Taxmann's GST Acts With Rules & Forms

S T N E T N O C E G A P

Guide to GST

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List of Forms

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DIVISION ONE Central Goods and Services Tax Act, 2017 u

Arrangement of Sections

1.3

u

Text of the Central Goods and Services Tax Act, 2017

u

Central Goods and Services Tax (Removal of Difficulties) Order, 2020 1.195

u

Appendix : Text of provisions of Allied Acts referred to in Central Goods and Services Tax Act, 2017 1.197

u

Validation Provisions

1.219

u

Subject Index

1.223

1.13

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DIVISION TWO Integrated Goods and Services Tax Act, 2017 u

Arrangement of Sections

2.3

u

Text of the Integrated Goods and Services Tax Act, 2017

2.5

u

Validation Provisions

2.35

u

Subject Index

2.39

DIVISION THREE

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Union Territory Goods and Services Tax Act, 2017 u

Arrangement of Sections

3.3 I-5

S T N E T N O C

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u u u

Text of the Union Territory Goods and Services Tax Act, 2017 Validation Provisions Subject Index

DIVISION FOUR

3.5 3.27 3.31

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Goods and Services Tax (Compensation to States) Act, 2017 u u u

Arrangement of Sections 4.3 Text of the Goods and Services Tax (Compensation to States) Act, 2017 4.5 Subject Index 4.17

DIVISION FIVE

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GST Rules and Forms u u u u u u u u u u u u u u

Central Goods & Services Tax Rules, 2017 5.3 Integrated Goods & Services Tax Rules, 2017 5.585 Goods and Services Tax Compensation Cess Rules, 2017 5.601 Union Territory Goods and Services Tax (Andaman and Nicobar Islands) Rules, 2017 5.605 Union Territory Goods and Services Tax (Chandigarh) Rules, 2017 5.609 Union Territory Goods and Services Tax (Dadra and Nagar Haveli) Rules, 2017 5.613 Union Territory Goods and Services Tax (Daman and Diu) Rules, 2017 5.617 Union Territory Goods and Services Tax (Lakshadweep) Rules, 2017 5.621 Goods and Services Tax Settlement of Funds Rules, 2017 5.625 Goods and Services Tax Appellate Tribunal (Appointment and Conditions of Service of President and Members) Rules, 2019 5.655 National Anti-Profiteering Authority : Procedure and Methodology 5.663 Tribunals Reforms Act, 2021 5.667 Conditions of Service of Chairperson and Members of Tribunals, Appellate Tribunals and other Authorities 5.686 Tribunal (Conditions of Service) Rules, 2021 5.690

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1. Object and Purpose of GST as implemented w.e.f. 1-7-2017 u Develop National Market - One Nation One Tax. u Avoid cascading effect of various indirect taxes like Central

Excise, Central Sales Tax, State Vat and Entry Tax (Octroi). u Reduce multiplicity of indirect taxes. u Reduce distinction between goods and services to avoid overlapping

of State and Central Tax on same transaction. u Remove barriers in inter-State movement of goods to reduce

wastage of truck time and wastage of man-hours at check posts.

2. Overall structure of Goods and Services Tax u Goods and Services Tax (GST) will be on ‘supply’ of goods or

services or both, in India w.e.f. 1-7-2017 (including Jammu and Kashmir w.e.f. 8-7-2017). Area upto 200 nautical miles inside sea is ‘India’ for purpose of GST.

u For supplies within the State or Union Territory - (a) Central tax

(Central GST i.e. CGST) will be payable to Central Government and (b) State tax (State GST - SGST) or Union Territory Tax (UTGST - Union Territory GST) will be payable to State Government or Union Territory (as applicable). Area upto 12 nautical miles inside sea is part of State or Union territory which is nearest.

u For inter-State supplies (supply from one State or Union Territory

to another State or Union Territory), Integrated tax (Integrated GST i.e. IGST) will be payable to Central Government. IGST is payable if supply is beyond 12 nautical miles but upto 200 nautical miles. However, there is no IGST on high seas sale i.e. sale beyond 200 nautical miles or sale before clearance of goods from customs bonded warehouse. u In addition, GST Compensation Cess will be payable on few items

like pan masala, tobacco products, coal, aerated waters and motor cars.

