&ST snd

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Syllabus ,:,
Un.it 1. Basic Concepts of
t.direct Taxes .1.
,
Unit 2. Lewy and Collection
of GST 26
.

Unit 3, Input Tax Credit 60

' Practical Questions 85

Unit 4. Procedures B9

Unit 5. Special Provisions 99

Unit 6. Customs Law 117

Practical Questions 129

troo0
 .' SYLLABUS
B.Com. (Hons.)
GST AND CUSTOMS LAW
Objective: To p¡ovide students with a workirlg knowledge of principles and
provisions of GST and Customs Law.
"Èi:Jmiî"iåtåork or rndirect raxes berore GSr (raxation powers or
Union a¡d State Government); Concept of VAT: Mea¡lng, Varians and Methods;
Major Defects in the structu¡e of Indirect Taxes prior to GST; Rationale fo¡ GST;
Structure oi GST (SGST, CGST, UTGST and IGST); GST Council, GST Network,
State Compensation Mechanism, Regisfration.
UNIT II: Lery.and Collection of GST
Ta¡able event="Supply" of Goods and Services; Place of Supply: Within state,
Interstate, Import ârtd Expo¡U Tilne of supply; Valuation for GsT-Vâluation
¡ules, taxability of reimbuTsement of expenses; Exemption from GST: Smàll
supplies and Composition Scheme; Classification of Goods a¡d Servicês:
Composite a¡d Mixed Supplies.
UNIT III: Input Tax Ciedit
Eligible and lneligibte Input Tax C¡edit; Apportionments of Credit and Blocked
Credits; Tax Credit in ¡espect of Capital Goods; Recovery of Excess Tax C¡edit
Availability of Tax Credit in special circunútances; T¡a¡sfer of IÌrput Credit
(Input Se¡vice Distribution); Payment of Taxes; Refrind; Doct¡i¡e of unjust
enrichment TDS, TCS. Reverse Charge Mecharjsm, Job work.
UNIT ry: Procedures
Tax Invoice, Credit altd Debit Notes, Retums, Audit in GST, Assessment: Self-
Assessment, Summary and Scrutiny.
UNIT V: Special Prrivisions
Taxability of E-Commerce, Aiti-Profiteering, Avoidar.rce of dual coñkol, E-way
bills, zero-¡ated. supply, Offences and Penalties, Appeals.
UNIT VI: Customs Lary
Basic Concepts, Te¡ritorial Waters, High Seas, T'?es of Custom Duties,
Valuation, Baggage Rules and Exemptions. I
'ãoîcj
(i")
Bnsrc CoNcrprs OF
. I ¡-r
* 1.1 Itackg¡ound . . i,.;
In aj1y welfare state,.it is the piime resporisibitity óflthe Governrnent to fulJil
the increasjng develop-rnen.al. nè$d,ið.lttrðrèÉrilnömy and jts people by way of
public expencliture. hdia, beinga.developing economy, has been striving to fulJil
the obligatiþns of a welfaie state witlL its limited resources; tlLe primary source of
revenue belng lery of taxes. Though the collection of tax is to augment as much
reverÌue as possit,Ie to the Govemment to provide public services, over tlte years
it has been used as an instrument of fisca1policy to stirnulate economic 8¡owtlì.
Taxes a¡e cbllected to fulfil the socio-economic ob;ectives of the GovernÍìent.
E' 1.2 l)irect and Indirect Taxes
Q. 1. Dirrferentiate between Direct and Indilóct taxes.
Ans. Di¡'ect Taxes, A Direct tax is a kind of charge,-which is imposed directly
ôn the taxpayer and paid directþ to the Govemment by the person (juristic or
naturai) on whom it is imposed. A diect tax is one that ca¡not be shifted by the
taxpayer to someone else, A sigrrificant dirèct tgx imposed in india is Income tax.
Indi.rect Taxes. If the taxpayér is iust a conduit and at every stage the tax-
incidence ils passed on tül it finally ¡eaches the consumer, who really bears the
brur1t of it, such tâJ< is indûect tax. An indi¡ect tax is one that can be shifted by the
taxpayer td someone else. The significant indùect taxes that were being levied i¡
lndia till lrrle 2017 are excise duty, customs duty, service tax, cent¡al sales tax
(CST), vahJre added tax (]/AT), octroi, entry tax, pulchase tax ahd the like.
In ordet do away with va-rious Indirect Taxes, GST was introduced fronÌ
|uJy L, 2O1.7.
ffIiritÍffin,ï*frHû ìl
:i
? rr,Ft¡yÀ.süñ&ffisÈiËi *".-.:- .;i.-*..-.....,..... "..."...,......",:,i:,,:,
Different types of di¡ect and indirect taxes are presented in the figure: t+ 1.3 Constitutional F¡ameworle
Q. 2. Which Government bodies cont¡ol and Administe¡ di¡ect taxes and
indLect taxes in india?
, Ans. lndia has a three-fiei federal strlrctule, comp¡ising the Union
Govemment, the State Gove¡nments and the Local Govem¡irentr.-Th" po-"a to
lely taxe6 and duties is dist¡ibuted among the th¡ee tiers of Governrnent in
accordãnce with the provisions of the l¡rdia¡ Constiiution.
The Constitution of India is the supreme law of l¡rdia. Ìt consists of a preamble,
22 parts containing 444 Articles and 12€chedules.

iì
(OIl sales within thc State)

il
1,1
.)
j
i:l - Power to.lery and collect taxes whethe, dùect or indirect
il emerges from the
!) Constitution of India. In case any tÐ( law, be it a¡r act¿ rule, notificatià o¡ orde¡ is
Ii IndùectTax
':i . The person paying the tax to the . The person paying the tax to the not in conforinity with the Constitution, it is cauéd ultrø z)ires the Constitution
1l Covefnment di.recdv bears the GoveÍìment collects th€ salne ftom and is illegal and void.
1i incidencê ôf th; râY the ultiÃlate customei. Thus, incidence
.ProAresgive in ¡aiure. Hishe¡ of the tax is shifted to rhe othe¡ person. Thus, a study of the basic provisions of the Constitution is essential for
;l . ReseEsive in natue. A¡l
rate ot taxes for p€ople hâving rhe understanding the genesis of the va¡ious taxes beiñg imposed in IrLdia. The
higher abiliry ro pay. consümers equally beù rhe l,urde¡t
i iÌ¡espective of thei¡ ability to pay.
significant
mtrcant p¡ovlarons
p¡ovisio¡rs oiof the Constitution relating to tâxation a¡e:
r. A¡ticle zÞJ:
1. ,¡rñcre l\rtrcle zb5
265: Article 265 ot
of the Cor¡stitution I¡rdia p¡ohibits
Constitution of India ptohibits a¡l
albitra¡y collection
of iari. lt statés that'1no tax shatl be levied o¡ collected elcep quthoritu of lazD"
tbv .,uthorìtV
exceptby lalÐ":
Tt\e terrí øuthoity o/ ta?r mea¡s that tax proposed to be levieå musfbe within the
legislative competence of the lægislature imposing the tax.
2. A¡ticle 245: Part XI of the Constitution deals with relationship between the
Union a¡rd States. The power for enacting the laws is cor¡Jerred on the pa¡liarrient
and on the Legislatue of a State by Article 245 of ttre Constitution. The saiìl
Artjcle provjdes as under:
(i) Subject to the provisions of this Constitution, parliament may make laws
for the whole or a¡y part of the teffitory of India, and the legislatu¡e of a
State may make laws fo¡ the whole or any part of the State.
(ll) No law made by the Parliament shall be deemed to be invalid on the
grou¡d that it would have extrà-tenitorial ope¡ation.
fiË4å.
3. A¡ticle 246: It gives the respeðtive autho¡ity to Union aftd Staie
î$S;i¡ilÍirii*ü.i'ffi¡Ëii#*
Ceût¡al Excise Duties lEntry 84]
.
Goveûunents for levying taxes. I4¡hereas Parliament may make laws for the Duties of excise on tobacco arrd
whole of India or a¡y pâlt af the te¡ritory of Irrdia. the State Legislature mây other goods mânufactured or
make laws for whole or part of the State, produced in india except a-lcoholic
4. Seventh Schedule to Article 246: It contai¡s three lists which enumerate the liqrrors for hurnân consuÍiption,
matters urde¡ which the Union and the State Gove¡rEnents have the aut¡ority to opium, India-n hemp and other
make laws. narcotic drugs afid narcotics, but
_----
----------- inciuding . medicinal and tõi1et
I ri"t-r, u¡vror,¡ usr ,| i-------------- i-----_
| .ui"t-ll srlrr lrsr | | Li"t-n¡, co¡¡ci-rnnegr r-ãT-l preparatiôns contairúng alcohol or
I It contains rhe maue" I I rrco;tri'* ,t';;ai;J flr,..,..o"i"L. rn.
-'] m / indian hemp / narcotic
-.n ^
I in respectof which th" I I i¡re.p".l ofwtLicn t¡e J I in¡esoeci oÉ wbich I

I PaÌliãment (centrat ll Staie Covemment I I borh üìe Central and I çeiitral Sales Tax lEniry 924]
I theGovemment¡ has | | has rhe er.tusìve right i I th. Stote Co*,e,runent. I Toles on the sale or purchase. of
exclusive risht ro b *o{!1"-.._l
I make laws.
ll I have power to m¿Ìe l¿ws. I goods otlrer than newspapers,
I I
whe¡e such salê or purchase takes
Entries 82- to 92C of List I enumetâte the subjects where the Cenkal place in the course of inter-state
GoveÍìment has power to leay taxes. Entries 45 to 63 of List II enumerate the llade or comfneice
subjects where the State Governments have the pow€¡ to lely taxes: paÌliameñt Se¡vice Tax lEnfi 97) .''
fu1y otlÌer matter not enumerated
has a further power to make any law for,,.ar.i¡r'
iart òf India not comprised i¡ a
State even if such matte¡ is included i¡i thêìStâte.rl-ist.. '. i¡ List ll or List Ill iñcludi¡g any
Q. 3. Write a sho¡t no¡e;ò¡r..áltect and indilect taxes lavied onder va¡ious tax not mentioned iì1 either of those
tists provided in Seventh schedule to the constitution of india.
Ans. The table givenrb.{1ôw..énlists the significant dùect as well as indtuect
taxes being levied in lndià ü¡rde¡ the va¡ious ãnt¡ies of the Union and State Lists.
The¡e is no head of taxation in the Concurrent List (Union and the States have no
The principal cenhal and state level indirect taxes being levied in lndia along
conculrent
witlì tlìe relevant statutes are tabulated below:

Incor¡re tax [Entry 82] Excise D¡rtv A tax on the manufactule or'
Taxes on i¡come otlìe¡ lhalr Taxes on the sale or pur.chase of production of goods in lndi.1
agricultural incor¡e. goods (excluding newspapers) [Cent{al Value
Added Taxl irnposed by the CeÌ1tr¿l
except tax on i.nter state tfacle ol (cENVAr) Gove¡nnent.
comrnelce.
Basíc Çenercl rate: 12.5/.
Customs Dutiès [Entry 83]
Duties of Customs includi¡g export Duties of excise on alcoholic liquors
Customd Duty A dutj¡ imposed by ìÁ.
duties. for human consumption; opium, Cent¡al Gove¡rEnent olt
.
Indian hemp a¡d othe¡ naÌcotic goods irnported i¡io/
drugs and narcotics. The entry does exported out of IrLdia,
not i¡clude duties of excise on Basic General Rate: 10%
medical and toilet preparations Additional duty of customs
contairri¡g alcohol or .opium/ (Ca¡D) equivalent to the
Indian her¡p/other na¡cotic drugs/ excise duty levied on .like
narcotics, goods produced ir.I India
(12.5'/") + Special additional
of customs @ 4%.
 q f ,9t'tv.A-t¡,Éh&iËm#iúsfü,,i",,.,#ih*H"it¡1,...;',",;1. i.1:r.... ,,,í ,

Service Tax Chapter V and VA of the A tax imposed by the Centfal

Fina¡ce .Act, L994' Govern:ment. on the services
(except the se¡¡ices cove¡ed
irt the negative list öf se¡vices
ând exeIJipted selvices)
R1te: 14%
Central Sales Tax Cent¡al Sales Tax Act 1956 A tax on the inter-state sales
of goods, imposed by the
Central Government but
appropriated by the
originating state.
Røte: 2%
Value Added Ta¡ VAT Acts of respective State A tax on the i¡t¡a-state sales
governments of goods, imposed by the

Rate generally at 5% a¡d

12.5%
Besides these, the¡e a¡e other i¡dfuect-..tax€!. ,¡ikg entry tâx, luxury tax, Q. 5, How doe6 VAT operate?
ente¡tai¡ment tax etc. levied by the State:.Gô.i/,e¡nments. Muniçipal or local Ans, Value Added Tax (VAT) is levied âs a p¡oportion of the value added at
aul.horities also impose taxes lfüe octroi or,lgéal aiêa táxes. each stage of production o¡ distribution (1.e., sales ninus purchase) which
is
The Deparrmeni d.i.fi¿,i,Mi{iåå1i"äi'iuu¡r"" exe¡cises conr¡ol in equivalent to -,vages plus i¡terest othel costs arld p¡ofits. To ìllustrate, a cha¡t of
"f RèJen\r.
respect of matters relati4g to .gl1-.'"t:1he,] iidûect taxes through statutory Boards, transactions is given belou:
f
namely, the Central Bõaiìl'.ôf Excise and Customs (CBEC). The Bo¿ud has been
constituted under the Central Boa¡d of Reve4ì¡e Act, 1963. i
CBEC deals with the tasks of fo¡mulatioìr óf policy qoncerning levy and
r--;;;.,*.,"
l&ìlelrice=?3ro
-_-l
f- wh"r"J",--]
collection of customs and central excise dúties a¡d service tax, prevention of
I
I sale Price = T4oo I

I cross vAr @ 12.5% = T37.J0 | ---------------> I cross vAr @ 12.5% = {50 |

smuggling and ad¡ninistiation of mattets lelating to customs, ce\t¡al excise, I NeiVAT = 121, i.?., I
I Ner VAT = {12.50, r.¿.. I
narcotics to the extent under CBEC's purview and se¡vice taxl'The Board is the I (¡lz.so *
t¡:z.so - r+ll
I I rrso - r¡z.sol
administrative âuthority fo¡ its subo¡dinate organizations, including Custom I

Houses, Central Excise and Service Tax Commissionerates. 1 I

The State level indi¡ect taxes are administered by Comrnerciaì Tax I

_l I
Depaftments of the respective states.
re 1,4 Concept of VAT
l-----;;""",,*__-]
I Sale rrice = rloo I
l-
I
-"**"
T5oo
sale Pnce =
I Gross VAT @12.59" I

I N"t
I
lcrossvAr@12.5%
What is VAT? Eiplain it with the.help of an example.
J

Q. 4. = rrz.so | = t625o
I

Value Added Tax (VAÐ, as_the term suggests, is a tax on the value I v¡r = uz.so I Nut var = trz.so
I

I
_Ans. I
'.".,
added to the comqrodity at each stage in production and dist¡ibution chain, It is I rtøz.so - r;ol
I
a system to collect the tax on the value at the final or tetail point of sale. VAT is a
consumption tax because it is borne ultirnately by the final consumer. FoÌ a manuJacturer A, inpûts aÌe p¡oduct X and product y which a¡e
Let us try to under6ta¡d the concept of VAT with the help of an example. purchased from a primary producer, In practice, even these producers use
saásá¿¡¿tì ,*Ì--^:..^:
inputs. Fol example, a farme¡ would use seedg feeds, fertilizer, pesticides¡ etc.
However, for this example, thejÌ VAT impact is not considered. B is a wholesaler
a¡d C ìs a retailet.'
The inputs X and Y are pwchased at Tl00 each on whi.ch tax is paid @ 12.S%
 ';:,:it : .: ,
! 1:i .,i

r:.qiii:1+'iiaf,
and 4% respectively. 'After adding wages, salaries and othe¡ manufacturing
iÌullirffiïtrtW .
"
(excluding value of material) including profìts io arrive at the total valuc
expenses to the cost of inputs, Ma¡ufactue¡ A will also add his own plofit.
addition on which the tax rate is applied to calculate the tax. This type of
Assuming that aJter the addition of al1 these costs fus sale price is 300, the gtoss
calculaäon is mainly used with inconre va¡iant of VAT. A d¡awback of
tax (at the rate of 72.507.) would be T37,50. As nÌanufactuter A has already paid
tax on {200, he would get credit for this tax (i,e., T12.50 + <4 = f16.50). Therefore,
t¡is method is that it does not facilitate matching of invoices for detectin€l
evasion as tdx liability ¡s calculated periodically and not i¡vo¡ce-w¡se.
lús net VAT liability rvouìd be {21 only ({37.50 minus <16.50) and because of this,
(ii) Invoice method. This is the most common and þopular -method for
he would take the cost of his inputs to be only {200.
computing the tax liability ulder VAT system. Under ttris method, tax is
Similarly, the sale price of t400 fixed by Wholesaler B would have net VAT
irrtposed at each stage of sales-oñiñéãñEi-e sale value and dre tax paid at
liability of {12.50, l.¿., (<50 - (37.50) and the sale price of {500 by retariler C would
the earlier stage (on purchases) is a.llowed as set-off. Thus, at every stage,
also have net VAT liability of t12.50, t.¿.; (T62.50 - t50). Thus, VAT is collected at
differentiâl tax is being paid. Ihe most i¡nportant aspect of this method is
each stage of production and distribution process, ard in principle, its entte
that at each stâge, tâx is to be charged separately in the inwoice.
burden falls on the fi¡al consuûrer, who does not get any tax ctedit. Hence, VAT
This method is very popular ir-t weste¡n count¡ies. Ifr India a1so, this
is a b¡oad-based tax covering the value addêd by each pafty to the coml¡odity
method was followed u¡der tìe State Level VAT- ãnd the Cent¡al Excise
during the vùious stages of production and dìskibutjon.
L¿Lw befo¡e the advant of GST. Thii method was also called the 'Tax
s 1.5 Va¡iants of VAT Credit Method' or 'Voucher Method'.
Q, 6. Enlist and explain varialts of VAT. Exanple:
AJ¡s. Various types of oariq.nts of VAT:
(i) Gross Product Va-riànt. The gross product vê¡ia¡t allàws deductions for
taxes paid on all purchases of ¡aw ma-teriâls and componènts, but no
deduction is allowed for..taxeslprü'il6ii:öäþiÌaf,iiáþuts. MäÌrufactu¡ei/Fhst sellei in the 725
(ri) Income Vadan¡:1,trÞ.¡ryç;ritè1ià¡an¡ldf rVÁT òn the other ha¡d allows fo¡ state gells the goods to distribulo¡
deducLions on the purchase of raw malèrials and components as well as fo¡ {1,000. Rate of tax is 12.5%.
Therefore, his tax will be t125. He
depreciation on lç'4þ!_fa1: :gòods. This method provideS incentives to
will not get any VAT credit, being
classify purchasés'äs cuÍent expenditure to clai¡n set-off. the fi¡st selle¡.
(ill) Consumption Variant. ftis vaiiant of VAT allows deduction for all
2 Dist¡ibuto¡ sells the Boods to a 150 t25 25
busÍness purchases includi¡g capitai assets. Thus, gross investment is
deale¡ fo¡ Í7,200 @ 1250% a¡d
deductible in calculating value addêd. It neithei distiaguishes between will get set-off of the tax paid at
capital a¡d cufient expenditu¡es no¡ specifies the life of asset o¡ eârlier state t.¿., 11Æ. Thus, the
depreciation allowances for different assets. tax payable by him will be T25. .50
The consumption vadant of VAT is the most widely used vaÌiant of the VAT. 3. Wholesaie dealer sells the goods
Seve¡al countries of Ëurope and other continents hâve âdopted this va.riant as it Lo a reLailer at <1,500. He¡e agairì,
does not affect decisions regarding investment because the tax on capital goods is he will have to pay tlle ta-x on
also available fo¡ set-off against the VAT liability. Hence, the system is tax <1,500. He will get credit of tar
neut¡al in respect of techniques of production (labour or capital-i¡terLsive). It also paid at eadier stage of t150. The
simplifies tax administration by obviati¡g the need to disti¡guish between tâx payable bY hirn will be (37.50. 250 787.50 62.50
purchases of inputs arld capital goods. 4 Retailer sells the goods to
h practice, the¡efore, most cou¡tries use the consumption valiant. Also, most consumers at (2,000. Again, he
VAT cou¡kies i¡clude many services in the tax b¿se. Since the businesb gets set- will haye to pay ta.r< on T2,000. He
712.5O 462.50 250
off fo¡ the tax on ser:vices, it does not cause any cascading effect. will get credit for tax paid at the
earlier'stage of {187.50. The t¿lx
r 1,6 Methôds of Computation of Tâx payable by him will be <62.50.
Q. 7. Write a note on different methods of computation of VAT.
A\s. Methods oÍ coupU.tgtLo! -of.VAT:
(i) Addition method. This method aggregates all the factor paymentE Thus, the Govemment will get tax on the final retail sa.le price of T2,000.
llowever, the tax will be paid in i¡stalments at different stages. At eacÌr
il:tl

¡ì 1"ìll{Erlriã: ;:ïli:it:i i:ii:r,, iiil!rtr&åíil}ê1å$å!i)1,i*;ç,@

stage, tax liability is wo¡ked out on the sale price and credit is also tiven This mefhod i6 suitable fo¡ gross product variant. !,,i;.ol
' on the basis of tax c\arged in the purchase invoiòe. lf the fi¡st sellei is a thus, under this system also, tax is charged
marLufacturer, he getl the credit of tax paid on raw materiak;, etc. which at each stage and the hcidence of
¡ tâx.:n the- final sale price io the-consumer remains
a¡e used in the manufacturing. the same as in the invoice
method. However, rhis holds øoo4 ¡1¡ tf.," ti*.
From the aboùe illustration, it is cleat that under this methód, tax credit all i¡puts, inctudiag consuriables arrd sewices, *,u-"ã*"luäü,ü i" urou.,uo o'
ca¡¡ot be claimed u¡rless and until the pu.rchase invoice .is produced. As production/distribution. lf the râtes. are no,t "dd;;-;l' ;" stages of
ll a result, in a chain, if at any stage the transaction is kept ouiof the books, comme.n, tf,.r, it tax by the
i two methods may'differ. This is explained ,I*.;õ',Àä
stiÌl there is no loss of revenue. The Goyemment can tecovet the full tax "-firåf ¡"ro*,
äãmprå"'äi"r,
I at the hext stage. Thus; the possibility of tax evasion, if not entüely ruled
All Inputs taxable at O-NE Rate
j out, is teduced.to a minimi¡m. Howevet, þroper measures are require-d to
prevent the ploduction of fake invoices io cÌai¡n cred.it of tax paid at an
l
:j,
earlier stage.
3 It is said tlrat in this method, the beneficiary is the trade and industr.y
, because in the above example, the total tax collection at all the stages is
T712.50 whe¡eas tax leceived by the State is oñIy <250.
(llí) Cost Ei¡bkaction method: Unde¡ this method tax is charged only on the
i value added at each stage of the sale of goöds. Since the tqtal value of ,,
goods sold is not taken into account,, the question óf gtant of:claim for 125
200
set-off o¡ tax credit does not ârise. Fu-rthet rlrider this method tax ca-nriot
be shown separately in invoice at-t{iìta¡. iiabiiity only be calculated
periodically. Since, tax p:rii.able on a þ¡ãd!,rct ib not "al
known, end-use based
exemption canrrô!þ*.æye¡iii:n4f r tbii ;aä¡noa.
For imposing tå:ù¡,!yqt¡id,4è4dai'îit simply taken ad the diÍfe¡e¡nce between
sales ald purchases
Inputs for A
Tax is calculated bv the formula.= T A sells goods fo B
1 ;Y]?'..:ri,,,'''."er and R = rax Rãre B sells goods tq Ç-
j C sells goods to D
îiü,i:l D sell6 Eoods to Ë
I
l?1.,..¿,.

7. First seller sells tlrc goods to a All Inputs taxabie at DIFFERENT Rates
distributor at (1,125 inclusive of htooice method
tax.
2. Dist¡i¡utor sells the goods to a 225 25
whole-saler at <1,350. He¡e, taxable lnputs for ,A
turnover will be 41350 - <1.125. Prodllct X @ 4%
*SëI5-fhë-goÞds Product Y 12.5%
3. Who.lesale¡ to a 37.50
retailel at T1,687.50, He¡e, taxable (337.50x12.s0)l 770 650
tutnover will be {1,687.50 - {1,350. -100.1150 A sells goods to B 7725 1000
]
,o
4. Retailer se.lls the goods at l¿250. 562,50 62.50 B sells goods to C 1800 1600
Taxable turnover wilì be {2,250 - f(i62.so' t2.so)l C sells goods to D 2250 2000
D sells goods to E 200
<16a7.50. L 1oo+1rso I 2700 2400 250
 'l'iÈ.Í,'
Lack of coordination between States and Union Before the GST, the federal government and individual states couldn’t make separate tax policy decisions on the same topic. As a result, there was
friction between the federal government and the states over taxation. There was no systematic plan for implementing tax policy that would boost national development. Because of this

r*"re disorganisation, detecting and prosecuting cases of tax evasion were both difficult.

Suüsbaction method
:liriii,l.iËft &#ii;{$.ffi :Íi}W"#ffi .!-ii
taxation powers in the Constitutiorç neithô¡ the Cente no¡ the States can
apply the tax to such bu¡dtes in a sea-qùess man¡er. Each Covem:ment
could tax only parts of the bundle, creating overlaps in taxation.
(?rii) Narow base. Due to different tfuesholds u¡de¡ different lar¡s as well as
nuErerous exemptiohs and concessiory, the tâx base urder indirect tax
was n¿úrow as compared to other cou¡kies.
(zriiÐ Mulltiple administrations. Unde¡__lbq_gl¡stem, businessmen we¡e
requtued to visit differerit tax offices according to the applicable laws to
Thus, on the safne consumer price_òf T2700, r¡¡rde¡ inwoice rnethod VAT works his business. This inc¡easeed the corirplia.nce cost of_ businesses a¡d
out to be 1300 whereas u¡rde¡ the substraction methocl it wo¡ks out to be {281. woxrld lead u¡mecessaly complexity. .

cascading tax—is a
Therefore, this method is not considered as a goocl method. ç 1.8 Rationale of GST
repeating sales tax
that is imposed on
* 1.7 Major Defects In The Structure of Indirect Taxes Q. 9. Dis'tuss the rationale of GST.
Ans, Ratlonale of GST:
products at each Q. L What ale the demerits of indìrect svstem of taïes?
successive stage in
Ans. Demeríts of V.4T System: (i) GST ìs a value ädded tax levied on manufactu¡e, sale and consumption
the supply chain, -The of goods and se¡vices. GST offers comprehensive and èorìtinuous chain
from raw material to (i) Cascading effect. system of multiple levies distributed behveen
consumer purchase.
Cent¡e and States.tesuits into cascading eflect (i.e.,.tax on tax). For of tax qedits from the producer's point/service p¡ovidefs Éôint upto the
Each buyer in the ¡etailer's level/con-sume¡'s level thereby ìaxing oirly the value added at
supply chain pays a instance, no credit of State VAT is al1owed,.agai¡st Centlal Tax. CST
price based on its credit paid in the origjnating StateliÉ alsoi nól:,a1lowed in the receivj¡g each stage of supply chain.
cost, including the
State, This results in the inc¡eade i¡ thè:oúei.ìll b'rüden of tax in the hands
(il) The supplier at each stage is permitted to avail sedit of GST paid on the
previous tax or taxes
that have been of end consumer and qeates distortion i¡ the ma¡ket. pu¡:hase of gdods and/or services and ca¡r set ofl tlús credit atainst the
charged. GSTI payable on the supply of goods and services to be made by him.
(il) Exemptions &:Co¡céidiòni; Uiìder rhe VAT system, businesses enjoyed
ThùLs, orùy the fi¡al consqmer bears the GST chqrged by the iast supplier.
many kinds exÈii!þfiOiis and concessions under
distortion "f oi Vet and thus c¡eated disto¡tion.different levies which
b¡oke the chain in the supply cþairç with set-off benefitJ at all thá previous stages.
A.lso these kinds of
benefits do not create a level playing fielcl especially when the same (ili) Since, only the value added at each stage is taxed urider GST, there is no
= tax on tax or cascading of taxes under GST systèm. GST does not
deformity (i;l) commodity is taxed at different rates i¡ different ju¡isdictions, diffeÌentiate betwee¡i goods ánd services and thus, the two ate tâxed at a
Lack of transparency. Under excise and service tax law, there wàs no
mechanisllt to c¡òss ve¡ify the claim of CENVAT credit made by the single rate.
ma¡ufacture¡/service prôvider. Even under State VAT laws, ail ,the !+ 1.9 S,tructure of GST (SGST, CGST, UTGST & IGST)
States in lndia did not have the. mechanism to cross ve¡if the creditq.
different tax rates Q. 10. Explain briefly the structu¡e of GST.
(iz.') Lack of unifo¡mity in provisions and rates. The VAT sttucture ac¡oss A^s. Stfitcture of GST:
and procedures
across states the States lacked uniformihj, which was not restricted only to the rates of L- Dual GST. I¡rdia has adopted a dual GST which is irrLposed concrurrently by
created barriers tax but also the qedit prbvisions as well as procedufes. j the. Centre and States, i,e,, Centre arid States sünulianeòusly tax goods a¡d
to seamless (?) Multiple- poi¡rts of ta¡Àtion. Unde. the VAT system there were multiple services. Centr_e has the polÞe¡ to tax inha-state sales & States are empowered to
interstate trade points of taxation. Excise was levied when goods manufactu¡ed wãre
and hindered the tax se¡viceé. GST extends to whole of India includirig the State of Jamlflu and
clea¡ed f¡o¡n the factory p¡emises irrespective of the fact that the Kashmi¡.
ease of doing
business. The clea¡a¡ce was oit. accou¡t of sale o¡ otherwise. Stäte VAT was levied on
2. CGSïII'SGST ITGSTIGST. GST is a destination based tax applicable on all
lack of a unified the sale of goods. Entry tax was levied on the entry of goocls in a t¡a¡sactiorLs involving supply of goods and services for a consideration subiect to
tax structure pa-rticulaÌ 5tate. exceptions thereof, GST in fndja coniprises of:
resulted in
inefficiencies,
(ai) Complexity in determining the natu¡e of transaction- Goods (í) Central Goods and Service Tåx (CGST)- levied a¡d collected by Central
"s.
Services. The distinction between toods and services found in the Indian
increased Cove¡nment.
compliance Constitution$ae-åe€oÃtçmore complex. Toàay, goods and se¡vices a¡e (il) Sia{e Goods and Seivice Tax
being packaged as comfosite bundles and offe¡ed fo¡ sale to custome¡s
(SGST) - levied and collected by the Statè
burden, and Goryemdrents or Union Te¡ritories w-ith StaÍe l-egislatu¡es, '
hindered u¡der a va¡iety of supply-chain aÌlangernents, Under the division of and
economic growth.
ü

