Taxmann's Indirect Tax Laws (IDT) | IDT SAAR | CLASS NOTES

INDEX Chapter

CHAPTERS NAME

PAGE NO.

N0.

GOODS & SERVICES TAX 1.

GST IN INDIA – AN INTRODUCTION

1.3 – 1.9

2.

SUPPLY UNDER GST

2.1 – 2.21

3.

CHARGES OF GST

3.1 – 3.21

4.

EXEMPTIONS OF GST

4.1 – 4.46

5.

PLACE OF SUPPLY

5.1 – 5.15

6.

TIME OF SUPPLY

6.1 – 6.4

7.

VALUE OF SUPPLY

7.1 – 7.7

8.

INPUT TAX CREDIT

8.1 – 8.25

9.

REGISTRATION

9.1 – 9.15

10.

TAX INVOICE, CREDIT AND DEBIT NOTE

10.1 – 10.10

11A..

E-WAY BILL

11A.1 – 11A.11

11B.

ACCOUNTS AND RECORDS

11B.1 – 11B.4

12A.

PAYMENT OF TAX

12A.1 -12A.6

Unit 1: Payment of Tax, Interest and other Amounts 12B.

PAYMENT OF TAX

12B.1 – 12B.5

Unit 2: Tax deduction at Source and Collection of Tax at Source 13.

RETURNS

13.1 – 13.12

14.

REFUNDS

14.1 – 14.20

15.

ASSESSMENT AND AUDIT

15.1 – 15.6

16.

INSPECTION, SEARCH, SEIZURE AND ARREST

16.1 – 16.5

17.

DEMAND AND RECOVERY

17.1 – 17.9

18.

LIABILITY TO PAY IN CERTAIN CASES

19.

OFFENCES AND PENALTIES

19.1 – 19.9

20.

APPEALS AND REVISION

20.1 – 20.10

21.

ADVANCE RULING

21.1 – 21.8

22.

MISCELLANEOUS PROVISIONS

18.1 –18.4

22.1 – 22.9

I-7

CUSTOMS & FTP 23.

BASIC CONCEPT OF CUSTOMS

23.3 – 23.8

24A.

TYPES OF DUTIES

24A.1 – 24A.7

24B.

CLASSIFICATION OF IMPORTED AND EXPORTED

24B.1 – 24B.4

GOODS 25.

IMPORT PROCEDURE

25.1 – 25.23

26.

VALUATION

26.1 – 26.16

27A.

DUTY DRAWBACK

27A.1 – 27A.4

27B.

WAREHOUSING UNDER CUSTOMS

27B.1 – 27B.12

28.

BAGGAGE, STORES AND IMPORT BY POST

28.1 – 28.6

29.

TRANSIT AND TRANSSHIPMENT

29.1 – 29.2

30.

REFUNDS UNDER CUSTOMS

30.1 – 30.4

31.

FOREIGN TRADE POLICY

31.1 – 31.22

䚉㻌 COLOUR USED

䚉Black - Heading, Sub-heading & important words 䚉Blue 䚉Red

- Matter or Content - Section, Rules & Schedule

䚉Green - Key code, Date, Month - Amendments for May 2022 - Amendments for Nov 2022

㻌

I-8

CHAPTER 3 CHARGES OF GST

GLIMPSES Intra-State Transfer & Inter-State Transfer: Liability To Pay Tax Under CGST/IGST Act: Reverse Charge Mechanism List of Specified Services Taxable Under Reverse Charge [i.e. The Services Where Tax is Payable By The Recipient] U/S 9(3) of CGST Act [In Case Of IGST U/S 5(3) Of IGST Act] List of Services Taxable Under Reverse Charge, i.e. The Services Where IGST Is Payable By The Recipient Tax Payable By E-Commerce Operator On Notified Services [U/S 9(5) of CGST Act, 2017] Composition Scheme Under CGST Act, 2017 [Section 10]

INTRA-STATE SUPPLY & INTER-STATE SUPPLY: Intra-State Supply U/S 8 of

[Nov 17, Jan 21]

Inter-State Supply U/S 7 of IGST Act.

IGST Act. 1. Where the location of the

1. Supply of goods/services when location of the

supplier and the place of

supplier and the place of supply are in two

supply are in –

different States/UTs.

Same State

Same Union territory

2. CGST and State Goods & Services Tax i.e. SGST/ Union Territory Goods & Services Tax i.e.

UTGST shall be charged on an Intra-State Supply.

