CA Inter GST Marathon Notes

INDEX
Ch Name Page no.

No
1, 2 Introduction, supply under gst 1
3 Charge of gst 13
4 Exemptions from gst 29
5a Time of supply 44
5b Value of supply 50
6 Input tax credit 57
7 Registration 69
8 Tax invoice, credit and debit notes 83
8a e-way bill 95
9 Payment of tax 103
10 Returns under gst 111

Ch 1 INTRODUCTION/ CH 2:
SUPPLY UNDER GST
CA INTER GST JULY 2021
CA Vikram Phatak
AIR HOLDER
CH 1 INTRODUCTION/ CH 2: SUPPLY UNDER GST CA VIKRAM PHATAK (AIR HOLDER)
Taxes subsumed in GST and not so subsumed
Status of certain items
Alcohol for human Power to tax

consumption remains with the
State [State excise
duty and VAT are
currently
applicable]
5 petroleum GST council to

products – Crude oil, decide date from
Diesel, Petrol, which GST will be
Natural Gas and applicable
ATF
Entertainment tax Power to tax

levied by local remains with Local
bodies Bodies
Tobacco GST applicable –

Power to levy excise
duties also
retained.
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Definition of Goods/ Services

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Definition of Supply
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Definition of Related Person

A person who is under influence of another person is called a related person like members of the same family or subsidiaries of a
group company etc.
Family: means, —
(i) the spouse and children of the person, and
(ii) the parents, grand-parents, brothers and sisters of the person if they are wholly or mainly dependent on the said person
Under GST law various categories of related persons have been specified. The term ‘related person’ has been defined in explanation
to section 15.
Persons including legal Such persons are officers/directors of one another’s business
person are deemed as
related persons if - Such persons are legally recognised partners
Such persons are employer & employee
A third person controls/ owns/ holds (directly/ indirectly) ≥ 25% voting stock/shares of
both of them
One of them controls (directly/indirectly) the other
A third person controls (directly/indirectly) both of them
Such persons together control (directly/indirectly) a third person
Such persons are members of the same family
One of them is the sole agent/sole distributor/sole concessionaire of the other

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Supply of goods or services
It has been clarified that the activity of transfer of tenancy right against consideration [tenancy premium] is squarely covered under supply
of service liable to GST.
However, Grant of tenancy rights in a residential dwelling for use as residence dwelling against tenancy premium or periodic rent or both is
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exempt from tax

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Negative List under GST
Schedule III
Functions performed by Members of

Parliament, State Legislature, Panchayats,
Services by an employee to the Municipalities, Local Authority; Duties by a
employer in the course of or in Services by any court or Tribunal
person holding Constitutional Post; Duties
relation to his employment established under any law for the
performed by any person as a Chairperson or a
time being in force
[refer note below] Member or a Director in a body established by
the Central Government or a State Government
or local authority
Services of funeral, burial, Sale of land and, subject to

Actionable claims, other than
crematorium or mortuary including paragraph 5(b) of Schedule II, sale
lottery, betting and gambling
transportation of the deceased. of building
The following shall not be treated as amounts paid in relation to services in the course of employment: [and hence shall be a supply]
 Services provided on contract basis by a person to another i.e. principal-to-principal basis [services provided not as an employee].
 Any amount paid by employer to employee for not joining a competing business
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Composite Supply V Mixed Supply

Composite Supply Mixed Supply
Composite supply means a supply made by a taxable person to Mixed supply means two or more individual supplies of goods
a recipient consisting of two or more taxable supplies of goods or services, or any combination thereof, made in conjunction
or services or both, or any combination thereof, which are with each other by a taxable person for a single price where
naturally bundled and supplied in conjunction with each other such supply does not constitute a composite supply.
in the ordinary course of business, one of which is a principal
supply;
How taxed? How taxed?
Principal supply means the supply of goods or services which A mixed supply comprising of two or more supplies shall be
constitutes the predominant element of a composite supply treated as supply of that particular supply that attracts highest
and to which any other supply forming part of that composite rate of tax.
supply is ancillary.
Indicators: Indicators:
 The perception of the consumer or the service recipient  Not a composite supply
 Majority of service providers in a particular area of
business provide similar bundle of services
 The nature of the various services in a bundle of services
[Breakfast and dinner included in stay in hotel is
ancillary service] etc.
Examples: Examples:
 Goods sold on door delivery terms – Goods + Transport  A supply of a package consisting of canned foods,
charges + Transit insurance etc. – Principal supply is sweets, chocolates, cakes, dry fruits, aerated drink and
goods fruit juices when supplied for a single price is a mixed
 When a consumer buys a television set and he also gets supply
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mandatory warranty and a maintenance contract with  Supply of package consisting of a toothbrush and
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the TV toothpaste
The services provided by way of tolerating non-performance of a contract and its chargeability
Non-performance of a contract is the failure to fulfill the obligations under a contract. It is generally one of
the conditions stipulated in any contract for supply of goods/services.
The agreement entered into between the parties stipulates that both the service provider and service
recipient abide by the terms and conditions of the contract. In case any of the parties breach the contract
for any reason including non-performance of the contract, then such person is liable to pay damages in the
form of fines or penalty to the other party.
Tolerating non-performance of a contract in lieu of damages or fines is a supply in terms of section 7 of the
CGST Act, 2017 as it is made for a consideration by a person in the course or furtherance of business.
Further, tolerating non-performance of a contract is treated as a supply of service in terms of section 7 read
with Schedule II of CGST Act, 2017.
However, in case of supplies to Government, non-performance of contract by the supplier of service for
which consideration in the form of fines or liquidated damages is payable is exempt from GST.
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On the go:
Branch transfer/ Stock transfer:
Transactions between different locations (with separate GST registrations) of same legal entity (e.g., stock
transfers or branch transfers) will qualify as ‘supply’ under GST as these are transactions between distinct
persons.
However, transfer between two units of a legal entity under single registration (apparently within same State) will
not be considered as supply
Sales Promotion Schemes:

Free samples and gifts: Samples which are supplied free of cost, without any consideration, do not qualify as
“supply” under GST, except where the activity falls within the ambit of Schedule I (i.e when supplied to related
person)
Buy one get one free offer: It is not an individual supply of free goods, but a case of two or more individual
supplies where a single price is Buy one Get one free being charged for the entire supply. Taxability would
depend upon whether it is “mixed” or “composite” supply
Inter-State movement of various modes of conveyance [clarification]

Inter-State movement of various modes of conveyance, between distinct persons including-Trains, Buses,
Trucks, Tankers, Trailers, Vessels, Containers, Aircrafts carrying goods or passengers or both; or for repairs and
maintenance, shall be treated ‘neither as a supply of goods or supply of service’ and therefore not be leviable to
IGST. [except in cases where such movement is for further supply of the same conveyance]
Inter-State movement of rigs, tools and spares, and all goods on wheels [like cranes] - This circular shall mutatis
mutandis apply.
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Recent Questions:
Nov 2020 - exam
With reference to provisions of the CGST Act, 2017 discuss in brief, when ''Importation of services" is to be considered as
supply and when it is not to be considered as supply. [ 5 marks]
Answer:
Importation of services for a consideration whether or not in the course or furtherance of business is to be considered as
supply.
Importation of services by a person without consideration is deemed as supply provided the following two conditions are
satisfied:
(a) such import is from related person or from his establishments located outside India, and
(b) such import is in the course or furtherance of business.
In case any or both of the above two conditions is/are not satisfied, the import of services without consideration shall
not be deemed as supply.
Mock Test: March 21

Briefly explain the leviability of GST or otherwise on petroleum crude, diesel, petrol, Aviation Turbine Fuel (ATF) and
natural gas. [ 5 marks]
Answer:
 Petroleum crude, diesel, petrol, ATF and natural gas are presently not leviable to GST.
 GST will be levied on these products from a date to be notified on the recommendations of the GST Council.
 Till such date, central excise duty continues to be levied on manufacture/production of petroleum crude, diesel, petrol,
ATF and natural gas and inter-State/intra-State sale of the same is subject to CST/ VAT respectively.
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Mock Test: April 21

GST is a simplified tax structure. Justify the statement. [ 5 marks]
Answer:
 GST is a simplified tax structure. The statement is justified.

 Simpler tax regime with fewer exemptions along with reduction in multiplicity of taxes under GST has led to
simplification and uniformity in tax structure.
 The uniformity in laws, procedures and tax rates across the country makes doing business easier.
 Common system of classification of goods and services across the country ensures certainty in tax administration
across India.
ICAI Module Question [New]

Sarvanna & Sons wishes to start supplying liquor in the State of Tamil Nadu. Therefore, it applies for license for selling
liquor to the Tamil Nadu Government for it has charged specified fee from it. Examine whether the grant of alcoholic
liquor license by the Tamil Nadu Government to Sarvanna & Sons qualifies as supply.
Answer:
 Services by way of grant of alcoholic liquor license by the State Governments have been notified to be treated neither as
a supply of goods nor as a supply of service.
 Such licence is granted against consideration in the form of licence fee or application fee or by whatever name it is
called.
 Thus, in the given case, the grant of alcoholic liquor license by the Tamil Nadu Government to Sarvanna & Sons is
neither a supply of goods nor a supply of service.
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ICAI Module Question [New]

Gagan Engineering Pvt. Ltd., registered in Haryana, is engaged in providing maintenance and repair services for heavy
steel machinery. For carrying out the repair work, Gagan Engineering Pvt. Ltd. sends its container trucks equipped with
items like repair equipments, consumables, tools, parts etc. from Haryana workshop to its own repairing centres
(registered under GST law) located in other States across India where the clients’ machinery are being brought and are
being repaired.
Discuss the leviability of GST on the inter-State movement of trucks from the workshop of Gagan Engineering Pvt. Ltd. in
Haryana to its own repairing centres located in other States across India.
Answer:
 A person who has obtained more than one registration, whether in one State or Union territory or more than one State
or Union territory shall, in respect of each such registration, be treated as ‘distinct persons’.
 Supply of goods and/or services between ‘distinct persons’, when made in the course or furtherance of business is
deemed supply as per Schedule I.
 However, in view of the GST Council’s recommendation, it has been clarified that the inter-State movement of various
modes of conveyance between ‘distinct persons’, not involving further supply of such conveyance, including trucks
carrying goods or passengers or both; or for repairs and maintenance, may be treated ‘neither as a supply of goods nor
supply of service’ and therefore, will not be leviable to IGST
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CH 3: CHARGE OF GST
Vikram Phatak
AIR HOLDER
CH 3: CHARGE OF GST CA VIKRAM PHATAK (AIR HOLDER)
Amendments and important updates:
Union Territories
 Dadra and Nagar Haveli and Daman and Diu – is one Union Territory …. [relevant for registration]
 Ladakh is a separate UT.
The following are UTs with State Legislature [which are treated like State for GST purpose and SGST applies]
 Delhi
 Puducherry
 Jammu and Kashmir
Clarification on levy of GST on Director’s remuneration
Remuneration paid by companies to independent directors or non-employee Company to pay under RCM
directors [TDS u/s194J]
Remuneration paid to employee-directors [TDS u/s 192] Not a supply
Directors’ remuneration declared separately other than salaries Company to pay under RCM
[ TDS u/s 194J]
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Services covered under RCM – Chart I

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Services covered under RCM – Chart II

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Services covered under RCM – Chart III

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Services covered under RCM – Chart IV

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GTA flowchart
Specified goods:
• agricultural produce
• milk, salt and food grain including
flour, pulses and rice
• organic manure
• newspaper or magazines registered
with the Registrar of Newspapers
• relief materials meant for victims of
natural or man-made disasters
• defence or military equipment
7 Specified persons:
• Factory registered under the
Factories Act,1948;
• A society registered under the
Societies Registration Act, 1860 or
under any other law
• A co-operative society established
under any law;
• A GST registered person
• A body corporate established by or
under any law; or
• A partnership firm whether
registered or not (including AOP)
• Casual taxable person
GTA means a one who issues consignment note
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Composition u/s 10(1) and (2)
Tax payment:
Quarterly – CMP 08
Return filing:
Annual – GSTR 4
Marginal supply of service allowed – 10% of TO in state or 5 lac whichever is higher.

