Summary Book

Summary Book
Indirect Taxes
CA Finals
May 24
www.icaleague.com
8871334736
By Yachana Mutha Bhurat

CA, DISA
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INDEX
SR.NO CHAPTERS PAGE NO.
GOODS AND SERVICES TAX
1. SUPPLY UNDER GST 1 – 14
2. LEVY AND COLLECTION OF TAX 15 – 17
3. REVERSE CHARGE MECHANISM 18 – 31
4. COMPOSITION SCHEME 32 – 37
5. TIME OF SUPPLY 38 – 41
6. VALUE OF SUPPLY 42 – 51
7. INPUT TAX CREDIT 52 – 66
8. JOB WORK 67 – 73
9. REGISTRATION 74 – 91
10. PLACE OF SUPPLY 92 – 107
11. IMPORT, EXPORT AND ZERO RATED SUPPLY 108 – 115
12. ACCOUNTS AND RECORDS AND E-WAY BILL 116 – 122
13. TAX INVOICE, DEBIT NOTE AND CREDIT NOTE 123 – 129
14. PAYMENT OF TAX 130 – 137
15. RETURNS UNDER GST 138 – 148
16. REFUND UNDER GST 149 – 160
17. ASSESSMENT AND AUDIT 161 – 165
18. TDS AND TCS 166 – 169
19. DEMAND AND RECOVERY 170 – 176

20. LIABILITY TO PAY IN CERTAIN CASES 177 – 178
21. INSPECTION 179
22. OFFENCES AND PENALTIES 180 – 188
23. APPEALS AND REVISIONS 189 – 192
24. EXEMPTIONS UNDER GST 193 – 219
25. ADVANCE RULING 220 – 222
26. ETHICAL ASPECTS UNDER GST 223 – 227
27. MISCELLANEOUS PROVISIONS 228 - 231
CUSTOMS
1. INTRODUCTION AND LEVY OF CUSTOM DUTY 1–5
2. TYPES OF DUTY CLASSIFICATION OF GOODS IN TARIFF 6 – 19
3. IMPORTATION AND EXPORTATION PROCEDURES 20 – 26
4. VALUATION UNDER CUSTOMS 27 – 33
5. STORES, BAGGAGE 34 – 37
6. REFUNDS 38 – 39
7. AUDIT 40
8. WAREHOUSING 41 – 46
9. FTP 47 – 52
©Author
No part of this book may be reproduced, stored in a retrieval system, or distributed in any form, or by
any means, electronic, mechanical, photocopying, recording, scanning, web or otherwise without the
written permission of the author. Information and contents of this book have been collated with utmost
care, caution and dedication in order to provide a reliable and comprehensive textual reference for
readers. However, any mistake or errors that may have crept in due to any inadvertence does not impose
any legal liability over the author
CHAPTER 1 Supply under GST
1) Introduction to supply Under GST
 The taxable event under GST is supply. The scope of supply under GST can be understood
in terms of following parameters:
Supply should be made in Supply should be

Supply should be of Supply should be made
the course or furtherance of made by a taxable
goods or services for a consideration
business person
 The discussion with respect to supply is broadly categorised into following:
Supply
Includes Excludes
7
7(1)(c) : Activites not

7(1)(a): All forms 7(1)(b): Import 7(1A) IF to be treated
of supplies made or of service for a Activities Supply as per as supply of
agreed to be made consideration specified in 7(1) , goods
for a consideration whether or not Schedule 1 Whether /services -
in the course or in the course or made without aupply of G/S reffered in
furtherance of furtherance of a consideration as referred in Schedule III
business business Schedule II
 Goods means
 Every kind of movable property
 other than money and securities
 But includes actionable claim, growing crops, grass and things attached to or forming
part of the land which are agreed to be severed before supply or under a contract of
supply.
CA Yachana Mutha Bhurat 09669357770 gst.yachana@gmail.com

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 Services means
 anything other than goods, money and securities
 but includes activities relating to the use of money or its conversion by cash or by any
other mode, from one form, currency or denomination, to another form, currency or
denomination for which a separate consideration is charged.
‘Explanation – For the removal of doubts, it is hereby clarified that the expression
“services” includes facilitating or arranging transactions in securities;’
Author’s Analysis on Goods & Services
Particulars Comments
Transaction in money i.e neither good
Deposit or Withdrawal of money from Bank
nor services
It is a supply of service
Processing fees
(Sep Consideration )
Conversion of currency Transaction in money
It is supply of service
Commission for conversion of currency
(Sep Consideration)
Sale or purchase of stock, shares, Transaction in securities i.e. neither
Derivatives goods nor service
Goods, However as per schedule III,
Actionable claim other than lottery,
Actionable claims
betting and gambling is neither supply
of goods or services
Service charges or service fees or For provision of service and

documentation fees or broking charges chargeable to GST.

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 Supply for consideration in course or furtherance of business [Section 7(1)(a)]
Supply for
consideration in
in the course or
course or
For Consideration furtherance of
furtherance of
business
business [Section
7(1)(a)]
 Supply includes Activities or transactions, by a person, other than an individual, to its members
or constituents or vice-versa, for cash, deferred payment or other valuable consideration [ Section
7(1)(aa) ]
 Importation of services for consideration whether or not in course or furtherance of

business [Section 7(1)(b)]
Supply should be in course or furtherance of business. The exception to said rule is import of
services is deemed as supply even if the same has been imported not in course/furtherance of
business.
Import of Services
With Without
Consideration Consideration
In course or Not in the course From Related Person /

Other
furtherance of or furtherance of Distinct Person + in the
Person
Business. Business course or furtherance of
Business
Taxable Not Taxable

Taxable as per
Taxable
7(1)(b) but
exempted via
notiifation

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 Supply without consideration - Deemed Supply [Section 7(1)(c) read with Schedule I]
As per Schedule I, in the following four cases, supplies made without consideration will be treated
as supply under section 7 of the CGST Act:
o Permanent Transfer/Disposal of Business Assets
Business Input Tax Credit availed

Assets
Permanently
transferred/disposed
o Supply between related persons or distinct persons
Related Person 1 Related Person 2

Supply of goods or services
In course or furtherance of business
Employer Employee
Not supply

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o Supply between principal and agent:
 By a principal to his agent where the agent undertakes to supply such goods
on behalf of the principal; or
Deemed Supply
Principal Agent
supplies goods
supplies goods on behalf

of principal
Third person
 By an agent to his principal where the agent undertakes to receive such

goods on behalf of the principal.
Third Person Agent

Agent receives goods on
behalf of principal
Deemed
supplies goods to Supply
principal
Principal
o Importation of services: Import of services by a taxable person from a related

person or from any of his other establishments outside India, in the course or
furtherance of business.
Effect of above amendment: This amendment is to ensure that import of services by

entities which are not registered under GST (for instance, who are only making
exempted supplies), but are otherwise engaged in business activities is taxed when
received from a related person or from any of their establishments outside India.

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 Activities or transactions to be treated as Supply of goods or Supply of services [Section

7(1A) read with Schedule II]
Supply
Sr Activity /
Type of Goods
No Transaction
/ Service
(i) Title in goods
(ii) Title in goods under an agreement that property shall pass at a Goods
1 Transfer future date.
Right/undivided share in goods without transfer of title in them Services
Lease, tenancy, easement, licence to occupy land

Land and
2 Lease/letting out of building including a commercial/ industrial/ Services
Building
residential complex for business/ commerce, wholly/ partly.
Treatment or
3 Applied to another person’s goods Services
Process
Goods forming part of business assets are transferred/disposed off
by/under directions of person carrying on business so as no longer Goods
to form part of those assets
Goods held/used for business are put to private use or are made
available to any person for use for any purpose other than business, Services
Transfer of by/under directions of person carrying on the business
4 Business Goods forming part of assets of any business carried on by a

Asset person who ceases to be a taxable person, shall be deemed to be
supplied by him, in the course or furtherance of his business,
immediately before he ceases to be a taxable person.
Goods
Exceptions:
Business transferred as a going concern.
Business carried on by a personal representative who is deemed to
be a taxable person
Renting of immovable property
Construction of complex, building, civil structure, etc.
5 Temporary transfer or permitting use or enjoyment of any intellectual property right Services
Development, design, programming, customisation, adaptation, upgradation,
enhancement, implementation of IT software

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Agreeing to obligation to refrain from an act, or to tolerate an act or situation, or to

do an act.
Transfer of right to use any goods for any purpose
Following composite supplies:-
Works contract services.
6 Services
Supply of goods, being food or any other article for human consumption or any
drink.
 Negative list under GST [Section 7(2)(a) read with Schedule III]
Activities or transactions which shall be treated neither as a supply of goods nor a

Sr No
supply of services
1 Services by an employee to the employer in the course of or in relation to his employment.
2 Services by any court or Tribunal established under any law for the time being in force.
(a) Functions performed by the Members of Parliament, Members of State Legislature,
Members of Panchayats, Members of Municipalities and Members of other local authorities;
(b) Duties performed by any person who holds any post in pursuance of the provisions of
3 the Constitution in that capacity; or
(c) Duties performed by any person as a Chairperson or a Member or a Director in a
body established by the Central Government or a State Government or local authority and
who is not deemed as an employee before the commencement of this clause.
Services of funeral, burial, crematorium or mortuary including transportation of the
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deceased.
5 Sale of land and, subject to paragraph 5(b) of Schedule II, sale of building.
Actionable claims, other than specified actionable claims.
6
As per Section 2(102A), Specified actionable claim means the actionable claim involved in
or by way of betting, casinos, gambling, horse racing, lottery or online money gaming.
Supply of goods from a place in the non-taxable territory to another place in the non-taxable
7 territory without such goods entering into India
8(a) Supply of warehoused goods to any person before clearance for home consumption
Supply of goods by the consignee to any other person, by endorsement of documents of title
8(b) to the goods, after the goods have been dispatched from the port of origin located outside
India but before clearance for home consumption.

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 Composite and mixed supplies
What is Composite Supply What is Mixed Supply
Section 2 (30), of CGST Act, 2017 Section 2(74), of CGST Act, 2017.
 Composite supply means a supply made by a  Mixed Supply Means
taxable person to a recipient and  Two or More individual supplies of goods
 Comprises of two or more taxable supplies of or services, or any combination thereof
goods or services or both, or any combination  Made in conjunction with each other
thereof:  By a taxable Person
 Are naturally bundled and supplied in  For a single Price
conjunction with each other, in the ordinary  Where such Supply doesn’t constitute
course of business and one of which is Composite Supply
principal supply.
 The elements in a composite supply are
dependent on the ‘principal supply’.
Example: Charger supplied along with mobile phones. Example: A gift pack comprising of chocolates,
candies, sweets and balloons.
Significant Notifications/Circulars:
1) Clarification on various doubts related to treatment of sales promotion schemes under GST:
Buy one get one free offer: Taxability of such supply will be dependent upon as to whether the
supply is a composite supply or a mixed supply and the rate of tax shall be determined as per
the provisions of section 8 of the CGST Act.
2) Clarification on scope of principal and agent relationship under Schedule I of CGST Act in the
context of del-credere agent (DCA)
Issue 1: Whether a DCA falls under the ambit of agent under Para 3 of Schedule I of the CGST
Act?
Where the invoice for supply of goods is issued by the supplier to the customer, either himself or
through DCA, the DCA does not fall under the ambit of agent.
Where the invoice for supply of goods is issued by the DCA in his own name, the DCA would fall
under the ambit of agent.
Issue 2 : Whether the temporary short-term transaction-based loan extended by the DCA to
the recipient (buyer), for which interest is charged by the DCA, is to be included in the value of

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goods being supplied by the supplier (principal) where DCA is not an agent under Para 3 of
Schedule I of the CGST Act?
Where the DCA is not an agent under Para 3 of Schedule I of the CGST Act, the temporary short-
term transaction based loan being provided by DCA to the buyer is a supply of service by the
DCA to the recipient on principal to principal basis and is an independent supply.
Therefore, interest being charged by the DCA would not form part of the value of supply of goods
supplied (to the buyer) by the supplier.
Issue 3: Whether DCA is an agent under Para 3 of Schedule I of the CGST Act and makes payment
to the principal on behalf of the buyer and charges interest to the buyer for delayed payment along
with the value of goods being supplied, whether the interest will form part of the value of supply
of goods also or not?
In cases where the DCA is an agent under Para 3 of Schedule I of the CGST Act, the temporary
short-term transaction based credit being provided by DCA to the buyer no longer retains its
character of an independent supply and is subsumed in the supply of the goods by the DCA to the
recipient. It is emphasized that the activity of extension of credit by the DCA to the recipient would
not be considered as a separate supply as it is in the context of the supply of goods made by
the DCA to the recipient.
Value of the interest charged for such credit would be required to be included in the value of
supply of goods by DCA to the recipient as per section 15(2)(d) of the CGST Act.
3) Service by way of grant of alcoholic liquor license is neither a supply of goods nor a supply of
service
Government has notified the following activity or transaction undertaken by the State Governments
in which they are engaged as public authorities, to be treated neither as a supply of goods nor a
supply of service, namely:-
Service by way of grant of alcoholic liquor licence, against consideration in the form of
licence fee or application fee or by whatever name it is called”
It may be noted that services provided by the Government to business entities including by way of
grant of privileges, licences, mining rights, natural resources such as spectrum etc. against payment
of consideration in the form of fee, royalty etc. are taxable under GST. Tax is required to be paid
by the business entities on such services under reverse charge
4) Clarification in respect of goods sent/ taken out of India for exhibition or on consignment basis
for export promotion
It is, accordingly, clarified that the activity of sending/ taking the goods out of India for exhibition
or on consignment basis for export promotion, do not constitute supply as the said activity does

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not fall within the scope of section 7 of the CGST Act as there is no consideration at that point
in time, except when such activity satisfy the tests laid down in Schedule I of the CGST Act.
Since such activity is not a supply, the same cannot be considered as “Zero rated supply” as
per the provisions contained in section 16 of the IGST Act. That being the case, execution of a
bond or LUT, as required under section 16 of the IGST Act, is not required
If the specified goods are sold abroad, fully or Issue a tax invoice in respect of
partially, within the specified period of 6 such quantity of specified goods which
months has been sold abroad
When the specified goods sent / taken out of Issue a tax invoice on the date of expiry
India have neither been sold nor brought back, of 6 months from the date of removal of
either fully or partially, within the stipulated such quantity of specified goods which
period of 6 months have neither been sold nor brought back
5) Levy of GST on the service of display of name or placing of name plates of the donor in the
premises of charitable organisations receiving donation or gifts from individual donors
When the name of the donor is displayed in recipient institution premises, in such a manner,
which can be said to be an expression of gratitude and public recognition of donor’s act of
philanthropy and is not aimed at giving publicity to the donor in such manner that it would be an
advertising or promotion of his business, then it can be said that there is no supply of service
for a consideration (in the form of donation). There is no obligation (quid pro quo) on part of
recipient of the donation or gift to do anything (supply a service). Therefore, there is no GST
liability on such consideration.
GST will not be levied on consideration received namely: -
 The gift or donation is made to a charitable organization,

 The payment has the character of gift or donation and
 The purpose is philanthropic (i.e. it leads to no commercial gain) and not
advertisement
6) Clarification regarding GST applicability on liquidated damages, compensation and penalty

arising out of breach of contract or other provisions of law
Clarification: Agreeing to the obligation to refrain from an act or to tolerate an act or situation,
or to do an act has been specifically declared to be supply of service in Para 5(e) of Schedule II
to the CGST Act,2017 if the same constituted a “Supply” within the meaning of the CGST Act

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The Expression ‘Agreeing to the obligation to refrain from an act or to tolerate an act or a
situation, or to do an act’ has 3 limbs:
a) Agreeing to the obligation to refrain from an act
b) Agreeing to the obligation to tolerate an act or a situation
c) Agreeing to the obligation to do an act
1. There must be an expressed or implied agreement or contract must exist
Above three activities must be under an agreement or a contract to fall within the ambit
of Para 5(e) of Schedule II.0
Such contractual agreements are independent arrangements in its own right, such
arrangement/agreement can take the form of an independent standalone contract or may
form part of another contract.
II. Consideration must flow in return to this contract/agreement
for such (a) refraining or (b) tolerating or (c) doing
Taxability of some of the transactions has been discussed as under:
Sr. Transactions Clarification

No
1. Liquidated Damages Performance being the essence of the contract, Liquidated damages
cannot be treated as consideration received for tolerating the breach
or non-performance of the contract.
Payment for Liquidated damages is stipulated in a contract to ensure

performance and to deter non-performance, unsatisfactory performance
or delayed performance.
Where ‘liquidated damages’ is an amount paid only to compensate for

injury, loss or damage and there is no agreement, express or implied,
by the aggrieved party receiving the liquidated damages, to refrain from
or tolerate an act or to do anything. Such payments do not constitute
consideration for a supply and are not taxable.
The key in such cases is to consider whether the impugned payments

constitute consideration for another independent contract envisaging
tolerating an act or a situation or refraining from doing an act or
situation or simply doing an act. If the answer is yes, then it

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constitutes a ‘supply’ irrespective of by what name it is called,

otherwise it is not a “supply”.
2. Cheque dishonour Fine The fine or penalty that the supplier or banker imposes for
or Penalty dishonour is a penalty imposed for not tolerating, penalizing and
thereby deterring and discouraging such act or situation hence
cheque dishonour fine or penalty is not a consideration for any service
and hence not taxable.
3. Penalty imposed for There won’t be any agreement between the government and violator,
violation of laws specifying the violation.
Hence such fines, penalty chargeable by government or a local authority
imposed for violation of a statue, bye laws, rules or regulations are not
liable to tax.
4. Forfeiture of salary or The provisions of forfeiture of salary or recovery of bond in the event
payment of bond employee leaving the employment before the minimum agreed period
amount in the event are incorporated in the employment contract to discourage non-serious
of the employee employees. Such amounts are recovered as penalties for dissuading non-
leaving the serious employees and neither the employee gets anything in return
employment before from the employer. Therefore, such amounts recovered by the
the minimum agreed employer are not taxable.
period
5. Late payment The facility of accepting late payments with Interest or late payment
surcharge or fee fee, fine or penalty is a facility granted by the supplier naturally
bundled with the main supply
It is not uncommon or unnatural for customers to sometimes miss the
last date of payment of electricity, water telecommunication services
etc.
Most of the service providers across the world provide the facility
of accepting late payments with late fine or penalty. Since it is
ancillary to and naturally bundled with the principal supply such as of
electricity, water, telecommunication, cooking gas, insurance etc.
should be assessed at the same rate as that of principal supply.
6. Fixed Charges for Both the components of the price charged, the minimum fixed
Power charges/capacity charges and the variable/energy charges are charged
for sale of electricity and are thus not taxable, as electricity is exempt
from GST
7. Cancellation Charges This facilitation service of allowing cancellation against payment of
cancellation charges is also a natural part of the bundle and

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supplied in conjunction with principal supply of transportation in

the ordinary course of business
Therefore, such facilitation supply of allowing cancellation of an

intended supply against payment of cancellation fee or retention or
forfeiture of part or whole of the consideration in such cases be
assessed as Principal Supply.
7) Clarification with respects to Perquisites provided in terms of Contractual agreement to

employee not liable to GST
Any perquisites provided by the employer to its employees in terms of contractual agreement
entered into between the employer and the employee are in lieu of the services provided by the
employee to the employer in relation to his employment hence perquisites provided by the employer
to the employee in terms of contractual agreement entered into between the employer and the
employee will not be subjected to GST.
8) Clarification No supply of service by the insured to the insurance company in lieu of ‘No
Claim Bonus’ offered by said insurance company to him
It is clarified that there is no supply provided by the insured to the insurance company in form
of agreeing to the obligation to refrain from the act of lodging insurance claim during the previous
year(s) and No Claim Bonus cannot be considered as a consideration for any supply provided by
the insured to the insurance company.
9) Supply of food and beverages at cinema halls taxable as restaurant service.
It is hereby clarified that:
(i) supply of food / beverages in a cinema hall is taxable as ‘restaurant service’ as long as:
(a) the food or beverages are supplied by way of or as part of a service, and
(b) supplied independent of the cinema exhibition service.
(ii) where the sale of cinema ticket and supply of food and beverages are clubbed together,
and such bundled supply satisfies the test of composite supply, the entire supply will attract
GST at the rate applicable to service of exhibition of cinema, the principal supply.

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10) Clarification on taxability on shares held in a subsidiary company by holding company.
Issue: Whether the holding of shares in a subsidiary company by the holding company will be
treated as 'supply of service' and whether the same will attract GST or not?
Clarification: It is clarified that securities are considered neither treated as goods nor as services.
Further, securities include 'shares' as per definition of securities. This implies that the securities
held by the holding company in the subsidiary company are neither goods nor services.
Further, purchase or sale of shares or securities, in itself is neither a supply of goods nor a supply
of services.
For a transaction/activity to be treated as supply of services, there must be a supply as defined

under section 7. It cannot be said that a service is being provided by the holding company to the
subsidiary company solely on the basis that there exists a SAC entry ‘997171’ in the scheme of
classification of services mentioning; "the services provided by holding companies, i.e. holding
securities of (or other equity interests in) companies and enterprises for the purpose of owning a
controlling interest.", unless there is a supply of service by the holding company to the subsidiary
company in accordance with section 7.
Therefore, the activity of holding of shares of subsidiary company by the holding company per se
cannot be treated as a supply of services by a holding company to the said subsidiary company
and cannot be taxed under GST.

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CHAPTER 2 Levy and Collection of Tax
 Extent and Commencement of CGST Act / SGST Act / UTGST Act / IGST Act
Inter State
Intra State Supply
Applicability Supply
CGST SGST UTGST IGST
States of India Yes Yes Yes
Union Territories with State legislature (i.e. Delhi
Yes Yes Yes
Jammu and Kashmir and Puducherry)
Union Territories without State legislature (i.e.
Andaman & Nicobar Islands, Lakshadweep, Ladakh
Yes Yes Yes
Dadra and Nagar Haveli & Daman and Diu,
Chandigarh and other Territory)
 Levy and collection of CGST / IGST
Particulars CGST IGST

Intra-State supplies of Inter-State supplies of
Levied on
goods/services/both goods/services/both
Collected and paid
Taxable Person
by
Supply outside
Alcoholic liquor for human consumption
purview of tax
Value for levy Transaction value under section 15 of the CGST Act
IGST rate= CGST rate + SGST rate
Rates as notified by Government.
Rates (more or less) Maximum rate of IGST
Maximum rate of CGST will be 20 %
will be 40%.
Supplies on which  Petroleum crude
tax to be levied  High speed diesel
w.e.f. a notified date  Motor spirit (commonly known as petrol)
(Memory Tech:  Natural gas and
PHMNA)  Aviation turbine fuel
 Supply of goods or services or both, notified by the Government on the
Tax payable under recommendations of the GST Council.
reverse charge  Supply of taxable goods or services or both by an unregistered supplier to
a class of registered person for specified category of goods or services.