2. Supply of goods/services imported into the territory of India.

3. Supplier located in India and the place of supply is outside India.

4. Supply to/by SEZ developer or SEZ unit; or 5. Supply to Foreign Tourist 6. Supply in the taxable territory, not being an Intra-State supply & not specified anywhere.

7. IGST shall be charged on an Inter-State Supply.

Example 1: Place of Supply = Maharashtra

Place of Supplier = Gujarat

IGST‫܃‬

Example 2: Place of Supply = Punjab

Place of Supplier = Chandigarh

IDT सार

IGST‫܃‬

3.1

Note: Although Chandigarh is located within the State of Punjab, such supply will not be considered as Intra-State supply because Punjab is a state and Chandigarh is a Union Territory. Therefore, such transfer is an Inter-State supply as per section 7 of IGST Act, 2017.

Example 3: Place of Supply = Maharashtra

CGST‫܃‬

Place of Supplier = Maharashtra

+

SGST Maharashtra State ‫܃‬ Example 4: Place of Supply = Chandigarh

CGST‫܃‬ +

Place of Supplier = Chandigarh

UTGST ‫܃‬

Example 5: Place of Supply = Delhi

CGST‫܃‬ +

Place of Supplier = Delhi

SGST of Delhi ‫܃‬

Note: State includes a Union Territory with Individual Legislature. Delhi, Puducherry & Jammu & Kashmir have their own individual legislature and hence covered under State GST Law.

UNION TERRITORY OF INDIA Before Amendments “Union Territory” means the territory of-

After Amendments “Union Territory” means the territory of-

a) The Andaman and Nicobar Island

a) The Andaman and Nicobar Island

b) Lakshadweep

b) Lakshadweep

c) Dadra and Nagar Haveli

c) Dadra & Nagar Haveli and Daman & Diu

d) Daman and Diu

d) Ladakh

e) Chandigarh

e) Chandigarh

f) Other territory

f) Other territory

STUDENTS NOTE:-

IDT सार

3.2

Note:- State of Jammu & Kashmir has been reconstituted into 2 Union Territories

Jammu & Kashmir

Ladakh

(With separate legislature)

For GST purpose Treated as State Impact of Amendment:State includes a Union Territory with Individual legislature, It means Delhi, Puducherry & Jammu & Kashmir (have their own individual legislature), Covered under state GST law. a) Place of Supply = Jammu & Kashmir

Location of Supplier = Jammu & Kashmir

Intra-State Transfer

CGST SGST of Jammu & Kashmir

b) Place of Supply = Jammu & Kashmir Location of Supplier = Ladakh

Inter-State

IGST

Transfer

STUDENTS NOTE:-

IDT सार

3.3

LIABILITY TO PAY TAX UNDER CGST/ IGST ACT:

Liability to pay tax

Forward charge

Reverse charge

E-Commerce operator

Taxable person making

Recipient of Supply

Electronic Commerce

Supply will be liable

will be liable

Operator will be liable

REVERSE CHARGE MECHANISM

Reverse charge mechanism Section 5(3) of IGST Act, 9(3) of CGST Act

Specified categories of goods or services or both received from unregistered person

NN 13/2017

NN 4/2017

U/S 5(4) of IGST Act, U/S 9(4)

Specified Services (discussed

[Specified Goods]

of CGST Act

under next heading)

Under this provision, tax

1.

under reverse charge is

2. Bidi Wrapper

payable by the NOTIFIED

Not applicable

3. Tobacco Leaves

in Exam

class of registered persons

4. Silk yarn

on NOTIFIED categories

4A. Raw Cotton supplied by agriculturist to any registered

of supplies of goods and/or services received by such registered persons from any unregistered supplier Example: A developer purchased cement from unregistered person [If developer charged GST on sale of flats @1% / 5%]

IDT सार

Cashew Nuts

person.

5. Supply of Lottery by SG/UT/LA to Lottery Distributor or Selling Agent 6. *Used Vehicles, Seized and Confiscated Goods, old and used goods, waste and scrap *Conditions for Reverse Charge are as follows: a) If the supplier is Government/Local Authority. b) Supply is of used vehicles, seized & confiscated goods, old and used goods, waste & scrap. c) Goods Recipient Any Person.