Interest income not to be considered for marginal supply of service and is nor considered as TO.
Only Manufacturer of notified goods (ice-cream …..) are not eligible for composition – but traders of such goods are eligible.
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Composition u/s 10(2A)

Those registered persons who are not eligible for composition levy u/s 10(1) and (2) can opt for composition under this section. [for example, small service
providers can opt]
Turnover limit : 50 Lakh
Rate of tax: : 3% CGST + 3% SGST .. [total 6%]
The following shall not be eligible for opting for composition u/s 10(2A):
Engaged in making any

Manufacturer of notified
supply of goods/service
goods - icecream and
Supplier of goods/ Supplier of inter-state through an electronic Casual taxable person
other edible ice,
service not leviable to outward supplies of commerce operator who [CTP] or Non-Resident
panmasala, tobacco
tax goods/service is required to collect tax Taxable person [NRTP]
products and aerated
at source under section
water.
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All other provisions are the same like Composition u/s 10(1) and (2)
[except that provision relating to marginal supply of service is not applicable – naturally because this composition is meant for service providers or partly
service providers]
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Recent Questions:
Jan 21 - exam
Mr. Anurag, a famous Author is engaged in supply of services by the way of transfer or permitting the use or enjoyment of
a copyright covered under clause (a) of sub-section (1) of section 13 of the Copyright Act, 1957 relating to original literary
works to a publisher.
Explain in brief the conditions under which an Author can choose to pay tax under forward charge. [ 5 marks]
Answer:
Mr. Anurag, an author, can choose to pay tax under forward charge provided he fulfills the following conditions:
 He has taken registration under the GST law.
 He has filed a declaration, in the prescribed form, that he exercises the option
o to pay tax on the said service under forward charge and,
o to comply with all the provisions of the GST law as they apply to a person liable for paying the tax in relation to
the supply of any goods and/or services and
o that he shall not withdraw the said option within a period of 1 year from the date of exercising such option.
 He makes a declaration on the invoice issued by him in prescribed form to the publisher.
Nov 20 - exam
In the following independent cases, decide, who is liable to pay GST, if any. You may assume that recipient is located in
the taxable territory. Ignore the aggregate turnover and exemption available.
i. 'Veer Transport', a registered Goods Transport Agency (GTA) paying IGST @ 12%, transported goods by road of
Dilip & Company, a sole proprietary firm (other than specified person) which is not registered under GST or any
other Law.
ii. Mr. Kamal Jain, an unregistered famous author, received 20 lakh of consideration from PQR Publications Ltd.
for supply of services by way of temporary transfer of a copyright covered under section 13(1)(a) of the Copyright
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Act, 1957 relating to original literary works of his new book. [ 4 marks]
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Answer i :
In case of a GTA service, where GST is payable @ 5% and recipient is one of the specified recipients, tax is payable by the
recipient of service under reverse charge.
However, where GST is payable @ 12%, tax is payable under forward charge by the supplier of service. Therefore, in the given
case, tax is payable under forward charge by "Veer Transport", a registered GTA.
Note In the given case, since the recipient of service is other than specified recipient, i.e., unregistered sole proprietorship firm,
GTA service is exempt from GST. However, in the above answer, the said exemption has been ignored since the question
specifically requires the students to ignore the exemptions, if any, available.
Answer ii :
Supply of services by an author by way of transfer of a copyright covered under section 13(1)(a) of the Copyright Act, 1957
relating to original literary works to a publisher located in the taxable territory is taxable under reverse charge mechanism.
Thus, in the given case, the recipient of service, i.e. PQR Publications Ltd. is liable to pay GST.
The tax can be paid by the author under forward charge if the author is a registered person. Since in the given case, the
author is an unregistered person, the said option is not available to him.
MTP – Mar 21
M/s Shubhank Associates, a partnership firm, provided recovery agent services to Neelkanth Credits Ltd., a non-banking
financial company and a registered supplier, on 15 th January. Invoice for the same was issued on 7th February and the
payment was made on 18th April by Neelkanth Credits Ltd. Bank account of the company was debited on 20th April.
Determine the following:
i. Person liable to pay GST
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ii. Time of supply of service

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Answer i:
Tax on services supplied by a recovery agent to, inter alia, a non- banking financial company (NBFC) is payable under reverse
charge by such non-banking financial company.
Therefore, in the given case, person liable to pay GST is the NBFC - Neelkanth Credits Ltd.
Answer ii:
As per section 13(3) of the CGST Act, the time of supply of service on which GST is payable under reverse charge is earlier of
the following:
 Date of payment as entered in the books of account of the recipient (18 th April) or the date on which the payment is
debited in his bank account (20 th April), whichever is earlier;
 Date immediately following 60 days since issue of invoice by the supplier, i.e. 9 th April.
Thus, time of supply of service is 9th April.
RTP – May 21
Mr. Priyam, director of Sun Moon Company Private Limited, provided service to the company for remuneration of
1,25,000. Briefly answer whether GST is applicable in the below mentioned independent cases? If yes, who is liable to pay
GST?
i. Mr. Priyam is an independent director of Sun Moon Company Private Limited and not an employee of the
company.
ii. Mr. Priyam is an executive director, i.e. an employee of Sun Moon Company Private Limited. Out of total
remuneration amounting to 1,25,000, 60,000 has been declared as salaries in the books of Sun Moon
Company Private Limited and subjected to TDS under section 192 of the Income-Tax Act (IT Act). However,
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65,000 has been declared separately other than salaries in the Sun Moon Company Private Limited’s accounts
and subjected to TDS under section 194J of the IT Act as professional services.
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Answer i:
As per Para I of Schedule III of the CGST Act, services by an employee to the employer in the course of or in relation to his
employment are non-supplies, i.e. they are neither supply of goods nor supply of services.
Services provided by the independent directors who are not employees of the said company to such company, in lieu of
remuneration as the consideration for the said services, are clearly outside the scope of Schedule III of the CGST Act and are
therefore taxable.
Further, such remuneration paid to the directors is taxable in hands of the company, on reverse charge basis.
Thus, GST is applicable in this case and Sun Moon Company Private Limited is liable to pay GST.
Answer ii:
The part of director’s remuneration which is declared as salaries in the books of a company and subjected to TDS under
section 192 of the Income-tax Act (IT Act), is not taxable being consideration for services by an employee to the employer in the
course of or in relation to his employment in terms of Schedule III.
Further, the part of employee director’s remuneration which is declared separately other than salaries in the company’s
accounts and subjected to TDS under section 194J of the IT Act as fees for professional or technical services are treated as
consideration for providing services which are outside the scope of Schedule III and is therefore, taxable. The recipient of the
said services i.e. the company, is liable to discharge the applicable GST on it on reverse charge basis.
In lieu of the above provisions, 60,000 declared as salaries in the books of Sun Moon Company Private Limited and subjected
to TDS under section 192 of the Income-Tax Act (IT Act), is not taxable being consideration for services by an employee to the
employer in the course of or in relation to his employment in terms of Schedule III.
Further, 65,000 declared separately other than salaries in the Sun Moon Company Private Limited’s accounts and subjected
to TDS under section 194J of the IT Act as professional services is treated as consideration for providing services which is
outside the scope of Schedule III and is therefore, taxable. The recipient of the said services i.e. the Sun Moon Company
Private Limited, is liable to discharge the applicable GST on it on reverse charge basis.
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ICAI Module
Sultan & Sons, a partnership firm, in Nagpur, Maharashtra is a wholesaler of a taxable product ‘P’ and product ‘Q’ exempt
by way of a notification, in the State of Maharashtra. Its aggregate turnover in the preceding financial year is 130 lakh.
The firm wishes to opt for composition scheme under sub- sections (1) & (2) of section 10 of the CGST Act. However, its
accountant is of the view that a person engaged in making supply of exempt goods is not eligible for the said scheme.
Discuss.
Note: Assume that Sultan & Sons is not engaged in manufacture of goods as notified under section 10(2)(e).
Answer:
 The view taken by the accountant of Sultan & Sons is not valid in law.
 A registered person with an aggregate turnover in a preceding financial year up to 1.5 crore is eligible for composition
levy, under section 10(1) & 10(2), in Delhi.
 Further, such person must not be engaged in making any supply of goods which are not leviable to tax under this Act
and must not be engaged in making any inter-State outward supplies of goods, for being eligible to pay tax under said
scheme.
 In the given case, the aggregate turnover of Sultan & Sons does not exceed 1.5 crore. Further, it is engaged in making
only intra-State supply of goods and Product P supplied by it is taxable and Product Q supplied by it is leviable to tax
though exempted by way of notification.
 Therefore, it is eligible for composition levy under section 10(1) & 10(2) in the current year.
ICAI Module
A person availing composition scheme, under sub-sections (1) & (2) of section 10 of the CGST Act, in Haryana during a
financial year crosses the turnover of 1.5 crore in the month of December. Will he be allowed to pay tax under
composition scheme for the remainder of the year, i.e. till 31st March? Please advise.
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Answer:
 No. The option to pay tax under composition scheme lapses from the day on which the aggregate turnover of the person
availing composition scheme for goods during the financial year exceeds the specified limit ( 1.5 crore).
 Once he crosses the threshold, he is required to file an intimation for withdrawal from the scheme in prescribed form
within 7 days of the occurrence of such event.
 Every person who has furnished such an intimation, may electronically furnish at the common portal, a statement in
prescribed form containing details of the stock of inputs and inputs contained in semi-finished or finished goods held in
stock by him on the date on which the option is withdrawn, within a period of 30 days from the date from which the
option is withdrawn.
RTP – May 21
“Wedding Bells”, a wedding photographer, has commenced providing pre-wedding shoot services in Jaipur from the
beginning of current financial year 2020-2021. It has provided the following details of turnover for the various quarters till
December, 2020 :-
S. No. Quarter Amount ( in