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The Government may notify specific categories of services the tax on supplies
Tax payable by the of which shall be paid by electronic commerce operator (ECO) as if such
electronic commerce services are supplied through it.
operator. If the ECO is located in taxable
Person liable to pay tax is the ECO
territory
If the ECO does not have physical Person liable to pay tax is the person
presence in the taxable territory representing the ECO
If the ECO has neither the physical Person liable to pay tax is the person
presence nor any representative in appointed by the ECO for the purpose
the taxable territory of paying the tax
IGST Shall be levied and collected on
import of goods as per the section 3
of the custom tariff Act, 1975
Goods Imported into
No CGST and SGST/UTGST payable. Note : It has been notified that
India
Online Money Gaming will be taxed
under IGST as import of goods
without applicability of customs duty.
 What is an Economic Commerce Operator (ECO)

Electronic Commerce Operator has been defined in Sec. 2(45) of the CGST Act, 2017 to mean
any person who owns, operates or manages digital or electronic facility or platform for
electronic commerce.
Following categories of services supplied through ECO are notified for this purpose –
 Services by way of transportation of passengers by a radio- taxi, motor cab, maxi cab
and motor cycle, omnibus or any other motor vehicle.
 Service by way of transportation of passengers by an omnibus except where the
person supplying such service through ECO is a company.
 Services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites
or other commercial places meant for residential or lodging purposes except Registered
person
 Services by way of house-keeping, such as plumbing, carpentering except registered
person etc.
 Supply of restaurant service other than the services supplied by restaurant, eating joints
etc. located at specified premises

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 Clarification regarding GST on services supplied by Restaurants through ECO:
1. ECOs not to collect TCS in respect of restaurant services so notified

2. ECOs not required to take separate registration for paying tax on restaurant service supplied
through them
3. ECO to pay tax on any restaurant services supplied through them
4. Supply of restaurant services to be included in aggregate turnover of person supplying restaurant
services through ECO
5. Restaurant services provided through ECO not to be considered as inward supply for ECOs liable
to RCM
6. Reversal of proportionate ITC on input goods and services not required by ECO
7. GST to be paid by the supplier on services not notified under section 9(5) of CGST Act but
supplied through ECO
8. Billing in case of ‘restaurant service’ and goods / services other than restaurant service being sold
by a restaurant to a customer under the same order
9. ECO to raise invoice in respect of restaurant service supplied through ECO

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CHAPTER 3 Reverse charge Mechanism
1) Liability to pay tax by the recipient of supply of goods or services or both instead of the
supplier of such goods or services
2) Difference between Forward charge and Reverse charge mechanism:
Payment of Tax under Forward Charge Payment of Tax under Reverse Charge
Government Government
Person making Recipient of Person making Recipient of

Taxable Supply Taxable Supply Taxable Supply Taxable Supply
Here person making taxable supply i.e. Supplier is liable Here recipient of Taxable supply is liable to pay tax
to pay tax on taxable supply being made. on taxable supply being received.
3) Relevant section under reverse charge mechanism
Section Particulars
Liability for payment of tax under Reverse Charge in notified cases

 RCM in case of Goods
Notification no 04/2017 CT (R ) and IT(R)
 RCM in case of services:
Notification No. 13/2017 CT (R) dated 28.06.2017 as amended
9(3) of CGST Act, 2017 has notified categories of supply of services wherein whole of
the CGST shall be paid on reverse charge basis by the recipient
of services.
Notification no 10/2017 IT (R) notifies category of services
where whole of IGST shall be paid by recipient of service on
reverse charge basis.
Reverse Charge in case of supply by Unregistered to class of Registered
9(4) of CGST Act, 2017
person in respect of specified category of goods or services.
CA YachanaMuthaBhurat 09669357770 gst.yachana@gmail.com

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4) Services as per notification no 13/2017 and chargeability as per RCM provisions

 CGST Purposes
Sr. No Category of Supplier Person liable to pay tax & Recipient of Service
supply of of
service service
GTA Goods (a) factory or
Transport (b) society or
Agency (c) co-operative society or
(GTA) (d) any person registered under the CGST Act or the IGST Act
1 or the SGST Act or the UTGST Act; or
(e) body corporate or
(f) any partnership firm or
(g) any casual taxable person.
Located in taxable territory
RCM shall not apply to services provided by a GTA, by way of transport of goods in a goods
carriage by road to-
(a) a Department/establishment of the CG/SG/UT or
(b) local authority; or
(c) Governmental agencies,
which has taken registration under the CGST Act only for the purpose of deducting tax
under section 51 and not for making a taxable supply of goods or services.
Further, nothing contained in this entry shall apply where,-

(i) Supplier has taken registration under the CGST Act, 2017 and exercised the option to pay
tax on the services of GTA in relation to transport of goods supplied by him under forward
charge and
(ii) Supplier has issued a tax invoice to the recipient charging CGST at the applicable rates
and has made the prescribed declaration on such invoice issued by him

19
Summary Book
Analysis :
 If GST on GTA Service is chargeable and if GTA is registered under GST, then GTA has the choice
to opt to pay GST under Forward charge Mechanism by making a required declaration on tax invoice
issued by it.
 If GTA opts to pay under forward charge mechanism then, GTA has the option to pay either:
 @ 5%
 Without any Input Tax Credit (ITC) on  @12%
Inputs, Capital Goods and Input services used  With ITC on Inputs, Capital Goods and Input
by GTA service used by GTA.
 Further if GST on GTA Service is chargeable and if GTA does not opt to pay GST under Forward
charge Mechanism, then recipient will be liable to pay GST under RCM and applicable rate of GST
will be 5% in this case.

20
Summary Book
Analysis of Exemption and taxability of GTA Services
GST on GTA
service
If the recipient is Dept.

If the recipient is other If the recipient is one of the 7
of CG/SG/UT/LA/GA
than 7 specified categories specified categories of the person
who taken for
of person (e.g unregistered
registration for tax
individual end consumer)
deduction
GST is
Chargable
GST is exempt GST is exempt
GTA service
supplier has the
choice
Take registration
under GST and opt Otherwise
to pay GST under
FCM
Receipent will
Applicable rate be the liable to
of GST pay GST under
RCM
5% (without 12% (with ITC

any ITC on IN, on IN,CG& INS Applicable rate
CG & INS used used by GTA) of GST 5%
by GTA)

21
Summary Book
Sr. No Category of supply of service Supplier of service Person liable to pay tax
& Recipient of Service
Services supplied by an individual An individual advocate
advocate including a senior advocate including a senior
by way of representational services advocate or
before any court, tribunal or firm of
2 authority, directly or indirectly, to any advocates.
business entity located in the
taxable territory, including where
contract for provision of such service
has been entered through another
advocate or a firm of advocates, or by Any business entity
a firm of advocates, by way of legal located in the taxable
services, to a business entity. territory.
Services supplied by an arbitral An arbitral tribunal. Any business entity
3 tribunal to a business entity. located in the taxable
territory.
Services provided by way of Any body corporate or
4 sponsorship to body corporate or Any person partnership firm located
partnership firm. in the taxable territory.
Services supplied by the  CG , SG Any business entity
 CG,SG,  Union territory or located in the taxable
 Union territory or local authority territory
 local authority
to a business entity excluding, -
(1) renting of immovable property,
and
(2) services specified below-
5 (i) services by the Department of
Posts and the Ministry of Railways
(Indian Railways)
(ii) Services in relation to an aircraft
or a vessel, inside or outside the
precincts of a port or an airport
(iii)Transport of goods or passengers.
Services supplied by
CG, SG,  CG , SG

22
Summary Book
Union territory/  Union territory or

local authority excluding the Ministry local authority
of Railways (Indian Railways), Any person registered
5A by way of renting of immovable under the CGST Act,
property to a person registered under 2017
CGST Act, 2017
5AA Service by way of renting of residential Any person Any registered person
dwelling to a registered person
Services supplied by any person by way
5B of transfer of development rights or
Floor Space Index (FSI) (including
additional FSI) for construction of a Any person Promoter
project by a promoter
Long term lease of land (30 years or
5C more)by any person against
consideration in the form of upfront Any person Promoter
amount (called as premium, salami,
cost, price, development charges or by
any other name) and/or periodic rent
for construction of a project by a
promoter.
Services supplied by a director of a The company or a body
company/ body corporate to the said A director of a corporate located in the
6 company/ body corporate. company or a body taxable territory.
corporate

23
Summary Book
Remuneration
paid to
Whole-time
Independent Directors including
Directors (not managing Directors
employees) (may or may not
be employees)
Outside scope of TDS Deduction In respect of In respect of

Schedule III under Income Contract of Contract for
(employment Tax Service Service
services), Thus,
taxable under
reverse charge Outside scope of Transaction in
Deducts TDS Deducts TDS
in the hands of Schedule III nature of
u/s 192 - u/s 194J -
company (employment employment
Employee Professional
services), Thus, services, thus
Services Services
taxable under not leviable to
reverse charge in tax
the hands of
Transaction in
Outside scope of company
nature of
Schedule III
employment
(employment
services, thus
services), Thus,
not leviable to
taxable under
tax
reverse charge in
the hands of
company
Clarification on Services supplied by director of a company in his personal capacity such as renting of
immovable property to the company/body corporate Tax not payable under RCM:
It is hereby clarified that services supplied by a director of a company/body corporate to the company/body
corporate in his private/personal capacity such as services supplied by way of renting of immovable property
are not taxable under RCM.
Only those services supplied by director of company/body corporate, which are supplied by him as or in the
capacity of director of that company or body corporate shall be taxable under RCM in the hands of the
company or body corporate under Notification No. 13/2017 CT(R) (Sl. No. 6) dated 28.06.2017.

24
Summary Book
Services supplied by an insurance Any person carrying on

7 agent An insurance agent insurance business,
located in the taxable
territory.
A banking company or a
Services supplied by a recovery agent A recovery agent financial institution or a
8 non-banking financial
company (NBFC),
located in the taxable
territory.
Supply of services
 by an author, music composer,
photographer, artist or Author or music
 the like by way of transfer or composer, Publisher, music
9 permitting use or photographer, artist, company, producer or
 enjoyment of a copyright covered or the like the like, located in the
under section 13(1)(a) of the taxable territory
Copyright Act, 1957 relating
to original literary, dramatic, musical
or artistic works to a publisher,
music company, producer or the like.
Supply of services by an author by
way of transfer or permitting the use
or enjoyment of a copyright covered
Publisher located in
9A under clause (a) of sub section (1) of Author
the taxable territory
section 13 of the Copyright Act, 1957
relating to original literary works to a
publisher

25
Summary Book
Current scenario for services by

Author to publisher
Option 1 Option 2
Taxable under RCM Taxable under

basis forward charge basis
Author is liable to pay tax

Publisher is liable to
subject to fulfiullment of
pay tax
certain conditions
However, an author can choose to pay tax under forward charge if-
 he has taken registration under the CGST Act and filed a declaration, that he exercises the option
to pay CGST on the said service under forward charge and that he shall not withdraw the said option
within a period of 1 year from the date of exercising such option;
 he makes a declaration on the invoice issued by him in prescribed form to the publisher
Supply of services by the members of Members of
10 Overseeing Committee to Reserve Bank Overseeing Committee RBI
of India (RBI) constituted by RBI
Services supplied by individual Direct
Selling Agents (DSAs) other than a Individual Direct
body corporate, partnership or limited Selling Agents
liability partnership (LLP) firm to (DSAs) other than a A banking company or a
11 bank or non-banking financial company body corporate, NBFC, located in the
(NBFCs). partnership or LLP taxable territory
firm
Services provided by Business
12 facilitator to a banking company Business facilitator A banking company,
[Effective from 01.01.2019] located in the taxable
territory

26
Summary Book
Services provided by an agent of An agent of business A business

13 business correspondent to business correspondent correspondent, located in
correspondent. the taxable territory
Security services (services provided

by way of supply of security
personnel) provided to a registered
person. However, nothing contained
in this entry shall apply to:
(i) (a) a Department establishment
of CG or SG or UT or Any person other A registered person,
(b) local authority or than a body located in the taxable
14 (c) Governmental agencies; corporate territory.
which has taken registration
under the CGST Act only for
the purpose of deduction
tax under section 51
of the said Act and not for
making a taxable supply of
goods or services or
(ii) a registered person paying tax
under composition scheme.
Security
services
Any person
other than Body corporate
body corparate
CG, SG, UT, LA Gov Forward charge

Composition Registered person
agent which are
dealer other than
Registered deduct tax
composition deals
U/S 51
Forward Forward
charge Reverse Charge charge

27
Summary Book
Any person, other

than a body corporate
Services provided by way of renting of
any motor vehicle designed to carry who supplies the Any body corporate
passengers where the cost of fuel is service to a body located in the taxable
15
included in the consideration charged corporate and does not territory
from the service recipient, provided to issue an invoice
a body corporate charging CGST @ 6%
to the service recipient
Clarification regarding RCM on renting of motor vehicles service
Person liable to pay

tax under renting of
motor vehicle service
Where GST is Where GST is

payable @ payable @
5% 12%
Supplier is other
Supplier is Body
than
Corporate
Body Corporate
Recipient is a Body Recipient is other

Corporate than Body Forward charge
Corporate
Reverse
charge
Person liable to pay Person liable to

GST is Recipient ** pay GST is Supplier

28
Summary Book
 Clarification on situations in which corporate recipients are liable to GST on Renting of Motor
vehicles which are designed to carry passengers under Reverse Charge Mechanism
Issue: - Situations in which corporate recipients are liable to pay GST on renting of Motor Vehicles
designed to carry passengers under RCM
The main question is whether RCM is applicable on

(i) Service of renting of motor vehicle designed to carry passengers or
(ii) Service of transportation of passengers
Clarification: There is distinction between 2 services, where services of renting of motor vehicle designed to
carry passengers which covers mainly service of renting of motor vehicle and passenger transport services
covers passenger transport services over pre-determined routes on pre-determined schedules.
 Where the Body corporate hires the motor vehicle for a period of time during which the motor
vehicle shall be at the disposal of the body corporate, the service would fall under ‘services of
renting of motor vehicles designed to carry passengers’, and the body corporate shall be liable to pay
GST on the same under RCM.
 Further where the body corporate avails the passenger transport service for specific journeys or
voyages and does not take on rent, service would fall under passenger transport service and the body
corporate shall not be liable to pay GST.
Lender i.e., a person who
deposits the securities
registered in his name or Borrower i.e., a person
Services of lending of securities under in the name of any other who borrows the securities
16 Securities Lending Scheme, 1997 person duly authorized on under the Scheme through
(“Scheme”) of SEBI his behalf with an an approved intermediary
approved intermediary for of SEBI
the purpose of lending
under the scheme of SEBI
Clarification regarding taxability of supply of securities under Securities Lending Scheme, 1997: Under the
Scheme, lender of securities lends to a borrower through an approved intermediary to a borrower under an
agreement for a specified period with the condition that the borrower will return equivalent securities of the
same type or class at the end of the specified period along with the corporate benefits accruing on the
securities borrowed. There is anonymity between the lender and borrower since there is no direct agreement

29
Summary Book
between them. The lenders earn lending fee for lending their securities to the borrowers. The security lending
mechanism is depicted in the diagram below: -
The lending fee charged from the borrowers of securities has the character of consideration and
this activity is taxable in GST since 01.07.2017.
Apart from above, the activities of the intermediaries facilitating lending and borrowing of
securities for commission or fee are also taxable separately.
 IGST Purposes:
Sr. No Category of supply of service Supplier of Person liable to pay tax &
service Recipient of Service
Any service supplied by any person who Any person located in the
Any person
is located in a non-taxable territory to taxable territory other
1. located in a non-
any person other than non-taxable than non-taxable online
taxable territory
online recipient. recipient
 Reverse Charge Mechanism on Supply of Goods (Notification No. 4/2017 CT (R) IT (R) dated
28.06.2017)
S. No. Description of supply of Goods Supplier of goods Recipient of Supply
1 Cashew nuts, not shelled or peeled Agriculturist Any Registered Person

2 Bidi Wrapper Leaves (Tendu) Agriculturist Any Registered Person
3 Tobacco Leaves Agriculturist Any Registered Person
3A Following essential oils other than those Any unregistered person Any Registered Person
of citrus fruit namely: -
(a) Of peppermint (Mentha piperita);
(b) Of other mints :
Spearmint oil (ex-mentha spicata),
Water mint- oil (ex-
mentha aquatic), Horsemint oil
(ex-mentha sylvestries),

30
Summary Book
Bergament oil (ex-mentha citrate),

Mentha arvensis
4 Silk Yarn Any person who Any Registered Person
manufactures silk yarn
from raw silk or silk worm
cocoons for supply of silk
yarn
4A Raw Cotton Agriculturist Any Registered Person
5 Supply of Lottery State Government, Lottery Distributor or
Union Territory or Selling Agent
any local authority
6 Used vehicles, seized and confiscated Central Government Any Registered Person
goods, old and used goods, waste and excluding Ministry of
scrap Railways (Indian
Railways),
State Government,
Union territory or
Local Authority
7 Priority Sector Lending Certificate Any Registered Person Any Registered Person

31
CHAPTER 4 Composition Scheme
 Taxable Supply: Supply of G/S which is leviable to tax

 Exempt Supply: Supply of G/S (NIL Rate of tax + wholly exempt from tax + non-taxable
supply)
 Non-Taxable Supply: Supply of G/S which is not leviable to tax
 Aggregate Turnover
Includes Excludes
Taxable Supplies CGST
Exempt Supplies SGST
Exports UTGST
IGST
Inter State Supplies
Compensation Cess
of persons having the same PAN be computed on all
Value of inward supplies on which tax is
India basis
payable under reverse charge
 “Turnover in State” or “Turnover in Union Territory”

"turnover in State” or “turnover in Union territory” means the aggregate value of
 all taxable supplies (excluding inward supplies on which tax is payable under RCM and
 exempt supplies made within a State or Union territory by a taxable person,
 exports of goods or services or both and
 inter-State supplies of goods or services or both made from the State or Union territory
by the said taxable person
 but excludes central tax, State tax, Union territory tax, integrated tax and cess

32
Summary Book
 Eligibility:
Supplier Aggregate Turnover
Other than Special category States Rs. 1.5 Crore in Preceding FY
In Special Category States Rs. 75 Lakhs in Preceding FY
Special category states (Memory Technique: TSUNAMMM)
Meghalaya Mizoram Manipur
Arunachal Pradesh Nagaland Tripura
Sikkim Uttarakhand
Note: In case of Himachal Pradesh, Assam & Jammu and Kashmir, the eligibility limit of
turnover will be Rs. 1.5 crore
 Composition Scheme u/s 10(1) read with Rule 7:

Sec 10(1) Category of Registered Persons Rate (CGST+SGST)
(a) Manufacturer 1% of T/O in state or UT
(b) Supplier of Food (i.e. Restaurant services) 5% of T/O in state or UT
(c) Traders 1% of T/O of Taxable supplies of
goods and services in the state or UT
A person who opts to pay tax under clause (a), (b) or(c) may supply services (other than
Restaurant services), of value not exceeding
 10% of turnover in a State or UT in the preceding financial year or
 5 lakhs rupees,
whichever is higher
Note: While computing value of services [other than restaurant services] as referred in second proviso
to section 10(1), interest on loans/deposit/advances will not be taken into account.
 Section 10(2): Conditions for Scheme u/s 10(1):

The registered person shall be eligible to opt under sub-section (1), if––
(a)Save as provided in 10(1), he is not engaged in the supply of services i.e.
 Either he is not at all engaged in supply of services other than restaurant services or
 In case he supplies services other than restaurant services, value of such services does
not exceed 10% of the turnover in a State/Union Territory in the preceding financial
year or ` 5 lakh, whichever is higher.

33
Summary Book
(b) he is not engaged in making any supply of goods or services which are not leviable to tax
under this Act i.e Non-taxable goods or services
(c) he is not engaged in making any inter-State outward supplies of goods or services
(d) he is not engaged in making any supply of goods or services through an electronic commerce
operator who is required to collect tax at source under section 52
(e) he is not a manufacturer of following notified goods:
 Ice Cream and other edible ice,
 whether or not containing cocoa,
 Pan Masala and Tobacco and manufactured tobacco substitutes.
 Manufacturer of aerated water
 Fly ash bricks or fly ash aggregate, fly ash content; Fly ash blocks
 Bricks of fossil meals or similar siliceous earths
 Building bricks
 Earthen or roofing tiles
(f) he is neither a casual taxable person nor a non-resident taxable person
 Composition scheme u/s 10(2A):
A registered person, not eligible to opt to pay tax u/s 10(1) & (2), whose aggregate turnover
in the preceding financial year did not exceed 50 lakh, may opt to pay at (CGST 3% +SGST
3%) of the turnover in State or turnover in UT
Note : Section 10(2A) is applicable to those persons who are ineligible for opting composition
scheme u/s 10(1) and 10(2).Thus composition scheme of Sec 10(2A) is available to following
taxable person.
 Predominant for service providers

 Those persons who are ineligible u/s 10(1) and 10(2) i.e. manufacturers/ traders/
restaurant etc. providing services in excess limit as mentioned in proviso 2
Conditions for composition scheme under section 10(2A)
a. He is not engaged in making any supply of goods or services which are not leviable to tax
under this Act
b. He is not engaged in making any inter-State outward supplies of goods or services
c. He is not engaged in making any supply of goods or services through an electronic
commerce operator who is required to collect tax at source under section 52;
d. He is not a manufacturer of such goods or supplier of such services as may be notified
by the Government on the recommendations of the Council; and
 Ice Cream and other edible ice, whether or not containing cocoa,

34
Summary Book
 Pan Masala
 Tobacco and manufactured tobacco substitutes.
 Manufacturer of aerated water
 Fly ash bricks or fly ash aggregate, fly ash content; Fly ash blocks
 Bricks of fossil meals or similar siliceous earths
 Building bricks
 Earthen or roofing tiles
e. He is not a casual taxable person or a non-resident taxable person
Scheme U/s 10(2A) is applicable for all transactions of registered person with same PAN
Note : As per Rule 7, A registered person opting for composition levy for services u/s 10(2A)
shall pay tax @ 3% [Effective rate 6% (CGST+ SGST/UTGST)] of the turnover of supplies
of goods and services in the State or Union territory.
 Other Important points
Composition scheme shall lapse with effect from the day on which his aggregate turnover during a
financial year exceeds the limit specified under 10(1) or 10(2A)
RP who opts for composition scheme shall not:
 Shall not collect any tax from the recipient on supplies made by him
 shall be entitled to any input tax credit
If the proper officer has reasons to believe that a taxable person has paid tax despite not being
eligible, such person shall,
 In addition to any tax
 be liable to a penalty
and the provisions of section 73 or section 74 shall, mutatis mutandis, apply for determination of
tax and penalty.
Explanation 1 – For the purposes of computing aggregate turnover of a person for determining his
eligibility to pay tax under this section, the expression "aggregate turnover"
 shall include the value of supplies made by such person from the 1st day of April of a financial
year up to the date when he becomes liable for registration under this Act,
But
 shall not include the value of exempt supply of services provided by way of extending deposits,
loans or advances in so far as the consideration is represented by way of interest or discount.

35
Summary Book
Explanation 2.-For determining the tax payable by a person, the expression "turnover in State or
turnover in Union territory " shall not include the value of following supplies, namely:-
1. Supplies from the first day of April of a financial year up to the date when such person
becomes liable for registration under this Act; and
2. Exempt supply of services provided by way of extending deposits, loans or advances in so far as
the consideration is represented by way of interest or discount.
Other Conditions and Restrictions

He is neither a casual taxable person nor a non- resident taxable person
Stock has not been purchased from an unregistered supplier, where purchased tax paid under reverse
charge
He shall pay tax under section 9(3)/9(4) (reverse charge) on inward supplies
He is not engaged in manufacturer of notified goods
Words “Composition taxable person, not eligible to collect tax on supplies” is mentioned at the top
of the bill of supply
Words "Composition taxable person" displayed at prominent places
The registered person paying tax under section 10 may not file a fresh intimation every year
 Composition Scheme – Procedure
Effective date of composition

Category of Persons How to exercise option
levy
Intimation in the From the effective date of
New registration under GST
registration form registration
Registered person opting for composition Intimation in prescribed
Beginning of the financial year
levy form
 Special procedure to be followed by ECOs in respect of supplies of goods through them by

composition taxpayers
ECO who is required to collect tax at source under section 52 has been notified as the class of persons
who shall follow the following special procedure in respect of supply of goods made through it by the
composition suppliers, namely: —
(i) the ECO shall not allow any inter-State supply of goods through it by the said person;

36
Summary Book
(ii) the ECO shall collect tax at source under section 52(1) in respect of supply of goods made
through it by the said person and pay to the Government as per provisions of section 52(3); and
(iii) the ECO shall furnish the details of supplies of goods made through it by the said person in
the statement in Form GSTR-8 electronically on the common portal.