3.4

LIST OF SPECIFIED SERVICES TAXABLE UNDER REVERSE CHARGE [i.e. THE SERVICES WHERE TAX IS PAYABLE BY THE RECIPIENT] U/S 9(3) OF CGST ACT [In case of IGST U/S 5(3) OF IGST ACT]

S. Nos. 1: Services provided by GTA who has not paid GST @12% in respect of Transportation of

Goods BY ROAD to specified person {MCQ-Nov 20} Supplier GTA

Recipient is:

Recipient is any other person Exempt

a) Department/ establishment of

Recipient is:

Refer Entry 21A

CG/SG/UT Or b) Local Authority Or c) Government agencies

Specified person: 1)

Any factory registered under Factories Act, 1948.

2) Any society registered under the Societies Registration Act, 1860.

3) Any co-operative society established by or under taken by or under any law.

(which has taken

4) Any person registered under GST Act, 2017

registration only for

5) Any casual taxable person located in the

the purpose of deducting tax u/s 51 and not for making a taxable supply).

taxable Territory.

6) Any partnership firm whether registered or not under any law including AOP. 7) Body corporate established under any law.

Exempt (Refer entry 21B)

★ CG Central Government

Tax Rate @5% RCM

Tax Rate @12% FCM

SG State Government

Note: - If question says, GTA is

UT Union Territory

unregistered person then RCM will be applicable.

STUDENTS NOTE:-

IDT सार

3.5

S. Nos. 2 & 3: Legal Services

Legal services provided by Arbitral tribunal/ Advocate S.N. 2: Supplier is senior Advocate

S.N. 2: Supplier is

S.N. 3: Supplier is Arbitral tribunal

Partnership firm of Advocates {NOV 20} Individual Advocate [Expect senior Advocate] Recipient is

Recipient is an Advocate

Recipient is any person

Recipient is

Govt./ LA/

Or

other than Business entity

Business entity

GE/ GA

Firm of Advocate Aggregate Turnover of preceding financial

Exempt

Exempt

year of recipient is as make it eligible for

Refer Entry 45

Refer Entry 45

exemption from GST registration.

Yes

Exempt (Refer Entry 45)

Recipient is Govt./ LA/

Recipient is an advocate or firm of Advocate

GE/ GA

No

Taxable under RCM

Recipient is any person other than Business Entity

Aggregate Turnover of preceding Exempt

financial year of recipient is as make

Exempt

Refer Entry 45

it eligible for exemption from GST

Refer Entry 45

registration.

Yes

★

No

Exempt

Taxable under

Refer Entry 45

RCM

GE Government Entity GA Government Authority LA Local Authority

STUDENTS NOTE:-

IDT सार

3.6

→ S. Nos. 4: Services provided by way of Sponsorship to any body Sponsorship services

RCM Supplier [Any person] Recipient [Body corporate or partnership firm] located in TT S. Nos. 5: Services provided by Govt./Local authority to Business Entity

Services provided by Govt./Local authority to Business Entity S. N. 5 Services provided by

Business entity

Postal department by way of: [SEAL] S

Speed post

E

Express parcel post

A

Agency service

L

Life insurance service

S. N. 5A Services by way of

S. N. 5 Any other Services

Renting of immovable property [Subject to Exemptions]

Taxable under

Govt. In relation to an Aircrafts/ Vessels.

Services provided by Govt. To

Govt. In relation to Transportation

Recipient is registered

Recipient is not registered

RCM [but subject

under GST Act

under GST Act

to exemption]

of Goods or passenger [Subject to Exemption]

Tax under RCM

Tax under FCM

Tax under FCM

S. Nos. 5B: Transfer of development rights or floor space index (including additional FSI)

Supplier [Any person]

IDT सार

RCM

Recipient [Promoter]

3.7

S. Nos. 5C: Long term lease of land (30 years or more) Long term lease of land (30 years or more) for construction of a project by a promoter Consideration in the form of upfront amount

Supplier

like Premium, Salami, etc. & periodic rent.

Promoter

[Any person] RCM

Analysis of S. Nos. 5B & 5C E.g. Consideration 10 Cr.

Transfer of development rights or Any Person

Floor space Index or

Promotor

or

Long term lease of land (30 year or

Developer

or

more) against consideration in the

Builder

form of upfront amount (called as premium/salami etc.)