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u Basic customs duty, Social Welfare Cess, IGST and GST

Compensation Cess (on goods where Compensation Cess is applicable) will be payable on import of goods. u Distinction between goods and services has been reduced. This

has reduced problem of dual taxation which was faced by construction industry, works contract, food related services (like restaurants, canteens and outdoor catering), leasing and hire services and software services. u GST is based on Vat concept of allowing input tax credit of tax paid

on inputs, input services and capital goods, for payment of output tax. This will avoid cascading effect of taxes. u GST is consumption based tax i.e. normally, tax is payable in the

State where goods or services or both are finally consumed. u The rates of IGST - Nil, 0.25%, 3%, 5%, 12%, 18% and 28%. In case of

supply within State, CGST rate will be 50% of IGST Rates and SGST/ UTGST rate for supply within the State or Union Territory will be 50% of IGST rates. Thus, CGST plus SGST/UTGST rates will be equal to IGST Rate. u Though tax is payable to both Central Government and State

Government/Union Territory, control will be exercised either by State Government/Union Territory Authorities or Central Government Authorities. This will avoid dual control. u Central Excise duty will continue on petroleum products i.e.

petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel. These products are out of GST at present and may be brought under GST later. u Tobacco products will be subject to excise duty plus GST. u Alcoholic liquor will be subject to State duty. This product is out

of GST. u GST Council (Goods and Services Tax Council) is Apex

Constitutional body which will determine policies of GST. Note - The terms used in CGST, SGST, UTGST and IGST Acts are ‘Central Tax’, ‘State Tax’, ‘Union Territory Tax’ and ‘Integrated Tax’. However, generally, for sake of brevity, the terms used are CGST, SGST, UTGST and IGST respectively.

3. Changes in GST law proposed to be made by Finance Act, 2022 Nirmala Sitharaman, Minister of Finance, Government of India, presented Budget 2022-23 on 1-2-2022. Finance Bill, 2022 was also pre-

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sented. Finance Bill, 2022 was passed by Parliament and became Finance Act, 2022 on 30-3-2022, after receiving assent of President.

The proposed changes are as follows.

These are discussed at appropriate places in the book. These will be effective from date to be notified. The changes may be notified in or around December 2022 as corresponding amendments have to be made by all State Governments in their SGST Act. Non-eligibility of ITC if restricted under section 38 of CGST Act – Section 16(2)(ba) of CGST Act proposed to be inserted vide section 100(a) of Finance Act, 2022 from date to be notified, provides that ITC will be allowable only if the details of input tax credit in respect of the said supply communicated to such registered person under section 38 has not been restricted.

No ITC in respect of invoice or debit note if not taken before 30th November of following year or due date of furnishing annual return – Section 16(4) of CGST Act proposed to be amended vide section 100(b) of Finance Act, 2022 from date to be notified, provides that ITC in respect of invoice or debit note will not be available if not taken before 30th November of following year or due date of furnishing annual return, whichever is earlier.

Suo motu cancellation of registration by proper officer – Section 29(2) of CGST Act, proposed to be inserted vide section 101 of Finance Act, 2022 from date to be notified, provides that proper officer can cancel registration of registered person if (a) In case of composition dealer – if return for financial year not filed for three months beyond due date (b) In case of other dealers – if return not filed for such continuous period as may be prescribed.

Credit note with GST can be issued upto 30th November of following year – Section 34(2) of CGST Act proposed to be amended vide section 102 of Finance Act, 2022 from date to be notified, provides that Credit note with GST can be issued upto 30th November of following year [presently, it is required to be issued before September of following year].

Furnishing details of outward supplies in form GSTR-1 – Section 37 of CGST Act makes provision for furnishing details of outward supplies. This section is proposed to be amended vide section 103 of Finance Act, 2022 from date to be notified, as follows – (a) Restriction of filing details between 11 to 15 of any month has been removed (b) Provision of accepting or rejecting the details by recipient and matching have been omitted (c) GSTR-1 can be amended upto 30th November of succeeding financial year (d) GSTR-1 return for subsequent pe-

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riod cannot be filed unless return for earlier period has been filed, unless Government specifically permits.