ü
''to.,**'¡-tu'gi¡iW:iúr:i:*;:¡ll¡jll.,"...',.,-..,.,"...',,
(iii) Union Teûitory coodg and Service Tax (UTGST) iand collected
),;,i;üüiiill¡-i*lìtfliiÈ¡1,,i:;+pereiiäerryi _.*,1.s_,
-levied
by U_nion Territories without,State Legislatures, on inka_state supplies of and the States on impo¡tânt issues relatea t" CSf, tIãìilJloods and services that
taxable toods and/or services. ûlay be_subiected or exempted f¡om GST, model GST Laws, principìes that
(i?r) Integated Goods and Se¡vice Tax (IGST) govern Place of Supply, ttueshold lùnits, GST rates including the Àoor ¡ates with
on Inter-stâte supplies
of taxable goods and/ot services. IGST is -lsyis¿
approximately the sum total of
bands, special rates fo¡ ¡aisi¡g additional resou¡ces during natural calamities/
CGST and SGST/UTGST a¡d is levied by disasters, special provisions fot ce¡tain States, etc.
Cenrre ;n aU inrer_state I'lhe Union Cabinet u¡rder the Chairmanship
supplies. of prþe Minister Sh¡i Na¡end¡a
3, Legislative frainework, There is iingle legistation - CGST A,ct, 2017 for Modi approved setting up of GST Council àn.12th September,2016 and also
settìn8 up its Secretaiat as per the following details:
ler'ying CGST. Sirnilarly, Unìon Territories r ¡ithout state legislatures [Andaman
a¡d Nicoba¡ Islands, Lakshadweep, Dadra and Nagar Haveli, Danan and Diu . . Creation of the GST Council as per Article 279^ of t]l¡re amended
and Chandigart'.1 are.govemed by UTGST AcÇ2017 for levying UTGST. States Constitution;
. Creation of the GST Council Secretariat, with its office at New Delhi;
and Union te¡ritories with thei¡ own legislatu¡es [Delhi and Puducherr¡r] have .
their own GST legislation for levying SGST. Appointment of the Seêretary (Revenue) as the Ex,officio Secretary to the
GST Cor¡¡cil;
Though there are multiple SGST legislations, the basic features of law, such as .
chargéâbility, definition of taxable event and taxable peisor! classification and Inclusion of the Chai¡pe¡son, Cenhal Boa¡d of Excise and Customs
valuation of goods and services, procedu¡e for collection a¡d levy of tax and the (CBEC), as a pe¡manent invitee (non-voting) to all proceedings of the
lil<e a¡e u¡riform in all the SGST legislations, as fa¡ as feásible.
CST Co¡.¡¡cil;
Thii is necessary to .
preserve the essence of dual GST. Create one post of Additional SecretaÌy to the GST Corjncil in the GST
Council Secretariat (at the level of Additional Secreta¡y to the
Government of lrrdia), and four posts of Cou¡ûrissione¡ in the CST
Cou.ncil Sec¡etariat {at the level of Joint Secretary to the Government of
India). The Cabinet aÌso decided to provide for adequate furds for
meeting tàe recurring and non-recurrirg expenses of the GST Council
Secretariat, the entire cost for which shall be bome by the Central
5. Composition SclEine. In GST regirne, tax (1,¿., CGST and SGST/IJTGST for Govem¡nent, The GST Council Secretariat shall be ma¡med by officers
intra-state supplies and IGST fo¡ inte¡-state,supplies) is payable by every taxable taken on deputation from both the Central aj:rd State Governments.
person and in this regârd provisions have been presc¡ibed in the iaw. r+ 1.11 GST Network
However, for providing relief to small businesses making intra-state supplies,
Q, 12. Write a short note on the structu.re of GSTN.
a sirnpler method of paying taxes and accounting thereof is a_lso prescribed, A¡s. The Goods and Se¡vice Tax Network (or GSl$ is a non-profiÇ non-
known as Composition Levy. govemment organization. lt will manage the entire IT system of the GST portal,
rs 1.10 GST Counëil which is the mothe¡ database for everythirig under GST. This portal will be used
b)¿ the govemrhent to track every financial transaction, a¡d will provide tax-
Q. 11. Write a short note on GST Council.
A¡s. As per.Articfe 2794 (i) of the Añended Constitution, the GST Cor¡ncil payers with âll seryices-fiom ¡egistration to filing taxes and maùtaining all tax
was to be constituted by-the P¡esident witìin 60 days of the cômmencernent of details.
Atttcle 279A- The notification for bringi¡g into forte Arrlcle 27gA with effecr Stnrctarc ol GSTN:
from 12h September, 2016 wasjss¡¡ect on 10ù September, 2016. Private players own 51% sha.re in the GSTN and the ¡est is owned bj¡ the
As per Article 2794 of the Amended Constihrtiöf! the GST Council wtrich wiJj Govemment. The authorized capital of the GSTN is t10 crore (JS $1.6 minion), of
be a ioint foru-ur of the Centre and the States, shall consist of the,following which 49% of the sha¡es a¡e divided equally bgtween the Central and State
members: goveûlrnents/ and the remai-ning is with p¡ivate banks.
.
Union Finance Mini ste\ - Chaitpersort The GS.TN has also been approved for a non-recurring grant of {315
.
The Union Mnistel of State, in-charge of Rewenue o f Fjnance _ Meatbet crores, The co¡rtract for developing this vast technological backend was
.
The MiÌristq in-<harge of Fina¡rce ot Taxation or a¡y other Minister awaÌded to InJosys in September 2015.
nomi¡ated by eàch State Governûtent The GSTN is chaired by Mr. Navir Kulrtar, a¡ I¡dian Administràtive Service
-Mcmbets serva¡t (1975 batch), who sewed in marty senior positionJ,with the Gôvernment
As per Article 279Á' (4), the Councit will make recommendations to the Union
of Biha¡, a¡d the Cenhal Govemment.
 19, t-Wv,âtEt*fis Frå:{*i.1¡flnri¡:,1,r,,t;,t;ttf;illiii.jf,Ë}4rrîj¡i,,:it
'ltirdiii¡rllfü$rl1¡åriil,,i].li'*¡iF,ffi i,ii¡'
Q. 13. What are the sal¡ent features of GSTN?
' Foi the purpose of ca.lculàting the compensation ar4ount in afly financial
yelc, year 2015-16 is taken as the base year, from which.revenue will be
A]is. Salient leataTes of the GSTN: T]ne GSTN is a complex IT initiative. It wilt
pr¿iected. The growth rate of revenue for a stâte during the five-year
estâblish _a uniforqr interface fo¡ the taxpayer arld also create a com¡non a¡rd
period is âssumed to be 74o/. per arìnum.
shaJed IT i-nf¡astructule between the Cent¡e aÌrd States. . The base yeâl tax reïenue shall consist of ttte statils tâx ievenues frorn:
(i) Trusted National Info¡mation Utility. The GSTN is a trusted Narional
(r) State Value Added Tax (VAT), (ii) Ce-ntral Sales Tax,
Information Urility (\mÐ providing reliable, efficient a¡d robust IT (iii) Entry Tax, Octroi, Local Body Tax, (iz) Taxes on Luxuries,
backbone for the smooth functioning of GST in India.
(d) Taxes on A.dvertisements,-+tc,.*.-.*---
(ii) Handles Complex Transactions. GST is a destination based tax, The
However, any revenue among these taxes ârising related to suPPIy of-
adiustment of IGST (for i¡te¡-state trade) at the government lèvel (Centre
(f) alcohol for hurian consumption, and
and valious stâtes) will be extremely complei, considering the sheer
(ii) certain pet¡oleurn products
volrrme of hansacfio¡s all over India. A rãpid settlement mechânism
'lvill not be accounted as pa¡t of the base yeai ievenue.
amongst the States arid tlìe Cenhe will be possible orùy when the¡e is a . ',ti]e compensation payable to a slate has to be provisionally calculated
strong ff infrastructule alrd service backbone wlúch ciptu_res, processes
. and exchanges information. a¡r<l released at the end of every two months. Fu¡thet an annual
cal,culation of the total revenue will be undertaken, which will be audited
(iii) All i¡formation will Le secure. The government v/ill have shategic by the Coinptroller and Audito¡ Gene¡ai of India.
cont¡ol over the GSTN, as it is necessarj, to keep the information of all . GST Compensation Cess may be levied on the supply of cettain goods
taxpayers corLfidential and secu¡e. The Cent¡al Govemmènt wiil have
an¡l services, as recommendèd by the GS'T Co.uncil. The receiPts fronÌ the
.over the òmposition of the Board, mechanisms of Special
cont¡ol
Resolution and Sha¡eholde¡s Agree.rnen_t-q4d:agreements betweà the
cesswill be deposited to GST Compensation Fund. The receipts will be
used for compensating stàtes for any loss due to tlte imPleñentation of
GSTN- and_ o her stut go"..i'me$áit¡Ájþj:,.r1Íé.,eia¡eholding panern is
GST.
such that the Gowe¡nrneri! shareholding,at 49% is fa¡ mo¡e ihin that of .
a¡y single private:insJitu tion The cess will be capped at:
(i.r) Elffenses wiu be-eha¡e¿'i:ThÞ'ùser charges will be paid enthely by the (i) 135% for Parr masala,
(t¿) <400 per tonne for Coal,
!¡n!ra.l cowemrqerú and the State covemments in eiual proporiio., 11."., (äí\ <4,170 + 290% pet 1,000 sticks of,Tobacco, and
50 : 50) on bêhaff óf all the use¡s. The state sha¡e will,Ëe th¿n apportioned
(ia\ 1^5% Íor all other:goods and services including motor cars and
to individual statês, in proportion to the number ol taxpavers in the state.
aerated w¿ter.
Q. 14. Write down the functions of GSTN. . Arly unutilised
Ans- Functíons of GSTN. GSTN is the backbone of the ComÍron portal money in the Compensation Fl¡nd at the end of the
which compensation period will be distributed iñ the following manner:
islhe interface between the ta-apayers arìd the gover¡rme¡rt. ff.r" ."tir"
GSI is online sta¡ting from regishation to the fi_li¡g of returns. þ.o.1"" ái \Ð s\y" of tne funa to be sha¡ed between the states i¡r ProPoÌtion to
It has to support about 3 billion iniroices pêr- month and the subsequent levenues of the states, and
return filing for 65 to 70 lakh tax payers. (ii) thé remaining 50% wiu be part of the cènt¡e's divisible pool of taxes
The GSTN 71rìll hafldte: r.+ 1.13 Regiskation
. Invoices
. -
Q. 16. Who is requùed to be registered for GST?
Various returns A¡rs, Evlery suppliel of goods and/or serviòes is requted to obtain registration
. Registrations
. in the Stale/UT from where he makes the taxable supply if his aggregate
Payments and Refunds. turnover exceêds (20 laldr during a Financial Yea¡.
* 1.12 State Compensation Mechanism Howevgr, the limit of f20 lakh v/ill be ¡educed to ?10 lakh if the person is
Q. 15. W¡ite
carrying oht busi¡ress in the Special Category States-11 Special Category States
a
_short note on State compenaation mecha¡rism under GST. rue specified in A¡ticle 2:Z9ee)@;) oJ the Constitution (States of A¡u¡rachal
Ans. The Gooãs and Services Tax (Cômpensation to Sfates¡ nn-,-
-The ZOLZ *u" P¡adesh, Assam, Jarrrmu and Kashrnir, Manipur¡ Meghalaya,. Mizora¡¡i,
roduced in tok Sabha o
i¡troduced lla\ch 22, i\l7.
on Ma¡ch pÃia-""ã.
n r o¡ovide"
àotz.'mà Bi.tl fá"
to states for an)¿ loss itì+€+'enre-due to the implementation of "á....""^-
"ã-p.o.ution Nagalã¡d, Sikkim, lripura, Himachal Pradesh and Uttarakhand).
. Cornpensation will þ provided to a state for a period GST. of five yeard from
the date on which the state bdngs its State GSTiAct into force.
fì
te-¡,á1'11Ei1yj¡¡frffii! þ."1;i.,,,*;-;i;¿.,,.--,,".,.^..-.,,ii1þ¡ilt::,;¡..,
Busi¡esses ,n'i *. *q'i-.¿to ;; ä#;;"" csT irresf"cuve of theû
iril'1*üli'ii:a];,-{ltìliri¡x*ii1i:qnimÊíüiv*l,s,q+' dúl#&urs+.¡r,,
;l turnover a¡e as folloi¡¡s: a sepa¡âte application for r?þiîtrTEõì-aì such lnput Service
' (Ð Every person who is registered under the pre_CST
*il.I*u
Distributo¡.
lâws (i,e., 2. Validation of p,AN, Mobile no. ând e_mâil add¡ess_
fl Excise, VAT, Service Tax etc.).
1l (tÐ When a business which is registered has been r . The Permanent Account Number shall be validated.. onìine
,j transferred to by the
portal from the datâbase maintaìned by the Central Board
s:meole, the t¡a¡sferee shall take registration with effec,t f¡om of
date of t¡ansfer.
the
:--- . Direct Taxes.
(ii) Persons màking a.rly i¡ter-state taxable supply of goods. .
The mobile numbe¡ shall be ve¡ified tluough a one_time password
: sent
(ia) Casual taxable persons. to the said mobile numbe¡;
il (u) Non-Resident taxable persons making taxable supply.. . Th-e e-rnail address decla¡edandshall be verified. through a sepaÌâte
one_
rì
(ar) Agents of á supplier. . time password sent to the said e-mail add¡ess.
,l (aii) Those paying tax u¡der the Reverse Charge mechanisrn. 3,.Generation of l{eference number. On successful verjfication of the pAN,
i (aiii) Input servicè ¡iistributors. mobile numbe¡ and e-mail address, a tempo¡ary reference number shall
ìi be
(rr) E-commerce oþerators or aggregators. genetated a-nd comnunicated to the applicant on tie said mobile number and e_
(x) Person who supplies via e{oûtmerce aggregator. mail add¡ess.
i (rl) Person supplying online i¡rfo¡mation and database access or 4. Filing of Form GST REG-01 (paft B). Using the reÍe¡ence number
j gene¡ated, the applica¡t shall electroniàally uppUJutiå., ir, p*t e o¡
ret¡ieval services fiom a place outside lndia to a person in lndia,
other than a registered taxable person. FORM cST REC-01, duly sigrcd or Verifieà through""i^it ori
elecåänic ve¡ification code,
I along,with the documents specified in the said Forà at the coûrmon portâì, either
by the sove¡nment.
,ÍÍì "t.o"ïîT,..s-no.S$ed
(riii) Persons who.are required..1g.+Sd"g..-t directly or tfuough a Facilitation Cent¡e notified bv the Conunissiôner.
C"¡, ei souñe u/s 51 (TDS
. 5l Issuance of ì.cknowledgement. On ."."ipt of an applìcation, a¡
li
deductor).
"]-}::t"1.s;:4,"].:: i . .,1 Ack¡rowledgement shall be issued electronicalty to tLe applicant
I Q. 17. Who i-s
17.*ry]ro not li;-kl
is nor Iiabt to let
qer ¡egisrered uridd cST.
regisrered uiider'GST. ü FORM GST
REG-02.
AJÂs,. Follouíng per;í&Viã.ii.filiàiìi¿
ts. Follo?þíng perì;rq1!î f"i ti,iUt" t"
tu get regiÈtered
registered under
under GS
GST: 6, Application by casual taxable person. A person applying for
I (t) Any. person engdg'ed'exclusively,
cÃcrusrvery, tnin lne
ttre business
Þusrness otof supplyi¡g
supply goods or
retlstration as
a casual taxáble person shall be given a temporâÌy iê¡é"uri"" nu-ñber by
j services that ate not liable to tax or wholly exempt frorn tax. " " the
common portal for making advance deposit of tax in accorda¡ce with
(ti) A¡ agricultu¡ist to the extent oJ suppty of produCe out of.cuLtivation the
of provisions of Section 27 a¡d the acknowledgement shall be issued electronically
I la¡d. only after the s¿id deposit.
Q. 18. Describe the process of getting registered u¡der GST? Q. 19. Write a short note oir the following:
Ans. Applicatíon for rcgìstrøtíon: (a) Verification of the application and approval
1. Filing of form GST REG-OI (part A). Every person (otler than [Rule 9]
I â non_ (b) Issue of registration cefificate
[Rule 10] .
resident perso& a petson required to áeàuct taì at sou¡ce unde¡ (c) Separate registration fot multiple business veÉicãI$ within
-taxable
Section 51. â petson ¡èqufued to colleci tax at.soÌr¡ce r¡nder Sectiorr 52 and __ a State or a
I a Union territory lRute tt]
person supplying online i¡fo¡mation and database access or ret¡ieval
l se¡vicés Grant of registration to persons required to deduct tax at soulce or to
I t¡om a place outside India to a non_taxable ónline recipient) who ,(d)
is liable to be collect tax at source [Rute 12]
: registered arrd eùery person who is.not liable to Uå,"gi"t"."ïbut (e) Grant of registration to non-resident taxable person
seeking
registration (herèafter in this Chapts referred tã as ,,the applicant,,) [Rule 13]
":lylju.y
slrall, before applying for reÈtration. declare his pAN, mobile number,
(r-
- Grant of registration to a person supplying online i¡formation and
e_maiJ database access or retrieval services from a plãce-ouiside fnaia to a non_taxJiã
acldress, State or ljnìon territo¡y in pa¡t A of FORM GST
REG_01 on the online recipient [Rule 14]
comrnon poital either directly oi through . f""Uái"" C."u.ì-o,fr"a
Uy ,t" (gl nxtensio_n in period of operation by casual taxable person and
non_
I Com¡nissione¡:
. ¡esident taxable person [RuJe 151
I P¡ovided thad a person having a r]ltit(Ð ifl á Special Economic Zone (ft) Suo moto regisaadon [itule 16]
or
being a Special EconoûLic Zone developer ,-shall rnak€ u (rJ Assìgrurent of Unique ldentit5r Nurnber to
I
application for regishation as a business vertical distinct fro¡ri his'other
""paruiu cdtain special entities [p-ute 1Z
units located outside the Special Economic Zone. _f) Display of regietration càÉificate ar¡d .Gooás a¡r¿ éervices ra¡
Identification Number on the name board [Rule 1g]
. Provided further that èvery person being an Input Service Distributor (k) Anendrnent of regishation [Rule 191
aò r .
sHrvÀ'äffrjúNnÆùù+e"È-r$:ffitüi.,,jlï¡1|..i;:
lil¡iliil$lii!:,|¡i3iü$¡¡rälf;rfftrtrÍA,sÉ i i:ÈÂrð"ffim'ñüÈËi"ip$¡Éìzr
(a) Verific:àr¡on of thè applicøtìon ønd. approztøl
^ns^.
[Rule 9]: (ii) The registration shall be effective from the date on rvhich the person
(Ð The application shall be fo¡wa¡ded tá'the proper office¡ who
shall becomes liable to registration where the application for regishation has
exarnine the application and the accompanying dO-cuments
and approve been submitted ?rithín ø period òf 30 days f¡oÛr such date.
9. g"l.t of ¡egisharion to rhe appficàt o p"Aoa i¡ s zoot*.ing
døys ftorr- the date of submissiån of the-ití;n
applicaion, if ú"
(iit) Whe¡e ã¡ application for regisüation haj been submitted by the
fou-nd to be in ordel.
*. "u-" applicant aftelthe expiry of ttliÌty days ftom the date of his becoming
(tÐ whe¡e the âppücation submitted r¡rder Rar¿ liable to registuation, thq effectìve date of ¡egistation 6hall be the date of
I
is found to be deficient, th€ gaant of registratfo¡under Sub-rule (1) ot Sub-rule (3) ot Sìtb-rule (5) of
in-.terms of a¡y informaLion or any docuf¡ìent ."ouir"¿
:¡tl:r.
¡urrushed under the s¿id rule, or whe¡e rhe proper officer
to U" F'ule 9.
iequires any (iu) Every certificate of registration shall be duly signed or verified through
cla¡ification-with regard to any infonnation oi dåcuments,
he moy rsso" el:ctronic verification code by the profier officer.under the Act.
a notice to the applicant electronically in FORM
GST REê_o3, zuithin ø (z:) Where the registration has been granted under Su¿-r?le (5) ol Rule 9, the
peiod,of S uto-rking dø1is fromthe dáte of submission of the
arld the applica-nt shall fumish such clarification, i¡formation
aþplication a¡iplicant sha.ll be com¡n'¡nicated the registration number, ald the
or certiJicate of registrâtion uljrdet Sub-ruIe (1), duly signed or verifiecl
:::-iT:_.fdays froû the dateur ofFoÌM
.1":".m.1all4, GsT F.EG44, toithìn a perioiÍ of 7 tlrough electronic. vedfication code, shall be made available to him on
,,..- ?lrKtng the receipt of such notice. the coñfnon portal, withìn a pe¡iod of three days âfter the expùy of the
(¡rr) where the proþe¡ officer is satisfied with the claÌificâtion,
ir¡formation o¡: period specified in Sub- e (5) of Ruh 9.
doqu:rre¡ts firrnished by the applica¡t, t.r"
-uy tf,el|; ;;
^pfrolr"divs Írom t}re
Ìegistràtion to the applicant zoithrn a pertoa of í wàr¡ìng (c\ Sepllrrrte tegìstrøtíon fot multiple business aerîicøls zDìthìn ø Støte or .t
Uflion tenitory [Rt e 711:
,. date of the ¡eceiptbf such clarification o. inf.olrmution or'dã.urr,"rro.
(izr) \4/here no repty is tumished by the (í) Ahy person having muldÞle business verticals within a State ol a Union
applicant in ,*";*;;; rhe norice tetritory,.tequi¡ing a separate registuation for any óf its business verticals
]:".::d :l wrrere..the
¡¡rormatlon ¡J9ee1 o$cer is ¡åt ""ti"fi;t;'rt, tt',";lariricarjon,
ot.dõali¡ilqnte fur.riþhèd, he shall, for ¡easons to be reco¡ded
' ¡ider sub-sec.tion (2) of Section 25 shall be gtanted sepa.rate registration
. ln wnt¡¡g, reiect qllchåpp1icãtion a¡d i¡rform the applicant in respect of each of thê verticals subject ío the following conditions,
electronicâily neLmely:
in FORM GST R¡'b.os.
(a) If the proper officer failè: ' . sirch petson hãs more than one business ve¡tical as defìned il
(a) wìthin a period of tfuee working days from clause (18) of Sectiôn 2;
of the applicatiory or
tlre date of- submission . the business ve¡tical of a taxable person shall not be granted
(ü) within a pcriod of seVen working days registraúon to pay tax uìder Section l0 if any one of the other
fróm the date of the receipt business ve¡ticals of the samg person is paying tax unde¡ Section 9;
of the clarificatioç i¡formatiori or ldo"umurrt" frrrrrisl"d Uy . all separately registered business verticals of such person shall pay
appüca¡t.
tf,.
The applicati¡m for gtaat of registration shall be tax u¡der the Act on supplj' <if goods or sewices o¡ both made to
deemed to have been another registered.business vertical of èuch person and issue a tax
approved.
(bl.I^ssue-of registration certiÍicq te i¡voice for such supply.
lRule 101: Eltplaflat¿on: For the purposes of cløuse þ), it is he¡eby cladfied that
(i) Subjecr to Lhe provisiorìs of Section 25(12),
where the appucation for where a¡ri-business vertical óf a registered pe¡son t].at llas been granted
grant of regisbation has been appro.o"d u¡der R¿le
¡esisrrarion i¡ ,, - a Separate registiation becomes ineligible tô pay tax u¡der Section 10, all
FoRM Gsr REi3-06 "':""HÍä;i
business and ¿dditional place or places "h.;; th;-;riltiìi b."-;j;
of business
prac. or othei business ve¡ticâls of the said persori shall become ireligible to pay
available to the applicant 'on tax under the said section.
anJ Services Tai ldentification.th" "o--on
"h"ll
p""ã"äJ. iï]a"rg,, aooo" (ii) A registered person etigiþle to obtaùl separate regishation for business
N"^Uu. iCsiñ¡'lfìfì'lï urrtgo.a ve¡ticals may submit a separate application in FORM GST REG-01 in
subject to the follòwing characters, namely:
. two chalacterc for the State code; respect of each such vertical.
. ten characters for the permaneht (iil) T1re provisions of Rule I arrd Rule 10 relating to the verification a¡rd the
Deduction and Collection
Accoufrt. --..----
Nu¡nber or the
Y Tax 8-lant of ¡egistatio sh 1, nut.ttis mùiøndis, apply to an applicAtion
Account Numbe¡;
. two châ{a€te!€JeÈ th,e entity code; and
.
submitted u-nder this R¡¿¡¿ 4.
. one checksum cha¡acter.

, "e'p;slvÀffit&tiä!¡È#fftpgHq*íil.r,t iíi.i$*ll*i!;¡¡l$il;rlg,¡tlil$l"lÍ
.(d)Grant oJ regìstrølion to percons require¿l to deduct tør øt soqrce or to
collect lax at source [RuIe 72]:
(l) Any person requiredio deåuct tax in accordanre with the provisions of
Section 51 (fDS deductor) or a person required to collect tax at soulce in
accorda¡ce with.the provisions of Section 52 shall elechonically submit
an application, duli. signed ór verified tfuough elecbonic veriJication
code, in FORM GST REG-07 for the grant of.registratiòrt ttu:ough the
common portal, either directly or ttuough a Facilítation Centre nótjfied
by the Commissioner.
(¡¡) The proper officer may grant registration after due ve¡ification a¡d issue
a certificate of regisbation in FORM cST REG-06 withìn a pcr¡od of 3
zootkìng døys fuofljr the date of subrnission of the application.
(iii) Where, upon an e¡qlriry or pursuant to any other þioceeding under the
Act, the propet officet is satisfied that a person to whom a cã¡tificate of
registration in FORM ÇST REG-06 has been issued is no ionger liable to
deduct tax at sou¡ce unde¡ Sectio¡¡ 51 o¡ collect tax at sou&e under
Section 52, the said officer may cancel the registration and such
cancellation shall be commu¡icated to. the said perion elecfronically in
FORM GST REG48, Provided that the proper office¡ shall follow the
procedure as provided tn Rule 22 for the cancellation of regish.ation.
lel Graflt of tegistrøtion to nory.resi|etlt:t:d:i;;hiè.:p;erson [Rule ßj:
(i) A non-resident_taì4ble person shall electronically subrrrit ar aFplication,
along with a self--ättested copy of his valid passport for registråúon, duly
signed or verified:$ioir!h elect¡onic verification ioae, in fOnV CSt
REG-09, 4f leøst,5riløys pr¡o/ to t]¡te comlnencement pf business at the
c¡mlnon potal eitllei directly or thlol¡gh a Facilitation Cent¡e notified by
the Commissioner. P¡ovided that in'the case of a business entitw
incotporatèd or established outside India, the apptication for registratioí
shall- be submitted along with its tax identificaãon number u urLique
number on the basis of which the entity is identified by the Govgmment
of that cou¡rby or its Pêrmanent Accorint Nr:mber, if ávailable,
(ii) A person applying for registration as a non-resident taxable person shall
be given a temporAry ¡efe¡ence number by the coûlrnon portJ for mating
ân advance deposit of tax iÀ accoÌdance with the provisiìns of Section 2i
and the aclorowledþement ulder Sub-rule (5) oÍ RuIe I shall be issued
only after the said deposit in tris electronic cash ledger.
..... *.o",ri:4y
(iii) The provisions of Rule g and. Rule 10 relating tò the ve¡ification and the
$ant of registratioiì shall,-appiy- þo ari application subrnitted lmder this
¡ule.-
(lrr) The_application for registration made by a non-resident ta_\ab¡e person
shall be duÌy signed or veriÍi".d through electronic verification códe by
his.authorised signatory wåo shall be a person resident in Indiel having â
valid Permanent Accor¡nt Nuutbet.
-
(fl Gtønt oÍ tegistration to a percot sup,ptVíng onlìne irtfonnqtion and
database access ot rctrieoal seroices ltotn ø place outaìde lndiø tâ a ton_taxable
online rcc¡pient [P'ule 74]:
'.':".'.
,i
r..1..¡,.-:,,'...,'*:..,,*,r-.,;,*-..,.,,,,,_cl:l4 l_¡¡19*s,'!9gS.¡tRiÞ, fÞ, :iÈS::l
(i) Any person supplying online information--artd- database access o¡
retrieval services fron a place outside IJrdia to a non_taxable orùine
recipient shall electronically submit â¡ application for registratiory duly
signed or verified through electronic veiification code, i-, fOnU CSÍ
REG-10, al_lh::oûÌ¡non portal, either directþ or thrciugh a Faciliration
Cenhe notiJied by Lhe ComÌnissioner.
(ii) Th€ applicant sha[ be granted registratiórL i¡ FORM GST REG_06,
subjectto such conditions a¡d restriitions and b'y such officer as may be
notified by the Cent¡al Government on the rácommenäations of'the
Cou¡cil.
(g¡\.ExtenÀion in peri:od of operøtioft by cøsuøl taxable person
ønd non-r.esídeflt
taxøble person IRule 75]:
(i) Where a. registered casual taxable person or a non_lesident taxabÌe
person ìntends to extend the petiod of tegistration indicated in his
application of registation, a¡ application in FORM çS.I REG_l1 shau be
eleciromcally^through the com::ro., po¡tal; either directþ or
::b*t}:d
tluoug! a- Faclütation Centre
\_crrr¡e notfied
nouneo by tne :Comrrrissioner,
oy the Lom4ússroner, byby such
person before the end of the ¡.alidity of registration granted to him.
(ii) The application shall
sÍrall be acknowledged
acknowledsed only oavlenr of the
onlv on paylent rho amourt
specified in szb-section (2) of Section 27. "-^,,.r
(h) Slo ,noto registrøtion [Rule 16]:
(i) Where,-pu-rsua¡t.to any survey, enquùy, inspection, seârch or any other
proceedirgs under the Act, the prôper officeifinds that a pe¡son liable to
registration u¡del the Act has faiìed to apply for such ¡ehst¡atiory such
offiçer may register the said person or., á i"rrrpo"ury basis and issue an
o¡de¡ in FORM GST REG-12.
(iÐ The ¡egishâtian g:ra¡ted shall be effectjve Érom the date of such
o¡de¡
gra¡tirìg registration.
(iil) Every person to whom a temporally regist¡ation ha6 bcen g¡anted under
sub-rule (1) shaIl, withìn a peiod of 90 tløys from the date ãf ihe garlt
of
such registration, submit an application fâr regishation in the form and
marner provided in Rule I ot Rule 72:
Provided llÌat where the said person has filed an appeal agai¡st tlÉ grant
of temporary regist¡atio¡t in such case, the applicàtion ior regist¡ation
shall be submined within a peñod.of SO aàys torn,t" ãàr" or af,"
issua¡rce of the o¡der uphotding the liabilitf to ¡egist¡ation by
the
Appellate Authoriry,
(iîr) The provisions oÍ Rule g aIld RuIe i0 relaring to verification and the issue
of the certificate of registration shall applylo an application submitted
under suh-rule (3).
(u) The Goods and Se¡vices Tax Iclentification Numbe¡ assigned, puÆua¡t
. the verification r¡¡ det sub-rule (4), shalÌ be effective
to
f¡oä the'date of the
oider granting regisftat:rorr Ødet sub-rule (1).
(i\ Assìgnment. of llníque IdefttítV Number to certt il specìot errt¡ties
lRute 771:
0) Every- pcrson required to be gra¡ted a Unique Identity Nufiber in
acco¡da¡ce with the p-rovisions of.sub.scction 1S)'of Seition ZS muy
 lø¡:¡:¡i,rrV¡1"
submit a¡.âÞpücation elecrronica[y in fOnV CSf nnC_iã, a.rfy
"igr,"a
thlough electuonic verification code, in the manner spec-iÍied
t,ltLr,ñ¡:ì:i llit1ËiÍìi¡irïi;iril*l¡ffi ,as

in l"lfi:d
:. (b) tlìè clÌange relaül]Lg.to sub-clause (í) arrd sub-clause (üi) of Clarse (a) in any
Rule I po¡ral, eirher directly or'througÀ a Facilitation State or Uflion territory shall be applicable for all registrations of the registered
1!.rle-coTmgn
centre notified by the Corrunissioner. person obtained under the provisions of this Chapter on the same pe¡manent
Th: Ulrque ldentity. Number gtalrted under sub-rule (i) [o a person Accourrt Nulclbe4
vrrdet ctause (a) of sub-section (9) of Section 25 sÀall be applicablJto the (c) wherre the change relates to any particulals other than those specified in
territory of India. Clatse (ø), the certihcate of registration shall staird amended upon submission of
(tt) The_proper officer may, upon subÌarission of an application in FORM the applicaÈiôn in FORM GST REc-1tu¡¡tle.j9pq¡no! poftalf
cST REG-13 or aJter fillin-g up the said form -qr after receiving a
.
(d) where a change in ihe cônstitution of any businesJ results in the change of
recom¡nendation f¡om the Ministry of. Extemal Affaiis, Govemrnent of t _
the Permanent Accou¡t Number of a registered peqson;. the said person ãhall
Inqil: assiqn:_Unlque ldentiry Nrùnber to the said perso4 and issue a apply foi fr€sh rcigistlation in FORM cST REG-oI:
certificate in FORM GST IJ.EG46, znith¡fl ø per¡od if 3 ,uorking døys P¡ovided fu¡ther that any changê in the mobìle nurnber or e-mail add¡ess of
from the date of the submission of the aoolic#on- l
the autho¡ised signatory submitted under this rul,e, as amended from time to
_.A .Pìsp.løV of regìstrø¡ion certificqte
I¡lentificdtioi Nunberl¡ the naìne boârd tRute"àà
eooi" cmd seruices Tøx i time sh¿ill be car¡ied out orlly after o¡rline .ve¡ification iluough the common
181: portal in the ma¡ner provided under stLb-rute (2) of Rule 8-
(Ð Every
Ëvery registe¡ed
regrstered person shaÌl
registe¡ed ihalÌ display
ihall displav his certificate of reqist¡ation in â I
cr Notlvithstanding anything contained, in sub-rule (1), any particular of the
proninent location at his principal place of business Ld ut uu.ry [.
application for.íêFstration shall not stand amended with- ef?ect from a date
additional place or places of businãss. -
' I

(;Ð Every retßrereo

eadier tharl the-date of subrnission ôf the apþÌìcation in FORM GST REG-14 on I
lyeV registered person shatl
shall display hhis Goods a¡rd Services Tax the com¡non portal'except with the order of the Comurissione¡ fo¡ reasons to be
Identification l\ûatbet
raennncauo¡l Numbe¡ on the name.board i
name-bóard eihibited at the entry of his recorded irì writin8 and subject tO such conditions as the Commissioner may, in i
principal place of business aJta ai. e'üaiyì'ààtiìlir."f pf."" ,ì
busi¡ess.
fí."* "t
the said order, specify.
2. I4¡here the proper.officer is of the opiîion that the amendment sought ulder
(kl Amendme t of registrafion [Rule 79]:
1., Whe¡e_ there is ariy change in any of the particuJars fumished
sub-rule (1) is either not waranted or the documents fumished therewith.ìre
to¡ Ìegisûario_¡i ín FORM GST REG_01.o¡ FORM cST REG47 o¡
in the I incomplete or incorect, he may, Taith¡tt 4 period of 75 ?porking døVs ho¡¡ the
i
14p]I3h"i
FORM GST REG-09 or FORM GST REG-10 or for Uniiue ldenrity date of the rêceipt of the application in FORM GST REG-'14, sene a notice in I
Number in FORM GST REG-03, requiring the registered pe$on to slnr,w cause, atìthit a
FORM GST-REG-I3, eithe¡ ar rhe ri_me obr"irintl;;rtra;;i;;üü;
ldentity Number or as amended f¡om time"fto time, tfe ,"firt"."ã p.""o" perìol of 7 íþorkìng day,s of the. service of the éaid notice, as to why the I
t
zuitlin application submitted ûr,det sub-ruIc (i) shall not be rejected.
"n"ff,
ryio4of 15 dags oÍ such c.hange, subrnit an apptiåttorr, ã,iy stgr,.a
verified: through
o" 3. The registered person shalÌ furnish a reply to the notice to show cause, f
electrorúc verification õde, electror.icåily,in FORM GST REG_
14,_ alon.g with the.documents telating to such charge
issued under 6ub-rule (2), ih FORM GST REê-04, v¡ithin a period of severr t
át the comrnon portal, working days from the date of the service of the said hotice.
either dir_ectly or through a Facilitado;Centr.e notfiejby the Co¡imissioier: l ii
4. Where the reply fumished u¡de¡ sab-rule (3) iÀ founð, to be not satìsfacto¡),
Provided that-
(ø) where the change relates to:
Ë or where no reþly is furnished in rtisponse to the notìce issted u¡der sub-ntle (2) !
(i) legal name of-business; within the period prescribecl ir..sub-rule (3), the proper office¡ shall ¡eiect the I
(ii) address of the principal place of busi¡ess or ary additional place(s) application submitted vnder sub-rule (1) and pass an order,in FORM GST REG- I
business;
of 05. l ì.i

(tiÐ aädiriôñ, delerion or rerireñenr of pa¡t¡eis or 5. [f the proper officer fàils to take any âctionì È
!
directors, Katta. Mal.laging
Coûmittee, Bo#d of Trustees, Cirief Executive (a) zoithin ø period of 75 "toorkìng ilays from the date of submjssion of the
ó¡n"*ìì equivalent,
for rhe dayro_day aJfai¡s of th" il;;;;;;"h âpFlication, or Ê

:.::1.":tbþ
waÌrant cancellation of registration unde¡ does irot (b) wìlhit ø Tteioil of 7 zoorking døys from the date of the receipt of the 'lli
Section Zl, ihe ploper offlcer
shall, ¿fte¡ due ve¡-iJication, appror e lhe reply to flÌe notice to show cause undet sub-ru\e (3), li
¿nrendment zuitl¡i¿ a pcriod of the certificate of registration shall sta¡d anended to the extent applied for ancl
7s uotkíns days fro¡n the datà of
the r"""t;;;; ü. ;;;;;^tr.n i¡ FoRM I I
cST REc-14 and issue an o¡rter in ¡onrø csr the amendctd certificate shall be made available to the registered person on the
üã_ì;ä"ä:;::ì;
and such ameadac¡t-¡;Àa.l!_take effect
the event v{aÌra¡ting such amendmenl
fromìh"ãàlirh" Í cornmon portal.
ili
"-.""r*""" "¡ F i,l
E
æSq
u I
il
f iii
f lti
ä.:
i)
ir

iì
itiiiriiiiil,.äillrirüi,*tii,i.,',,.,,r:. :: :ì çF.-r4ilF ei.evyr..g!g,ço-.qFg¡! F1''.1,,:?;,:
ä
tt::d"i.tf?]l Norwithstanding anyrhingtônlä.fñê-tFh sub_secrion (1)
(a) achvlhes or transactions spccified i¡ Schedule III; or
.. I (b) such activities o¡ tla¡sactiorÌs undertaken by the Centtal Goverrunent,
â
ii State Gove¡nmenl. or any local authority in which they aÌe entaged
as
ij public authorities, âs m¿y be notified by the Govemment on the
' ' recoûErlendatiôrrs of ttre Cou¡rcil shall be t;ated
neither as a supply of
I goods nor a supply of services.
I [Section 7(3)] Subiect to sub-sections (1) & (Z), the crivemrirent may, on the
r ¡ecdm¡rendations of the Council, specify, by notificafion, the transactions that
ìi
are to be treated as-
;l
rl I o a supply of goods ând not as a supply of services; or
t_ . a supply of services and not as a supply of goods.
ìj
The meaning and scope of supply tâxable u¡de¡ GST call be understood in
r
LeVy AND Co¡-recrtor{ te{.ns of the following pararneters, which ca¡r be adopted to chaÌacterize a
traisaction as supply: Supply should be of goods or sen iies. Supply of anything
other thari goods oÌ services like u'ioney, securities etc. does not'ait¡act
GST.
. Supply shoulä be made for a conside¡afion
. Supply should Ëe rnâde in the course or furthe¡ânce of business.
.
Supply should be made by a taxable person.
I
¡ 2.1 Taxable Event .
Supply Should bè a taxable Supply
,ì
Let us analyse the terms goods and seroíces as defined u¡def the Act:
relatirg to meaning
Act read with vâ¡ious
shall be discussed in

Ans. Meøaittg of SiìpþIy [Section 7(1)]:

(ø) alÌ forms of supplx of goods or services o¡ both such as sale, tua¡sfer, ba-rtet
exchange, Iicence, rental, lease or disposal made or apgeed to be m¿de for a
consideration by a pèËãñ- ri:tourse or furthera¡cã of business.
(á) importation of serwices, for a conside¡ation whether or not in the course
or furtherance of business,
(c) the activities specified in Schedule I, made or agreed to be made without
a consideration,
(d) the activities to be treated as slrpply of goods or supply of services as
refer¡ed to in Schedule II.

i,. j 4{¡jffi#*#g.9-eF1l?&W¿l:¡:¡:¡;. ..j j. t; ii,;,, ;, ì,. -

 aB. sHMA d.$næäriV sr+res . -,,:... ,-. :¡iiijli:l:i¡q!ù4.!Eè'r,: i-r.cilÈ,i:sl.¡ es
Anything suppLied other thart goods a¡d services is outside tìe a year
scope of
supply. No4 we will analvse the various illustrative modeè .ñcif à
of supply mentioned
in Section 7(1)(a): ìn lhn
I. Sâle a¡d Tra¡lsfer. Ea¡lier, VAT was levied by the State on the saje of
goods which was defined under most State VAT laws
as ka¡sfer of vity undêrtaken in course/for furthera¡ce of-business would
prope¡ty in goods fo¡ consideration, Under the CGST Act, although constitute a supply. Since 'busi¡ress' includes vocatiorL sale of goods or
sale
has been t¡eated as a form of supply leviable to GST, the servjce évcn as a vocation is a supply under GST.
definition of
'sale' has not been provided.
Fn¡ther, the tenn 'trønsþr', which has also been included as a
form of
supply, is also not defined.
II. Büter a¡rd Exchange. lÁ/hile ba¡ter may deal with a tua¡saction which
o.fy.yctua¡s art- exchange of goods/éervices, exchange
sltuation where the good6 -uy "olr." u
paftly paid for in goodi anð :ôf
-are p:ertly in
money. 144ren there is a barte¡ of'good" or serii"es, s":rre actilþ iô,f.i-ÌÈ-ome
constitutes supply as well as conside¡ation.

<lefi¡ition of 'businä#. :Ì ' :r '"ì

. .:'- ":
Vl. SuPply b), a Taxable Pe¡gon. A supply to athact cST should be made by
a trìxable person. Herice, a supply between two non-taxable persons docs
not corEtitute taxable supþly under GST.
The restriction of being a taxable person is only on the sùpplier r.hereas
the recipient cân be either taxable or non-taxable: Furthér,rthere is uo
condition that supply needs to be made to a¡ottrer person i.e,, supplies
¡óJ ttig¡âìitut'Éi.tlie barbgr :- .r"":.: . l'.-ï-ï*'; m¿lde to self a¡e aÌso taxable.
,
LicencÈ, Lease, Rental etc. LiceÀes, leases alà ientals Q. l. Who is a taÌable person?
of !ioa. *"r" Ans. A "taxâble person" is a person who is registèred o¡ liable to be ¡egistercd
earlier treated as. services whe¡e Lhe goods lvere t"un"fun?lilltnout
t¡a¡sfer of right to use (eftectivo possession und under S€cl.ion 22 or Section 24.
gooqs) ànd were treated ãs sales where t¡e goods we¡e"ont
ol ou". ìhì Hence, t:ven an uruegistered pe¡son u'ho is liable io be registe¡ed is a taxâLrle
transfer¡ed with person. Similarly, a .person not liable to be ¡egiste{ed, but has taken voluntar_v
fransfer of ¡ighl to use.
Under the GST regime, suclÌ licen¡es, leases and ¡entals registration and got himself registered ¡s .ìlso a taxable person.
of goods with.or Q.3. tdhat is ta-xable supply?
without transfer of right to use are cove¡ecl rurde¡ the
supöly A\s- Tadcøble stpply. For a supply to athact GST, the supp.ty must be taxable.
oecause üìere is no transfer of title in such supplies. "i ";,ãå
Sr¡ch tr'arlactions â¡e Taxable sripply has been broadly defined a¡d meafis any supply of goods or
sjeci{j:¿lty.r¡eated as supply of se¡vice in S"n"aute rf
.¡ èèõi
-, Lons¡oerat¡on. One of the essenti¡L conditions for the suppl_7 of goods
rv. a"t. se¡vices ol both, which is leviable to tax under the GST Láw. Exemptions may be
and/o¡ services to fall withi¡ the ambit of cST is tf,ut o provided to the specfied goods or services o¡ to a specifi€d category of persons/
s,lipiyls
for a consideration. However, ccnsiclc¡ation ao"".,ot uiujuí" maa" entities makirg su pply.
money. Tt coveß â¡ytlLing which mjtht be possibly
clone, giveí or^"u¡l,
made
t+ 2.2 Place of Suppty (pOS)
:::il1q: j:i:.Tethirg erse. Furtñe¡, a .ãnsi¿.íutio., neäîà, ur_uy, Q. 4. Bliefly explain the èoncept of place of Supply.
flow
_- In r¡om lhe recipient of the supply. ltcan a]so be made by a third person.
v.
A¡s. ln GST, the concept of a place of supply has been màde relevant not onl_y
Coruse or fu¡thera¡ce of Business. CSf is for the supply of se¡vices but also for the transaction of goods.
coÍrrnerciaÌ tra¡sactions. Hence, only those supplies "ss"ntilt|;-;.:j;;;
that í" ir, i¡r. .or:.". ì /hich tax is to be levied (IGST or CGST ahd SGST/UTGST) wi.ll depend.on
or turtherance-db¡¡¡;isesE guarry ; lri.rä". csi. nÀùì"ruy, a¡ry whether a particular t¡arisaction is an lnte¡-state supply or l¡tra-state supply.
supplies made by an individual in his "rrppty Hence, ewcry transaction will have to go tfuough the test ofp¡ovisions relating to
þársonal aã'io, .o_.
an" "upuiif
u¡de¡ the ambit of CST Lr¡tess Lhey fa[ ;¡rhjn a.firriÉ, ã¡ Uì.¡r,ïrr. the plâce of supply in o¡der to determine which tax is to be levied.
 q9;,r,.9¡r-va;oej$.iú_$_ii.i.ig!¡.-ry.ÉF8F. ...: ... .:ì:ì.1,:. l
iir,:ir ..1:i ì:ìr:...:I,,r... i,i,..: .. ç]-lAP¡Eq 2: LE\¡/ aNF cq+Ec' noñ lF gs-r,t qj
Thc puryose of the place of supply prooisions is tluo-folrt: -.
1, In case of c¡oss-border transactions, to dete¡mine whethe¡ tax Ìs to The second part of the hansaction_ b;tw;;l;;iradeÉ a¡d prime
. be Ha.rdware6. Ram Traders is the suþplier, a¡d prime Hardwales is
levied on a particuJar ba¡sacLion. the
2. ln the case of domestic transactions, to deterllli¡e la,hether a pâtticulat . 91
y-:fi
l1g rraders bitls',the tr,âiú!çÈ;" iõ: Þ;":,È;¡t;;;,;;à,
transaction is an inter-state supply or an int¡a-state supply. , :ng?t*.t the lorry receipi (goods stupped in a lorry by Hdnuma¡
Pløce of Suppty (POS) for Imports àìi axports (Section t7i:^ ' : Tráders) i¡
favou¡ of p¡ime Ha¡dwo¡es. T1ris lorry receþt
[LR) wil
. Iûrports. The place of supply of goods impoited irìto Iídia shall be the enablè Prirnê Ha¡dwalesLo ta-k e the delivery of the goods.
her.e, oir the i¡rstruct¡on from Ram iraders, Éaruman Traders
location of the importer. . Ovgr.
. Exports. The place of supply of goods exported f¡om India shail be the shiþç th9 tablea to Priine Ha¡dwa¡es located in Tamil Nadu.
location outside India. Here, Rdm--Traders is deemed â6 the thûd person. Tt erefore, the place of
Trarßactions othe; thøn btqrort or Export (Section 70) ilp.ply *Ui be thè príncipat place of business of rhe third person, i.c.,
1. Movement of Goods, Section 10(1)(a) states thai ì,¡uhere the stqply ínuolues Mahafashtra. Accordingly, Ha¡uman.Trade¡s charges CGST
billing to:Ram T¡aders. The second part of tlre Fã¡uaction between -¿ SCST on
m.ozrefient of goods, whetlær by the supplíer or the recipie t or t)y ony othti person, Ram
the Traders and Pr¡me Hardwa¡es
place of supply of such goods shall be the location of the gootls ;t ü1; tit11e rú i,hich will be inter-state, a¡d TGST will be charged.
the
tl1oac 1eflt of goods teftninates
for delíoery to the recipieni',.
This i

or othenÞise, ¡t âhall be dee-tned thnt the saírl inir.a pár"o,, has receiaed' te gootts
and Íhe
pløce-of supply of atch goods shall be the principal place of business
of such person,,.
When goods a¡e delive¡ed to a paÌty on the diiection o¡ ã tfri¡a person
the
place of supply will be the location of such thjrd peison and not whe¡e
the
clelivery termi¡ates.

P.!¡¡4é

ffiiüifflli, ËÉr,,,ffi*..EÍ!irf|,!iiiúÌi1fiflii1iirr:,;iil),t'irСr
 ¡glïËg¡gIffiii1å{,:.ffi' rÌírititifíä;r;liifriíjiîfii*Ë'W¡t1l:.;,l?'.l 1ífiiì''ffiffidiil
''j-]..:':¡',-a,:-.-'.

:, "::::,:,. ri:¡::lii.,',l:.r...1 l1,l .'I l,l :;;:-:j)'1:'fir:r,qtAPl-EF'l?i$ry.lp!lli.F.t+Éit'tþÑól'ésr'

t ss
4, Wlren Goods are. Installed. Section 10(1)(d) states "|þhere the Soorls orc
assentbled Òr iixstalled at site, tlTe place of supply shall be the place of such instullation at
assenbly."

not itxoolþe mo1.)eftteflt of goods, tolrcther, by the s pplier or the recipieflt, the place of
supply slnll be the locûtion of such goods st fhe tínle of the delia,ery to the recipient."
When goods ale of such naLure which does not require alry movement, place
of supply shall be the location of such goods.
Exømple: Bharat Li¡ ted registered jn Maharashtra sold ifs pïe-¡nstalled
tra¡smission tower (clectIic tãwer) Iocatcd at Madhva p¡adesh tà Hindustan
- '. . l'" .
Limited registered in Delhi.
'
'--
l'. Iri. tþi!,;caqe;. tfG loéátion of the supplier is Maharashtra, l¡ut the
Þlace bf:,
i ,
. suÞply ûtll b-é Madþa Praclesh. Hence, IGS'T will be leviecl ,. . ,
.
,: nt-ampie; ni*n t-imitéã of Rajàsthan. gers.an oider ót.fOo éêU:þiones from
'rlPatil Elèqb9niò! iiì Mahàiàôhr¡a. patd Elerrronics j¡¡f- úTlq.n4if,l].iiuiitóä ttiut._
ci.
5. Goods; on Board a conveyance. Section 10(1)(e) slales "?þhe1e the Soods tttc
supplied on boat d a contteyance, inclltdittg ø þessel, an aircraff, a trøíiòt ø motot oehicle'
ttæ p\øce of t\trpply shall.be the locatiotx at ul1¡clx such loods,are taken-on boncl'"
ihis p;ovision includes those pulchases which a¡e done while t¡avellinEi on a
conveyancc.
. ;::Eryq1nþJ!, iili:iæirta]s trâùéíliíg on.a.cru!eelin€¡-{r.-,,op.,.}-,r..y¡$9-i ¡å, !o:. ne
ol,r.tão," a notebook from thã in-house store in thè cärìse liner' These
iliJliil ;;;;+J ;;;
M";ù;ì. R"Bt"r","J pr.." or u'"r''ess or the
notqbóþl(.,síop ls in:Mumbâi' Place of supply, h $^S.:iTl.yiU bè Munbai'
:
rnis i, r.,i i.,tl.çtaite'supply¡.ànd CGST ;d SGST win be charged '
!ô2.3 'fime of Supply
Q. 5. Fpf the Pr¡-rPose of paying tax liâbilit, point of taxation is requfued'
Time of srllpply is nãthing but point of taxatìon. Briefly exPÌain the concePt of

. $er:;w{;,!!e ¡$ê delivery' bf the iell phones .froÀ,*ie iitioi:]i,.ãr,:,nàti i .,'

. Liûäted,àÈJaipur. , . t..;. ,.,.,:.. ... ll
' time of sulþply.
He¡e the Iocation of the supplier is RajasthaJl and location of the receive¡.is .q.ns. poìnt'of taxatiol-t is the Point of time when goods are deemed to bc
Maha¡ashka. However, l-atil Electrolìics has agreed to t¿ke the delivery supplied or sen ices a¡e dee¡necl to be Providecl. It helPs to deterrlline value' rate
from Rathi Limited's Jaipur facro¡y. This implie;thaithe têújnàiìóñ,óf rh;rr, of tåx a¡Ld due date for tax Payment Under GST, the liability to pa)' tax arises Ât
movement of the cell phones to F;til Electronics t¡kes placc at the factory of the time wl.ren goocls or services are supplied Íhus, time of suPPly is nothirìg Lrut
:supply is laipui rin poirt of ta\¡ tion.
¡ $thi Lii.nitga, i.e., in Jatpur. Hence, rhe place of
Raiastha¡. There ¡Ite some general pÌovisions and some specific provisions for-
deterûLin rg time.of sripply. Time ol supply is different for goods â¡d selvices lf
ì .,IhÞ ió.. ah:jnlra-sià!è úe¡sactiqn an4 CGST .andi gç,çf . *itt -U.e,- ieii¿¿:,tyrl, sþecific prõvisions are àpp ed to determine the time of supply then gener'rl
.nathi,Li¡iütàä..Iù';hoûld.bê nór€id thê! Raih¡ Lrmited"w41. .,þe.pheis¡iäSé-éíi.
.