Constructed Flats are Sold

Before issuance of completion

After issuance of CC & covered

certificate & tax is paid on them

under Schedule III

Consideration ₹ 10 Cr. will be exempt

Consideration ₹ 10 Cr. will be Taxable under RCM

Refer Entry Nos. 41A & 41B of Exemption Notification of CGST Act, 2017

S. Nos. 6, 7 & 8: Services supplied by directors, Insurance agent & Recovery agent S. N. 6

IDT सार

Category of supply of GST

Supplier of

Recipient of service

Services

(liable for payment of Tax)

Services supplied by a Director of

A director of a

The company or a body corporate

a company/body corporate to the

company or a

located in the taxable territory as

said company/body corporate.

body corporate

per Sec 2(11) of Companies Act, 2013.

3.8

7

Services supplied by an Insurance

An insurance

Any person carrying on insurance

agent to any person carrying on

agent

business, located in the taxable

insurance business.

8

territory

Services supplied by a Recovery

A recovery

A banking company or a financial

agent to a banking company or

agent

institution or a non-banking

a financial institution or a non-

financial company, located in the

banking financial company.

taxable territory.

S. Nos. 9: Services by a Music composer, Photographer & Artist S. N. 9

Category of supply of GST

Supplier of

Recipient of service

Services

(liable for payment of Tax)

Supply of services by Music composer,

Music

Music company, producer

photographer, artist or the like by way of

composer,

or the like, located in the

transfer or permitting the use or enjoyment

photographer,

taxable territory.

of a copyright covered under section 13(1)(a)

artist, or the

of the Copyright Act, 1957 relating to

like

original dramatic, musical or artistic works

S. Nos. 9A: Supply of Services by Author Supplier Author

Permitting the use of enjoyment of a copyright Recipient – Publisher in Taxable Territory

Option I

Option II

Publisher is liable for

Author can be liable

payment of tax under RCM

for payment of tax If:

i. ii.

Author has taken Registration under GST Act Filed a declaration in the Form at Annexure I to the GST Commissioner

iii.

He shall not withdraw the option within a period of 1 Year

STUDENTS NOTE:-

IDT सार

3.9

S. Nos.: 10 & 11 {NOV 20}

S. N.

Category of supply of GST

Supplier of services

Recipient of service (Liable for payment of Tax)

10

Supply of services by the

Members of Overseeing

members of Overseeing

Committee constituted by

Committee to Reserve Bank of

the Reserve Bank of

India (RBI)

India (RBI)

Services supplied by individual Individual Direct Selling

11

Direct Selling Agents (DSAs)

Agents (DSAs) other than

other than a body corporate,

a body corporate,

partnership or Limited

partnership or LLP firm

Reserve Bank of India (RBI)

Bank or NBFCs

Liability Partnership (LLP) firm to bank or non-banking financial company (NBFCs).

S. Nos. 12 & 13:

S. N.

Category of supply of GST

Supplier of services

Recipient of service (Liable for payment of Tax)

Services provided by Business

12

Business facilitator

A banking company, located

facilitator to a banking company

in the taxable territory

[Effective from 01/01/2019]

Business Facilitator

Banking Company

Supplier S. N. 13

Category of supply of GST

Recipient Supplier of Services

Recipient of Services

Services provided by an agent of

An agent of

A business correspondent,

business correspondent to business

business

located in the taxable

correspondent.

Correspondent

territory.

[Effective from 01/01/2019]

Agent of Business Correspondent Supplier

IDT सार

Business Correspondent (TT) Recipient

3.10

S.N os. 14: Security Services {NOV 20}

S. N.

Category of supply of GST

14

Supplier

Recipient

Security Services (services provided by way of supply of security

Any

A

personnel) provided to a registered person.

person

registered

However, nothing contained in this entry shall apply to:

other

person,

than a

located in

body

the

corporate

taxable

(i) a) Department or Establishment of the Central Government or State Government or Union Territory; or Local authority; or

territory.

b) Governmental agencies; which has taken registration under the CGST Act only for the purpose of deducting tax under section 51 of the said Act and not for making a taxable supply of goods or services; or (ii) A registered person paying tax under composition scheme.

[Effective from 01/01/2019]

Example: Case

Supplier

Recipient

Impact

1.

Mr. A (URP)

Mr. B (RP)

RCM

2.

Mr. A (RP)

Mr. B (URP)

FCM

3.

Mr. A (URP)

Mr. B (URP)

No Tax

4.

Mr. A (RP)

Mr. B (RP under CS)

FCM

5.