lakh)
1 April,2020-June,2020 20
2 July,2020-September,2020 30
3 October,2020-December,2020 40
You may assume the applicable tax rate as 18%. Wedding Bells wishes to pay tax at a lower rate and opts for the
composition scheme. You are required to advise whether it can do so and calculate the amount of tax payable for each
quarter?
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Answer:
 Section 10(2A) of the CGST Act, 2017 provides the turnover limit of 50 lakh in the preceding financial year for
becoming eligible for composition levy for services.
 Wedding Bells has started the supply of services in the current financial year (FY), thus, it’s aggregate turnover in the
preceding FY is Nil. Consequently, in the current FY, Wedding Bells is eligible for composition scheme for services. A
registered person opting for composition levy for services shall pay tax @ 3% [Effective rate 6% (CGST+ SGST/UTGST)]
of the turnover of supplies of goods and services in the State.
 Further, Wedding Bells becomes eligible for the registration when the aggregate turnover exceeds 20 lakh (the
threshold limit of obtaining registration). While registering under GST, Wedding Bells can opt for composition scheme
for services.
 The option of a registered person to avail composition scheme for services shall lapse with effect from the day on which
his aggregate turnover during a financial year exceeds the threshold limit of 50 lakh.
 However, for the purposes of determining the tax payable under composition scheme, the expression “turnover in State”
shall not include the value of supplies from the first day of April of a FY up to the date when such person becomes liable
for registration under this Act.
 Thus, for determining the turnover of the State for payment of tax under composition scheme for services, turnover of
April,2020 – June,2020 quarter [ 20 lakh] shall be excluded. On next 30 lakh [turnover of July,2020 – September,
2020 quarter], it shall pay tax @ 6% [3% CGST and 3% SGST].
 For the purposes of computing aggregate turnover of a registered person for determining his eligibility to pay tax under
this section, aggregate turnover includes value of supplies from the 1st April of a FY up to the date of his becoming
liable for registration.
 Thus, while computing aggregate turnover for determining Wedding Bells’s eligibility to pay tax under composition
scheme, value of supplies from the first day of April of a financial year up to the date when it becomes liable for
registration under this Act (i.e. turnover of April,2020 – June,2020 quarter), are included.
 By the end of July, 2020 – September, 2020 quarter, the aggregate turnover reaches 50 lakh. Consequently, the
option to avail composition scheme for services shall lapse by the end of July, 2020 – September, 2020 quarter and
thereafter, it is required to pay tax at the normal rate of 18%.
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Answer: (contd …)
Considering the above provisions, the tax payable for each quarter is as under:
S. Quarter GST rate [CGST Turnover ( GST payable (

No. + SGST] in lakh) in lakh)
1 April, 2020 – - 20 -
June, 2020
2 July, 2020 – 6% 30 1.8
September, 2020
3 October, 2020 – 18% 40 7.2
December, 2020
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CH 4: EXEMPTIONS FROM GST
CA Vikram Phatak
AIR HOLDER
CH 4: EXEMPTIONS FROM GST CA VIKRAM PHATAK (AIR HOLDER)
Changes:
Services by way of transportation of goods by an aircraft from customs station of clearance in India to a place outside India upto 30.9.2021
[earlier it was upoto 30.9.20]
Services by way of transportation of goods by a vessel from customs station of clearance in India to a place outside India upto 30.9.2021
[earlier it was upoto 30.9.20]
New exemption added:

Satellite launch services supplied by Indian Space Research Organization, Antrix Corporation Ltd or New Space India Lid.
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Services related to charitable and religious activities
Charitable entities registered u/s 10(23C)/ 10(23BBA) are also covered by exemption.
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Agriculture related services

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Education services
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Health care services
Recognized systems of medicines in

India:
 Allopathy
 Yoga
 Naturopathy
 Ayurveda
 Homeopathy
 Siddha
 Unani
 Any other system of medicine
that may be recognized by
Central Government.
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Services by Government Services by the Government [Department of post] – what is

taxable and what is exempt?
** Transport of goods can be exempt under other entry of the notification.

Also, where taxable, it may be subjected to RCM.
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Services To Government
A Pure services provided to Government
Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central
Government, State Government or Union territory or local authority or a Governmental authority or a Government Entity by way of any
activity:
 in relation to any function entrusted to a Panchayat under article 243G of the Constitution or
 in relation to any function entrusted to a Municipality under article 243W of the Constitution.
B Composite supply of goods and services to Government
Composite supply of goods and services in which the value of supply of goods constitutes not more than 25% of the value of the said
composite supply provided to the Central Government, State Government or Union territory or local authority or a Governmental authority or
a Government Entity by way of any activity:
 in relation to any function entrusted to a Panchayat under article 243G of the Constitution or
 in relation to any function entrusted to a Municipality under article 243W of the Constitution.
C Service provided by Fair Price Shops to Central Government, State Government or Union territory by way of sale of food grains, kerosene,
sugar, edible oil, etc. under Public Distribution System against consideration in the form of commission or margin
D Services provided to the Central Government, State Government, Union territory under any insurance scheme for which total premium is paid
by the Central Government, State Government, Union territory
E Services provided to the Central Government, State Government, Union territory administration under any training programme for which total
expenditure is borne by the Central Government, State Government, Union territory administration.
F Services provided by the GSTN (Goods and Services Tax Network) to the Central Government or State Governments or Union territories for
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implementation of Goods and Services Tax.

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Passenger Transport
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Other important exemptions:

[also refer revision notes of Ch 2 where some exemptions linked to RCM were covered]
Pure labour contracts – single Services by way of pure labour contracts of construction, erection, commissioning, or
residential unit installation of original works pertaining to a single residential unit otherwise than as a part of a
residential complex
TDR/ FSI Supply of TDR, FSI, long term lease (premium) of land by a landowner to a developer are
exempted subject to the condition that the constructed flats are sold before issuance of
completion certificate and tax is paid on them.
Goods transport other than  Services by way of transportation by rail or a vessel from one place in India to another of
road the specified goods are exempt.
 Transportation of goods service provided to Government are exempt.
Extending deposits, loans or Services by way of extending deposits, loans or advances in so far as the consideration is
advances represented by way of interest or discount (other than interest involved in credit card services).
Interest would cover penal interest (delayed payment charges) but would not include service fee
or charges levied etc. for extending loans/ deposits etc.
Inter se sale or purchase of Inter se sale or purchase of foreign currency amongst banks or authorised dealers of foreign
foreign currency exchange or amongst banks and such dealers.
It is important to note that such services provided to general public will not be covered in this
entry
Services provided by specified  Employees’ State Insurance Corporation

bodies  Employees Provident Fund Organisation
 Coal Mines Provident Fund Organisation
 National Pension System (NPS) Trust

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IRDAI
 SEBI
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Leasing services Long term lease (30 years or more) provided by the State Government Industrial Development
Corporations or Undertakings or by any other entity having 50% or more ownership of Central
Government, State Government, Union territory to the industrial units or the developers in any
industrial or financial business area.
Services of leasing of assets (rolling stock assets including wagons, coaches, locos) by the Indian
Railways Finance Corporation to Indian Railways
Services by an unincorporated  as a trade union

body or a non- profit entity –
share of contribution  for the provision of carrying out any activity which is exempt from the levy of Goods and
Services Tax; or
 up to an amount of 7,500 per month per member for sourcing of goods or services from
a third person for the common use of its members in a housing society or a residential
complex
Services by an unincorporated  activities relating to the welfare of industrial or agricultural labour or farmers; or
body or a non- profit entity –
share of contribution –  promotion of trade, commerce, industry, agriculture, art, science, literature, culture,
membership fee sports, education, social welfare, charitable activities and protection of environment
Lodging / accommodation Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential
services or lodging purposes, having Value of Supply of a unit of accommodation below or equal to
1,000 per day or equivalent.
Business exhibition Services by an organiser to any person in respect of a business exhibition held outside India
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Recognized sports body Services provided to a recognised sports body by-

 an individual as a player, referee, umpire, coach or team manager for participation in a
sporting event organised by a recognized sports body;
 another recognised sports body.
However, services by individuals such as selectors, commentators, curators, technical experts

are taxable. The service of a player to a franchisee which is not a recognized sports body is also
taxable.
Services by way of giving on  to a state transport undertaking (STU), a motor vehicle meant to carry more than 12
hire (a transport vehicle) passengers
 to a local authority an EOV [Electrically Operated Vehicle] meant to carry more than 12
passengers
 to a goods transport agency, a means of transportation of goods.
 motor vehicle for transport of students, faculty and staff, to a person providing services of
transportation of students, faculty and staff to an educational institution providing
services by way of pre-school education and education upto higher secondary school or
equivalent.
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Recent Questions
Mock Test: April 21

Kashi Enterprises, an event organizer, provided services to Brisk n Frisk Ltd. by way of organizing business exhibition
in New Delhi as part of Make in India initiative. Kashi Enterprises claims that it is not required to pay GST as the services
provided by way of organizing business exhibition are exempt from GST. Examine the technical veracity of the claim of
Kashi Enterprises, in the given case. [4 marks]
Answer:
 No, the claim made by Kashi Enterprises that it is not required to pay GST is not correct.
 Services provided by an organiser to any person in respect of a business exhibition are exempt from GST only when
such business exhibition is held outside India.
 However, since in the given case, the exhibition is being organized in India, the services of organization of event by
Kashi Enterprises will not be exempt from GST.
ICAI new question

ST Ltd. has given on hire 5 trucks to Titu Transporters of Delhi (a goods transport agency) for transporting goods in
Central and West Delhi. The hiring charges for the trucks are 7,500 per truck per day. Examine whether GST is payable
in the given case.
Answer:
GST is not payable in case of hiring of trucks to Titu Transporters.
Services by way of giving on hire, inter alia, to a goods transport agency, a means of transportation of goods are exempt.
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ICAI new question

Ekta Charitable trust, registered under section 10(23C)(v) of the Income-tax Act, 1961, manages a temple in Rohini, Delhi.
It has given on rent a community hall, located within temple premises, to public for celebration of Teej Mela. Rent
charged is 9,500. You are required to determine whether the services provided by Ekta Charitable trust are liable to GST.
Answer:
Services by a person by way of renting of precincts of a religious place meant for general public, owned or managed by an
entity registered as a trust or an institution under section 10(23C)(v) of the Income-tax Act are exempt provided renting
charges of premises, community halls, kalyanmandapam or open area are not 10,000 or more per day.
Thus, in the given case, renting of community hall by Ekta Charitable Trust is exempt from GST, as rent is less than 10,000
per day.
Jan 21 exam
Green Agro Services, a registered person provides the following information relating to its activities during the month of
February, 2020:
Gross Receipts from ( )

Services relating to rearing of sheeps 6,00,000
Services by way of artificial insemination of horses 4,00,000
Processing of sugarcane into jaggery 8,00,000
Milling of paddy into rice 7,50,000
Services by way of fumigation in a warehouse of agricultural produce 1,80,000
All the above receipts are exclusive of GST.

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Compute the value of taxable supplies under GST laws for the month of February, 2020.
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Answer:
Computation of value of taxable supplies
Particulars Amount
( )
Services relating to rearing of sheeps Nil
[Exempt since services relating to rearing of all life forms of animals, except horses, for food etc. are exempt.]
Services by way of artificial insemination of horses 4,00,000
[Not exempt since services of artificial insemination are exempt only of livestock other than horses.]
Processing of sugarcane into jaggery 8,00,000
[Not exempt, since processes which alter the essential characteristics of agricultural produce are not exempt and processing of
sugarcane into jaggery changes the essential characteristics of sugarcane.]
Milling of paddy into rice 7,50,000
[Not exempt, since this process, being carried out after cultivation is over, is not an intermediate production process in relation to
cultivation of plants and it also changes the essential characteristics of paddy.]
Services by way of fumigation in a warehouse of agricultural produce [Specifically exempt from GST.] Nil
Value of taxable supplies 19,50,000
May 2018
Examine whether GST is exempted on the following independent supply of services:
a. Teja & Co, a tour operator, provides services to a foreign tourist for tour conducted in Jammu & Kashmir and
receives a sum of 3,00,000.
b. Ms. Poorva acts as a Team Manager for Indian Sports League (ISL), a recognised sports body, for a Tennis
tournament organised by Multi brand retail company and received a remuneration of 2,00,000.
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Answer a:
 Services provided by a tour operator to a foreign tourist are exempt from GST provided such services are in relation to a
tour conducted wholly outside India.
 Thus, since in the given case, services provided by Teja & Co. are in relation to a tour conducted within India, the same
are not exempt from GST.
Answer b:
 Services provided by a team manager to a recognised sports body for participation in a sporting event are exempt from
GST provided said sporting event is organised by a recognized sports body.
 Thus, since in the given case, the sporting event is not organised by a recognised sports body, the services provided by
Ms. Poorva are not exempt from GST.