37
CHAPTER 5 Time of Supply
1) Time Of Supply Where Tax Is Payable Under Forward Charge
Time of supply of goods [Section 12(2)] Time of supply of services [Section 13(2)]
(a) Invoice issued within the prescribed time
period
Earliest of the following:
 Date of issue of invoice by the supplier
 Date of issue of invoice by the supplier
or the last date on which he is
 Date of receipt of payment (entering the
required, to issue the invoice under
payment in books of account or crediting of
section 31 with respect to the supply
payment in bank account, whichever is earlier)
 Date on which the supplier receives the
(b) Invoice not issued within the prescribed time
payment (entering the payment in
period
books of account or crediting of
payment in bank account, whichever is
 Date of provision of service
earlier) with respect to the supply
 Date of receipt of payment (entering the
payment in books of account or crediting of
No GST on advances received for supply of
payment in bank account, whichever is earlier)
goods: In case of supply of goods by a
(c) When the above events are unascertainable
registered person (excluding composition
 Date on which the recipient shows the
supplier), GST is to be paid on the outward
receipt of services in his books of account
supply of goods on the date of issue of invoice
or the last date on which invoice ought to
Supplier receives upto Rs. 1000 in excess of amount
have been issued in terms of section 31
indicated in invoice, TOS to the extent of such excess
[Notification No. 66/2017 CT dated 15.11.2017].
amount at option of supplier be date of issue of
invoice.
2) General Time Limit For Raising Invoices
Supply of goods Supply of services

Before or at the time of,-
Before or after the provision of service but
(a) removal of goods for supply to the
within 30 days [45 days in case of insurance
recipient, where the supply involves movement
cos./banking and financial institutions
of goods, or
including NBFCs] from the date of supply of
(b) delivery of goods or making available thereof
services
to the recipient, in any other case

38
Summary Book
3) Time of Supply Where Tax Is Payable Under Reverse Charge
Time of supply of goods [Section 12(3)] Time of supply of services [Section 13(3)]
 Date of receipt of goods, or
 Date of payment as entered in the books of
 Date of payment as entered in the books
account of the recipient or the date on which
of account of the recipient or the date on
the payment is debited to his bank account,
which the payment is debited to his bank
whichever is earlier, or
account, whichever is earlier, or
 61st day from the date of issue of invoice
 31st day from the date of issue of invoice
Where the above events are not ascertainable, the time of supply shall be the date of entry in the
books of account of the recipient of supply
Import of service from associated enterprise Date of entry in the books of account of the
recipient or the date of payment, whichever is earlier
4) Time Of Supply Of Vouchers Exchangeable For Goods And Services
Supply of vouchers exchangeable for goods and services [Sections 12(4) and 13(4)]
(a) Supply of goods or services is identifiable at the time of issue of voucher
Date of issue of the voucher
(b) Other cases
Date of redemption of the voucher
5) Time Of Supply Of Goods And Services In Residual Cases
Supply of goods and services in residual cases [Sections 12(5) and 13(5)]
(a) Where a periodical return is required to be filed
Due date of filing such return
(b) Other cases
Date of payment of tax
6) Time Of Supply For Addition In Value By Way Of Interest/ Late Fee/Penalty For Delayed
Payment Of Consideration
Addition in value by way of interest, late fee/penalty for delayed payment of consideration.
Time of Supply - Date on which the supplier receives such addition in value

39
Summary Book
7) Change in Rate of Tax (Section 14):
Change in Effective rate of tax (CERT)
 Issuance of Invoice
Any of two events before Any of two events after
8) in rate of tax  Supply of Goods /
change change in rate of tax
Services`
 Receipt of Payment.
Old Rate. New Rate.
8) Time for payment of tax in case of joint development agreements in real estate sector
In case of-
 supply of development rights against consideration in the form of construction service of
complex, building or civil structure;
 supply of construction service of complex, building or civil structure against
consideration in the form of transfer of development right
GST is to be paid at the time when the possession or right in the property is transferred to
the land owner by entering into a conveyance deed or similar instrument (e.g. allotment
letter)
9) Special procedure for determining the time of supply of services in certain cases :
Supply of services by a landowner to a developer by way of –

(i) transfer of transferable development rights (TDR) or floor space index (FSI);
(ii) granting of long term lease,
for construction of residential apartments have been exempted subject to the condition
that the constructed flats are sold before issuance of completion certificate or first
occupation of the project, whichever is earlier, and tax is paid on them.
Such exemption for TDR, FSI, long term lease (premium) shall not be available in case
of flats which remain un-booked on the date of issuance of completion certificate or
first occupation of the project, whichever is earlier.

40
Summary Book
The promoter (developer) shall be liable to pay tax at the applicable rate, on reverse charge
basis, on such proportion of
(i) Value of development rights and/or FSI, or
(ii) Upfront amount paid for long term lease,
As is attributable to such un-booked residential apartments.
Tax on such supply can be paid in the tax period in which earlier of the two events occur or
any earlier period

41
CHAPTER 6 Value of Supply
1) Value of Supply (Section 15)
Value of Supply
Supply made to Supply made to

Supply where price
Supply is a
unrelated person related person notified supply
is not the sole
where price is the u/s 15(4)/(5)
consideration
sole consideration
Value of Supply = Value to be determined under

Transaction Value Chapter IV: Determination of Value
u/s 15(1) of Supply of CGST Rules
 Value = TV = Price actually paid or payable when S and R are not related + Price is sole
consideration
 Inclusions in value u/s 15(2)
 Taxes other than GST
 Third party payments made by customer in relation to supply, which supplier was liable to pay
and were not included in the price
 Incidental expenses including commission and packing anything done by the supplier in respect
of the supply till delivery of goods/ for supply of services, if charged to recipient
 Interest/late fee/penalty for delay in payment of consideration.
 Subsidies linked to price of supply other than the ones given by Central/State Governments
 Exclusions from value 15(3)

 Discounts given before or at the time of supply and recorded in the invoice
 Post supply discount / incentive, if known in advance & linked with invoices and
proportionate ITC has been reversed by the recipient

42
Summary Book
 Valuation Rules:
Rule 27 : Consideration not wholly in money
Value shall be either of the following in the given order:

 open market value
 total of consideration in money + amount equal to the consideration not in money
 value of supplies of like kind and quality
 Consideration in money + money value of non- monetary consideration computed as per rule 30 or 31 in
that order.
Rule 28 : Supply between distinct/ related persons, other than agent

 Open market value
 Value of supplies of like kind and quality
 Value as per rule 30 or 31 in that order.
 Option to supplier to value goods sold as such by recipient. Value= 90% of price charged by recipient to
its unrelated customer
Recipient eligible for ITC. Invoice value = open market value (taxable value)
The value of supply of services by a supplier to a recipient who is a related person, by way of providing
corporate guarantee to any banking company or financial institution on behalf of the said recipient, shall be
deemed to be
 1% of the amount of such guarantee offered, or
 the actual consideration,
whichever is higher
Rule 29: Supply of goods made/received through an agent

 Open market value or 90% of price charged by recipient to his unrelated customer for supplies of like kind
and quality;
 Value as per rule 30 or 31 in that order.
Rule 30: Value based on cost
Value shall be 110% of cost of production/acquisition/ provision of goods or services

Rule 31: Residual method (Best Judgement Method)
Value shall be determined using reasonable means consistent with the principles and general provisions of
section 15 & valuation rules. For services, rule 31 can be adopted before rule 30.

43
Summary Book
Rule 31A: Value of supply of lottery, chance to win in betting/ gambling/ horse racing in race club
The value of supply of lottery will be higher of –
 100/ 128 of the face value of ticket
OR
 100 / 128 of the price as notified in the Official Gazette by the Organising State.
Actionable claim in form of chance to win in betting, gambling or horse racing in a race club - 100%
of the face value of the bet or the amount paid into the totalisator
Rule 31B: Value of supply in case of online gaming including online money gaming
The value of supply shall be the :

total amount paid or payable to or deposited with the supplier by way of money or money’s worth, including
virtual digital assets, by or on behalf of the player:
Any amount returned or refunded by the supplier to the player for any reasons whatsoever, including player
not using the amount paid or deposited with the supplier for participating in any event, shall not be deductible
from the value of supply of online money gaming.
Rule 31C: Value of supply in case of actionable claims in case of casino
The value of supply shall be the total amount paid or payable by or on behalf of the player for –
(i) purchase of the tokens, chips, coins or tickets, for use in casino or
(ii) participating in any event, including game, scheme, competition or any other activity or process,
in the casino, in cases where the token, chips, coins or tickets are not required
Any amount returned/refunded by the casino to the player on return of token, coins, chips, or tickets, as
the case may be, or otherwise, shall not be deductible from the value of the supply of actionable claims
in casino.
Explanation- For the purpose of rule 31B and rule 31C, any amount received by the player by winning any
event, including game, scheme, competition or any other activity or process, which is used for playing by the
said player in a further event without withdrawing, shall not be considered as the amount paid to or
deposited with the supplier by or on behalf of the said player.
Tax to be paid on specified actionable claims at the time of receipt of payment for such supplies by
the suppliers
Notification No. 66/2017 CT dated 15.11.2017 was earlier issued to exempt all registered persons from the
requirement of payment of tax at the time of receipt of advances in case of supply of goods and provides
for payment of tax in such cases at the time of supply as specified in section 12(2)(a).
With effect from 01.10.2023, said notification has been amended to exclude registered persons making
supply of specified actionable claims from the said exemption, so that in case of specified actionable
claims, the tax can be paid at the time of receipt of payment for such supplies by the suppliers.

44
Summary Book
RULE 32: Value of in respect of certain specific supplies

 Purchase/sale of foreign currency:
Option 1
Particulars Value
Currency when exchanged Difference in Buying / Selling rate and RBI reference rate for
from or to INR that currency at that time X Total units of currency
If RBI reference rate is not 1% of gross amount of INR provided / received by person
available changing money
1% of lesser of 2 amounts the person changing money would
If neither of the currencies
have received by converting them to INR on that day at
exchanged are INR
reference rate of RBI
Option 2
Currency Value
Up to Rs. 1,00,000 1% or Rs. 250 whichever is higher
From Rs. 100001 to Rs. 10,00,000

Rs. 1,000 + 0.5%
Rs. 5,500 + 0.1% subject to maximum of Rs.
From Rs. 10,00,001
60,000
OPTION ONCE EXCERSIED SHALL NOT BE WITHDRAWN DURING REMAINING PART OF FY
 Booking of tickets by air travel agent:

Value = 5% of basic fare for domestic bookings and
10% of the basic fare for international bookings.
Basic fare = Air fare on which commission is normally payable to agents by airlines.
 Life insurance business :

Case Taxable Value
Gross Premium charged less amount allocated for investment /
Policy with dual benefits of
savings if such allocation is intimated to the policy holder at the
risk coverage and investment
time of collection premium.
Single premium annuity policy 10% of the single premium charged from the policy holder
25% of Premium charged from policy holder in 1st year and,

Other cases 12.5% of premium charged for subsequent years.
Above not to apply if entire premium is towards risk cover.

45
Summary Book
 Buying & selling of second hand goods:

 Value = Selling price – Buying price (ignore if value is negative);
 Purchase value of goods repossessed from unregistered borrower = Purchase price- 5% per quarter or
part thereof from date of purchase till the date of disposal by the person making repossession
 Coupon/voucher: Value = money value of supplies redeemable against such voucher/ coupon
 Notified services between distinct persons without consideration: Value = Nil, if ITC is available
Rule 33: Supply as a pure agent
Costs incurred by the supplier as a pure agent of recipient shall be excluded from value
Pure Agent = (Contractual arrangement + Neither Intends to hold nor hols any Title + Does not use his
own interest + Receives only the actual amount incurred)
Conditions = ( Supplier acts as a pure agent + payment made Separately indicated in the invoice + Addition
to services he supplied on own)
Rule 34: Rate of exchange for determination of value
Goods = Rate notified by CBEC under Customs Act on the date of time of supply of such goods;
Services = Rate as per GAAP on the date of time of supply of such services
Rule 35: Value inclusive of taxes
Where value of supply is inclusive of GST.

Tax amount = (Value inclusive of GST x GST rate in %)
(100 + sum of applicable GST rates in %)
Significant Notifications / Circulars/ Orders
1. For the purpose of 15(2), TCS under the provisions of the Income Tax Act, 1961 would not be
includible as it is an interim levy not having the character of tax.
2. In the BF model or the BC model operated by a banking company, a banking company is the
service provider. The banking company is liable to pay GST on the entire value of service charge
or fee charged to customers whether or not received via BF or BC.
3. Clarification on discounts
Discounts including ‘Buy more, Save more’ offers : Discounts offered by the suppliers to customers
(including staggered discount under “Buy more, save more” scheme and post supply / volume
discounts established before or at the time of supply) shall be excluded to determine the value of

46
Summary Book
supply if it satisfy parameters laid down in section 15(3) of the CGST Act, including the reversal
of ITC by the recipient of the supply as is attributable to the discount on the basis of document
issued by the supplier.
Secondary Discounts: These are the discounts which are not known at the time of supply or are
offered after the supply is already over. Secondary discounts shall not be excluded while determining
the value of supply as such discounts are not known at the time of supply and the conditions laid
down in section 15)3)(b) of the CGST Act are not satisfied.
4. Clarification on issue of GST on airport levies
Airport operators
i.e. Mumbai
international airport
ltd.
Airlines operators
i.e. IndiGo, Go Air,
AirAsia etc
Airport Passengers
PSF and UDF are charged by airport operators for providing the services to passengers.
Thus, services provided by an airport operator to passengers against consideration in the form
of UDF and PSF are liable to GST. UDF was also liable to service tax.

47
Summary Book
The airport operators shall pay GST on the PSF and UDF collected by them from the passengers
through the airlines. Since, the airport operators are collecting PSF and UDF inclusive of GST,
there is no question of their not paying GST collected by them to the Government.
The collection charges paid by airport operator to airlines are a consideration for the services
provided by airlines to airport operator and airlines shall be liable to pay GST on the same
under forward charge. ITC of the same will be available with the airport operator.
Clarification:
Accordingly, the airline acting as pure agent of the passenger should separately indicate actual
amount of PSF and UDF and GST payable on such PSF and UDF by the airport licensee, in the
invoice issued by airlines to its passengers.
The airline shall not take ITC of GST payable or paid on PSF and UDF. The airline would only
recover the actual PSF and UDF and GST payable on such PSF and UDF by the airline operator.
The amount so recovered will be excluded from the value of supplies made by the airline to its
passengers.
In other words, the airline shall not be liable to pay GST on the PSF and UDF (for airport
services provided by airport licensee), provided the airline satisfies the conditions prescribed
for a pure agent under rule 33 of the CGST Rules.
The registered passengers, who are the ultimate recipient of the airport services, may take
ITC of GST paid on PSF and UDF on the basis of pure agent’s invoice issued by the airline to
them.
5. No Claim Bonus permissible as deduction under section 15(3)(a) for the purpose of calculation
of value of supply of the insurance services provided by insurance company to insured.
As per section 15(3)(a), value of supply shall not include any discount which is given before or
at the time of supply if such discount has been duly recorded in the invoice issued in respect of
such supply.
It is clarified that NCB is a permissible deduction under section 15(3)(a) for the purpose of
calculation of value of supply of the insurance services provided by the insurance company to the
insured.
Accordingly, where the deduction on account of NCB is provided in the invoice issued by the
insurer to the insured, GST shall be leviable on actual insurance premium amount, payable by the
policy holders to the insurer, after deduction of NCB mentioned on the invoice.

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Summary Book
6. Clarification on applicability of GST on incentive paid by MeitY to acquiring banks under

Incentive scheme for promotion of RuPay Debit Cards and low value BHIM-UPI transactions
It is clarified that incentives paid by MeitY to acquiring banks under the Incentive scheme for
promotion of RuPay Debit Cards and low value BHIM-UPI transactions are in the nature of
subsidy and thus not taxable.
7. Taxability and valuation of personal guarantee by Directors and corporate guarantee by related
person, for the company [Rule 28 amended]
Issue- Whether the activity of providing personal guarantee by the Director of a company to the bank/
financial institutions for sanctioning of credit facilities to the said company without any consideration
will be treated as a supply of service or not and whether the same will attract GST or not?
Clarification- Since director and company are related persons, the activity of providing personal
guarantee by the Director to the banks/ financial institutions for securing credit facilities for their
companies is to be treated as a supply of service, even when made without consideration [as per section
7(1)(c) read with para 2 of Schedule I]. Value will be Open Market Value of such supply [rule 28].
However, as per the mandate provided by the RBI Guidelines in this regard, no consideration by way of
commission, brokerage fees or any other form, can be paid to the director by the company, directly or
indirectly, in lieu of providing personal guarantee to the bank for borrowing credit limits, except in
exceptional cases.
Consequently, there is no question of such supply/ transaction having any OMV.
Accordingly, it is clarified that OMV of the said transaction/ supply may be treated as zero and therefore,
no tax is payable on such supply of service by the director to the company.
However, in exceptional cases, where remuneration is payable to the director, the taxable value of such
supply of service shall be the remuneration/ consideration provided to such guarantor by the company,
directly or indirectly.
In short in case of personal Guarantee:
Case Value
Where there is no consideration OMV treated as Zero and No GST Payable
Remuneration is payable remuneration/ consideration provided to such
guarantor
Issue No 2- Whether the activity of providing corporate guarantee by a person on behalf of another
related person, or by the holding company for sanction of credit facilities to its subsidiary company,

49
Summary Book
to the bank/ financial institutions, even when made without any consideration will be treated as a
taxable supply of service or not, and if taxable, what would be the valuation of such supply of services?
Clarification- Where the corporate guarantee is provided to the bank/financial institutions by:
(i) a company for providing credit facilities to the other company, where both the companies are
related,
(ii) a holding company, for securing credit facilities for its subsidiary company [related in terms
of explanation to section 15],
the activity is to be treated as a supply of service between related parties even when made without
any consideration [in terms of section 7(1)(c) read with para 2 of Schedule I].
In such cases, the taxable value will be determined as rule 28(2) irrespective of whether full ITC is
available to the recipient of services or not.
As per rule 28(2), value in above cases will be higher of:
(i) 1% of the amount of such guarantee offered,

or
(ii) actual consideration.
8. Clarification regarding internally generated services - where HO is providing certain services to

the BOs for which full ITC is available to the concerned BOs
Issue- In respect of internally generated services, there may be cases where HO is providing certain
services to the BOs for which full ITC is available to the concerned BOs. However, HO may not be
issuing tax invoice to the concerned BOs with respect to such services, or the HO may not be including
the cost of a particular component such as salary cost of employees involved in providing said services
while issuing tax invoice to BOs for the services provided by HO to BOs.
Whether the HO is mandatorily required to issue invoice to BOs under section 31 for such internally
generated services, and / or whether the cost of all components including salary cost of HO employees
involved in providing the said services has to be included in the computation of value of services
provided by HO to BOs when full ITC is available to the concerned BOs?
Clarification- The value of supply of services made by a registered person to a distinct person needs
to be determined as per rule 28 read with section 15(4). As per rule 28(a), the value of supply
between distinct persons shall be the OMV of such supply.
The second proviso to rule 28 provides that where the recipient is eligible for full ITC, the value

50
Summary Book
declared in the invoice shall be deemed to be the OMV of the goods or services.
In respect of supply of services by HO to BOs, the value of the said supply of services declared in the
invoice by HO shall be deemed to be OMV of such services, if the recipient BO is eligible for full ITC.
Accordingly, in cases where full ITC is available to a BO, the value declared on the invoice by HO to
the said BO in respect of a supply of services shall be deemed to be the OMV of such services,
irrespective of the fact whether cost of any particular component of such services, like employee cost
etc, has been included or not in the value of the services in the invoice.
Further, in such cases where full ITC is available to the recipient, if HO has not issued a tax invoice
to the BO in respect of any particular services being rendered by HO to the said BO, the value of
such services may be deemed to be declared as Nil by HO to BO, and may be deemed as OMV in
terms of second proviso to rule 28.
Issue No. 2- In respect of internally generated services provided by the HO to BOs, in cases where
full ITC is not available to the concerned BOs, whether the cost of salary of employees of the HO
involved in providing said services to the BOs, is mandatorily required to be included while computing
the taxable value of the said supply of services provided by HO to BOs?
Clarification- In respect of internally generated services provided by the HO to BOs, the cost of
salary of employees of the HO, involved in providing the said services to the BOs, is not mandatorily
required to be included while computing the taxable value of the supply of such services, even in
cases where full ITC is not available to the concerned BO.

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CHAPTER 7 Input Tax Credit
333
 Provisions of section 16 relating to eligibility and conditions for taking ITC read with relevant
rules are summarized below:
Section 16(1) : Registered person to take credit of tax paid on inward supplies of goods and/or
services used/ intended to be used in the course or furtherance of business
Section 16(2) : If the following four conditions are fulfilled :
 He has valid tax invoice / debit note/prescribed tax paying document
 He has furnished valid return
 Tax on such supply has been actually paid to the government
 The detail of such invoice / debit note referred to in clause(a) has been furnished by the
supplier in statement of outward supplies
 If the details of input tax credit in respect of the said supply communicated to such
registered person under section 38 has not been restricted
 He has received goods and / or services
 Deemed receipt of goods in case of bill to ship to model
 Deemed receipt of services, if services provided to any person on the direction
of and on account of RP
Goods received in lots – ITC allowed upon receipt of last lot
If depreciation claimed on tax component, ITC not allowed
Goods delivered to third person on the direction of the registered person deemed to be received by
the registered person – ITC available to the registered Person (Bill to ship model)
Time limit for availing ITC - ITC pertaining to a particular FY can be availed by 30th day
November of next FY or filing of annual return, whichever is earlier.
Exception: Re- availment of ITC reversed earlier
Reversal of input tax credit in the case of non-payment of consideration : If Value wholly
or partly along with tax payable is not paid to supplier, within 180 days from date of issue of
invoice, shall pay or reverse an amount equal to the ITC availed proportionate to the amount not
paid to the supplier along with interest payable, while furnishing GSTR-3B for tax period
immediately following period of 180 days from the date of the issue of the invoice.
Exception: 1) Supplies under reverse charge
2) Deemed supplies without consideration
52
3) Additions made to the value of supplies on account of supplier’s liability, in
relation to such supplies, being incurred by the recipient of the supply
Reversal of input tax credit in the case of non-payment of tax by the supplier and
re-availment thereof [New rule 37A] :
Where a RP (recipient) avails ITC in GSTR-3B for a tax period in respect of such invoice /
debit note, details of which have been furnished by its supplier in Form GSTR-1 / IFF.
If supplier does not furnish GSTR-3B for the tax period corresponding to the said
GSTR 1/IFF till 30th September following the end of FY in which the ITC in respect of such
invoice / debit note has been availed.
Then ITC shall be reversed by recipient in GSTR-3B on or before 30th November following the
end of such FY during which such ITC has been availed.
If ITC is not so reversed by recipient, amount shall be payable along with interest u/s 50.
If supplier subsequently furnishes the return in GSTR-3B for the tax period, the said RP may
re-avail the amount of such credit in the return in Form GSTR-3B for a tax period thereafter.
The provisions of section 17 relating to apportionment of credit and blocked credits read
with relevant rules are summarized as under:
A Apportionment of credit
Attributable to
Used partly for business
business purposes
and partly for non-
business purposes
Goods and/or ITC available
services only as
Used partly for making
taxable (including zero
Attributable to taxable
rated supplies) supplies & supplies including zero
partly for exempt supplies rated supplies
Exempt supplies include supplies charged to tax under reverse charge, transactions in securities,
sale of land and sale of building when entire consideration is received post completion
certificate.
53
‘value of exempt supply’ for the purpose of this section 17(3) shall not include the
value of activities or transactions specified in Schedule III, except those specified
in paragraph 5 of the said Schedule, i.e. sale of land and sale of building.
For rule 42 and rule 43, the value of activities or transactions mentioned in
paragraph 8(a) of Schedule III which is required to be included in the value of
exempt supplies under clause (b) of the Explanation to section 17(3) shall be the
value of supply of goods from Duty Free Shops at arrival terminal in international
airports to the incoming passengers.
Therefore, while in all other items of Schedule III, ITC will not be required to be reversed;
in case of sale of land and sale of building, ITC will need to be reversed.
B Special provisions for banking companies and NBFC
 Remaining 50% ITC will

lapse.
 Restriction of 50% shall not
apply to the tax paid on
Option 1: Avail Option 2: Avail supplies made to another
registration within the same
proportionate ITC 50% of eligible ITC entity.
 Option once
exercised cannot be
withdrawn during remaining
part of the year.
54
C Apportionment of common credit in case of inputs and input services
Total Input tax on inputs + Input

services. "T"
Remaining ITC credited to

Input tax on Blocked Credit
Electronic legder.
Inputs + u/s 17(5)."T3"
Input Tax on
C1 = [T-(T1+T2+T3)]
Input Inputs + Input
services used services used
exclusively exclusivley for Credit Attributable to Inputs + Common
for Non - Exempt Input service used exclusively in Credit.
Business Supplies. "T2" taxable supplies including Zero
purpose. "T1" C2 = C1 - T4
rated supply. T4
Common Credit.
C2 = C1 - T4
amount of input tax credit Credit attributable to non-business

attributable towards exempt purposes if common inputs + input
Remaining Common Credit.
supplies, be denoted as. services are used for business + partly
for non-business purposes. = C2 - (D1+D2)
D1 = (E ÷ F) × C2.
D2 = 5% x C2.
Ineligible Credit
Ineligible Credit
Eligible Input tax credit
Reversed by the registered person attributable to business &
in GSTR 3B or in the prescribed Reversed by the registered person in taxable supplies including
form GSTR 3B or in the prescribed form Zero rated supply
 C3 will be computed separately for ITC of CGST, SGST/ UTGST and IGST.
 ∑ (D1 + D2) will be computed for the whole financial year, by taking exempted turnover and aggregate
turnover for the whole financial year. If this amount is more than the amount already added to output tax
liability every month, the differential amount will be reversed by the RP in GSTR 3B in any of the month
st
till November of succeeding year along with interest @ 18% from 1 April of succeeding year till the date of
payment.
55
 If this amount is less than the amount added to output tax liability every month, the additional amount
paid has to be claimed back as credit in GSTR 3 of any month till Sept of the succeeding year.
Rule 43: Methodology for apportionment of ITC on capital goods and reversal of ineligible credit
Step 1 – Compute common credit (Tc) on Capital Goods
Input tax on Capital Goods Electronic Common

credit ledger Credit
Input tax on capital goods used/ intended to be used Not Eligible, -
(a) exclusively for non-business purposes or making exempt not to be Cr.
supplies and declare the same in GSTR 3B to ECrL
Input tax on capital goods used/ intended to be used Credited to -
(b) exclusively for making taxable supplies including zero ECrL
rated supplies and declare the same in GSTR 3B
(c) Input tax on capital goods not covered under (a) and
(b) above (i.e., the capital goods which are used/intended Credited to
to be used commonly for making taxable as well as exempt ECrL A
supplies & business & non business purposes)
Useful life of such goods = 5 years from the date of
the invoice
Change from exclusive use for non-business Credited to

purpose/exempt supplies to common use : ECrL
Capital goods which were initially covered under (a) above
get subsequently covered under clause (c),
ITC in respect of such capital goods denoted as “A” shall
be credited to the ECrL
Ineligible credit attributable to the period during which
such capital goods were covered by clause (a),denoted as A
“Tie”, shall be calculated at the rate of 5% for every
quarter or part thereof and added to the output tax
liability of the tax period in which such credit is claimed
Explanation: An item of capital goods declared under
56
clause (a) on its receipt shall not attract the provisions
of Sec 18(4), if it is subsequently covered under this
clause.”
Change from exclusive use for taxable including zero
rated supplies to common use
Provided that where capital goods which were initially
covered under (b) above get subsequently covered under A
clause (c),
the input tax credit claimed in respect of such
capital good(s) shall be added to arrive at the
aggregate value “Tc”
Step 2 - Determine common credit during the useful life of capital goods for a tax period
as under and denote the same as „Tm‟: [Clause (e)]
 Tm = Tc ÷ 60
Useful life of any capital goods shall be considered as five years from the date of invoice and
the said formula shall be applicable during the useful life of the said capital goods.”;
Step 3 - Apportion common credit attributable to exempt supplies as under:

 Te = (E ÷ F) x Tr
Where E = Aggregate value of exempt supplies made during the tax period
F = Total turnover during the tax period
Step 5: Restrict ineligible credit
Add Te to the output tax liability along with applicable interest during every tax period of the
useful life of the capital goods concerned.
Imp Note :Clause (g) provides the formula for determining ‘T e’, i.e. amount of common credit
attributable to exempt supplies, as Te = (E/F) x Tr.
The term ‘Tr’ which is used in the said formula was defined in clause (f). Omission of
clause (f) has thus, rendered the formula given in clause (g) otiose as now the term
(‘Tr’) which is used in the formula is nowhere defined in the rule.
57
For the purpose of Rule 42 and 43 Exempt supply :
NIL
Means Wholly Exempt From Tax
Non Taxable Supply
Supplies under RCM
Transaction in securities
(1% of S.V. of securities)
INCLUDE
Sale of land & building- consideration received
after CC (value adopt for paying statup duty)
Supply of warehoused goods before

clearance for HC (duty free shop at arrival
terminal )
Service Accepting deposit, loan/advances

consideration is Interest/ discount - by person
other than banking company/ financial
institution
EXCLUDE Value of duty credit scrips

Sale of land & building
consideration received after CC
Activities Specified in Schedule 3 Except
Sale of warehoused goods before
clearance for HC
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BLOCKED CREDITS PART-A
MV for transportation vessels and (ab) services of Food and beverages, outdoor
of persons having aircraft except general insurance, catering, beauty treatment,
approved seating when they are servicing, repair and health services, cosmetic and
capacity of not more used maintenance in so plastic surgery, leasing, renting
than thirteen persons far as they relate to or hiring of motor vehicles,
(including the driver), motor vehicles, vessels or aircraft referred to in
vessels or aircraft clause (a) or clause (aa) except
referred to in clause when used for the purposes
(a) or clause (aa) specified therein, life insurance
and health insurance:
EXCEPTIONS EXCEPTIONS EXCEPTIONS EXCEPTIONS
except when they (i) for making the (i) where the motor 1. ITC available where an inward
are used for following taxable vehicles, vessels or supply of such goods or services or
making the supplies, namely:— aircraft referred to in both is used by a registered person
following taxable (A) further supply of clause (a) or clause (aa) for making an outward taxable
supplies, namely: such vessels or are used for the purposes supply
(A) further supply of aircraft; or specified therein;  Of the same category of goods
such motor vehicles or (B) transportation of (ii) where received by a or services or
passengers; or  Both or as an element of a

(B) transportation of taxable person engaged—
taxable composite or mixed
passengers; or (C) imparting (I) in the manufacture
supply
(C) imparting training training navigating of such motor vehicles,
on driving such vehicles such vessels; or vessels or aircraft; or 2.ITC available it is obligatory for an
(D) imparting (II) in the supply of employer to provide the same to its
training on flying general insurance services employees under any law for the time
such aircraft; in respect of such motor being in force
(ii) for transportation vehicles, vessels or
of goods aircraft insured by him;
Credit available on the above
1.Membership of a club/health & fitness centre

Inward supplies used
2.Travel benefits extended to employees on vacation Goods lost/ stolen/
for personal
such as leave or home travel concession destroyed/ written off or
consumption
Exception: disposed of by way of gift
ITC available it is obligatory for an employer to provide or free samples
the same to its employees under any law for the time
being in force
59
BLOCKED CREDITS PART-B
Inward supplies received by

taxable person for
construction of immovable
WCS for construction
property on his own account
of immovable property
including when such supplies
are used in the course or
furtherance of business
EXCEPTIONS EXCEPTIONS
a. WCS for P & M

b. Where WCS for
immovable A. Construction of P &
Credit available on
property is input M
such exceptions
service for B. Construction of
further supply of immovable property
WCS [Sub- for others
contracting]
G/S received by NRTP

Tax paid u/s 74 (Tax short / not
Inward supplies
paid or erroneously refunded due to
charged to Exception:
fraud etc)
composition levy ITC available on goods
Tax paid u/s 129 (Amount paid for
imported by him
release of goods and conveyances
in transit which are detained) and
(A) Construction includes re-construction/ Tax paid u/s 130 (Fine paid in lieu
renovation/ addition/ alterations/ repairs to the of confiscation)
extent of capitalisation to said immovable
property.
(B) P & M means apparatus, equipment, &
machinery fixed to earth by foundation or
MV&OC-Motor vehicle & other
structural supports but excludes
conveyance;
 Land, building/ other civil structures,
NRTP-Non-resident taxable person;
 Telecommunication towers, and
WCS-Works contract service; LTC-
 Pipelines laid outside the factory premises.
Leave Travel Concession; HT-Home
town
60
Blocked Credit : Part C
Goods or services received for Corporate Section 17(5)(fa) Goods or services or both
social responsibility received by a taxable person, which are used
or intended to be used for activities relating
to his obligation under corporate social
responsibility referred to in section 135 of
The Companies Act, 2013.
Clarification on ITC in the hands of the supplier in respect of sales promotional schemes:
Free samples and gifts.
Section 17(5)(h) of the CGST Act provides that ITC shall not be available in respect of goods lost,
stolen, destroyed, written off or disposed of by way of gift or free samples.
It has been clarified that ITC shall not be available to the supplier on the inputs, input services
and capital goods to the extent they are used in relation to the gifts or free samples
distributed without any consideration. However, where the activity of distribution of gifts or free
samples falls within the scope of “supply” on account of the provisions contained in Schedule I of
the said Act, the supplier would be eligible to avail the ITC.
Buy one get one free offer:
It is clarified that ITC shall be available to the supplier for the inputs, input services and capital
goods used in relation to supply of goods or services or both as part of such offers.
Discounts including ‘Buy more, save more’ offers:

It is clarified that the supplier shall be entitled to avail the ITC for such inputs, input services
and capital goods used in relation to the supply of goods or services or both on such discounts.
61
The provisions of section 18 read with relevant rules have been summarized as under:
a. Special circumstances enabling availing of credit
Special circumstances enabling availing of credit
Registered person switching

from composition levy to Registered person's Person applying for Person obtaining
regular scheme of payment exempt supplies registration within 30 days voluntary
of taxes becoming taxable of becoming liable for registration
registration
Credit entitled on
Credit entitled on
 Inputs as such held in stock
 Inputs contained in semi-finished goods held in stock  Inputs as such held in stock
 Inputs contained in finished goods held in stock  Inputs contained in semi- finished
 Capital goods [In case of exempt supply becoming goods held in stock
taxable Capital Goods used exclusively for such exempt  Inputs contained in FG
supply] reduced by 5% per quarter or part thereof from
the date of invoice
Note: ITC claimed shall be verified with the corresponding details
furnished by the corresponding supplier.
On the day On the day On the day

On the day immediately
immediately preceding the immediately immediately
preceding the date from
date from which preceding date from
which such supply becomes preceding the
he becomes liable to which he becomes
pay tax under regular taxable Dateof registration
liable to pay tax
ITC, in all the above cases, is to be availed within 1 year from the date of issue of invoice by
the supplier.
62
Conditions for availing above credit:
(i) Filing of electronic declaration giving details of inputs held in stock/contained in semi-finished goods and finished
goods held in stock and capital goods on the days immediately preceding the day on which credit becomes eligible.
(ii) Declaration has to be filed within 30 days from becoming eligible to avail credit.
(iii) Details in (i) above to be certified by a CA/ Cost Accountant if aggregate claim of CGST, SGST/ IGST credit is more
than Rs. 2,00,000.
b. Special circumstances leading to reversal of credit / payment of amount
Special circumstances leading to reversal of credit

/payment of amount
Registered person (who has Supplies of registered Cancellation of Supply of capital goods
availed ITC) switching from person getting wholly registration (CG)/ plant and machinery
regular scheme of payment of exempted from tax (P& M) on which ITC has
tax to composition levy been taken
Amount to be paid is equivalent

Amount to be reversed is equivalent to ITC on :
to higher of the following:
 Inputs held in stock/ inputs contained in semi-finished or finished
(i) ITC on CG or P&M less 5%
goods held in stock
 Capital goods per quarter or part thereof from
on the day immediately preceding the date of switch over/ date of the date of invoice
exemption/date of cancellation of registration (ii) Tax on transaction value of
such CG or P & M
 If amount at (i) exceeds (ii),
Manner of reversal of credit on inputs and capital goods & other
then reversal amount will be
conditions
added to output tax liability.
(i) Inputs  Proportionate reversal based on corresponding invoices. If
 Separate ITC reversal is to be
such invoices not available, prevailing market price on the effective date
done for CGST, SGST/UTGST
of switch over/ exemption/cancellation of registration should be used with
and IGST
due certification by a practicing CA/ Cost Accountant
 Tax may be paid on
(ii) Capital goods  Reversal on pro rata basis pertaining to remaining
transaction value when
useful life (in months), taking useful life as 5 years.
refractory bricks, moulds,
(iii) ITC to be reversed will be calculated separately for ITC of CGST,
dies, jigs & fixtures are
SGST/UTGST and IGST.
supplied as scrap.
(iv) Reversal amount will be added to output tax liability of the
registered person.
(v) Electronic credit/cash ledger will be debited with such amount.
Balance ITC if any will lapse.
63
Transfer of unutilised ITC on account of change in constitution of registered person
 In case of sale, merger, amalgamation, lease or transfer of business, unutilised ITC can be
transferred to the new entity if there is a specific provision for transfer of liabilities to the
new entity. The inputs and capital goods so transferred shall be duly accounted for by the
transferee in his books of accounts.
 In case of demerger, ITC will be apportioned in the ratio of value of assets of new unit as per
the demerger scheme. The “value of assets” means the value of the entire assets of the
business, whether or not ITC has been availed thereon.
 Details of change in constitution will have to be furnished on common portal along with request to
transfer unutilised ITC. CA/Cost Accountant certificate will have to be submitted certifying that
change in constitution has been done with specific provision for transfer of liabilities
 Upon acceptance of such details by the transferee on the common portal, the unutilized ITC will be
credited to his Electronic Credit Ledger.
Note: It has been clarified that transfer or change in the ownership of business will include
transfer or change in the ownership of business due to death of the sole proprietor.
CBIC clarification relating to apportionment of ITC in cases of business reorganization:
 The value of assets of the new units is to be taken at the State level (at the level of
distinct person) and not at the all-India level
 The ratio of value of assets,shall be applied to the total amount of unutilized ITC of the
transferor, i.e. sum of CGST, SGST/ UTGST and IGST credit. The said formula need not be
applied separately in respect of each heads of ITC (CGST/ SGST/ IGST).
 The total amount of ITC to be transferred to the transferee (i.e. sum of CGST, SGST/ UTGST and
IGST credit) should not exceed the amount of ITC to be transferred. However, the transferor
shall be at liberty to determine the amount to be transferred under each tax head
(IGST, CGST, SGST/ UTGST) within this total amount, subject to the ITC balance available with
the transferor under the concerned tax head.
 The provisions of section 20 relating to ISD are summarized as under:

ISD is basically an office meant to receive tax invoices towards receipt of input services and
distribute the credit of taxes paid on such input services to supplier units (having the same PAN)
proportionately
An ISD is required to obtain a separate registration even though it may be separately
registered. The threshold limit of registration is not applicable to ISD.
 ITC of input services is distributed only amongst those recipients to whom the input services
are attributable.

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Summary Book
 ITC is distributed amongst the operational units only and in the ratio of turnover in a State/UT
of the recipient during the relevant period to the aggregate of turnover of all recipients during
the relevant period to whom input service being distributed is attributable.
 Relevant period is previous FY or last quarter prior to the month of distribution for which turnover
of all recipients is available.
 Distributed ITC should not exceed the credit available for distribution.
 ISD should issue an ISD invoice for distributing ITC. It should be clearly indicated in such
invoice that it is issued only for distribution of ITC.
 The ISD needs to issue a ISD credit note, for reduction in credit if the distributed credit
gets reduced for any reason.
 ITC available for distribution in a month is to be distributed in the same month.
 Details of distribution of credit and all ISD invoices issued should be furnished by ISD in
monthly GSTR-6 within 13 days after the end of the month.
If the ISD has distributed excess credit to any recipient, the excess will be recovered from the
recipient with interest as if it was tax not paid.
For the purpose of this section Turnover in relation to any registered person engaged in
supply of taxable goods as goods not taxable under this act means =
Value of turnover reduced by :
1) Excise duty
2) State Excise duty
3) VAT
4) CST
The above-mentioned scenario can be understood with the help of below mentioned
presentation:
Credit of IGST Credit of IGST
Recipient and ISD Input tax credited

located in same under same category
Credit of CGST
State of tax
and SGST /
UTGST Recipient and ISD
located in different Input tax credited as
States IGST
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Summary Book
 Rule 36(4)
No input tax credit shall be availed by a registered person in respect of invoices or debit notes
the details of which are required to be furnished under section 37(1) unless-
(a) the details of such invoices or debit notes have been furnished by the supplier in
in Form GSTR-1 or using IFF and
(b) the details of such invoices or debit notes have been communicated to the
RP in Form GSTR-2B
Clarification regarding availment of ITC in respect of common input services procured

from the third party but attributable to both HO and BOs or exclusively one or more BOs
Issue: The main issue revolves around whether the Head Office (HO) can claim Input Tax Credit (ITC)
for common input services obtained from a third party that are attributable to either the HO alone or to
one or more Branch Offices (BOs).
Scenario (i): If the services are attributable to both HO and BOs.

Scenario (ii): If the services are exclusively attributable to one or more BOs.
Clarification: The clarification provided states that, according to the present provisions of the law, it is
not mandatory for the HO to distribute ITC using the Input Service Distributor (ISD) mechanism.
Options for HO:

The HO has the flexibility to choose between two options:
Option 1 Option 2
Distribute ITC using the ISD mechanism. Issue tax invoices directly to the concerned BOs for
the common input services obtained from a third
party, and allow BOs to avail ITC, subject to the
provisions of sections 16 and 17.
If the HO opts for the ISD mechanism, the If the HO opts to issue tax invoices directly to BOs,
input services must be attributable to the it can only do so if the common input services have
specific BOs, and the HO must be registered actually been provided to the concerned BOs.
as an Input Service Distributor (ISD).
66
CHAPTER 8 Job Work
 Goods Sent by principal to Job work
Send goods for job work no tax
1
2
Principal Job worker
2
2
Export - No tax
Supply with in India Principal Supplies
Principal to pay tax goods directly from job
worker’s premises
within prescribed time
Export - No tax
Supply with in India Principal to pay tax

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Summary Book
 Input credit to be availed by Principal on Goods sent to Job Worker
Principal allowed to take

ITC on the goods sent to
job worker
Even without bringing them

to the place of Principal Does not return within 1
year/3 years
Considered to be supplied on
the date when goods sent moulds and dies, jigs and
or from date of receipt of fixtures, or tools need not
goods in case of direvt be brought back
dispatch
I. SIGNIFICANT NOTIFICATIONS/ CIRCULARS/ ORDERS
Clarification on Issues related to Job Work via Circular no 38/12/2018 dt 26.03.2018 and
Amended as per Circular No. 88/07/2019-GST
Issue 1:
Is it compulsory to take registration for a principal involved in job work transaction?
Clarification
It is his choice whether or not to register & avail the benefit of the provisions of section 143 of
the CGST Act which are applicable only to a registered person.
Issue 2:
Whether a job worker is required to obtain registration when they are located
i) In the same State where the principal is located. or
ii) In a State different from that of the principal.
Discussion : Job work is a supply of service. So exemption of 40lakhs is not applicable.

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Summary Book
Job worker & principal is located in same state:
Job worker is required to obtain registration only if his aggregate turnover, to be computed
on all India basis, in a financial year exceeds the specified threshold limit as specified in
section 22(1) of the said Act, read with clause (iii) of the Explanation to the said section in
case both the principal and the job worker are located in the same State.
Job worker & principal is located in different state:
The requirement for registration flows from clause (i) of section 24 of the CGST Act
which provides for compulsory registration of suppliers making any inter-State supply of
services.
However, exemption from registration has been granted in case the aggregate
turnover of the inter-State supply of taxable services does not exceed the specified
threshold limit as specified in section 22(1) of the said Act, read with clause (iii) of the
Explanation to the said section in a financial year vide N/No. 10/2017 – IT dt. 13/10/2017
Clarification:
Therefore, it is clarified that a job worker is required to obtain registration only in cases where
his aggregate turnover, to be computed on all India basis, in a financial year exceeds the
threshold limit regardless of whether the principal and the job worker are located in the
same State or in different State
Issue 3:
Whether the principal can supply goods directly from the job worker's place of business /
premises to its end customer and if yes, whether the supply will be regarded as having been
made by the principal or by the job worker.
Clarification:
Supply of goods by the principal from the place of business/premises of the job worker will be
regarded as supply by the principal and not by the job worker (provided it is an additional place
to the principal).
Issue 4:
Whether the e-way bill is required to be generated in case of job work?
Clarification:
An e-way bill is required to be generated by every registered person who causes movement of goods
of consignment value exceeding fifty thousand rupees even in cases where such movement is

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Summary Book
for reasons other than for supply (e.g. in case of movement for job work). However, for
interstate movement of goods e-way bill shall be generated either by the principal or by the
registered job worker irrespective of the value of the consignment.
Issue 5:
What are the documents required to be issued
for sending the goods
a) From the principal to the job worker
b) From one job worker to another job worker
c) From the job worker back to the principal.
d) Directly by the supplier to the job worker
e) Where goods are returned in piecemeal by the job worker to another job worker or
principal
Clarification:
The documents required to be issued for sending the goods in the given cases :-
a) Challan in terms of Rule 55 to be issued by the principal in triplicate. Two copies of the
challan are sent to the job worker along with the goods. The job worker should send one
copy of the said challan along with the goods while returning them to the principal.
b) the goods may move under the cover of a challan issued either by the principal or the job
worker. In the alternative, the challan issued by the principal may be endorsed by the job
worker sending the goods to another job worker, indicating therein the quantity and
description of goods being sent. The same process may be repeated for subsequent
movement of the goods to other job workers.
c) The job worker should send one copy of the challan received by him from the principal after
carrying out the job work.
d) The goods may move from the supplier to the job worker with a copy of the invoice issued
by the supplier in the name of the buyer (i.e. the principal) wherein the job worker's name
and address should also be mentioned as the consignee and the Principal shall issue challan
as per Rule 45
e) In case the goods after carrying out the job work, are sent in piecemeal quantities by a job
worker to another job worker or to the principal, the challan issued originally by the principal
cannot be endorsed and a fresh challan is required to be issued by the job worker.

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Summary Book
Issue 6: Filing ITC-04 will be considered as a submission of intimation under sec 143 of
CGST act, 2017?
Clarification : Yes, Form GST ITC-04 will serve as the intimation as envisaged under section
143 of the CGST Act and It is the responsibility of the principal to include the details of all
the challans relating to goods sent by him to one or more job worker from one job worker
to another and its return there from.
Issue 7: In case of supply of services by job worker what are the provisions with respect to
I) Time, value and place of supply in the hands job worker

ii) Issuance of invoices by the job worker
Clarification :
TOS: In case of supply by job worker shall issue an invoice at the time of supply of the services
as determined in terms of section 13 of CGST Act.
Invoicing: Invoice shall be issued within a period of 30 days from the date of supply of
service as per section 31
Value: It shall be determined in terms of section 15 (i.e. transaction value) of the CGST Act
and it would include not only the service charges but also the value of any goods or
services used by job worker for supplying the job work services, if recovered from the
principal.
Note: Value of such moulds and dies, jigs and fixtures or tools may not be included in the value of
job work services provided its value has been factored in the price for the supply of such services
by the job worker
Issue 8: Whether ITC can be availed by
i) Principal in respect of inputs / capital goods that are directly received by the job worker
ii) Job worker in respect of inputs, etc. used by him in supplying job work services
Clarification
i) ITC would be available to the principal, irrespective of the fact whether the inputs
or capital goods are received by the principal and then sent to the job worker for
processing or they are directly received at the job workers place.
ii) Job worker is also eligible to avail ITC on inputs ,etc .used by him in supplying the
jobwork services if he is registered.

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Summary Book
Issue 9:
Explain the provision with respect to Supply of goods by principal from the place of business
of job worker?
Clarification:
Time of Supply , value and place of supply :- Since the supply is being made by the principal,
it is clarified that the time, value and place of supply would have to be determined in the
hands of the principal irrespective of the location of the job worker’s place of
business/premises. Further, the invoice would have to be issued by the principal.
In case of export :- Clarified that in case of exports directly from the job worker’s place of
business/premises, the LUT or bond, shall be executed by the principal.
Illustration :- Illustration: The principal is located in State A, the job worker in State B and the
recipient in State C. In case the supply is made from the job worker’s place of business /
premises, the invoice will be issued by the supplier (principal) located in State A to the recipient
located in State C. The said transaction will be an inter-State supply. In case the recipient is also
located in State A, it will be an intra-State supply.
Issue 10:
Whether principle is responsible to keep proper account for input & capital goods sent for
job work
It may be noted that the responsibility of keeping proper accounts of the inputs and capital
goods sent for job work lies with the principal. Moreover, if the time frame specified under section
143 for bringing back or further supplying the inputs / capital goods is not adhered to, the activity
of sending the goods for job work shall be deemed to be a supply by the principal on the day
when the said inputs / capital goods were sent out by him.
Thus, essentially, sending goods for job work is not a supply as such, but it acquires the
character of supply only when the inputs/capital goods sent for job work are neither received
back by the principal nor supplied further by the principal from the place of business /
premises of the job worker within the specified time period (under section 143) of being sent
out.
It may be noted that the responsibility for sending the goods for job work as well as bringing them
back or supplying them has been cast on the principal.