Communication of details of inward supplies and availment on input tax credit – Section 38 of CGST Act provided for verification, validation, modification or deletion of details by recipient of goods of services, which were communicated to him. This provision has been completely revamped vide section 104 of Finance Act, 2022. Now, details of outward supplies furnished by supplier in form GSTR-1 will be made available to recipient (in form GSTR-2A and GSTR-2B). The communication will contain details of ITC that may be availed and that cannot be availed. In fact, this is provision at present also, made through rules.

However, as per section 41(1) of CGST Act, ITC shall be availed by recipient of goods and services on self assessment basis.

Furnishing of returns by registered person – Section 39 of CGST makes provisions for furnishing of returns by registered person. The changes proposed vide section 105 of Finance Act, 2022 from date to be notified are as follows – (a) due date of filing GSTR-5 return by non-resident taxable person will be 13th of following month (b) statutory provision made for payment of ‘amount’ by composition dealer in first two months of quarter (c) Returns can be amended upto 30th November of succeeding year subject to conditions and restrictions (d) Return cannot be filed if the registered person has not submitted his GSTR-1 for the tax period, unless Government grants specific exemption.

Availment of Input Tax Credit – Section 41 of CGST Act provides for claim of ITC and its provisional acceptance. This section is proposed to be substituted vide section 106 of Finance Act, 2022 from date to be notified to provide as follows – (a) Availment of ITC on self assessment basis, subject to conditions and restrictions (b) Reversal of ITC with interest if supplier has not paid the tax.

Omission of provisions relating to matching, reversal and reclaim of ITC and reduction in output liability – Section 42 of CGST Act provides for matching, reversal and reclaim of ITC. Section 43 of CGST Act provides for matching, reversal and reclaim of reduction in output liability. Section 43A of CGST Act provides procedure for furnishing return and availing of ITC. All these sections are proposed to be omitted vide section 107 of Finance Act, 2022 from date to be notified. In fact, these sections were never implemented and were any way redundant.

Levy of late fees – Section 47 of CGST Act is proposed to be inserted vide section 108 of Finance Act, 2022 from date to be notified to make corresponding changes in provision of late fees in line with other proposed changes.

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Payment of tax, interest, penalty and other amounts – Section 49 of CGST Act proposed to be amended vide section 110 of Finance Act, 2022 from date to be notified makes following provisions – (a) Transfer of balance in electronic cash ledger to other units of same person (i.e. same PAN) to other branch or division [ease of doing business] (b) Government can restrict proportion of output tax liability that can be discharged by use of ITC. Payment of interest if ITC was wrongly availed and utilised – Section 50(3) of CGST Act is proposed to be inserted vide section 111 of Finance Act, 2022 with retrospective effect from 1-7-2017 to provide for payment of interest where ITC was wrongly availed and utilised [The present section 50(3) provides for such payment only in case of matching of ITC under section 42 and reduction of output liability under section 43. Since these provisions were never implemented, section 50(3) had become redundant. Now, reference of sections 42 and 43 has been omitted with retrospective effect].

Refund related provisions – Section 54 of CGST Act which makes provisions for refunds is proposed to be amended vide section 113 of Finance Act, 2022 from date to be notified to provide as follows – (a) Procedure for claiming balance in input cash ledger is proposed to be streamlined (b) UN Agencies, foreign Embassies etc. can file refund claim within two years (c) Provision relating to withholding of refund or deducting from refund claim broadened to cover any refund due.

Retrospective exemptions – (a) Sections 117, 120 and 123 of Finance Act, 2022 grant retrospective exemptions from GT to unintended waste generated during production of fish meal, except fish oil, during 1-72017 to 30-9-2019. (b) Sections 118, 121 and 124 of Finance Act, 2022 grant exemption to ‘services by way of grant of alcoholic license in the form of license fee or application fee or by whatever name called by State Government’ for the period 1-7-2017 to 30-9-2019.