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Ca
CH 5A: TIME OF SUPPLY

CA Vikram Phatak
AIR HOLDER
CH 5A: TIME OF SUPPLY CA VIKRAM PHATAK (AIR HOLDER)
Recipient of supply of goods or services or both

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Time limit for issue of invoice – goods

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Time limit for issue of invoice – services

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Time of supply
In case of goods, tax liability does not arise on receipt of “advance money”. However, in case of services, tax is to be paid on advance
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money received.
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Recent Questions
MTP – Mar 21
M/s Shubhank Associates, a partnership firm, provided recovery agent services to Neelkanth Credits Ltd., a non-banking
financial company and a registered supplier, on 15 th January. Invoice for the same was issued on 7th February and the
payment was made on 18th April by Neelkanth Credits Ltd. Bank account of the company was debited on 20th April.
Determine the following:
i. Person liable to pay GST
ii. Time of supply of service
Answer i:
Tax on services supplied by a recovery agent to, inter alia, a non- banking financial company (NBFC) is payable under reverse
charge by such non-banking financial company.
Therefore, in the given case, person liable to pay GST is the NBFC - Neelkanth Credits Ltd.
Answer ii:
As per section 13(3) of the CGST Act, the time of supply of service on which GST is payable under reverse charge is earlier of
the following:
 Date of payment as entered in the books of account of the recipient (18 th April) or the date on which the payment is
debited in his bank account (20 th April), whichever is earlier;
 Date immediately following 60 days since issue of invoice by the supplier, i.e. 9 th April.
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Thus, time of supply of service is 9th April.

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ICAI Module
M/s XYZ & Co., a firm of Chartered Accountants, issued invoice for services rendered to Mr. A on 7th September.
Determine the time of supply in the following independent cases:
(1) The provision of service was completed on 1st August and payment was received on 28th September.
(2) The provision of service was completed on 14th August and payment was received on 28th September.
(3) Mr. A made the payment on 3rd August. However, provision of service was remaining to be completed at that
time.
(4) Mr. A made the payment on 15th September. However, provision of service was remaining to be completed at
that time
Answer i:
1st August since the invoice is not issued within 30 days of supply of service.
Answer ii:
7th September since the invoice is issued within 30 days of supply of service and the payment is received after the issuance of
invoice.
Answer iii:
3rd August viz., earlier of date of issuance of invoice (7th September) or date of receipt of payment (3rd August)
Answer iv:
7th September viz., earlier of date of issuance of invoice (7th September) or date of receipt of payment (15th September)
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CH 5B: Value OF SUPPLY
CA Vikram Phatak
AIR HOLDER
CH 5B: VALUE OF SUPPLY CA VIKRAM PHATAK (AIR HOLDER)
Value of Supply of Goods/ Services

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Inclusions/ Exclusions in Value of Supply

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Treatment of discount
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Recent Questions
Jan 21 exam
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Nov 20 exam
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MTP Mar 21
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MTP Apr 21
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CH 6: INPUT TAX CREDIT
CA Vikram Phatak
AIR HOLDER
CH 6: INPUT TAX CREDIT CA VIKRAM PHATAK (AIR HOLDER)
Eligibility and conditions for ITC

Registration under GST Only registered persons entitled to ITC
Goods/services to be used for business Tax paid on goods and or/services which are used or intended to be used for
purposes non-business purposes cannot be availed as credit
Possession of Tax paying document 1) Invoice issued by the supplier of goods and/or services
2) Invoice issued by the recipient receiving goods and/or services from
unregistered supplier along with proof of payment of tax, in case of
reverse charge
3) Debit note issued by the supplier
4) Bill of entry or similar document prescribed under the Customs Act
5) Revised invoice
6) Document issued by input service distributor
Demands involving fraud Tax paid in pursuance of any order where any demand has been confirmed on
account of any fraud, wilful misstatement or suppression of facts cannot be
availed as ITC.
Receipt of the goods and / or services The registered person taking the ITC must have received the goods and / or
services. [deemed receipt of goods/ services in case of bill to ship to model]
Tax actually paid The supplier should have actually paid the tax charged on the goods and/or
services, for which ITC is being taken, either in cash or by utilizing ITC.
However, section 41 allows the taxpayer (recipient) to take ITC provisionally

on self-assessment basis.
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Filing of return The registered person taking the ITC must have filed his return under section
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Eligibility and conditions for ITC

Goods received in lots In case the goods covered under an invoice are not received in a single
consignment but are received in lots / instalments, ITC can be taken only
upon receipt of the last lot / instalment
Payment in 180 days  The registered person must pay to the supplier, the value of the goods
and/or services along with the tax within 180 days from the date of
issue of invoice.
 In the event of failure to do so, the corresponding credits availed by the
registered person would be added to his output tax liability, with
interest.
 Interest will be paid @ 18% from the date of availing credit till the date
when the amount added to the output tax liability is paid.
 Re-credit on payment is allowed
 Not applicable to- Tax paid under RCM, Supply without consideration,
additional value in the nature of interest, late fee etc.
Depreciation on tax component If the person taking the ITC on capital goods and plant and machinery has
claimed depreciation on the tax component of the cost of the said items under
the Income-tax Act 1961, the ITC on the said tax component shall not be
allowed.
Time limit for availing ITC ITC on invoices pertaining to a financial year or debit notes relating to
invoices pertaining to a financial year can be availed any time till:
 The due date of filing of the return for the month of September of the
succeeding financial year [20th October] or
 The date of filing of the relevant annual return,
Whichever is earlier
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Restriction on invoices not uploaded by supplier in GSTR1

Illustration:
Mr. Vijay, a registered supplier, receives 100 invoices (for inward

supply of goods/ services) involving GST of 10 lakh, from
various suppliers during the month of October 20XX. Compute
the ITC that can be claimed by Mr. Vijay in his GSTR-3B for the
month of October 20XX to be filed by 20th November 20XX in the
following independent cases assuming that GST of 10 lakh is
otherwise eligible for ITC:
Case I: Out of 100 invoices, 80 invoices involving GST of 6 lakh

have been uploaded by the suppliers in their respective GSTR-1s
filed on the prescribed due date therefor.
Case II: Out of 100 invoices, 75 invoices involving GST of 9.5 lakh
have been uploaded by the suppliers in their respective GSTR-1s
filed on the prescribed due date therefor.
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Blocked credit [ITC not allowed]

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Blocked credit [ITC not allowed]
Composition No ITC allowed

taxpayer
NRTP • Tax paid on goods and/or

services received by such
non-resident taxable
person, is not available as
ITC.
• However, tax paid by him
on imported goods is
allowed as ITC
• For imported services -
blocked
Free • Goods that are disposed off

samples, by way of gift
gifts, goods • Goods that are disposed off
lost/stolen by way of free samples
etc • Lost goods
• Stolen goods
• Destroyed goods
• Goods that are written off
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In case of new registration, switching from composition to regular and exempt supplies becoming
taxable
Conditions for availing the aforesaid credit:

 ITC in such cases is to be availed within 1 year from the date of issue of invoice by the supplier.
 Filing of electronic declaration giving details of inputs held in stock/contained in semi-finished goods and finished goods held in
stock and capital goods on the days immediately preceding the day on which credit becomes eligible
 Declaration has to be filed within 30 days from becoming eligible to avail credit
 If the claim of ITC pertaining to CGST, SGST/UTGST, IGST put together exceeds 2,00,000, the declaration needs to be certified by
a practicing Chartered Accountant/Cost Accountant.
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Supply of capital goods Transfer of ITC- change in constitution

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Manner of utilization of ITC

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Apportionment of common credit [Input and Input Services]
Zero-rated supply
(export ….) is eligible
for ITC.
Exempt supplies for this purpose include:
 Nil rated
 Wholly exempt
 Non-taxable (petrol, diesel, alcohol, electricity etc.)
 Supplies on which recipient is liable to pay tax on RCM
 Transaction in securities [1% of sale value for apportionment purpose]
 Sale of land [stamp duty value for apportionment purpose]
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 Sale of building [only when entire consideration is received post completion certificate]
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Apportionment of common credit [Capital Goods] Special provision for banks/NBFC

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Recent Questions
Jan 21 exam (extract)
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Nov 20 exam (extract)

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CH 7: REGISTRATION
CA Vikram Phatak
AIR HOLDER
CH 7: REGISTRATION CA VIKRAM PHATAK (AIR HOLDER)
Aadhar authentication
New applicant Every (i) individual applicant or (ii) an applicant, other than an individual, shall undergo
authentication/furnish proof of possession of Aadhaar number, in the manner prescribed.
Where an applicant opts for authentication of Aadhaar number, he shall, while submitting an
application for registration, undergo authentication of Aadhaar number. Said authentication is
required to be eligible for grant of registration.
Where Aadhaar number Where a person fails to undergo authentication of adhaar number or does not opt for authentication of
is not assigned / Aadhaar number, the registration shall be granted only after physical verification of the principal place
Aadhar authentication of business in the prescribed manner
not done
Date of submission of shall be earlier of:
the application (a) the date of authentication of the Aadhaar number, or
(b) 15 days from the submission of the application in Part B of Form GST REG-01
Existing registered Every registered person shall undergo authentication/furnish proof of possession of Aadhaar number,
persons in prescribed form and manner and within the prescribed time.
If an Aadhaar number is not assigned to an existing registered person, such person shall be offered
alternate and viable means of identification in the prescribed manner.
Persons/class of Aadhar authentication shall not be applicable to the following:

persons exempt from i. A person who is not a citizen of India
aadhaar authentication ii. A class of persons other than the following class of persons:
a. Individual
b. Authorised signatory of all types
c. Managing and Authorised partner
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d. Karta of a Hindu Undivided Family

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Procedure for registration (amended along with Aadhar authentication):

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Deemed approval of Application