'. aild Cc3T:iii'rRáiasihåir. rþ credìt of which shall ,,ot ¡" u.,ruuuUÏêíá;Èutit,.:" provisions are irreleva¡t.
¡l¿cúoniæìin Mahâi;shria. úence; thêi" oiitiì¡e . ñ¡i:úäãaãl*.{r
AJtematively, if Patil Elechonica woL¡l<l have askecl Rathi Ll^i,"a to ¿"tiu".
goods at itè facrory in v"tl*aJ,t ¿ it wi"i¿'rioii,å,ièèi;a,.sl¡¡ä¡i
transaction a¡¡d IGST would have beer levied. The creclit of tCSt woúld "tåt",,_
have been av¿ílable to Patil Electronics.
. Many.experts have an altàrnate íiè.iv,O" *"r.øii¡;îiÉ,1*'.",tnË,ttrrÀ;¿råriili.
involves the movement of goods by the buyel it shói¡Jâ be qoveied uirde¡
Section 10(1)(a) ancl nor l0(i)(c). WÍrich iarpÎes that ptace of supply should
be Maia¡ashtra a¡d-lGsI.ElËll be levied on the kansaction
i,i
,;
;ì

so.,.'-ì=t.v¡;i#¡P*iim-[iljsinliÈ,:¡.rr¡,.iì:,jl:i:lr:::::,. ., ' ì;',,r,r,:.r.,;,.',..",... ,.,,, ., ;1,;.'".11 ].,:'¡ll;.l,i:i.',:;,,.:'':tì,.]:,..r, '. .r c¡rÀFnR.è:'r¡.vylÀrygr.coLiÉinOr.!.or,.es¡,r,s5...

,Å
To detertnifle tifite of supply of goods øttil setzices, fotrr cø.tegor.íes Fre p1,o?)iilc¿l 2. Tìtne oÍ Iss4e of Inaoice for Seruices: - - - -
as belou.¡: (i\ Befot e or after lltc ptou¡sioü ol scruicc oilhin 30 clnqs:
Itl I. Time of Supply of Goods E¿ Se¡vices under Forward Charger . 45 days i¡ case of banl<ìng and but financial irstiiutions ftom the date of
supply of services.
,' Time of Supply of Goods and Services (ii) ltt cnse of con!inuous sttpply of scntiies:
. Due date of paynent can be identified from the conkact, T.he
ì1 i¡voice will be issued before or after the payment is to be made by
il
In case of Goods- the ¡ecipient but within 30 or 45 days of ãuè dare of paymenr.
Eâ¡Iie¡ of the following:
In case of Services - . Due date of payment cannot be identified from the cont¡act. The
I Earliest of the foilowingr
i¡voice shall be issued before or: afLe¡ each time when the supplier
of service receives rhe pâyûìent but withirì 30 or 45 days;f r¿;eipt
Date of issue of Invoice Date of issue of lnvoi.e
by the supplier or the of p¿),rìten t
I bv the supplie¡
last dáte by which he "
Paymenf is linked to the completion of an event. The invoice shall
is tequired to issue be issued before or afte¡ the tinìe of completion of tlÌat event but
I the invoice Date oJ Provision of within 30 o¡ 45 days of completion of event.
I
'i
service if ìnl,oic(: is not . Srpply of se¡vices ceases under a conhact before the completion
issuecl withi¡ the
Date on ùhich the prescribecl period of the supply. TÏìe invoìce shalÌ be issued at the tirne when the
supplier receives the
payment supply ceases and sucl-r invoice sllall be issued to the extent of the
Dàte orì which ihe service provicletl befo,e stoppjrrg.
i supltier receive! tlÌe. 3. The supply shall I¡e deemed to have been nÌade to the extent it is cove¡ed by
i payment the ilrvoice or, âs the case may be, the payment.
4. Optional Tinte of strpph.¡.If arnount ap to T1,000 in excess of i¡r,oice amount
i
is_received then the supplier llas the opfion to take the time of supply as the
- date
I
of invoice issued for such excess or acivance received.
l 5. If invoice is r-rot issued and clàte of payrìÌent or daie of completion ot
provision of service is also not ascefiainable, then the time of supply shall be the
date on which the recipient shows the receip! of services in his bååks of accounts.
Example: llxlr. A, ama¡ufacturer, sold goods fo Mr. B, wholesaler,
whoresaIer, and issu
Pãyment is entered
into books of accounts
payrnent is credited i:.::l:î^Y,;l11Ti.rï:ll:"
invoice- for the sale on 01srAu$rst, î11-e-oo.1"
2017. Now,'o Y.
issued
determine the time ór.sùppry
f:is:3]f,,,_.o¿411.r--{9sus! ?oJ7:,ìNoMr,Ce.teñine;,thê.iiriia of supç
to bank accoun i of goods'for the followint cases:
I. Date oÍ Issue of Inaoíce for Goods: (4, removes the
r-.¡noves
rvr.r. ê. th.e goods tor
Éor delivery to M_r.
f| {.gf!y!ryr¡o HAr B on
òn l6rh
16rl August
Äugirst 2017.
(bl ]vtrif collecis the goods from premjses of Mr. A on lOth A"ugusr 2017
2012.
(r) lVìren of goods is involved in supply, then bef(xe or at the fE !
' time of_movement
remova_l of goods. (q) M¡. B made full pãyment on 2'6Lh July, 2O't7.-
(ii) \4/hen no movement of goods is involved ir-r supply, tl-ren belrore or at the (d) Mr.-B credited the p¿yment in bank acco¡r¡t of Mr. A on 2grh
July, 20L7
for 3/jú
fo: Mr. a
3/4ù 9f goods, llt¡. A reco¡ded
recorded the êame as receipts in his
. ti_me of delive¡y of goods or making available io tÍ-re recipìerrt.
liii) lf co¡rtinuous suppiyì? Sõds-(E xanryIe, S:uppIy of Oit), thqn earliest of ' .3rd3rd Auglst.2017.
Augrst.2017. The goods weie dispatched on 5th-AususL.
hisbooks
books on
5rhãuzust,20lZ
)O.17 tr¡¡
- - f¡om
the following: . r the warehóirse.
warehoúse.
.
Time when each statement is íssued. Answeri
.
Tirne when each paymeni is received, (al iit,+tgust ZOL-7 is the limc ol suppty of
Boods i.e.. eritti¿r of fhe followíng
(lo) If goods are sent for approval then ea¡lie¡ of the following: :.',.:. D¡itê.iþf iInû¡i!è! 191.é.u8u.6t, 2017i o;
D¡itê.iþf-Inû.ò.i¡è..::191..ê.usu.6t, or " : ',..'.' .

. Time when it becomes knowlr tlìat supÞly has takerri,lace. on which invoice is r€qqired to be issued _ I6ur August, ZO77.
Dale lo1i,i^¡hich
ÞÂté
. S¡x moRths from the date of remov¡l (bl IsÍA ousl)O:l7i<lhrt;'nî^t'<Lnnttr^r-^^¿ci-
gusl
l.st August 2077 is lltc
¿077 tlrc tiùr(
tiùr( oJ'supplli
oJ'supptli oI
oI goods i.e., earlicr tt-^-r^¡''.-..:.,-.
^î the
^^-t:-- of fo owing
Invoice-lsi
Dáte of Invoice - I si Au
August,
gust,2017;
2017; or
o.
Date on which goods is delivered- 10rh,August, 2017.
 iÞ.ä* --Fl-ó¡.:or-qqr lrsz
.,...,:1,,,.'',, r,:.:l-,:...',,t.."1r,,1:.,¡,¡ri:t14,!¡6afitìi¡,LE\a1-...
(i) the vendor who is not registered sells the goods to a regiòtered person.
Thus, GST shall t'e payable by the registered perÞon.
(l/) suþpJier of the goods o¡ services or bothare located in non-tÐ(able te¡¡itory.
(lii) suþply of goods or services in an uno¡ganised sector, such as, to a person
whose âggregate tumover is less.
(lo) indirect levy of tax on a sector genera-lly exempt ftom tax.
Time ofSupplv of Gol
S€rvices under Revers€
E:ample: Mr. A entered i¡to a contract wiur Mr. B for supply of
oil
tluoughout the yeaJ. Ml. A issues monthJy st¿teme¡ri for the o¡l suoolied to
Mr. B. Now, deterrnine the tirne of supplv of goods in the following:cascs:
In câs€ of Goods
(a) Mr. Bmâde pâymenr for the mon tf, ¡""f y o" ef .r
"f ori grh Juty, 201t;JM_r. A Earii-st of the follorvinA
issued statement for the month of Julv Aueust. 20lZ-
(b) M¡. A issued siatement'f", ,r-r. .íãí,h .i e"g,:îá,iTá'r"p*-u"r, Thc date of the ¡eceipt
Ässociated ErteÍprises - Other than Àâ6sociated
. 2O17, the payment of which was not received t;ij of rlìe Boo.ts
.
Answer:
SOu, S"ptu-ú"r, ZOli. Earlier of the ro owing: Enterpris€s - Ea¡lier of
th€ followi¡g:
(a\ 31st-luly-2017 tai be tine ol sipplu, i.c., earliest of.thcþtkruing: 'l:he date on which
Dâte-of Invoice grh.rhe
August, 2017 t
The date of entry
- The dâte on whrch
,.,,,.,-,,,,r,,-!leJ,.,.4qigoll,whishinvii¡áiâãrto:u.,is".ru¿-Dut:óiií¡çn1¿1;1,;¡,.' I payEent is made
,,,
'lî,':trrGt¿iô_Aþ¡t:ùfuè1ii:vé;rìséàrlier¡.e.,zt¡ti,v.iolz..'-*-.i...,..,,.,
(b) 5d! Sq+mqei 2017.w¡ I
be the tinc of suppLy, i,e.. earliesl of ttn fottowing: dâte invoice iss'ired
Date of Invoice-5rh September, 2011 I by the supplie¡
tast alate on.which invoice had to be ìssued_Date of or I
statement whicheve¡ is earliër, i.e., 5rh Sepl.ernber, '
þay,rnent
2017 .
I
If time of supply ca¡-not be determined with the help of abowe provisions then
Examplc: ABC Consultâncy services issued invoice for semices the time o[ supply shall be the date on which entry in the books of the recipient of
rendered
"ï.,fflIl olC*t 2017. Determine the time of supply in fo owing cases:to goods anci services is made.
. 14, r¡e provEtons ot serviceq were completed on lst lulv,2017 -
!åf ]hg Rrovisions of services *"* ".;;t;i;
áÅ isio IJtr,âìiz
I
lc, Í made the paymejÌt on 3rd August,2\lj, where provisions of services t
were remaini¡g to be completed.
(d) P made the paymeñt on 15iì ALjguct 2017, where provisions yet. ' -uÍrã
..:: .'-....
of services -oraäu
we¡e ¡êmaini¡rg to be completedi i (e) i4r A received goods on 3d ,qugrr"t, j.oi z puy-ent fo¡ the
.A¡_swef;
lame on 4th Augus¡ 2017. ,ìi.*',,^,, , .
.. .. !^'t t:l.uI:}.T|.
Esried wttrin l4l. -þ: ¡-!¡
timq,óf euppJy qr -"e*.i¡èí,"':iiídäj,*lioi!
,
(c) V[r. A.¡nade pavment on SthJuIv,.and ¡eceirÌþd-Aoödi on thè same date.
._ the time frame of 30 days.
yitÌ b: rhe time of iuppiy of services aó invoice is
ø V[ e ru."iuaã goåat å.' 1otr'l¡¡y,.1qz jfiåt"frais pa].rnent for the
sâme on 9ú July, 2017.
@)
: 1"i.1:4"_t.19lJ
lssuect .la¡¡tfrin the tiDle frame. ti- ,lr .r ,:. .

(.)
T^i,j,1q*j.?9lT
*lt b: rhe rirne of supply of bewices as paymenr
'
feqelved' lrefole invoice date. 1_
(d) 5ù Augueq 2017 wiü be tlìe time of supply of services
.
I
. rssued betore the completion of proviiions of services. as inVãice isl- I

II. Time of Supply of Goods & Services under Reverse Charge: Ë

\^¡hen the receiver bëdõmFsliat +e to_ pay the ta* ir.rst"ud

of -"__'_ of goods, it &
is known as reve¡se charge. Reverse charge applies E'
-h"rrJ "upfrier r
F
H
 : . hÌ,. ,l,ul.iri:ì ::::1,,:i :..:fi: :, CHAPTER 2 tEvYrÁND COLIEIÍION:OF cSI.,! 39
IV, Residuary Clause

retun hâs to be filecl,

the date on which such
return is to be filed

ol supply in case of change in ta of tax:

.,.:,:Iûfle:.9flt
t¿asc ; Ebèhts àftè¡¡; :
îitt¿. òÍ sitþply .
þpty
chøipè ììt'effeitioè if go.adi:t idiùìi ¿l€0,qþ!,:gùiqls
: . 'tatò oj iaì'¡: øre supplied befot
i.:.9ulp li l 4: ft eil
q
cllßrße ifl effectìo ",i
,chaflge li .effe6tíþe
iate.:.of tà;: . .,: , tøte of,atax :.

1 tnvoice lssued/ No activity Date of ¡eceipt NA

Payment Received of Payment, irr
Dafe of issue of
invoice, whichever
is earlieÌ,
2. lnvoice Issùed/ Supply of Coods NA Date of ¡eceipt
Payment Received & Services of payment; or
Date of issue of
invoice, whicevel
is earÌieÌ.
3. fnvoice issucd PaymenL Received Dale of Invoice Date of receipt of
P3IT,"-11...,,,. ......
1_--_
4. Pavment Received lnvorce lss,red Date of receipt of Date of Invoice
Pal'mcnt
. Datè of Receipt of the pøW eflt br¡ supplìer, Payment is entered into the
books t¡f the account or cteLlited in his bar-Lk account, whicheve¡ is earlie¡.
. Proviclecl, bhe date of receipt of payment shall be the date of credit in the
bank account if such credit ill the balÌk account is after fout wo¡king days
Time of Supply of fol Goods from the date of change in the rate of tax.
d¿ Services:
, EiT.;ryì!i.!i\.', goods toìW: B ón z8th.Decembei,.2017- The cST
^.i.ùpphed.
rli.ter:.9¡:lg99ds it' ç¡-Ìarlgecl fl:pm 72%'to 5%,w.e.f.' lstjãnugIy,r2018- Mr. A ,

:.,issÉ.e41þV.o,rfg o¡128!r Decéuiber,:20t1-,.and pay-Ingnt is crediicjd iri hü.banl<

:a...c!g¡h,tiÊii,3qt tÐècê¡¡i6ei;,2917,. whàt is thê lime ofsupplyr,iri ¡his q¿sel
A¡gi¡¡ää:,i',.,.,t -'::'lì:l irr : ''.. :1 . '
f ìt:t"-\"g X".* nape becn clone beÍore change in úecliae rute of ta,r:
. Go_ocls Suppaied . Lìvoice lssued . Payment Received
28ù December 28rh Deceml¡er 30ù Dece¡nber
iÍ1Íti,*i:Æiilffiíürßirui.fc,litåi:äËffit*tffiåìii|;ÉFiilnÏffiäTiir'gÌl#!*1:S¡åi.ïffiæffix,#åi#

,r:'i i:*rÂpilFrê1€¡r:Áñ¡itEÈ- ¡fi-qñ iir sì+' r 41

¡¿i207õ.I,V'e.f
,:indjhtoice
after

s 2.4 Valuation fot GST

GST will be leviÈd on'the value of supply. In other wo¡ds to lery GST, co¡rect
value of stJipply is required. \44rat can be part of the value of supply or what does
not foÌm FJart of the value of supply is ve¡y imPo¡tant.
Q. 6. Wh¿t is Value of supply?
A^s. Mrttfling.In general value of suþply means consideration charged fol the
supply Éronì ¡ecipient.
E iarnplP: Mr. X is selling a proáuct for T1,000 to Mi';É. ln this examþle value
'
of supply will be considìraìion chaiged i e.,,r1.000.
Definitìon. The value of supply of gooäs or services o¡- both shall L¡e
the traisa,ction valúe, which is lhe price actually paid or payable for the saicl
supply of goods or services o¡ both where the supplier and the ¡ecipient of the
r"ppfy not related and the price is the sole ionsideration for the suppl,v
"tã
[section 15(] )1.
'.'.. We need to u¡Iderstand fòur impodânt terms involved in the definition'
t(: Tr'øflsøatiott Vølue, lrafrsacÍíor. value is thq consideration ¡harged from the
recjpient for supply.
consi¿l¿lation ii relation to the supply of goods or services ol both includes -
(a) a¡y payment made or to be made, whether in money or otherwise, in
¡espect ol in response to, or fo¡ the inducement of, the supply of goods
oí se¡vices o¡ both, whether by the recipient or by any other person [rut
shall not ínclude any subsidy given by the Central Govemment or a
State CovernmenU
(b) the monetary value of any act or forbearance, in respect of, in respbnse
to, o¡ for the inducement of, the supply of goods or seitices o¡ botÏ,
il I
i:
â t'
:.t
42 E SHIVA DELHI UNIVEfISITY SEFìIES
t
l CI-IAPTEF A: LFVY AND COLIECTTON OF cST ¡ 4s
, r.,rhether by the recipient or by any other person but shall not include li
(ll) Any amount whicl.r:
any subsidy given by the Central Gove¡nment or â Stâte Gor,/ernment. I (r) rrl<(ourìt grvell ¿Jter the suppl)
ìl . L
- the suppiier is liaLrle to rray if:
Provided that a deposit given in respect of the supply of goocls or
services o¡ both shall not be considered âs payment rnacLe. for such
t:
- but incurred by Recipient, and - Such discountis established
ä
supply unless the supplier applies such deposit as consideration for the - not included lr thc pricc in terms of an agleement
t actually paid or payable for enteted into at o¡ before the
said supply; . such supply time of such supply
P ce .actu¡tlly pøìil or pøyøble. It mea¡s the consideratioû pai.d o{ to be paid t,
ir '(c) Incidental expenses suclì as and
l.y the supplier for the supply. speiifically linl<ed to reÌevant
packaghg, coÍrmission etc. ând invoices.
CONDITION 1: Supplier a4d Recipient of the supply are not ¡elated I any amount charged for anvthirg
Supplier and recipieni should not be related parti... ó"fitrlt;on of reLated party I dùnc by rhe srlplli", ir.r.Éturior, - Tnput tax credit relotilg to
such discount is reverscd bv
ii as below: I
I to supply of goods or servìces at the ¡ecipient.
Pe¡sons shall be deemed to be "related persons" if- the time or before. theil delivery.
i
l (d) Interest, late fee or penalty fot
delayed payment.
(¿) Subsidies directly linked to the
II price e.r.cluding subsjdies pro_
vided by fhe st¿te o¡ Ceritral
L
Govemment.

Ma¡ket Value then the sa¡¡re wilÌ be the sole considerâtiôn

One important âspect is that both the conditions will apply simultaneously.
It means if only onä óondition is dissatisfied, then the altual consideration
will bè the value of supply.
If the above conditions are not satisfied then vâ1ue of supply witì. be
determined with the heÞ of valuation rules.

I' l::ro^l?,Y;
ot (Z,OUU at the".'"ll
soods ro ¡!:1: B fï
T20,000. Mr. A is a[owins discount
tirne of supply. Detemine value of suppìy for ihe purpose of
. levy of GST? ,

,lLq+t¡.:1q.:9Èqrlf p gliÈí.1¡O9 tj-" '.fsûþp.þ,1rià value of tuxable s,,ppry m

, j!¡9.
tryglçq."t* Srving effect of disôó.rni ,null U. <ra;oOo f*
iÀe purpo"u of
LS¿ítìijn.7õ,ß)I levy ofGST.
(a) Any taxes, dutiês, cesses, fees & (a) Discount given before or at the
charges levied ùnder any lâw time of supply through invoice. ro Mr. B for {20,000 and torãr unirs
other than GST law if charged lÍ-t3y:å::11_t:9og
*" y9* "j ,.gds
l*SB afrer_ includins rhese unirs is 2,s00.
sepaÌately by the supplier; :ï^o:.jÏg
rerms ot tt¡e âgreement1îif"YI.
Mr. B purchascs morã Èhan 2,000
As pe¡
r:ni* of goods in
 44 ¡ SHIVA DEL'.I¡UNNÆFSTIY SERIES
,:iij;liï:ü!,tiiÆafiî.-å.îi$,a;¡fr$ ñ.e.iffiàou
a year then Mr. A shall âllow a discount of 10o/o i¡ all the supplies. Assuming
IGST rate is 18%. Hor,r, will the discourt be recorcled? '
A¡swën
Irr the given case discou¡t has been given afte¡ the sãle, Mr..Arçil! issue a
.eredi. 1¡qtêyftli úr9..ù9. q{:gf ¡isçount å owed, ;.e., T5,qpq .nO _cdä,Þ¡ ¡ir¡h1r
aiscõirrit:O rdy.':;.:,, <SAO ,"': .:. .li:li l:l ,,, ;:,.
Exømple: Mr. X is providing coristfi-r ction seryicés to Mii y- In áddítiônrtô. the :','
consideration, Vfr, y ir iso. supplying construction mate¡ial to M¡. X.
Determine Value of Supply to levy of CST?
Answer:
, tn'th¿ givgnl!âse. ¡/.alùer of':co¡rÉtruction material will form p."t oi tirtir-e.oll ,

'supPl.y-i]:.:],...'.......'.:.:
Q. 7. What is the value of supply of goods ot services where conside¡ation is
not solely in money lRule 24?
Ans. If supplies are made against ba¡ter excha¡ge or partially in money and
partially irr exchange of goods and services, then the consideration is not wholly
in money. ln such a case value of supply shall be:
(i) Open market vdlue of such supplies, or
(il) If open ma¡ket value is not avâilable then monetâry consideration plas
nìoney value of conside¡ation not paid in money.
(tti) If the value of su¡lply is not de[erminable as above, value of supply of
like kind and quality;
(ia) If the value of supply is not dete¡miuabLe as above; nìonetary
consideration pltis amount jn illonel. equivalent to the consideration nót
Ln money as pet RuIe 30 or RuIc 31. Q.8. What is value of supply of goods or services or both between distinct
Rule 30-If the value of supplv of goods and services a¡e nol clete¡mirecl with or related pelsons, other than through an agent [Rule 28]?
A]¡.E, Distiflct Persons: lf a person has obtained more tharì one registrations
tl:.ehelp ol RuIe 27 To Rtrle 29, then the value of supply shall be 110% of the cost of
such supply. whether in one state o¡ mo¡e than one state sha1l, in respect of each such
Rule 31-lf the value of supply of goods and se¡vices are not deter¡nined with regist¡âtion, be ùeated as distinct person.
the help of RuIe 27 to R¡rle 3ø then value of supply shall be deterrnined usilg Value of sgpply between distinct persons _or whe¡e the supplier and
¡easonable mea¡s consistent with the pri¡ciples and general provisions of this recipient are related (other than where supply is made thror¡gh an agent, shâll
chapte¡. be) will be-
(a) Open market value of such supplies;
.Elornplz: Mr- A sold a ner¡j, bike for î34,000 i¡ a¡ exchùEe-i¡t old bike. Ooen (ú) lf open market value is not availablelthen the value of supply of goods or
Markèt p¡ic€ of. rhe ne¡¡u bike is t52,000. Old Biké ¿an bã sot4 in tlie nìartet services or both of like kind and quálity
for {2Q000.Ðetermine. the vaiue of suppit for the purp<ise òf teiþ:'of CST. -' (c) If thg value of supþly is not determinable as âbove, value of supply shall
A¡ewen i ':- -- : be determined as per RuIe 30 or Rule 3L.
ln this case¿ Open Ma¡ke1 Value is availabje. Hence, Value of Supply sháll be lf the goods are intended for further supply as such by the recipient then the
?52;000. -
value shall, at the option of the supplier, 90% of the aÍrou¡t chatged for supply
of like kind and qualþ from the customer (urrelated pa¡ty) by the ¡ecipient.
 :..-:: . .:.::;a¿:::t:.:.: . 'ì: . ::lii,:trlli:.. :..,
,,, .l
-cI4¡1ïF 2:.1Êr¡íaNÞ.coLLEsnoN,9E:9sTr.¡ 47:t
. At the opLion of tÌre supplier, 90% of the amo!¡lli charged for supply of
Á¡iòilé¡i: like ki¡d ârid quâlift f¡om the cuäòffi-(ñièlated pa¡ty) by the
.In,tlüs.¿¿
, recipient.
be. tliä) .If
the value of supply is not dete¡minable as above, walue shall be
E4øtfpleiL,,, determi:red as per Rrr/e 30 ot Rule 31.
price of Exønple: A p ncipal supplies grouirçínur oil tot'his¡aggnt 3¡{.,th.Stag."ltl¡, j
PA.I.J. supplying grou ndnut oil of like ki¡d a¡d qu¡lily in subsequent supplies al. a
Ansyreìí,;:iti* pricc öf T5,000 per quirltal on the day of lhe supply, Another indcpendenl
hr.: lhè,tti supptier is sûpplyijlg groundnut oil oflìke kilìd ard quality to the said agent
Hêiiôê;i a{ rhe piice of <4,550 per quintêt.
$-nswer:' -
îhe value ofìhe su pply nade by the principal shall be ?4,550 per quinlal or
wlre¡e he exe¡ciseslhã option. the value shaJl6e 90"/" of T5,000, i.e., T4,500
þer quintai- .

Q. 10. ÉIow to detêrmine of value in respect of certain specified supplies

[Rule 32]?
Ans. The value of certai¡ suppÌies, as specified below, shâll be determined in
tl-re Iollowing manler, at the option of ihe supplies:
1. Value of supply of service relating to sale of foreign curency including
money changing:

(Gross arnouni of lndian Rupees)

ence rate) x 1% p¡ovided/received,

Neither of cuÍencies exchanged is hrdian Rupees: 1% of lessel of the two

amounts received by converting â¡y of the two cu¡rencies i¡to l¡dian
Rupees at RBI Reference Rate.
iÞf (b) Person can also opt to âsce¡tain value in the following manne¡ for a F-Y
15ô,. 4.* :¡l
a¡d such ootion shall not be withdralvn du¡ine aÌÌv Þart of F.Y.
t:iú tut

(5,500 + 0.1% of
gross amount
và1ùe Subject to maxi-

Q. 9. How is the value of supply of goods ¡¡rade or received through an agent 2. Value of Supply fol Ait Travel Agent:
delermined [Rule 29]? .
In cøse of Dot¡testic Bookittgs: 5% of the Basic Fare
A¡s. The oølue of sltpply of goods betzaeen the priflcipal ønd. his øgent shall .In case of Intenlatio øl Bookings:10% of the Basic Fale
bc: Basic Fare meaÌìs part of fair on which com¡nission is normally paid to the ail
. Open market value of such supplies; or travel agent by the airlines.
 ce, ¡ dÈ$ u¡trveÈ-È'rrv senled i:', . ,. ,,.,.,.,'i'..,
sHrvÀ
:.:,,,,,
f
: ,,.i :. -...::
.' '.. .. r;r:i1Íji.c!4qÊ-i¡.,ië ôÉc$r E 4e
3. Value of supply of services in ¡elation to life insurance business:
(n) Gross premium charged less any aDlount allocaLed for investmelÌt
i P¡.¡re Ageñt: Following conditions are required to be satisfied
. -
or I ContÌactual agreement with thefecipient
savilgs on behalf of the policyholcler, if such amount is intimatedj I . No title on the goods or services
(ú) In case of single premium ar¡nuity policies ohher tha¡ above,
10% of t . No use of goocls or services for his own inte¡est
single prernium cha¡ged f¡om the policy holder; t . Receives only the actual amount incurred to procure such goods or
(c) In all othe¡ cases: . t servÌces,
. 25% of the fLst yeâr p¡erlrlium
. 72.5% oÍ the subsequent yeat pte¡nium çiqjäilëtt,:x7
The.rbove provisions are not applied if entire p¡emium paicl is only towar<ls
the risk cover.
4. Value of supply in case of second hand goods. Difference between
selling .,Vàrådl of
price ald purchase pdce. No input tax credii ii available to ihe buyer of seconã t feesl tröf:lihôse
hand goods.
.1S â
Value of goods repossessed from a defaulting borrower not tegistered for the
purpose of recovery of loan/debt: purchase price of goods redu"ced by S%
for
each quattet ot part thereof between purchase date aná disposal
date by person
makìng such repossession. Q. 12. How to determine MRP Bâsed Product lRule 35]?
5. Value of a tokeny'vouchey'coupon/stamp (other than
Ans. Whele MRP of a product is inclusive of GST the value of supply shall be
Þostage stamp) which I determi¡ed as follows:
is redeemable agai¡st a supply of goods or se:-vices o¡ botil: Money
value of the
goods or services or both ¡edeenrable agaitst such tokery vouchér, loo
coupon¡ or MrP
t ^(100 + føj Rnie)

Q. 13. Define the following:

(n) Free Supplies
(b) Input Tax Credit relating to free samples
(c) Free Promotionâ1 Item with Târlable Product
Ans. (a) Free Supplies. Schedule I of the CGST Act prgvides ce¡taù1 activities
to be heated as supply even if made without,consideration:
1, Penndfient transfer or dísposøl of business øssets uheie ITC has been apaíIecl ott
sucll øsset.In case ITC has not been availed, it does not fall into the criteria.
of suppty of in case of f"r"
?:1t.]|}"l_*,.,1" "aiue ùy
ìncurred _services ^g;ii 1n"t"
rhe supplier on behaU of tt" ,".ifr",.,t
aa¡z f 2, It coveis,supplies of.Goods or Services òr both between related persons or
¿s a pure between dìstinct persons as specified in Section 2Þ, r ¡hen made in the course or
"_1}1":"|;ri::l
agent shaLl not Jorm part of value of supply if following
conclitions a¡e satisfied:
. The supplier acts as an autho¡izJd pure agenrJf the r""ipi;i .i;"ppl;;
t furtherâJrcb of business without consideration.
. Cost. incur¡ed as pure agent sÌrorìld be separately måntionecl in the Ë Hence FIee Samples to unrelated pe¡sons are not cove¡ed u¡der the definitiolì
I of supply. Criteria of taxable supply is not fulfilled in case of free samples. If
lnvolce;
. Supplies of pu.;Ee.agren*bal1 be i¡ addition to the services he supplies on
supply has not been done, taxable event ì¡r'ill not aÌise.
his own account. Thus, Frec Samples are not liable to GST âs the same is not a supply.

I
r
È
 Þ-o;i,jÞ,{ül,tH$iF",W#ütÞÉ"ÈËg':ili$L*_ïil,t*î:llr}.ii,.ìlit:,,}:,,n,i:,,,ìr,r,ì,:ti1ii,,ìr:',ìr]i..tl
' Free samþles to ielated or distincf persons are taxable anci value
of supply
rl¡ill be dete¡mined in accorda¡cé with RuIe 2g (øs aboue),
(b) Input Tax Credit relating to free samples. Section
iz(S)(h) of the IGST Act
p¡ovides that no input tâx c¡edit is availablã if goods ar" toit, ìtot"rU
destroyed ,
wrÌtten off or disposed off by way of gift or fre-e sample.
Hence input tax Gedit on inputs and seryices used in free samples
should be
¡evelsed.
(c) Free Promotional Item with Taxable product.
lf a free promotional item is
provicled along with ihe taxable product then lhe consideraiion f.,
th" ;;;bi;
product only u'ill be charged from the consumer.
For lhe purpose of input tax credit on the promotional item, the¡e is
no
resl¡iction in the law. input tax crèdit on p¡omotional it"í alollg _ith
_H¡1ce,
taxable product is available.
+ 2.5 Taxability of Reímbgrsgrteêt_pft..F¡pgnses to
Pure Agent ,.,.. ,. ,-1. .,. ..:'::.::. :.. :.
Q. 14. Enfisarhe corþþf.9r..rhiç.h leed to be fulfilled to act as a p¡¡re agenr.
Ans. Normaìly exgeryes i""urieá Uy the sgpplier of goods or se¡¡lces or bottr
ald reimbursed by the ietipient would be i¡òluded in-the t¡ar¡saction value of
supply for the purpose of levy and collection of GST. Howeve¡ if tlìer suppÌier
of
sewi¡esrnerely acts as a pure agent then such expenses reinbûrsecì ¡r¡ould
not be
inclr¡ded i¡ the t¡ansaction value.
As per-Rule 33 the expenditure or costs incurred by lhe supplirr as J purc
.rgerìt of fhe recipient of supply of se¡vices shall be exiluded
.uPPly if:
f-m lhe uuluo oi
(i) The supplier acts as a pure agent of the recipient of the supply,
whr:n he
makes payment to the third party for the services pråcurecl as the
confiact.fo¡ supply rnadè by third party is between thiid p4rty and the
rrrl iîåTäå",j"îãiþ¡a" u'es the services so procured by thè supplier
service provider in hiÈ-T-àpacity-as pure agent óf.the recipient of
,..,. srçþly.
(itl) The recipient of supply is liable to make payment to the'third par.ty.' '
(lø') The recipient of supply authorizes
th" supptie, to nake pay{nent on his
behalf.
(ø) The recipient of supply knows that the se¡vices fo¡ which
payment has
been made by the supplier shall be provided by the third p'arfy.
.
(ai) The-pa]'ñent made b) the supplier ôn behalf óf the
recipierrt of supply
has been separately indicated in the invoice issued by the
supplie¡ to the
lecipient of service.
igt:Jl
(z/i) The supplier recove¡s f¡om the recipi-e¡it-ofs-äppty only such amount as
has been paid by him to the thircl party.
(zili) The services procured by tÌre suppiier f¡om the thi¡d party as a pure
âgent of the recipient of supply are in addition to the supply he provides
on his own account.
Q. 15, Define the Term Pure Agent.
Ans. Pu1,e ø.gent fieans a person zaho
(a) Enters i¡to a cont¡actuâl âgreement with the recipient of supply to âct as
his pure agent to incur expenditure ot costs in tlìe course of supply of
gooCs or sen¡ices o¡ both.
(ú) NeitÌrer intends to hold no¡ holds arÌy Litle to tlÌe goods or services o¡
both so procured or provided as pure agent of the recipient of supply.
(c) Does not use for his own intelest such goods or services so procured and
(d) Receives only the âchral amoulìt incu¡red to plocure such goods or
services,
' 'Êxønple: Cotporate services firm A is erlgageJ Lo handle the leg?! work
pertdinìng to trire i¡col't oration of Company B. Other.thariits service fees, A
álso"recôvers ftoln-B, regishatjon fee a¡d apþroval fee for the name of the
company paid to thé Registrar. of the Comp¿¡ies, The fees cha¡Ëed by the
a. n"gititur åt tlre compani"es lor registration ond approval of the"nasrä a¡e
.compuJsorily levied on B. A is merely acting as a pwe agent in the payment
,. ¡ofrthosä:Iiies; Theigfo¡ei .{q îéçovcry of such expènses is a disbrirsêinèn1 anc{
¡q¡t¡åf tn" ;áù9 of st¡ppl.r,'madèt¡vre q.,.rr.,' -.,t,: ,,1 :¡
1 : i:.'¡,r,.'r..
, "41
P 2.6 Exernption from GST
Q. 16. Explain various exemptions provided in GST under the cornposition
scheme.
:
Aní Corupositìon Schetne. A scherne which is made for the t'enefit of small
clealers, smaÌl manufacturers and small service providers by reducing thei¡
burden of complialces through less number of retwns, less maintena¡ce of books
afld Ìecords as compared to general dealer.
Who cøn opt for Compositiott schetne?
: Dealers and ¡ranufaciure¡s, who ate supplying goods and whose aggtegate
furnovet does not exceed 11 crore in the preceding finaincial year ca¡ opt for
Composition scheme. In case of North-Easte¡n States and Himachal Pradesh
(Special category stâtes) the limit is {75lakl.r. A non-resident taxable pe¡sonis not
eligible to opt for this scheme.
Aggregate Turnover means.the aggregate value of-
(i) AIl taxable supplies (excluding the value of inwa¡d supplies on which
. tax is payable by a person on Reverse charge basis),
(ii) Exempt supplies including non-taxable supplies.
l
(ill) Expolt of goods or services or both.
I
(i?) Inte¡-state supplies of person having the same Permanent Account
Numbe¡, to be computed on all Ind a basis. I
 äiliiitiiti#Íl#ffif Ídft ilffi ffi ffitrffi Í#trilffi ffi il ji#ff f
fiËÞ":ilr,1ütryÄ:4Éñ,¡j.lllFæ.É"vÆ!'Es.,:¡ij,....l;lír, r,r:.tr.,:1,: rirïi:':;iíri':i.;rffii¡:,rr,':ri;tl.i
Flowevet Aggaegate turnovet, excludes Cenhal tax, State tax, Union te-r¡itory
tax, Integrated tax a¡d Cess [Section 2(6)].
The defii¡jtion of aggregate tumover is very wide. The definition of eìernpl
supply iacludes Non-taxable supply also. So every supply whether covered
un<le¡ GST or not is included in the definition of aggregate turnover. Also the
agglegate turnover is for all businesses ¡êgistered uncler single PAN.
Follouing rcg¡stercd persons shall ftot be eligible to opt fot cornpositiott
sèheme:
. Supplier engaged in making inter-state outward supply.
. Supplier engaged in making aly supply of goods which a¡e not leviable
to tax uride¡ the Goods a¡d Service Tax Act,
. The supplier shall not make any supply through an e-colrunerce
operator.
. Supplier is not engaged in the manufacturiag of Ice c¡eam, Pan masala
a¡d Tobacco products.
. No benefit is given to the setvice providers but theÌe is ar exception
given io the rertau:rant service providers as mentioned it Ctause ft) of
patøgraph 6 of Scherlule II. If a restaura¡t service provider is providing
sewices and aggregate tu¡novet does not exceed 11 c/o,.e ifl the p¡eceding
fi¡ancial year tñen he is entitled to opt for Composition scheme.
Impact of becomíng a normøl dealer from a Composítion dealer:
lf during the current':i€àittie,laggregate turnover exceeds 11 cror¿ then the
supplier is requted to Þãyrjâi àê a ritìimal clealer. In this case the Composition
supplier is required to fiþ.âFORM cST.CMp-04 within Z ,¡ays.
Details of stock and capital goods, as on the day when the Composition dea-ler
is becoming a no¡mal dealer, are required to file in FORM GST ITC-01 within 30
daAs b rake the credit o{ input on the same.
Teftfls ør1d Cotlditions to opt Íot Contposition scheme:
(a) Composition scheme will be available for all businàsses registered under
singte PAN. A supplie¡ is required to opt for Composition scheme fo¡ all
businesses registeled under his PAN.
(b) The supplier-is required to mention "Composition Taxable perso., r,ot
eligible to collect tax on supplies" on the Invoice.
(c) The supplier is required to rnenlion "Cornposition Taxable pe¡son,, on
every notice, signboard displayed at all places of his business.
(d) The supplier should not be a Casual Taxable pe¡son o¡ Non-resident
Taxable Pe¡son.
(e) The supplier will have to pay tax unde¡ Reverse charge if any of his
inward supplies is covered unde¡ Reverse charge meclLanism.
(rf) Stock as on appoi¡ted day has not been purchased in the course of-.
. Inter State Trade ot coûu¡erce
. lf you are registeredas composition dealer r¡¡der some previous law, i.¡.,
Imported From a place outside ilrclia
. V.t\T/Excise then also you need to apþly for Composition Scheme in GST
¡eceived-f¡orn his blanch situated outside the state
. irì FORM GST CMP-01, cluly signed within 30 days from the appointèc1
received from his agent or pri¡cipal outside the stale
þ ftrijr¡l$¡#i¡i¡ffi¡';;¡tffi i,ffiíì:ffi
Í.{#,íif,líilf
,' .1,t :. ;;;:,:;i;:.,,
:,..:.:.;:;,,t.,1,:;.,.:r;,.r:,,,11ä.llfäfqiÄiTÈn!i.
..$F.#,F.. ilìÞeÈr' i¡ ss
. If the supplier has stock as on appointed day which is purchased
form unÌegistered dealer then the supplier is required to pay tax
under Reverse chafge according to sub-section 4 of Section 9
otherwise he is not entitled to opt for Composition scheme.
(g) Ali registered persons having the same PAN shall have to opt for
Composition scheme.
(/4 If the supplier has opted for Cornposition scheme then he is not eligible
to collect tax f¡om the appoin€ddâfif+he application is filed after the
apÞointecl clay but shall issue bill of supply for supplies made âfte¡ thc
said day.
(i) if you are supplying goods to a ¡egistered dealer then Composition
.
Scheme is not beneficial for you as the Registered dealer is not enLitled
for lnput la\ credit.
(/) IGST deale¡s are rÌot eligible to take thê bqnefit of Composition scheme.
(k) lf you ate a normal deale¡ and wânt to opt for Composition scheme, ail
credit in your ledger will lapse and will be included in the cost of goocls
ls¡:ction 18(4)1.
(l) If you are'opting fo¡ Composition scheme then you are not entitled fol
lnput Tax c¡edit which becornes cost of your product. Now you will acl(ì
margin aÌid ConÌpositicà tax, credit of which is not available to the
buyel. So for.the purpose of opting for Composition scheme, one should
take decision after considering competition as the cost of product'¡r'ill
increase.
(nl lf any registe¡ed person wants to withdraw f¡om the Composition
scheme he shall file an application in ÈOnV CSf CVfp¡ , electronically
before the date of such withdtawal.
Qt¡.trtetly ReturtL A person v¡ho iq paying tax under Composition scheme has
to file quarterly retu¡n in Form GSTR- on or before 78th day of the nofltl1
succeeding the quârter for supplies made during that quarte¡. Exantple, fot'
supplies filade during 1st July to 30th September, retum is required to be filed u¡r
to 18rlr October.
Røte of Tøi! Composition scheme dealers shall pay tax on their turnover in
state or Union terdtory at following rates:
For Manufactu¡els other than
manuf actu¡e¡s of notified
of 6 of Schedule II
.
dây. F{oweve¡, once the option is exercised 4/s 10 it shall ¡emain valid so
 b4 .ä .rSHMAìjÊt¡iiiilN,t$ffiä-..s€E,EFil,,i_,i ,.r:. ...
i;t.iillilif,.f1t ,::,',,..
:,.tt.t
.; .t ':..:..'...:t:."...::: . :::: )" çHAqrER 2: tEvY.ANDcoLrE-cÍoÑ oF ijsr É 55
. long as he satisfies all the conditions mentioned in Section 10 ãnd
.
. lle
Composibion Rules. .'. ,(c)j iË$;tj\4¡,ìri is.têtigil,t": ø,,"q-ppeiit"'trçî"?ê.Ei,lòvèr,.of his .fi¡m
is also required to furnish the details of stock, including the invard ,,,,,,,.
supply of goods received from u1ùegistered persons, hetd by him on the '',.i4.cji,Í,-lpJ,¡éfÊ99t:t.1.qc19.ln'tlie'pr,+édiagliaanci{Yea¡..r.
day preceding the date f¡om which he opts fo¡ Composition scheme, a:'.F.1;t4ij¿¡$¡t:a41.;â;,q!a1er.whn Þ,.sgLi¡g:sòodiwhiç¡.;"¡e',i.vritte,to csr,'
exernpied good.s and non-taxable goods. His turnover in the precediJìg F,Y,
electronically in FORM cST CMp-03 with),n 60 days ol the dâte f¡or¡
is T55 lakh.Ío¡ thê.foods wtuch a¡e leviable to GST, T10 lâklrfór exempted
which Compoèition scheme is opted.
. goods ánä T15 lal.]r for non-tâxabie goods resþectiùe1y. Is Ml. A is eligible
If any registered person, í.e., normal dealer wants to opt for Composition
for Composition scheme?
scheme, he shall electronically file intir¡ation in FORM GST CMp- ' Ansvr,er: -
02 prior to the commencement of finaìcial yeal. He is also requirecl to
furnish FORM GST ITC-3 wltl¡t¡t 60 days frorn the cormnencement of ilÌe ,. 4eC'€91¡9.1, q'¡."1-el.i4rlqde! att tyþË-.óflsuppliès,,ry4e,.byi.4il,:lhgi:perso. ¡s
::,.ÍegiétQièijirälcie¡r:sirùlelPÀN: If a pe!3o¡.iq 3e!lùig.th.e'ÉoddÈ ilvhich:àie not
relevant firìancial year.
,r,,: iev¡ã¡tê:tó:itái,irñdèîr:dST. r¡en h;.js.ì]ligiui¿ uì,- Þitl:.ftl¡,ihålcornposition
In addition to the above, he shall pay an amount, by viay óf debit in the scheme. ln this case âggreg¡te tllrnover do"es not exccecls t1 cro¡c. Aìso he ¡s
clectronic creclit ledge¡ or electronic cash iedgeç equivalent to the credit of input g"õãt ini.fr are nol, leviable to tax. So, Mr. A is eliBible
making iupply
foÌ Cornposition"fsch,cme.
l:ìx irì lespect of ùlputs held in stock and inputs contained in semi-finished goods
or firished goods held in stock and on capital goods, teduced by such, percentage
l'roinLs as prescribed in ITC rules on the day immediately preceding the date of Êxanple:Mr. A rcþiitered in RalasLha¡, who is setli.ng 6oods from Rajasthan
,'\ercising such option. .to Cujarat. Tr¡¡nover of M¡. A ii t73.,L3!! in the ?Ieçgd¡8 4+a¡!t4 yg*. I"
Mr. A elgrblè f9r Compositiolì Þcbe-rl.g? ,: . : ...: ..:, ... '. . :'.j.:.:::t..
Exam¡lè: MÍ;
Will yóui answer change if M-Ì. A is mcki¡g Purchases from Gujarat and
sellLìg-goods i¡ Rajasthan?
_ -,. : : : .:.1-...:. :,.::.
"i',o*ro'-¡iÌ3t
:¡r¡i Ajll6wel:' :.:. ::.::
Pleceor¡g iy., Á.'i¡ fo. composition scheme as hc is making intet-state
(¿r),-ISiì:Miåì "", "iiþlUt.
outrvard supplìes.
Tf Mr. A is making purchases forú Cutaret thelì he is eligible tor
(bi''u. Composition scheñe as there is a restriction on outward iîte¡-stÀte 6upply
,i" i^**a ¡","r-state suPply.
"r,
(")..tfi.ttiê: Exømple: Mr. A ¡s sellirìg gocds through aii e<ommerce operator. Tumover
of prececling li¡a¡cial yeÀ-r is {7L lakh. ls M-r. A eliFble for Composition
.':, schèäê,3-li.i..'i.i '.]:j':l¡:, ,..', l.:ìi::'r''r.. r.. : '::'' .:..:..: .. . .:'.. ,.
Ans¡ryéi:- ' . A¡rswe¡i '
ACCr.gCêtq
.No- Mi..A- is selli¡g goods ttuoilgô,Þii,rq:co4iliêr€pperato,t'hence hé is not..
undéil. ithå
¡çhe¡ìre: l r':.r-- ,' ' -...' , .. .';.:'..'
glfgrb]e fo¡ Compg,sitió¡r ;:'. .
acclegê!C,i
': ÉrintiJ¿::,ltll..N,l..àlRón-¡.esiaent' ta.:¡abie peison:is ruming,a ieadymade
exerhpt
tuu roven: , gaúiþf.rr;!úo.¡^tL9-qrí.ùr Raþstlian.. T¡¡¡¡1ove¡ !q¡ ¡the prlecgding financial year
(n) M¡:ri{ : is {Z0.,i!é,!.¡,:]9 hF.lÌêligible to opt fór) Coi¡posilion sclleme? , , .

