-7 24.4.4 If a cultural programme, drama or a ballet is held in an open garden and not in a theatre, would it qualify as an entertainment event?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B24-7 24.4.5 Would standalone ride set up in a mall qualify as an amusement facility?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B24-7 24.4.6 Would entry to video parlors exhibiting movies played on a DVD player and displayed through a TV screen be covered in the entry?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B24-7 24.4.7 Elephant or camel ride, rickshaw ride and boat ride. . . . . . . . . . . . . . . . . . B24-8 24.4.8 Services by author – HSN 99963. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B24-8 24.4.9 Taxability of movie ticket. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B24-9 24.4.10 Taxability of film artists or music composer. . . . . . . . . . . . . . . . . . . . . . . B24-10 24.4.11 Lottery, betting, gambling and horse-race . . . . . . . . . . . . . . . . . . . . . . . . B24-10 24.4.12 Bit-coin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B24-14 24.5 Place of supply (POS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B24-14 24.6 Miscellaneous matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B24-16 Chapter B-25 Other services [HSN 9969, 9981, 9994, 9999]. . . . . . . . . . . . . . . . . . . . . . . . B25-1 25.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B25-1 25.2 Classification of services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B25-3 25.3 Electricity, gas, water & other distribution Service. . . . . . . . . . . . . . . . . . . . . . . . . . . B25-5 25.3.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B25-5 25.3.2 Whether electricity is goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B25-5 25.3.3 Taxability of electricity under the GST Act . . . . . . . . . . . . . . . . . . . . . . . . B25-6 25.3.4 Meaning and scope of electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B25-6 25.3.5 Other services provided by the electricity distribution companies. . . . . . . B25-7 25.3.6 Impact on industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B25-7 25.4 Transfer of business as a going concern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B25-8 25.4.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B25-8 25.4.2 Judicial pronouncements under the erstwhile VAT/CST Act in respect of sale of business as a going concern. . . . . . . . . . . . . . . . . . . . . . B25-9 25.4.3 Sale of business as a going concern in GST. . . . . . . . . . . . . . . . . . . . . . . B25-11 xlvii

Guide to GST on Services (HSN Code wise taxability of all services)

25.5

25.6

Research and development services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.5.1 Meaning of “incubatee” [Para 2(zh) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . 25.5.2 Taxability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sewage and waste collection services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.6.1 Taxability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.6.2 Services by the Government and local authority . . . . . . . . . . . . . . . . . . .

B25-13 B25-13 B25-13 B25-13 B25-13 B25-14

Chapter B-26 Exempt Services by and to the Government, Local Authorities, etc . . . B26-1 26.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B26-1 26.1.1 Exempt service by the Government etc . . . . . . . . . . . . . . . . . . . . . . . . . . . B26-1 26.1.2 Exempt service to the Government, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . B26-6 26.2 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B26-8 26.2.1 Meaning of “Government”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B26-8 26.2.2 Meaning of “Local Authority” [Sec 2(69) of the GST Act]. . . . . . . . . . . . B26-8 26.2.3 Meaning of “State” [Sec 2(103) of the CGST Act] . . . . . . . . . . . . . . . . . . B26-8 26.2.4 Meaning of “Union Territory” [Sec 2(114) of the GST Act] . . . . . . . . . . . B26-9 26.2.5 Meaning of “Governmental Authority” [Para 2(zf) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . B26-9 26.2.6 Meaning of “Governmental Entity” [Para 2(zfa) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . B26-9 26.2.7 Meaning of “Business Entity” [Para 2(n) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . B26-9 26.3 Taxability and Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B26-10 26.3.1 Meaning of Government. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B26-10 26.3.2 Meaning of “Local Authority” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B26-10 26.3.3 Functions entrusted to a Municipality under article 243W of the Constitution – Exempt from GST (Sl. No. 4 of the Notification). . . . . . . B26-11 26.3.4 Local bodies constituted by a state or central law – Whether Local Authorities?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B26-11 26.3.5 Various regulatory bodies formed by the government - Whether ‘Government’? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B26-12 26.3.6 Statutory body, corporation or an authority constituted under an Act passed by the Parliament or any of the State Legislatures Whether ‘Government’ or “Local Authority”?. . . . . . . . . . . . . . . . . . . . . B26-12 26.3.7 Property tax and water tax collected by Municipal Corporation . . . . . . . B26-12 26.3.8 Are all services provided by the Government or Local Authority exempted from payment of tax?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B26-13 26.3.9 What are the transport services provided by the Government or Local Authorities exempt from tax?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . B26-13 26.3.10 Taxability of services provided to individuals (other than business entity). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B26-14 26.3.11 Exempt services by the Government to business entities – At a glance. . B26-14 xlviii