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Summary Book
Furnishing of Form GST ITC-04
Aggregate turnover of Form GST ITC-04 to Due date(s) for filing Form GST ITC-04
principal during be filed on
preceding F.Y.
Upto ` 5 crore Annual basis 25th April
Greater than ` 5 crore Half yearly basis April-September : 25th October &
October-March : 25th April

73
CHAPTER 9 Registration
1) Nature of Registration
 The registration in GST is PAN based and State specific.
 One registration per State/UT.
 However, a business entity having place of business in a State may obtain separate
registration for each of its place of business i.e optional registration.
 GST identification number called “GSTIN” - a 15-digit number and a certificate of registration
incorporating therein this GSTIN is made available to the applicant on the GSTN common portal.
 Registration under GST is not tax specific, i.e. single registration for all the taxes i.e. CGST,
SGST/UTGST, IGST and cesses.
2) Persons Liable to Registration
Those who exceed  A/To > Rs20/40lakh

threshold limit  Aggregate turnover >Rs. 10 lakh in case of
special category states (MMT-N)
Who are registered under  Shall be liable to be registered under GST

earlier now
In case of transfer of  Transferee liable to be registered from the

business on account of date of succession of business
In case of amalgamation  Transferee liable to be registered from the date on

/demerger by an order of which registrar of Companies issues incorporation
High court etc. certificate giving effect to order of High court etc.

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Summary Book
States with threshold States with threshold States with threshold

limit of ₹ 10 lakh for limit of ₹ 20 lakh for limit of ₹20 lakh for
both goods and both goods and services and ₹40
services services lakh for goods
Arunachal Pradesh Jammu and

Manipur
Kashmir
Meghalaya
Mizoram Assam
Sikkim
Uttarakhand
Nagaland Himachal Pradesh
Puducherry
Tripura All other States

Telangana
3) Aggregate Turnover
Analysis of Aggregate Turnover

Includes Excludes
Taxable Supplies CGST
Exempt Supplies SGST
Exports UTGST
Inter State Supplies IGST
Compensation Cess
of persons having the same PAN be
Value of inward supplies on which tax is
computed on all India basis
payable under reverse charge

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Summary Book
4) Compulsory registration in certain cases: Sec 24

(i) Inter-State supplier
Except –
 Service supplier if aggregate TO doesn’t exceed Rs. 20 lakh,
 Person making inter-state supply of handicraft goods if aggregate value of such
supplies, to be computed on all India basis, does not exceed an amount of Rs. 20
lakh [Rs. 10 lakh] in case of specified SCS [i.e MMT-N] in a F.Y.
 Persons making inter-State taxable supplies of notified products when made by
craftsmen if Aggregate value does not exceed 20 lacs [Rs. 10 lakh in case of
specified SCS [i.e MMT-N] in a F.Y.
 Job workers engaged in making inter-State supply of services to a registered person
have been exempted from obtaining registration. However, nothing contained in this
notification shall apply to a job- worker
(a) who is liable to be registered under section 22(1) or who opts to take
registration voluntarily under section 25(3) of the CGST Act; or
(b) who is involved in making supply of services in relation to jewellery, goldsmiths’
and silversmiths’ wares and other articles
(ii) Casual taxable person

Except –
 If CTP is engaged in making supply of Handicraft goods then he is no required to
obtain registration if aggregate value of such supplies, to be computed on all India
basis, does not exceed an amount of Rs. 20 lakh [Rs. 10 lakh in case of specified
SCS [i.e MMT-N] in a F.Y.
 CTP making inter-State taxable supplies of notified products when made by
craftsmen if Aggregate value does not exceed 20 lacs [Rs. 10 lakh in case of
specified SCS [i.e MMT-N] in a F.Y.
(iii) Person receiving supplies on which tax is payable by recipient on reverse charge basis
(iv) A person who is required to pay tax under 9(5) E.g. : Booking of cab through an
ECO.
(v) Person who is required to deduct tax u/s 51
(vi) Non-resident taxable persons

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Summary Book
(vii) Persons who supply goods or services or both, other than supplies specified u/s 9 (5),
through such ECO who is required to collect tax at source u/s 52
Except - Such persons having an aggregate turnover, to be computed on all India basis,
not exceeding an amount of Rs. 20 lakh (Rs. 10 lakh for specified special category
states) in a FY, have been exempted from obtaining registration
(viii) A person who supplies on behalf of some other taxable person (i.e. an Agent of
some Principal)
(ix) ISD whether or not separately registered under this act.
(x) Every ECO required to collect TCS U/s 52
(xi) Supplier of OIDAR Services
(xii) Every person supplying online money gaming from a place outside India to a person
in India
(xiii) Person/class of persons notified by the Central/State Government.
5) Persons not liable for registration: Sec 23

 Person engaged exclusively in supplying goods / services / both not liable to tax
 Person engaged exclusively in supplying goods/services/both wholly exempt from tax
 Agriculturist limited to supply of produce out of cultivation of land
 Specified category of persons notified by the Government.
6) Where and by when to apply for registration?

Person who is liable to be registered under A casual taxable person or a non- resident
section 22 or section 24 taxable person
• in every such State/UT in which he is so liable • in every such State/UT in which he is so

• within 30 days from the date on which he liable
becomes liable to registration • at least 5 days prior to the commencement
of business
7) Voluntary Registration and UIN

Voluntary Registration - Person not liable to be registered under sections 22/24 may get
himself registered voluntarily.
Unique Identification Number - In respect of supplies to some notified agencies of United

Nations organisation, multinational financial institutions and other organisations, a UIN is
issued

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8) Effective date of Registration – Rule 10
• Application submitted within 30 days of the applicant becoming liable to registration -

Effective date is the date on which he becomes liable to registration
• Application submitted after 30 days of the applicant becoming liable to registration –
Effective date is date of grant of registration
9) Optional Registration
Person having multiple place of business in a state or union territory may obtain separate
registration for each place of business
If one of the place of business of a taxable person is paying tax under normal levy (Section
9), no other place of business shall be granted registration to pay tax under Composition
Scheme (Section 10)
10) Suo-motu registration by the proper officer:
Where, pursuant to any survey, enquiry, inspection, search or any other proceedings under
the Act, the proper officer finds that a person liable to registration under the Act** has failed
to apply for such registration, such officer may register the said person on a temporary basis
and issue an order in prescribed form.
11) Simplified registration scheme for a person supplying OIDAR services from a place outside
India to a non-taxable online recipient also made applicable for a person supplying online
money gaming from a place outside India to a person in India

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12) Procedure of Registration

Part 1:
Every person liable to get registered and person seeking voluntary registration shall, before
applying for registration, declare his Permanent Account Number (PAN) and State/UT in
Part A of FORM GST REG-01 on GST Common Portal
AN is validated online by Common Portal from CBDT database and is also be verified
through separate OTPs sent to the PAN linked mobile number and e-mail address.
Temporary Reference Number (TRN) is generated and communicated to the applicant on the
validated mobile number and e-mail address.
Using TRN, applicant shall electronically submit application in Part B of application form, along
with specified documents at the Common Portal
Part B of application contains the details, such as, constitution of business, jurisdiction, option
for composition, date of commencement of business, reason to obtain registration, address of
PPoB and nature of activity carried out therein, details of APoB, details of bank account(s),
details of authorized signatory, aadhaar authentication, etc.
On receipt of such application, an acknowledgement in the prescribed form shall be issued to

the applicant electronically. A Causal Taxable Person (CTP) applying for registration gets a
TRN for making an advance deposit of tax in his electronic cash ledger and an
acknowledgement is issued only after said deposit.*
Application shall be forwarded to the Proper Officer.
The procedure after receipt of application by the Proper Officer is depicted in Part II of the
diagram.

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Part 2:

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Deemed Approval of Application
If the proper officer fails to take any action in the following cases within the stipulated time,
the application for grant of registration shall be deemed to have been approved
In case where is
the person is Within a period of 30 days from the date
covered in (B) of submission of the application
above
In case where is
the person is Within a period of 7 working days from the
covered in (A) date of submission of the application
above
In case of Within the 7 working days from the date of

covered in (C) receipt of clarification, information or
above documents furnished by the applicant
Thus, in case of successful authentication of Aadhaar and no SCN being issued, registration will
be deemed to be approved within 7 working days. However, if Aadhar authentication is not opted
for / aadhaar authentication fails in validation/ PO deems it fit to carry out site verification and
no SCN is issued, registration will be deemed to be approved within 30 days by tax official.
Tax Officer can issue SCN within 7 working days, for grant of registration, in cases of successful
Aadhar authentication. However, in cases when taxpayer do not opt to provide Aadhaar / when
Aadhar authentication fails/ PO deems it fit to carry out site verification, he can issue SCN upto
30 days. In both cases, applicants can submit their reply within 7 working days from issue of
SCN
Rule 25 :
(i) Where the proper officer is satisfied that the physical verification of the place of business of a
person is required AFTER the grant of registration the date of such verification, he may get such
verification of the place of business done and the verification report along with the other documents,
including photographs, shall be uploaded in prescribed form on the common portal within a period
of 15 working days following the date of such verification.
(ii) Where the physical verification of the place of business of a person is required BEFORE the grant
of registration in the circumstances specified in the proviso to rule 9(1), the proper officer shall
get such verification of the place of business done and the verification report along with the other
documents, including photographs, shall be uploaded in prescribed form on the common portal at
least 5 working days prior to the completion of the time period specified in the said proviso.

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13) Amendment of Registration
Except for the changes in some core information in the registration application, a taxable person
shall be able to make amendments without requiring any specific approval from the tax authority.
In case the change is for legal name of the business, or the State of place of business or
additional place of business, the taxable person will apply for amendment within 15 days of the
event necessitating the change.
The Proper Officer, then, will approve the amendment within the next 15 days.
For other changes like the name of day-to-day functionaries, e-mail IDs, mobile numbers etc.
no approval of the Proper Officer is required, and the amendment can be affected by the taxable
person on his own on the common portal.
Permission of proper officer required if change relates to core fields of information
Legal name of Address of Addition, deletion or retirement of partners

business PPoB/APoB or directors, Karta, Managing Committee,
Board of Trustees, Chief Executive Officer
Change does not or equivalent, responsible for day to day
warrant cancellation of
affairs of the business
registration under
section 29
Change of such particulars shall be applicable for all registrations of a registered person obtained
under provisions of this Chapter on same PAN.

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Registered person Submission of application within GST Common Portal
/ UIN Holder 15 days of change
Non-Core areas Core Areas
Registration Proper officer

Certificate Permission to be granted (PO)
Amended within 15 days
But, if PO is of the opinion

PO will serve a SCN why
that amendment is
application for amendment
unwarranted or documents
Within 7 should not be rejected?
furnished are incomplete /
working
incorrect
days of
receipt of Application
If registered Person replies to the
No rejected
notice within 7 working days?
Yes
If reply is satisfactory? No
Ye

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If the Proper officer fails to take any action:

 Within a period of 15 working days from the date of submission of the application, or
 •Within a period of 7 working days from the date of the receipt of the reply to the
SCN, the certificate of registration shall stand amended to the extent applied for and the
amended certificate shall be made available to the registered person on the common
portal
14) Special procedure for registration of CTD and NRTD

Casual Taxable Person Non-resident Taxable Person
A Casual taxable person is one who has a
registered business in some State in India, but
wants to effect supplies from some other
A Non-Resident taxable person is one who is
State in which he is not having any fixed place
of business. a foreigner and occasionally wants to effect
Such person needs to register in the State taxable supplies from any State in India, and
from where he seeks to supply as a Casual for that he needs GST registration.
taxable person.
Casual Taxable Person Non-resident taxable person
GST law prescribes special procedure for registration, as also for extension of the operation
period of such Casual or Non-Resident taxable persons.
They have to apply for registration at least 5 days in advance before making any supply.
Registration is granted to them or period of operation is extended only after they

make advance deposit of the estimated tax liability.
Registration is granted to them for the period specified in the registration

application or 90 days from the effective date of registration.

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15) Cancellation or suspension Of Registration –

By Proper Officer or Application by tax payer
– Issuance of SCN except in case of death
– Providing reasonable opportunity of being heard
 Reasons for cancellation -
– Transfer/discontinuation of business
• Discontinuation of business
• Full transfer of business for any reason
• Death of proprietor
• Amalgamation
• De-merger
• Disposal of business
– Change in constitution of business
– No longer liable to be registered
During pendency of the proceedings relating to cancellation of registration filed by the
registered person, the registration may be suspended.
The suspension of registration shall be deemed to be revoked upon furnishing of all

pending returns
 Cancellation possible even from earlier date if
– Contravention of provisions of GST Law

Prescribed contraventions which make a registered person liable to
cancellation of registration [Rule 21]:
(a) RP does not conduct any business from the declared place of
business, or
(b) Issues invoice/bill without supply of goods/services in violation of
provisions of Act or rules
(c) violates the provisions of section 171.
(d) violates the provision of rule 10A
(e) Violation of conditions of taking ITC
(f) Mismatch of GSTR 1 and GSTR 3B
(g) Violation of rule 86B provisions
(h) Monthly return filer, has not furnished returns for a continuous
period of 6 months.

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(i) Quarterly return filer, has not furnished returns for a continuous
period of 2 tax periods.
– Composition dealers – has not furnished returns for a for a financial year beyond
3 months from the due date of furnishing the said return;
– Other dealers – not furnished returns for a continuous period as may be prescribed
– Voluntary registration – Business not commenced in 6 months from the date of
registration
– Registration obtained by fraud, willful mis-statement, suppression of facts
 ITC
– Pay ITC of inputs in stock, contained in semi-finished or finished goods or capital goods or
plant & machinery or output tax, whichever is higher
– Capital goods: Pay either ITC (-) specific % or tax on transaction value, whichever is higher
Note: Cancellation of registration shall not affect liability of taxable person for period prior to
cancellation to pay tax and other dues or to discharge any obligation irrespective of the time
of determination i.e. either before or after the date of cancellation.
Suspension of Registration :
Situations Registration to be suspended from

(a) the date of submission of the application
Where registered person has or
applied for cancellation of (b) the date from which the cancellation is sought,
registration whichever is later,
pending the completion of proceedings for cancellation of registration.
Where cancellation of the With effect from a date to be determined by Proper officer,
registration has been initiated pending the completion of the proceedings for cancellation of
by the Department on their registration.
own motion
 Where
Comparison of returns furnished by RP under section 39 with:

 GSTR 1 or
 GSTR 2A
OR
Such other analysis

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show significant differences or anomalies indicating contravention leading to cancellation of

registration,
or there is a contravention of the provisions of Rule 10A
his registration shall be suspended. He shall be issued notice within 30 days as to why his
registration shall not be cancelled.
A registered person, whose registration has been suspended:
 Shall not make any taxable supply during the period of suspension (shall not make any taxable
supply shall mean that the registered person shall not issue a tax invoice and, accordingly, not
charge tax on supplies made by him during the period of suspension) and
 Shall not be required to furnish any return u/s 39

(Revised tax invoices and first return in respect of the supplies made during the period of
suspension shall apply)
 Where cancellation is initiated by department and registration suspended, such person shall not
be granted any refund.
 Suspension is deemed to be revoked upon completion of cancellation proceedings. Revocation

effective from the date on which the suspension had come into effect.
 Suspension of registration shall be deemed to be revoked upon furnishing of all the pending
returns
 Suspension of registration shall be deemed to be revoked upon compliance with the provisions of
rule 10A.
Note: Suspension may be revoked by PO anytime during pendency of cancellation proceedings
16) Revocation of cancellation :
A RP, whose registration is cancelled by the PO on his own motion, may submit an application
for revocation of cancellation of registration within a period of 90 days from the date of the
service of the order of cancellation of registration or within such time period as extended by the
AC or JC for a further period not exceeding 180 days.
Deemed revocation of suspended GST registration upon furnishing of all the pending
returns by the taxpayer
That there will be deemed revocation of suspended GST registration upon furnishing of pending
GST returns, where GST registration was suspended due to non-filing of GST return for a
financial year beyond 3 months from the due date of furnishing the said return by a

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composition taxpayer or returns for such continuous tax period as may be prescribed by
registered persons (other than composition taxpayer) subject to the condition that the
registration has not been cancelled by the proper officer under rule 22.
17) Bank Account details may be furnished after obtaining registration certificate [New rule
10A inserted and rule 21 of the CGST Rules amended]
The registered person (except TDS deductor / TCS collector), after obtaining certificate of registration
and a GSTIN, is allowed to furnish information with respect to details of bank account on the
common portal,
 within a period of 30 days from the date of grant of registration, or
 before furnishing the details of outward supplies of goods or services or both under section 37
in Form GSTR-1 or using IFF (Invoice Furnishing Facility),
whichever is earlier.
18) Aadhaar E-KYC based registration has been introduced under the GST law. With effect
Aadhaar authentication has been made mandatory for the new applicants in order to be
eligible for grant of registration. Subsequently, existing registrants will also be required to
undergo aadhaar authentication otherwise their registration shall be deemed to be invalid

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Aadhar Authentication
Procedure
Section Section Section Section

25(6A) 25(6B) 25(6C) 25(6D)
Aadhar Authentication Aadhar Authentication Aadhar

for Already registered for Fresh Applicant Authentication for Person not liable
person being Individual Fresh Applicant to do Aadhar
being other than Authentication
While submission of Application for Individual
registration, an applicant shall
undergo Aadhar Authentication
If he does Aadhar
✓A person who is not
Authentication: -
a citizen of India
Date of submission of
✓ Department or
application is earlier :
establishment of
Fails to do Aadhar Authentication or State Government or
- Date of authentication of
doesn't opt : Central Government
the Aadhaar number or
✓ Local authority
- The notice in FORM GST REG-03 may be ✓ Statutory body
- 15 Days from the
issued not later than 30 days from the ✓ Public Sector
submission of the application
date of submission of the application. [ If Undertaking
in Part B of FORM GST REG-
officer failed to send notice - deemed ✓ A person applying
01
approval] for Unique Identity
Number.

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Persons required to undergo Aadhaar authentication: New applicant
Risk-based biometric-based Aadhaar authentication of registration applicants – Pilot

project in Gujarat
Biometric based aadhaar authentication of the high-risk applicants who opt for authentication
of Aadhaar number has been introduced on a pilot basis in the State of Gujarat.
An applicant who has opted for authentication of Aadhaar number and is identified on the
common portal, based on data analysis and risk parameters, shall be followed by biometric-
based Aadhaar authentication and taking photograph:
(i) of the applicant where the applicant is an individual or
(ii) of such individuals where the applicant is not an individual,
along with the verification of the original copy of the documents uploaded with the application
in Form GST REG- 01 at one of the notified Facilitation Centres.
The application shall be deemed to be complete only after completion of the process laid down
hereunder.
An acknowledgement shall be issued to the applicant after completion of biometric-based

authentication.
Rule 10B : Aadhaar Authentication for Registered Person :

RP other than a person notified u/s 25(6D), who has been issued a certificate of registration
shall, undergo authentication of the Aadhaar number in order to be eligible for the following:
 For filing of application for revocation of cancellation of registration

 For filing of refund application
 For refund of the IGST paid on goods exported out of India
If Aadhaar number has not been assigned to the person required to undergo authentication of
the Aadhaar number, such person shall furnish the following identification documents, namely:–
(a) her / his Aadhaar Enrolment ID slip and

(b) (i) Bank passbook with photograph or
(ii) Voter identity card issued by the Election Commission of India or
(iii) Passport or
(iv) Driving license issued by the Licensing Authority
Such person shall undergo the authentication of Aadhaar number within a period of 30 days of
the allotment of the Aadhaar number.

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Unregistered persons with aggregate turnover up to threshold limit permitted to supply goods
through an ECO. Special procedure to be followed by ECOs in respect of supplies of goods through
them by such unregistered persons
Persons making supplies of goods through an ECO who is required to collect TCS U/s 52 and having an
aggregate turnover in the preceding FY and in the current FY not exceeding the threshold limit as per
section 22(1), are exempted from obtaining registration, subject to the following conditions, namely ,
Such person:
(i) Shall not make any inter-State supply of goods;

(ii) Shall not make supply of goods through ECO in more than one State/Union territory;
(iii) Shall be required to have a PAN issued under the Income- tax Act, 1961;
(iv) Shall, before making any supply of goods through ECO, declare on the common portal :
a. their PAN
b. address of their place of business and
c. State/UT in which such persons seek to make such supply,
which shall be subjected to validation on the common portal;
(v) Have been granted an enrolment number on the common portal on successful validation of
the PAN declared above;
(vi) Shall not be granted more than one enrolment number in a State/UT;
(vii) no supply of goods shall be made by through ECO unless such persons have been granted an
enrolment number on the common portal; and
(viii) where such persons are subsequently granted registration under section 25, the enrolment
number shall cease to be valid from the effective date of registration.
The ECO who is required to collect tax at source under section 52 has been notified as the class of
persons who shall follow the following special procedure in respect of supply of goods made through it
by said unregistered persons (hereinafter referred as said person):
(i) ECO shall allow the supply of goods through it by the said person only if enrolment number
has been allotted on the common portal to the said person;
(ii) ECO shall not allow any inter-State supply of goods through it by the said person;
(iii) ECO shall not collect tax at source under section 52(1) in respect of supply of goods made
through it by the said person; and
(iv) ECO shall furnish the details of supplies of goods made through it by the said person in the
statement in Form GSTR-8 electronically on the common portal.

91
CHAPTER 10 Place of Supply
1) Place of supply of goods other than import and export [Section 10]
Sr No Nature of Supply Place of Supply

Location of the goods at the time
Where the supply involves the movement of
at which, the movement of goods
1 goods, whether by the supplier or the recipient
terminates for delivery to the
or by any other person
recipient
Where the goods are delivered to the recipient
or any person on the direction of the third Principal place of business of such
2
person by way of transfer of title or otherwise. third person
(Bill to Ship Model)
Where there is no movement of goods either Location of such goods at the

3
by supplier or recipient time of delivery to the recipient
Location as per the address of said

Place of supply of goods purchased Over the person recorded in the invoice
Counter in one State and transported to
Note : Recording of the name of the State
another State where supply of goods is made
of the said person in the invoice shall be
4 to a person other than a registered person deemed to be the recording of the address
of the said person.
Place of supply of goods purchased Over the
Counter in one State and transported to
Location of the supplier
another State where the address of the said
person is not recorded in the invoice
Where goods are assembled or installed at Place where the goods are
5
site assembled or installed
Where the goods are supplied on- board a
Place where such goods are taken
6 conveyance like a vessel, aircraft, train or
on-board the conveyance
motor vehicle
2) Place of supply of goods imported into, or exported from India [Section 11]

1 Import Location of importer
2 Export Location outside India

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3) Place of supply of services where location of supplier and recipient is in India [Section 12]
(i) In respect of the following 12 categories of services, the place of supply is determined with
reference to a proxy; rest of the services are governed by the default provision.
(Memory Technique = (T3OI-BP)

 Location at which the immovable
Immovable property related-services property or boat or vessel is located or
including accommodation in intended to be located
hotel/boat/vessel  If located outside India: Location of the
1
recipient
If the immovable property or boat or
Each such State in proportion to the value of
vessel is located in more than one
services provided in each State
State
Personal grooming, health service,
beauty treatment, fitness, and Location where the services are actually
2
Restaurant and catering services performed
(Memory Technique= PH-BFR)
 B2B: Location of such registered person
3 Training and performance appraisal  B2C: Location where the services are
actually performed
Admission to an event or amusement Place where the event is actually held or

4
park where the park or the other place is located

Organisation of an event including  B2C: Location where the event is
ancillary services and assigning of actually held
5 sponsorship to such events • If the event is held outside India:

Location of the recipient
If the event is held in more than one Each such State in proportion to the value of
State services provided in each State

6
Transportation of goods, including  B2C: Location at which such goods are
mails or courier handed over for their transportation

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Where transportation of goods is to a place outside India, POS = Destination of such goods.
Therefor if LOS and LOR is in India and goods are transported outside India, POS = Destination of
such goods i.e Outside India.