If the proper officer fails to take any action in the following cases within the stipulated time, the application for grant of registration
shall be deemed to have been approved-
In cases where a person successfully undergoes within a period of 3 working days from the date of
authentication of Aadhaar number or is exempt from submission of application
Aadhaar authentication
In cases where a person fails to undergo Aadhaar within a period of 21 days from the date of submission of
authentication or does not opt for Aadhaar authentication application
In cases where Proper Officer issues notice seeking within 7 working days from the date of receipt of
clarification, information or documents from the clarification, information or documents furnished by the
applicant applicant
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Persons liable for Registration
Meaning of aggregate Turnover
Every supplier of goods or services or both is required to obtain registration in the State or the Union territory from where he makes the
taxable supply, if his aggregate turnover exceeds specified threshold limit in a FY.
Aggregate turnover includes total turnover of all branches under same PAN.
Aggregate turnover includes all supplies made by the taxable person, whether on his own account or made on behalf of all his principles
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State [UT] wise threshold limit applicable:
Wherever limit is enhanced to 40

lakh, it does not apply to -
 Persons required to take

compulsory registration
under section 24 of the
CGST Act.
 Persons engaged in
making supplies of ice
cream and other edible
ice, whether or not
containing cocoa, Pan
masala and all goods of
Chapter 24, i.e. Tobacco
and manufactured
tobacco substitutes
Note: Aerated water is eligible

for limit of 40 lakh for
registration but not eligible for
composition:
However, in case he makes exempt/non-taxable supply from a Special Category State and taxable supplies from a State other than Special
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Category State, the threshold limit shall not be so reduced

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Compulsory Registration Persons not liable for registration

[threshold limit not applicable] 1) Person engaged exclusively in supplying
goods/services/both not liable to tax/wholly exempt
1) Persons making any inter-State taxable from tax
supply.
2) Agriculturist to the extent of supply of produce out of
2) Casual taxable persons (CTP) making cultivation of land - by own labour or by the labour of
taxable supply family or by servants/ hired labour under his
supervision or supervision of any member of his
3) Persons who are required to pay tax under family.
reverse charge on inward supplies received
3) Persons making only reverse charge supplies U/s 9(3)
4) Non-resident taxable persons (NRTP)
making taxable supply. 4) Persons making inter-State supplies of taxable services
up to 20 lakh [ and having aggregate turnover on all
5) E-commerce or person who supplies India basis not exceeding 20 Lakh/ 10 Lakh]
through [other than supplies specified u/s
9(5)] through ECO. 5) Persons making inter-State taxable supplies of notified
handicraft goods/notified products when made by
6) Persons who are required to deduct tax craftsmen predominantly by hand even though some
under section 51 machinery may also be used in the process [ and
having aggregate turnover on all India basis not
7) Persons who make taxable supply of goods exceeding 20 Lakh/ 10 Lakh].
or services or both on behalf of other
taxable persons whether as an agent or 6) Casual Taxable Persons making inter-State taxable
otherwise. ……… supplies of notified handicraft goods/notified products
when made by craftsmen predominantly by hand even
though some machinery may also be used in the
process [ and having aggregate turnover on all India
74
basis not exceeding 20 Lakh/ 10 Lakh].

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One registration per State [ but multiple registrations within a state possible]
Registration needs to be taken State-wise.
Taxable person has an option to obtain independent registrations with respect to each such separate place of business within a
State. Separate registration application needs to be filed for each place of business.
Voluntary Registration
A person who is not liable to be registered under section 22 or section 24 may get himself registered voluntarily
However, once a person obtains voluntary registration, he has to pay tax even though his aggregate turnover does not exceed 40
lakh/ 20 lakh/ 10 lakh, as the case may be
Effective date of registration

Where an applicant submits application for registration … effective date of registration is
within 30 days from the date he becomes liable to registration the date on which he becomes liable to registration
after 30 days from the date he becomes liable to registration date of grant of registration
Composition levy in case of separate registrations for multiple places of business .. possible ?
If a person is paying tax for one of his places of business under normal scheme, he shall not pay tax under composition levy for
any other place of business.
If one of the places of business [separately registered] of a registered person becomes ineligible to pay tax under composition levy,
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all other registered places of business of said person would also become ineligible to pay tax under composition levy.
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Amount Payable on Cancellation of Registration
In respect of inputs: • ITC on stock of inputs computed proportionately on the

basis of corresponding invoices on which credit has been
availed
• Output tax payable on such goods
Whichever is higher
In respect of Capital Goods • ITC involved in the remaining useful life in months of the
capital goods computed on pro-rata basis, taking the useful
life as 5 years
• Tax on the transaction value of such capital goods or plant

and machinery u/s 15
Whichever is higher
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Recent Questions
Jan 21 exam
Under the provision of section 29(1) of CGST Act, 2017 read with rule 21A of CGST Rules, 2017 related to suspension of
registration if the registered person has applied for cancellation of registration, what is the period and manner of
suspension of registration ?. [5 marks]
Answer:
 Where a registered person has applied for cancellation of registration, the registration shall be deemed to be suspended
from:
o the date of submission of the application or
o the date from which the cancellation is sought, whichever is later, pending the completion of proceedings for
cancellation of registration.
 Such person shall not make any taxable supply during the period of suspension and shall not be required to furnish
any return.
 The expression “shall not make any taxable supply” mean that the registered person shall not issue a tax invoice and,
accordingly, not charge tax on supplies made by him during the suspension period.
Jan 21 exam
Explain the circumstances under which proper officer can cancel the registration on his own of a registered person under
CGST Act, 2017. [5 marks]
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Answer:
The circumstances under which proper officer can cancel the registration on his own of a registered person under the CGST
Act, 2017 are as under:
(i) A registered person has contravened any of the following prescribed provisions of the GST law:
a. he does not conduct any business from the declared place of business.
b. he issues invoice/bill without supply of goods/services in violation of the provisions of GST law.
c. he violates the provisions of anti-profiteering.
d. he violates the provisions relating to furnishing of bank details.
(ii) A person paying tax under composition levy has not furnished returns for 3 consecutive tax periods.
(iii) A registered person paying tax under regular scheme has not furnished returns for continuous period of 6 months.
(iv) Voluntarily registered person has not commenced the business within 6 months from the date of registration.
(v) Registration was obtained by means of fraud, wilful misstatement or suppression of facts.
Nov 20 exam
BBD Pvt. Ltd. of Gujarat exclusively manufactures and sells product 'Z' which is exempt from GST vide notifications issued
under relevant GST legislations. The company sells 'Z' only within Gujarat and is not registered under GST laws. The
turnover of the company in the previous year 2018-19 was 50 lakh. The company expects the sales to grow by 10% in
the current year 2019-20.
However, effective 01.01.2020, exemption available on 'Z' was withdrawn by the Central Government and GST@ 5% was
imposed thereon. The turnover of the company for the nine months ended on 31.12.2019 was 42 lakh.
BBD Pvt. Ltd. is of the opinion that it is not required to get registered under GST for current financial year 2019-20.
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[5 marks]
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Answer:
 For a supplier exclusively engaged in intra-State supply of goods, the threshold limit of turnover to obtain registration in
the State of Gujarat is 40 lakh.
 However, a person exclusively engaged in the business of supplying goods and/or services that are not liable to tax or
are wholly exempt from tax is not liable to registration.
 Therefore, since BBD Pvt. Ltd. was engaged exclusively in supplying exempted goods till 31.12.2019, it was not required
to be registered till that day; though voluntary registration was allowed.
 The position, however, will change from 01.01.2020 as the supply of goods become taxable from that day and the
turnover of BBD Pvt. Ltd. is more than 40 lakh.
 Since the aggregate turnover limit of 40 lakh includes exempt turnover also, turnover of ‘Z’ till 31.12.2019 will be
considered for determining the threshold limit even though the same was exempt from GST.
 Therefore, BBD Pvt. Ltd. needs to register within 30 days from 01.01.2020.
MTP Mar 21
Fair Oils, Delhi has supplied machine oil and high-speed diesel in the month of April as per the details given in table
below. Fair Oils is not yet registered.
Sl. Particulars Amount

No. (Rs.)*
(i) Supply of machine oil in Delhi 9,00,000
(ii) Supply of high speed diesel in Delhi 18,00,000
(iii) Supply of machine oil made in Punjab by Fair Oils from its branch located in Punjab 12,00,000
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*excluding GST. Determine whether Fair Oils is liable for registration. [6 marks]
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Answer:
A supplier is liable to be registered in the State/Union territory from where he makes a taxable supply of goods and/or
services, if his aggregate turnover in a financial year exceeds the threshold limit. The threshold limit for a person
making exclusive intra-State taxable supplies of goods is as under:
 Rs. 10 lakh for the Special Category States of Mizoram, Tripura, Manipur and Nagaland.
 Rs. 20 lakh for the States, namely, States of Arunachal Pradesh, Meghalaya, Puducherry, Sikkim, Telangana and
Uttarakhand.
 Rs. 40 lakh for rest of India except persons engaged in making supplies of ice cream and other edible ice,
whether or not containing cocoa, Pan masala and Tobacco and manufactured tobacco substitutes.
As per section 2(6), aggregate turnover includes the aggregate value of:
i. all taxable supplies,
ii. all exempt supplies,
iii. exports of goods and/or services and
iv. all inter-State supplies of persons having the same PAN.

The above is computed on all India basis. Further, the aggregate turnover excludes central tax, State tax, Union
territory tax, integrated tax and cess. Moreover, the value of inward supplies on which tax is payable under reverse
charge is not taken into account for calculation of ‘aggregate turnover’.
Section 9(2) provides that CGST is not leviable on five petroleum products i.e. petroleum crude, motor spirit (petrol),
high speed diesel, natural gas and aviation turbine fuel. As per section 2(47), exempt supply includes non-taxable
supply. Thus, supply of high speed diesel in Delhi, being a non-taxable supply, is an exempt supply and is, therefore,
includible while computing the aggregate turnover.
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Answer: (contd…)
In the backdrop of the above-mentioned discussion, the aggregate turnover of Fair Oils for the month of April is computed as
under:
S. No. Particulars Amount (in Rs.)
(i) Supply of machine oils in Delhi 9,00,000

(ii) Add: Supply of high speed diesel in Delhi 18,00,000
(iii) Add: Supply of machine oil made by Fair Oils from its branch located in Punjab 12,00,000
Aggregate Turnover 39,00,000
Fair Oils is making exclusive supply of goods and hence the threshold limit for registration would be Rs. 40,00,000.
Since the aggregate turnover does not exceed Rs. 40,00,000, Fair Oils is not liable to be registered.
MTP Apr 21
Examine whether the supplier is liable to get registered in the following independent cases:-
i. Aadi of Assam is exclusively engaged in intra-State supply of taxable services. His aggregate turnover in the
current financial year is Rs. 25 lakh.
ii. Atri of Assam is engaged in intra-State supply of both taxable goods and services. His aggregate turnover in the
current financial year is Rs. 30 lakh. [6 marks]
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Answer:
As per section 22 of the CGST Act, 2017 read with Notification No. 10/2019 CT dated 07.03.2019, a supplier is liable to be
registered in the State/Union territory from where he makes a taxable supply of goods and/or services, if his aggregate
turnover in a financial year exceeds the threshold limit. The threshold limit for a person making exclusive taxable supply of
services or supply of both goods and services is as under:-
(a) Rs. 10 lakh for the Special Category States of Mizoram, Tripura, Manipur and Nagaland.
(b) Rs. 20 lakh for the rest of India.
i. Though Aadi is dealing in Assam, he is not entitled for higher threshold limit for registration as the same is
applicable only in case of exclusively supply of goods and he is exclusively engaged in providing services. Thus, the
applicable threshold limit for registration in this case is Rs. 20 lakh and hence, Aadi is liable to get registered under
GST.
ii. Since Atri is engaged in supply of both taxable goods and services, the applicable threshold limit for registration in
his case is Rs. 20 lakh. Thus, Atri is liable to get registered under GST as his turnover is more than the threshold
limit.
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CH 8: TAX INVOICE, CREDIT
AND DEBIT NOTES
CA Vikram Phatak
AIR HOLDER
CH 8: TAX INVOICE, CREDIT AND DEBIT NOTES CA VIKRAM PHATAK (AIR HOLDER)
Number of HSN digits required on tax invoice