Table of contents

26.3.12 26.3.13

26.4

GST on taxes, cesses or duties – Whether leviable. . . . . . . . . . . . . . . . . . Applicability of GST on services provided in lieu of fee charged by Government or a local authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.3.14 GST on liquor license fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.3.15 Services in the nature of change of land use, commercial building approval, utility services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.3.16 Services provided by police, fire and rescue services or security agencies of Government to PSUs or corporate entities or sports events held by private entities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.3.17 Guarantee provided by State Government. . . . . . . . . . . . . . . . . . . . . . . . 26.3.18 Assignment of right to use any natural resource. . . . . . . . . . . . . . . . . . . . 26.3.19 The Department of Posts provides a number of services. What is the status of those services for the purpose of levy of tax? . . . . . . . . . . . 26.3.20 Services provided by Government or a Local Authority by way of tolerating non-performance of a contract for which consideration in the form of fines or liquidated damages is payable. . . . 26.3.21 Fines and penalty imposed by Government or a Local Authority for violation of a statute, bye-laws, rules or regulations. . . . . . . . . . . . . . 26.3.22 Services in relation to nominee-director. . . . . . . . . . . . . . . . . . . . . . . . . . 26.3.23 Services by any Court or Tribunal established under any law Neither as a supply of goods nor a supply of services – Entry no. 2 of Sch. III. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reverse Charge – Services by Government. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.4.1 Scope of the reverse charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.4.2 What is the scope of agency services provided by the Department of Posts mentioned in the notification no. 12/2017 dated 28.06.2017?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.4.3 What is the GST rate of tender submission fees collected by the department while submission of e-tender?. . . . . . . . . . . . . . . . . . . . . . . .

B26-16 B26-16 B26-17 B26-17

B26-17 B26-18 B26-18 B26-19

B26-19 B26-20 B26-20

B26-20 B26-22 B26-22

B26-23 B26-24

Chapter B-27 Services relating to Agriculture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.1 Rates of tax and exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.2 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.2.1 Meaning of “goods” [Sec 2(52) of the GST Act]. . . . . . . . . . . . . . . . . . . . 27.2.2 Meaning of “intermediary” [Para 2(zl) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . 27.2.3 Meaning of “agricultural produce” [Para 2(d) of the Notification No.12/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . . . . . . . . . . . 27.2.4 Meaning of “agricultural extension” [Para 4(vi) of the Notification No.11/2017-CT (Rate), dated 28 June 2017]. . . . . . . . . . . . . 27.2.5 Meaning of “agricultural produce marketing committee or board” [Para 2(e) of the Notification No.12/2017-CT (Rate), dated 28 June 2017] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.2.6 Meaning of “agriculturalist” [Section 2(7) of the GST Act]. . . . . . . . . . . .

B27-1 B27-1 B27-5 B27-5 B27-5 B27-6 B27-6

B27-6 B27-6 xlix

Guide to GST on Services (HSN Code wise taxability of all services)