Common portal for GST - www.gst.gov.in will be Common Goods and Service Tax Electronic portal for all functions under CGST Rules, other than those provided for e-way bill and for generation invoices under rule 48(4) of CGST Rules, w.e.f. 22-6-2017 – section 115 of Finance Act, 2022.

Interest rate of 18% under section 50(3) of CGST Act w.e.f. 1-7-2017, where 24% was specified- Interest rate will be 18% under section 50(3) of CGST Act w.r.e.f. 1-7-2017 as against 24% provided earlier, for undue or excess claim of ITC – sections 116, 119 and 122 of Finance Act, 2022.

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3.1 Other relevant changes made recently Other important changes are as follows: Foreign Trade Policy 2015-20 and Handbook of Procedures 20152020 extended upto 30-9-2022 - Foreign Trade Policy 2015-20 and HBP 2015-2020 has been extended upto 30-9-2022 [DGFT Notification dated 31-3-2022] IGST and GST Compensation Cess on imports under Advance Authorisation and EPCG and imports by EOU are exempt upto 30-62022 - IGST and GST Compensation Cess will not be payable on (a) imports under Advance Authorisation and EPCG and (b) imports by EOU. This exemption is valid upto 30-6-2022 [amendment to relevant customs notifications made on 31-3-2022]

4. Nature of IGST u IGST (Integrated GST) is payable on supply of goods or services or

IGST is intermediary tax mainly on B2B (Business to Business) transactions. It is not envisaged as final tax as input tax credit of IGST will be available to recipient in another State. u If IGST is paid on B2C transaction (Business to Customer), the

State where goods or services or both are consumed will get their share of SGST. u IGST Rate is double the CGST rate and will be uniform all over

India. u IGST will ensure that goods or services or both and taxes move

together across the country, which will ensure seamless and tax free movement of goods and services within the country. u In view of IGST, there will be no need to claim refund of input

taxes, except in case of physical exports and supplies to SEZ. Refund is also permissible in case of inverted duty structure i.e. tax on output is less than tax payable on inputs and input goods (except in few cases). u Exports and supplies to Special Economic Zones (SEZ) are zero

rated i.e. input tax credit will be available even if tax is not paid on output. This will make exports and supplies to SEZ really tax free.

u Supply from SEZ to DTA unit will be treated as ‘import’ by DTA

unit and customs duty will be payable. u IGST, concept of ‘supply’ instead of sales and removal of distinction

between goods and services are game changers in GST. u IGST is a unique concept nowhere else been tried in the world.

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GUIDE TO GST

5. Overview of IGST Act u IGST Act is small but very important Act [It can be compared with u

u

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Central Sales Tax Act].

‘Integrated tax’ means the integrated goods and services tax levied under Integrated Goods and Services Tax Act - section 2(12) of IGST Act [In this write-up, the tax is termed as IGST and Act is termed as IGST Act for sake of brevity].

The IGST Act carries important definitions relating to export and import of goods, export and import of services, location of supplier and recipient of services, taxable territory and zero rated supply [section 2 of IGST Act].

As per Article 246A(2) of the Constitution of India as amended w.e.f. 16-9-2016, Parliament will have exclusive powers to make laws with respect of goods and services tax where the supply of goods, or of services, or both takes place in the course of interState trade or commerce. Under this constitutional authority, section 5(1) of IGST Act imposes tax on inter-State supply.

Section 5(3) of IGST Act make provisions in respect of reverse charge in case of notified services. Section 5(4) of IGST Act provides for reverse charge when supplies are received from specified persons in specified cases.

Parliament may, by law, formulate principles for determining (a) place of supply of goods or services (b) when supply of goods or services or both are in the course of inter-State trade or commerce - Article 269A(2) of the Constitution of India inserted w.e.f. 16-92016. Under this constitutional authority - (a) Sections 7, 8 and 9 of IGST Act define inter-State and intra-State supply (b) Sections 10 to 13 of IGST Act make provisions of place of supply.