Annual Turnover (AT) in the preceding FY Number of Digits
of HSN Code
AT ≤ 1.5 crores Nil
AT ≤ 5 crores [ and more than 1.5 crores] 2
AT ≥ 5 Crores 4
E-invoicing
W.e.f 1.10.20, there is switch from voluntary to mandatory e-invoicing for certain notified category of taxpayers.
[discussed in detail later]
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Time limit for issue of Tax Invoice

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E-Invoicing:
Class of persons notified to mandatorily issue e-invoice How is E-invoice generated?
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Important terms with reference to E-invoicing:
E-invoice Schema  Businesses use various accounting/billing software, each generating and storing invoices in their own
electronic formats.
 To ensure complete ‘inter-operability’ of e-invoices across the entire GST eco-system, an invoice standard is
a must.
 This uniform standard format (containing specified fields) applicable for all the businesses across the
country is known as ‘e-invoice schema’.
 It is notified as Form GST INV-1.
 E-invoice schema mandates what particulars shall be reported in electronic format to IRP.
Invoice Registration Portal (IRP) IRP is the website for uploading/reporting of invoices by the notified persons. Following IRPs have been notified for
the purpose of preparation of the e-invoice:
www.einvoice1.gst.gov.in, www.einvoice2.gst.gov.in www.einvoice3.gst.gov.in, www.einvoice4.gst.gov.in
www.einvoice5.gst.gov.in, www.einvoice6.gst.gov.in www.einvoice7.gst.gov.in, www.einvoice8.gst.gov.in
www.einvoice9.gst.gov.in, www.einvoice10.gst.gov.in
Invoice Reference Number IRN is different from invoice number.

Invoice no. (e.g. ABC/1/2019-20) is assigned by supplier and is internal to business. Its format can differ from
business to business.
IRN, on other hand, is a unique reference number (hash) generated and returned by IRP, on successful registration
of e-invoice, for instance, 35054cc24d97033afc24f49….
Quick Response (QR) code Upon successful registration of invoice on IRP, it will return a signed e-invoice to the supplier with IRN and QR Code.
IRN is embedded in the QR Code which shall be extracted and printed on the invoice.
The QR code enables quick view, validation and access of the invoices from the GST system from hand-held devices.
This will be helpful for tax officers checking the invoice offline on the roadside where internet may not be available
all the time.
Dynamic QR code A Dynamic Quick Response (QR) code made available to buyer by such registered person through digital display
(with payment cross- reference) shall be deemed to be having QR code.
This has no relevance or applicability to the e-invoicing in respect to B2B supplies by notified class of taxpayers.
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Revised Tax Invoice Consolidated Revised Tax Invoice
Consolidated Tax Invoice (Note – This is different from consolidated revised tax invoice)
If the following 3 conditions are satisfied, No Tax Invoice required to be issued
– instead - such registered person shall issue a Consolidated Tax Invoice for
such supplies at the close of each day in respect of all such supplies.
1) Value of the goods/services/both supplied < 200

2) The recipient is unregistered; and
3) The recipient does not require such invoice
The above provision is also applicable to “Bill of supply”

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Bill of Supply Receipt Voucher
Refund Voucher Payment Voucher

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Documents in lieu of “Tax Invoice”

Document in lieu of the tax invoice
Supplier of taxable service
Optional information Mandatory information
Insurer/ Banking Company/ FI/ NBFC  Serial number Other information (other than serial no. and
 Address of recipient address of recipient) as prescribed for a Tax
Invoice
----
Goods Transport Agency (GTA) supplying  Gross weight of the consignment
services in relation to transportation of goods Name of the consignor and the consignee
by road in a goods carriage Registration number of goods carriage in
[Lorry receipt]
which the goods are transported
 Details of goods transported
 Details of place of origin and destination
 GSTIN of the person liable for paying tax
whether as consignor, consignee or GTA
 Other information as prescribed for a tax
invoice
Supplier of passenger transport service  Serial number Other information (other than serial no. and
[ticket]  Address of recipient address of recipient) as prescribed for a Tax
Invoice
Supplier of services by way of admission to Details of recipient Other information (other than serial no. and
exhibition of cinematograph films in multiplex address of recipient) as prescribed for a Tax
screens Invoice
[Electronic ticket]
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Delivery challan
Rule 55 specifies the cases where at the time of removal of goods, goods may be removed on delivery challan and invoice may be issued
after delivery:
o Supply of liquid gas where the quantity at the time of removal from POB of supplier is not known
o Transportation of goods for job work
o Transportation of goods for reason other than supply
o Such other supplies as may be notified by the Board
Just like tax invoice, Delivery challan shall be prepared in “Triplicate”
Where goods are being transported on a delivery challan in lieu of invoice, the same shall be declared in E-Way Bill.
Goods transported in SKD/ CKD condition
Where the goods are being transported in a semi knocked down or completely knocked down condition or in batches or lots –
 The supplier shall issue the complete invoice before dispatch of the first consignment
 The supplier shall issue a delivery challan for each of the subsequent consignments, giving reference of the invoice
 Copies of the corresponding delivery challan shall accompany each consignment along with a duly certified copy of the invoice; and
 The original copy of the invoice shall be sent along with the last consignment
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Credit Notes
Debit Notes
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Recent Questions
Jan 21 exam
ABC Cinemas, a registered person engaged in making supply of services by way of admission to exhibition of
cinematograph films in multiplex screens was issuing consolidated tax invoice for supplies at the close of each day in
terms of section 31(3)(b) of CGST Act, 2017 read with fourth proviso to rule 46 of CGST Rules, 2017.
During the month of October, 2019, the Department raised objection for this practice and asked to issue separate tax
invoices for each ticket.
Advise ABC Cinemas for the procedure to be followed in the light of recent notification. [4 marks]
Answer:
The procedure to be followed by ABC Cinemas, a registered person engaged in making supply of services by way of admission
to exhibition of cinematograph films in multiplex screens, is as under:
 The option to issue consolidated tax invoice is not available to a supplier engaged in making supply of services by way of
admission to exhibition of cinematograph films in multiplex screens. Thus, ABC Cinemas cannot issue consolidated tax
invoice for supplies made by it at the close of each day.
 ABC Cinemas is required to issue an electronic ticket.
 The said electronic ticket shall be deemed to be a tax invoice, even if such ticket does not contain the details of the
recipient of service but contains the other information as prescribed to be mentioned.
MTP Mar 21
Narayan Singh, a registered supplier, has received advance payment with respect to services to be supplied to Shelly. His
accountant asked him to issue the receipt voucher with respect to such services to be supplied. However, he is
apprehensive as to what would happen in case a receipt voucher is issued, but subsequently no services are supplied. You
required to advise Narayan Singh regarding the same. [4 marks]
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Answer:
 Narayan Singh is required to issue a receipt voucher at the time of receipt of advance payment with respect to services
to be supplied to Shelly.
 A receipt voucher is a document evidencing receipt of advance money towards a supply of goods and/or services or
both.
 A registered person, on receipt of advance payment with respect to any supply of goods or services or both, shall issue a
receipt voucher or any other document, evidencing receipt of such payment.
 Where, on receipt of advance payment with respect to any supply of goods or services or both the registered person
issues a receipt voucher, but subsequently no supply is made and no tax invoice is issued in pursuance thereof, the
said registered person may issue to the person who had made the payment, a refund voucher against such payment.
 Therefore, in case subsequently no services are supplied by Narayan Singh, and no tax invoice is issued in pursuance
thereof, Narayan Singh may issue a refund voucher against such payment to Shelly.
ICAI new question

Discuss whether E-invoice is mandatory in the following case for – a) SEZ unit and b) DTA unit.
Maharaja Private Limited has an SEZ unit and a regular DTA unit (both having same PAN). The aggregate total turnover of
Maharaja Private Limited is more than 500 crores (considering both the GSTINs). However, the turnover of DTA unit is
below 100 crores.
Answer:
 A registered person (except specified class of persons), whose aggregate turnover in any preceding financial year from
2017-18 onwards exceeds 500 crores.
 However, SEZ units have been covered by exception to the above rule.
 In this scenario, SEZ unit is exempt from e -invoicing.
 However, e-invoicing will be applicable to DTA Unit because the aggregate turnover of the legal entity in this case is > `
500 crores. The eligibility is based on aggregate annual turnover on the common PAN.
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RTP May 21
Bali Limited, a registered taxpayer, provides security services to registered persons from Mumbai office and Delhi office.
The aggregate turnover of Mumbai office and Delhi office in the preceding financial year is 300 crore and 250 crore
respectively. For the month of November in the current financial year, Bali Limited prepares duplicate invoices and does
not issue e-invoice as it is of the view that it’s aggregate turnover does not cross the threshold limit to make it liable for
issuing e- invoices.Briefly explain whether the view taken by Bali Limited is correct in law? Also explain the advantages of
e-invoicing, if any
Answer:
The view taken by Bali Limited is not correct in law.
 All notified registered businesses (except specified class of persons) with an aggregate turnover (based on PAN) in the preceding
financial year greater than 500 crore are required to issue e-invoices.
 The eligibility is based on aggregate annual turnover on the common PAN. Thus, the aggregate total turnover of Bali Limited is more
than 500 crores (considering both the GSTINs) and is required to issue e-invoices.
 Further, where e-invoicing is applicable, there is no need of issuing invoice copies in triplicate/duplicate.
E-invoice has many advantages for businesses, which have been given as under:
 Auto-reporting of invoices into GST return and auto-generation of e-way bill (wherever required). Under e-invoicing, business
has to report the B2B invoice data only once in the e-invoice form and the same is reported in multiple forms (GSTR-1, e-way bill
etc.). E-way bill can be auto-generated using e- invoice data. GSTR-1 can also be auto-populated with the e-invoice data. It will
become part of the business process of the taxpayer.
 Accuracy/Reconciliation. Since same data is reported to tax department as well as to the buyer to prepare his inward supplies
(purchase) register, transcription errors are reduced. On receipt of information through GST System, buyer can do reconciliation
with his Purchase Order.
 Early payment. E-invoicing facilitates standardisation and inter-operability leading to reduction of disputes among transacting
parties and thus, improving payment cycles.
 Cost reduction. leads to improvement of overall business efficiency.
 Reduction of tax evasion. Since a complete trail of B2B invoices is available with the Department, it will enable the system-level
matching of input tax credit and output tax thereby reducing the tax evasion.
 Elimination of fake invoices. E-invoicing eliminates the fake invoices. Claiming fictitious input tax credit (ITC) by raising fake
invoices is also one of the biggest challenges currently faced by tax-authorities.
 Paper Elimination. E-invoicing helps in paper elimination and thereby it is eco- friendly.
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CH 8A: E-WAY BILL
CA Vikram Phatak
AIR HOLDER
CH 8A: E-WAY BILL CA VIKRAM PHATAK (AIR HOLDER)
When is e-way bill required to be generated?