for,::, ;.A¡qrú..s,¡l:l..l,.,.,''..,.:|.:'..|::.::
CóÌn '.: Mi;.i.Ä:i:i$iìqot-,è.qgi.Þ,le ¡or coTpg9¡lj,o¡ sc.þ¡me . gs ¡Ja¡-ab. .fq . ,¡ion-resident
sa.ûie ,'t ÞÞ,i1.d.'¡. i#i¡,c!.--r,i!,+J üqluaed. itr¡+;!þe c!-inpof itiôr! 3chgm9: I

Q, 17. Explain the exemption ptovided to small service Ploviders under

GST.
(bt : S%øII sttpplie¡. A busi¡ess entity with an aggÌegate hr¡nove¡ of up to <20
Á ^ns.would not be ¡equired to get itself regislered under the GST regime, unÌess
lakÌrs
he voluntarilv chooses to do so.
 Ì-¡i#i$: ir'- : lì#":1 ,,; ¡, i,ll'il' ;:' : :i. .ì :ì'',i ,j..,ri,.'i,

s6 . r SHMA DEi.tiìt-uNr\ÆRsiTy SÈFES : .1 t

Ans..A composite supply comprising of two or inore.supplies, one of which is
a principal supply, shall þe treated
as ã supply of such principai supply.
,,t;ta41l t.Ã:.;1,t,. ,.:
ri ì::!r{r1,,: r¡l! ¡!.i!rni.á}¿i¡
'.:.,:a).:.tr,.:

ìi+¿o¡*tt"
supply
Below is the list of states which are assigned special status unde¡
Goods and rand
Services Tax Law:
1. Arunachal P¡a<lesh 2 Assar¡
3. Jammu & Kashmir 4 Manipur
5. Meghalaya 6 Mizo¡am
7. Nagaland 8. Sikkim
9. Tripura 10. Himachal Praclesh
11. Utta¡akha¡rd
g:.l.l1,tt*i of aggregate tumover for aI.the abòve states has beeù kepr
^. Lh: t,* So Lhe s¿rne exâmple wi¡l apply here too, but the numbers will get
1_al.?

tumover of the fa¡mer Mr. B Iiving jJ¡ Nagalând js î15 l¡kh

,Exatnfte:.\e e. rrow ro derermine
trom agricultlire. Hrs taxable tur-nq1,s¡ É-.m the sale of p'Íasfic bags
is only
1e.
course of ]5usiness?
-h"rh;;;h""Ji;;";:"ilä;ål,,tr,e o"ai,,ury
15O,Ooo.
Ansu¡e,r: . :,.t, Ans, I44lether the services are bundled in the ordinary cou¡se of business,
,:_.-"-F:a:,t under CST as his oggr"gui" rlrmover. exceeds wouid dei:end upon the normal or f¡equent practices foilowed in the area of
F: ? îT,1"-"
rhfeshotd limit of ?10 lakh for special
rhe business to wtrich se¡vices Íelate. Such no¡mal ãnd frequent practices adoptecl
ìn
category itut"r.
a business cân be asce¡tained from several indicatorsìome of wbich â¡; tistect
Þ 2.7 Classification of Goods and Services below:
Conrposire supply means a .uppty made by a rdxabLe persorì . T¡.e perception of the consume¡ or the service receivêi. lf lâtge number o f
a. _r^:,:11:,:,rt:,
ro selvice receivers of such bundle of services reasonably expect such
rectprent that:
. comp¡ises two or more taxable supplies of goods sersices to be provided as a package, then suçh u pu"iug" coulcl l¡e
or services or both, or tréated as naturally bundled in the ordinary course oflusiness.
any combination tÌrereof.
. are Lìaturally bundled ancl supplied in conjunction . Majority of se¡vice providers in a iarticular atea of business p¡ovide
wiih e¿(h other, in tbe
ordinary coruse of business sirnil¿¡ bundle of se¡vices.
is a principat suppty lsedion 2(30) of rhe CGST For example, bundle of caterùtg on boa:.d a¡d t¡a¡sport by aù. is â bundle
*,::T:f .îT:h
I r¡.rs ¡neans that
Acrl.
in a composite supply, goods ot services o¡ both ale burìdled ofl:ered by a majcjrity of aûlines.
owi¡g to natu¡al necessiries. the elementsln a c"*p""i¿:"ppi; . TÌie natrue of the va¡ious servjces in a bundle of services will also help in
on the 'principal supply'
;à dependent determùÍng whether the services are bundled in the o¡di¡arv course of
Pri¡cipal sì.rpply meâtìs the supply of goods or se¡vices.which business, If the nature òf services is such that one of the se¡íices .is the
constitutes the rnai¡ service and the oLher se¡vices combined with such service are in tlLe
e.l:Tînt_9Ld supFty , r.J r\, ,vhictL .ìnv orher.sUpply
lï?:"""j
,ot:yq lo]]Ipos¡re
or thàr composite supply is ancill¿ry r.ratu¡e of incidental or ancillary se¡vices which tielp in bettér en¡oyment
Q. 18.
l:rt
HoM/
lsection 2(90) of CGST Á;tl.
to dete¡mine the tax liability on composite sìppti""Z of a main service.
 I
ue i:i;i:iil;,:!',|¡"i t,,,t:,
'rliÉËru:"ffi'¡t¡5m¡ff",ü;*silÉiìÍ çr¡+p.:re¡ èi,r¡-vvr¡Ñp"çot++ùiù.o. r.osr¡,,a"
. For ettample, service of stay i¡r a hotel is often combined with a se¡vice o¡
1

. .laundering of 3-4 items of clothing free of cost per day. Such service is an
ancillaС service to the provision of hotel accommodation ând the
resultant package would be t¡eated as services naturally bundlecl ill the
ordindry course of busjness.
Other itlusiTative indicators, not determinative but indicative of bundling o.f
services in the ordinary course of business a¡e:
. There is a single price or the custome¡ pays tlÌe sane amount/ ro matter
how much of a package the customer actually recejves or uses.
. The elements are normally adve ised as a package.
. The diffe¡ent elemellts are not avaílable separateiy.
. The different elements are i¡teglal to one overall supply. If one o¡ mo¡e
is removed, the nature oi the supply would be aÍfected.
No straight jacket formula can be Ìaid clown to deierIniìe whether a service is
nalurally bundled in the ordinary course of business. Eacl.i câse has to be '==B@l*r=
hdividually examined in the backdrop of several factors soû.e c,f which a¡e
outlined above. The above principles explained in the light of what constitlrtes a
raturally bundled ser¡¡ice can be gainfully adopted to determine whethe¡ a
palticular supply constitutes a composite s-upply,under GST âncl if so what
constitutes the principal supply so as to-.dé.té¡nriiiç fhe:tright classification and I
r.ate of tax of such composite. supþty, .:. ',t:r:. i,r,. t]:,,, '
e" 2.8 Mixed Suppliès
Q. 20. Define Mûed supply.
Ans. Míxcd stpply mèalns:
. two or more individual supplies of goods or serwices, or any combination
thereof, made in conjunction with each other by a tãxable person.
- for a single price where such supply does not constitute a composite
supply. [Section 2(74) of the CGST Act]
TlÌe i¡rdividual supptes are irìdependent of each othe¡ and are not natu¡ally
bundled.
Q.21. How to detèrmine if a particular supply is a mixed supply?
Ans. In orde¡ to identify if thg particular supply is a mixed supply, the first
requisite is to ¡ule out that the supply is a composite supply,
A supply can be a mixed supply only if it is not a composite supply. As a
corollary it can be said that if the transaction consists of supplies not naturally
bundled in the ordina¡y cou*ss€Éåusiness then it would be a rnixed supply.
Once tbe amenability of the transaction as a coûrposite supply isi ruled out it
would be a mixed supply, classified in terms of suppiy of goods or services
.rtbractirìg highest rate of tax. i
Q. 22, llow to determine the taj( liability on mixed supplies? I
Ans. A mixed supply comprising of two o¡ more supplies shall l¡e treared as
supply of that pa¡ticular supply that attratts highest rate oÍ tax.

t
I
 .:..-.,.. ,..,. .:. ::...: LI.i,II,I:..IIi,ri C'HAPIEF g::li\lCO!\4EJ-å|:qBF.D.fr.:,1!r.q1

Q. 2. Describe the cases where ITC is unavailable unde¡ GST.

A¡s- Cøses uthere ITC is unøz¡øiløble undet GST-
1. O¡ inwa¡d supplies used for non-business purpose, When a registerecl
person is using input toods or selwices for both business as well as r-ron_business
purposes/ credit of GST paid on goods and services used fo¡ non_business
purpose shâll not be available.
t::¡k À þucha9esl
Exønpìle:.Mt.
,.þø;þtè-i::[\i:1 hãs
¡leen paid.
been Palo. 75 /5 meter of th¡ fói nrs
'Clièntstl¿iì{dì,25t
Clients arld 25 riíéÍéi3ìid
meters is used
ù'è by h
No\i our of cST o¡ g10,000 paid. ,¡otlbe
dv.!lqo¡s. to rìuÌ:
available rro lütn. ,.., ., 1..:t:..::tt::.iì,,i;t.,;::"::l:iì1,:lrl:l:titjl:i:.4ti{tiì.:j,..ü::tiiìji
i 2. On inv¡ard supplies used for'exempt
for exempt goods. \44ren
ì44ren a registered
reeìste persoñ is

lrupur Tnx eneolr usi¡g goocls or. services for making

11g taxable
ta as well as exempt supplies, Credit of
GST paid on goods and services used for making exempt suppiiãs shall not be
àvâilable.
* 3.1 Definitions Expott anii. supply of Goods or serttices to SEZ is cowlted ds zerc ïøted. supplV. Credit
It?pu means any goods other than capital goods used or intended to be used
¿ of GST paid. ìtt:t goods ûnd serþices used for making zero rated supply toíll be aõailnble.
by a supplier in the course or furtherance of business.
Exarnple: Mt- A purchases 100 meters of i:loth on wfücü'.-ddÏof {10,000 has
Input sercice mea¡s any service used ot intendedrto be used by a supplier in
lhe course or fultherance of business.
been paid. 75 merers
meters of rhat cloth ¡s
that clqth ic useá bv hi- lóiiìi'dl'jiü
"""á l'" him lÀi#ät'r;; shirts
on¡i" for
¡^. his
r.¡"
lttzaørd supply in telation to a persor¡ shall. mean feceipt of goods or services
cfients orììt
¡l1s¡a
of which some shirts àie ãlso êx;orred-:;t rs .Ë"i"i" ¡..,,".¡ oy
giTt:91,¡,r'jn ¡ú''e'j!$.rÈ.iilri.¡.,i4ü:¿,Þtí,iÊ¡'|_&ä*Ð*,.tilÈjè"!,.åË"""0
'ã
t ,
him for making army uniforms, whi¡h is a exgmpt.èrillily;.ÀIow
exempt.èrillily;J-rl9w out of GSi
or both \,vhether by pwchasg,t acquilition or any other means with or withoirt r

consideration. of 110,000 paid by Mr. A, cledjr.

cedir öf t2,500 w¡lt.not.t5Éäüâtãbtê.to
wilt not.Ëååüâlãbtê to him.
Ortryttrt tax Í\relatron tô a tâÌable persoû means the tax chargeable under this 3. Pu¡chal¡e of motot vehicles ánd other conveyance. ITC is not available availal on
Act oñ taxable supply of goods or services or bolh made by hilì or by his agent
o¡ both purchase of rnotor vehicles and other convevance.
but exclude,s tax payable by him on reverse
¡eversc charge basis_
basis. There a¡e lew exceptiorrs to this:
Outu¡atd. suppl! i^ rclattorl to a taxable p""õrr, supply of goods or . When motor vehicles afld other conveya¡ce aÌe used for further
^uurt" ücåicä, rentat, lease
se¡vices or both, whether by sale, traasfe¿ bartêr, exch'angø providing supply of such vehicles or conveyances.,
or disposal or.any other_ mode, made or agreed to be madã by such person in the , j1t3¡1.r:ï:.::::.: :rr: "r:.
course or furtherance of busi¡ess :,to a
Wotks Cofltuact mea¡s a contracL for building, const¡uction, fabricatiory
completiorç e¡ection i¡stallatiory fittjng out, impto,iement, modificatiory ¡epai¡,
maintenarìce, renovatiory alte¡ation ãr commissioning of any imrnovable
propert¡r wherein
lralsfer _of prope¡ty in goods (whethe-r as gooás or in some
other torm) is involved in Lhe execution of such contract,
Ca.pit.tl Good.s mears goods, the value of which is capitalized in the books of
accounts of the person claiming the i¡put tax credit and which are usecl or
i¡tended to be used in the coursq o¡ furtirerance of business.
GST Capital Goods Input Rule-43
:+ 3.2 Eligible and Ineligible Input Tax Credit
Q. r. What is lneligible .(TC?
Ans. brelìgible lnp t Td.Ì Credit OTC) mea¡s situations whe¡e input tax c¡edit
Lrnde¡ CST is not ¿vAiiable.__. -_

I
f
I
I
 "i.¡!e¡1i.ÀW'.'':,,:,¡'.,;.','|;;|;;,:,' ..,, ., 1.,..,.
.
ri::¡:i,.:,i..;-:*,*t|1,..,ii.,ii,l:.,:,:.;:.,,r..,,, ,r:.:r:,r,,.i,,,,ç¡+Èi'Én,C;:fñçq¡¿E,[.f+,çnçÉi¡,¡:,.-6._gï
: 2. Avail of every month, ârì amount eqùättô-flfty?er cent of the eligible
4. On services such as food and beverages, outdoot cate¡i¡g, Ireauty :
tÌealnrent, health seryices, cosmetic a¡d plastic surgery, except wheti they aie inpr¡t tax credit on i¡puts, capitat goods and input services in that month
used as inputs fôr providing the same category of goods or services. and Lhe rest shall lapse:
5. Mernbership of a club, health or fitfless centue. Provided tF'at ú Optìofl 2 is .exercised, it shall not be withdrawn duÌing the
6. Rent a cab, life insu¡ance ancl health insutance sevices eÍcept- rernaiìing pâlt of the financial vear.
. When they are oandato¡ily requi¡ed to be ptowided by the employer to Provided furtlìer thât the ¡e.st¡ic-tion of 50% shall not apply
to the tâx paid
the employee u¡der any law. on supplies made by one ¡egisterecl person to anothqr regiËtåräa
p"r"or. hu.ring
. Vvhen they are used as inputs for providing the same cateBory of goods the same PAN.
oi services,
7. Trâvel benefits extended tã ernployees on vacation such as leave o¡ home
4.
!lif- ll" eligibitfty
?. Eligìbìlity
A^s.
and condirions for taking inpur rax credir.
ttfld conditìons fot tøking ínput tix cridif lsecrion 16]r
tlavel concession. (i) A_U Registered pe¡sons shall-take c¡eáit åf input tax ad i.rlUtu
u" p." tf,"
8. GST paid on workÊ conkact services, goods and services used in relation to terms and conditions specified in Section 49 on all goods
and supplies
an Immoval¡le Propefty (òther than Plant and Machinery) e¡:c¿p¿ when they are or both used, i¡tended to be used in the course oiÏurthe¡ance of
his
used fo¡ further supply of works contract service. business.and the said amount shall be credited to his ECL
lElect¡onic
"Cónstruction" íncludes rc-construction, renooatiul,,oddilions or filt¿rfitions 01, Credft Ledgerl.
lcpn¡rs, to the ex.tent of capíta.lisatian, to tlæ søid imntoaable propetty; Furnish such detail in Form GSTR_21
"Plant a¡d Machinery" meats apparatus, equipment, and machínery (tt) A Registered person can claim credit årúy if he_
. fx.ed to ecÍtl1 . possess Invoice or Debit notei
by founcløtion or sttuctufil support thûI are used for finking ounlard suþply of goocls or
seruices or both and includes sudt foutdation ltnd stru9tuiql.. supports but exchtdes _ ... received the goods or seivices;
. Land, buildìng or any other cioil stniiiiies'l:1.:.. ::.- . tax chdged on such supply has been paid to Govemrnent either in
. Telecommunìcatíon towet s,.: .. r. . .t , li;a ì:)ir ii., - .,r '. cash or tlr¡ouglì credit utilization,
. Pípelines laid outside th¿ factory pr"*ii"". . pe¡son has filed the Retum ry's 39.a¡rd
9. Composition sche,iñe-rÇóôdè o¡ services or both on which tax has been paid (iii) Where the toods a¡e received i¡ instalments o¡ lots, I.l.C shall be
Lrncler composition scheine; available at the time of receiving of final instalment or lot.
10. Non-tesident taxable person. Goods or services or bdth received bv a no:.r_ (lz) Recipient shall make the payment to the supplier of goods or
services
resident taxable person except on goocls irnporteá by hirn; (except tax payable unde¡ ¡everse cha¡ge) along with
tJx payable within
11. Personal corisumption. Goods or seriices used for pelsor-ral consumption. 180 days from the date of ìvoice othe¡wise.thjtc taten'shalt
be added
to.his ouÞut tax Ìiability with irterest [Furnish such detãil in Form
_ 12. Goods lost stoìen, destroyed, written off õr disposed off by way of gifr or csTR-21.
hee samples-
Any tax paid in accoidance with the.provisions of Sections
13. 7{ Same ITC can be claimed after the payment to supplier along with to.
129 and 130
of CGST Act (These sections are related to assessment). payabie thereon.
Rule 2 plovìde, tctt such fTC shnll be added to o tput tax liøbility
Fiß,!ple; \4r.. { þ¡q {qne Tax Evasion of {20,00,000 and tùe sarne is caught the month øftet the passing,of 780 days. Registe/ed person need ti for
by the Assèssing gtríç.f1. He shalt nöt be- atlswed lo use input tax credirTor þøy
interest as per Section 50 of the act
paymenl of'this:tà*:j-Þility. . :.., : fiom tne døte if tøklng ITC to ttie
døte of adding to olrtput tør l¿ø.bility,
Similarlp input tax ctedit ca¡Ìrot be used fo¡ payment of any interest or (¡r) 1 &ere the ¡egistered person has claimed depreciation
penalty Jevied iî tllis act. as per lncorne Tax
-_=_ Act on tax component of cost.of capital gooás and plant ånd machinery,
Q. 3. State the provisions pertaìilig to mode of claiming ITC by Banking ITC Ehall be denied on the said tax comfonent.
conrpanies. (?,i) ITC shall not be allorved afte¡ the due daìe of furnishing
the return ry's 39
Ans. Abanking company or a Financial institution i¡cluding a Non-banking for the month of September following the elrd of finarr"cial year to which
_.
Fi¡ancial Comp_aly (NBFC), engaged in supplying services by walr of acceptin! invóice/debit note ¡elates or funrishÌng of the Annual Retu'¡n whicheve¡
deposits, extending loans or advances shall have the folìowing t\a,ó opdons_ - is earliel.
1. Comply with lhe provisions u/s t7(2\¡.i.e, avail of ITC attributable to Q,5, What.is the Orde¡ of utilization of ITC available in the Electronic
taxabìe supplies (including zero rated supplies) and not on exempt Credit Ledger?
supplies, or
 64 T SHÍVÁ ¡]ËLHI UNIVEFSÍ.Y SEBìÉS

Ans, As per Section 49(5), the followìng shall be the order in which the Inpul ': ,', ì ,,.:::.,:.:..,.:tìi,llt:,tr;i.t::j:¡,..,:!.:l't.;,:],ø]4pdffi.ä.ìiFi$t fd(:Eii¿ù¡ es
tax c¡edit available ì¡ the Electronic credilleclger shall be uljlized for tax
mentl 2. Aváii of everv month, arl amount equal to 50% of the eligible iiput tåx
c¡edit on inputs, capital goods and input services in that rnonth ând the
Ittput t.1x Crcdit on tqr Crcdit ofl rest shall lapse:
accouflt of CGST øccount of SGS:IIIIGST Provideci that if Option 2 is exercised, it shall not be withdrawn during the
First for payment of Fi¡st fo¡ payment of remaùrùrg part of ihe finùncial year.
IGST. CGST. Provided fu¡ther that the rest¡iction of fifÇ per cent shall not apply to the la\
Then fo¡ payment of Then for payment of Tl-ren fo¡ paymenl of paid on supplies made by one ¡egistereðgeÆg!_to anóther Ìegistered pe¡son
IGST, IGST. having the same PAN. \
*In case there is fu¡ther
.
A¡d then if balance is *In case there is fu¡the¡ ¡+ 3.4 Tax Credit in lespect of Capitãl Go-dds
there for payment of bâlânce it ia'ill be balance it will be car¡ied Q. 7. Explain the manner in which Input.Tax Credit on capital goods can be
SGST o¡ UTGST. cauiecl forwardto the forwa¡cl to the next detc:rmined,
nexi periotl aud shall period ald shall not 1¡e Ans. Subject to the provisions of Sub-section (3) of Section 16, the input tax
not be utilized for pay- utilized for paymerÌt oI credit ùl respect of capital toods, which att¡act the.provisions of Sub-sections (1)
ment of SGST/UTGST. CGST. and (2) of Section 17, being par!þ used for thc purposes of business ancl partl)'
* CCST and gas-[ te 1,11tt1ta11y ¿r¿¡ßr¿¿.$,hich mea¡s rhat these câ¡¡oi be adjusted againsr for other purposes, or partly used fo¡ the pu¡poses of business and partly for
other purposes, or pa¡tly used fo¡ effecting taxable supplies including zero ratecl
¡+ 3.3 Apportionment of Credit and Blocked Credits supplies and partly for effeçting exempt supplies, shall be attïibuted to the
6. Explain the concept of Apportioirment o{ Credit and Blocked C¡edit. purposes of business or for effeeting tàxable supplies in the following ma¡¡er,
Q.
AJ¡s- Apport¡o tne f of Cre.tit and Btocked Crcdìt: n¿rnely:
1. I¡y'here the goods or services or botir aÌe used by the registered pe¡son-
(ø) The amorrnt óf input tax in respect of capital goods used or intended to
partly fo¡ the purpôse of any busi¡ess, ancl be used'exclusively for non-business or used or intended to be used
parlly for othe¡ pu¡poses exclusively for effectùrg exempt supplies shall be indicated in Fo¡ur
.
the amount of credit shali be res t¡icted to the i¡put tax attributable to the GSTR-2 a¡rd shall not t'e credited to his electronic credit ledger,
pu-rposes oÉ his business. (b) The amount of input tax in respect of capital goods used o¡ intended tcr
2. V\¡here the goods 01 se¡vices or both ale used by the registeled peïson_ be used exclusively for effecting supplies othei than exempted supplies
. paÌtly fo¡ effecting taxable supplies i¡cluding r"ro_rnLd brit including ze¡o-rated supplies shall be indicated in Form GSTR-2
supflies under and shall be credited to the elect¡onic credit ledger.
CGST Act or under the IGST Act, alìd
. partly fot effecting e¡empt supplies unde¡ the said Acts, (c) The amount of inpui tax in respect of capital goods not covered ur'ìder.
. tlìe amount of credit shall be rest¡icted to tlÌe input tax athjbutable Clattses (¡) and (b), denoted as 'A', (1.e., capital gobds are not exclusil'cl!
to the used for: aforesaid pu{poses) shall be credited to the elect¡onic credit
said taxable supplies including zero_rated suppìies.
The aalue of exempt sttpply shall be øs prescibed by goaetnntett_ lerlger ancl the useful lìfe of such goods shall be taken as five years flom
. include supplies on which the recìpient is tiabiá to pay tax on reverse the clate of the invoice for such goods,
charge basis Ptovided that ITC shall not be available for the tax componerìt of cost of
include hansactions i¡ seclr¡ities capital goods on which depreciation has been claimed
. includeìsale of land and, subiect to clause Piovided fu¡ther that r¡,7here any capital goods ea¡lier covered under
þ) of paragraph 5 of Schedule
CIøuse (a) (1.¿., exclusively used for specified purposes) is subsequently
II, sale of building.
A banl.<i1g company or a Financial instituLion including a non_banking not exclusively used for aforesaid purposes, the value of 'A'shall L.e
..
financial comparLy, aúived at by reduci¡g the i¡put tax at the rate of fìve percentage poilrts
engaged i¡ supplying services by way of aãceptìng deposits,
exLendi¡g Ìoâns or adva¡ces shall hìve tÁe for every quarter or part thereof and the amount 'A' shall be credited to
tollowini twJ options'_ the ECL;
1. Comply with the provisio\s v/s 17(2), i.e.,-avail ol lTC att¡ibutable
to Etplønøtíon, An item of capital goods declared under Cløuse (a) cj¡ its
taxable supplies Gncludjlre zero râLed supplies) and not on exel¡pt
supplies, or ¡eceipt shall not attract the provisions of Sub-section(4) of Section 18,'if
it is subsequently covered under this clause.
 t,

66 !r,'.9¡lrv-Á.iF.ûÈEüü6fury.i.-sjnlg.sr;.l.r:il:rtL,,r:',,¡:,'¡,.
: .,,:: 1,.,., .,.., .. .. , , ,l . ...,,,: . . ,.. . cHaprcB g: tNcoMÉ TAi cREDtT. r 6Z
(d) The atgregate of the amourits of ,A, , CCST ¡",, ZO1T is eniiiled ro ffC of inlultlxñipect of goods held in
credited to the electromc credit
ledger under ctøase
(¿), ,r",,
tå be denotea * I stock (inputs as such ancl inputs contained i¡ semi-finished o¡ finished
in respect of capital goods for a Lax period. "i"iiuËiï" .-oi¡ o., .ruait r goods) on the dây, ir!ììlediately p¡eceding the date of registration.
Provided that where anv.apital goáds earlier (lii) A person switching over to normal scheme'from composition scheme
coverecl unde¡ CIouse (b)
is subseqqentty ci"""i rn under Section 10 is entitled to ITC in respect of goods held in stock
"^tiå"i äTLl.,""o
t"l,- o,
"o.,"r"d,r.,åu.
reducing the input rax ar the ¡are of fi"";;r.";;;; ", (inputs as such ar-rd inputs contained irì semi-fi¡ished or finished goods)
quaÌter or paÌt thereof shajl be ad|'led to t¡" *,
* "-'l
"*,.,
'
""_--.i- .:-,.^ .
"àr"rr and capital goods on the day immediately precedirÌß the date f¡om which
k) ih" .*"",ü;; ;il;ä;:i;',;"ffi:åtfåii"Jåï".i:;-_." he becornes liable to pay ta\ âs norm¡l tJxpayer.
capitat goods during their useful life, be denoreàis ,ÍJäã I (i?) l 4:!ere an exempt supply of goods or se¡vices o¡ both become taxable, the
es_ "ut"utut"a . persotl making such supplies shall be entitled to take ITC in respect of
Tm = Tcl60 (S years) . goods held in stock (inputs as such and inputs contained i¡ semi-fi¡rished
(/) The arnount of tax cÌedit ât the beþlrù.,g,of o¡ finished goods) relatable to exempt supplies. He shall also be entitled
. iu* p.¡iocl, ';efiod,
capital goods whose useful life-¡emañ.u d"ri";--,il;';;on âlI common r to take credìt on capilal goods used exclusively for such exernpt supply,
denoted as ,T¡'a¡rd shall be the aggregate of ,Tri, fo¡ all srich
Lre
r subject to reductiorìs for the earliet usage as prescribed in the rules.
capital
goods; (¿,) ITC, in âll the.above cases, is to be availed within l yea¡ f¡om the date of
(g) The amount of common credit atkibutable issue of invoice by the supplier.
towards ! !!¿¡¡l'rlq supplies,
- -" exempted
be denoted as,Te'and calculated as_ (zi) In case of change of constitution of a registeled petson on account of sale,
rq=(E/F)*rr merger, demerger etc. the unulilised ITC shall be allowed to be
...wherc f'E' is the assreßate varue transfer¡ed to the transferee.
suppric5, ,nade. duri¡s ine rê\ pcroo. and
l'F' is the total rurnover of :l:ìeTp.t
the leFste-red Person during thJtax perjod (aii) A person switching over from composition scheme Lo normal scheme o¡
)¡^t¡i.r^,r !L-! -.,L - -
j::1"î::lî:1".i:r:$.9.'.r¡;i¡ìå,9. {irüï."Ëä,,i.1,"å* o",,", whe¡e a taxable supply become exempt, the ITC availed i¡ respect of
the, said tax period or
\iri "'^îffg
:l: ;T: :ii-ïl::|
r oe carcutatect :: th.: t'p.r::l4rñ.,
trv takinq ùah¡es o,f i*"tþ,íÞ¡ài."",i.ur" ïn"îi".' ""äiiT
iE, and,F, of the last six pe¡iod fo¡ wfuch
goods held in stock (inputs as such and irputs coniained in semi-finished
o¡ finished ggods) as well as capital goods will have to be paid.
rhe details suctr turn-:vËàe
or ðuc¡¡
ua Llrrrr<r.yertaïe,âva
-or.vì"", i. ,i..'^äü
åvaitable,
able, pre\ijous to the mönth during
åuring which (alli) In case of supply of capital goods or pla¡t and machinery, on which ITC
of,E/!, i$ïo be calculated
the said value of,E7!,
the_said whtch
c¡cul,t"¿, is taken, an amount equivalent to ITC availed minus f}.e ¡eduction as
,::::::.i:: For rhe purposes of this clause, ir is hereby cia.rified prescribed in rules (5% for every quarter or part theregÐ shall have to be
¿Eigregare value of exempt supplies ana thar rhe
,f," ør¿ .""ì"ã?,n"ä."., .f paid. In case the tâx on transaction value of the supply is mo¡e, the sarne
uty ta). or tax levied ur.det Entry
r-r
of List 1 "i¡i *'
of tf_," S.""r,tii'èJL"aule to ".y
the would have to be paid.
l

con:j-i\tuti:njld EnW s11nd ia of Li", _e4

í¡ ,r ,¡. *iJ".;ili;. ' I

(r') 1 rç 3.6 Transfer of Input Credit (Input Service Distribution)

3: 11o'ry.'r.e *¡i1,.3-'" g;;ïå;"åä*, sh4u, during l

every tax period of-"$cthe useful Iife - - concernert ."-;r"l'l'^^"- Q. 9. Define input service diskibutor and recipient of credit. i

ã.{À-¡ +^
add_ed to rL^ , tiabititylifeofot_the
^--,_,_. tax
the output
of iÀe concerned
th;;;;;il:ää#fä*:;
capital gooCs, be
"^ Ans. Input Service Distributoi (ISD) is defined üy's 2(61) as an office of rhe
credit. supplier of goods or services or both, which leceives tax invoices issued under
2. the arìrou¡rt ,Te' shall be computed separately SecÉion 31 towaÌds receipt of input services a¡d issues a prescribed document
for CenL¡âl tax, State for the purposes of distributing the credit of CGST, SGST, IGST or UTGST paid
Tax, Union tax ¿ìnd Integrated Tax.
¡+ 3,5 Availabiiity of TãÌI?-e-tlifin on the said services to a supplier of taxable goods a¡d/or services havi¡g the
Special Ci¡cumstances sâûle PAN as that of the office refe¡red to above.
8.
?. f*pl:ii ll" avaitabiliry
Ans. Auøìlqbility
of Tax credit in special circumsrancls.
of Tøx credit itr special circttmslances.,
Once a peÌson gets registered as ISD in the GST regime, he would be eligible to
transfe¡ or distribute c¡edit as per the provisioÌls of Section 17.
(i) A person who has applied for registration Recipient of cterlit mealìs the supplier of goods or services or both having the
rn itfri., gO day5 of becorìdng
ti¿ble fo¡ regisrrafion is enrirled rã lrc or ¡,;;r;; same PAN as ihat of the lSD.
hgld. in- stock (inputs as such and i'.p,rt"
t" ö;.t ol Soods
.oi.ttuitruJ Iì Q, 10, Describe the Duties of ISD.
finished goods) on the day immediatàty p"""Jiriã ""ä-ìt*"n"' .. Aras- As pet this proaision, an Input Setuice Distributot (ISD) zuould be able to:
he
ìnî ã.i" ir.r" ,"r"n . Dist¡ibuie credit of CGST/SGST and IGST to the supplier io rihom such
becomes liable to pay úx.
(/¡) A person who has taken voluntary tegishation sewices rnay ìre attributed.
under Section 2:t(g) of tlìe
 68. a 5¡1¡y4 ¡6¡1¡¡ UNIVEFSTTY SEHTES
. In case of inter-state transfe¡ of i¡pui credit whe¡e ISD and recipient are
Iocated i¡ different States:
(ø) under the CGST law, col¡ponents of CGST a¡d IGST caÌr be ttans-
feqed as IGST.
(b) under the SGST law, cornponcnts of SGST arrd ICST can be trans-
fcrred ¿s IGST.
Notei It is impo¡lant to noie that ITC of CGST cannor ìre utiliz€d fo¡ paymenr of SCST. However,
for i¡ter-state trãEfer of inpui crcclits, there coulci be no other mechanism becaus€ SGST of on€ Srate
cannol be l¡arsferred ãJlcl use.ì in the or].ìe¡ Srate. Furrhcr, if it js presumed rlìar ihe disuiburion by
lSD to iis own supplier unit consLiLutes a iaxâble suppty, the app¡opriate rax woutd have beerì tcST
orìlt agåinst which the disi¡ìbutor would lìave been in a postion ro c¡âim inpüt c¡edit of CGST/
SGST/'IGST. In other words, tTC of CCST, SCST ãs lvell as that of IGST can be distribured as rTC of
ICST,
recovefed?
I¡ case of i¡tra-state transfer of input credit where ISD and tecipient
þusiness verticals having obtained seþaÌate registuations ir the sarne State):
(a) under the CGST 1âi^', components of CGST and IGST can Lre
tla¡sferled as CGST.
(b) under the SGST 1a\', components of SGST and IGST can be
tlansferred as SGST.
Note: Distribution of credir through ISD would be lequired within rhe same Srare when rhe
taxabte person is havi¡g ñore tha¡ one tax ¡egist¡atrons within rìe Srare which is possible only iJ rtrc
taxpayer has opted for separare regist¡arions for sepffate busjness ve¡ricâts unctei the p¡ovisions of
Section 19(2) of the MGL. In orher worde ITC of CGST and IGST can be disíibured as ITC of CGST
while ITC of SST ã¡d jCST ca¡ 6e dìstribured as IfC of SC5T.
Q. 11. n'rite down th" ¿
AJns. The.coflditio s afld ffiaflflel of distibtÉion of credit by ISD a.r,e sø,nc øs
.tre therc in the presebt Seraice tax regifiet afld the sqme øïe sltmmøtized qs
follozus:
1. The c¡edit would be dishibuted through tax invoice ol.othe¡ document
as prescribecl. Þ 3.7 Payment of Taxes
2. The amount of c¡edit diskibuted shall not exceed the amount of crêclit
available for distribution.
3. If the credit is att¡ibutable to one supplieÌ, it shall be dishibuted only to
that supplie¡.
4. The c¡edit of tax paid on illput services akribLrtable [o ¡ìlore than one or
all recipients of credit shall be distributed orùy amongst such recipients
to whomgiven input se¡vice is att¡ibutable. The man¡ãr of allocar.ing the
amount shall be as follows:
(a) the Uiskibution shall be on plo-rntn, on the basjs of turnove¡ in a
state on unioh te¡ritory of such recipient, to thê aggregate of turn_
over of all such recipients to whom such input se¡vice is
attributable.
(b) for the purpose of computing distribution ¡atio, the tumover of
resPective suppliers for preceding year is to be taken. ln case ar,ly of
the supp_liers_ was -not operatíonal in the preceding year, the
tumover of immediately preceding quarte¡ ftom the month of
distribution is to be takerÌ as basis. (as per,expla¡atiol to Section
ri$ûff-_Sri'ñ: ,iÁx:qirE.Dri ! 6e
20 of the CGST Act,'relevant period'has been defined in this
manner).
(¿) Once the credit is distributed by a¡L ISp in the prescribed malÌ1el b)'
way of prescribed document, the recipients to whom sucl-t cteclit is
a
dishibuted 8et c¡edit in their Electronic Cledit Ledger and can Lrsc it
fo¡ payment of their ouq)ut taxes.
(¿l) AÌL ISD is required to file its Return i]1 Form GSTR 6 by 13th of thc
month succéecling the -mã-rìfi-'ñ-which the credit has beetr
distributecl. When ISD files his rerurri; the amount of credit gets
c¡edited in Elect¡onic Credit Ledger of th: ¡eciPient.
Q. 12. Flow credit distributed in excess by InPut Sereice Distributor (ISD) is
Ans;.Møntet of recoaeql oî credit distributed í) ercess (ISD):
. The¡e could be a situation of diòhibution/use of excess credit irr
comparison to what is available o¡ allbwed u¡rder the law to tlle
recipient. To take care of tl-tis situatiorL Section 18 of the MGL contains
p¡ovisions for recove¡y of excess credit distributed by the lSD.
. It provides that in case the creclit dishibuted by an ISD is môre thân tlìe
credit availâble to ldm, the excess ctedit may be recovered from ISD Lrv
initiating âction under the provisions of Section 51 of the MGL.
. Section 18(2)- of the MGL Provides that in case the credit distributecl b1'
ISID is in contrâvention of Section 17 (which could be dist¡ibutio¡, of
more thaì1 available credit or dist¡ibutiòn of credit in ircorrect ¡âtio or-
clistribution of credit to a suPPlier not entitled to it or it could relate tc)
the type of tax distdbuted), the excess credit may be recovered froln the
re¡:ipient by initiating action under the Provisions of Sectio¡ 51 of the
MCL.
Q, 13,What a-te the payments to be made undeÌ GST?
Ans. Undel GST the tâx to be paid is ñâinly divided into-
. IGST-To be paid rvhen inter-state suPPly-is made (paid to the Centre).
. cGST-To be paid when making supply within the state (Paid to tlÌe
Ceììtre),
. SGST-To be paid when making supply within the. state (Paid to State).
Goods solcl fro¡n Delhi to Bombav
Goods sold within Bombav
Apøtt flofi the Ltbooe pøUríeflts ø der,ler í6 lèquiteil to møke these payments:
. Tax
Deducted at Source.(TDS), TDS is a mechanism by v/hich tax is
d.."9"!:d9ttu9T1."-{..b-9.Íî:i#lj$¡îH..:.11.'.,9.Ihesupprier
Cry._ee,.e.Ig,1,$:layirlg êóntrãct to
'.1 rxeuä1fe; A gove¡r¡i¡elf agg.ncy. à
r.' puif àþr, The !ont¡ai!.v.á!ùé; iÈ' T10 lakh.::r.:tlill:!.:,:a :;,',,:'
 '. .. '-., .-.. -.:!|[.'*]:;]]j-: j$::)ìtiilil

70 o sÈ¡v¡
-oe!!lfjij,tùJ!G-_-Ë{Lil.Èenes /
When the govérnn:i*.iC":?^T: k." q.yment to the . .efiÀFEFIfrNCOME
-t% (which I
. bLritdc¡ TDS @
a;òunrs t."nrj,oooi *;i-,u"';.#,"ä..il1";;;
amount will bé Þaicr.
TAX CBEDr¡' 71 I