 B2C: Place where the passenger embarks
7 Passenger Transportation on the conveyance for a continuous
journey
Location of the first scheduled point of

8 Services On board a conveyance
departure of that conveyance for the journey
 LOR of services in the records of the
9
Banking and other financial services supplier
including stock broking  LOS of services if the location of the
recipient of services is not available

10 Insurance services  B2C: Location of the recipient of
services in the records of the supplier
 Each of States/Union Territory where the

advertisement is
Advertisement services to the
11 broadcasted/displayed/run/disseminated
Government
 Proportionate value in case of multiple
States

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 Services involving fixed line, leased and

internet leased circuits, dish antenna
etc: Location of such fixed equipment
 Post-paid mobile/ internet services:

Location of billing address of the
recipient and if the same is not
available, location of supplier
 Pre-paid mobile/ internet/DTH services
provided:
• Through selling agent/re-
Telecommunication services seller/distributor: Address of such selling

agent/re- seller/distributor in the records
12
of supplier at the time of supply
• By any person to final subscriber:
Location where pre-payment is received
or place of sale of vouchers
• When payment made through electronic
mode - Location of recipient in records
of supplier
 Other cases: Address of the recipient in
the records of the supplier and if the
same is not available, location of supplier
If the leased circuit is installed in Each such State in proportion to the value of
more than one State services provided in each State
(ii) For the rest of the services other than those specified above, the default provision has been
prescribed as under:
Default rule for the services other than the 12 specified services
Sr No Description of Supply Place of Supply

1 B2B Location of such registered person
Where the address on record exists: LOR

2 B2C
Other cases: LOS of services

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4) Place of supply of services where location of supplier or location of recipient is outside

India [Section 13]
I. In respect of the following categories of services, the place of supply is determined with reference
to a proxy; rest of the services are governed by the default provision.
(Memory Technique = PBEI2T3-O2)
Sr No Nature of Service Place of Supply

Services supplied in respect of goods
which are required to be made Location where the services are actually
performed
Physically available
1
Services supplied in respect of goods but
Location where the goods are situated at
from a remote location by way of
the time of supply of services
electronic means
Above provisions are not applicable in case of goods that are temporarily imported into India
for repairs or any other treatment or process and exported after repairs without being put to
any other use in India
Services which require the physical
presence of the recipient or the person Location where the services are actually
2
acting on his behalf with the supplier of performed
services
Service supplied directly in relation to an

Place where the immovable property is
3 Immovable property including
located or intended to be located
accommodation in hotel, boat, vessel
4 Admission to or organisation of an Event Place where the event is actually held
If the above services are supplied at more than one location i.e.,
(i) Goods & individual related
(ii) Immovable property-related
(iii) Event related
At more than one location, including a location in
Location territory in the taxable
the taxable territory
Each such State in proportion to the value of

In more than one State
services provided in each State
Services supplied by a Banking company,

5 or a financial institution, or a NBFC to Location of the supplier of services
account holders

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Intermediary services
Services consisting of hiring of means of
Transport, including yachts but excluding
aircrafts and vessels, up to a period of
one month
6 Transportation of goods, other than by

Place of destination of such goods
(Omitted) way of mail or courier
Place where the passenger embarks on the

7 Passenger Transportation
conveyance for a continuous journey
First scheduled point of departure of that

8 Services provided On-board a conveyance
conveyance for the journey
Online information and database access

9 or retrieval services Location of recipient of service
(OIDAR Services)
II. For the rest of the services other than those specified above, a default provision has been
prescribed as under:
Sr
Nature of Service Place of Supply
No
Default rule for the cross-border supply of services other than nine specified services
 Location of the recipient of service
 Location of the supplier of service, if
1 Any Services
location of recipient is not available in
the ordinary course of business

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IGST Rules :
IGST Rule: To compute the proportionate value of advertisement services attributable to
different States or UT in the absence of any contract between the supplier and recipient:
Rule Means of Advertisement Mode of Payment & Basis of Apportionment

The amount payable for publishing an advertisement in
Newspapers and all the editions of a newspaper or publication, which are
3 (1)
publications published in a State or Union territory, as the case may
be
Printed material like The amount payable for the distribution of a specific
3 (2) pamphlets, leaflets, diaries, number of such material in a particular State or Union
calendars, T-shirts territory
Hoardings other than on

3 (3) The amount payable for the hoardings located in each
trains
State or Union territory.
The breakup, calculated on the basis of the ratio of the

Hoarding , ads placed on
3 (4) length of the railway track in each State for that
trains
train, of the amount payable for such advertisements
The amount payable for the advertisements on bills
On back of utility bills of
3 (5) pertaining to consumers having billing addresses in
oil & gas companies etc.
such States or Union territory
The breakup, calculated on the basis of the ratio of the
number of Railway Stations in each State or Union
3 (6) Ads on Railway tickets
territory, when applied to the amount payable for such
advertisements
The amount payable to such radio station, which by
3 (7) Radio Stations
virtue of its name is part of a State or Union territory.
The amount attributable to the value of advertisement
service disseminated in a State shall be calculated on the
basis of the viewership of such channel in such State,
which in turn, shall be calculated in the given manner
3 (8) Television Channels  the channel viewership figures be taken from figures
published in this regard by the Broadcast Audience
Research Council;
 the figures published for the last week of a given
quarter shall be used for calculating viewership for
the succeeding quarter

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 where such channel viewership figures relate to a

region comprising of more than one State or Union
territory, the viewership figures for a State or Union
territory of that region, shall be calculated by applying
the ratio of the populations of that State or Union
territory, as determined in the latest Census, to such
viewership figures
the ratio of the viewership figures for each State or Union

territory as so calculated, when applied to the amount
payable for that service, shall represent the portion of the
value attributable to the dissemination in that State or
Union territory
the amount payable to a cinema hall or screens in a
3 (9) At cinema halls multiplex, in a State or Union territory, as the case may be
The advertisement service shall be deemed to have been

provided all over India. Thus, the value of such service
will be apportioned amongst all States and UTs, of India
in the manner prescribed therein.

service disseminated in a State or Union territory shall be
calculated on the basis of the internet subscribers in
such State or Union territory, which in turn, shall be
calculated in the following manner, namely:
(I) the internet subscriber figures for a State shall be

taken from the figures published in this regard by the
3 (10) Over Internet
Telecom Regulatory Authority of India;
(ii) the figures published for the last quarter of a given

financial year shall be used for calculating the number of
internet subscribers for the succeeding financial year;
(iii) where such internet subscriber figures relate to a

region comprising of more than one State or Union
territory, the subscriber figures for a State or Union
territory of that region shall be calculated by applying the
ratio of the populations of that State or Union territory,
as determined in the latest census, to such subscriber
figures; the ratio of the subscriber figures for each State

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Summary Book
or Union territory as so calculated, when applied to the

amount payable for this service, shall represent the portion
of the value attributable to the dissemination in that State
or Union territory.

service disseminated in a State or Union territory shall be
calculated on the basis of the telecommunication
(hereinafter referred to as telecom) subscribers in such
State or Union territory, which in turn, shall be calculated
in the following manner, namely:
(a) the number of telecom subscribers in a telecom

circle shall be ascertained from the figures published by
the Telecom Regulatory Authority of India on its website
www.trai.gov.in;
(b) the figures published for a given quarter, shall be

Short Message used for calculating subscribers for the succeeding quarter;
3(11)
(c) Where such figures relate to a telecom circle
comprising of more than one State, or Union territory,
the subscriber figures for that State or Union territory shall
be calculated by applying the ratio of the populations of
that State or Union territory, as determined in the latest
census, to such subscriber figures.
(d) the ratio of the subscriber figures for each State or

Union territory as so calculated, when applied to the
amount payable for that service, shall represent the portion
of the value attributable to the dissemination in that State
or Union territory.

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 Computation of value of services where immovable property is located in more than one
State and where the location of supplier and recipient is in India [New rule 4 of the
IGST Rules]
Factor which determines the

S.No. Type of service in relation to immovable property
proportionate value of service
Service provided by way of lodging accommodation by
hotel, inn, guest house etc. and its ancillary services
Number of nights stayed in such
(a) (other than the cases where such property is a single
property
property located in 2 or more contiguous States/ UT or
both)
All other services provided in relation to immovable
property including:
 Services by way of accommodation in any

immovable property for organising any marriage or
reception etc. Area of the immovable property lying
 Supply of accommodation by a hotel, inn, guest in each State/ UT
house, club or campsite, by whatever name called
(b)
where such property is a single property located in
2 or more contiguous States or/and UT
 Services ancillary to services mentioned above

Time spent by the boat or vessel in
Services by way of lodging accommodation by a house each such State/ UT, to be determined
boat or vessel and its ancillary services on the basis of declaration made by the
(c) service provider
 Computation of value of services where event is organised in more than one State and
where the location of supplier and the recipient is in India [New rule 5 of the IGST
Rules]
Particulars Place of Supply

The place of supply of such service is deemed to be in each of
If contract or agreement the respective State/ UT in proportion to the value of services
exists determined in terms of the contract or agreement entered into
in this regard.
In the absence of any
The value is determined in accordance with rule 5 by the
such contract or
application of generally accepted accounting principles.
agreement

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 Computation of value of services where leased circuit is installed in more than one
State and where the location of supplier and the recipient is in India [New rule 6 of
the IGST Rules]
In the absence of any such contract or agreement, the value is determined in accordance
with rule 6 in proportion to the number of points lying in the State/ UT.
 Computation of value of services where the service is performed in more than one State
and where the location of supplier or the recipient is outside India [New rule 7 of the
IGST Rules]
Section 13(3) POS of goods and individual requiring physical presence. The place of supply
of such services is the location where such services are performed.
As per section 13(7) of the IGST Act, if such services are supplied in more than one State/
UT, the place of supply of such services is taken as being in each such State/ UT and the
value of such supplies is determined in terms of the contract or agreement entered into
in this regard. In the absence of any such contract or agreement, the value is determined
in accordance with rule 7 in the following manner:-
Manner of computing the proportionate value of

S.No. Cases
service
Services supplied on the same Equally dividing the value of service in each of the
(i)
goods States/ UT where the service is performed
Considering the ratio of the invoice value of goods in
Services supplied on different each States/ UT, on which service is performed, as the
(ii)
goods ratio of the value of the service performed in each
State/UT
(iii) Services supplied to individuals Applying generally accepted accounting principles.
Significant Notification/clarification
1) Section 13(13): In order to prevent double taxation or non-taxation of the supply of a

service, or for the uniform application of rules, the Government shall have the power to notify
any description of services or circumstances in which the POS shall be the place of effective
use and enjoyment of a service. Following services has been notified in this regard:

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Place of supply of research and development services related to pharmaceutical sector
Sl. No. Nature of supply Place of supply
Integrated When research and development

1.
discovery and development services related to pharmaceutical
sector are supplied by a person
2. Integrated development
located in taxable territory to a
Evaluation of the efficacy of new chemical/ biological
3. person located in the non-taxable
entities in animal models of disease
territory, the place of supply
Evaluation of biological activity of novel shall be the location of the
4.
chemical/ biological entities in in-vitro assays recipient of services subject to
Drug metabolism and pharmacokinetics of new chemical fulfillment of the following
5. conditions:-
Entities
Safety (i) Supply of services
6. Assessment/ from the taxable territory is
Toxicology provided as per a contract between

the service provider located in
7. Stability Studies
taxable territory service recipient
Bio-equivalence and
located in non-taxable territory.
8. Bioavailability
(ii) Such supply of services fulfills
Studies all other conditions in the definition
9. Clinical trials of export of services, except the
condition that place of supply is
10. Bio analytical studies outside India
o POS of B2B MRO services in case of aircraft engines and other aircraft components:
Description of services or circumstances Place of supply
Supply of maintenance, repair or overhaul service in respect The place of supply of services
of aircrafts, aircraft engines and other aircraft shall be the location of the
components or parts supplied to a person for use in the recipient of service
course or furtherance of business

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o POS of B2B MRO services in case of shipping industry shall be the location of the recipient:
Description of services or circumstances Place of supply

B2B supply of maintenance, repair or overhaul service (hereinafter The place of supply shall be the
referred to as MRO service) in respect of ships and other vessels, location of the recipient of
their engines and other components or parts supplied to a person service.
for use in the course or furtherance of business
2) Clarification regarding determination of place of supply in certain cases
 Services provided by Ports - place of supply in respect of various cargo handling services provided by
ports to clients
 Clarification: It is hereby clarified that such services are ancillary to or related to cargo handling
services and are not related to immovable property. Accordingly, the place of supply of such services
will be determined as per the provisions contained in section 12(2) or section 13(2) of the IGST Act,
as the case may be, depending upon the terms of the contract between the supplier and recipient of
such services.
 Services rendered on goods temporarily imported in India - place of supply in case of services rendered
on unpolished diamonds received from abroad, which are exported after cutting, polishing etc.
 Clarification: In case of cutting and polishing activity on unpolished diamonds which are temporarily
imported into India are not put to any use in India, the place of supply would be determined as per the
provisions contained in section 13(2) of the IGST Act i.e. “location of recipient of services” or
location of the recipient of services is not available: “location of supplier of services”
3) Clarification regarding determination of place of supply in case of software/ design

services related to Electronics Semi-conductor and Design Manufacturing (ESDM) industry
It is clarified that the place of supply of software/design by supplier located in taxable territory to
service recipient located in non-taxable territory by using sample prototype hardware / test kits in a
composite supply, where such testing is an ancillary supply, is the location of the service recipient as
per section 13(2) of the IGST Act. Provisions of section 13(3)(a) of IGST Act,2017 do not apply
separately for determining the place of supply for ancillary supply in such cases.

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4) Recipient entitled to ITC where the place of supply determined in terms of the proviso to
section 12(8) of the IGST Act, 2017 is outside India
Issue Clarification
In case of supply of services by In case of supply of services by way of transportation of goods,
way of transportation of goods, including by mail or courier, where the transportation of goods is
including by mail or courier, where to a place outside India, and where the supplier and recipient of
the transportation of goods is to a the said supply of services are located in India, the POS is the
place outside India, and where the concerned foreign destination where the goods are being
supplier and recipient of the said transported, in accordance with the proviso to section 12(8) of
supply of services are located in IGST Act.
India, what would be the place of
supply of the said services?
In the case given in (i) above, It would be considered as inter-State supply in terms of section
whether the supply of services will 7(5) of the IGST Act since the LOS is in India and the POS is
be treated as interState supply or outside India. Therefore, IGST would be chargeable on the said
intra-State supply? supply of services.
In the case given in (i) above, The law do not restrict availment of ITC by the recipient located
whether the recipient of service of in India if the POS of the said input service is outside India.
transportation of goods would be Thus, the recipient of service of transportation of goods shall be
eligible to avail ITC in respect of eligible to avail ITC in respect of the IGST so charged by the
the said input service of supplier, subject to the fulfilment of other conditions laid down
transportation of goods? in section 16 and 17 of the CGST Act.
5) Place of supply in case of supply of service of transportation of goods, including through

mail and courier
Consequent to omission of 13(9), place of supply of services of transportation of goods, other than
through mail and courier will be determined by default rule under section 13(2):-
Situations Place of supply
Where location of recipient of services is available, location of recipient of services
Where location of recipient of services is not available in the location of supplier of services
ordinary course of business

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On the same principles as mentioned above, the place of supply in case of service of transportation
of goods by mail or courier will continue to be determined by the default rule under section 13(2) of
IGST Act.
6) Place of supply in case of supply of services in respect of advertising sector
Advertising companies are often involved in procuring space on hoardings / bill-boards erected and
mounted on buildings / land, in different States, from various suppliers ("vendors") for providing
advertisement services to its corporate clients. There may be variety of arrangements between the
advertising company and its vendors as below:
Issue - There may be a case wherein there is supply (sale) of space or supply (sale) of rights to use
the space on the hoarding/ structure (immovable property) belonging to vendor to the client/advertising
company for display of their advertisement on the said hoarding/ structure. What will be the place of
supply of services provided by the vendor to the advertising company in such case?
Clarification- The hoarding/structure erected on the land should be considered as immovable structure
or fixture as it has been embedded in earth. As per section 12(3)(a) of the IGST Act, the place of
supply of services directly in relation to an immovable property, including services provided by
architects, interior decorators, surveyors, engineers and other related experts or estate agents, any
service provided by way of grant of rights to use immovable property or for carrying out or coordination
of construction work shall be the location at which the immovable property is located.
Therefore, the place of supply of service provided by way of supply of sale of space on hoarding/
structure for advertising or for grant of rights to use the hoarding/ structure for advertising in this
case would be the location where such hoarding/ structure is located.
Issue No 2- There may be another case where the advertising company wants to display its
advertisement on hoardings/ billboards at a specific location availing the services of a vendor. The
responsibility of arranging the hoardings / billboards lies with the vendor who may himself own such
structure or may be taking it on rent or rights to use basis from another person. The vendor is
responsible for display of the advertisement of the advertisement company at the said location.
During this entire time of display of the advertisement, the vendor is in possession of the hoarding /
structure at the said location on which advertisement is displayed and the advertising company is not
occupying the space or the structure. In this case, what will be the place of supply of such services
provided by the vendor to the advertising company?
Clarification- In this case, as the service is being provided by the vendor to the advertising company
and there is no supply (sale) of space / supply (sale) of rights to use the space on hoarding /
structure (immovable property) by the vendor to the advertising company for display of their
advertisement on the said display board / structure, the said service does not amount to sale of

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advertising space or supply by way of grant of rights to use immovable property.
Accordingly, the place of supply of the same shall not be covered under section 12(3)(a) of IGST
Act. Vendor is in fact providing advertisement services by providing visibility to an advertising
company's advertisement for a specific period of time on his structure possessed / taken on rent by
him at the specified location.
Therefore, such services provided by the vendor to advertising company are purely in the nature of
advertisement services in respect of which place of supply shall be determined in terms of section
12(2) of IGST Act.

107
CHAPTER 11 Import, Export and Zero rated Supply
 Export of Goods & Services

Export of Goods Export of Services
 As per Section 2 (6) of IGST Act, 2017 :
“Export of services” means the supply of any
service when,–
(i) the supplier of service is located in
India;
 As per Section 2(5) of IGST Act, 2017: “export (ii) the recipient of service is located
of goods” with its grammatical variations and outside India;
cognate expressions, means taking goods out of (iii) the place of supply of service is
India to a place outside India; outside India;
Note: (iv) the payment for such service has been
 As per Section 7(5)(a) of IGST Act, 2017: received by the supplier of service in
Supply of goods or services or both, When the convertible foreign exchange or in Indian
supplier is located in India and the place of rupees wherever permitted by the RBI and
supply is outside India; - it will be treated to (v) the supplier of service and the
be an Inter State trade or commerce. recipient of service are not merely
 Export of Goods are Zero Rated establishments of a distinct person in
accordance with Explanation 1 in section 8:
Note:
 As per Section 7(5)(a) of IGST Act, 2017:
Supply of goods or services or both, When
the supplier is located in India and the place
of supply is outside India; - it will be treated
to be an Inter State trade or commerce.
 Export of Services are Zero Rated

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 Import of Goods & Services

Import of Goods Import of Services
 As per Section 2 (10) of IGST Act, 2017:  As per Section 2 (11) of IGST Act, 2017:
‘import of goods” with its grammatical ‘‘import of services” means the supply of
variations and cognate expressions, means any service, where–
bringing goods into India from a place outside (i) the supplier of service is located outside
India; India;
Note : (ii) the recipient of service is located in India;

and
 As per Section 7(2) of IGST Act, 2017: Supply
(iii) the place of supply of service is in
of goods imported into the territory of India,
India;
till they cross the customs frontiers of India,
Note :
shall be treated to be a supply of goods in the
 As per Section 7(4) of IGST Act, 2017:
course of inter-State trade or commerce.
Supply of services imported into the
territory of India shall be treated to be a
supply of services in the course of inter-
State trade or commerce.
 Author’s Special Note:
Inter State or Intra

Sr. No LOS LOR POS Remarks
State
Import : IGST : Reverse Charge
1 Germany Mumbai Mumbai Inter State Supply
applies Except NTOR
Export : Zero rated supply if

2 Mumbai Germany Germany Inter State Supply
other 2 conditions fulfilled
Inter State Supply Since LOR is in India it cannot

3 Mumbai Germany Mumbai
but not Export be treated as Export
Inter State as per Section 7(5)

but exempt if both parties in
4 Germany Singapore Mumbai Inter State Supply Non-Taxable Territory then all
services are exempt except
transport of Goods in Vessel

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 Taxability of OIDAR Services
Type Supplier Recipient Status Remarks

Supplier is liable to
Non-Taxable Online take registration and
OIDAR Services Taxable
Recipient pay tax u/s 14 of IGST
Act, 2017
Trust is liable to pay
OIDAR Services Trust Taxable
tax under RCM basis
Exemption given under
Other Online
Unregistered Person Exempt N/No. 9/2017 - IT ® dt.
Services
28.06.17
Exemption given under
N/No. 9/2017 - IT ® dt.
Any Person
Other Online 28.06.17 only if these
located in Non- Trust Exempt
Services are received for the
Taxable Territory
purpose of carrying out
charitable activity
Any person other than Reverse Charge is
OIDAR Services
Non- Taxable online applicable under N /
or other online Taxable
recipient located in No. 10 /2017-IT ® dt.
services
taxable territory 28.06.17
Online Money A Person in the Supplier is liable to pay

Taxable
Gaming taxable territory IGST
 Section 14: Special Provision for Payment of Tax by a Supplier of OIDAR Services :
On supply of OIDAR Services by any person located in a non-taxable territory and received by a non-
taxable online recipient, the supplier of services located in a non-taxable territory shall be the person
liable for paying IGST on such supply of services.
In the case of supply of OIDAR services by any person located in a non-taxable territory and received by a
non-taxable online recipient, an intermediary located in the non-taxable territory, shall be deemed to be the
recipient of such services except when such intermediary satisfies the following conditions, namely:–

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(a) the invoice or customer’s bill or receipt issued or made available by such intermediary taking part in
the supply clearly identifies the service in question and its supplier in non-taxable territory
(b) the intermediary involved in the supply does not authorise the charge to the customer or take part in
its charge which is that the intermediary neither collects or processes payment in any manner nor is
responsible for the payment between the non-taxable online recipient and the supplier of such services
(c) the intermediary involved in the supply does not authorise delivery and
(d) the general terms and conditions of the supply are not set by the intermediary involved in the supply
but by the supplier of services.
Supplier of OIDAR services shall, for payment of IGST, take a single registration under
(2)
the Simplified Registration Scheme.
Any person located in the taxable territory Shall get registered and pay IGST
representing such supplier
If such supplier does not have a physical presence or Appoint a person in the taxable territory for the
does not have a representative for any purpose in purpose of paying IGST and such person shall be
the taxable territory liable for payment of such tax.
 Special provision for taxability of supply of online money gaming by a person located
outside the taxable territory to a person in India [New section 14A]
A supplier of online money gaming, not located in the taxable territory, shall in respect of the supply of
online money gaming by him to a person in the taxable territory, be liable to pay IGST on such supply.
Supplier shall obtain a single registration under the Simplified Registration Scheme.
Any person located in the taxable territory Shall get registered and pay the IGST on
representing such supplier behalf of the supplier.
Further that if such supplier does not have a Shall appoint a person in the taxable
physical presence or does not have a territory for the purpose of paying
representative for any purpose in the taxable i IGST and such person shall be liable for / payment
territory, of such tax.
In case of failure to comply by the supplier or a person appointed, any information generated, transmitted,
received or hosted in any computer resource used for supply of online money gaming by such supplier shall
be liable to be blocked for access by the public.

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 Section 16: Zero Rated Supply
Sub Section Particulars
“Zero rated supply” means :–

1 (a) export of goods or services or both or
(b) supply of goods or services or both for authorised operations to a Special Economic
Zone developer or a Special Economic Zone unit.
Credit of input tax may be availed for making zero-rated supplies, notwithstanding
2
that such supply may be an exempt supply.
A registered person making zero rated supply shall be eligible to claim refund
of unutilised ITC on supply of goods or services or both, without payment
of integrated tax, under bond or LOU.
3
RP making zero rated supply of goods shall, in case of non-realisation of sale proceeds,
be liable to deposit the refund so received with interest U/s 50 of the CGST Act within
30 days after the expiry of the time limit prescribed under the FEMA, 1999 for receipt
of foreign exchange remittances.
The Government by notification, specify -
(i) a class of persons who may make zero rated supply on payment of IGST and claim
refund of the tax so paid
(ii) a class of goods or services which may be exported on payment of IGST and the
supplier of such goods or services may claim the refund of tax so paid.
In pursuance of the same, with effect from 01.10.2023, following goods/services/suppliers

4 have been notified :
(i) all goods or services (except the goods specified) as the class of goods or services
which may be exported on payment of IGST and on which the supplier of such goods
/ services may claim the refund of tax so paid; and
(ii) all suppliers to a Developer or a unit in SEZ undertaking authorised operations as
the class of persons who may make supply of goods or services (except the goods
specified) to such Developer or a unit in SEZ for authorised operations on payment of
IGST and on which the said suppliers may claim the refund of tax so paid.