Mr. A (RP)

Mr. B (RP)

FCM

6.

Mr. A (RP)

Mr. B (RP)

FCM

7.

Mr. A (RP)

Registered only for Deducting TDS

FCM

RP – Registered Person URP – Unregistered Person CS – Composition Scheme STUDENTS NOTE:-

IDT सार

3.11

S. Nos. 15: Renting of motor vehicles {Nov 20}

S. N.

Category of supply of GST

Supplier of services

Recipient of service (Liable for payment of Tax)

15

Services Provided

Any person other than a

Any Body Corporate

By way of renting of any

Body Corporate, Who

Located in the taxable

motor vehicle designed to

supplies the service to a

territory.

carry passengers where the

Body Corporate and does

cost of fuel is included in the

not issue an invoice

consideration charged from

charging GST @12% (CGST

the service recipient

@6% + SGST/UTGST @6%)

To a Body Corporate

to the service recipient

Person liable to pay tax under renting of motor vehicle services Where GST is payable @12%

Where GST is payable @5% Supplier is other than Body

Supplier is Body Corporate

Corporate Recipient is a Body Corporate

Forward Charge Recipient is other than Body Corporate Reverse Charge Analysis of S.N. 15

S. No.

Particulars

CGST

SGST

IGST

Impact

1.

Mr. ‘X’ (RP) provide services by way of,

2.5%

2.5%

5%

RCM

6%

6%

12%

FCM

No GST &

No GST &

No GST &

RCM

Renting of any motor vehicle designed to

No Tax

No Tax

No Tax

carry passengers to Body Corporate

Invoice

Invoice

Invoice

Renting of any other motor vehicle designed to carry passengers to Body Corporate [ITC Not allowed except ITC of Input Services in Same link of Business] 2.

Mr. ‘X’ (RP) provide services by way of, Renting of any motor vehicle designed to carry passengers [Full ITC allowed]

3.

IDT सार

Mr. ‘X’ (URP) provide services by way of,

3.12

S. Nos. 16: Lending of securities

S. N.

Category of supply

Supplier of services

Recipient of service

of GST 16

(Liable for payment of Tax)

Services of lending

Lender i.e. a person who deposits

Borrower i.e. a person who

of securities under

the securities registered in his

borrows the securities under

Securities Lending

name or in the name of any

the Scheme through an

Scheme, 1997

other person duly authorized on

approved intermediary of

(“Scheme”) of SEBI

his behalf with an approved

SEBI.

as amended.

intermediary for the purpose of lending under the scheme of SEBI.

LIST OF SERVICES TAXABLE UNDER REVERSE CHARGE, i.e. THE SERVICES WHERE IGST IS PAYABLE BY THE RECIPIENT S. N.

Category of supply of GST

Supplier of services

Recipient of service (Liable for payment of Tax)

1

Any service supplied by

Any person located in

Any person located in the

any person who is located

a non-taxable territory

taxable territory other than

in a non-taxable territory

(NTT)

non-taxable online recipient

to any person other than non-taxable online recipient.

Recipient

Supplier (NTT)

S. N.

Recipient

Category of supply of GST

Non-Taxable Online Recipient

Other than Non-Taxable Online Recipient

Supplier of services

2

Services supplied by a

person

FCM

Recipient of service (Liable for payment of Tax)

A person

Importer, as defined in section

located in non-taxable territory

located in

2(26) of the Customs Act, 1962,

by way of transportation of goods

non-taxable

located in the taxable territory.

by a vessel from a place outside

Territory (NTT).

India up to the customs station of clearance in India STUDENTS NOTE:-

IDT सार

RCM

3.13

R

R

S

Freight =

₹

2,00,000 Exporter (NTT)

Importer (India) (TT) Liability to pay tax on Importer

TAX PAYABLE BY E-COMMERCE OPERATOR ON NOTIFIED SERVICES [U/S 9(5) OF CGST ACT, 2017] {Nov 18} Services supplied through ECO are notified for this purpose Services supplied through ECO are notified for this purpose (a) Transportation of passengers by a radiotaxi, motor car, maxi

[MTP Dec 21]

(b) Accommodation for lodging or residential purpose in hotels, inn, guest house etc; (c) Housekeeping such as Plumbing, Carpentering etc.

cab and motor cycle; If Supplier is liable for

ECO is liable for the

Registration U/S 22 of CGST Act

If Supplier is not liable for Registration U/S 22 of CGST Act

payment of Tax Supplier is liable for the

ECO is liable for the

payment of Tax

payment of Tax

(d) GST impacting On Restaurant Services Provided by E-Commerce Operators i.e .