. Tax Collectej ai óåurce,fiCs). TCS is

mainly for e._comme¡ce aggrega_
tors. tr mea¡s any deltl se[i,_,g ú"o";i,;;o;;eice /
lhaj
payment after deduction of -ICS @ 2í/^ v¡ill receive
This p¡ovision is cuEently rela>.ed ancl Cash Ledger
wiLI not be applicable J;ill notifiecl Credit Ledger Liabilify Ledger
by the government. This Ledger !vilt ITC ãs seü-assÉssed
. Reverse Charge. The liability of-payrnent reflect all deposiis in monrhly returns
Tle Tohl tax liabrlftr,
of â taçaye¡ /
of tax shifts fto1n the Þad€ ìn Cash, and (âfrer
services ,o tr.,u' .".n1*.'"i.äi. i"i,u,., supplier TDs or (àndi rcs
wilì be reflecred here. ne tting) fo¡ rhe
:í""ï:*":lo "ou",r,"o made or1 âc.ounr of
The rredit in rhis
ìedger can be used to
pÃrticùlar month witt
be shown automa-
Q. 14._ payrnent to-be ¡nade is calculated the Tâxpaye¡. This n1âke pâymcnr of
Ans. Usua-How y, unde¡ GST? ledge¡can be used fo¡
ticâlly displayed onâ
the InÞut Tax^_crectli shoulJ t ; ;;;";;;* TAX ONLY and no CST payer,s dash
Liability ro c¿lculate the Lotal cST paymenr
to U" _Jul-
" """ ourwarct Tax maklng ally paymeni
onaccountofcST
other aNou¡ts sucìì /
as rìrterest, pânelry
TDS/TCS will be reduced f.orrl áe- totul or
figure. Inte¡esr and tate fees (if any).wi'b"
CSf^ì" .".1"" at the net pavable
Also, ITC ca¡rnot be claimed on interest "dã;;;;;;;;* f*al amount. I

and f"t" f""". È.À'ììærest ancl late Q, 18. What are the different I o""''""r can be mâde?
";;;;;;"^/; å:,lli,l,.tt
fces are required to be paid in cash. A^s. Gsr pcryn,n
Thc zoay lhe calcrlation is fo be ¡ìone
is díflerent . Pâyment through Credif Ledger. Tire
. Rcsrrlar Deale¡. A regutar for dilferetrt .å
tttpes of de{tlet.s: c¡edit of ITC can be used by
is.ti"br; i; ;;í ä;i rtre outwa.ct
deale¡s for GST payrnenr..Tire ã¡e<tit ca¡
b","k""-;i;ä; payment of
-dealer
suppties made,.andi.câ:n . also_. Tar. tDieresr, perìatrv.rnc{.tare fees cainot u"
purchases made by him.
clâim f.,pr.,t
_. fui C*àii'1rfC¡ or., *," . pay."ent rhroush õash r"ds",. fliã'ly "írii"g rrc
cst ;;;;ã.i*.]i i"'ï'"o"
The CST payable by u .:g..,g deale¡
is rhe diffe¡ence offli¡e. The challan has to be glneratect j" 6ä.;if* "¡r""u.,¿
",
outward tax liability and th¿ ITC. -"'* berween the offlinc CST paymenr. ;åt¡, o.,lin"
. .-..-
Composition Dealer. The GST pa),meltt r
for a compos.itton
cor¡pa¡atively simpter. A a"or"r' *rr" - clealer is !h¡1e ]ax Ìiability is more rharì T10,000, it is ma¡datory to pav taxes Online.
Q. 19.. is the penalty for norì_p¡yment or delayed pJyment
, scheme has to pay a fixed percentage _1l"" fîà" iå,
"o^po"irio', Ans..lf_What
CST iq short lraicl, urrpaid o¡ paid late, i¡tc¡est.at,
of GST? i
of CSf å"-ì¡e i.tqt ouh.vard a rate ot 1g% is
I
supplies made. required to be paid by the clea.ler.
Q. 15. Who shall be liable to make the payment under Al"o, u.punurry is to be paid. The-penal4,is higher
o"'-.r!"::
1::*2 a1e r.eluíred t. *ok"¿éi-;;';,;;;,:
cST laws?
'" ""' , paid or
short unpaid, whichever is higher.
of {r0,000 or 1u"6 0f the r¿\ i
. A.Kegiste¡ed dealer is required to mut. ðSf payment Procedure to pay tax in cash
if GST iiability Step 1: Calculate tax payable in cash. i.
. dealer required to pay tax uncle¡ Reverse Step 2: CerÌerate CplN number rn F9_lM ii
[egisterea
(RcM). Ch¿rge Mech¡nism cST pMT_4 on common portal by ii
erte¡ing the details of amounr of rax (CGST,
. Ë-cornmerce operator is ïequired to coilect
fCSr c- èCSîi,"åìi*s, fees, and
ancl pay TCS.
penalty etc. payable: ll
. Dealers specified bv ttre-e (d) Gene¡ated challan shall hLave 14 diFt í,1
CPIN number (Co¡nmon portâl
o.16.wh;rïiil;;""í,#ffffiå'rirnËå"å.deductrDS. identification Numberì
cST payment is to be r¡ade i,f*" csfn (b) This cllallan shall be v'al¡¿ for 15 days
m-Ans. it"ìr"a, i.e., by 20th of the next from the date of geneÌafion). l1
(c) Tâxpâver carr pârrialrv f'r in rhe ch.ú".
Q. I7. What are eleckonic ledgers? ¡..mì"Jiåipr?lr'iìy ,,"u.,,u,, ,r,"
cha'an fo¡ compJetion at a tater stage. a-;;;
Ans. These ledgers are maintai;ed electrorrically ;;i,#i_ be ,,edired,, Ii
on the GST po¡tal. be(o¡e fi¡alization
(d) Challan generated online may not be modified Èij
fll
_ afte¡ submission.
step 3: Now make pavment with ieJe¡ence.to aiove*.À"lräitPinI Ët
bar.king/Card/ RTCS/NEFT) or dny other nrode uy tN",_
as specified by rhe Govenrment. få
Step 4: Afrer successful paymenr of Ta*, a crN 1críJia.,ìã"ïtiì'i'Juior, Nl,_rr". l;il
tiil
A3

ffi
 iliillliil

.. CI-IAFTEFTêIiNCOÀ¡E lAX CBEDTT E 73

za E sHfva DELHT uñryÉnsnv s¡gtes ,

ha\ i¡g l7 digits-1.1 CPtN ¡rìd 3 dipir B.Lnk Code)

JudgeÌllenL/Dec¡ee/orde¡/dilection of Date of comrnunicÂhon of suclì
sh¡Jl be gencr¿Led, \^.hich is Courf or A ppellatc Authority_/Tribunal._
actu.rl ploof of Tax p.ìynìerìt.
TTC accu nul,ìtes a< output is t¿\ Last date of financial yeâ¡ to tvhicÌì
ç 3.8 Refund of Taxes exenpt or nil-rated.- _ q" ¡Sl9¡tC9.
":Sgt!
Q.20. Wtat is GST rcfund? of p¡oi,i"i"tr¡ u"""""t *r.t Date on which tax is ad
--Firralisâtion
. 1r.r. U:rl!]y r,r'lrcn tlr,. CS t pard i. n,orL. Ltr-,rr rtrL, C5-f liabjliiV, .Ì siruarion ot
(1,ìrrnrllS
Also Jf ¡r:f,Lnd is paid with delay, ân intereAt @ 24% p.a. is payable by thc
L;5J rcfund ¡ri:e. L'r(1,.r (ì--f tl¡. 1,.¿ç*-. ol cJainLirrg ¿ ¡efu¡tl i. 8O\7eflllrelì:.
standar<lized to avoid colúusion..l.he pL.ocess is orrline and
t1.." firiii" nl""-ìl* Q. 24. Hriv can â person ciaim GST iãfûitd*aìtd u¡hat is the time limit fo¡
been set for the same. claiming refund?
Q. 21. What are the circuûstances under wlüch ¡efund of GST can be clairned? Ans. ThZ ¡efur.rcl application has to be macle in Fo¡m GST IìFD 01 within Z
An,s, A (laih of reltni nay realisc ott ncaorrnt oí: lrorr tlÌe relevdnt date.
¡ c.r|s
li) F-\Fùrt {ilìLl'dints dee,,tcLJ e\pori) rI roocl.,5pr\iLc, Lrnrfer I l'c lt ¡rr- :hur¡ld also be certified by a Chartered Accountant.
cldinr LrI
reh.te ot Rei rì n,J

(ir) ITC accunrulation dÙe to oLrtlìLlt tax Lreins oxempt or

ril_ratecl. '+ 3.9 I'i)S
(dl) Refund of tax paìd on purcirases maae bj, 6¡,6¡.ri"s Celtain categories of registerecl persons shall be required to deduct taxes lvhilc
or UN bodies.
(ru) Tax Refund for lntemational Tou¡ists. lnaking paltÌrents to the suppliers, Le., TDS and deposit it with the gol'enxnent.
(zJ Finali,,atìon of provisionaì ¿i-essmerrr. Let's try to unclerEtand TDS telated procedures under the law.
(¿'i) Refuncl of pre-deposits. Q. 25. What is the rate of TDS unde¡ cST and who ihatl collect it?
(uiil Excess paynrenL clue to nlist rkc. Ans. TDI! is to be deducted at the rate of 1 pef cent on payments macle Lo the
(aíil) Refund of CGST/SGST pâid. by rreating rhe supply supplier of taxable goocls and/or services, where the total value of such suppi].,
as irìrer_stare supply
is subsequenrly_found rò bc i¡tci_sr.rre urrde¡ an ûfclividual contract, exceeds î2,50,000.
,. , yry.h "rpffy fo¡ ,,i."_rr.,.u.
\¿.r., Ãeruno on account ot issuatlce of ¡efulcl vouchers
un.f
There shâll be no tax deduction ü¡he¡e the location of supplier a4d place of
taxes paid oll
agâinst whjch goocì< or serr ices hJve not bcen :uppliei. supply is diffe¡ent from the State of the registration of the ¡ecìpient.
^ 22.
Q. ^_oL"on.:t
How i,, GST refund calculÀted? As per GST løzo following people/enti!:ies need to deduct TDS:
t:.I".1.:impte casc ot e\cess t.ìx (l) A <lepartment oÌ establislwtent of the Cent¡al or State CoverÌrrrletÌt, o¡
f,lt;Tlr^
rvr¡. o s \->r traÞrhty t.;ynì(.ìrr màde.
tor tlÌe m.,nlh of September lii) Lo¡al authorj ry, or
is {50,000. But ciue to mistake,
Mr. B made a GST piynrent of {5 t¡kh. (l/¡) Go'",enunental agencies, or
Now Mr. B has m¡cJe ¡n e\.êcs GS ì p,,) |llerìt (l¡) Pelsons ot category of persons as may be notified, by the Cent¡al o¡ ¿r
clairned .ìs a refuncl bv hiìr,l or î4.5 lakLl rr,fuch c¡n bc
-fhe St¡ le Coverrunent,
tinre limit for ciajmins tlÌc ¡cfuncl .rs l¿l An autlìoliiy or a bo¡¡d or any other bociy which has been sct up Lrr
2 yeats frolì1 lhe ci.ìte of payment.
Q.23. Wtàt is the (irre liinit for claiming I.cfund? Parliameni or a State Legislature or by a government, with 51% equitY
Ans. The tirne linit fol claimirg ,.r r.eIun.lìs (co rl-rol) orvned bv government,
2 rTccrs fi.om thc r.ejcv¿ìnt date
The ¡elevant date is different i,r'*,r"r;, (¡rl) A !ociety established by the Central or alty State GovernmenL or a Local
Here are the televant dates for sotle "a."._ Autholity ancl the society is registerecl under the,Societies Regist¡atiol
cases
Acli. 1860
Releoatrt Date (ali)
(z,li) lu161ic sector u¡cìertakings.
Pul5lic sec
.Excess p¿ymen L oiasr........- Date of Pavment Q. zb.
\¿. wnart should
26. What snoulct be u1e value of
Þe the ol supply on which
which TDS
l DS shall be
tre deducted?
Exp-rt or aìão,.a'"^poillãoa. ã, D.rte of disfatch t,y post/sh;p oi Ans. Fo! tlìe ptLrpose of deduction of TDS, the value of supply is to be taken as
se¡vtces.
¡i¡craft leavcs lncl ia/pâssing flÌe ihe: amounll,excluding
amounil excluding the tax indicated in the invoicr
invoice. This mea¡rs TDS shal1 ncrt
l¡e deducted on the CGST, SGST or lcST component of invoice
Deenred export of eoóa.. Ttl whom is TDS paid and what is the time limit
Q. 27. Tti imit fo¡ paying TDS. Also
-¡iott or sã*.",
" state the compliances. required under TDS?
D

Ans. TDB shall be p aid zoítltin liom the ónd of the monrh i{l whicll rê\
døus flom
zoítttin 70 døys
is deducted. The payrnent shall be made to the appropriãfe government l\¡hich
ii
'ii:)

z¿ snl¡
il ". p¡+ril!¡.ñ.ttiÈ-re.,trr.*ryæ
: .t .... CHAPTEFì g: tNcOME TAX CBEDTT . 75
t¡ The Central Government in case of the IGST and the CGSI.
È!
. .
The State govemment in.case of the SGST. th¡eshold limit to register. (like irT -o'th?r-tâses
on T20 lakh). In other
. Ful.ther, d1clctots neeìl wolds, every e-col¡¡lerce operatot as well as lhe suppliel rvho supplies
to follout tlßse listed prccedural compliatrces:
,11ì ll:h
d:d":t:l to get compulsorily registered unáer Spcrion 23. thtou¿lh e-commerce operator has to get itself compllsorily registerecl
H 1¡¡) (Jbtaining TAN-needs
issued under ùrcome tax aciis MANDATO¡|y. under GST irrespective of its turno\ze¡.
jl (r/,) Ihey need to remit such TDS collected by tjne Any petson required to collect tax at soutce/ shall electronically submit
1.1tr, day o] the ¡nonth
succeeding the month in whiclL TDS was coliected and repirtu a¡ _application, c{uly signed or verified th¡ough elecblonic ve;ification
rr ¡ ir., CSfn Z.
(lz') The amoult deposited as TDS will l¡e ¡eflected in th'e eier:t¡onic
lll cash code, in FORM GST REG-07fo¡ the grant ofìegistration through the
¡.',,
ledger of the supplier. colnmon pottâI, eithe¡ di¡ectly ot through a Facilitation Cenhe nobified
jI (-.') They need to issue a ce¡tihcate of such TDS to the deductee
within 5 ¿lays by the Commissio^er fRltle 72(1) of CGST Rutes, 20Uì.
ij of deducting TDS mentioning therein the contract value, rate;f ll, Credit Lo be claimed. The tax wlich is collected by e_commerce ope¡ator
cleduction, amou-nt deducted, the amouni pâicl to tlìe appropriate shall l¡e c¡edited to the supplier rvho supplies goád" o, servi"es o, both
fl , .. G,ovemment and such particulars as may be piescribed.
(z,l) Non-deduction/short deduction/non_páymei t o. rhort payrnent
through the operator ir.r hiiìlectronlc caåh ledgir arìd can be claimed by
of TDS the suppliel of u'hich is reflected in the stateùrent of the operator.
iil is on offence unde¡ the Act fo¡ lthichi minimum p"r,.iÇ uf {10,000
. prescribed under the act.
is Q.30. Explain the Stateûìents to be fu¡nished by e_commerce ooerator.
Alas, EolloToitlg hþo støtetúe .ts to bc rmùshed by ttre e_commctce operøtor:
t7,.e
:ii
Q, 28. How can the deductee claim benefit of TDS? 1. Monthly Staternent.
Ans. The deductee shall claim credit, in his elect¡onic cash leclgeq, of
Evet operator who colllcts tax, shaÌl furnish a
)'
statement, elecrronìcally, containitìg the cletâils of outward supplies of goods
tlìe tax or
tleclucted a¡.rd ¡eflected in the return of the deducto¡ fr.rrrrished ii th" scrr ices or boilr effected tlu.ough it irrclrrriin¡¡ tlle slrLìrlies of gåå.ls or serrri.es
¡n,ì¡,.,". o,
prescribed. A¡y amoufit deducted as TDS ..and . reported i¡ botÌì r'etLìrnecl tlìrouglÌ it, ârìr1 tÌre ¿rmount collected within 10 days after the
CISTR_7 ,,vill
1
automatically get reflected in Electronic cash iedger. ' of such morrih.
end
I Reftrncl of the excess ørnount ilgductèd: , ' - Rule 67: lorn anil nøi¡et o.f subnissioit of statencrú of supplies
! . L¡ case the amoiiìit iÈ.claimed by deductee in Elechonic cash Ìedger: c- c o1fllÌtefce op cf øtor:
throtgh alt
tÀ

Refund to aeaùtiôi ris:nòì possitle in such case. Ho*".,"r;'d"arr.r"" (i) Ever.y elech.onic coutlneÌ.ce ope¡aLor requilcd to collect tax at sou¡ce
I clairn a ¡efu¡rd.Ëf tai "o.,
to Refund provisions of tf," Á"f;. practically ry's 52 shall futnish a statenent in FORM GSTR_8 electiorìicallv o1l the
it is not possible to""U;"it
claim â¡y eûoneous deductíon of rfDS bv the common portal, either directly o¡ f¡om a FaciliLation Cent¡e noiified bv
i deductor.
j . Lhe Commissione¡, contâ riÌrg details of supplies effected through suci
ln case the amou¡t is noi so clainìed bv cleductee: ope¡ator and the an1outtt of tax collected as ¡eouired.
I
Refund of eûoneous exqess TDS.clecìucied is posiible to cledrtctor., subject (ii) The cletails furnished bv the operator above, shall be made available
l to refund provisions and procedure of the Act. electronically to each of the suppliers in Fa¡t C of FORM GSTR_2A on
i
+ 3.10 Tax Collectecl at Source (TCS) the comnon portal aJter tlÌe due ¡lare of filing of FORM GSTR_g.
layAan'9 language, the onewho collects taxat source is krlor¡¡n 2. Amìual Statement. Evel.y operàtor who collects tax, shall fu¡nish an annuaÌ
_ln asTax statement, electr.ollically, containing th€ detaiis of outward supplies of goods or
I
collector. Under^GST, every elect¡o4ic commerce agglegator (ol ,ol)erator,)
has se¡vices or both€ffected througlÌ it, including the supplies of gåóds or services
been assigned the role of Tax Collector. or
Alrthotization to colleôt tâx both retum€d tfuough it, and the ar-nount iollectJ duringf ri-re financial year,
As per sectron 5Z(l) of CGST Act, 2017 only before 37st December followùrg the end of such financial yeir.
liLl.^t^ï-l:l_:3(1) î1.çtT onlv etecrronic (
electronic commerice operaror Rt¿le 80(2) Afltl al rchùtr, Every electronic
(not
\¡rv! uclrá arr
being an éËclrr,
agent), brtau
shall corecr
collect a¡
an amount ot i¡ respect
t¡x r¡
of t¿Ìx respect of tsxqble supplies ope¡ato¡ ¡equi¡ed to
,'l goods (r¡ servrces
"o--"r"Ë
collect tax at sôutce under Sectio¡ 52 sl-rall furnish an¡ual statemenf ln FOIIM
Ë,urjlrs o¡ services or both-midê-Ihforrgh
Þoüt made thloügh it oÌ or thlough
throLrgh othe¡ su ppliers.
åther suppliers. GST'T{-98.
Q. 29. Explain the statutory
statutorv provisions of TCS unãer nnãp" r:cr
CST.
s, tsolloutitg
Ãtts. Followitts øre the støtltory t1rÕ7ri<iõt'c of -r.<
stahttônt prcoisiofls t!q)-- /^cr, Q.31. Ho , are the details of supplier matched with the details fwnished by
^Í TCS un¡ler GST: the e-comnte¡ce opelator?
1. Rate of Tax to be collected, The rate of tax to be coll()cLed
bv ân Ans. Mechattisnt of ncúching of detoils.
corlutìe¡ce opelator shall not exceed one per cent, as may be notificd
by (i) The_-detaits
the Goverrìrnent on the recommendatiolmìf the Council,'of the
net value _of suppliers fu¡nished by e-conunerce operator (Form
GSTR-8) shall be matclìect witlì rhe concåmed supptier (còTR_1).
ol taxable supplies.
(/i) If tÌre detàils do not match, the saÌne shall be co ¡nunicated to both of
2. Registration. As pql Secrion 24(x) of CGST Act, 2012, there is no them (Supplier in Form GST MIS-3 & e-commerce in Folm GST MIS_4).
 ;rrllüiÌiL¡;lil*i
76 T SHÍVA DELHI.UNMÊRSfIY SEB|ES
(iii) lf the disc¡eparÌcy is not ¡ectified by tlìe supplier i¡ his vaÌid ¡Þturn o¡ tlÌe
operato¡ in his statement fo¡ the tnoùth in which cliscrepancy is
communicated, it shall be adcled to the out?ut tâx liability of the said
supplier, where the value of out¡,u'ard supplies furnished b1i the operator
is mo¡e than tlìe value of outwa¡cl supplies furnished by the supplier.
(lo) Such.supptier shalÌ pay the tax payuúle in respect of s.ich suppty along
with jnterest as specified uncler Section 50(1).
Section 50(1): Intelest on delayed payment of tax, Intetest shall be at such
¡ate, not exceecling 1870, as ûlay be rrotified by the Government on tìre ¡ecolì-rlìr_
enclations of the Council.
_ Serving of Notice to the opetator. Anv auihotitv not below the rank of
Deputy Comrnissionet may serve a notice, requiring ihe opetator to fu¡nish such
cletails relatint tol
. supplies of goods or services or both effecled through such operaLor
during any period; or
. stock of goods held by the suppliers making supplies through such
operato¡ i¡ the godowns or warehouses, by whatever name callecl,
managed by such opetator and declared as âdditional places of business
by such suppiiers, as may be specified in the notice. .
* 3.11 Job Work
Q. 32. WÍat is Job Work?
Ans, Job Work:
. Activities undertaken by .,small/medium inclustries on inputs/semi_
fi¡ished inputs as per the di¡ections of tile principal manufãctu¡e¡ a¡e
known as job works.
. The person who u¡dertakes the job wo¡k is commonly known asjob
worker, generally in small sectol.
Q.33. Define the term Principal.
F€r the purpose of job work, the,principal, means:a reg.istered person
,Ans.
who sends inputs or capital goods, without þayment of tax, Ïo a job worker
for job-work 1rlla¡rd
f¡om thete subsequently senàs'to a¡othe¡ job worket and
Iikewise o¡ return io principai.
,
r:n-(,": o[ common job works are s]itting, màchinjng, weldi¡g, painting,
electroplating, assembly, powder coating etc. Jðb works arJalso widãly'resorteã
to
IQ. t^eltiles,-.ag¡i_p¡ocessing, printing, gems anct jewellery sectors, etc.
34. Define the term taxable person.
l 4. Ftom the¡e, those can be subsequently sent to anôthet job worker(s).
Ans. Taxøble persofl rnes.ns a. petsofu ztlho is rcgistered or liøble to be rcgisteretî:
. An establishmërÌt or person who has oltained or is required tó obtail
registration in a State arld a¡y of his othe¡ establishmentsl a:rother SLate
shall be heated as distinct persons for the purposes of GST law.
. Therefore, t¡a¡sactions, such as stock tranifer, transfer of capital goods
etc., between tr\.o p¡ocessing ur-Lits o¡ acìnÌinishation offices åf th"".u^.
job worker, shall be t¡eatecl as supply. Since such t¡ansâction is
macle
between two distiDcl+el,to.4E, theráfòie, s,.,ch s.,pply q,ould be subject to
lev-v of cST.
fi:iíË;,:t$$ffi*rufgå,iÌä:¡ii
,,::;t,,r;.,,ilil.....':iì::l;tltì. },i:itffi&Iw,, z, :
Q. 35. Is a iob worker eligible to obtain the benefits of Composition
Scheme?
.A¡rs. Benefits of composition scheme ale not available to certain catego¡ìcs of
persons, sr.rch as one-
. wlao is engaged in the supply of services, or
. who rnakes any supply of goods which a¡e not leviable to tax u¡de¡ the
CST, or
" wlho makés alry inte¡-State ou-t¡ùäã-sùþües of gòods.
Accordingly, if the p(ocess undertâken by the joþ worker.a(nounts to
manufactrue/deemed manufactu¡e of goods (except as may bè restricted by the
Governrnerrlt), then such job worker is eligible.to opt fol composition scheme. In
case any lÞrocess does not amount to manufacture/deemed marìufacture, oÌ
services or y, then such job worker is not eligible for composition scheme. Thus
a job worl(er is eligible to opt for composition scheñe if he statisfies the eligibiliry
crite¡ia lair[ down ry's 10 of CGST Act.
Q. 36. !\fhat is the th¡eshold limit fo!. regiskâtion in case of fob Work?
Ans. A:l iob work is a service, the job worker would be requked to obtain
registration if his ággtetate tu¡nove¡ exceeds t]le prescribed tlreshold.
The su¡iply of goodç after completion of job-worþ by a registered job worker
shall be beated as the supply of goods by the principal and the value of such
goods shall not be ihcluded in the aggtegate turrrovet of tìe registered job
worker.
Q. 37. Éirlist the criteriâ to dete¡qri¡re the place of supply irr case of Job lVork.
Alrs, Clìterìø to ¡letennìtte the place of supplg ìi cøse of fob Wotk
1. ln the case of job worþ the supply of goods, after completion of job-
w¡Drk, by a registered iob worker shall be heated as the supply of goods
b¡ the principal.
2. GÞods sent by a taxable person þrincipaf) to a job worker afld liable to
GllT wìll be heated as a supply as supply includes all forms of supply
such as sale, ha¡sfer, etc.
3- Hlswever, the registered taxable person (the principal), under intirnation
afld fulJilment of specified conditio¡rs sehds any inputs and/or capital
g(lods, without pay.ment of tax, to a job #orker for job work.
5. Èlncipal can either-bring back such inþuts/capitâl gooals after cornple-
tit)r of job work or otherwise, urìthìfl 7 yeat/3 yeqrs of tFLeir being sent
orit or
6. Saippiy such inputs/capital goods after completion of iob work or
otherwise zpiúl¡i¡ 1 year/3 yeaß of thei¡ being sent out.
7- F¡om the plaie of business of a job wo¡kq on payment of tax witlìi¡
India or with or without payment of tax fo-r export.
Q. 38. Desclibe the procedu¡e/provisions followed rnder job work.
Iob Tootk Procedu¡es:
^ns,
1. A p¡incipal (regìste¡ed pe¡son) may u¡der intimation and sub.iect to
¡,l
lirrl

Irìl
Íirj .t.:;'snrv¡:ÉeffiUliffir.-Û,i t,,:l .:lilg:,irt,,.i '',:.-,.:r--.:
..ìt.t'.:.ì ,t-r i:,.
li prescribed conditioru, send any inputs or
:i
_cHAFrEn
g: tNc{lt/E TAX CFEDIT . 79
capital goods to a iob worke¡
fo¡ iob-wo¡k and frcjm there slbsËquentty, J""J i" the duplicate copy beirg marked u=,arpfi.ut-fJ.
i,r
+.: rrithout paj¡lnent of tax.
..árrr*.. Ëi **t* ,(ii)
(ii¡) fra¡sporte¡,; a¡d
lhe triplicate copy being ma¡led as,t¡pli.ut. fo, C"*iå-^,,
il1 2. After completion of job wotk or otherwise, principal
shall_ Q,40._When do Job Work provisions O""o-. uppti.uUì"i '
O bring back inputs oÌ capiral goods 1.,rrå, ,n""äàJà"lnd dies. jigs Arts. (l) The provisions retating to.job wort àre applicable only
[l ard,fixtures, or tools), within one year and tfuee yea¡s,lleìpec¡vely, rcgrsteted taxable petson int-ends to send taxable goods.
when a
In othet wo¡ds,
ili of theù being sent out, ro ur,y óf H" pfu"" of'Urr.i.,årri these p:ovisions are not applicable to e\empted
oi rrorr_t^u¡t" good" o,
tf:
pa'.rnent of tax, or *itno,_rt when the sender is a pe¡son other tl.ran a re-giètered taxable
,... person.
(ii) supply inputs or câpjtal goods (orher than moul,ls (ii) It is not conpulsory rhat job work provision"s iJToito*"a Uy ttu l
fr jigs and:uc;l and
fixtu¡es, or tools), iritlrt , 'onu yu* u-rJ^tirå dies, principal, The principal "f,o,la
respectively, of thei¡ being sent out f¡om thå pt."" yuu"", "u. "undthethespecìul
payment of GST without following
inputs or capital goods after
procedr.rie. ln such a case,
Ìl job worker on payment ãf tax within l"aiul of b,rlii,u"" of u the job-worker would take
o. *itliìî*itn"1,t iiput t;x creäir urrJipfry uu"t tf,"
-the
I

tax fo¡ export, as the case may be. p_.o1":::d goods (after compÌerion of job_work) on paymeiri of GST.
" lr,..ts rmportant :f
ü .PuyT""l ^ _,
J. to note that there is no time limii for b¡ingi¡g Q.41. Is cST payable on job work? I

il back mou lds

and dies, iigs and fixtures, or tools. charges of iob zþorker. CST wilt be paydbte oñ
,..jl:.Lî_t^T^:: :"nt.ìce on, a¡y matcrial the job
4. The goods shall not be Dermitted to be supplied used by the job worke¡ at hjs own level.
busi¡ess of a job worker u¡rtess the pr*.;;;
from the place of Yl¡K.cnarges,rncludirig
rrinclpal wltl bc entifled to take tax_c¡edit of the same subiect
fl
business of the job-worker as his additi"".f på..
;;.i;;J inå 1,"* , conditions.
to usual
rl Jì""r"""'i*1"p, ,. ,
_ "11.
,ylif rhe job worker is registered. . : .
Tttusitional prooisíon, ln case any i¡puts o¡ serni_finished goods
had been
i:l 5. ITC shall be allowed to the n_in.-ci.¡iái ¡o¡i::i¡Þuts ¡ernoved before the appointed date from tire factory of the
manuÄcture¡ u¡rd serrt
senr to job rvorke¡ even
to a job \ /orker for carrl.ing futther ptocessing, iesting, repait
,o. though they sell them direcrly from job woiks prerrrisus.'
rn€ pnncrpal shêII be responsible.'foii.kèeping proper purpose, and the same is ¡eceived on ot aJter ttie appo;itea'date,
or ior a simlta¡
no tax str¿t ¡e
" . âcco.unts for [lìe payable if the follol 'i¡g conditions are satisfied:
r _ nputs or capitâIlÈp-sds ü1.4tead ¡¡ job worker. ..
inputs or capitál goods (orher tha¡ moutds ' underlyi'g goods are returned to the factory within 6'¡o¡¡úlrs from rhe
1
" ll.::",y,T: ln"
lrgs and lrxtures, or tools) sent fot job wo¡k a¡e not rieceived back
ancl dies, appointed date (extendable for a ma;<imum
principal aJter complerion of iob wo,rk o. otll"r*i"",. by the . Declaration of the goods hcld by job wo¡kerpe jsrioddone
of 2 nonths).
in specified fo¡m
àl *ãì,ãi,ìp¡u*a ¿¡d ma¡nc¡.
from the place of business of th.
¡ou .".t", *it-Àl ä i.-"ii;ã'o.t o, . Supply of semi-finished goods or
tt ,r,ulii.li"-". """,¡u,
three yea-r(s) respecrively of their úeing *"t goods is done onìy on
s¡l i.1>u o or.capital goods had beeñ supptiej ".,t uy ,À" payment of tax i¡ lndia.
o.lr,.lo"i . ,n"
Joo-worKer on the dây when the sajd inputs or.npitul gãods were
scrrt t+ 3.12 Reverse Charge Mechanism
I
out.
8. Any waste and scrap generated drûing the job Q, 42. What is Reverse Charge Mechanism unde¡ GST?
worl may be suppìied by
_-Ans. Generally, the s!Ìpplier of goocls o¡ se¡vices is liable to pay GST.
I
directly from his place-of u""i"*" o"
I :1,:I:Jîl:1
sucn Job worker is registered, or by the principal, f1y..L,,rr or r¿x, ir
if th; joi
However, in specified cases like inpo¡ts a¡rd other notified supplies, the Íiability
regìstered.
worker is nôt m-ay be casd on the recipient under the reverse charge mËJhanirm. Re.,e¡se
Charge means the liabiliry to pay tax is on the recipieni of supply of goods or
9, It is important -to.,note that for. the p.r.rq>oses of job worll, the
i¡put se¡vices i¡stead of the supplier of such goocls or se¡vices in rËspéct oinotified
a+ising from uny o"urrn"ì.,, or p¡ocess
:11ï^r..._ ll*.l"Oiare-€oods
out on the inputs by the pri¡cipal
categories of supply.
- _.31t"d
^ 39. or the ¡ob worler. Tzoo types of Reztetse charge scenaríos prooiiled it laza:
Q. What kind of involce is required to Lu i""rr"a'ir,
Arts. For the pur¡roses of transp.ortltio., of gooa" ìi-¡pu Wortz f-ilsú is dependent on the nâture of supply and/or nature of supplier. This
f_lo; "u""
*ã.i,1_r,,
may issue a delivery chaìlan, sertilly ,,u*b"ruã, Consignor scenario is coverecl by Secrion 9(3) of the CGST/SGST/UTGST Act and Section
irrrt*ã 'oÌ *Lì.ì"" u, ,i," u,'," 5(3) of the IGST Act.
oï removal of goods for Eansportation.
The d.eliuery challan shøll be orepareil ìr, t.ìplicate,
As per the provisions of Secrion 9(3) oÍ CGST/SGST/UTGST Act,2017 or
goods, in the follozoing mønner:
ir the cnse of supply of Section 5(3) of IGST Act, 2017, the Govemrìrent may notiJy speciJy carcgories of
(i) the originaÌ copy being marked as,original for.Consignee,, supply of goods or services or both, on which the tax shall be paid on Reverse
charge basis try. the recipienb of such goods o¡ sc¡vices or both. Aìl the provisions
 ao...r-,g{va ÉÈr,u¡ìwssnv *nleé . j.¡¡l,i:,,t, : ''-,..., ... .
.,..
of this Act shall apply to such recipient as if he is lhe person liable for payi¡g the
tax in ¡e.lation to the supply of such goods or. services or both.
S¿con d scena¡io is cove¡ed by Section 9(4) of the CGST'/SGST (UTCST) Act
and Section 5(4) of the IGST Act whe¡e taxable supplies by a¡y u¡registered
pe¡son to a registeted person is covered.
Section 9(4) of CGST/SGST/UTCST Act, 2017 o¡ Section 5(4) of ÌGST Act,
2017 provides that the tax i¡ ¡espect of the supplv of tâxable goods or seÌvices or
both by a supplie¡, who is not registe¡ed, to a registe¡ed person shall be paid by
such person on reverse cha-lge basis as the recipient and all the provisions of this
Act shau apply to such recipient as if he is the pe¡son liable fo¡ paying the tax in
relation to the supply of such goods o¡ services or both. Accordingly, wherever a
registered person procures suppLies from an un-registered supplier, he needs to
pay GST on reverse charge basis. Flowever, supplies where the aggretate value
of such supplies of goods or service or botl-r received.by a registered pelson from
a¡y or all the uffegisteted suppLiers is less than <5,000 in a day aÌe exempted.
llowever, AII categories of registereà persors are exempkd fTon the proz.tíiions ol
rcoerse clq|ge till 31.03.2018. T'hís ezemption is aoaîlable only tilt 31.03.201g.
The provisions of Section 9(4) of rhe CGST Act,2017, will not be applicable ro
supplies made to a TDS deducto¡ in tems of NotífieationNo. g¡2077 CentthlTaz
(Rate) ¡lated 28.06.2077. Thus, covernÌiÌeit. entiti4 who are TDS Deductors
i r-1.i,¡rir:.r'1,.i.i,tri;ii:tìtrlit,..iir$:ì:Íìlti:,¡ili:.]i.,Srl [ ffiiÍgr.eäør'ir.'; er
:!.r:,ri,:,.r.:
. the date immediately following 60 days fuorrr thLe date of issue of invoice
or si-rnilar other document.
lVhere ìt is not possible to determine lime of supply using above methods,
time of supp'ly wou-ld be the date of enh.y in the books of account of the recipient.
Q. 46. Enlist the various compliances in respect of supplies under reverse
charge mechanism?
it rcspect of supplies Lfi.Let Reterse charge mechønism:
A'¡.s. Coltll,pliaflces
(Ð Merltion in invoice. As per Sec-Êòñ3l:Of.tlre ÇGST Act, 2017 read wíth
Ruìer 46 of the CGST Rules, 2017, every târ'invoice has to mention
whedre¡ the t¿r in respect of supply in tl.re invoice is payable on- reversi:
chatge. Similarly, this also needs to be mentioned in receipt voucher as
q'ell as refund voucher, if tax is payable on reverse chalge.
(ii) Maintenance of accounts by registered persons. Evè¡y regidtered person
is required to keep arnd ¡oaintain reco¡ds of all supplies attrâcting
payjment of tax on reverse charge.
(iii) Payment only be e-cash ledger. Any ar¡ou¡t payable under ¡everse I
charge shall be paid by debiting the electronic cash ledger. ln other
words, reveise charge liability ca¡not be dischãrged.by using Input tax
cred:it. However, after discharging reverée charge liability, credit of the l

same can be taken by the re¡ipient, if he is otherwise eligible.

unde¡ Section 51. of CGST Act, 2015, neeá noi pay isl u¡rde¡ reverse charge in
(i?r) lnvciice level informatión in ¡espect of all supplìes attracting reverse charge,
case of procurements f¡oû\ q¡úcgiste;ed supplierò.
rate wise, a¡e to be furnished separately in the fable 4B of GSTR-7.
Q. 43. When a persón is..ièijrriied ¡o get ¡egistered u¡rder RCM? (?,) Ad¡,lance paid for rewerse charge supplies is ãlso leviâble to GST- Thc
A¡rs._ An¡ person who isi iequiled to pay tax under Reve¡se chalge has to
person making advance payment has to pay tax on ¡eve¡se charge basis.
compulsorily register under GST and the th¡eshold 1i¡nit of ? 2O løkh g7O lalJ. Iot i
special category states except J&K) i6 not applicable to them. Q- 47. Enlist the various supplies of goods under Reverse charge !
mechanism,,
Q. 44. Ca¡t a person paying tax r¡¡der RCM claim ITC?
Ans. A supplier ca¡not tâle lTC of GST paid on goods or services used to
u¡der Reverse mechanism i

make supplies on which recipient is liable to pay tax.

Q. 45. Explain the provisions regarding Tiure of Supply under RCM.
Ans. The ti¡¡re of supply is ttre point when the supply is liable to GST. One of 1. I Cashewnuts, not shelled
-
the factors ¡elevant for determjni¡g time of supply iì tÉe person who is liable to
pay tax. In Reverse cha¡ge, lecipient is liable to pay GST. Thus time of supply for
9_r__peelg _'
Any registered person
supplies ulder reverse chalge is djfferent from the supplies which a¡Ë-u¡de¡ I
forward charge. ir

In cøse of supply of gootls, time of supply is ea. ieêt of "taa"d;;;; I

. dale of receipt of goods; or 1l

. date of payment as per books of accounts or date of debit in ba¡k I

accou¡t, wl chever is earlier; o¡ ii
. the date ùnmedìately following BO days fiom the date of issue of invoice
or sinilar othe¡ document. .Bgv-:g.qg.. -.._....,.., Agriculturist
-9,
It case of supply of serþices, t:ìtne of sttpply is eßrliest of: 6. Supply of lottery State Gove¡nment, Lottery
. date of payulgr¡!3s_p_e¡ _books of accounts or dâte of debit in bank Union te¡¡itory or selling agent.
accou¡t, whjchever is earljet o¡ any local authoritJ'.
ii
i
r
i ee o-,,.sHva.dû!,lti¡Ì_ffiJiÞ,çÈFs,;1ìt:ri.ii,
i 7.
;.r,.,i.:ì '.: .t
.
-.
.t
,:;. .: : a..: _.,:.i.4' cfiagtÊF 3:.lNcoME fAx ióREDIr..r 'e3.
lt Cent¡al Government, Arìy registefed person
il 2, services specifed below:
State Government, (i) service by the
ij Union ter¡itory or a Depaftment of posts
local autho¡if.v
by way of speed
of services under Re chatçt post, exptess pdcel
-:' |I
rvo.
1
D1"i!,P4-o:|;gîÊrFtlv :
,.
of. Sèi?leëtÈ:ï,Ê:
Any service supplied by
.: à,Yr,!l#'!{Ë, : 'i
\94.riþ¡!::*en¡i6,
post, liJe i¡surance,
and agency setvices
provided to a pe¡son
a¡ty person who î.ny person located in A.lly person located in
other than Cenrral
is a non-taxable terri- the taxable te¡ritory
located in a non-taxable tòru. Govefiment, Stâte
other than nontaxable
teûitory to any petson online recipient.
Govelnmeni o¡
other thân non-taxäble Union tertitory ot
onli¡e recipient. loial authorityj
Goods Tra¡sport Agency (ii) ser-vices in ¡elation
2 GTA who has not Alty factory society, to alì. airc¡aft or a
(CTA) Services. pâid integrated tax at cooperative society,
vessel, inside or out-
llre rate of 72/o. ¡egiste¡ed person, body side the plecincts of
corporate, parhlelshp a port ol an ai¡po¡ti
firm, casu;¡l taxable (iii) hansport of goods
petson; located in the
taxable tetritory Reverse
Charge Mechanism in
-.-__oJ-P-.asi9l-89ls:
Services supplied by a .c àìi;tá" .f -; Ttre company or a

GST.
director of a company o¡ company or a body body corporate located
a body corporate lo the colporate in the taxable territory.
f-egal Services bv adriùàie. An indiv.idual advocate
includir-rg a senior located
A.t--ú'..*;;ti;" said company or the
i¡ the taxaÈrl'e
advocate ot fi¡m of ierritory.
l

q{Y9_"3t"::_____ Services supplied by al An insu¡ance agent Any person carrying

i¡su¡ance âgent to any
I

Services supplied bv a¡ A¡ arbitral t¡ibunal. on i¡surance busiñess,

tury business entity
|
person carrying on located in the taxâble
a¡bit¡al t¡ibu¡al tt a ocated in the taxable
I
business entiti¡- insu¡anc,e business. t"!t,jgty.
g{o-ry:-
I

9. Services supplied by a A recovery.rgent A barking company

Services provided by way Any person.
rrf sponsorship to any
I \rry body corpolate lecovery agent to a or a finarìcial insti-
body co¡porate o¡
I rr partnership firm barking company or a tution ol a non-
I ocâted irl the taxabie fi¡ancial Ì¡stitution o¡ a banking fi¡ancial
PartnershiD firm I

non-banking fi¡ar-rcial company/ located in

Services supplied by
the Centrâl Governfient,
Cenbal Governmeñti Sta-lè- - Govemment, lenv trusìnejs enhty company.
lhg-lÊr3þ-l-",!9r"!9ly_:.,
I locitea in the t,ìrâble Services supplied by a A person located i¡ Importel, as defi¡ed
State Govemment, Union Union territory or i ierritow. pe¡son located i¡ non- non-taxable territory. nt of
territo¡y ol local Local authority.
clause 26 Section
authority to a I taxable teûitory by way 2 of tlLe Customs Acl,
business
entity excluding- of trâ¡sportation of goods 1962 (52 of 1962), Io-
1. renting of immovable by a vessel from a place cated in the taxable
property, and outside India up to lhe ter¡itory.
customs station of
sl."-qs-çs r_L!4i1
 liii'l**, ihí1i¡ï11ffr Ë.i¡iärl,;:,,,i#:ii;,,,;,:l1il..riir:riili
r¡r, suvdri:Lrn'!¡ivvmsrú;bÈhm
Supply of servicês by an Autho¡ or music Publishe¡, music
author, music composet composer photog¡aph company, producer or
Praetichl Qtrestions
photographer, artist o¡ her, artist, or the like. the like, located in the Q. 1. Mr. S a supplier of goods, pays GST undet regular scheme. ffe has
the like by way of ta-\able ter¡itory Røoels¿ mâde the following outwa¡d taxable supplies iJr the month of Decemtrer, 2017:
t¡â¡sfe¡ or permitting the Charge Mechanísm ìn Pøt ticuli¡rs Amount (?)
use o¡ e.nio]¡ment of a GST. Inhjr-state supply of goods 72,O0,OOO GS'I @ l2y.
copy¡ight covered u¡rde¡ Intei-state supply of goods 10,00,000 CS-t @ 12y.
Section 13(1)(n) oI ùe He has also furnished the following. inforr¡ràtijn in respect of purchascs
Copyright Act, 1957 made by hil[r during the same tax period:
¡elating to original Pdt'tiqdaß Atnount ft)
literary, dramatic, musical Intra-stato .purchase of goods 6,00,000 (Exclusive of cST) ' GST @ 12%
or a¡tistic wo¡ks to a hlte¡-stât(¡ purchase of goods 2,00,000 (Exclusive of GST) GST @ 12y,,
publisher, music comparry, Mr. S h:a!l the following ITCS with him as on 7-12-2O77:
or the like CCST rcST ICST
Supply of serwices by the Membe¡s of Ove¡- Rese¡ve Bank of India.
{70,000 <60,000 {45,000
Compute the net cST payable by Mr. S foÌ the month of December, 2012.
membe¡s of Overseeing seeing Committee
Comnittee to Rese¡ve constituted by the ble by Mr, S on outwa¡d
Bank of lndia. Reserve Ba¡k of India.