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 Clarification regarding admissibility of export remittances received in Special Rupee

Vostro account, as permitted by RBI, for the purpose of consideration of supply of
services to qualify as export of services:
When the Indian exporters, undertaking export of services, are paid the export proceeds in Indian
rupees from the Special Rupee Vostro Accounts of correspondent bank(s) of the partner trading
country, opened by Authorised Dealer (AD) banks, the same shall be considered to be fulfilling
the conditions of sub-clause (iv) of section 2(6) of the IGST Act, 2017, subject to the conditions
/ restrictions mentioned in Foreign Trade Policy, 2023 & extant RBI Circulars and without prejudice
to the permissions / approvals, if any, required under any other law.
 Clarification on export of services under GST
Issue: In case of an exporter of services outsources a portion of the services contract

to another person located outside India, what would be the tax treatment of the said
portion of the contract at the hands of the exporter. There may be instances where the
full consideration for the outsourced services is not received by the exporter in India.
Clarification: Where an exporter of services located in India is supplying certain services to a

recipient located outside India, either wholly or partly through any other supplier of services
located outside India, the following two supplies are taking place: -
a) Supply of services from the exporter of services located in India to the recipient of
services located outside India for the full contact value;
b) Import of services by the exporter of services located in India from the supplier of
services located outside India with respect to the outsourced portion of the contract.
Thus, the total value of services as agreed to in the contract between the exporter of
services located in India and the recipient of services located outside India will be considered
as export of services if all the conditions laid down in section 2(6) of the IGST Act, 2017
read with section 13(2) of the IGST Act are satisfied.
It is clarified that the supplier of services located in India would be liable to pay
IGST on reverse charge basis on the import of services on that portion of services
which has been provided by the supplier located outside India to the recipient of
services located outside India. Furthermore, the said supplier of services located in India
would be eligible for taking ITC of the IGST so paid.
Thus, even if the full consideration for the services as per the contract value is not received in
convertible foreign exchange in India due to the fact that the recipient of services located outside

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India has directly paid to the supplier of services located outside India (for the outsourced part
of services), that portion of the consideration shall also be treated as receipt of consideration
for export of services in terms of section 2(6)(iv) of the IGST Act, provided the:
a) IGST has been paid by the supplier located in India for import of services on that
portion of the services which has been directly provided by the supplier located outside
India; and
b) RBI by general instruction or by specific approval has allowed that part of the
consideration for such exports can be retained outside India.
 Clarification in respect of goods sent/ taken out of India for exhibition or on consignment
basis for export promotion
The activity of sending/ taking specified goods out of India is not a zero-rated supply. That being
the case, execution of a bond or LUT, as required under section 16 of the IGST Act, is not
required.
 Clarification on Export of Services :
Situation 1 :

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Situation 2:
Situation 3:

115
CHAPTER 12 Accounts and Records and E-way Bill
 Who is required to maintain his books of accounts and at which place?

 Every Registered Person – at his Principal Place of Business
 Where more than one place of business - the accounts relating to each place of business shall
be kept at such places of business.
 If any documents or books of accounts are found at any other premises they shall be presumed to
be maintained by the registered person.
 Books of accounts can be maintained in electronic form in such manner as may be prescribed.
 Types of Accounts and Records

Every Registered Person shall maintained following books of accounts
(a) production or manufacture of goods;

(b) inward and outward supply of goods or services or both;
(c) stock of goods;
(d) input tax credit availed;
(e) output tax payable and paid; and
such other particulars as may be prescribed
Records Prescribed By Rules :
(1) The goods/services imported/exported,
(2) Supplies attracting payment made on RCM basis along with relevant documents, bill of supply,
delivery challan, credit notes, debit notes, receipt voucher etc.
(3) Separate account of advances received, paid and adjustments made thereto.
 Records to be made by Specific Persons

Records which are required to be maintained by Agent [Rule 56(11)]
(a) particulars of authorisation received by him from each principal to receive or supply goods or
services on behalf of such principal separately;
(b) particulars including description, value and quantity (wherever applicable) of goods or services
received on behalf of every principal;
(c) particulars including description, value and quantity (wherever applicable) of goods or services
supplied on behalf of every principal;
CA Yachana Mutha Bhurat 09669357770 gst.yachana@gmail.com 1

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(d) details of accounts furnished to every principal; and

(e) tax paid on receipts or on supply of goods or services effected on behalf of every principal.
Records to be maintained by a manufacturer [Rule 56(12)]
Monthly production accounts showing quantitative details of raw materials or services used in the
manufacture and quantitative details of the goods so manufactured including the waste and by
products thereof
Records to be maintained by a supplier of services [Rule 56(13)]
Accounts showing quantitative details of goods used in the provision of services, details of input
services utilised and the services supplied.
Records to be maintained by a supplier of Works Contract Services [Rule 56(14)]
 The names and addresses of the persons on whose behalf the works contract is executed;
 Description, value and quantity (wherever applicable) of goods or services received for the
execution of works contract;
 Description, value and quantity (wherever applicable) of goods or services utilized in the
execution of works contract;
 The details of payment received in respect of each works contract; and
The names and addresses of suppliers from whom he received goods or services.
Records which are not to be maintained by a supplier opting for composition levy [Rule 56(2)
and (4)]
(i) Stock of goods: Accounts of stock in respect of goods received and supplied by him, and such
accounts shall contain particulars of the opening balance, receipt, supply, goods lost, stolen,
destroyed, written off or disposed of by way of gift or free sample and the balance of stock
including raw materials, finished goods, scrap and wastage thereof.
(ii) Details of tax: Account, containing the details of tax payable (including tax payable under reverse
charge), tax collected and paid, input tax, input tax credit claimed, together with a register of
tax invoice, credit notes, debit notes, delivery Challan issued or received during any tax period.
 Failure to maintain the accounts

 Where the registered person fails to account for the goods or services or both
 the proper officer shall determine the amount of tax payable on the goods or services or
both that are not accounted for
 The provisions of section 73 or section 74, as the case may be, shall, mutatis mutandis,
apply for determination of such tax.

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 Period of Retention of Accounts

 Every registered person shall maintain accounts - 72 months (i.e. 6 Years) from the due
date of furnishing of annual return for the year pertaining to such accounts and records.
 Every registered Person who is party to Appeal shall maintain accounts for a period of one
year after final disposal of such appeal or revision or proceedings or investigation, or 72
months (i.e. 6 Years) from the due date of furnishing of annual return, whichever is later.
E-Way Bill [Section 68 read with Rule 138]:
 When is e-way bill required to be generated?
Whenever there is a movement of goods of consignment value exceeding Rs. 50,000:
i. in relation to a supply; or
ii. for reasons other than supply; or
iii. due to inward supply from an unregistered person,

The registered person who causes such movement of goods shall furnish the information
relating to the said goods as specified in Part A of Form GST EWB-01 before
commencement of such movement.
 Special situations where e-way bill needs to be issued even if value the of the
consignment is less than Rs. 50,000:
1. Inter-State transfer of goods by principal to job-worker

2. Inter-State transfer of handicraft goods by a person exempted from obtaining
registration
3. Voluntary Generation of E-way Bill
 Details required to be furnished in E-Way Bills.
An e-way bill Form GST EWB-01 contains two parts
Part A Part B
GSTIN of supplier Vehicle Number
place of delivery Transporter document number

GSTIN of Recipient -
Document Number -
Document Date -
value of goods -
HSN code -
Reasons for transportation

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Part A to be furnished by a registered person who is causing the movement of goods

**However, information in Part-A may be furnished:
 by the transporter, on an authorization received from such registered person or
 by the e-commerce operator or courier agency on an authorization received from the

consignor
Part B to be furnished by the person who is transporting the goods
 E-way Bill is required to be generated by:
Situations Who will generate

Goods transported by a RP as consignor or consignee RP to generate E way Bill
E-way bill not generated by RP and the goods are RP furnish details of transporter in Part
handed over to the transporter, for transportation B and E-way bill shall be generated by
of goods by road the transporter
Goods transported by railways or by air or vessel RP to generate E way Bill
Railways shall not deliver goods unless the e-way bill required under rules is produced at the
time of delivery
 When is it not mandatory to furnish the details of conveyance in Part-B?
Details of conveyance may not be furnished in Part-B of the e-way bill where the goods
are transported for a distance of upto 50 km within the State/Union territory.
 Acceptance and Rejection of E-Way Bill

 The details of the e-way bill generated shall be made available to the supplier or recipient,
if registered.
 Such supplier or recipient shall communicate his acceptance or rejection of the consignment
covered by the e-way bill.
 In case, the person to whom the information in Part-A is made available, does not
communicate his acceptance or rejection within the specified time, it shall be deemed
that he has accepted the said details.
The time-limit specified for this purpose is:
I. 72 hours of the details being made available to him on the common portal, or
II. the time of delivery of goods,

Whichever is Earlier.

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 Validity period of e-way bill / consolidated e-way bill

Sr Distance within country Validity period from relevant date
No
1 Up to 200 km 1 day in cases other than Over Dimensional Cargo
or multimodal shipment in which at least one leg
involves transport by ship
2 For every 200 km or part 1 additional day in cases other than Over
thereof thereafter Dimensional Cargo or multimodal shipment in which
at least one leg involves transport by ship
3 Up to 20 km 1 day in case of Over Dimensional Cargo or
multimodal shipment in which at least one leg
4 For every 20 km or part 1 additional day in case of Over Dimensional Cargo
thereof thereafter or multimodal shipment in which at least one leg
 Transfer of goods from one conveyance to another :

Goods are transferred from one conveyance to another,
 Consignor or
 Recipient, who has provided information in Part A, or
 Transporter
shall, before such transfer and further movement of goods, update the details of conveyance
in Part B.
 Documents and devices to be carried by a person-in-charge of a conveyance
The person-in-charge of a conveyance shall carry –

(a) the invoice or bill of supply or delivery Challan and
(b) a copy of the e-way bill in physical form or the e-way bill number in electronic
form or mapped to a RFID embedded on to the conveyance [except in case of
movement of goods by rail or by air or vessel]
In case of imported goods, also carry a copy of the bill of entry.
 Invoice Reference Number (IRN) in lieu of tax invoice
In case, E-invoice is issued, the Quick Response (QR) code having an embedded IRN in it, may
be produced electronically, for verification by proper officer in lieu of physical copy of such tax invoice
In such a case, RP will not have to upload the information in Part A of E-way bill for
generation of e-way bill and the same shall be auto-populated by the common portal on the
basis of the information furnished in the prescribed form

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 Documents in lieu of e-way bill
Where circumstances so warrant, the Commissioner may, by notification, require the person-
in- charge of the conveyance to carry the following documents instead of the e-way bill:
(a) Tax invoice or bill of supply, or bill of entry; or
(b) A delivery Challan, where goods are transported for reasons other than supply
 Cancellation of e-way bill

 where an e-way bill has been generated, but goods are either not transported or are not
transported as per the details furnished in the e-way bill, the e-way bill may be cancelled
electronically on the common portal within 24 hours of generation of the e-way bill
 However, an e-way bill cannot be cancelled if it has been verified in transit
 Further, unique EWB number generated is valid for a period of 15 days.
 Facility for uploading information regarding detention of vehicle

 Where a vehicle has been intercepted and detained for a period exceeding 30 minutes,
the transporter may upload the said information in specified form on the common
portal.
 Inspection and verification of goods
 A summary report of every inspection of goods in transit shall be recorded online by

the proper officer in Part A within 24 hours of inspection and the final report in Part
B shall be recorded within 3 days of such inspection.
 The Commissioner, or any other officer authorised by him,may, on sufficient cause being
shown, extend the time for recording of the final report, for a further period not exceeding 3
days.
 No further physical verification of the said conveyance shall be carried out again in the
State/Union territory, unless a specific information relating to evasion of tax is made
available subsequently.
 Only such goods and/or conveyances should be detained/confiscated in respect of which
 there is a violation of the provisions of the GST Acts or the rules made thereunder.
 Consolidated E-way bill

 Where the consignor/consignee has not generated the e-way bill in Form GST EWB-
01 and the aggregate of the consignment value of goods carried in the conveyance is more
than Rs. 50,000 the transporter, except in case of transportation of goods by railways,

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air and vessel, shall, in respect of inter-State supply, generate the e-way bill in Form
GST EWB -01 In Form GST EWB-02 on the common portal prior to the movement of goods.
 However, where the goods to be transported are supplied through an e- commerce

operator or a courier agency, the information in Part A of Form GST EWB-01
may be furnished by such e-commerce operator or courier agency.
 Where multiple consignments are intended to be transported in one conveyance, the

transporter may indicate the serial number of e-way bills generated in respect of each
such consignment electronically on the common portal and a consolidated e-way bill in
Form GST EWB-02 may be generated by him on the said common portal prior to the
movement of goods.
 Rule 138E : Restriction on furnishing of information in Part A of Form GST EWB-01 :
No person shall not be allowed to furnish the information in Part A of Form GST EWB-01 in
respect of any outward movement of goods of a registered person who:
 A person paying tax under composition scheme has not furnished the statement for
payment of self-assessed tax for 2 consecutive quarters, or
 A person paying tax under regular scheme has not furnished the returns for 2 consecutive
tax periods, or
 A person paying tax under regular scheme has not furnished GSTR-1 for any 2 months or
quarters
 A person, whose registration has been suspended under rule 21A pending the completion of
the proceedings for cancellation of registration.
However, Commissioner (jurisdictional commissioner) may, on receipt of an application from a

registered person, on sufficient cause being shown and for reasons to be recorded in writing, by
order, in prescribed form allow furnishing of the said information in Part A of Form GST EWB-01,
subject to prescribed conditions and restrictions.
An order rejecting said request shall not be passed without giving the said person a reasonable
opportunity of being heard.

122
CHAPTER 13 Tax Invoice, Debit note and Credit Note
1) Manner of Issuing the invoice

Supply of Goods Supply of Services
Triplicate Duplicate
 Original copy for recipient  Original copy for recipient; and
 Duplicate copy for transporter; and  Duplicate copy for supplier
 Triplicate copy for supplier
The serial number of invoices issued during a month / quarter shall be furnished electronically
in FORM GSTR-1.
2) Types of Invoice
Types of Invoices
Invoice cum Bill of

Tax Invoice Bill of Supply
Supply
To be issued by Person To be Issues by person

To be issued by Registered
making Exempted engaged in making
Person making Supply of
Supply or by Composite taxable as well as
Taxable Goods or Services
dealer Exempted supply
Note : Invoice-cum-bill of supply shall contain the particulars as specified under rule 46 or rule
54, as the case may be, and rule 49
3) Receipt Voucher
Advance payment
Supplier Recipient
Receipt Voucher
Where at the time of receipt of advance, rate of tax/ nature of supply is not determinable
Where at the time of receipt of advance
(i) Rate of tax is not determinable tax shall be paid at the rate of 18%
(ii) Nature of supply is not determinable same shall be treated as inter-State supply
4) Refund Voucher

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Summary Book
Advance payment
Receipt Voucher
Supplier Supply Recipient
Refund Voucher
Consolidated Tax Invoice :

Consolidated Tax Invoice shall be issued for such supplies at the close of each day in respect
of all such supplies
Tax Invoice is not required to be issues where:
 Value of supply < Rs. 200
 Recipient is unregistered
 Recipient does not require such invoice
5) Revised Tax Invoice
Revised Tax Invoices to be issued in respect of taxable supplies

effected during this period
Effective date of Date of issuance of certificate

registration of registration
Consolidated Revised Tax Invoice (CTRI) may be issued in respect of taxable

supplies made to an unregistered recipient during this period
In case of inter-State supplies, CTRI cannot be issued in respect of all unregistered

recipients if the value of a supply exceeds ` 2,50,000 during this period.
Particulars of the Debit and Credit Notes are also same as revised tax invoices

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6) Credit Note
Where one or more tax invoice have been issued for supply of any goods or services or both
Taxable value in invoice > where goods or

where the
Taxable value in respect of such
goods supplied services or both
supply
are returned by supplied are found
OR OR
Tax charged in invoice > Tax the recipient to be deficient
payable in respect of such

supply
Registered Supplier of
may issue one or more Credit
goods or services or both
Note for supplies made in a F.Y
7) Debit Note
Where a tax invoice has been issued for supply of any goods or services or both
Taxable value in invoice < Taxable value in respect of such

supply
Tax charged in invoice < Tax payable in respect of such supply
Registered Supplier of
Issue one or more Debit Note Recipient of goods or
goods or services or both
for supplies made in FY
service for both

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8) Signature/ digital signature of supplier/ his authorised representative not required on :

(i) Electronic tax invoice,
(ii) Electronic bill of supply,
(iii) Electronic consolidated tax invoice in case of banking companies etc. and
(iv) Electronic ticket for passenger transportation service
9) Number of HSN digits required on tax invoice and class of registered person not required
to mention HSN:
Sr. No Annual Turnover in the Preceding FY No of digits of HSN Code
For B2B Supply- 4
1 AT ≤ Rs. 5 Crores
For B2C Supply- 4 (Optional)
2 AT > Rs. 5 Crores For B2B and B2C Supply- 6
10) Special provisions pertaining to tax invoice for services by way of admission to exhibition
of cinematograph films in multiplex screens [Rule 46 and 54 of the CGST Rules]
Option to issue consolidated tax invoice has been disallowed to a supplier engaged in making
supply of services by way of admission to exhibition of cinematograph films in multiplex
screens.
A registered person who is supplying services by way of admission to exhibition of
cinematograph films in multiplex screens shall be required to issue an electronic ticket. The
said electronic ticket is deemed to be a tax invoice, even if such ticket does not contain
the details of the recipient of service but contains the other information as mentioned
under rule 46. Moreover, supplier of such services in a screen other than multiplex screens
also has been given an option to follow above procedure.
11) E-invoicing :
Class of persons notified to mandatorily issue e-invoice
A RP (except specified class of persons), whose aggregate turnover in any preceding financial
year from 2017-18 onwards exceeds 5 crores, shall prepare e-invoice in respect of B2B
supplies or for exports. (not required/allowed to report B2C invoices). Further, e-invoicing is
also not applicable to invoices issued by ISD.
If the invoice issued by a notified person is in respect of supplies made by him tax on which
is payable under reverse charge under section 9(3), e-invoicing is applicable.

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Summary Book
Example : A taxpayer (say a firm of advocates) having aggregate turnover in a FY of more than
5 crore is supplying services to a company (who will be discharging tax liability as recipient under
RCM), such invoices have to be reported by said taxpayer (since it is a notified person) to IRP
However, where specified category of supplies are received by notified person from
unregistered persons [attracting RCM under section 9(4)] or through import of services,
e-invoicing doesn’t arise/ not applicable. E-invoicing is also not applicable for import of
goods (Bills of Entry).
Where e-invoicing is applicable, there is no need of issuing invoice copies in triplicate/duplicate

and carry them physically.
Exemption from E-invoicing:
Following entities are exempt from the mandatory requirement of e-invoicing:
 SEZ units
 Insurer or banking company or financial institution including NBFC
 GTA supplying services in relation to transportation of goods by road in a goods carriage
 Supplier of passenger transportation service
 Person supplying services by way of admission to exhibition of cinematograph films in
multiplex screens
 A Government Department and a local authority (Further such taxpayers are now required
to provide a declaration on the tax invoice stating that though their aggregate turnover
exceeds the notified aggregate turnover for e-invoicing, they are not required to prepare
an e-invoice.
Thus, above mentioned entities are not required to issue e-invoices even if their turnover
exceeds 5 crore in the preceding financial year from 2017-18 onwards.
It is important to note here that only SEZ units and not SEZ developers are exempt from
issuing e-invoices.
Clarification 1: It is hereby clarified that the said exemption from generation of e-invoices is
for the entity as a whole and is not restricted by the nature of supply being made by the said
entity.
Clarification 2: Accordingly, the registered person, whose turnover exceeds the prescribed
threshold for generation of e-invoicing, is required to issue e-invoices for the supplies made to
such Government Departments or establishments / Government agencies / local authorities/ PSUs
which are required to deduct TDS U/s 51.
How e-invoice is generated?

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Summary Book
The taxpayer first prepares and generates his invoice using his own ERP/ accounting/ billing
system or manual system. The invoice must conform to the e-invoice schema (standard
notified format) and must have the mandatory parameters.
The details of this invoice are uploaded/reported by the taxpayer to the Invoice Registration
Portal (IRP).
This way taxpayer registers his supply transaction on IRP. On uploading, IRP returns the e-invoice
with a unique ‘Invoice Reference Number (IRN) after digitally signing the e-invoice and adding
a QR Code (Quick Response Code). Then, the supplier shares the e-invoice with the receiver
along with QR Code.
Invoice Registration Portal (IRP)
IRP is the website for uploading/reporting of invoices by the notified persons. Following IRPs
have been notified for the purpose of preparation of the e-invoice:
www.einvoice1.gst.gov.in www.einvoice6.gst.gov.in
Important Content of a Tax Invoice [Sections 31(1) & (2) read with rule 46] : There is no format
prescribed for an invoice, but rules make it mandatory for an invoice to have the following fields (only
applicable fields are to be filled):
A Name, address and GSTIN of the supplier

A consecutive serial number not exceeding 16 characters, in one or multiple series, containing
B alphabets/numerals/special characters hyphen or dash and slash, and any combination thereof,unique for
a FY;
C Date of its issue;
D If recipient is registered - Name, address and GSTIN or UIN of recipient
If recipient is unregistered and value of supply is Particulars of invoice
Name and address of the recipient and the
Rs. 50,000 or more address of delivery, along with the name of State
E
and its code
unregistered recipient may still request the
less than Rs. 50,000
aforesaid details to be recorded in the tax invoice
Provided that in cases involving supply of online money gaming or in cases where any taxable service is

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Summary Book
supplied by or through an ECO or by a supplier of OIDAR services to a recipient who is un-registered,

irrespective of the value of such supply (even if it less than Rs. 50,000), a tax invoice issued by the registered
person shall contain name of the state of the recipient and the same shall be deemed to be the address
on record of the recipient.
F HSN code for goods or services
G Description of goods or services
H Quantity in case of goods and unit or Unique Quantity Code thereof
I Total value of supply of goods or services or both
J Taxable value of supply of goods or services or both taking into account discount or abatement, if any
K Rate of tax (central tax, State tax, integrated tax, Union territory tax or cess)
Amount of tax charged in respect of taxable goods or services (central tax, State tax, integrated tax,
L
Union territory tax or cess)
Place of supply along with the name of State, in case of a supply in the course of inter-State trade or
M
commerce
N Address of delivery where the same is different from the place of supply
O Whether the tax is payable on reverse charge basis and
Signature or digital signature of the supplier or his authorized representative (not required in case of
P
issuance of an electronic invoice)
Quick Response code, having embedded Invoice Reference Number (IRN) in it, in case e-invoice has
Q
been issued

129
CHAPTER 14 Payment of Tax
Types of Electronic Ledger
1. Electronic Cash ledger:
(Assume it as an account statement provided by bank, for easy understanding)
Debit Amount Credit Amount
• Credit amount of this ledger may be used for

payment of tax, interest, fees etc. • Any deposit made towards tax, interest, penalty,
• Remaining credit balance amount after payment late fee etc. via internet banking, RTGS, fund
of above tax etc. will be refunded to taxable transfer etc.
person. • TDS/TCS claimed
2. Electronic Credit ledger

• Credit amount of this ledger may be used for
payment of output tax viz IGST, CGST, SGST, • Input Tax credit as self-assessed in the return
UTGST in the prescribed order. in the form of IGST, CGST, SGST, UTGST
3. Electronic Liability Register
 Amount payable towards tax, interest, fees

etc.  Electronic cash ledger
 Tax or interest payable due to mismatch
 Any other dues
• Amount payable towards output tax  • Electronic credit ledger
 Electronic Credit Ledger
The amount available in the electronic credit ledger may be used for making any payment
towards output tax : (subject to such conditions and restrictions)

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Utilisation of Cash Utilisation of Credit

Tax Dues
ledger ledger
Output GST Yes Yes
Interest Yes No
Penalty Yes No
Fees Yes No
Other Amount Yes No
After, ITC of IGST to be completely exhausted mandatorily
ITC on account of SGST/ UTGST should be utilized towards payment of IGST only after the
ITC of CGST has been utilized fully
ITC of CGST • Output SGST
ITC of SGST • Output CGST
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 Electronic Cash Ledger

The amount available in the electronic cash ledger may be used for making any payment
towards
 Tax
 interest
 penalty,
 fees or
 any other amount payable under the provisions of this Act or the rules made there under
Minor and Major heads:
Major Heads Minor Heads
• IGST • Tax
• CGST • Interest
• SGST/UTGST • Penalty
• CESS
• Fee
• Others
Major Heads Minor Heads