Zomato, Swiggy etc.

Applicable in exams, if it is in supplementary issued by ICAI

(1) Restaurant Services by E-Commerce On September 17, it was decided at the Goods and Services Tax Council meeting that e-commerce operators be made liable to pay tax on services provided through them namely transport of passengers, by any type of motor vehicles- restaurant services provided, with some exceptions. This will become effective January 1, 2022, said a statement issued by the Finance Ministry after the GST Council meeting.

NN 17/2021 wherein E-commerce platforms (“ECO”) Zomato, Swiggy are liable to pay tax on the restaurant services effective 1st January, 2022 The liability to pay taxes on the non- restaurant services as per this directive still lies with the restaurants themselves.

IDT सार

3.14

Further Circular No. 167/23/2021-GST dated 17.11.2021 issued for clarification regarding modalities of compliance to the GST laws in respect of supply of restaurant service through ECO.

ECO is now made liable to pay GST on “restaurant services” provided through the e-Commerce platform.

This change is not applicable for restaurant services provided from a premise with declared of Rs. 7,500/- or above per day.

Swiggy, Zomato qualifies etc is qualify as an “e-commerce operator” under Section 2(45) of tariff CGST Act, 2017.

(2) What is Restaurant and Non-Restaurant Services?

As per NN.11/2017 – CTR, “Restaurant service means supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink provided by a restaurant, eating joint including mess, canteen, whether for consumption on or away from the premises where such food or any other article for human consumption or drink is supplied”. A restaurant is a place which is in the business of preparing and serving food in the premises or as takeaway.

An illustration under this category is provided below: a) Restaurants located in a premise where declared tariff is not exceeding Rs. 7,500 per day and providing restaurant services.

b) Food and beverage sold as a part of restaurant services and which qualifies as restaurant services.

c) Cloud kitchens providing restaurant services etc. d) Stand-alone restaurants which are not ice cream parlors or bakeries.

As per NN. 17/2021, Zomato, Swiggy shall be responsible for charging, collecting and paying GST @ 5% on supply of “restaurant services” made by such restaurant thru the ECO platform. For Restaurant with No GSTIN, ECO will be responsible for charging, collecting, paying GST @5% on total order value.

Section 9(5) The Government may, on the recommendations of the Council, by notification, specify categories of services the tax on intra-State supplies of which shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services.

NN. 17/2021

IDT सार

3.15

supply of restaurant service other than the services supplied by restaurant, eating joints etc. located at specified premises. specified premises means premises providing hotel accommodation service having declared tariff of any unit of accommodation above seven thousand five hundred rupees per unit per day or equivalent.

(3) Schedule II of CGST Act, 2017- Clause 6 – Composite Supply The following composite supplies shall be treated as a supply of services, namely: —

a) works contract as defined in clause (119 ) of section 2; and b) supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration.

(4) Frequently ask question

1.

If you operate or manage E-Commerce Platform, Whether TCS would be applicable? YES

2. If Suppliers making taxable supplies through E-Commerce Operator, Whether TCS Would be applicable? YES

3. Suppliers supplies Transportation of Passengers, housekeeping, and hotel Accommodation services thru ECO, Whether TCS would be applicable? NO

4. Restaurant Service is provided from Specified Premises, Whether ECO would be liable for charging of tax? NO

5. Restaurant Service is provided from location other than Specified Premises, Whether ECO would be liable for charging of tax? YES

If ECO is located outside India If the ECO is located in taxable territory

Person liable to pay tax is the ECO

No If the ECO does not have physical presence

Person liable to pay tax is the person

in the taxable territory

representing the ECO

No If the ECO has neither the physical

Person liable to pay tax is the person

presence nor any representative in the

appointed by the ECO for the purpose of

taxable territory

paying the tax

IDT सार

3.16

COMPOSITION SCHEME UNDER CGST ACT, 2017 [SECTION 10(1)(2) & 10(2A)] [May 18, Nov 18, RTP Nov 19, Nov 19] {RTP, MCQ, CASE STUDY, Nov 20} [RTP Nov 20, MTP Dec 21] Composition scheme & concessional rate scheme Basis

Composition Scheme u/s 10(1) & 10(2)

Concessional Rate Scheme (Presumptive Scheme) (Sec 10(2A)

1. Optional scheme

It is an optional scheme

It is an optional scheme

2. Eligible Person

Manufacturer [other than notified Goods] Exclusively engaged in Notified Goods: (Key:- PITA) (i) Ice cream and other edible ice, whether or not containing cocoa. (ii) Pan Masala (iii) Tobacco and manufactured tobacco substitutes (iv) Aerated Water

Trader

supplying services other than restaurant services.