æÊ$"+o

tation of Total ITC

.state purchases of goods

C(imiutãtion of cST ble from Electronic credit ledger

tGsT @ 12%
:: .:(t) .

6S,000
Lessi GST pafable 1,20,000
Balancel ITC avâ¡leble
lessr Utilize¿ lor lóst
Net GsliPava¡le
+ Unutilised mC on 01-01-2018 is 12000 (SGST).
Q.2. Grcysham & Co., a registered manufactu¡er is engaged in taxable
supply of goods. It procured the following goods during the month of Janua4,.
Determine the amount of Input Tax Credit available by giving necess¿uy
explanationI foÌ treatment of va¡ious items.
 ESHMAEqI:U¡¡-_-_ÍV-EFFIIJSB|ËS.
CHAPÍEn 3: IN@ME TAX CFìEDIr ¡ S7
Sol. ul.ation of Liability ãf
oi Fv-erEõT-Tiaders
bverest l rå.lerç
Laplops used in office within lhe factory
CGST ({) (?)
Truck used for lranspodation of ¡nputs with¡n ìhe factory
Intet-sfdle Sale:
Capital goods used exclusively for non bus¡ness purposes
Product A sold to deâler in Ahmedabad
Êlectric i\¡otors obtained fiom an Ljnregislered supplier on which tax
(IGST @ 12% on <50,000) 6,000
has been pâid by Greyshyam & Co. on Reverse charge basis
Product D sold to deale¡ in Ahmedâbad
Building l\¡alerial used in the construction of Offìce building
(IGST @ 18% on {30,000)
Capilal Goods used exclusively for makinq outv,/ard suoDlies to SEz un¡t 5,400
Lessr Eligible ITC on purchase f¡om Ludhiana
Sol. Computation of Input Tax Credit available ¿o Greysham & Cio. (T82,600t18+118) 12,600
LJnUt¡l¡sed ITC
f,200)
,nf¡¿-sfáfe Sa/ei
ProdlrctD sold within Haryana
Truck used for transportation of inputs wilhin the factory'1 (CGST/SGS'[ @ 9% each on <40,000) 3,600 3,600
Capital goods used exclusively fóinon,business pu¡poses*z Lessr Eligible ITC on local purchase
Elêchic ltlotors obtâined from an Unrpgistered supplier on wh¡ch târ
l{50,400 x 12 + 1121, ie., <5,400 2.700
has been paìd by Greysham & Co. on Reverse chârge basis'3 Net amount of CGST/SGST/IcST
Building l\.laterial used in construction of oflìce buildtng'a Lessr lGSl used to seloff payment liabihty of
CapÌtal coods used exclusively for niaking outward suppìies to SEZ unit' CGST and SGST in order 900 300 1
Total lnput Tax C¡edit available to Grevsham & Co. NIL 6û0
Working noles:
., a" l"' s..rio. îz1s¡1a¡1ii¡, rnp"t rax cÌedir is u"¡iur"la. rhe Moror vehictes and orher Q.4. The following are details of purchase and sales effected by tr4/s Crown
.onveyances ùe being used for rr¡flsport-¿rion Associates, a registered mamrfactu¡er under CGST Act,2017:
+, As per SRtion 17(5), no Input rax oedjr slull beolâdnissibt€
inpurs with in the facLory.
i¡ case of capjirt goods nor bcing (l) Pwchased Raw Material 'X'f¡om a local deale¡ fo¡ t86,100 (inclusive
,ìsêd fo; B,,cìñêqc . :-,:. : of cST @ 5%).
-3 MoJols acquÈädr&,orä a.rt.Uftesisrercd supptier on rehich rax lìâs beerì paid by
?ecLr¡c
Greyshâm & Co. on Reygrsè charge basis is etigible for tnpur rax credir.
(il) Purchased Raw Mate¡ial'Y'from a local dealer fo¡ T1,12,000 (inclusive
rr As per Section 17(5)(d), mC ìs not avâilabte on goôds or services uséd in construdion of aD of GST @ 12%).
immovable prope¡ty. (iii) Purchased capital goods ftom within the state to be used in the
*s Input tax c¡edit of tax paid on capital goods used for maknrg raräbte suppljes to SËZ manufactu-re of tãxable goods for t1,96,000 (inclusive of GST @ 12%).
admissible even though it is a zero rared supply. (ia\ Other Direct and Indirect expenses T58,000,
Q.3. Everest Ttaders, a tegistered dealer in Ambala, furnishes the following (") Take Profit margin @ 50/o on total cost.
details of purchase and sales pertaining to the month of Nove¡nbe¡: (oi\ During the month of October, TOVo of the prodrction is sold within the
state. It atkacts GS'r @ 120/0,
Calculate the amount of CGST and SGSî payable after utilising Inpüt tax
jB%) credit for the month of October, assuming thât no opening balance of Input tax
Product D purchased from Ludhiana (inctùìji¡ìg IGST @
] aZ,oOO (redit is âvailable.
Sâles made during.lhe month to a Deater of Ahmedabad I
Sol. Computâtion of Invoice Value

t
of Raw malerial X from a locâl deâler (<86,100 100 + 105)
All the above amounts of sâles a.re exclusive of GST, Compute the GST Purchase of Raw maledal 'Y'from a locâl dealer (T1 12,000 x 100 + 112)
Liability of Everest Traders, if any, for the month of November. Othe¡ direct and indirecl expenses
Total Cost ol goods manufactured
88,t,E S{MiræiJ¡ tiN\wERSfiy SÈFE4i..i. r .',j'..,,i., ... ::,,,,ì .,,
Computation of Tax Liability
Pattiallars
Outpul lax liâbility for lhe month of October @ 12%
(being CôST 6% and SGST 6%) F1,76,400 x t2%, ¡.e., <21,168)
of-
Lessi Eligible lnput tax credit in respectof p!tchases
Raw matedal 'A [{82,000 , 5%];/:e., T4,100
Raw material 'B'[t1,00,000 x 12%], r:e., T12,000

cred¡t lo be cåÍied forward

trnocnouRES
u+ 4.1 Tax Invoice
Q. 1. What is Tar( invoice? Explain the tJæes of tax invoices under cST.
AJrs. GfiT invoice ot tax invoicé is a commercial dqçqment tÌ¡at must be issuecì
by a seller to a buyer. Entities ¡e'gistered undeaCsf-.þ]¡lt issue GST inwoice fo¡
every tâxable supply of goods and services supþli.é{.{1ì$oices also serve as legal
docurnenLs, dema¡ding payment for !'oods öi sèrviòËs. Once payment is made orr
ìnvoicé by the buyer, the-l*X9{Ë}1.$t¿Ua'¡.""e as a legal docufnènt showirlg
11
title to the p¡operty puèh¿ised:
Thete øre møinly 3 tyiii{'òf tnooices under GST:
(i) Ta* Invoice. For taxable supplies either wittin state o¡ outside state a¡d
the person is reqrlited to collect a¡d pay the tax on such supplies.
(ii) Bill of Supply. Thè supplies on which the pe¡son is not requi-red to
collect and pay the tax. These are mairùy tssiedby Contposìtiorl Deûlers
afad Expørteîs.
(iii) P¿iyment Vouche¡. This voucher is requ.iÌed to be issued when the tax is
p¿lyable by the receiver of goods or ser'¡iceC or both. It covets fmpo¡fels
artd, Reoetse Chatge Mechanisnr of paying tãxes.
Q.2. What details are required to be rnentioned on a,GST Invoice?
¡s. Dêtailed rules and guidelines for issue of invoice and GST invoice fo¡mat
has been provided fo¡ in the GST Tax Invoice, Credit and Debit Notes ¡ules. As
per the GST invoice rrles, all GST invoices issued in India must have the
following details manda tori.ty:
1. Name, add¡ess änd GSTIN of the supplier of goods or services.
2. lníoice nu¡rbe¡, r¡nique fo¡ each firiàcial yeä which is a consecutive
ser.ial numbe¡ not exceeding sir<teen chalactert in one ot multiple series,
ccintaining alphabets o¡ nuûrelals o¡ special châracters hlphen or dash
a¡rd siash.
-

. :,:i r. i,,',:Lr..'-is-e.,,r:.jjìffiË.r"¡.,;, :
 ;::1,.å; r,r:. r' :::'-:.1;.
"ol.:ql¡ü¿:çÈff'i$dffiffü'*¡Ìçi(.:¡¡;1;ii;'||!;||¡¡...',,.ì.]::.!':i.].]¡:l,::i;]:l:i CrtnPIeR ¿: pnOCeOUA¡S r sr
3- Invoice date Sample GST Ta-x Infoic-ê-Fúrftãt-.
. 4. Name, add¡ess and GSTIIñ of,the recipient of goods or services. In case
the recipient is not ¡egistered u¡dei GST, then name and adcLress of the VERVE Fínanc¡âl Serv¡ces pvt. Ltd. TAX INVOICE
recipient and the address of delivery must be mentioned on the invoice if 6 Dhannamal Streèt,
lnvoice Number : 2017-40
Spurtank Road, Chetpet,
the value of the taxable supply is more than {50,000. lnvo¡ce Date : 20-07-2017
Chennai-600031.
5. lf a¡ invoice value is less than (50,000 then name and address of the TAIúIL NADU Payment Due Date ì 2O-O7-2017
recipient and the address of delivery ca¡r be mentioned, if required or GSTIN : 33AABCL398G2ZH
requested by the recipient of goods and service.
6. HSN Code or SAC Code for ihe goods or service. The requirement for Custome¡ : Ajeeth Kumar
mentioning HSN code o¡ SAC code on tax invoice has been relaxed for Billing Address Sh¡pping Address
Ajeeth Kumar Ajeeth Kumar
taxpayels whose turnove¡ is below (1.5 c¡ores.
6 Dhânnamal Street, 6 Dhannâmal Sheet,
7. Description of the goods or services.
Spurtank Road, Chetpet, Spurtank Road, Chetpel
8. Quântity ànd unit of measurement. Chennai-600031. Chennai-6O0O31.
9, Total value of supply of goods or seryices. TAIVIL NADU TAMIL NADU, INDIA
10. Taxable value of thê supply of goods or services taking into account
discou¡t or abatement, if any.
11. GST rate applicable along with the amount of CGST, SGST, IGST and No 4ry. Disc.
GST Compensation Cess payable by the recipient. I GSTRcgis,'¡Â$on - 1 4752 0 4L52 0 0 9 3n 6a 9 373.68 0
12. Place of supply along with the name of the State, in the case of a supply Steda¡d Package
in the cor.¡Ìse of inter-State uadè cii co¡¡r¡àêice.
13. Add¡ess for delivery of goods and services, if it is different fiom the Iaable Value
place of suppl)¡¡.rì'iìr l.,1. '
4152
. ri rr'

14. Whether tax is Þày¿ltle oh'ieverse charge basis. Ccnrral Coods ând Senices Tax (CSÐ 373.68
15. Signature or digital sig¡atu¡e of the supplier o¡ autho¡iseci State Goods and S€¡',,ices Tãx (SCST) 373.68
representative.
Q. 3. Explain the man¡er of issuing Invoices in GST. Intcgrâted Goods and Se¡vlces Tax (tCS¡ 0
AÌns. The nønnet of issuing lnooices in GST ìs øs follozus:
GST Coúìtcnsation Cess 0
1. Tax Invoice for Supply of Goods is to be issued in 3 copies as:

.'
Original Copy for the Recipient Totaì P¿yable 4899.36
Duplicate Copy for the Transporter
. Triplicate Copy for the Supplier Tlìank yoù lor yoùr business!
2. Tax Invoice for Suppty of Services is to be issued in.2 copies as:
. Originaì Copy for the Reòìpient Q, 4. When should a tax Invoice be issued under GST?
. Duplicate Copy fór the Supplier Ans. Time ol supply for goorls or service is when GST becomes payable.
3. Bill of Supply for bolh goòds ancl services ca¡ be issued as: -Issua¡ce of tax invoice is an impo¡tant element in determi¡ing
time of suppty. ln
. Original Copy for the Recipient most scenarios, time of supply of goods or service is th.e date of issuanie of an
. Duplicate Copy for thË.supp.lfer i¡voice or receipt of payment, whichever is earlier. If goods or services have been
supplied, then invoice must be íssued ¡¡/ithìn a period of 30 days. lìence, GST
i:rvoice_ should ideally be issued when payment for goods or services is
reasorrably assured or if the goods or services have been supplied to the recipient.
It is vety impo¡tant to note that the supplier becomes liable for remittance of
GST to the govemment on the issua¡ce of tax invoice, even if payment has not
been ¡eceived f¡om the customcr. Hence, if payment is not reásonably assured
and goods ot services have not been delivercd, an estimate can be issued by the
supp)ier.
 ,:: . .: '..I .. tì.:1ì,:,:::'¡,-,r :".::,i.:::t:::t.. ì::t::.1;ijiiÄiiiËfitäi a gA
9e Ë ffilE
SHMA.-ìqI{Ì1UNI\ÆmITY 1 .. . 11. r,:;' ll Ë-nijCeóùneS,

+ 4.2 Credit and Debit Notes Deta¡|6 to be copeted in Debít Note &nd Credít Note:
name, addLess, ancl GSTIN of the supplie4
Q. 5. When are Debìt notes and Credit notes .issued? nafu re of the documenL;
A¡rs. wlren goods supplied are r:efuûred o¡ when thete is a r.evision in the
a (ionsecutive serial numbe¡ contairrirg only alphabets and/or numerals,
invoice value due to goods (ot services) nob being up to the malk or extra goads
ur ique for a financial yea-r;
bei¡g issued a Debit Note o¡ Credit Note is issucd bv Ihe supplier and receivcr of
dâLe of issue oÉ such document,
goods a¡d services.
name, adcìress and GSTIN/Unique ID Numbe¡, if registered, of thc
A debit note oÌ q Cred.it Note c4n be issueil ifl l:tþo sihntions
-
1. When the aanoult payable by buyer to selle¡ dec¡eases. There can be a
rer:ipienu
name ancl address of the ¡ecipient artd the. address of delivery, along
change in the value of goods after tìre goods ¡.e delivered arld i¡vojce is issueJ
with the name of State a¡d its code, if èuch recipient is_ uruegistered;
by the seller. This ca¡r be due to a retum of goods oi due to the bad quality of the
sellìal numbe¡ and date of the corresponding tax invoice or, âs the case
goods delivered, etc. ln this case, the value of goods decreases due to r.hich a
nr,ry be, bill of su p¡ly;
Debit Note is issued by the pu¡chaser to the seller. The Debit Note p¡ovides
ilrt¿taxable value of goods or services, rate of tax-a¡d the amount of the
details of the ãlnourlt of money debited f¡ofn the seilers, accou¡t and also states
taik qedited or, as the case may be/ debited to the recipient'a¡d
the re¿son for the same. The reason behi¡d this is thàt Lt the purclìaser,s books of
si¡tnature or digital signatule of the supplier or hìs autho¡izeLl
account the seller will have a c¡edit balance. l/hen a debit note is issued the
¡e'P¡esentative.
credit balance of the seller's account decreases, thus reducing the selle¡,s balance.
Debit Note o¡ C¡edit Note caJI be issued anytime i.e,, there is no bime limit for
It mea¡s that that lesse¡ aûìoürtt is required to be paid by the buyer to the seller
issujrrg the Debit,Note. Also, Debit Notes and Credit Notes issue have to bc
to settle his Liability. Thus debit note ¡educes the liability for the buyer. The seller
declare<l ilr the GST Returns {iled'in the following month for the month in which
issues a Credit Note âs a response or acknolvledgment to the Debìt Note
docur¡enL is issuei{
2. When the amount payable by buyer to seller incieases. l4¡hen the value of
Tlrc detøìls l1øue to be decktred on ea ier of the foltoiaing døtes:
invo¡ce i¡creases due to extr¿ goods being delive¡ed or the goods ahea<1y . by the 30th of September follor.r'ing the end of the year in which such
delìve¡ed have been cha¡ged at an incbr¡.ect lesser value, a Debit Note is required
sù.pply was made,
to be issued- The Debit Note, iÌ this caie, is issued by the seller to the buyér and . the date of fili¡g of the ¡elevant a¡nual return.
the buyer as an acknowledgment to the receipt of Debit Note issues a C¡edit
Note. The ¡eason behind this is that i¡ the selle¡,s books of account the buyer will Note: The tâxliability willbe adjusted butno reduction in output tax tiability of the supplier
have a detrit balance. \À/hen a debit note is issued tlìe debit balance of the-buyer,s will be peñrined if the hcidence of tax and interest on such supply has been passed on to ârìr

accou¡t increases- It mearìs that mo¡e aÌrtourìt is requûed to be paid by the buyer
to seller to settle his liabitity. Thus, c¡edìt note f¡om the buyer increases his *"'4.3 Retufn
-the
liability. Q. 9. Explain different types of retu¡ns under GST.
Q.6. In which c¿ses a Del¡it Note is issued unde¡ GST?
AJls. C.rses |þherc Debit flote has to .be iss ed bA tlrc s pplìeri
(r) Original tax i¡voice has been issued and laxabÌe value in the invoice is
less than actual taxable value.
41!,rl]:
;Eoin1l.,:l ffi .r,#iÍiiii'{#¡!ii$l¡i ffiåå#tr$
(ii) Original tax invoice has been issued and tax charged in the invoice is less G STR-] Detaíls of outward supplies of Registered Taxable 10t' of the
than actual tax to be paid. taxable goods and/or services Supplie¡. next montl..
effected.
Q. 7. In ¡rhich cases a C¡edit Note is issued i¡nder GST?
Ans, Cøses xohen Crcdit ,tote is to be ¡ssøed. by s pplierl GSTR-2 Details of inward supplies of Registered Taxable 15ff of the
(Ð Orig,rrul tax i¡tvoice has been issued and taxable value in the invoice táxable goods a¡d/or services PerAon. next month.
exceeds actual taxable value. er'fected clai¡ni¡e input tax c¡edit.
(ir) Original tax inwoice has been issued a¡rd tax chatged Monthly retum on the basis of Registered Taxable 20,h of t]ne
exceeds actual ta¡ to be paid.
þ the invoice GSTR-3
finalization of details of outwa¡d Person. next molìth.
(iir) Recipient retums the goods to the supplie¡. supplies and inward supplies
(i?r) Se.vices are founéto-be-defi cient. aloflg with the payment of
Q. 8. What are the d€tails to be covered in Debit Note and Credit Note? amount of Lax.
{o
i:.ii

ll 94 r sHfvA r'Fl 4 uN\HlSITy sEBtEs .

CSfn+ '. ¡:,:i . .:ì:. CHAPIÈB 4: PFOCEDURÉ .¡.9Þ..

ll | Quarterly return for composrtion
I tarable person.
Composition sup-
plier.
lFt of the . a reconciliation sLaferrelrt, reconciìiiì¡] -ErEiãÌì-ê-of
supplies decla¡ed i¡r
¡nonth succ- tÌÌe tetutrr with the aucliteci a¡nual fjn¿r¡cial stutcm.ntl '
*¡ er:ding qua- . and other parLiculars as prescribed.
GSTR-s Return for Non-Resident foreig¡
If
rr drty taxable
any (axaÞle petson,
pelson, after. iurnishi¡t a
alter furnishirg â return
discovels
discovers any omission/
aÌ1y omission/
d I Ì.Ion-¡esiclent Tax- 20tt, of tbe incortect details (from results of aucl_it), he czur rectify subject to
I taxable person. ubl" iayment of
!."a91:_ _.... qetl5_ inteÌest. However, no rectification w l úe a|owed urtur'tt.," ã,:ut¿utu
csrn-o lnet"rn for it9* tor f ing of
il rnp"i---- lãrlri""- Input Setvice 13¿,, of retùrn.Ior the month of September or second qualter, (as the case
*9 :f the financiat year, o¡ the acruãl date oi rit ,g oi,tl.may Ue),
the
lDistributor. Dist¡ibr for
GSTR-7 Retu¡n foi authoiities deducting Tâx
r

"9i1t-glqlq,_ l"*T,lqjf "ut.l,u,,t

m
Deductor. 10úl of the
tax at sou¡ce.
'fr next montlì. hã!
GSTR-8 Details of E-com:nerce oper- let of the g1¡19"1.,.,re!
|Å "oppli"" operator
through e-commerce "?".t"ã ator/tax :öt¡tÈj;i.Itè
collector. next month.
eng th9 a_rnount of tax collected. rdâtÞ!
H GSTR-C A¡¡rual Retum ,ltt*:l
Registered Taxable 31st Dec, of
,,4
Petson. nrext furaucial
This rectificøtion zuill tot be allou¡ed u¡here results øre
:a
the tax øuthoûties.
from scnÈíny/øttdìt by
GSTR-IC | ¡i¡¿l Retut t Taxable person talithtu 3 Q. 11. What is Audit t y Tâx Autho¡ities?
i 'rwhäse rreg.istration ,nottths of
lbêq.,_b..eênr.òur¡end-
A\s. Audìt by T.trc Authorities:
the date of . The Com¡¡rissioneì of CGST/SGST (or any officer authorized
I ,.:..
I

.:erèd-ó¡ cancelled. cancellation by him)

't'l¡"" :''''
. .-
' ' or date of
may- conduct audit of a taxpayer. The frequency and ma¡mer
shall be as prescríbed,
of audit
..::j..).t:. a
cancellation . A notice will be sent to the auditee at least 15 tløys belore.
orde¡, which- . The audit shall be completed withjr.¡ j ffionths frãm date of commence_
GSTR-l D"t"tb t"**d -rppl,". to ¡" Person }ráving 9r9r
- i!-1"i91-
.
ment of the audit.
funished by a person having UIN ând claiming zqth on the
"f The CorìÌmissioner can extend the audit periocl for a
Íurther 6 months
T .nonth follo- with ¡easons recordecl i¡ writing. i
refu¡rcl. rving the Oblígøtions of the auditee:
¡onth for The taxable petson will be required to
I
I
¡/hich sbate- . provide the necessary facility to verify the books of accounts/other
I
nerìt is filed. documents as required, i
Q. 10.,who are,required to get Audited unau, csr
t^*l -__-- . to give information and assistance for timely cornpletion of the audit. I
Ans. Audit under GST is the process of Fi'rdings of Audit:
examination of recor.cls, returns àncl
oLlrer documerìts maiiìtai¡ed by a taxable,perso.. On conclusion of an aûdit the office¡ lj

cor¡ectness of tumove¡ decla¡eá, taxes paid,.efu¡rd

Th; p;;;;ro verL? fhe will inform the taxable person within g0
clu¡Àeianã days of'. ll
¡vâilcd, aÌrd to assess the coär¡tiante rvirh i'.pur tax creait . il
i¡" pr"rt.jã* .j
ää"', the fiJrdings,
Every reg.istered taxable person whose tu'mov.¡
a.rrirll-u firrur,.iuf y"o, . theiÌ reasons, and
c\reeds-the prescribed limit
[As per the l¡test GST ñ"i;,. ì;"" i_¡¡nuve¡ linrir . the taxable person's rights ¿nd oblig¿tjons
¡L¡ove T1 crorel shaJl get his accounts is
audited by Ci";L;; oì"rrrl,url, o, o If the audit results in cletection of unpaià/shorçaid tax olrv¡ong ¡efund o¡
Cost Accountant. He shall electronicallv
file: " rvrorig input tax credit availed, then à"-o"a urla recovery actions will
. using the Fol; GSTR 98 alongwith the reconciÌiation ir1i tia ted.
be
1:.an¡ual.rehlm
sLatement by 37st Decenber of the next Fina:rcial"yea¡,
. the audited copy of the aÌu1uâi accounts, ti
lj1
Ti
 s6 . ! : sHlva o€it{t uñvengrry senms ii,lrli:::_ iÌ:l':,rcr!ÃË,ìËäËìädCÊbúåes.;i : sz
SPECIAL.AUDIT iri.it
furnislì a retum for each tax period. Tlús mea¡s GST contrltues to p¡omote self-
Q. 12. When can a special audit be initiated? assessment just like it was ilt the Excise, VAT and Setwice Tax.
Ans. The Assistant Coûìl:rrissioner may initiate special audit, considerjng the
Q. 19. Ìryhat is P¡ovisional Assessment unde¡ GST?
nature and complexity of the case and in tÌre interest of ¡evenue. If during any Ans. Art assessee caÌr request the officer fo¡ p¡ovisional assessment if IÌe is
stage of scruti¡y/enquiry/investigation he is of the opinion ihat the value has urlable to determine value of goods and services or rate of tax aPPlicable.
not been conectly declared o¡ the wrong c¡edit has been a.,,ailed +hen special Unable to dete¡mine value due to difficulty in
¿ udit can be initiated. .Calctriating the t¡ansaction value.
Special audit can be conductecl even if the tâx pâyer's books l-rave already been .Understanãing whêthe¡ ce¡tain ¡lèe-ipiàiñìld. be included or not.
audited before. Unable to detehrine rate of tax due to difficuþ in-
will o¡der and conduct special audit?
Q. 13. Who . Classifying the goods ol services.
Àns. The Assistant CoÌ¡]¡issioner (Í'iih the p or approval of the . Identifying whether any notjJication is applicable or not.
Comrnissioner) car order for special audit (in writing). The special auclit $/ill Lre P¡ovisions of Provisional Assessment-
ca¡¡ied out by a Chatiered Accountani ol a Cost Accountanl noûlinated by Lhe . Requests for provisional assessrnents will be given in lvriting.
Commissione¡.
Q, 14. Wìãt js the t¡ñe limit for conducfing special audit3
' The p¡oper officer cal allow paying tâx on provisional basis at a ¡âte ol
on À vàlue specilied by lrim,
Ans. The auditor will have [o submit the report .i1,'ithin 90 days- This may be . Order will be passed within 90 days from date of request.
further extended by the tax officer for 90 days on an application made by the . The. taxable person hâs to issue a bonci with a security p¡on]ising to Pay
taxable person or the íìuditor. the difference between P¡ovisionally assessed tax ald finally assesse-{
Q. 15. Who wiu bear the cost of special audit? . tàx.
A¡rs. The expenses for exami¡ation a¡d auclit including the auditot's .Provisional assessment will be followed by final assessment. Ttte Proper
¡emune¡ation will be detetmi¡ed and paid by the Comûrissioner. officer ca¡ ask fo¡ info¡mation before final assessment.
Q. 16. What steps iâed to be takerron findings of special audit? Q, 20. r,44rat is the time limit for final assessment?
A¡s. The taxable person will be given an opportunity of being hearcl on the Ans. The final assessment will be done within 6 months of the provisional
fi¡dings of the special audit. assessnìent. This can be extended for 6 months by the Joint/Additional
If the audit results in detection of unpaid/shortpaid tax or w¡ong refund or Commissione¡. Howeve¡, the Comrnissione¡ can exLend it fol further 4 years as
i¡put tax credit wrongly avaiÌed then der¡ancl and ¡ecovery actions will be he deerns fit.
initiated.
Q.21. How a(e inte¡est on additional tax Payable and refunds calculated?
b 4.4 Assessnent Ans, The tax payer will hawe to Pay irlterest on any tax payable un<ler
Assessment means clete¡mì¡alion of tax liabilitT uncler GST law. Belolv
provisional assessment which was not paid within the due date. Interest pe¡iocl
a1e the
vaious types of assesstnents uncler GST. ¡,r'ill L.e calc'uiated fron the day when tax was fhst due on the goods/services
(and not the date of provisional assessment) till- the actual payment date,
Q, 17. Explain the diffetent types of assessments under GST.
Ans. T1¡pes of ílssessments utldcl GST ir¡espective of payment being made before or after final assessment Rate of
. Self-assessnent interesb will be maximum 18%.
. Provisional assessmenL If the tai as per final asseÀsment is less tha¡ the provisional assessment, tllc
. Scrutifly assessment taxable perSon will get a refund as well as ìlltgrest on refu¡rd.
. Best jutlgrnent assessment Râte of intelest will be maximum 6%,
. Assessment of no¡-fileÍs of retums Q. 22. I^rhat,is scruti¡ry. of returns unde( GST?
. Assessment of unregistered persons Ans. Theproper officer cal.t sc¡utinize the return to vedfy its coüectness. It is a
.
Suûu¡ary assessment non-compulse¡y pre-adjudication process. In simPle words, it is not mandatory
Only self-assessment is done by the taxpayet hh¡self. All the other assessmenLs for the officer to scnltirize a retum. Scrutiny of returns is not a legal or judicial
aÌe done by the tax authorities. proceedingr i.¿., no o¡der can be passed: The officer will only ask for explanations
Q. 18. What is self-assessment under GST? on discreparrcies noticed.
Ans. Every re6steìJã-ãxãiJïe'ferson shall himself assess the taxes payable a¡rd Q.23, I4/hat steps are taken by the proPer officer in câse exPlanatiorr is
satisfactory or when explanation is not satisfactory?
 !È:..r:':ì..;-::iitt..t:,:i, ,., ì : . ..-
ge,.".,s¡Uv¡..qe.-ùti¡j,.Nr.re,
,¡'
Explanøfion is Satisfactory. If the officer finds the exptar.ìatiorì
"":i::,Y": Ute taxable persoù
s.lnsractory/ will be i¡fo¡med and no fu¡the¡ aclion will be
trUhen Explanatìon ís not Satisføctory:
The proper officer wiII take action_
' person does not give a satisfacto¡y exptanarior¡
wirhin
::i::i?"tot" 30
. He does not rectify the discrepancies within a
reasonable Lilne (not yet
prescribed).
The officer nuy
-
. Conduct audit of the tax p¡yer q/s 65.
. St.ìrt Specia¡ Audit procedLrre
. lnspect and search the places ofty'sbusiness
66.
. Start DemaÌtd and Recovery p¡ovisions. of the tax payei. SpseEAL Faæv¡stoNts
æ=@e t+ 5.1 Taxability of E-commerce
Q, l. What is E-commcÌcc?
Ans. Electronic Comme¡ce or F,-Conrmerce is cìefi¡ed uncler Section 2(44) of
CGST Act, 2017 as the suppll, ef goods or sewices or botl.ì, including digital
productc over digital or eLectroììic lleLlvork.
Q, 2. Who is an E-Comrnerce opelator? .

Arrs. Electronic Corä¡nerce Opelatot or E-Comme¡ce operator is defined as

any,person who owns, qperates or manages digital or electtonic facility ot
platform for elecûorric cominelce.
'E-com¡ne¡ce
i¡rcludes all services o¡ goods sold over the intetnet or a¡y other
digital network. lt includes even services sold online. E-commerce ope¡atol is
definecl as any person who operates the platforrn. Eor etøtnple, Flipkatt, Aûrazon
are few of the operators whicl.r will fall uùder the definitìon óf E-co*^"r"e
ope¡ator. They own the platforrn for allowing traders to sell their products
onli¡e.
Q. 3. Is GST legistration conpulsory fo¡ an e-com¡ne¡ce opelatot?
Ans. Whether one has just sta¡ted theil po¡tâl or own ân existing e-coDlmetce
po¡tal, GST tegishation is compulsory,
SecÉion 24 of CGST Act, 2017 defines the suppliers who are requûed !o obtain
regiskation regardless of applicabilìty of Section 22.
Cla se(x) of Section 24, specifies every e-commerce operator to take
regishation.
GST has irtroduced the concept of Tax Collection at Sou¡ce fo¡ e-co¡nme¡ce
operators. Every e-commerce operator is required to collect Tax at source from
the payment made to their sellers selling goocls or services through portals
operated by them.
As per Section 52 of CGST Act, every elecr¡onic commerce ope¡ator, not bei¡g
:..'!9S,!ì..s*tlti4çliÞ¡:ur,trr;tnsiiiV*-n¡t9 , . irr .: . t,:.|:' ì.,,.)i::rlr.',1.:,..r. ll
an agent, shall collecì an amount calculated .1t such rate not exceeding 1olo, as
may be notified by tlÌe Goveûrment on the recomrìlendations of the Council, of
the net value of taxable supplies made throùgh it by oiher suppliers. Whe¡e the
conside¡ation with respect to such supplies is to be collected by the operator:
. Every e-commerce ope¡ator is r-equireci to collect tax at source (TCS)
regardiess of turnove¡ o¡ supply macle tlu.ough the portal.
. It is not appiicable if the operator is operating as an agent.
. The rate is not specified but it will not be more than 1%.
. TCS is applicable only vvhen the payr¡ent fron1 custome¡ ìs received Lry
the po¡tal a¡d then passed on to ihe selle¡, ,vhen the s-eller di¡ectly
.eceives payment fÌom the custoûLer, tlüs provision is not aþpücable.
. The TCS shoulcl be made on the net value of taxable supplies, iret value is
the total value of sales made on the poltal lrl??¡./s sales rehrm-s durirg tlìe
month.
Due date of payment. The due date to pay the TCS to governrnent is 70th of
eoery motth following the taxable mont:f.. For cxntnple, Tax coliected in the month
of Octobe¡ should be deposited by 10th November.
- Monfhly
details
retu¡n. Every operator is ¡equi¡ed to file a monthly return (regarding
of supplies) withiî 10 da\s afte¡ completion of month, il.re rehrrn contains
infor-mation such as details of outward supplies of goods or servicès or both
effected through it, including the suppìies of goods oisèrvices or both returned
through it, a¡d the amount ògllècted as TCS.
The monthly return cân be revised a]1y tine before fili¡g of retutn for the
month of September or filin! of annual return, whichèver is eailier. If there is any
mistake in return, and ou+)ut tax was paid less, the return should be reviseà
along with payment of interest.
Fol er.ample, retum filed for the month of January can be ¡evised befo¡e the
ope¡ator files the reûlrn for the month of Septembe¡ or a¡nual return. If annual
retu¡n is filed on 15th August then return of Jalìualy can be revised before
15th August.
A¡nual retr¡¡n. Every ope¡ato¡ also needs to file a¡ a¡nual statement
containing the details of outward supplies of goods or sewices or both effected
through it, including the supplies of goods o¡ sirvices o¡ both returned through it
and the amou¡t collected during the fi¡a¡cial year. Due date to file a¡nual
statement is 31st Decernber every year.
Details uploaded by E-coÍunerce opetatot should be matched with details
uploaded by-orrline sellers. lf any discrepaÌrcy is found in detâils,
retutn shoeld
::.I:"t:1d alter paying rhe extra tax and interest as applicable.as per
Section
52(8) of CGST Act.
Any officer not below the ¡ank of Deputy CommissioÌter
may serve a notice
to an operatot fo¡ following detãils:
1. S-upplies of goods or services o¡ both effected thiough
such operato¡
du¡i¡e any perioci: or
2. Stock;f g."àr-ñiã-ty lLe suppliers nraking supplies
rhrough suclr
.. :i,::,1:',,',',:::::::,t:t1t:..':.'..1i¡t¡lìlitii:,:rtil,,.:, ,¡i{$f;Ë,$,r!{¡¡.Égudioñs ¡ ror
ope¡atôr in the godowns or wa¡ehouses, by whatever name calied,
mâhaged by such operator and declared as additional places of business
by ruch suppliers, as may be specified in the notice.
OpeÌatof to whom notice is served is required to provide l}jre details zoithífi 75
days fron lhe date of service of notice.
If detaiis are not provided, then penalt).' which ma¡' s¡1s.¿ iô <25,000 may be
imposed on operator,
* _ __ '_.,
!Þ 5.2 l\nti-Profiteering
Q.4. Whàt do you mean by Ànti-profiteering?
A¡ls. A¡ti Profiteering is a check against profiteering - somettring which ought
to be ethical but is now a legal issue in Goods ànd Service Tax. -
As per Section.171 of ihe CGST/SGST Act, any reduction i.Il rate of tax on anv
supply of æods or se¡vices or the benefit of inÞut tax credit shall be passed on h.
tlìe recipient by way of commensurate recluction in prices. A]1 authority nla), L.e
constjluted by the govemÌnent to examine whether input tax credits avaiiecl b,v
any registered person or the ¡eduction in the tax rate have actually lesulted irl a
co¡nnensurate reduction in the pdce of the goods or services or both suppiied bv
hirrr.
Q. 5. Write a oote on Anti-profiteering authority,
Atl,s. Axtì-prcfìteeiflg Author¡ty, The power has been given to Central
Goverrurrent to collstitute an autho¡ity to oversee whethet the coqlmensrlraLe
benefit of allowance of i¡put tax credit or ¡eduction in the tâx rates have been
passed on to the final customer. Section 171(2) of the- GST Act provides fot'
establislnnent of an authority for an aÌÌti-profiteering clause in order to ensu¡e
that business passes 01ì the benefit of reduced tax incidence on goocls or se'-r'ices
or botlì Lo lhe consumers.
. Object, T:he National Anti-profiteering Authority shall be responsible for'
applying anti-profiteed¡g measu¡es in the event of a reduction in rate of GST oìr
supply of goods or services or, if the benefit of input tax credit is not passed on to
the recipients by way of commensurate reduction in pdces.
Coflstitutioi. Tlie National Anti-profiteering Autho¡ity shall be lleaded by a
senio¡ officer of the level of a Secretary to the Gove¡nment of India and sl-rall
have fou¡ technical members f¡om the Cent¡e and/or the States.
The Authority under section 177 of tl:.e GST Act shall have the following
monitoring functions:
(a) Input tax c¡edit availed by taxpayer have actually resulted in
comménsurate reduction in price of goods/services.
(b) TI1q reduction in pdces on account of reduction in tax rates have actuâllv
resulted in a co¡rimensu¡ate ¡eduction in the price of goods/services.
The Government has notified anti-p¡ofiteering authority (APA) which will
check any undue increase in prices of products of comPanies under GST. TlÌe
APA will work to cl.reck any undue increase i¡ piices of p.oducts by taxpaye¡
cor¡pânies t¡nder the GST regime.
*i
*1
9ii
,1.)ì
lo¿ s sHlv¡ ¡euri uruvens¡ry senus
ÌÌ1 ' Va¡ious authorities under cST law ,,ì.ì.r ......,:iri:,ìr .:
:i::::,, qHAryF?j!.s+c!ÁÈJRoVSrdNs ¡ loa
ø. urrti_p.ofit"..i." ìir,r",ro*O.*" with ar-r.18% irìteresi, ¡educe prices and if tlre cor.rsumerìs
of the followingr "nurr,
. cleposil the
not identifiable,
Nàtional A-n ti _profi teering Authority, amount i¡l a ConsUnte¡ t4,clÉ¡.e Funcl.
iil .
Standing Committee on A¡ti_profitáering, and In yet anothe¡ move, CBEC has issucd an adviso¡y to major colìsumet
. ma¡uJJcLurerc to ensule that price reLiuction ,f,ouía trt"'pio."-
ptocluct
State level Screening Conìmitiee.
_t¡ìe powers nave þeen lowe¡ed so that benefits may go io consume¡s.
rn¡'.hereue¡ ,ates
to take action are also listed as duties wherebv Restaura¡ts ale one
lj rcducfior! refund of profit, recovery pe"aty itc¡¡ order prjce such examples .i /he¡e there are compllints ot norr_po*i.,g''oiihe benefit
of
rcgishation. The authoritv constituted'b¡Centrâl ". ",r;rr'ä."flarior., of cs,f consur''eÌ.s. Except ¡estâurants in big lìoteìs, GST has
to
il kì impose a penalty in cáse it finds that ,f; prì""
C"*r*""ri'ì"iff nave pon,ers jrÌst 5% with no ir.rput tax creclit béncfit.
úeen lJwe¡ed jiom 1g% to
rod_uced consequent to reductiorÌ jn rate
ir"*g ïfrïrg"a 1.,u" ,.ro, t
of tax'o¡ ¡f._li* ài?ip"a tar< cledit, ""r., Companies will have to ensure that l.ctaile¡s ancì dist¡ibution
iì Lìurirìg the two yeârs of initial 'Airtilrofiteering cST cut benefit to consume¡s l,\,ith irnmecliate effect. N.
chain pass orì the
;ti i"ao êSi ,"girrr" a"L"f *iät" It
\r'tJìority_(ArA) -tra¡sition
wir¡ step in arìd nray is tlìe.co¡npany's responsibility [o erìsuÌ.e that its eÌìti¡e
cÌ.rai¡r "ttowed.
'.1
ask businesses tt,"t"nuu" no1purr,..r o,, iutt retájl fol]ows its
1...'cfit< of reduced t¿x burden to cånsum".s di-¡ectives on prj.ing. If a h.ader is not >" t.g u goåJìi r"rri."äviT, ,n..,
,o rp ilr .,,-.1'rr.^;ì,i tr," ,r,"
itt1. ¡çt¡. "lut" ",iiì jj-.ie rvlÌl lavJ toiespond to itre Ànti_p,orit.eri,,g
il Anti-Profiteering Ar¡thoritv (ApA) shall âct âs a
monitoring and r¡:gulôtory
:ïÌl::lÌfj,l? .co,ûpany. ,rr
¿\ur/lotrty. Ìn ttus ¡ction ca¡ only be takcn againsi organized
plavers as they arã
lì .:i,hî':? to curb anri-profiteerìng practices ;;; tLre oncs wlìo decicle MRp.
rì Tlrr. APÄ shall lrave powers to: ;;;;;ã". cs1 ,.si_". The setting up of NAA has been expecrited in viel^, of
. the fact .ìat nìany
¡l Make company reduce the prices. t¡ade¡s and businesses have faiÌed to pass on Lhe benefit
:l to corìsunìers. Activation
" Make company refund the money to the consumer
arong with inte¡est in the,ta\^r rni¡¡ht have Lreen avoicied, noá t uJ" ana ina,,"t y
ii l6'á p.a. @ .::",1ï on
passed ï.;-':t:l
the elimjnated cascaditìg of Laxes to consumers by
. Orcler company to deposil the refu¡d amount way of lower prices.
ü Fund (in case the buyàr is not identifiablei
itì the CorÌsumer. !\elfâr.e t+ 5.3 Avoidance of Dual Control
.Impose moneiq¡y.. A taxable- person is requirecl to pay botlì CGST and
¡ þ-énalty, equivalent to amount..involved i;n unclue SCST. Thus, for same
profiteering. .. i:.,r I L¡a¡saciion, he wiÌÌ ha¡,e to face tlyo authotities. .fhjs will
make his liJe rniserable
I
. Cancel regisfratio¡i óf .re
assessee,
as t\vo, ¿rutlrorities mry fake difÉcrent vie.,. on saùle
tlansactions. He *ill face
Orders of authority may be for any of lhe following: wrrn cruar assessments, duar ¡udits, dual de¡ra'ds e|.. The¡e
. Reduction in prices. revisions, tç1'o reclifications and t.n o appeals.
will be tno
I
. Returrring money to the customer along witi1 the
1

Such dual control is unwo¡kabÌe. A taxalrle person shouìcl

I
. Depositing money in custolner welfa¡e fund interest. be unde¡ one i
autho¡ity - either. CeDtre or State. This 1.¡as been ugre"¿ ,,por,
I
not clain it or is not identifiable.
ill case the custorne¡ Llocs Priìrciple of avoidi^g dual conL¡or 'Howe,]e", ; èST Coun. .