Whenever there is a movement of goods of consignment value exceeding 50,000:
 in relation to a supply; or
 for reasons other than supply; or
 due to inward supply from an unregistered person,
Exceptions to minimum consignment value of 50,000 [situations where e-way bill needs to be issued even if vale of consignment
is less than 50,000]
 Inter-State transfer of goods by principal to job-worker

 Inter-State transfer of handicraft goods by a person exempted from obtaining registration
Meaning of consignment value of goods

Consignment value of goods shall be the value:
 determined in accordance with the provisions of section 15,

 declared in an invoice, a bill of supply or a delivery challan, as the case may be, issued in respect of the said consignment
and
 also includes the Central tax, State or Union territory tax, integrated tax and cess charged, if any, in the document and
 shall exclude the value of exempt supply of goods where the invoice is issued in respect of both exempt and taxable supply
of goods.
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Information to be furnished in E-way bill and Who generates E-way bill?

Part A Part B
Part B is not mandatory : In case of intra-state movement of goods upto 50 km

distance –
 From PoB of consignor to PoB of transporter for further transportation, or

 From PoB of transporter finally to PoB of the consignee
Who generates E-way bill
Where the e-way bill is not Where the movement is caused by

Where the goods are transported generated by the registered
by a registered person - an unregistered person either in
person and the goods are handed his own conveyance or a hired one
whether as consignor or recipient over to the transporter, for
as the consignee or through a transporter
transportation of goods by road
The said person shall have to E-way bill shall be generated by the
generate the e-way bill (by furnishing transporter on the said portal on the He or the transporter may, at their
information in part B on the common basis of the information furnished option, generate the e-way bill
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portal) by the registered person in Part A

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Transfer of goods to another conveyance Consolidated E-way bill
Cancellation of E-way bill

• Where an e-way bill has been generated, but goods are either not
transported or are not transported as per the details furnished in the
e-way bill, the e-way bill may be cancelled electronically on the
common portal within 24 hours of generation of the e-way bill.
• However, an e-way bill cannot be cancelled if it has been verified in

transit in accordance with the provisions of rule 138B.
• Further, unique EWB number generated is valid for a period of 15

days for updating of Part B
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Validity period of E-way Bill Extension of Validity
Who generates E-way bill in case of Bill to Ship To

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Cases where e-way bill is not required
 Specified goods – LPG, Kerosene (sold under PDS), Postal baggage, Precious stones, Precious metals, jewellery, goldsmiths and silversmiths’ ware,
used personal and household effects, coral.
 Where the goods are being transported by a non-motorised conveyance
 Where the goods are exempt from tax [except de-oiled cake]
 Alcoholic liquor for human consumption, petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas or aviation
turbine fuel
 Where the supply of goods being transported is treated as no supply under Schedule III of the Act.
 Any movement of goods caused by defence formation under Ministry of defence as a consignor or consignee
 Where the consignor of goods is the Central Government, Government of any State or a local authority for transport of goods by rail
 Where empty cylinders for packing of liquefied petroleum gas are being moved for reasons other than supply.
Note: there are few more cases where e-way bill is not required. We have covered only those that are important from exam perspective.
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Recent Questions
Jan 21 exam
Agni Ltd. a registered supplier wishes to transport cargo by road between two cities situated at a distance of 368
kilometres. Calculate the validity period of e-way bill under rule 138(10) of CGST Rules, 2017 for transport of the said
cargo, if it is over dimensional cargo or otherwise. [3 marks]
Answer:
The validity period of e-way bill under rule 138(10) of the CGST Rules, 2017 for transport of cargo by road between two cities
situated at a distance of 368 km is as under:
 If it is over dimensional cargo: the validity period of the e-way bill is one day from relevant date upto 20 km and one
additional day for every 20 km or part thereof thereafter.
Thus, validity period in given case:
= 1 day + 18 days
= 19 days
 If it is a cargo other than over dimensional cargo: the validity period of the e- way bill is one day from relevant date upto
100 km and one additional day for every 100 km or part thereof thereafter.
Thus, validity period in given case:
= 1 day + 3 days
= 4 days
MTP April 21
Brief explain when is it not mandatory to furnish the details of conveyance in Part-B of the e-way bill?. [5 marks]
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Answer:
E-way bill is valid for movement of goods by road only when the information in Part -B is furnished in terms of explanation 2
to rule 138(3) of the CGST Rules, 2017. However, details of conveyance may not be furnished in Part-B of the e-way bill where
the goods are transported for a distance of upto 50 km within the State/Union territory:
 from the place of business of the consignor to the place of business of the transporter for further transportation
or
 from the place of business of the transporter finally to the place of business of the consignee.
RTP May 20
Discuss the correctness of the following statements:
(i) Once generated, an e-way bill cannot be cancelled.
(ii) E-way bill generated in one State is valid in another State
Answer:
i. The said statement is partially correct.
Where an e-way bill has been generated, but goods are either not transported at all or are not transported as per the
details furnished in the e-way bill, the e-way bill may be cancelled electronically on the common portal within 24 hours
of generation of the e-way bill.
However, an e-way bill cannot be cancelled if it has been verified in transit in accordance with the provisions of rule
138B of the CGST Rules, 2017.
ii. The said statement is correct.
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The e-way bill generated under Goods and Services Tax Rules of any State or Union territory shall be valid in every
State and Union territory.
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ICAI new
Is E-way bill mandatory in the following cases?
a) Bhanupratap Shoe Manufacturers, registered in Punjab, sold shoes to a retail seller in Gujarat, at a value of 48,000
(excluding GST leviable @ 18%) and wants to send the consignment of such shoes to Gujarat.
b) Sindhi Textiles of Ludhiana, registered in Punjab, sends cloth to a job worker in Jalandhar, Punjab on a delivery
challan. The value of cloth mentioned in the delivery challan is 48,000.
Answer:
E-way bill is mandatory whenever there is a movement of goods of consignment value exceeding 50,000.
Consignment value includes the Central tax, State or Union territory tax, integrated tax and cess charged, if any, in the
document.
In case of movement of goods for reasons other than supply, the movement is occasioned by means of a delivery challan which
has to necessarily contain the value of goods. The value given in the delivery challan should be adopted in the e-way bill.
a. The consignment value will be 56,640 [ 48,000 × 118%]. Since the movement of goods is in relation to supply of
goods and the consignment value exceeds 50,000, e-way bill is mandatorily required to be issued in the given case.
b. Since the movement of goods is for reasons other than supply, the value given in the delivery challan is adopted for
the purposes of the e-way bill. Such value does not exceed 50,000. Consequently, e-way bill is not required to be
issued in this case.
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CH 9: PAYMENT OF TAX
CA Vikram Phatak
AIR HOLDER
CH 9: PAYMENT OF TAX CA VIKRAM PHATAK (AIR HOLDER)
Interest on net liability when tax declared in return [ Interest rate is 18% p.a]
When a registered person has paid his taxes through a return specified under Section 39 of CGST Act, 2017 belatedly, interest
shall be applicable only on the net taxes paid through electronic cash ledger and not on the gross taxes paid for such tax period.
Note:
Interest is payable on the net tax liability paid in cash, only if the return to be filed for a tax period under Section 39, has been
filed after the due date to furnish such return.
Otherwise, interest is payable on gross basis.
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Electronic Cash Ledger
CPIN: Common portal Identification Number valid for 15 days on

successful generation of chalan (14 digits)
BRN: Bank Reference Number is the transaction number given by the

10,000 limit for OTC not applicable in following cases
bank for a payment against a Challan
 Proper officer authorized to recover outstanding dues including
CIN: Challan Identification Number generated on successful payment. (17
attachment proceedings or sale of moveable/ immoveable properties.
digits – 14 digits of CPIN + 3 digits bank code)
 Proper officer authorized to collect the amount by way of cash /cheque
E-FPB: Electronic Focal Point Branch - branches of authorized banks which /DD during any investigation/enforcement activity /any ad hoc deposit.
are authorized to collect payment of GST  Government Departments or any other deposit to be made by persons
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as may be notified by the Commissioner in this behalf

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Major and Minor heads and cross-utilization of funds
Facility to the registered person to transfer an

amount from one (major/minor) head to another
(major/minor) head in the electronic cash ledger:
 The amount available in the electronic cash ledger

can be utilised for payment of any liability for the
major and minor heads.
 For instance, if the registered person has made a

deposit of tax erroneously i.e. by virtue of human
error, under a particular head instead of a specific
head, the same can be transferred to the
respective intended head vide Form GST PMT-09.
 This Form can be used either for

o transfer of erroneous deposits under any
minor head of a major head to any other
minor head of same or other major heads or
o for any of the amounts already lying
unutilised under any of the minor heads in
Electronic Cash ledger.
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Electronic Credit Ledger
Whether ITC can be utilized for payment of interest,

penalty, fees etc?
No
Whether ITC can be utilized for payment of tax

payable under RCM?
No. Because tax payable under RCM is not “Output
Tax”.
Output Tax definition:

Output tax in relation to a taxable person, means
the tax chargeable under this Act on taxable supply
of goods or services or both made by him or by his
agent but excludes tax payable by him on reverse
charge basis.
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Electronic Liability Register

Order of discharge of tax and
other dues:
Section 49 (8) prescribes the

chronological order in which
the liability of a taxable person
has to be discharged
I. Self -assessed tax and other dues for the