27.3

Exemption to Agriculture Produce under the GST . . . . . . . . . . . . . . . . . . . . . . . . . . . B27-6 27.3.1 Agriculture produce marketing system in India. . . . . . . . . . . . . . . . . . . . . B27-6 27.3.2 Meaning of the term ‘agriculture’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B27-7 27.3.3 Exempt support services relating to agriculture, forestry, fishing and animal husbandry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B27-7 27.3.3.1 Meaning of “agricultural produce” . . . . . . . . . . . . . . . . . . . . . . B27-8 27.3.3.2 Agricultural operations including …. testing [sub-clause (a)]. . . B27-10 27.3.3.3 Agricultural processes [sub-clause (c)]. . . . . . . . . . . . . . . . . . B27-10 27.3.3.4 Would leasing of vacant land with a green house or a storage shed meant for agricultural produce be covered in sub-clause (d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . B27-11 27.3.3.5 Storage or warehousing of agricultural produce [subclause (e)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B27-11 27.3.3.6 Meaning of “agricultural extension” [sub-clause (f)] . . . . . . . B27-11 27.3.3.7 What are the services referred to in the negative list entry pertaining to Agricultural Produce Marketing Committee or Board?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B27-12 27.3.4 Transportation of agriculture produce and foodgrain [Entry 21 of the Notification No. 12/2017-CT (Rate), dated 28 June 2017]. . . . . . B27-12 27.3.5 Services relating to fruits or vegetables [Entry 24(ii)]. . . . . . . . . . . . . . B27-12 27.3.6 Custom milling of paddy – Intermediate process [Entry 24(iii)]. . . . . . . B27-13 27.3.7 Construction, erection, commissioning, or installation of original works pertaining to mechanized food grain handling system [Entry 3(v)(f)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B27-13 27.3.8 Processes on fruits and vegetables [Entry 24(ii)]. . . . . . . . . . . . . . . . . . . B27-14 27.3.9 Weighment charges (Dharam Kanta) . . . . . . . . . . . . . . . . . . . . . . . . . . . . B27-14 27.4 Agriculturist. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B27-14 PART C

LEGISLATION Chapter C-1

Central Goods and Services Tax Act, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C1-1

Chapter C-2

Central Goods and Services Tax Rules, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . C2-1

Chapter C-3

Integrated Goods and Services Tax Act, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . C3-1

Chapter C-4

Integrated Goods and Services Tax Rules, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . C4-1

Chapter C-5

GST Rates on Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C5-1

Chapter C-6

Exemptions in the GST – Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C6-1

Chapter C-7

Compensation Cess Rates and Exemption on Services. . . . . . . . . . . . . . . . . . . . . C7-1

Chapter C-8

Scheme of Classification of Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C8-1

Part A Concepts of GST (Services)

Chapter A-1 Chapter A-2 Chapter A-3 Chapter A-4 Chapter A-5 Chapter A-6 Chapter A-7 Chapter A-8 Chapter A-9 Chapter A-10 Chapter A-11 Chapter A-12 Chapter A-13 Chapter A-14 Chapter A-15 Chapter A-16 Chapter A-17 Chapter A-18 Chapter A-19 Chapter A-20

Preamble........................................................................................................... A1-1 Meaning of Service and key definitions ........................................................... A2-1 Supply – Meaning and Scope ........................................................................... A3-1 Time of supply of services ............................................................................... A4-1 Value of supply of services .............................................................................. A5-1 Place of supply of services – Inter-state supply and Intra-state supply ............ A6-1 Levy, Rates and Exemptions ............................................................................ A7-1 Reverse Charge and Deemed Supplier ............................................................. A8-1 Composition levy ............................................................................................. A9-1 Input tax credit ............................................................................................... A10-1 Input service distributor ................................................................................. A11-1 Imports, zero-rated supplies and export of services ....................................... A12-1 Registration, Amendment and Cancellation ................................................... A13-1 Casual Taxable Person & Non-resident Taxable Person ................................ A14-1 Job work ......................................................................................................... A15-1 E-commerce, TCS & supply of online data– Special provisions ................... A16-1 Tax deduction at source.................................................................................. A17-1 Invoice, Accounts and Records ...................................................................... A18-1 Refund ............................................................................................................ A19-1 Interest, penalties and offences ...................................................................... A20-1

Chapter A-1

Preamble

Basic aim of this book is to understand and discuss, in length, the concepts and implication in respect of taxability of GST on the services. Nevertheless, no service can be envisaged without the involvement of goods. Even a doctor or an advocate requires piece of paper to give prescription or opinion. Works contract and catering activities, which involves substantial amount of goods, have been considered as services under the GST. Therefore, even while discussing services, taxability on goods cannot be completely ignored. Thus, this Book focuses the discussion on taxability of output services; and the inputs (goods) and/or input services qua service providers. This Guide has been compiled keeping in mind the CGST Act and the IGST Act. The relevant provisions under the State / Union Territory Laws are similar to that of the CGST Act; hence, entire discussion would be equally applicable to the State GST and UT GST also. Further, this Book has dealt the concepts and principles, involved in taxation of services in the GST; thus procedural aspects in relation to filing of various returns, forms and due dates have not been dealt with in this Book. Wherever GST Acts are silent either on definition of services or clarifications on the taxability, effort has been made to look into the erstwhile Service Tax under the Finance Act, 1994 for reference. Similarly, Education Guide on Service Tax released on June 20, 2012 has also been referred to locate the answers of the questions being faced by the taxpayers under the GST regime.