I is Ìaudabre. io* uir.,r"^tio. or

.'
Imposiljon of penaltv eouivalent to the amount oi profiteerirì8. taxable persons la,ill be made bet\^,een State ancl Cenh.e
is not clear.
I
ncell¡tion oi r"gi#udor,.
Ca IL seems such bifùrcation tvill be done on rarrclom
Uuri". ti tf,i" wiÌl leâd to
Union Cabinet has on 16ù November, Z01Z chaos; ln.case^ of taxable persons having multi_state "ã,
Ir""irl"*"r,'ìï"y
clea¡ed the setting up of GST ti
\'.rl.ional A¡ii-prþfiteednt Aurhority (Naa). The posi
oi Cniirliä'u.,a .^u¡n¡"r. assessed by state Governnìent autho¡i'lies in sonre
states
-"y U"
uí¿ u,, c"rlo",
ii

' 'i the-¡uthor¡ty lì¿ve beefl createcl covernmenr aurlÌoriries in sorne othe¡ Srates. This _iiL r"J'
þaving rhe _"y f., be functi.,,ral _ã, aii"riîi
soo. Ideally Govemment shrourd_have sãt r.JÁa "r,i-låriiy'io author.ities taking clifferent view orr sar¡e h-ansactions. Ideally,
,' lhe ul timate s uJferers of priee-hjJ<e jnlla "p ^".n ""ìl,"']r" ..,.,".,,o"r,
tion and ;;; lìâving multi-stare businesses (including i"l""o*, i;";;;;J)
taxabie persons
and those
Q. 6. How-is. anti-profiteering authority, an authority iã" ;;;;;;""r*S. predorninrnt¡y in e\port and import fierd shourd be
Ans, Authority to benefit Consumers. ffl" Nuil""¿i"î"ilì --¡,r,ti_profiteeri¡g
"or,",rrrl..r¡ Government
under .oni-or ol c"nt ul
is
'1ùthority â,.' assu¡¿Ínce to consunìers. rf any lndustlies and businesses restricted to one State should
"orr"rr*",
¡".i, ihiìenerit o¡ tax ^ :Gove¡nrnenL, This wilÌ ensu¡e avoidance
be under conbol of tl
on, he.can .o-itui,, t. rh" .;;i,";;;. rh" bJyl; State .."tfl"tlng- !t
:_Ì:"",:ij:,"_:.::::^c,pj"^"1:
ììrnaated to ensure that the benefits of GST ¡ate ¡ecluction is passed authorities on sarne issue. "f by tax
on to "i"ws il
cor'ìsulners.
The five-membe¡ anti-profiteering authority
¡+ 5.4 E-way Bills
will have poh,er to ask those not Applicability. Every registerecr ll
p.ìssirÌg on the tax benefit to rehtnihe unduá who causes rnoveDlent of goods of
profit earniã io ^person
consignment value exceeding {50,000 ll
"or,".,-u* "r.r,g (however the registereà pe.son or, u" th"

,$i-.ffifi.Tl-ïi,:.fiffi

104 E SHIVA DÈLHI UNIVEÊSMI SERIES
casè may be, the hansporter
-ay,at his option, generate and carry the e-r,vay bilJ
even if the value of the consignment is less thân t50,000).
P¡ovided also that where the goods a¡e hansported fo¡ a distance of less than
ten kilomekes withlì the State or Union ter¡itory froûr the place of business of
the consigno¡ to the place of
of busi¡ess of the transþorter for furthe¡
tra¡spo¡tation, the supplie¡ ot the
transpo¡tatron/ the transporter may not furnish the details of
conveyance in Part B of Fotm GST EWB-01.
FORM GST EWB-01
Folm GST ËWB-01 contains two palts
as follows:
1. PART A:
INFORMATION ABOUT THE GOODS
. GSTIN of Recipjent . pfàce ol Deljvery
. lnvoice or Challan Number . Invoice o¡ Challan Date
. Value of Goods . HSN Code
. Reason fo¡ Transportation " T¡a¡sport Document Number
Every registered pelson who causes movement of goods of consignment
value exceeding T50/000-
(i) In ¡elation to a supply; or
(ll) For reasons othet thLn supply; or
(iil) Due to inward supply f¡om a¡ urúegistered Þerson,
shall, before comûrenceinen[.'of èuchr.mòveñeiÌt, fu¡nish infotmation
relati¡g to the s-aid ggOàS.in pait a of.Èorm CSf n¡¡n-01, elect¡onically,
on the cornrnon poÍtai.
2. PART B: INFORMÀTION RELATING
To TRANSPoI{TBR
. (VEHICLE NUMBER)
Where the goods ate hansported by the registered person as a consignor or tlìe
¡ecipient of supply as the consignee, whether in his own conveyance or.a húed
one or by lailways or by air or by vessel, the said pe¡son or the recipieÌìt may
generate Lhe e-way bill in Fotm GST Ew.B-01 electronically on the common
portal after furnishing i¡Jormabior.r út pa B of Form CST EW;-01.
. 3.-l\¡he¡e the e-way bill is not generâteJ ttñder sÛb-tulp 12) and the goods are
handed ove¡ to a t¡arìsporter for transportation by road, the ¡egisteÌed persbn
shall fu¡nish the information relating to the tr.ansporter in part B of Form GST
ËWB-01 on the common portal and tire e-way bill shall be gener¿red by the
transporte¡ on the said podal on the basis of thc inlormatìon furnished by the
registered person in Pnrf .4 of Fo¡m GST E\{B-01.
4. Upon generation of the e-way bill on the corÌx¡on po¡tal, a unique e-way biÌl
number (EBN) shall be made available to tlle supplier, the iecìpient aÌìcl the
t¡ansporter on the common porLal.
5. Any trar¡spotter tra¡sferling goods from one conveyance to another in the
cou¡se of hansit shall, befo¡e such t¡aisfer and furLher movement of goods,
updâte tlìe del.ails of_ionveyàrìce ûÌ ihe e-way bill on the common poitaì in
FORM GST EWB-01.
P¡ovided that whe¡e the goods are transporbed fo¡ a distance of less tha¡r ten
ïiiil:[Ili'dii$t1úÉåi#i#åffi
'.:..
kilonetres within the State or Union teritory ftom the Place of business of tire
tlansportù finally to the place of business of the conbignee, the details of
conveyance may not be uPdated in the e-way bill.
FORM GST EWB-02
6. lnof muitiple consig¡ments are intended to be tra¡spo¡ted i¡t one
câse
conveyance, the tranÀporter may indicate the serial number of e-way bills
gene¡ated i¡ respect of each such coûsi&lg1sllt -e-lectronically on tlìe coûì1-l1ot]
portal and a consolidated e-way bill in FORM GST EWts-O2 may be generated
by him on the said comrnon portal priol to the movement of 8oods.
FORM GST E"T IB-0l BY TRANSPORTER '.-...-".
l\4'€re the consi8nor or the consignee has not generated FORM GST EWB-01
7.
in âccordahce with the provisions of Àub-¡ule (1') ard the value of goods ca¡lieLl
in the conveyance is more than fifty thousald rupees, the transporter sh¿\ll
generate FiDRM GST Et ¡B-01 on the basis of invoice or bill of supply or delivery
ãhullury ur the case may be, and may also generate a consolidated e-way bill in
FORM GST Eç\E-02 on the coÍimon Portal prior to the movement of goods
CANCEILAîION OF E-WAY BILL *""*-......
8. Wherir an e-way bill has been'generated under this rule, but goods are either
not hañsplorted o¡ are not transPorted as Per the details furnished in the e-way
bill, the e-1;vay bill rnay be cancelled elecfronically on the common Portal, either
directþ or through a Facilitation Centre notified by the Cominissioner, within 2'1
hou¡s of glèneration of the e-way 8i11.
transit
P¡ovide{l that ar.r e-way bill cannot be cancelled if it has bèen verified ir-ì.
BILL
Under ci¡cumétances of an exceptional nature, the goods caru1ot Lìe
t¡ansported within the validity period of the e-way bill, the transPortel may
generate anothe¡ e-way bill after upclating the details in Part B of FORM GST
EWB-01.
Note: lor the pu¡poses ol this rule, the "relevant date" shall mean the date on which the e-lY¡\
brll lús lreen generat;d and the period of validity shall be còunted ftoñ the time at'lvhich the c{!a\
bill lìas been eenerated âlld ea¡h dav sha[ be count€d âs twenty_fou¡ hours
ACCEPTANCE OF E.WAY BY RECEIPIENT OF GOODS
.,,,.,.,
9. The details of e-way bill generated under sub-rule (1) shall be made
available to the recipient, if registerecl, on the coÍnmon Poltal, who shall
communii:ate his acceptance or rejection of the consignnent covered by the c-
way bill.
 I
I

roe ¡,,qfryerhlilfrÑffi,áJd,,È3ii'qu:lÌ¡tir¡,:;i.;f,,,.:.,j':¡.,,:r.,.,,,...,.:,.,,..- ..... .r. . .

I .. : . .r : ::, : .ì : . .
:. :_ì.:.,.
10. Wherç the re-cipient refe¡¡ed to in sub_rule c444EB-5j-sllc'^l P'ovlsloNs ! 1o7
1f¡ ao"".,ot Irr; As already seen, the conce¡rr or
acceptarÌce or rejection wjthin sevehty two
hou¡s of the aetaifs "å_rr;-"";
being *"rl ,. thu j;;;ì;'.;;;îi;ä;: ratirìt or suPPlics ¡equires the supplies
¡vailable to him on the cbr.nrnon portal, it shall ¡nade '*o as
be dee¡nJ tlLat he has csr i¡iì'äi" uy
i#ri!;iffi: ij:j;lï n:,ll
l the suppries ro be'r¡ec or
¡ccepted the said details.
-1't. l \¡'l
rrre raxes parct on tÌìe srrnpries
Notwithstanding anything contained in lhis ruie, lr¡hicrr a-¡e zero Ìated are refunded;
requrreat to be genelated_
no e-vyay bill is (b) The credit of inputs/in¡ir cp¡r
ices is ¡llowed;
k) l:_.:. the goods bei¡g rra¡spo¡red are specified irr Alnexlrre of Rule lc) \4+rerever the sup¡ri¡s5 ¿¡¿ e,.enr¡ted,
payment of tax, the taxes
or the supplies Jre made without
13s(14); inPut' or i'ìPut services i.c. the
goods are bei¡g
:n" goorìs are being rransporred by a non_moto¡isecl conveyalìce; -,
unu.rirised r,''p", oì.,"iii :iirå::::
{c) :'T1ï"
Í11 where the transported from port, airpo:,f. air cargo
rrìe p¡'ovlsro s for tlte r.efund
of-unutilised jtÌput c¡eclit aÌ.e conlatned
expr¡narion i,r settiorl s4 oi rlìê cGsT i¡ the
complex and land customs _the
statiìn to an i¡¡land contuinir'ã*o,
o. u "RcJutLtl' ittchrdes refwrl A.r, .ä,;a 20r7,;rri;;;ilJ
.rs beiow:
. c.rntairrer.freight staLion for clearance by Custùms; ¿nd . of tnx ¡,
t)ottt at olt iltputs or itryut set.úi.cs,,.::t¿,,:": .Ï:,":':':! s-tryctits. of gootts al sct?i.es ar
(r7) ùì respect oJ movement of goocls
withi¡ such areas ad are notified u.de¡ tnt o, ttrc stLppty of
clayse (/t) ot sub-rule (14) of rule 138 oÌ the Goods
and Selvices Tax Rules s;od, nsn:,,.à"a n'.a: :::i::î,::i':i:/,!,,l,inì,:::j,';,,,.",, :ø,,0,",
artl¡l ,t: ptouide¿ u .ler suLtl>ettut, i:t,
"of the concemed Statê
Tlr.s, eve'r if a suppry is exctìpiecl, the crecrit
r.¡ 5.5 Zero-Rated Supply m.rkilrg zero-rated suppties. A registered p"r";";;ä;
of input tax .ray be ava ecl for
'ätuä
As pe¡ Sectio¡r 2(42) of the CGST Act, claim refund under eiLher ;;o - -'" ,,rppty *r,
a supply is said to be exempr, oÉ thc followjng op(io.,", ,.r"rnå*-
.2077-,
nil rate o-f dury o¡ is specifically (n) he may_ supply goods
I5l^.t.,,i:iï" ;.t;ification o¡ or Uãtn-..iä,uo.a or Lette¡ of
":p-:-:lÌl *" pu¡view of tax (i.e., â non{ST supply)."röí"J;;-;
Bur if a good j"
or service Unde¡taking, """"tå"'",
subject to such conctitiorís, .uJ"guur;.;;
'|
Àcr'¡Fìre(l,"r.rrorn pa),ynent oi tax,
càlnot be said that it is ze¡o i¡ted. rhe reason
ir. may be prescribecl, withour payrnent nf t ,*gr;a"J -.;l'.laim
procedure as
iu;< ,ef,r¡rd
l;.^::-]l::^: jïl
q(x,cr or prov¡slon otT:_ïIï:, ""q
rper se¡vjces whjch go i,lto ih" n*ting or rn" of unutilised input rax credi4 or
(b) he may suppþ goocrs or se¡vices or both,
serviae llas aheady suffered tàx a¡d o¡l) the final producL
exempted. Moreover, wn"è-¡:,*,èr ouçut is *;;r"d" is subject to such concritions,
,* i";" äo not allorn, :âJeguar+ and procedure as may be pr"r"iib"d, on payment
àvaiiment/utilisarion of ¿ìédtt on the i¡puts i¡tegrdtecJ tax arìd claim refuld of sLrch t¡x'paid of
of the exempted output. Ttrus, irl a true iense,ttre +d å;; "är"""'"""0 for.supply on gooá; o,. r".ui.". o,
in accoÌ.clarìce wittr rhe pro,Jìsions .?-õ;;;. s4
Though the output suffers no tax, the irìputs a¡d i¡put ""f."s".iiå"i **"ìr zero rated.
""ppìy iuu" r lo-i1]_supptied
CGST Act, 2017 or. the ¡ules made the¡euncle¡. of rhe
and since availmenr of tax c¡edir on inprt a,rff""u¿,.*
i" ,roi pur^ir-i"ä jIüà. u
As per section s4(3) of the CGST Act,2012, any
,nut ised input tax credit in
bo the_supplier. The concept of zero ratilrg "ia" of suiplies "*u" "o"a zero ¡ated supplies can be ¡efunded. wherever
aiÁs io co¡¡ect this *áfl
anomaly. the option of Bond / LUT. "r.lppil* "r""*ade by using
Q. 7. What is Zero Rating? Q.8. What is the diffe¡ence befween ze¡o_rated supplies and exempted
,n", the entire varue chain of the s.rD¡,ry is supplies?
*:; fror.
exerì1pt ll^,:1".-'*lgl^1"_T:11,
tax. This means that in case of zero ratirg, noi only
is th";;ip.i
Diffe¡ence between zet,o raúed sû lies and exe
.^rLnr¡t rrom
cxe*pf flom payment ot lies
tax, tt'"¡t
l!of tax/ there is1..,., rrr" on takingJavailing'cr"¡lì
no bar
1"*, makins/providins iaking/availi¡g"credit .iìJ""
^.-,,iri-ï..,-,,"::'-j^,,.
,r.l" å"ip"ï
of. t;es
"
Zelo-rqted
il::i^:::::..ir,:r-Ì11" such a.r E\crnpt supply" ,nean, ,rrp¡1-ol "Zero-rafed supply,, shall have tne
lrpproach would i¡ true sehse-t"" make the goods oi iuro "Ïpj¡,.
ruiå. anv goods or services or boilì \.vlú.lr
.As.
p.er.the G_ST law expqús
"rê-¡nea¡t to be ""*i"""
zero ¡ated. The zeto raling athâcts ril raLe of tax o¡ wlìich r¡av
n-reanrng assignecl to it i¡ Section 16
¡rrinciple is applied in retter ùd spirit for u.,a..rffti"" t,, s¡2. rt," be wholly exempt from tax unclei.
retevant provisions are contai¡eå i¡ section r6i1) "*po.t" .f ;h;ìcsiA:; ?01z' which Section 11 of CGST Act or unde¡
st¿rtes that '-'zerc rated 6upply" r ealirs any of the'íolowing
scrvices or both, namely: ";;pñ; of goods or Section 6 of the IGST Act and
(n). export of goods or services or botþ or .BsÞ4:..-1o":!elub"!_q9!ply
(2,) supply of goods o¡ se¡vices No tax on the outw¿rd Ño joi o,itt," n,rn"ui¿irpplì".;
or both to Special Economic Zone supplÌes, howc!cr. lhe input"*u,"p't"ä i.,put
developer or a Special Econornic Zone unit. suFptics suppìies also to be tax free
uscd for making c\empt supplicç to
be tê\ed.
 1o8r. ! I sH iADËLiìi,uñ¡iÈ¡.ériV seÊÉs:ì,,
Credit of inpùt tax needs to be Credit of input tax may be availed for
rirl::¡:¡¡,*rîl¡iTÍäiäiil;îËlis:tÊ,. .oe
reversed, if taken. making zero-¡âted supplies, even il 2. Issuing an inwoice without making supply;
No ITC on the exempted supplies. 3. Not payìng tax collected for a period exceeding 3 months;
such supply is an exempt supply ITC
4. Nob payìng tax collected in contravention of the CGST/SGST Act for a
allowed on ze¡orated
period exceeding 3 rroz flrs;
Value of exempt supplies, for Value of zero ra es shall be 5. Nolì deduction o¡ lower deduction of tax deducted at source o¡
appo¡tion¡nent of ITC, shall ir.rclude rìoL
added along with the taxable supplies depositing tax deducted at soulce under Section 51;
supplies on which the ¡ecipieht js fo¡ âppo¡tionment of ITC. 6. Nolh collection o¡ lower collecti.qn of or {ro¡f:pa)¡lnent of tax collectible at
liab¡e to pay tax oñ reverse charge
source u¡der Section 52;
basis, tra¡sac-tionsin securities, 7- Availing/utilizing input tax qedir withdut achial receip of goods and/
sale of la¡d and, subject to clause
or:eryices;
S. Frahdulently obtaining any refund;
9. A'/âiling/dìstdbuting input tax oedit by a+ hput Service Distributor in
Arìy pcrson engaged exclusively in Ä pcrson exclusively making zero viollation of Section 20;
,
the busi¡ess of supplying goods or ràtecl 5llpp]ies m.ry ltave to register as 10. Furnishing false i¡formation o¡ falsification of financia_l records or fur-
services ol botl-r tltat âÌe noL ¡elunclsof unutiÌisecl ITC oi inte- nishing of fale accou¡ts/docurnents with intent to evade payment of tax;
liable to tax or wl-rolly exempL from g¡ated tax paicl shâllhave to be 11. FailuÌe to register despite being liable to pay tax;
tax under the CGST o¡ IGST Act claimecl. 12, Fuhishing false ifformation regarding regiskation pa¡ticulars either at
- "¡illtg-t-b"]BÞ!" rçEt[egql!9 the tirne of applying for registration or subsequently;
A registered p"tron r;ttit;g No¡nral Lax i¡voice sh¿ll be is:uecl 13. Obritructing o¡ preventing any official in discharge of his duty;
exempted goods or services or boLh 14. TÞnspo¡ting góods witlLout prescribed docu¡¡rents;
shail issue, i¡stead tax of a 15. Suppressing tulnoveÍ leading to ta-\ evasion;
invoice, a bill ol 16. Failiu¡e to maintain accoults/documents in the ma¡ner specified in the
Provisional ¡efund. As per Section 54(6) of the CGST Act, 2012, gO% of Ihe ,{ct or failure to retain accou¡rts/documents for the period specified in
total amount of refund claime<l, on account of ze¡o-raLed supply of goods or thc Act;
services o¡ bôth made by registered pelsons, rnav be sanctioneá òn a próvrsional 17. Faillu¡e to fu¡nish information/docurnents required by a¡ offìce¡ ilt terrns
basis, The remaini¡g 10% can be refunded late¡ after due veriJication of of the Act/Rules or furnishing false information/docunLents during ihe
documents furnished by the applicant. course of any proceeding;
Q. 9, Is the P¡inciple of Unjust Eûichment applicãble in case of zero-¡ated 18. Supplying/úansportingfstoring any goods lìable to confiscation;
supplies? 19. Issui¡g invoice.or doculTtent using GSTTNI of a¡other person;
20- Tafhpe¡i¡g/dest¡oying any material evidence;
_an¡ The principle of unjust eruichment shall not be applicable jn case of 21. Disposing of/tampering with goods detained/seized/attached under the
refund of taxes paid wherever such ¡efund is on accounts oizero rated supplies.
As per Section 54(8) of the CGST Act, 2O17, t:ne refu¡dable amoun¡ i? such Act.
amount is ¡elatable to ¡efu-rcl oÉ tax paid on zeto-¡ated supplies of goods or Q. 11. What is meant by the telm penalty? State the general disciplines to be
services ot both oì on iÌlpLrts ot inFut services usecl in making sirch zã¡o_rated followed vrlhile imposing penalties, i l

supplies, shall insterd of being crcdited rô rhe l-u¡d, be p¿id to"the applicàrt. A¡s. Th¡¡ word "penalÇ" has not been defined in the CGST/SGST Act but
judicial pronor.rncements a¡d principles of jurisprudence have laid down thê
rt 5.6 Oìfences and penalties natuJc of a pena-lty as:
Q. 10. Discuss the offences listed u,/s 122(1). I . a td¡nporaС punishment ot a sum of money funposed by statute, to bc
Ans. The CGST/SGST Act codifies the offences a¡d cenalties in Chapter XVI. pald as purLishment fo¡ the commission of a certain offence;
The Act lists 21 offences i¡ Section 722(I), apaft Ír.oå the penalty prescribecl . a F unishment imposed by law or contract for doing or failing to do
S-""d.L10 for availilg compounding by a taxable p".sor,'*ho i"
T1:l for it. The
eìigible
,.,ot sonìething that was the duty of a pa¡tj¡ to do.
?id olfences a¡e ¿s follow¡: The generul discíplines to be lollolþed. øhìle irnposing perø.Itìes: .

1. Mak;ng a suppLy witlÌor¡t invoice or.wjth f.ì lse/ i¡correct i¡voice; The lery of penalty is subject to a certain disciplinary regime which is bascd on
iLrrisprudeflce, p¡inciples of natulal justice and principles governing intemational
Þr
il
i,:i

il
I 10 ¡ sHrva Dall-ù_ñwÉìsìy sÊFrEq t:...:t:,.: .:- :.ì;_::a::::tl ll,,:r i .,.iì,a;r.:,:. .:. i.,,r,ct-tAiú-fEF:6isFEctaLpRovisi:iNs'.! 111:rl
ir t¡ade a¡d agreements. Such general discipline is ensh¡ined i¡ Section 126 of the Q. 14. Is any pènalty prescribed fo,
-p"iLr-o-'tfì
úrun tt t""u¡1"
fi Ait. Accordingly- pelson? ".,y "
,i . no penalty is to be imposed without issuance of a show cause notice and .Ans. Yes, Scction tr22(3) provides for le.i.y of penalty extending
to {25,000 fo¡
+') proper hearing in the matte¡, affording ai1 opportunity to lhe pe¡son any person who-
'l proceeded against to lebut the allegations levelled agai¡st lìim, . aids or abets â¡y of the 21 offences u/s 722(7),
¿ii
. the penalty is to depend on the totality of the facts and cifcumstances of . deals in any wây (whethe¡ receivin& supplying, storing or transportmg)
5l the case, with goods that ate Ìiable to confiscation,
j
. the penaltyjmposed is to be commensurate with the cleglee and severity . knowingly receives or deals with supply of services i¡ coñt¡avention
of
of breach of the prowisions of the law or the rules allegéd, thc Acl
. the nature of the b¡each is to be specified clearly in the o¡der imposi¡g . fails to appea¡ befo¡e an authô¡ity who has issued a sumÌron,
t the penalty,
. " fails Lo issue any i¡voice for a supply ôr accou¡t for any invoice in his
ii the provisions of th€ law under which the penalty has.been imposecl is to books of âccounts,
be specified. Q. 15. What shall be the penalÇ for a person who contravenes any provision
t Q. 12. Whêt ate the citcumstances under which no substantial penally has of- CGST Acl, o4 Rules for which no sepalate penalty has been imposed?
been imposed r¡nder the GST law? Ans. Secfion 125 of the CGST/SGST Act p¡ovides that aÌry person who
Sectiott 726 specìÍies th.L, ifl paltículaf, rto substt¿ntiol peflalty is to be contravenes any provision of the Act or the rules made u¡rde¡ thij Act fo¡ which
^'rs. for:
inposed no separate penalty has been prescribed shall be punishable with a penalty that
. any minor breach (minor b¡each has been defined as a viol¿rtion of the may extend to t25,000,
;j provisions in a case where the tax involved is less. than T5,000), or Q, 16. 14/hat is the penalfy imposed under the CGST Act on transporte¡s or
:l . a procedural requirement of the law, or persons who stores goods in f¡ansit in conhavention of the Act?
. an easily rectifiable E¡istake/irmission in documents (explained in the Ans, If any peÌson tÍa¡sports any goods or stores any such goods while i¡l
law¡. as a¡r
rar an elTotr:_ap,parenton:record)
elrol:.âÞ,pâierit:ori,rècord) that has been made without ftaud_
ftaud- t¡a¡sit without the documents prescribed under the Act (í.¿., -invoice and a
ulent intent or 'glgss negligence. declaration) o¡ supplies or stores a¡y goods that l-rave not been ¡ecorded i¡ the
Fu¡the¡, *1..*:1.1_p:_f!ill:q
wherewer òf a fixed amoìrnt o¡ a fixed percenra¡¡e has been books o¡ accounts maintained by him, ror i¡ conttavention of any of the
providedi:in the CGST/SGST Acr, the same shãll appty. p¡ovisions of the Act, thên such goods shall be liable for cletention or seizure
Q. 13. What a¡e the penalties imposed unde¡ GST Act? ,
along with any vehicle on which they a¡e being transpo¡ted.
Ans. TI¿e qtantum of perølty proa¡ded fü ín the.CGST /SGST Act arc as Where o\rnet comes forward. Such goods shall be released on payment of the
follozas: applicable tax and penalty equâl to 100% of tax or upon furnishing of security
Fo¡ the offences mentionecl in Section 122(f), penalty shall be higher of the equivalent to the said amount.
lollowing amounls: of exempted goods, penalty is 2% of value of goods or T2S,000
. The âmorj-nt of tax evaded, fraudulently obtained as refund, availed as
_In_case.
whicheve¡ is lesse¡.
credit, or not deducted o¡ collected or shoÌt deduèted or short collected, lVhere owner does not come forwa¡d. Such goods shall be ¡eleased on
ot payment of the applicatrle tax and penalty equal to S0% of value of goods or
. A sum of T10,000. upon furnishing of secu¡ity equivalent to the said amount.
Fu¡ther Section 122(2) þrovides that a¡ìy registered perion who has lÌot pâid case of exempted goods, penalty is 5% of value of goods or t25,000
.In_
t¿rx, or makes a short payrnenlói.tax_on supplies, o¡ to whom tax has been whichever is lesser.
crrornously refunded, or availed/utilised ITC wrongly shall be liable lo a penalty
which will be the higher of:
* 5.7 Appeals
For reason other ftøuil, zaitful ttisrcprcselttatioi ot sttpptession of Q. 17. State the levels of appellate authority under goods and service ta¡
. 10% of the tax not paid o¡ short paid, or facts: act.
. T10,000. --
A¡¡s, The Ievels of appellate authority in GST can be desc¡ibed through a
For teason of frøùil, witful nìsteptesentøtiot ot supprcssion oî diagram:
. equal to tax due from such person facts:
. {10,000

ffii
 FHrv4.9q¡!iu!{-..qF.r¡-r+Fqs l"t:i:::'l;r:' :r:i ,.: ..-rr,t.f;,tf,,,:::,r:,,'1,,,.r,r1.:,li,li!'t¡]:.:i!ii'.¡,, ¡iirìÄnË,flËtË,1.ffi.#iiflffi5È$j: l:irs,
provided if ttle appellate authority is satislied that the aPpellant rvas prevented
b)' sufficient dause lsection 107(4)].
1. Adjudicating authority Q. 20. l /h(l is the Appellate Authority in case of first apPeal by the Person
This is the fj¡st level app€llate âuU,ority.
aggrieved or officer?
Any person âSgieved úder lhis a.t.an àpply to adjudicat¡ng ¿uthority. -41",
4¡y çlerson aggrieved by any decision or order Passed under CGST Act/
SGST Act/Ll"l:GST Act or an office¡ dùected may aPpeal to:
. 2- APþèIlàte Tribùnal :.:.' . (a) Thé ()omrnissioner (Appeals) where such decision or order is passed by
It consist of Nationât
': ''
or Fgid;l b€nch a¡d ct¿re bench (o¡ Area tienrh) ihe Addìtional or Joirìt Commissi'oneÊ- ----
Appeal €an be filed ågdjnsL the order of Adjudi.¿ring ãurhoriry. -rhe l[dditional Commissione¡ (Appeals) wheie.such decision or o¡de¡
(¡?)
is paslsed by the DePuty or Assistant ComÌüssioner or SuBerintendent
Q,21. Whht is the pre-¡equisite condition undet which an aPpeal can be
filed ulith thre Appellate Authority?
Aiorde¡ passed by scitc bench or.are¡ b€nch cãn be
_ãpeelcd ¡ thg A¡$ No appeol shall be filed w¡th the APPelløte Attthotít1l bA the persolt
suircme couÌLl aggricoad ulcss hc pøys:
App€ãl crn orìly be rnâda it thcre is substrntial qucsrion oflaw.
(a) In futl, such Part of the amount of tax, interest' fine, fee arrd Penalty
arisi4þ fron the impugned order, as is admiüed by him; and
(b) A sulln equal to 10% of the remaining amouÌì.t of tax in dispute arising
ordels paEsed by nationãl l,cnch shall dirccrty be apÉèaÍéd in ìh"
f¡om the sãid:o¡der, in relation to which the appea-l has been filed'
suPlemccou¡l . Whele the appellam-t pays the said âûtou¡t, the recovêry proceedings for the
O¡de¡s pass€d by thc col¡rt shall b€ appeâled ir tIÈ supreme ¿óúrr bâlance amor¡nt shali be cleemed to be stayed.
Q. 22. Can ¡n appeal. be adiourned by the Appellate Authodty?
APPEAL TO AÐJUDICATING AUTHORITY Ans. As p(:r Section 107(8), the Appellate Authority may, if sufficient cause is
Who cari file an appeal under tlìe cST Act? showrÌ at anlr stage of hearing of afi appeal, $ant time to the Parties ol. any oI
Q. 18.
Ans. Follotoing persons can them and adjournthe hearing of the aPPeal for reasons to be ¡ecorded in writing'
file afl appeal unrler the GST Act: No suclr adjoumment shall be Slanted more tl\a\ three times lo a party during
Any person aggfieved by tlìe order passed under CGST Act, SGST Act o¡
1.
UTGST Act or adjudicati¡g authoriÇ may appeal to the prescribed appellate hoaring of thc appeal.
authority. Q. 23. Whht order can be passed by Appellate Authority?
2. The comrrrissioner may, Ans. l. Tlre Appetl¿te Authoriry shall, afte¡ making necessary inquiry, ¡at'
. on his own motion, or such orcler, ¿ls it itrl¡ts ìust arrd pioper, confirmin& mòaifylrrg or aruìullù1g the
. upoñ tequest fio¡n ttre Commissionet of State tax or the Com¡nissioner oI clecision o¡ order appåaled ugiinst. It shall not refer the case back'to thc
Union territory tl\, âdjudicatinB authority thct passed the sàid decision or order.
. call for and exâqü¡e tlÌe ¡ecorcl of a¡y proceedings in which an 2. An orlle¡ èrùrartcing alry fee or penalty or finè i¡ lieu of confiscation o1'
adjudicati¡g authority has passed irny decision or c¡¡derìo satisfy himself confiscatì.n¡5 goods of greaLe¡ value ol reducing the amount of refund or input tax
of legaliiy or propriety of the said dácìsion or order, credit shall r-rot be passed unless the appellant has been given a reasonabìc
" to satisfy himself of legality or propriety of the said decision o¡ orde¡. lle opportunity of showing cause against the p¡oÞosed order.
may dùect any officer subordinate to hi¡n apply to the Appellate 3. The o¡L1er of the Appellate AuthoÌiry disposing o.f the appeal shall be itr
Authority. writing a¡d shall state the points for dete¡minqtior! the decision thereon and the
Q. 19. Whât is the tirrre linrit prescribed under the Act for filint a¡r appeaì reasons fo¡ lruclì decision.
_. to 4. The Ap,pellate Authority shall, where it is possible to do so,'hear and decidc
the Appellate Authority?
every appeal withi¡ a period of one year from the date on which it is filed.
. A¡s. The person aggrieved has to file ân appeal witllin 3 months from the
date of communication of such o¡der. The offì"e¡ can file an appeal rvithin 6 APPEAL TO APPELLATE TITIBUNAL
months f¡om the date of co¡nmunication of the said decision oi orde¡ fo¡ the 'Q. file an appeal to the AþPellate Trìbunal?
24. Who can
determi¡ation of sùtlì:pölîts-al.isirg out oÍ the said decision or orde¡ as mav be
Ans. AccÕrding to Section 112(1) and 2-
specified by the Commissione¡ in his o¡der. ,{n extension of I month may be
1. Any person aggrieved by the order of APPellate duthodty shall file a¡r
ili
iil
i:
ir
tl+,..r.,,stil¡ì¡f$i.S"N¡m,.[yi.*$.ii,i..]ì:,,rìii,.:'li;:',,ìi: r,
ì,. r'. ,,.:.:::. .,,,r-,,,.r r ,:, |: r,. , , 1 ,. .t, t,::rr.ii:r:lì l.rr''.::r,l:._r ìI - .,: .. ..
j,:cijAfJTEF.S:-lFlFgq!
flq{gpltg r...t1E
.appeal to the appeuate tribunat. If the amount involved is less than ï5e000, ihe . . with such difectionsas it mây thi¡k-fiC-4oræ-f¡esh adjudication or
.

ìì, appellate tribunaÌ may refuse to accept the appeal. decision afte¡ taking additional evidence, if necessa¡y.
tii _^r_..]l:.
ar-":::ioner may, on hi-s own äotion, or upon requesr ftom the Rectification of order. The Appellate Tribunal may amend ary order passed
r orru_rLlsstoner ot State ta¡ ot Commissionet of Union _
by it so as to tectify any apparent error, if such error is noticed by it, o¡ is biought
territory
cxamine the ¡ecord of a¡v o¡de¡ passed by the appellate ,autax, call fo¡ a¡d
):.
'"1',
thority or the to its notice by the Comrnissione! or the Com¡nissione¡ of State tai o. ihe
lÌl Revisional Aurhoriry, to saÉsfy himself a" to ifr" t"gutiti, ComÍrissioner of the Union ter¡itory tax or the other pa-rtj¡ to the appeal within a
orclcr. He may order, direcr any office, ,,_,uorãfrài"'to", *"Jàay ot rhe said
'riri'ø'
to tn" uppry period of 3 months from the date of the orde¡.
Appellate Tribunal.
Q. 30. What is the Period of disposing of appeal by the Appellate Tribunal?
. Q.25. Wha.t is the time.limit prescÌibed under fhe Act to file an appeal to the
Appellate Tribunal?
Ans. The appellate tribunal shall, as far as possible, hea¡ and decide every
appeal within a period of 1 year form the date on which it was filed.
A¡rs. Pe¡son Aggreieved can fire an appeal witl-r
tn 3 io, tsfrom the date of Q.31. Can additional evidence be produced befo¡e the Appellate Authority
comrnunication of such order.
il or the Appell¿te Tribunal?
officer c.n file an appear withi.. 6 tnottths from the daté bn whiah A¡rs. 1. The appellaint shalÌ not be allowed to produce before the Appellate
il order has been passed fot- deteûnination of such poi¡ts the said
*i"_g
- -' of AuthoÌ'ity o¡ the Appellate Tribunal âny evidence, whethet oral or docunentar¡r,
ti order as may be specified by the Comrrissio".. i"'hj;;;d.;-- "", the said other than the evidence produced by him during the course of the proceedings
-.T"ijï.]îi
.cxrensron :f 3.monrhs
rs aitowed
may.bc provided ro rÌìe person a8grjeved. Bur, no
to a comrnission for filing an appãal.
before theãdiudjcating authority or, as the case Ãay be, the appe aÈ Authori-ty
r except in the follo\a,ing cûcumsta¡ces, namely:
1:lU:*", : mea¡t
A¡s. On receipt
by Memorarrarl- of"c.o"s Li¡.".tior,:
of notice that an,appeal
(a) whe¡e the adjudicating authoriry o¡, the Appellate Authority has refused
has been preferred the paÌty agai¡st to admit evidence which ought to have been admitted; or
rvhom the appeal has_been prgferred may. nqiyr'iths¡andi¡g (b) where the appellant was prevented by sufficient cause f¡om producing
tl.rat he Dray not have
appealed against such order file; a memoran{u¡n nf ..o"i,oq""tiorrr,
!l
notiqe, verified in the prescribeJmurur";. å;;;;;;:;,:;
wi _rin 45 the evidence which he was called upon to produce by the adjudicatin[
:1:I'^:,"r]1.^:"::iîl authority or, Appellate Authority; oi
J rnc.oroer appealed?fagainst, An exterìsion of 45 ttnys after
the õ.piry of tËe s¡id (c) whele the appellant was prevented by suJficient cause f¡om p¡oducing
¡criod may be provided .if 'the appeltate aurhority"is ,",¡"fi"J äåiìrr" appe[¡nL before the adjudicatiÌìg authority or, the Appellate Authirity ani
\v.rs prevented by sufficignt causà.
t evidence which is relevant to any ground of appeal; or
i Q. 27. What is the fees for filing an appeal to the appellate triburial? (rI1 where lhe adjudicating autho¡ity or, the Appellate Authority has made
appeal.or restoration of appeai shair u",iroòò ro,
,
î1i::1_f::ltïg
rrK¡
" or,¿mount rnvolved subject to ma\imum of a25,000. ",,"ry
<t the o¡de¡ appealed against wiihout giúinB suJficient oppodunity to the
I
appella¡t to adduce evidence ¡elevâÌrt to any ground of appeal.
28. What is. the pre-¡equisite condition .rrr¿.,
---Q, .úrith
filed Appellate Tribunaì?
*t i"t an appeal can be 2. No evidence shall be aclnittecl unless Lhe Appellate Aulhoriiy or the
i Appellate Tribunal teco¡ds in w¡iting the reasons for its admission.
*:: t,hølt be filed unless the petsott aggñeued pays:
fr¡) l,t
ln :l!"",such
rut, paÌt of the arnou¡t of tax, interest, fine, fee alrd penalty
3. The Appellate Authority of the Appellate T¡ibunal shall not take arry
evidence produced unless the adjudicating authotity or a¡r office¡ authorised in
i arising from the impugned order, as is aamittea úv himi¡na
,. tl1is behalf by the said autho¡ity has been allowed a reasonable opportunity_
.'
(r) A sum equal to 20% of the remainìng amount of ta\ in dispLrte, (a) to examine the evidence o¡ document o¡ to cross-exami¡è any witness
addition'to the ainou+t par.d. r: tt appË in
e"ìhàrif ìri*g
'- f"orn tn" produced by the appella-nl or
said order, in relation to which the aipeut "t
" ¡,u" O""rriliåa. (b) to produce any evidence or any wiLness i¡ rebuttal of the e\¡idence
where the appellart has pa.id-Jhe_.e rrto".,i,'*," r".o,r"f
bJìance- àmount shall be deemed to be stayed. f räeeaurgs for the produced by the appellant.
4. Nothi¡g contained ìn this rule shall affect the power of the Appellate
Q. 29. l¡uhat Order can by passed by appellate t¡ibunal?
A¡rs. The Appellate. Tribunal, after giwlng the parries Autho¡ity or the Appellate Tribunal to direct the prôduction of a¡y document, or
o¡rportunity
to the appeat an the exarnination oÍ anv witness, io cnable it Lo diqpose of the appeal.
of being heard:
' may pass 0ide¡s of confùmin& modþing or arululring
the decision o¡ APPEAL TO HIGH COURT
order appealed against, or Q, 32. Who can file the appeal in the High Cou¡t u,/s U7?
. -uI refer the case back to the Appellate Auilrodt),, o¡ the Ilevisional Ans, Aly person aggrieved by any order passed by the State Bench ot Alea
Authority or to the origi¡aj adjudiiâting authorjty, ' Benches of the Appellate Tribu¡ìal may file an appeal to the High Cou-rt and the
 1i6 E sú¡vaiùrt qNrvËi$r,ff sEBtEs:. . . -r:;i:::.,.,,..rr:t.
. .
Hjgh Court mày admit sr.rch appcai, iJ it is s¡tisfied that tlìc case involves.ì
substa¡tial question of law.
. An appeal to rhe Hith Court shalÌ be filecl in FORM GST ApL_08.
. The grorutds of appeal a¡d lhe fo¡l.n of verification as contained in
FORM GST APL-08 shall be signed jn the marÌner specified.

ffi
Q. 33. What i6 the Time linrit for filing of appeal in the Àigh court? l
Ans. Appeal shall be filed r^riihirr lB0 days of from the date on which tl.re olcle¡
appealed agair¡st is teceived by the aggtieved person. lt shall be in such fo¡m,
ve¡ified in such mânner as may be prescribecl. The High Courb may entertain an
appeal after the expiry of the said.period if it is satisfied that therc;as sufficient
q,.ã
cause for not fili¡g it .vYithin such period.