previous tax periods have to be discharged
first.
II. Self -assessed tax and other dues for the
current period have to be discharged next.
III. Once these two steps are exhausted,
thereafter any other amount payable
including demand determined under section
73 or section 74 to be discharged. In other
words, the liability if any, arising out of
demand notice and adjudication
proceedings comes last. This sequence has
to be mandatorily followed.
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Recent Questions
RTP Nov 20
Suhasini is a registered software consultant. On account of her ill health, she could not provide any services during the
month of October. However, she had to incur all the expenses relating to her office. She paid 75,000 to various
vendors. Total GST involved on the goods and services procured by her is 13,500. Out of the total bills paid by her,
one bill for 15,000 relates to security services availed for security of her office, tax on which is payable under reverse
charge. GST involved in such bill is 2,700.
Suhasini is of the opinion that for the month of October, no GST is payable from electronic cash ledger as she has
sufficient balance of ITC for payment of GST under reverse charge on security services.
Do you think Suhasini is right? Explain with reasons.
Answer:
 The amount available in the electronic credit ledger, i.e. input tax credit may be used for making any payment towards
output tax.
 Output tax, in relation to a taxable person, means the tax chargeable on taxable supply of goods or services or both
made by him or by his agent but excludes tax payable by him on reverse charge basis.
 Therefore, input tax credit cannot be used to pay the tax liability under reverse charge. The same is always required to
be paid through electronic cash ledger and not electronic credit ledger.
 Thus, Suhasini is wrong and she should pay GST of 2,700 on security service through electronic cash ledger.
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ICAI new
M/s ABC Ltd., have filed their GSTR3B for the month of July, 2020 within the due date prescribed under Section 39 i.e.
20.08.2020. Post filing of the return, the registered person has noticed during September 2020 that tax dues for the
month of July, 2020 have been short paid for 40,000. M/s ABC Ltd., has paid the above shortfall of 40,000, through
GSTR3B of September 2020, filed on 20.10.2020 [payment through Cash ledger - 30,000 and Credit ledger 10,000].
Examine the Interest payable under the CGST Act, 2017.
What would be your answer if, GSTR3B for the month of July 2020 has been filed belatedly on 20.10.2020 and the self-
assessed tax of 40,000/- has been paid on 20.10.2020 [payment through electronic cash ledger - 30,000 and electronic
credit ledger 10,000]
Notes:
• There exists adequate balance in Electronic Cash & Credit ledger as on 31.07.2020 for the above short fall
• No other supply has been made nor tax payable for the month of July, 2020 other than `40,000/- missed out to
be paid on forward charge basis
• Ignore the effect of leap year, if applicable in this case.
Answer:
In the above scenario, M/s ABC Ltd., has defaulted in making the payment for `40,000 on self-assessment basis in the return
for the month of July, 2020. Accordingly, interest is payable on the gross liability and proviso of sub- section 50(1) shall not be
applicable.
Thus, the amount of interest payable by M/s ABC Ltd., is as under:
Period of delay = 21st August, 2020 to 20th October, 2020 = 60 days
Hence, amount of interest = 40,000 x 18% x 60/365 = 1,184.
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Answer:
Alternatively, if M/s ABC Ltd., have filed the return for the month of July,2020 on 20.10.2020, beyond the stipulated due date
of 20.08.2020 and if the self- assessed tax for July, 2020 has been paid on 20.10.2020, Interest under proviso to Section 50(1)
shall be payable on the tax paid through Electronic Cash Ledger only.
Hence Interest is payable from 21st August 2020 till 20th October 2020 = 60days
Amount of Interest = 30,000 x 18% x 60/365 = 888
ICAI new
M/s PPC Ltd., has availed Input Tax credit for 54,000/- IGST during February 2020 on a particular purchase. Accounting
records for the above purchase, indicate that IGST paid to the supplier is 45,000/- as per the bill received. GSTR1
uploaded by the supplier for the above supply indicates 45,000/- as tax paid.
Examine as per GST provisions, what value shall be updated in the ledgers maintained on behalf of M/s PPC Ltd., on the
common portal
Answer:
M/s PPC Ltd., have accounted and paid 45,000/- as IGST to the supplier concerned. However, availment of input tax credit
has been made for 54,000/-.
As per Section 49(2) of CGST Act, 2017 “The input tax credit as self-assessed in the return of a registered person shall be
credited to his electronic credit ledger, in accordance with section 41, to be maintained in such manner as may be prescribed.”
Accordingly, electronic credit ledger of M/s PPC Ltd., shall be updated with a value of 54,000/- as per self- assessed return to
be filed for February 2020, though the input tax credit shown by the supplier is only for 45,000/-.
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CH 10: RETURNS UNDER GST
CA Vikram Phatak
AIR HOLDER
CH 10: RETURNS UNDER GST CA VIKRAM PHATAK (AIR HOLDER)
Return filing through SMS [short messaging service] facility
The following Nil returns can be filed through sms –

a) NIL GSTR 1
b) NIL GSTR-3B
c) NIL Form GST CMP-08 (quarterly statement for composition taxpayer)

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GSTR-1: Details of outward supplies Due date
Who is required to furnish?
What details ?
No of HSN digits
Annual Turnover (AT) in the preceding FY Number of Digits

of HSN Code
AT ≤ 1.5 crores Nil
AT ≤ 5 crores [ and more than 1.5 crores] 2
AT ≥ 5 Crores 4
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GSTR 3B:
Nature Due Date
GSTR-3B is a simple return containing summary of outward supplies,

inward supplies liable to reverse charge, eligible ITC, payment of tax
etc. Thus, GSTR-3B does not require invoice-wise data of outward
supplies.
Filing of GSTR-3B is mandatory for all normal and casual taxpayers,

even if there is no business activity in any particular tax period. For
such tax period(s), a Nil GSTR-3B is required to be filed.
A Nil GSTR-3B can be filed through an SMS using the registered mobile
number of the taxpayer.
Contents
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Page
First Return: Final Return:
Annual Return: GSTR 9

Who is required to file? Due date for annual return
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GSTR 4: Return for Composition Taxpayer

Who is required to file? Due date
Every registered person paying tax under section 10 i.e., By 30th day of the month of April following the end of such
composition supplier is required to file and annual return in financial year.
Form GSTR 4.
Quarterly tax payment Statements/ returns for the period prior to opting for composition
scheme or withdrawing from composition scheme:
Composition suppliers are required to pay the tax quarterly.
The persons required to file GSTR-4 are also required to furnish a

statement in the FORM GST CMP-08 containing details of
payment of self- assessed tax, for every quarter (or part of the
quarter), by 18th day of the month succeeding such quarter.
Since composition suppliers are not eligible to take ITC, they

discharge their tax liability only by debiting electronic cash
ledger.
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Amendment or rectification of return
GSTR 1 GSTR 3B
 In GST since the returns are built from details of  As per section 39(9), omission or incorrect particulars
individual transactions, there is no requirement for discovered in the returns filed u/s 39 can be rectified in
having a revised return. the return to be filed for the month during which such
omission or incorrect particulars are noticed.
 Any need to revise a return may arise due to the need to
change a set of invoices or debit/ credit notes. Instead of  Any tax payable as a result of such error or omission will
revising the return already submitted, the system allows be required to be paid along with interest.
changing the details of those transactions (invoices or
debit/credit notes) that are required to be amended.  Section 39(9) of the CGST Act does not permit
rectification of error/omission discovered on account of
 They can be amended in any of the future GSTR- 1 in the scrutiny, audit, inspection or enforcement activities by
tables specifically provided for the purposes of tax authorities.
amending previously declared details.
 The time limit for making such rectification is earlier of
 The rectification of errors/omissions is carried out by the following dates:
entering appropriate particulars in “Amendment Tables” o Due date for filing return for September month
contained in GSTR-1 of next financial year or
o Actual date of filing annual return
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Recent Questions
RTP May 21
(a) K Miss Kashi is a registered intra-State supplier of goods in Haryana. During the months of August and September, she
was out of station on a religious pilgrimage with her family for 55 days. Thus, no business transaction was made during
August. Miss Kashi is of the opinion that as there is no transaction, there is no need to file monthly return [GSTR-3B] for
the month of August. However, her tax consultant has advised her to file nil GSTR-3B. Whether the advice given by tax
consultant is correct? Explain.
(b) Will your answer in (a) change, if Miss Kashi has placed an order for some purchases during August over her mobile
phone, which has been received in her premises and she intends to take input tax credit on the same?
(c) Assuming in (a) above, Miss Kashi does not have internet facility in her mobile and there is no facilitation centre
notified by the Commissioner, whether no return is required to be filed in the absence of means to file return? Explain.
Answer: (a)
 The advice given by tax consultant is correct.

 Under GST law, filing of GSTR-3B is mandatory for all normal and casual taxpayers, even if there is no business activity
in any particular tax period. For such tax period(s), a Nil GSTR-3B is required to be filed.
 Therefore, in the given case, even though Miss Kashi was out of station on a religious pilgrimage with her family for 55
days and thus, could not do any business transaction during the month of August, she is still required to file Nil GSTR-
3B for that month.
Answer: (b)
 Nil GSTR-3B means that the return has nil or no entry in all its Tables. Since in the present case, Miss Kashi has
received certain purchases, she cannot file Nil GSTR-3B, as the said purchases will need to be disclosed in the “Table
for Eligible ITC” in GSTR-3B.
 Thus, Miss Kashi is required to file monthly return, GSTR-3B for the month of August.
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Answer: (c)
 GSTR-3B can be submitted electronically on the common portal, either directly or through a Facilitation Centre notified
by the Commissioner. Further, a Nil GSTR-3B can be filed through an SMS using the registered mobile number of the
taxpayer.
 Thus, Miss Kashi is required to file Nil GSTR-3B for the month of August through an SMS using her registered mobile
number even though there is no internet facility in her mobile and no Facilitation Centre notified by the Commissioner.
RTP Nov 20
The due date for payment of tax by a person paying tax under section 10 of the CGST Act, 2017, i.e. a composition
supplier is aligned with the due date of return to be filed by the said person. Discuss the correctness or otherwise of the
statement.
Answer:
 The statement is not correct. Every registered person paying tax under section 10, i.e. a composition supplier, is
required to file a return annually in Form GSTR-4.
 Form GSTR-4 for a financial year should be furnished by 30th April of the succeeding financial year.
 However, a composition supplier is required to pay his tax on a quarterly basis.
 A quarterly statement for payment of self-assessed tax in GST CMP-08 is required to be furnished by 18th day of the
month succeeding such quarter.
 Therefore, while the return is to be furnished annually, payment of tax needs to be made on a quarterly basis, by a
composition supplier.
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Jan 21 exam
The aggregate turnover of Mr. Prithvi, a registered person for the FY 2017-18 and 2018-19 were 140 lakh and 170 lakh
respectively. He has not filed the annual return (GSTR-9) under section 44(1) of CGST Act, 2017 before the due date.
Discuss the penal provisions, if any, for not filing the returns before the due date. [ 3 marks]
Answer:
The penal provisions for not filing the annual return (GSTR-9) under section 44(1) of the CGST Act, 2017 before the due date
are as under:
 100 for every day during which such failure continues,

or
 0.25% of the turnover of the registered person in the State/Union Territory whichever is lower.
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INDEX

Ch Name Page no.

4 Exemptions from gst 29

6 Input tax credit 57

8 Tax invoice, credit and debit notes 83

9 Payment of tax 103

10 Returns under gst 111

Taxes subsumed in GST and not so subsumed

Status of certain items

Alcohol for human Power to tax

5 petroleum GST council to

Entertainment tax Power to tax

Tobacco GST applicable –

Definition of Goods/ Services

Definition of Related Person

Such persons are employer & employee

One of them controls (directly/indirectly) the other

A third person controls (directly/indirectly) both of them

Such persons together control (directly/indirectly) a third person

Such persons are members of the same family

One of them is the sole agent/sole distributor/sole concessionaire of the other

Supply of goods or services

exempt from tax

Negative List under GST

Functions performed by Members of

Services of funeral, burial, Sale of land and, subject to

Composite Supply V Mixed Supply

How taxed? How taxed?

Sales Promotion Schemes:

Inter-State movement of various modes of conveyance [clarification]

Mock Test: March 21

Mock Test: April 21

 GST is a simplified tax structure. The statement is justified.

ICAI Module Question [New]

ICAI Module Question [New]

Amendments and important updates:

Clarification on levy of GST on Director’s remuneration

Remuneration paid to employee-directors [TDS u/s 192] Not a supply

Services covered under RCM – Chart I

Services covered under RCM – Chart II

Services covered under RCM – Chart III

Services covered under RCM – Chart IV

Composition u/s 10(1) and (2)

Marginal supply of service allowed – 10% of TO in state or 5 lac whichever is higher.

Composition u/s 10(2A)

Turnover limit : 50 Lakh

Rate of tax: : 3% CGST + 3% SGST .. [total 6%]

Engaged in making any

ii. Time of supply of service

S. No. Quarter Amount ( in

S. Quarter GST rate [CGST Turnover ( GST payable (

Amendments and important updates:

New exemption added:

Services related to charitable and religious activities

Agriculture related services

Health care services

Recognized systems of medicines in

Services by Government Services by the Government [Department of post] – what is

** Transport of goods can be exempt under other entry of the notification.

B Composite supply of goods and services to Government

implementation of Goods and Services Tax.

Other important exemptions:

Services provided by specified  Employees’ State Insurance Corporation

Services by an unincorporated  as a trade union