IGST and GST Compensation Cess payable on supply of goods by a retail outlet established in the departure area of an international airport, beyond the immigration counters, is exempted w.e.f. 1-72019. The retail outlets are entitled to claim refund of Input Tax Credit.

Section 16 of IGST Act defines exports and supplies to SEZ as ‘zero rated supply’.

As per Article 269A(1) of Constitution of India (inserted w.e.f.

16-9-2016), IGST collected by Union will be apportioned between Union and States as per law made by Parliament on the recommendation of GST Council. Sections 17 and 18 of IGST Act make provisions for such apportionment under this constitutional authority.

Section 20 of IGST Act provides that provisions of CGST Act shall mutatis mutandis apply to IGST Act.

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6. GST Compensation Cess u Some States, particularly producing States like Maharashtra,

u u

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Gujarat, Tamil Nadu, Punjab, Karnataka may lose tax revenue due to abolition of Central Sales Tax. Such States will be paid compensation by Central Government for five years.

To enable Central Government to pay the compensation, a GST Compensation Cess has been levied on supply of goods or services or both within India and also on import of goods and services.

Sections 3 to 7 of GST Cess Act provide for mode of calculating compensation payable to States.

Input Tax Credit of GST Compensation Cess will be available, but the input tax credit in respect of GST Compensation Cess can be utilised only towards payment of GST Compensation Cess.

CGST Rules, 2017 will apply to GST Compensation Cess mutatis mutandis apply [except rules 3 to 7 and 117 to 120] - Notification No. 2/2017-Compensation Cess, dated 1-7-2017.

7. State GST Act (SGST) u Each State Government has passed its own State GST Act to

impose SGST on supply of goods or services or both within the State. u These State GST Acts are practically copies of CGST Act. The definitions and provisions are identical. There are some variations in transitory provisions and provisions relating to input tax credit, to adapt CGST Act to SGST Act. u Central Sales Tax is continuing to be applicable to petroleum products. In case of procurement of these products, C form can be issued even if the final product is covered under GST.

8. Union Territories GST Act (UTGST) u In case of Union Territories which do not have legislature, UTGST

(Union Territory Goods and Services Tax) will be payable.

Parliament has passed Union Territory Goods and Services Act, 2017 [UTGST Act] for this purposes. u The Union Territories to which UTGST Act applies are as follows

- (a) Andaman and Nicobar Islands (b) Lakshadweep (c) Dadra and Nagar Haveli, Daman and Diu (d) Chandigarh; and (e) other territory [as amended w.e.f. 26-1-2020 vide Regulations 1 and 2 of 2020 dated 24-1-2020, issued by President of India [Also amended vide Finance Act, 2020].

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u For the purposes of CGST Act and UTGST Act, each of the

territories specified above shall be considered to be a separate Union territory. Thus, IGST will be payable when supply is made from one Union Territory to another. u Delhi, Puducherry and Jammu and Kashmir have their own legislatures and they have their own GST Act. u “Other territory” includes territories other than those comprising in a State and those referred above - section 2(81) of CGST Act. This will cover Exclusive Economic Zone (except territorial waters).

Thus, ‘other territory’ means area inside sea between 12 nautical miles to 200 nautical miles. UTGST will apply for supply of goods and services within that area. However, it is not possible to obtain GST registration there, as it is not possible to have ‘fixed establishment’ at that place.

9. GST on Supply of Goods or Services or both u Supply of goods or services or both in the course or furtherance of

u u u

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business is ‘taxable event’ in GST as that event triggers liability to pay GST [section 9(1) of CGST and SGST Act] Definition of ‘business’ is wide. Even occasional supply can be ‘business’.

Supply covers all forms of supplies like sale, barter, rental, lease, exchange or disposal, made or agreed to be made.

Supply of goods and services for consideration is always taxable.

Consideration means something in return. It need not be in form of cash. It can be in any other form.

In case of activities specified in Schedule I of SGST and CGST Act, supply is taxable even if there is no consideration.

Supply by taxable person to related person is subject to GST even if there is no consideration i.e. no amount is charged.