Cusronns Lnw
APPEAL TO SUPREME COURT
Q. 34. Who can file an appeal to the Supreme Coüt ry's 11g?
AIs, An appea-l shall lie to the Supreme Court-
(a) from any order passed by the National Bench or Regional Benches of the
Appellate Tribunal; or h+ 6.1 Customs Law
(ú) from any judgment or order passed by the High Court in an appeal made Dfiflitiotts
unde¡ Section 117 in any case r4rici! on lt" or"., motion or on an Goods [Section 2(22)]. Goods inctudêi . -.
application made by or on behalf of the partyragg eved, irn¡nediately (i) Vessels, ai¡ciafts and vehicles . ,, , :.'ti...
after passing of the judgment or order, the Higiôóurt ce¡tifies to be a fit
. ... :r.
(iii) Bag¡1age
one for appeal to th.t*.t:ä: (i¿') Curr'ency aJìd nègotiable instruments
(o) Any other kind¡'i{ititir;, â, b.ìepi5ÞerW'
Dutiable ]þoods [sectió-i¡2'(14)]:Dutiable goods means any goods
. whidh aÌe chargêir:tilè to duty, and
. on which duty has not been paid.
Duty lsection 2(15)]. Duty Í earts, "ø duty of custons le¡¡iable undcr Custottts

Export goods, It means, " any goods Tohich øre to be taken out of India to a pløce
outside India - Goods brought neør Customs area þr exPort putPoses will be' etporL
goods '.
Imported goods. It mea¡s, " any goods btought intÐ Indìa ftom a Plûce oltlside
d.oÉts not incltde goods uhichhaoe been cleared'for hoÍLe corsutnptìofl". Íl1]Js,
llxdia, but
once goods äre cleaÌed by Customs Autho ties from Customs aÌea, these a¡e no
longer imported goods. "India" includes the te¡ritori3l waters of India. Territo¡iâl
waters of India which extend to 12 nautical miles into the sea f¡om the
appropriate base line. Goods are deemecl to have been imported, if the vessel
ente¡s the telritorial waters of lndia. lndia includes not only the surface of sea in
the te¡rito¡ial wate¡s, but also the air-space above and the ground or at tl.re
bottorn of the sea.
Customs aJea. lt úe.tns lhe area of n Ctßloms station and i.nclud!.s aüy or.a itì
zuhích inported goods ot etport goods ate ordinnrily kept beþrÞ clearønce by C slons
aulhor¡lics.
 114 5 SEFrEs .:. .
EHMA BElJll:qNt-lEîQFy
. .t . I

Customs station. ,'It means any Customs pott, Custons aírport

01. lt1t1il CLtstot s
'ttnt¡on.
'r i'p;;;;;;pect
in respect
Coastal goods, Coastal goods r'¡le:àt1st ,,goo¿ls
otlter thalt ijnpol.tei[ goods h.a]rs- äi"f;i:Ïå:Í"i'.",""^t":"tt or imports rrom
1\,r.feJ,¡u n L)essel lro one port of lndia ta nrothcr port of India,,. 2. Additional duty of Cusroms..t,::
lndia. lndia i¡cludes the territorial wate¡s of india (i.c., a portjorì Aclclition¿l duty is levjed u,/s 3(1) or \ :{*".:1,"9__a.unrerv¿iling dury (CVD).
r, Þpecraj additional duFv of Customs lariff Act.
of sea, whiclr urtorns
is adjacenh to the sholes of India; 12 nautical miles f"àrn tfrå
¡u"" irr.,u. Expo¡L is lsection S(5) of the Customs Tã¡ilf
complete when goods cross te¡rito¡ial waters and l¡npotL Actl. This duty is know¡ as Soeciil
ia ao*pl"t" u" u" tCor"r"r"uili"Uï"f¡.ìi,
gtxrcls enter territorial waters. sove¡eignty of rndia'extends "oon to the basic Customs dutv anrj c\Ð _cVq ,^
iá the te¡ritorial "oo,no"
leviabte u,/s 3(1) ¡¡rìd 3(ái of rhe customs
waLe¡s and to tlìe seabed and subsoil underlying and
the air_space over the TatifÍ Act,1g7s.
L1 ¡lers. C\¡D a¡rd special CVD wer.e earlieÌ imposed
to cou¡tervail
Indian C¡rstoms waterc. It means, ,'tlæ uaters extending into
the sen upto the limit rax respecrively. Now, rhese duties h;;;;;.;îåd excise duty and
of cdntigLtous zone af Indiø and includ.es
iny b,ty, gtLtf, harbíur, ,,r""i or't¡A r¡uu". Y.1Lt1":
exccpt on.items which are subject - "-!¡¡ ¡!v,qr by rGSr
Customs waters include -te¡¡ito¡ial wáters ai welt as contiguous l\ccordmg to Section 3ln of the.Customs
to e\cise duty.
zone. lnclia¡r Tariff Act, any article which is
Lelritorial waters extend up to 12 nautical miles from the"bás; imported inro t¡dia shall ue iia¡to ro.tcst
line whe¡eas at su.h ¡ar" ;1,j.; i, Ëu,ìr," ,y. ,
o,
contiguous zone extends to a further 12 nautical miles f¡om IGST Act on a like a¡ticle on its supply
the outer limit of in India.
teûitorial wate¡s, It means the Indian Customs wâtets extend IGST shall be calculated on the aggregafe
to a total of 24 . of:
naurical miles f¡òm the base line. [1 nautical mile = 1.1515 mites Assessable value
= 1.853 kmsj .
Exclusive economic zone, It extends up to 200 nautical miles Basic customs dutv
fro¡n the base
lirre. ln this zone, tndia has exctusive righis to exptoit €ducation
ii;.;;;;;;,,. purposes . safesua¡d
^.
ur,á
""r,Secrion"c.or,d*y artd fugher cducation cess.
(like oil exploratioi, power generatioru lishin& ;i..r"l ,""";;;;;and
scientific
4. Dury 8B of the c""d;; i;;;:;. """
research).- Beyonct 200 naulical miles, the a-¡ea is t ro*r, (d) Cenhal Gove¡runent cajn iimpose
,"-frigf, seas. .A.ll the safegua¡d duty if it is sâtisfied
.ountries have equal rights in high seas. that_
c"*"..,lf Tuî*, "ãny soods the import or erpoú of zottich is subjecr to . any ar.ticle is inported in large quantitiesi
.. .i:îijli::.,
tÌ,ty,prohÌbthon . such increased importation"is and
under Act ot any other law for Ilrc time beilng in-þrce, bt,t if dòes not
-this
,,,,-:.':,r:,::y t::1 good.s caustrf'or ìfueatenirg to cause
i,n rcspect condí!íons subiect ro wtich tie goads are t""-:. i¡iury to domestic indushy.
I'tnn tctl to 0e tmporled or elported .of.uhiclt.the
haue been cotnplied roilh,,.
.., _ ,
tø., rnts duty is applicable only for certain a¡ticles in respect of which
it is
. High Seas Sale (HSS). It mea¡ìs, ',sale of good.s by transfei of docutrcflts beþre
iltnrancc of goods ftottl Customs,
imposed.
. (c) This dr¡ty is in addition to any customs duty being imPosed
goocls. on the
., In case of_high seas sales, price charged by the impotter to buyer lvould fo¡m
tlre assessable value. The invoice issueJUy the foreign s.,ppti", (d) Central CovertuTìent mav.also
-uch a case is not relevant,
ø'tt .l-port"" i., impose a provisional saJeguard duty
till
fjnal dererminarion of sãfegu.'d ä,t;.h;;
Taxable Events. Goods become liable to impo¡t duty ot expo¡t maximum of 200 days.
;;;;',iiãri,l ,
ro,." ro,
duly when *
'. impo..is complete as soo¡ as goods enter into the te;itoriar watersj a¡d (¿) The duty, once impôsed, is.
valìd for fou¡ years, unless ¡eyokecl ea¡lie¡.
expo¡t is completg ody when goods closs te¡ritorial r¡,aters. rhis ca¡ be exrendcd L¡v rtre cenrrdt
¿;;;;ili, ;T,'t'o'tar perioa or
$ 6.2 Types of Customs Duties "safeguard' duty carrnoi be rno¡e than l0 years.
,, saleguatd.
What a¡e the diffeie_nt t¡¡p_es of Customs duties?
No d t!.t ilt certaifi cûses:
Q, 1,
O:.,.t. Basic customs duty- It is iãviõä unde¡ the provisions of Scction ' unless specificalry made appiicabre i¡ the notificatiorL the a¡ticres
.,
Uìc Lustoms Act and Section 2 ol the Customs Tariff
12 of imported.by a 100% Export oiient".t u"it
;;J;;iå'rä r..a"
Act. Normally, it is levied ôr a Speciat Economic Zone sha zo."
b".tj"bf J; ;";_i
.rr à percentage of value as deterrnined illçj.' " " s:rch..dyty shall be irnposed. or""rà_rticles jmpo¡red o"r".
Rates of basíc custons dut!|. The rates "¡,at whiclì Customs duty slìall f]o fio* I a"u"lopilg
be levied or inrporr or rh¿r a,r¡c¡e aois nãie"cle.dì";,
(:1t.1:.
tl."_CTjr_*s ¡\ct 1962 and specified i¡l the Firsr una S""o'r,J Scheclutes
of li,i.lp:r,l!::i:,:
drrrcre É ¡po¡Led fronl more than or rf the
one countries, then agglegate of
Lrsroms tarrff Act.

,,-!:!::irr:1, :"r: of ¡tuty...Lf Lhe t_oods a-Ìe imported from rhe prefcrenhat area, lili:lïj:.il,:i"Jch
counrries .ro""
"ot
u;:;;;;; ;;; imports or
r |lc pretercnbal rate is applicable.
cent¡a] covernmen[ notifies preferential area specific søfeþøtd dutu otl i1,'potts
impose Lhe hansitionat präduc frotn china- central Gove¡nment ca¡
sjegu".â a".y u iii"
"uìi.ä,;"^i:
 12t). ¡ ssve,on-ÈLu¡rnmnsr¡v srnres ,ì , 1, , .:, ,, :J.i:,-
'i]'ll
:i:ìå
âny ârticle is imported into lndia i¡ i¡creased quarltities from the " price is the sole conside¡ation for thè sale.
People's Repu blic of Chi¡a: In case of imported goods, the trarsaction value shall be-
. sìrch ìncreased import is causirg or threâtening to
cause harût to ' the price actually Paid or Payable for the goods when sold for impo¡t to
domestic industry- [Section 8C(1)] I¡rd ia;
5. Protective Duties. These duties are imposed by the Central Government on . for deliverf at-the ti¡ne arid place of imPortation;
the ¡ecom¡nendation of the Tariff Commission. The purpose of this lely is to . where the buyers and sellers of the Soods ale not ¡elated; â¡d
protect the inte¡est of lndiân i¡dustry. This duiy is irnposed 1y's 6 of Customs . p{ice is the sole considerafion for the sa-le.
Târiff Act. Addition6 to t¡ansaction value. SuéÎ-FñsãðE-dn value shall also include in
6. Anti-Dumping Duty addition to the price as aforesaid -
DlLhtping. Vvhen a country clumps ils goocls in another counby at a much (i) Cost of conlainer, cost of Packing and co¡nmiósion {excePt buyi¡.g
cheaper price tha¡ the norn1al price thereby unden"¡iting the pdce of the goods commission) which was obligation cf sçller brit Paid by buyer.
i¡ the domestic country and sells these goods, it is called dumping. The intention (ii) Arry obligation of seller but paid by buyer.
behincl dumping is to cripple the domestic industry of inìporting courìhy or to (iii) Cost of any material, components, tools, dies, moulds, iigs and desigrr
dispose off the excess stock by lhe exporting counh'y. It is conside¡ed an u¡fai¡ and engineerìng sketches provided by buyer.
tlade practice arld not an act of protection. (i?,) Royalties and licence fee related to import payable by buyer as a
Aflti-dùrnpittg Drr{,r, This duty can be imposed by the Central Gove¡nment condition of sa-le.
unde¡ Section 9A of Customs Act. The puÌpose of this duty is to avoid dumpi¡g (?') Value shall not include post importation.
arld to protect the domestic iÌrdustry. This duty is in addition to âny other duty (ai) Value of iúrpo¡ted goods shall also include éost of tra¡sportation,
chargeable u¡de¡ this Act o¡ a¡y other law for the time being in force. loa,Jing, urrloading, ha¡dling charges a¡d cost of insura¡rce.
The anti-clumping duty shall not be leviable on artiales imported by a lOO% (?li) ff cost of tra¡sportation/fieight is not ascè¡tai¡able, it shall be 20% of
EOU or a unit in a F¡ee Trade Zone or Special Economic Zone, unless the free on boa¡d value (FOB). However, if goods are imported by air, it shall
notification specifically makes it applicable for such unils. not exceed 20% of FOB value.
Qutt ttrrÍ of dunpitg ùul!. The quantum of alti-dumping duty will be (?riii) La¡rding charges includes all charges to bring the goods fronì board of a
durnpirtg maÌgin or i¡jury margi¡r, whichever is lor,r;er. shilp o¡ aircraft to lând mass of India. It shall be 1% of Cost krsurance
Møtgín of dunpìng.lt mea¡s the diffe¡ence between nor¡nâl value and expo¡t Freight (ClF) value.
price (i.e., p¡ice at which goods are expo¡ted). (lt) Í cost of insu-ra¡.ce is not ascertainable, it shall be 1.125% of FOB value of
lnjtary . rnargifl, It means diffcrence between fail selling price in domestic goods.
industrv
ustry. ând lancted
tustq¿ landed imported pr-odu,
ot the lmPorted
landed cost of impo-rted fro(lucl
Pr-oduct.
Anti-dumping action can be taken onll' lndia¡ industry
onl)' when there is an lndia¡ (4 Only those experìscs which aÌe relat€d to irìPorted goods alone cân be added
producing "Like arlicles" when comparccl to the alleged dumped importecl (it For p¡ica detcrminatiorL the ¡ate of exchange as in fo¡ce on lhe date on w¡LrcìÌ bill of cnLry
is presetned u/s 46 or shipping biü o¡ bil of exPort is p¡esented u/s 50 is to be conside¡ed
goods.
(iii) Rãtc of exch,tnge \4/i-tl be determined by CBÊC from dme to time or ascerta.ined in such
* 6.3 Valuation maìner ås CBEC ûìay direct.
Customs duty is imposed on "value" often called assessable value or Customs
value on percentage basis.
Section 14(2) empowe¡s CBEC (Cent¡al Boa¡d of Excise a¡d Customs) to fix
Ta¡iff values of imported goods or export goods by issuing a notification.
Customs Valuation'on the basis of transaction value. Section 14(1) of
Custom-s Act states that "value of exported arid imported goods sha1l be the
"tra¡rsaction value of such goods".
In case of export goods, transactron value shall be-
. the price actually paid or payable for the goods;
. when sold for¡¡:go¡-fgm Indiai
. for delivery at the time a¡rd place of exportation;
. where buyers and sellers of the goods are not related; arid
l
.l
:4

ï
ìirl
1 22 s SHTvADELHt¡rll¡l!¡¡¡r¡:seBF
CHAP.IEF 6: cLÀS.iÐMS LAW E izs
Sol.
tÐ :6,5 Customs Procedure Impo.t o-rra-E*r[#-
-
L¡Ìpo¡t. It rnea¡s, "bringing o/ gootts .fta,tl ntly
FOB value of equipment lùnce oÙts1de I dn into jndia,,.
F¡eight Chârges Clstoths areø. It neatls, ',.the nren of custolti ifntion and íncluries an.y tùea ujhete
Aàùl Tra¡sit lnsura.nce ihtp,oxtcd goods or cxport goocls n.re aí.dinarily ke2n penclíng cteirøtce
Uy Custorns
Aàà: Selling Exp€nses authoritics" .

Imported goods [Section 2(25)]. It ,,tttty

Total CIF Cost
- goads Orr,,fr,, ,]?:;l;ri;Y:\)
Landing Charges (1% of CIF iralue) ''.,eans,
place Òutside Indin but does itot inchttle goods, tirilch htne bien clearcd
consuntplion". foí lrcnte

. Importer. Section 2(26) i¡r ¡eÌaLion io any goods at an)¡ time between their
imporlation and the time wlìen they are cleareJ for home cânsumphon, includes
(i) Freight chùges hâve b€en inctuded.
(t,) Developmenr charges paid in tndia €xcluded. o"y_.:ytr-"I or anv persoD holding hìnlself out to be the importer.
, Bill of lading.
(itt) Insurance charges for tra¡spo¡ration f¡om Japân is inctuded. Bill of Ladir6 gir.en by the carrier of the
(i?, selling expenses (comission payable fo Agent) included. foods is the importer,s
clocument of title to the goods. The Bill of Lading coverã all the detailÀ of the
(¿,) Lmdi¡g clìases @ 1% of CrF inctuded. goods inìpo¡ted with full descriptior.r
:ç 6.4 Self-Assessment of Customs Duty Warehousing Stations. Impo¡ted goods can be sLo¡ed in public o¡ pdvate
wa¡ehouses lending payment of duty. Imported goods be clea¡ed on
Self-Assessment of Customs duty was inl¡oduced in 2011 by the Firance Act.
payment of duty in i¡stalments up to one yeal. "uir
It is applicable for both import and exporr and the procedure ij the same for both
It nray be a Public wa¡ehouse ús 57 wlrich is Ijcen:ed bv comm$sioner or
rc\lìechively. proper officer for depositing dutiable goods alld ur" ,r.ru,.,u¡¡"j by public
S e II- As s e s s n eÍ t p ro ced.u re : boclies.
P¡ivate wa¡ehouses are mañaged by individual importeìs.
(l) lmporrer importing.,goods has to submit biit of entry u/s 46 of the
Customs Act. Eip-oiGr is,¡equi¡ed to submit shipping bilt at the rime of ¡.t 6.6 Impott Proiedure
export ds 50 oF-íiretusìomJ nct. ' '- : Bill of Entry, Impo¡tq impo¡ting the goods is ¡equtued to submit
(ii) Bill of enlry should.be elecuonicâlly submi{ted in all cases. _
n¡tV- elgct oni¡aly giving details of goods to be clea¡ed fromthe Bill of
Customs
(ii¡) The
_impo¡ter/expo¡ter should seif-assess the duty leviable on such (Section 46). Bill of Entry is noreJ by Customs Offjcer.
goods. Whgn jhe Bill of Entry is filecì elect¡onically, it is i¡ four copies:
(ia).Ttre seÌf-assess¡nent ¡nay be verified by examining of the geods by a (a) Oiginal-neaÁt for CustoDìs autho¡ities for assess¡ient and collection
proper officer. The officer may examine the contract, insurance policy, of duty.
broker's note o¡ any other document whe¡eby the duty payabl" (b) Duplicøte
-uy
Éu -infended as an autho¡ity to the custodia¡ of the ca¡go to
asce¡tairìed. release cargo to the inlporter. from his custody.
(a) The proper offrte¡ may re-assess the bill of entry after such verification. (c) T riplicøte as a copy for record for the importer; and
(¿¡¡) If
Í the importer/exporter accepts in Miting the re-assessment made by -
(cl) Quød.tupliêate-as a copy to be presented ro the Bank
o¡ RBI for the
proper
p¡e1jcr uurcËr
officer about
deour crassulcauon/
classification/valuation/exemption/concressio¡
classification/valuation/exemption/concession,
vatuauon/ exemption/ concess: --
question òf issui¡rg any
dry formal
rer¡¡@r (Jruer
ordet arises. If not,
a¡rses. rr not/ the
üte OffrCeI
officer shall
nâ
Shall pass a
- prryo"._of
^Submission ^aking.re¡nittance
for the imported goods.
of othel docunents- Documents requfea-by CustomÊ authorities
. ... lpeahg o¡de¡ within 15 days frorn re-assessment of bill of entry.
(zii) If goods are not takeD-l9r^ve4_iflglrtiory the goods will be âllou,,ed to be
are required to be submitted by the importer to enãbÌe theí to:
(a) check the goods;
cleared from Customs. Later the duty assessment may be audited by the (b) decide value;
proþer officer. (c) classification of goods; and
(ulii) In cases importer/exporter is r:nable to determiné the duty, 1.e., make a (d¡ to ensue that the import is legally permitted.
self-assessment, a requqst shall be rnade to prope¡ office¡ fòr assessment Import General Manifest (IGM) or Import Report. person_in_charge of vessel
of the same ds 18(a) of the Customs Act. or ai¡craft has to submit an impott manifest to the ptoper officer plio¡ to its
(l;r) In both casé.where sêlf-assessment is done and when self-assessment is a¡¡ival. \4¡hereas the person-in-charge of vehicle has to submit import repo¡t
done but _requi¡es re-assessment the importer/exporter rnay opt for withi¡ 12 hou¡s of its a¡rival. 'Ihià repo¡t has detailed information for the
provisional assessûlent by the p¡ope¡ officer. Custorns about the goods in the vessel/a-ircraft.
 ; iiìi;it .lt,l l

ia¿- -r. sùùÁoe-'!\r,uN@r-nisrnrÉ¡,1,:l:.r r:'.,' r:.r.,:-l :;ii¡ti,it:|rìrilriìIîii';4.:¡,li1,r:i]l

:,.
'
. ' .'
:
r.: ' ì,;'i. r. r
ii . 1,
jri::;'1,üli:ri:;it rr,l,),i.1ÞtrÀffiäf'Ðffis,r,rvti.ro; r zs
Passenger a¡rd crew a¡¡iwal manifest. The person-in-<harge has to submit in case of a \¡essel or aircraJt an export manifest a]-td i¡ the case of a vehicle, au
passenger and c¡ew arrival manifest a¡ìd name reco¡d informatiôn of the arriving expo¡L reporl/ in tlìe prescribed form.
passengers before arrival in case of vessel o¡ aitcraft atìd after af¡ival in case of a Ent4l OulLþøtd. Export goods ¿úe not to be loaded on vessel urttil ent¡y
vehicle âlong'with import manifest or impo¡t ¡epo¡t. outwa¡d is granted by the Customs Officer,
G¡ant of Enky Inwa¡ds by Customs Officer. Afte¡ delivery of import As pe¡ Section 40, the goods car1 be taken qn bodd only if they are
manifest/import report or if the Custo¡¡rs OIfice¡ is satisfied that the¡e is acconrpanìed by the Éollovr¡ng documcnts:
sufficient reason for not subnittirìg the i¡nporl manifest, Customs Officer shall (l) In case of export goocls other than baggage ancl mail bags the goods shall
granl "entry inwa-rd" u,/s 31, It is a permission of unloadíng the cargo from the [¡e accompanied by
vessel.
. Shlpping Bills (at seaports/ airports)
Entry inw-ald is not ¡equùed for loadi¡g baggage, mail bags, anirnals, . Bill of expo¡t (at land Customs stations)
perishable goods a¡d hazardous goods. . Bill of Transshipñent (for t¡ansshipment of goods)
Unloading. Unloading of cargo can start o¡ùy after the,lcustoms Officel,, All duly passecl by the proper officer.
gra¡bs "Ent¡y Inwa-rds". Section 32 of Customs Act provides that only the goods (il) In case of baggage and mail bags, they should be perrnitted by Customs
mentionéd i¡ the import manifest can be unloaded. S,gch unloading can be orùy of e\port.
'No conoeyarrce to leø7.1e I.t¿ìthou-t uryítten ordd (Section 42). The person in
at approvèd places a¡d u¡rder the supervision of "Customs Office¡,,.
Payment of duÇ. Now Customs duty is paid electronically. lt should be paid cl.rarge of the conveyance which has loaded any export goods at a Custor¡s
within one working day (excluding holidays) after the "Bìll of Entry,, is retumed station shall not cause or perrnit.the conveyance to depart from that Customs
to the importe¡ for payment of dqty. station until a witten order to thab effect has been given by the proper officer.
If duty is not paid witl in one wo¡king dayr r4tere+.is payable at 1S%. Cleøtance of goodp for expòrtation (Section 57), After the Customs Officer is
sabisfiecl that the goods are not prohibited and the exporter ttas Paid the duty, if
r+ 6.7 Export Procedu¡e any, he makes the order for shipment on the duplicate copy of the shipping bill.
Export. ft Ãeans, 'taking goodsloùt'-¡¡ lrr¿i. t;,¡'ptu"" outside l¡rdia,,. This is known as "Let Export" order.
Expott goods, lt meanË, ,"aiÌyì:goods, which are to be taken out of India to a Differeflce betaoeen trønsit an¡l transshiprneflt of goods. Difference between
place outside India tlansit and lransshilrrnent are siven belolv
Exporter. In relation tò'arny goods at any time between thei¡ entry for expo¡ù
a¡d the time when they aÌe exported, includes any owner or any person holding (i) Section 53 of Customs Act, 1962 (i) Section 54 of Customs Act, 1962
himself out to be the exporter. provicles for bansit of goods. provides for transshipment of
E ttry of Goods Íot exportøtiott The exporter ry's 50 of Cu6tor¡s Act is requùed
to present eleckonica-lly to a prope¡ officer of Customs, a shipping biu in case of
export by a vessel or by air and a Bill of export in case of export by vehicle. (ii) In câse of hañsit of goods, goods (ti) ln case of tra¡sshipment of goods,
The Shipping BiI afld Bill of Export (Forms) Regulation Act 1991 p¡escribed a¡e allowed to remain on the same the conveyance changes. The goocls
forms of shipping bills: conveyi¡¡ce. a¡e rmloàded from a conùeyance
These for¡¡rs a¡e as follows: and loaded i¡ anothe¡

- (r) For dutiable goods : Yellow coloui (líl) No sepalate document is required (iií) Separate document called bill of
(il) For duty-free goods : White colou¡ for goods to be transitted further. t¡ansstripment is to be filed.
(lii) With duty-dlawback claim : Green colou¡ rfiention in IGM
(io) Duty-free ex-bond : Pi¡k colou¡
The colour scheme ôf shipping bitls has now become 1'¡edundant as now
r+ 6.8 Baggage
shipping bill hâs to be submitted elechoniially. Definìt¡otts
Export ilecløratiorÀ As per RuIe 7 of Customs Valuation Ru.les 200f the Baggage. As per the term baggage includes "urutcompanied baggnge, but does
exporter has to file decla¡ation about fuIl "value" of goods. not ínclud.e nolot oelticles". fSectj.o' 2(3ll
:
Export ñøniÍest/Export Report. Section 41(2) of the Customs Act p¡ovides Baggage is a very cornprehensive term Which rnea¡6 the luggage of.a
that the person incha{ee_pf_Sg+!-eya¡ce car¡yirÌg export goods shall, befo¡e the passenge¡ accoÌnpanied ol unaccompanied'and comprises t¡.1¡k or bags and the
departûe of the conveyance from a Customs station deliver to the proper offìcer, personal belongings o{ tlÌe passenger. It is not only limited up to bonafide
baggage as defined in Clause 3 of Tourist Baggage Rule 1958.
'i.

li te6 ¡ sr]Lv-4.,.qFi$.9ñl$Ê¡lTy_,..qEiEs,_ _r1.¡,,,,:,,:r..,:r,.:r,.,r ..- t: . ,:,..

Baggage iiecla¡ation 24, The_owner of any baggagc hus to

fiìl -
dcci¡raLion
1S""tior,
make
iill of its contenti to rhe (us¡e¡¡5 orrii",
The rare of dutv and taÌ¡ff vâluation r". ,ïJoli!ll"* o, ,, -C|-IAEER 6:qJsro¡¡s iÀtji:a tzt
irr
ill
i
tlre date ofdeclarãdon (Section Z8). "rr"ll
t" il," ,"Ë'",í¿""ii,ï,,." "aur,r,
in fo¡ce on Only used personal effects
:i,i:
+1 ,,-!tl* Çha"."1. Ut"l u person cleclares that.he does not hâve any lndiart_ passenger rcsiding -
¡ tcm. he c;rn go
thlough the ereen. cl ran¡el. f f p"*ã" dutiable
ch¡nnei carrying dutiable items. he ca¡_be " i, g.Lt
--fj.? ìtloug,n
j, tt g."un aDroâct lor > 1 vear
[Rule 5] .
punuli.ed ¡o. " Gentlemen: 20 gms value
Red Cha¡¡rel. W4-ren a person ca¡¡i"" å
il rc(l ctì¿uxret a¡d should submit d*ectararion
¿,ruåule irem", iå .r.råiia ".1","t¡on.
Ju". nrrorrgfl ,f.,"
cap of Tb0,000
ì::j
Rate of customs dur¡z on Bag_gage.
a,rJp;; ;il;d;*å Ëu,,o,n,.:r,,ry. ' Larl¡,:40 gnrs value cap of
Alt åuä;;' ì,',port"a uy o r1,00,000
ii't|, l)assenger o¡ a rnember of crew in his-bagg"g",
ìh 05qô {i..., 359. a 2.1".r 1%). .ro""a ;"'ffiä
;üã"ctive tartr rate of One laptop coDiputer/note
Bâggage is exempt from cVD.
ii
i È,\empred Baggage lsecrion zóirli.
personar u." pu..""g","
Ur"¿
"rri.¡ir.i'"]",.1"",
;::i;ï,1":"ïii;i,T"Ji;l3,".ll::ï
"i bonafide gift:Èior souvenirs
*- T¡ans.fe¡ of O""tU.
¡" orio-?"i ä"ÇäJï,"_..*
il l\.rcoìal
-elfects
and _"* ur" otro ffiiit:ï'i:rrfii"ïïiîiï,,: ;,ff:. f "r,ul and houselrold artictes (other 1-
ur-ty gxetnption to Baggøge u der scct¡on .,-l,- ]'*:îl"l thL
.
rlìe duty lelief available in resn¿ zal .iì¡á"r"rn.]i.'
ërii.ms
rcrers ro AÈt
eltaln sDe.ifjê.I arÊ¡r-.\
certain oir
^_ the basis of l s
il "#'"ï:::j
lilï; jiî:",j:,ii:&* ;ñ;;
uwlF.ott
i,j ,,,y,.,"'bj;.;;; ;;;;;', jlflg".r;jl
f¡) any article in the baggage, ot a
of Èigi aú?9d A*¡clus øuiu)ä-
fràeof,i,i,r'...
Corlditiohs
I respect of which the iãid offlce¡ is.passSn-qe1 0r a member ot the crew, in
satisfìed thal it has b"",., in his ur"
up to 3n agslegâte value lndian pàssenger
ì' fo. up tô 6 months of {60,000
slrch miÃimum period âs *.y U"
,tt,
spe.ifiäüï;,:;iä*" FroN 6 nìc,nths up to up to aì aggregaie value
rhébaggage of á pur"år,g.,. ir, ,;rii.iäî*¡u.1l hrdia¡ passenger
::{-:,'.,':,.",ti
saûstrecl that it is foÌ th rfe ofticeris of T1,00,000
r u,"Jrãì eir, å;.ååî."#i rvrìnrì.ìlunì stay of 1 yeãr

&
rä,å:j'ìî:ffi :,.9:ru:i::.,,":[:.*.,,'"; ourrnij p¡eceding 2 \.car
up to an aggregate value
of (2,00,000
l'rdian passenger who has iãl
;:iJ::i,'"'å'Jït
utt a'tici"sáã;' ;;, ,.ay availed the cotìcession in Þ¡ec_
"uåtr "i;JÏ:;'lirnits as
lvl¡
Eremption to Løptop rnum stay of 2 yca¡ up to an aggregate value
broughì as laggage bv (r) Mjnjmurn stay oÉ 2 years
18 years of"r*U"rr:11:^r:na"!,computer
age (other than membe. år of 15,00,000
:,]:ij;::t.ö cr.o_)-irÌuìry'oÀ-nrr,r rlor¡ abroad inÌìÌediateh, Þ¡ece_
cjìng the date of h;s airlval.
iD Total stay in India on sho¡t
vrsit duting the two
prececlirìg yea¡s should not
Foreigrers residing in India exceed 6 months,
l ourist of Indian Origin.
i) Passenger has not âvailecl
thjs concessjon i¡ Drece_
ot di¡p 3 ve:rc
P¡
Iourists of foreign oiigin o¡'arr drùu
A¡ticles up to value of unaccompanied bàggage it aPply to
was ir
?15,000 (Not being an infarri) .'"ffj:lïÍ.1*::*
,1'.trlll,ii ;,il'.,"i:,ïiilii
;ï:i i
h" ff i;ï.f î:Í.,:: flÆ:ff:i,"::,::...::,,ï.1
år;";¡iä-,;;"':; :,i:liï,:å."ï:,,ffi å1.
The urraccompanied lrueeoe" ;-, 1i
Indiân Residents
Foreigners residing in India Aficles up to value Df T15,000
.t wirhin.,,-L
*trh,; ^^*:^r -,,-
".¡,*3ä;îäXX:::Jå?
. ji::jiåî,'jåi"
l'!ld in ìndi'r up 2,nonrhs bero¡e
a¡¡ivar
Anv Tourist Exanple 2: X an Indiah tesidenl
,üllfií¡í.|åiìTjff
goods ::::'""'
while returni.rig ib iiåilltll,
f"diu
*ffi
visirins usA
Ì.i

(Nót being an infant)

(a) his peisonal
I :Ir.:+i'l',',ïcrr¡if¡..:ii.1el,l". L"+q
effecs valued at 130.00n.
f4.)'hiEÞê.íêiiià1ti+riú"'lîJ¡¿à,i¿.lnÅ¡;..l,:':".':,,:.'.,"':,,,-",i'::,i;i'i
,
H
(l¡) two b<itttes of R"il L.bel lvt t
Íilg:rTÆöl5i;ãil4lelvÞ.ri.í-+í+..¿opoi;iio
(c) new carirera valued af T50,000
-(c)newcari-reravaluedafT50,000''"*"*.
-
Compute the customs duty payable.

ffi
 ti,'i,i:iii tírtrffi r $
ráa e slva dÈult u¡lrvEns¡ry sEBtEs
C.!-r4P1--E&,F.riqJqIA\4s LAW. E "r 2s
Answer. Personal effecls are exempt frour duty. Two bottles of liquar of
T2000 ca¡ be included in general l.ree allowmcå. the total
öFe is å5.000.
Practical Questions
The totâl dqtiåble irems are (T5O00O + T,.,DOO), i.c., i52,000. Aftei allowing Q. 1. Find out the assessessable value in the following case:
X has to pay dury on (17,000 o.ssv. + 37" Price charged by expo¡te¡ (FOB) <45,00,000
l"!î,.Ï,?å;lXltrr. "¿.,.u,¡li Cost of tlal-rsportation to lndia by ai¡ t11,00,000
Cost of i¡rsu¡ance from expotting count¡y- to India T60,000
Load û ìg/ urJo¿ding chai.ges {3,000
Sol. . Computationof-Ad-sessâAfe-Value

TransaEtion value (FOB)

Cost 01 transpoilation + Loading/Unloading charges
(subject to úaxim!m 20% of FOB since goods âre tEnsported by air)
Cost of nsurancelActual)
Asses!ìable Value (ClF) of the

Q. 2. Find the assessessable value in the follo$¡ing case;

Amount cha¡ged by expo¡ter (FOB)
. Cost of ttansportation (not available)
Þ 6.9 Exemptions Cost of insurance (not aváilable)
Exemptions from Customs dufy are provided through provisions of: n of Assessable Value
(l) Customs Act a
(ii) Customs TarifÉ AcL, and FOB ptice of goods 90,50,000
(iii) Nohfications. ¡ddr Cost ol rcnsponalon (not available, therefore, 20% of FOB price) 18,10,000
Ádd: Cost of'nsurance (not ãscedainabfe, lhe¡efo rc, 1 .j2ío/o ol FOB)
speciøl e:tehtptions. If the centlar Gove¡n¡nent is satisfied that it is necessary
ilÌ the public interest to do So, it may, by Special Order exempt f¡ol¡ payment
of
duty, a¡y goods on. which clutf is'le;iable onty undei oi
exceptionaÌ natr¡e to be stated in iuch orcler.
lsecdo; 2S(2)l "ir"u-"tu.,"*
Genetual eremptionl General exempLions have been
^
Some of these are bejng given below:
$àniea in va¡ious cases.
_ ]mPorts by.UN Agencies, Governo¡s, Ford Foundation, Vice presidellt of
India, specified equipment bv a foreigrr nen;s agency, pár.o.rof
deceased person arÌd Gifrs i.nForrecl by äann nnu""t "ti""i" of o
gi"","à'àì"r''pti.".
Celtãin iñports by Lhe Goventl¡ent are also exerlpt"flonì
""í., the payDleùt of
Addi Cost of transpod, loâding, unloading and handl¡ng charges
^
Cusloms duty.
(<6,00,000 + {10,00,000) or 20% of t30,00,000 øt ¡chevet ¡s lowet
(Gobds are irnported by âk lherefore maximum transportatjon cost can
Commercial saûrples are also exempt irom Customs du.../. be 700á of FOB pr,ce) 6,00,000
4dd. Cost olinsù.ance (akeaoy included i1 FOB)
Asses!able Value (ClF)
,-*çÌ.*
Q. 4. Find the assessessable value in the given case:
PriÉe charged by exporter (FOB) {68,00,000
Cost of lransportâtion to India by Sea T2,00,000
Loading/unloading charges in lndia T10,000
CosI oi i¡¡surance f¡ont exporting country to ]ndia Not ¡vaiiablc
 'cHr\P.¡61
¡ - ¡,-rv¡ SFùt gú[m¡+¡"¡ç9i,. 6, s taw ! ,t3l
utarion of assessãtlãyãiõ--"r"a
.''''.'.1'''..'

I¡ansaclion value (FOB)

Áddi Co:j_of-ElToryüon by sea + Load¡ng and untoading chârges lBuyjng commrssion pad lo an ¿genl to represenl
the imponer in lhe foreign
({2.00.000 + T10,000) country cannol be incfud-¡l)
idd. Cost^oJ trânsport - Loading ând unloaojng 37,70,000
/4dd. Cost of insuranc€ cover (not availâbte, lhere lorc, 1.125o/o of FOB) chârges, hãndJing charges - DeÍuÍâoe
Assessable Value (ClF) . 1{7,20,000 + 110,000 + {23,000) T7,S:,òOo, itiu.not.".ulo
ZOi" or ¡-oe
" ''r'
Addr Cost of ¡nsu¡ance cover (Actualj 7.53.000

- 5.
Q. CIF Value
ai. t
<L4,20,000 Assessable Value
cost (Inctuded in CIF)
"."f*tution
lnsutance cost
t5,00,000 Sion of Tax
Not asce¡airable
Find out assessessable value.
Sol. Let the FOB value = {x. CIF value = {14,20,000 Add- Basic Customs D!iy (50% of {45,53,000)
Insura¡ce Cost = L.725% of FOB = 0.01125:v Add: EducêUon Cess (3% of f22]65A0)
We know that Assessable value and cusloms dutv
FOB = CIF - Amou¡tt of F¡ejght _ Insurânce Cost Add. IGST (12% or t.l7,87,480)
:+ x = 714,20,OO0 - TS,0O000 - 0.01125x Tolal
L.011,25x = 79,20,00t0
FOB value (r) =
Q. 7. Find our rhe 0"," from rhe given informarion in.espect of
- ? 9,09,765 goods imported by Z ïTå::-"
on of Assessable Jlalue
({)
boiid v¿Lue of pldni inrporrecl iFOB) ,í;l0
1r."".."
l\ir fare paid to Air C¿¡go Ger¡¡,ìry 20,000
Cost of package 6ome by Z Ltd. in USA
ûrot included in FOB)
*Demurr;rge paidl>y Z Ltcl. to Air Cargo
750

_ Germany for not liJting goocls i¡ time in Tndi¡

Q.,6..Find oüt the customs_ dufy fiom the following informaiion in r:espect of Lnsurance Charge5
45,000
goods imported by ABC Ltd.: 1,35,000
Loading/u¡rloading charges, hanclling charges
r_lsD (?) Basic custom duty .5,000
. 70%
F¡ee on board (FOB) value 65.000 IGST '
Buying comÌnission paìd by ABC Ltd. to a¡ 72%
¿gent ill USA for rep¡esenti¡g X Ltd. in the
. purchase of goods . 900
60
Ai¡ fa¡e 7,20,000
Demurrage paid by ABC Ltdì.to airlines 23,000
Insurance charges 58
30,000 on of assessable value
Loading/ udoading charge+åandlilg charges
10,000
Basic Customs clutj¡ -......-.. -...... -....... .......'.-_- ---
50% l¡¿lsacrjon vatue IFOB: ${95.000 r - +58j
ICST . ..
Add.
ZSOI
12% Cosl-of trânsoorlalion of impoded goods ro ,rd a
by a ¡
SBI buying rate of 1 USD (S20,000 r {58 + {45,000 + t5.0ú0J {12.i0,00ó
60 Dür rot more ilan of FOB
SBI selling rate of 1 USD ,4dd. Cosl of insu¡¿ncê cover (Actual)
2oolo 11,10,700
62
Excltaì1ge rate notified by Central Boatd of Excise Assessable Vatuê {ClF)
ar-rd Customs 58
,;i
32 :_r rìs¡iiir[fffir'.u¡¡¡Ê lêtnirs : t,

Assessable value 67,9S,

,4dó Basic cus{oms Duty (10% of {67,99,200) 6,79,
Addj Education Cess (3% of <6,i9,920)
Assessable value and customs duty
Addj IGST (12% of t74,99,518)
Total