1.1 (i)

Brief Introduction

Under the erstwhile indirect structure in India, there was a dual system of taxation of goods and services: by the Union as well as the State. Taxes on goods were described as â&#x20AC;&#x153;VATâ&#x20AC;? at both central and state level. It had adopted value added tax principle with input tax credit mechanism for taxation of goods and services, respectively, with limited cross-levy set-off. Inter-state sales were taxable under the Central Sales Tax Act, 1956. Until the introduction of MODVAT Scheme in 1986 under the central excise duty, duty was levied as origin based single point taxation system on manufacture of goods with some exceptions where set off scheme was used to reduce cascading effect of taxes. Import of goods was subject to Customs duties, which was primarily of three types: (a) Basic Customs Duty (levied under sec 12 of the Customs Act, 1962); (b) Additional Customs Duty/Countervailing Duty (CVD) under sections 3(1) and 3(3) of the Customs Tariff Act, in lieu of excise duty, now subsumed under GST; A1-1

Guide to GST on Services (HSN Code wise taxability of all services)

(c)

(ii)

Chapter A-1

Special Additional Duty of Customs (SAD) under sec 3(5) of the Customs Tariff Act, now subsumed under GST, to counter-balance the sales tax, value added tax, local tax or any other charges for the time being leviable on a like article on its sale, purchase or transportation in India to bring manufactured products in India at par with the imported goods.

Services currently contribute more than 57 per cent of the GDP of India. Service tax was first imposed in India in the year 1994 with three services through Chapter V of the Finance Act, 1994. More and more services were brought into the tax-net. Since, there was no separate legislation for imposition of service tax in India, it was governed and administered by the Finance Act, 1994. The tax was administered by the Central Government under the authority of Residual Entry 97 of the Union List (List I) under Sch VII of the Constitution of India. Up till 30 June 2012, service tax was levied on specified services by the Central Government, commonly known as positive regime. With effect from 1 July 2012, negative regime was brought in, whereby all the services were considered as taxable services, except services specifically excluded or exempted under the Act.

(iii)

Double taxed activities: These are those activities, which, due to definition in the respective law or ambiguity, invited double taxation on the total value of the transaction: both as sale and service. For example, sale of software along with license to use was subjected to VAT as well as service tax.

(iv)

Tax on overlapping value of service â&#x20AC;&#x201C; These are those activities, where part of the value was subject to VAT and part was subject to service tax. However in this process, due to overlapping, the person used to pay tax on more than 100% of the consideration/taxable value. For example, supply of food and beverage was liable to VAT on the entire value paid by customer, and at the same time, service tax was leviable on 40% of the same value. Similarly, works contracts were liable to VAT on 65% to 75% of the contract value; and service tax was liable on 40 to 60% of the said contract value.

(v)

GST has subsumed various Central indirect taxes and levies, such as, Central Excise Duty, Additional Excise Duties, Excise Duty levied under the Medicinal and Toilet Preparations (Excise Duties) Act, Service Tax, Additional Customs Duty (CVD), Special Additional Duty of Customs (SAD), and Central Surcharges & Cesses relatable to supply of goods and services. It has also subsumed State VAT/Sales Tax, Entertainment Tax (other than the tax levied by the local bodies), Central Sales Tax (levied by the Centre and collected by the States), Octroi and Entry tax, Purchase Tax, Luxury tax, Taxes on Lottery, Betting and Gambling; and State cesses and surcharges in so far as they relate to supply of goods and services. Under the GST, in lieu of CVD and SAD, the IGST would be levied on import of goods, and shall be available as input tax credit for further transactions. However, BCD shall be continued and levied in the present manner.