This will cover transactions between group companies (like deputation of persons, supply of goods on loan basis, common facilities shared by group companies), transactions between branches in different States. Even services supplied by taxable person to its branch or division outside the State or within the State with different GSTIN will be subject to GST. Free gifts to related persons will be subject to GST. Employer and Employee have been defined as ‘related persons’.

Hence, a view is clearly possible that GST may be payable on fringe benefits by employer to employees like transport, meals, telephone etc. provided to employees. PIB Press Release dated 10-7-2017,

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had stated that GST will not be payable on such fringe benefits to employees. However, that clarification cannot be held as law. u Gifts upto Rs. 50,000 to employees will not be subject to GST, but input tax credit will have to be reversed. The word ‘gift’ has to be interpreted as understood in trade parlance e.g. supply of meals in canteen cannot be termed as ‘gift’. u Supply between two distinct persons in course of business is

subject to GST. This will cover inter-State stock transfers, branch transfers, services by Banks and telecom companies in one State to their own branches in another State and the like. u Supply by principal to agent is subject to GST. Thus, GST is

payable on supplies to C&F Agents. However, commission agent has to pay GST only on his commission as he does not deal with goods or services. u Import of services from related person or from business

establishment outside India is subject to GST even if there is no consideration. Branch/Head Office in India receiving free services from Head Office/outside India will be subject to GST. u Lottery, betting and gambling is subject to GST. u Lottery tickets are goods and GST will be payable. GST will also be

payable on services relating to betting and gambling. u Some services provided by Government (except sovereign

activities) and by Local Authority are taxable and mostly will be subject to reverse charge i.e. GST will be payable by taxable person receiving the service from Government or Local Authority. u Alcoholic liquor and petroleum products [petroleum crude, HSD,

petrol, natural gas and aviation turbine fuel] are presently outside GST. Petroleum products will be brought in GST at later stage. u Petroleum products other than those specified above are subject

to GST.

10. What are Goods u Though tax is payable whether supply is goods or services,

distinction has been made in some cases. This is given in Schedule II of CGST and SGST Act. u This distinction is relevant to determine place of supply and time

of supply and also for valuation and composition schemes. u Hire purchase of goods and financial lease is ‘goods’. u Supply of goods in club is taxable.

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u Development of software is ‘service’. However, software in physical

u u u u

form will still be ‘goods’, whether as packaged software or tailormade software.

Permanent transfer of Intellectual Property Rights [IPR like patent, copyright, trade marks, designs] are ‘goods’.

Lottery, betting and gambling is taxable as ‘goods’ but any other Actionable Claim is not subject to tax.

Free gifts to non-related persons is not subject to GST, but input tax credit will have to be reversed.

Securities and money are not ‘goods’. However, facilitating or arranging transactions in securities is a service and subject to GST.

11. What is service u Though tax is payable whether supply is goods or services,

u u u u u u

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distinction has been made in some cases. This is given in Schedule II of CGST and SGST Act. Hire or operating lease of goods is ‘service’.

Renting, leasing of immovable property is ‘service’.

Works contract of immovable property (mainly construction and erection and commissioning related) is ‘service’.

Supply of food by way of or as part of service is ‘service’.

Development of software is ‘service’. However, software in physical form is still be ‘goods’.

Temporary transfer or permitting use or enjoyment of IPR (Intellectual Property Right) like patent, design, copyright is service. Permanent transfer of IPR is ‘goods’.

Job work is ‘service’. GST will be payable on job work charges, unless some specific exemption has been given.

Service (like transport, canteen, telephone, etc.) supplied by employer to employee can be taxed under GST. Obligation to refrain from act or tolerating an act or situation is ‘service’. This will cover Late Delivery Charges, Penalties for breach of contracts, Notice pay from employees, demurrage.

12. Supply which are neither Goods nor Services and hence out of GST u Some supplies are neither goods nor services. These are given in

Schedule III of CGST and SGST Act. u Money is neither goods nor services. Hence, ‘supply of money’ i.e.

loan, investments, dividend, profit distribution among partners is not subject to GST. However, interest is for use of money and

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subject to GST [though exempt except in case of (a) delayed payment (b) credit card]. Thus, interest is ‘exempt supply’.