Any person who is not eligible for composition scheme.

(Except Manufacturer of

Service Provider [only supplier making

Notified Goods)

supplies under Schedule II para 6 Clause 6(b) [Restaurant service] 3. Aggregate

Applicable to registered person, whose

Aggregate Turnover in

Turnover (ATO)

aggregate turnover in preceding year is not

preceding year is not

for Eligibility

exceeding ₹ 1.5 crore or ₹ 75 Lacs [in special

exceeding ₹ 50 Lacs

category states] Special Category State [Key –STNAM3 UK] Sikkim

Tripura

Nagaland

Arunachal Pradesh

4. Tax Rate

Manipur

Meghalaya

Registered

CGST

Mizoram

Uttarakhand

SGST

SGCT 3% of ATO

person is a Manufact-

0.5% of

urer

ATO

Trader

0.5% of

0.5% of Taxable

Taxable supply

supply

2.5% of ATO

2.5% of ATO

Restaurant

5. Is composition

0.5% of ATO

Composition scheme taxpayers permitted to

scheme holder

render services other than restaurant services

eligible for

upto a specified limit:

making supply

This specified value is not exceeding:

IDT सार

CGST 3% of ATO

3.17

of service [other

(a) 10% of the turnover (Excluding interest

than restaurant

on loan advance & deposit) in a

service]

State/Union territory in the preceding financial year; or (b) ₹ 5 lakh, Whichever is higher.

6. Aggregate Turnover

Aggregate Turnover Inclusions Value of all outward supplies i.e. –

Exclusions CGST

Taxable supplies

SGST

Exempt supplies

UTGST

Exports

IGST

Inter-State supplies

Cess

of persons having same PAN to be computed on all India basis

Value of inward supplies on which tax is payable under reverse charge.

Note: 1)

Interest income on loan, advance and deposit to be excluded while computing aggregate turnover.

7. Who cannot opt

a) A service provider (except Restaurant Services and a Registered person

for Composition

whose Value of Service < 10% of the Turnover in a state/UT in

Scheme/

preceding F.Y. OR ₹ 5 Lakh, whichever is Higher) (This point is only

Concessional

applicable for composition Scheme)

Rate Scheme (CRS)

b) Person making non-taxable supplies (Alcohol, Petrol and Supplies under Schedule III) c) Person making Inter-State supply of goods. [In case of CRS InterState Supply of Goods/Services] d) An electronic commerce operator responsible for collecting tax at source And e) Manufacturer of notified goods. f) Non-resident Taxable Person or Casual Taxable Person

8. Something To Know

1) The option availed by a registered person u/s 10 shall lapse with effect from the day on which aggregate T/O during Financial year exceeds limits specified. [Same in CRS U/S 10(2A)] 2) Composition scheme to be adopted uniformly by all the registered

IDT सार

3.18

persons having the same PAN. (Same in CRS) 3) A taxable person who is covered u/s 10 Concessional Rate Scheme 10(2A) shall neither collect any tax from the recipient on supplies made by him nor shall he be entitled to any credit of input tax.

4) There is no restriction on Composition Supplier to procure goods from Inter-State Supplier.

5) A taxable person (u/s 10) shall mention the words “Composition Taxable Person”. On sign board displayed at prominent place at his Principal place of Business and Additional place of Business.