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Chapter A-1

Preamble

1.2

Goods and Services Tax (GST)

(i)

The term “GST” stands for “Goods and Services Tax”, which is a comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at the national level.

(ii)

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. GST facilitates seamless credit across the entire supply chain and across all states under a common tax base. The pre-GST framework allowed limited inter-levy credits between excise duty (tax on manufacture) and service tax (tax on specified services). However, no cross credits were available between the input VAT paid on the purchase of goods against the CENVAT, or vice-a-versa.

(iii)

To summarize, 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.

(iv)

The Constitutional Amendment 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. Instead of amending List I and II of the Schedule VII of the Constitution of India, Article 246A has been inserted in the Constitution to confer simultaneous power to Union and State legislatures to legislate upon the GST. Both Centre and States can simultaneously levy GST across the value chain. Parliament has exclusive powers to make laws with respect to GST where the supply of goods, or of services, takes place in the course of inter-State trade or commerce. States have powers to make laws in respect to supply of goods and/or services takes place within the State.

(v)

The Central and State GST are levied on all transactions involving intra-State supply of goods and/or services, except those which are kept out of the purview of the GST. Integrated GST would be levied on inter-State transactions of goods and/or services.

(vi)

Exports and supplies of goods and/or services to a Special Economic Zone developer or a Special Economic Zone unit have been considered as zero-rated and will be relieved of all embedded taxes and levies at both Central and State level.

(vii)

Import of goods and/or 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.

(viii)

GST Council has been empowered to examine issues relating to goods and services tax and make recommendations to the Union and the States on parameters like rates of tax, exemption list and threshold limits.

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Guide to GST on Services (HSN Code wise taxability of all services)

1.3 (i)

Chapter A-1

Services

In accordance with the Art 366(26A) of the Constitution of India, the term “services” means anything other than goods. As per the Art 366(12) of the Constitution, the term “goods” includes all materials, commodities, and articles.

(ii)

As per sec 2(102) of the GST Act, the term “services’’ means anything other than• Goods, • Money, and • Securities. The term ‘service’ has been defined in the widest sense. Everything, which is not goods, is defined as service. However, as per the definition, the term “services” includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged. Thus, exchange of currency from one form/denomination to another has been considered as service. The term “service” under the GST Act has been defined in the negative sense: which is not goods or money or securities, would be termed as “service”. Therefore, one has to first find out, whether the activity is “goods”; and if not, it would be termed as “service”. Land or completed building is neither goods nor service. As per sec 2(52) of the GST Act, the term “goods” means every kind of movable property, and includes: (i)

actionable claim;

(ii)

growing crops;

(iii)

grass; and

(iv)

things attached to or forming part of the land which are agreed to be severed before supply or under the contract of supply.

The term “goods” does not include • Securities, and • Money. Schedule II of the GST Act enumerates various circumstances when a given activity would be treated as goods or services. Sec 7(2) of the GST Act empowers the Central/State Govt., on the recommendation of GST Council, to notify certain supplies as neither supply of goods nor services. The details of such supplies have been included in Schedule III of the GST Act.

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Chapter A-1

Preamble

1.4

Ascertaining taxability of output services – Steps

Step 1

Verify whether a given activity is “goods” or “service”. Schedule II of the GST Act enumerates various circumstances when a given activity would be treated as goods or services. In case of composite supply, find out what is the “principal supply”. If it is not “goods”, then only it would be termed as “service”.

Step 2

If it is service, refer the “Scheme of Classification” [Annexure to Notification No. 11/2017-CTR dated 28 June 2017] and find out nature of service and its appropriate HSN Code. Exemption and rates of tax of services are notified with reference to a particular HSN Code

Step 3

After ascertaining the HSN Code, check whether that given service is exempt under the GST Act. Notification No. 12/2017-CTR dated 28 June 2017 (as amended from time to time through various notifications) is the main notification for ascertaining the exemption. There are few other exemption notifications.

Step 4

If given activity does not fall in the exemption Notifications, then the rate of tax on that service will be ascertained in accordance Notification No. 11/2017-CTR dated 28 June 2017 (as amended from time to time through various notifications).

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Guide to GST on Services (HSN Code wise taxability of all services)

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