Securities are neither goods nor services. Hence, ‘supply of securities’ i.e. supply of shares, debentures, bonds, units of mutual fund, derivatives is not subject to GST. However, GST will be payable by stock brokers and mutual fund agents, as they themselves do not supply securities. They only facilitate or arrange supply of securities.

Sale of land or duly and fully constructed building (after possession) is neither goods nor services. Hence, GST is not payable. However, GST is payable on sale of TDR (Transferable Development Rights), transfer of development rights in land and long term lease of immovable property.

Actionable claims like assignment of unsecured loans, securitisation is not subject to GST. However, GST is payable on lottery, betting and gambling.

Services of Court or Tribunal are neither supply of goods nor supply of services.

Services of MP, MLA, members of State Legislature and local bodies is not supply of service (true indeed).

Activities by Central or State Government or local authority of services in relation to function entrusted to a Panchayat under Article 243G of Constitution are neither goods nor services Notification No. 14/2017-CT (Rate), dated 28-6-2017.

Services of funeral, burial, cremation or mortuary and transportation of deceased (small mercy after death).

Supply of goods by endorsement of documents before clearance for home consumption is neither supply of goods nor supply of services i.e. high seas sale or sale before goods cross customs frontier of India.

Supply of goods from one place out of India to another place out of India without goods entering India.

Supply of goods when in customs bonded warehouse is neither supply of goods nor supply of services.

13. Rates of GST on Goods u As per section 9 of CGST Act, rate of CGST will be as notified by

Central/State Government. The rate shall not exceed 20%. Same provision will be in SGST Act of each State. u Thus, total GST rate for intra-State supplies will not exceed 40% [20% CGST and 20% SGST].

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u CGST and IGST rates will be common all over India. However,

SGST rates will be decided by each State and may vary from State to State, though presently they are same. u The GST rates on goods will be notified based on HSN Code.

Customs Tariff Act will be taken as base. The rates are - Nil, 0.25%, 3%, 5%, 12%, 18% and 28%. u The relevant notifications of GST rate on goods are as follows - (a) Notification Nos. 1/2017-CT (Rate) and 1/2017-IT (Rate) both dated 28-6-2017 in respect of goods bearing GST rate of 0.25%, 3%, 5%, 12%, 18% and 28% (b) Notification Nos. 2/2017-CT (Rate) and 2/2017-IT (Rate) both dated 28-6-2017 in respect of exempted goods.

14. GST rates on Services The CGST and IGST rates are notified in Notification Nos. 11/2017-CT (Rate) and 8/2017-IT (Rate) both dated 28-6-2017 effective from 1-72017. SGST Rates are notified by respective State Governments.

Exemptions in respect of services are specified in Notification Nos. 12/ 2017-CT (Rate) and 9/2017-IT (Rate) both dated 28-6-2017 effective from 1-7-2017.

Notification No. 11/2017-CT (Rate) dated 28-6-2017 also specifies six digit service codes for services.

Parallel notifications are issued under SGST and UTGST Acts also in respect of SGST/UTGST rates and exemptions.

SGST/UTGST and CGST rates are presently 50% of IGST rates.

General rate of IGST on services is 18%. The IGST rate of 18% will apply to banking and insurance services, courier and postal services, gas and water distribution services, legal and accounting services, telecommunication services, R&D services, software.

Some important GST rates on services as on 1-1-2022 are as follows Service Code

Nature of service

GST Rate

99

Pure labour services (or where material content is not more than 25%) to Government or local authority relating to constitutional responsibilities w.e.f. 1-1-2022

Exempt [Till 1-1-2022, these services provided to Governmental Authority or Government Entity were also exempt].

99

Services provided by Government (where re-

Exempt

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Service Code

Nature of service

GST Rate

verse charge is not applicable) 99

Specified charitable activities [mainly relating to religion, public health, preservation of environment]

Exempt

99

Transfer of going concern as a whole or independent part thereof

Exempt

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Commercial Apartments (shops, offices, godowns etc.)