6) A taxable person shall pay Tax under RCM on inward supply of goods or services u/s 9(3)/ 9(4). (Same in CRS)

Example: A Photographer ‘Touch stone’ has commenced providing photography services in Mumbai from April this year. His turnover for various quarter till December is as follows: April – June

₹ 20 Lakh

July – Sept

₹ 30 Lakh

Oct- Dec

₹ 30 Lakh

Analysis: - Touch stone becomes eligible for the registration when his aggregate turnover exceeds ₹ 20 L - while registering under GST, he opts for composition scheme for services u/s 10(2A) - on Rs. 30 Lakh [turnover of July-Sept quarter], he shall pay tax @6% [3% CGST and 3% SGST], i.e. CGST ₹ 90,000 and SGST ₹ 90,000 - By the end of the July-Sept Quarter, his aggregate turnover reaches ₹ 50 L - Consequently, his option to avail composition scheme for services shall lapse by the end of July-Sept quarter and thereafter, he is required to pay tax at the normal rate of 18%. thus the tax payable for Oct-Dec quarter is ₹ 30 L X 18%, i.e. ₹ 5,40,000 RULES FOR COMPOSITION SCHEME Rule 3(2): At the time of registration, any person can option composition scheme in part B of Form GST Reg. – 01 Rule 3(3): Filing of intimation before the beginning of financial year: Any person who is registered under regular scheme but now opt composition Scheme shall electronically file and intimation in FORM GST CMP – 02. Prior to the commencement of the financial year for which the option to pay tax under composition Scheme is exercised.

Rule 3(A): He shall furnish the ITC declaration in FORM GST CMP - 03 within a period of 60 days from the commencement of relevant financial year.

IDT सार

3.19

Rule 3(5) : One intimation applicable for all place in case of same pan Rule 4: EFFECTIVE DATE FOR COMPOSITION LEVY The beginning of the financial year, where intimation is filed u/r 3(3) Rule 6: Provision regarding validity of composition scheme Rule 6(1): The option exercise shall remain valid so long as he satisfied all the conditions.

Rule 6(2): Mandatory Cessation of Composition Levy on Violation of Conditions: The person shall be liable to pay tax under regular scheme from the day he cease to satisfy any of the condition and shall issue tax invoice for every taxable supply and he shall also file intimation for withdrawal from the scheme in FORM GST CMP-04 within 7 days of occurrence of such event.

Rule 6(3): Application for withdrawal from scheme: The register person who intends to withdraw from the composition scheme shall file an Application in FORM GST CMP - 04.

Rule 6(4): Where the proper officer has reason to believe that the registered person was not eligible for composition scheme or has contravened the provision of the Act. Proper officer (PO) may issue a SCN (show case notice) as why option to pay tax u/s 10 shall not be denied.

Rule 6(5): Registered person as per (u/s 10) shall reply to proper officer upon receipt of reply, The PO shall issue an order within 30 days of the receipt of the reply or denying the Option to pay tax u/s 10 as the case may be.

Rule 6(6): Every person may furnish a statement in FORM GST ITC - 01 containing Detail of stock of inputs and inputs contained in semi-finished or finished goods held in stock by him on the date on which option is withdrawn or denied, within a period 30 days from the date from which the option is withdrawn or from the date of the order passed.

STUDENTS NOTE:-

IDT सार

3.20

Indirect Tax Laws (IDT) | IDT SAAR | CLASS NOTES AUTHOR PUBLISHER DATE OF PUBLICATION EDITION ISBN NO NO. OF PAGES BINDING TYPE

: : : : : : :

Mahesh Gour, K.M. Bansal TAXMANN June 2022 5th Edition 9789356222076 430 PAPERBACK

Rs. : 950 | USD : 46

Description This book is prepared exclusively for the Final Level of Chartered Accountancy Examination requirement. It covers the entire revised syllabus as per ICAI. It is a one-stop solution to conquer the vast subject of Indirect Taxation easily. This book aims to explain the complicated provisions of the law in a simplified manner with the help of charts & diagrams.

This book covers the following laws: · GST Act · Customs Act · Foreign Trade Policy The Present Publication is the 5th Edition & updated till 30th April 2022 for CA-Final | New Syllabus | Nov. 2022/May 2023 exams. It is authored by CA (Dr.) Mahesh Gour & CA (Dr.) K.M. Bansal, with the following noteworthy features: · Strictly as per the New Syllabus of ICAI · [Pictorial Presentation/Charts with Handwritten Fonts] are used in the book for easy understanding of complex concepts · [Multi-Colour Coded Book] which follows the below structure: o Black – Heading, Sub-Heading & Important Words o Blue – Matter/Content o Red – Section, Rules & Schedules o Green – Key Code, Date, Month  Amendments for December 2021  Amendments for May 2021 · [Author's View] for conceptual clarity · [RTPs & MTPs of ICAI] This book covers references to RTPs & MTPs Questions of ICAI · [Amendments Applicable for Nov. 2022 Examination] are especially highlighted

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