(A) in RREP (Residential Real Estate Project) - CGST 2.5% plus SGST/UTGST 2.5% (total 5%) (without ITC). (B) In other than RREP) - CGST 6% plus SGST/ UTGST 6% (total 12%) (with ITC) [where value includes land value]

9954

Residential apartments

(a) CGST 0.5% plus SGST/UTGST 0.5% (total 1%) (without ITC) for affordable residential apartments (b) CGST 2.5% plus SGST/ UTGST 2.5% (total 5%) (without ITC) for other residential apartments [where value includes land value]

9954

Works contract of immovable property

(a) 18% with full ITC (b) 12% in case of specified infrastructure related works contracts provided to Government or local authority [Till 1-1-2022, the infrastructure related services supplied to Governmental Authority or a Government entity were also exempt]

9954

Supply and erection of solar power plants, wind mills, waste energy plants, bio-gas plants

5% on 70% of value and 18% on 30% of value

99631

Accommodation Service

Renting of hotels, inns, guest houses, clubs, campsites, commercial places for residential or lodging (They can never charge IGST except in case of SEZ units,

I-21 Service Code

GUIDE TO GST

Nature of service

GST Rate as place of supply is their location)- (a) If daily value less than or equal to Rs. 1,000 - Nil (b) If value above Rs. 1,000 but less than or equal to Rs. 7,500 per day - 12% with full ITC (c) value above Rs. 7,500 - 18% with full ITC [as amended w.e.f. 1-10-2019].

99633

Food and drinks

(1) 5% without ITC in restaurants, canteens, railway platforms, in trains, take away at places other than hotels having declared tariff above Rs. 7,500 (2) event based outdoor or indoor functions that are occasional, at places other than hotels having declared tariff above Rs. 7,500 - 5% without ITC. (3) restaurants or outdoor catering. In hotels having declared tariff of Rs. 7,500 or above18% with full ITC [amendment w.e.f. 1-10-2019]

9964

Transport of passengers by air

(A) In business class or first class, GST rate is 12% with full ITC air transport in North East exempt].

(B) Economy class - 5%

9964

Transport of passengers by road or rail

(A) Exemption to services supplied by metered cabs or auto rickshaws and e-rickshaws [W.e.f. 1-1-2022, this exemption is not available to these services supplied through e-commerce operators] (B) 5% (with ITC of input services) in following cases – (a) Air Conditioned contract or stage carriage [exemption to non AC contract carriage, non AC stage carriage. W.e.f. 1-1-2022, this exemption is not available to these services supplied through e-commerce operators] (b) radio taxi (c) by rail in AC or first class [metro, second class and sleeper class exempt] (C) Transport of passengers in any

GST

Acts With Rules & Forms AUTHOR PUBLISHER DATE OF PUBLICATION EDITION ISBN NO NO. OF PAGES BINDING TYPE

: : : : : : :

TAXMANN TAXMANN APRIL 2022 6TH EDITION 9789356220317 1094 PAPERBACK

Rs. : 995 | USD : 50

Description This book contains Amended, Updated & Annotated text of the following GST Act(s) & GST Rules: u

Central Goods & Services Tax (CGST) n

u

n Rules

Integrated Goods & Services Tax (IGST) n

u

Act Act

n Rules

Union Territories Goods & Services Tax (UTGST) n

Act

n 5+

Rules

u

Goods & Services Tax (Compensation to States)

u

5+ Other Rules

n

Act

n Goods

& Services Tax Compensation Cess Rules

What sets it apart is the Annotation under each Section, which shows: u

Relevant Rules framed under the relevant Section

u

Reference to Relevant Forms prescribed

u

Reference to Relevant Notifications & Circulars

u

Date of enforcement of provisions

u

Allied Laws referred to in the Section

The readers also get a specially curated GST Guide along with the above.

The Present Publication is the 6 th Edition, authored by Taxmann’s Editorial Board, updated till 1 st April 2022 & amended by the Finance Act 2022, with the following noteworthy features: u [Taxmann’s series of Bestseller Books] on GST Laws u [Follows the Six-Sigma Approach] to achieve the benchmark of ‘zero error.’

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