IGST Tax Interest Penalty Fees Other
CGST Tax Interest Penalty Fees Other
SGST/UTGST Tax Interest Penalty Fees Other
CESS Tax Interest Penalty Fees Other
Facility has been provided to RP to transfer an amount from one (major/minor) head to
another (major/minor) head in the electronic cash ledger.
Form GST PMT-09 can be used either for
(i) Transfer of erroneous deposits under any minor head of a major head to any other minor
head of same or other major heads or
(ii) Transfer of any of the amounts already lying unutilised under any of the minor heads
in Electronic Cash ledger.
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 Modes of Payment :
 Author’s Note: Certain liabilities only to be discharged through cash

 TDS u/s 51 or TCS u/s 52
 RCM Payment
 Composition Levy u/s 10
 Interest, Penalty, Fees or any other amount under this act
 Order of Discharge of Liability of Taxable Person
3. All dues
including demand
2. All dues related determined under
to current tax section
period
1. All dues related to 73 and 74
previous tax period
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 A registered person may, on the common portal, transfer any amount of tax, interest,
penalty, fee or any other amount available in the electronic cash ledger under this Act, to
the electronic cash ledger for,
(a) Integrated tax, central tax, State tax, Union territory tax or cess; or
(b) Integrated tax or central tax of a distinct person and such transfer shall be
deemed to be a refund from the electronic cash ledger
However no such transfer under clause (b) shall be allowed if the said registered person has any
unpaid liability in his electronic liability register.
 Interest on delayed payment of tax
Interest Rates
If person pays the

unpaid amount on his
ITC Wrongly availed and
own (See Note 1)
utilised
Notifed Rate : 18%

18% per annum per annum
retrospectively w.e.f
01-07-2017
Note 1 : In case of late payment of tax Interest will be levied on “Net Liability to be discharged
in Cash” in respect of return u/s 39 of CGST Act (not in respect of dues arising on account of
Section 73 & 74)
This amendment is retrospective in nature, meaning thereby it will apply from 1st July, 2017 for
delayed payment of taxes which had been clarified by issuance of press release.
Note : In case the RP deposits the amount of erroneous refund sanctioned to him along with Interest
and penalty from its electronic cash ledger, proper officer to re-credit the said amount to its electronic
credit ledger
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Restrictions on use of amount available in electronic credit ledger [Rule 86B]
Rule 86B has been inserted in the CGST Rules to restrict the amount available in electronic
credit ledger which a RP can use to discharge his output tax liability to 99% of such tax
liability in cases where the value of taxable supply other than exempt supply and zero-rated
supply, in a month exceeds ₹ 50 lakh.
This rule overrides all other rules.
Exceptions: This restriction shall not apply in following cases :-
(a) Where the said person /proprietor /karta /managing director /any of its two partners, whole-
time directors, members of Managing Committee of Associations or Board of Trustees, as the
case may be, have paid more than 1 lakh as income tax in each of the last 2 financial years.
(b) Where the registered person has received a refund of more than 1 lakh in the preceding FY
on account of unutilised ITC in case of
(i) zero rated supplies made without payment of tax or
(ii) inverted duty structure.
(c) Where the registered person has discharged his liability towards output tax through the
electronic cash ledger for an amount which is in excess of 1% of the total output tax liability,
applied cumulatively, upto the said month in the current financial year.
(d) Where the registered person is:-
▪ Government Department
▪ Public Sector Undertaking
▪ Local authority
▪ Statutory body
However, the Commissioner or an officer authorised by him in this behalf may remove the
said restriction after such verifications and such safeguards as he may deem fit.
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 Clarifications regarding utilization of the amounts available in the electronic credit ledger
and the electronic cash ledger for payment of tax and other liabilities
It is clarified that any payment towards output tax, whether self-assessed in the return or
payable as a consequence of any proceeding instituted under the provisions of GST laws, can be
made by utilization of the amount available in the electronic credit ledger of a registered person.
 Whether the amount available in the electronic credit ledger can be used for making
payment of any liability other than tax under the GST laws
As per section 49(4), the electronic credit ledger can be used for making payment of output tax
only under the CGST Act or the IGST Act. It cannot be used for making payment of any interest,
penalty, fees or any other amount payable under the said Acts.
Similarly, electronic credit ledger cannot be used for payment of erroneous refund sanctioned to
the taxpayer, where such refund was sanctioned in cash.
 Whether the amount available in the electronic cash ledger can be used for making
payment of any liability under the GST laws?
Clarification: As per section 49(3), the amount available in the electronic cash ledger may be
used for making any payment towards tax, interest, penalty, fees or any other amount payable
under the provisions of the GST law.
 Last date up to which the rectification of errors allowed in the statement furnished by
ECO, extended up to 30th November of the following FY
 Clarification on charging of interest under section 50(3) in cases of wrong availment of

IGST credit and reversal thereof
This clarification addresses the calculation of interest under section 50(3) in cases of incorrect
claiming and subsequent reversal of IGST credit. The key consideration is whether the interest
calculation, as per rule 88B, should be based on the balance of IGST alone in the electronic credit
ledger or on the total available credits encompassing IGST, CGST, and SGST.
The conclusion is that the interest calculation should take into account the total credits
available in the ECL under IGST, CGST, and SGST.
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If the total ECL balance (combining IGST, CGST, and SGST) never drops below the amount of
wrongly claimed IGST credit during the entire period from the wrongful claim to correction, there
is no interest liability.
However, if at any point the total ECL balance falls below the wrongly claimed IGST credit amount,
interest is charged on the extent of the shortfall.
 Whether the credit of compensation cess available in ECL shall be taken into account while
considering the balance of ECL for the purpose of calculation of interest under rule 88B(3)
in respect of wrongly availed and utilized IGST, CGST or SGST credit?
Since ITC in respect of compensation cess can be utilised only towards payment of compensation
cess. Thus, credit of compensation cess cannot be utilized for payment of any tax under CGST or
SGST or IGST heads and/ or reversals of credit under the said heads. Accordingly, credit of
compensation cess available in ECL cannot be taken into account while considering the balance of
ECL for the purpose of calculation of interest under rule 88B(3) in respect of wrongly availed and
utilized IGST, CGST or SGST credit.
137
CHAPTER 15 Returns under GST
 Basic Features of return mechanism

 Electronic filing of returns
 Uploading of invoice level information
 Auto-population of information relating to ITC from returns of supplier to that of recipient
 Modes of Filing Return
Modes of Filing Return

GSTN portal (www.gst.gov.in)
Offline utilities provided by GSTN
GST Suvidha Providers (GSPs)
 List of Returns under GST
Return Description Who is required to file Due date of filing

Registered persons opting for 13th day of the month
Registered Person
QRMP scheme succeeding tax period
GSTR -1
Others 11th day of the month
Registered Person
succeeding tax period
30th day of April
GSTR-4 Return for FY or part of the year
Taxable Person opting following the end of FY
for Composition Levy 18th of the month
Quarterly Statement
succeeding the Qtr
13th of the month

succeeding the tax
Monthly Return for a non- period or within 7 days
GSTR-5 Non-resident Taxpayer
resident taxpayer after expiry of
registration, whichever
is earlier

138
Summary Book
 RP Providing online
money gaming from
place outside India to
Return for persons providing a person in India On or before 20th day of
online money gaming or OIDAR the month succeeding
GSTR 5A
services  OIDAR Service from the calendar month or
place outside India part thereof
o To NTOR
o To RP other
than NTOR
Monthly Return for an Input
GSTR-6 Service Distributor Input Service Distributor 13th of the next month
(ISD)
Monthly Return for authorities
GSTR-7 deducting tax Tax Deductor 10th of the next month
at source
Monthly Statement for E-
Commerce Operator
GSTR-8 E-Commerce Operator 10th of the next month
depicting supplies effecting
through it
Registered Person other
than an ISD, TDS/TCS
Taxpayer, 31st December of next
GSTR-9 Annual Return
Casual Taxable Person Financial Year
and Non-
resident Taxpayer
Within three months of

Taxable Person whose the date of
GSTR-10 Final Return registration has been cancellation or date of
surrendered or cancelled order of cancellation,
whichever is later.
 Quarterly Return Monthly Payment (QRMP) Scheme

QRMP Scheme is an optional return filing scheme, introduced for small taxpayers having
aggregate annual turnover (PAN based) of upto ₹ 5 crore in the current and preceding
financial year to furnish their Form GSTR-1 and Form GSTR-3B on a quarterly basis while
paying their tax on a monthly basis through a simple challan.

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Taxpayers having aggregate turnover of up to 5 cr rupees in the

Eligibility
preceding financial year
CBCI Circular No 143/13/2020 GST Dated 10th
Taxpayers can opt in the for any quarter from first day of
Exercising Option second month of preceding quarter to the last day of the first
month of the Quarter
Taxpayer must have furnished the last return as due on the date
Criteria
November 20
of exercising such option
Taxpayers are not required to exercise their option every quarter,

Option once exercised
shall furished return unless they revise the said option
Taxpayers who have filled their return GSTR-3B for October

Migration 2020 by 30 th November 2020 shall be migrated on the
comman portal
invoice details can be filled in GSTR -1 by using IFF for 1st and
Invoice furnishing facility 2nd month of the quarter
This will significantly reduce the compliance burden on such taxpayers as now the taxpayers
need to file only 4 GSTR-3B returns instead of 12 GSTR- 3B returns in a year. Similarly, they
would be required to file only 4 GSTR-1 returns since Invoice Filing Facility (IFF) is provided
under this scheme.
 Registered person debarred from furnishing details of outward supplies in Form GSTR-1/ IFF:
Cases where a registered person is debarred from furnishing details of outward supplies in
Form GSTR-1 / IFF :
(i) RP shall not be allowed to furnish GSTR-1, if he has not furnished the return in
Form GSTR-3B for the preceding month.
(ii) RP opting for QRMP scheme shall not be allowed to furnish Form GSTR-1 or using
IFF, if he has not furnished the return in Form GSTR-3B for preceding tax period.
(iii) RP to whom an intimation has been issued on the common portal rule 88C(1) in respect
of a tax period, shall not be allowed to furnish the details of outward supplies of goods
or services or both U/s 37 in FORM GSTR-1 or using the IFF for a subsequent tax period,
unless he has either deposited the amount specified in the said intimation or has
furnished a reply explaining the reasons for any amount remaining unpaid, as per rule
88C(2).

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(iv) RP to whom an intimation has been issued on the common portal under rule 88D (1)
in respect of a tax period / periods, shall not be allowed to furnish GSTR-1 / IFF for a
subsequent tax period, unless he has either paid the amount equal to the excess ITC as
specified in the said intimation or has furnished a reply explaining the reasons in respect
of the amount of excess ITC that still remains to be paid, as per rule 88D(2)
(v) RP shall not be allowed to furnish GSTR -1 / IFF, if he has not furnished the details of
the bank account as per rule 10A.
 Annual Return
Annual Return
This return needs to be filed by 31st December of the

next Financial Year.
In this return, the taxpayer needs to furnish details of

expenditure and income for the entire Financial Year.
Annual return may include a self-certified reconciliation statement
Self-certified Reconciliation statement
Value of supply as per Returns for FY Value of supply as per Audited Annual
Financials Statements
Exception : Any department of the CG or a SG or a LA, whose books of account are subject to
audit by the CAG of India, or an auditor appointed for auditing the accounts of LA.

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 Revision of Returns
The mechanism of filing revised returns for any correction of errors / omissions has been done
away with.
The rectification of errors/omissions is allowed in the subsequent returns.
However, no rectification is allowed after 30th day of November following the end of the financial
year to which such details pertain or furnishing of the relevant annual return, whichever is
earlier.
(i) Default In Furnishing Return [SECTIONS 46 & 47]
 A notice in prescribed form shall be issued, electronically, to a registered person who fails to
furnish Return under :
 Section 39 [Normal Return] or
 Section 44 [Annual Return] or
 Section 45 [Final Return] or
 Section 52 [TCS Statement]
The notice requires the registered person to furnish the return within 15 days, failing which the
tax liability will be assessed under section 62, based on the relevant material available with
the proper officer. In addition to tax so assessed, applicable interest and penalty will also be
payable.
 Late fees levied for delay in filing return [Section 47(1)] : Late fee is applicable for delay
in furnishing of return / details of outward supply as per the provision of section 47.
Delay in filing any of the following by their respective due dates, attracts late fee as given
here under:
(A) Statement of Outward Supplies [Section 37]
(B) Returns (including returns under QRMP Scheme) [Section 39]
(C) Final Return [Section 45]
(D) TCS Statement [Section 52]

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Rs. 200 (Rs. 100 under

CGST & Rs. 100 SGST/
UTGST) for every day
during which such
Quantum of late failure continues. Which ever is
fee
lower
Rs. 10,000 (Rs. 5,000
under CGST & Rs. 5,000
SGST/UTGST)
Note : It may be noted that the late fee payable by a registered person for delayed filing of a
return and/or annual return under section 47 is with reference to only the CGST Act
An equal amount of late fee is payable by such person under the respective SGST/ UTGST
Act as well. Penalty leviable under IGST Act shall be the sum total of the penalties leviable
under the CGST Act and the SGST/UTGST Act.
Rationalisation of late fees for delayed filing of Forms GSTR-1, GSTR-3B, GSTR-4, GSTR-7 and
GSTR-9 :
The late fee can be waived off partially or fully by the Central Government [Section 128]. In
view of this, late fees for delayed filing of Forms GSTR-1, GSTR-3B, GSTR-4, GSTR-7 and
GSTR-9 have been rationalized as follows:

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 For delayed filing of GSTR-1 and / or GSTR-3B :-

Amount of late fee payable under section 47 by the registered person who fail to furnish Form
GSTR-1 and/or Form GSTR-3B by the due date, shall be as follows:
Rs. 500 (Rs.250

Registered Persons
each under CGST &
Who Have Nil
SGST/UTGST)
Outward Supplies In
The Tax Period/ Which ever is
Rs.20 (Rs. 10
Whose Total Amount
CGST + Rs. 10
lower
Of Tax Payable In
SGST/UTGST ) for
The GSTR-3B Is Nil,
every day during
As The Case May Be
which such failure
continues
Rs. 2,000 (Rs.
1,000 each under
Registered Persons
CGST &
Other Than Those
SGST/UTGST)
Covered In (1) Above Which ever is
Whose Aggregate Rs. 50 ( Rs. 25
CGST + Rs. 25
lower
Turnover ≤ Rs. 1.5
SGST/UTGST) for
Crores In The
every day during
Preceding FY
which such failure
Delayed Filling
continues
Of GSTR-1
and/or GSTR-3B Rs. 5,000 (Rs.
Registered Persons 2500 each under
Other Than Covered CGST & SGST /
In (1) Above Whose UTGST
Which ever is
At In The Preceding Rs. 50 ( Rs. 25
lower
FY Is: CGST + Rs. 25
SGST/UTGST) for
Rs. 5 Crores ≥ At >
every day during
Rs. 1.5 Crores,
which such failure
continues
Rs. 10,000 ( Rs.

5,000 each under
CGST &
Registered Persons SGST/UTGST)
Whose Aggregate Which ever is
Turnover > Rs. 5 Rs. 50 ( Rs. 25 lower
Crores In The CGST + Rs. 25
Preceding FY SGST/UTGST) for
every day during
which such failure
continues

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 For delayed filing of GSTR-4 :-
Amount of late fee payable under section 47 by a composition supplier who fails to furnish
Form GSTR-4 by the due date, shall be as follows:
Quantum Of Late Fee
Rs. 500 ( Rs. 250

each under CGST &
Class Of Registered Persons
SGST/UTGST)
(1) Total tax

Whichever is lower
payable in GSTR-4 Rs. 20 (Rs. 10
is nil CGST + Rs. 10
SGST/UTGST) for
every day during
which such failure
continues
Where Rs. 2,000 ( Rs.

1,000 each under
(2) Registered CGST &
Persons other than SGST/UTGST)
the class of
registered persons Whichever is lower
Rs. 50 (Rs. 25
of registered person CGST + Rs. 25
whose covered in SGST/UTGST) for
(1) above every day during
which such failure
continues

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 For delayed filing of Annual Return (GSTR-9):-
Quantum Of Late Fee
Class of Registered Persons

Rs. 50 per day (Rs.
25 CGST + Rs. 25
Registered persons SGST/UTGST)
having aggregate Whichever is
turnover ≤ Rs. 5 0.04% of turnover lower
crores in the in the state or
revelant FY union territory
(0.02% CGST+
0.02%
SGST/UTGST)
Rs. 100 per day

(Rs. 50 CGST +
Registered persons Rs. 50
having following SGST/UTGST)
aggregate turnover: Whichever is
Delayed Filling Of lower
Rs. 5 crores < 0.04% of turnover
Annual return
aggregate turnover in the state or
≤ Rs. 20 crores in union territory
the revelant FY (0.02% CGST+
0.02%
SGST/UTGST)
Rs. 200 for every
day during which
such failure
continues (Rs. 100
Registered persons
CGST + Rs. 100
having aggregate
SGST/UTGST) Whichever is
turnover > Rs. 20
0.50% of turnover lower
crores in the
relevant FY of the registered
person in the
state or union
territory (0.25%
CGST+ 0.25%
SGST/UTGST)

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 For delayed filing of GSTR-7 :-
Total amount of late fee payable under section 47 by any registered person, required to deduct
tax at source under the provisions of section 51 for delayed filing of GSTR-7, shall be as
follows:
Rs. 50 (Rs. 25 each under

CGST & SGST/UTGST) for
every day during which
Quantum of late fee

such failure continues.
Which ever is
lower
Rs. 2,000 (Rs. 1,000 each
under CGST &
SGST/UTGST)
 Nil GSTR - 3B & GSTR - 1 can be filed through SMS:
RP who is required to furnish a Nil return in FORM GSTR-3B or a Nil details of in FORM GSTR-1
for a tax period, any reference to electronic furnishing shall include furnishing through a short
messaging service using the registered mobile number and the said return or the details of
outward supplies shall be verified by a registered mobile number based OTP facility.
A Nil return shall mean a return under section 39 for a tax period that has nil or no entry in all
the Tables in FORM GSTR-3B or FORM GSTR - 1 as the case may be.
The same facility has been extended to Statement CMP-08 i.e., for composition taxable person for
payment of tax on quarterly basis.
 Taxpayer to be intimated the difference in liability in Form GSTR-1 and Form GSTR-3B
and be requested to pay the differential liability or explain the difference [New rule 88C
introduced and rule 59(6) amended]
A new rule 88C has been introduced to determine a mechanism for dealing with difference in
liability reported in statement of outward supplies between Form GSTR-1 and Form GSTR-3B.
Accordingly, where the tax liability as per Form GSTR-1 for a tax period exceeds the tax liability
as per Form GSTR-3B for that period by more than a specified extent, the registered person
would be intimated on the portal of such difference and be directed to either

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Summary Book
(i) Pay the differential tax liability along with interest, or

(ii) Explain the difference, within specified time.
Unless the taxpayer either deposits the amount specified in the said intimation or furnishes a
reply explaining the reasons for any amount remaining unpaid, such a person should not be
allowed to file Form GSTR1/ IFF for the subsequent tax period.
 Manner of dealing with difference in ITC available in auto-generated statement containing

the details of ITC and that availed in return prescribed [New rule 88D introduced]
Where the amount of ITC availed by a registered person in the return for a tax period(s) furnished
by him in Form GSTR-3B exceeds the ITC available to such person in accordance with the auto-
generated statement containing the details of ITC in Form GSTR-2B in respect of the said tax
period(s), by specified amount and percentage, the said registered person shall be given an intimation
in prescribed form electronically on the common portal, and a copy of such intimation shall also be
sent to his e-mail address provided at the time of registration or as amended from time to time.
Said intimation shall highlight the said difference and will direct him to—
(a) pay an amount equal to the excess ITC availed in the said Form GSTR- 3B, along with
interest payable under section 50, through prescribed form, or
(b) explain the reasons for the aforesaid difference in ITC on the common portal,
within a period of 7 days.
Such registered person shall, upon receipt of said intimation, either,
(a) pay an amount equal to the excess ITC, as specified in intimation, fully or partially, along with
interest payable, through prescribed form and furnish the details thereof, electronically on the
common portal, or
(b) furnish a reply, electronically on the common portal, incorporating reasons in respect of the
amount of excess ITC that has still remained to be paid,
within 7 days period.
Where any amount specified in the intimation remains to be paid within 7 days’ period and where no
explanation/reason is furnished by the registered person in default or where the explanation/reason
furnished by such person is not found to be acceptable by the proper officer, the said amount shall
be liable to be demanded in accordance with the provisions of section 73 / section 74.

148
CHAPTER 16 Refund under GST
 Circumstances under GST Act where refund can arise
Refund of taxes under GST laws may arise in following cases:

(i) Export of Goods / Services
(ii) Refund of Unutilised ITC: A registered person may claim refund of any unutilised input tax credit
(ITC) at the end of any tax period in the following cases:
 Zero rated supplies:
 Accumulated ITC on account of inverted duty structure:
However, refund of unutilized ITC shall not be allowed if:
a) the goods exported out of India are subjected to export duty;
b) the supplier of goods or services or both avails of drawback in respect of CGST or claims refund of
the IGST paid on such supplies.
Deemed Export
(iii) Balance of Electronic Cash Ledger
(iv) Refund Voucher
(v) Tax wrongly collected and paid to Government
(vi) Refund to tourist
(vii) Refund on account of Court Order
(viii) Refund on account of Final assessment
(ix) Refund to UN Bodies
A registered person may claim refund of any unutilised ITC in case of zero rated supplies or
accumulated ITC on account of inverted duty structure at the end of any tax period
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 As per Explanation 2 to section 54: Meaning of Relevant date
Sr
Cases Relevant Date
No
In case of goods exported out of India where a refund of tax paid is available in respect of goods
themselves or, as the case may be, the inputs or input services used in such goods and
Date on which the ship or the aircraft in which such

(i) Goods are exported by sea or air
A goods are loaded, leaves India
(ii) Goods are exported by land Date on which such goods pass the frontier
Date of dispatch of goods by the Post Office
(iii) Goods are exported by post
concerned to a place outside India
In case of supply of goods regarded as deemed Date of filing of return, related to such supplies, by
B
exports the supplier.
In case of zero-rated supply of goods or services

or both to SEZ developer or SEZ unit where a
Due date for furnishing of return under section 39 in
refund of tax paid is available in respect of such
respect of such supplies.
supplies themselves, or inputs or input services
used in such supplies
In case of services exported out of India where a refund of tax paid is available in respect of services
themselves or, as the case may be, the inputs or input services used in such services, and
C
Date of receipt of payment in convertible foreign

(i) the supply of services had been completed
exchange or in Indian rupees wherever permitted by
prior to the receipt of such payment
RBI
(ii) payment for the services had been received

in advance prior to the date of issue of the Date of issue of Invoice
invoice
Where tax becomes refundable as a consequence

of judgment, decree, order or direction of the Date of communication of such judgment, decree,
D
Appellate Authority, Appellate Tribunal or any order or direction
court
Due date for furnishing of return under section 39

Unutilised ITC in case of zero-rated supplies
E for the period in which such claim for refund
or accumulated ITC
arises;”.
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Date of adjustment of tax after the final

F In the case where tax is paid provisionally
assessment thereof
In the case of a person, other than the supplier
[Note: In case of cancellation of contract/
G agreement, date of issuance of letter of Date of receipt of goods or services

cancellation by the supplier will be considered as
the date of receipt of the services by applicant]
H Any other case Date of payment of tax
 Amount to be claimed as refund in case of zero-rated supply of goods or services

Refund of ITC shall be granted as per the following formula:
(Turnover of zero-rated supply of goods +

Refund Amount = Turnover of Zero rated supply of services) Net ITC
Adjusted Total Turnover
Where:
"Net ITC" means input tax credit availed on inputs and input services during the relevant period other
than ITC availed for which refund is claimed under sub rules 4A or 4B or both
Turnover of zero-rated supply of goods means the

 value of zero-rated supply of goods made during the relevant period without payment of tax under
bond or letter of undertaking or
 the value which is 1.5 times the value of like goods domestically supplied by the same or,
similarly placed, supplier, as declared by the supplier
whichever is less, other than the turnover of supplies in respect of which refund is claimed under sub-rules
Deemed export 89(4A) or Merchant export 89(4B) or both.
"Turnover of zero-rated supply of services" means the value of zero- rated supply of services made
without payment of tax under bond or LUT, calculated in the following manner, namely:-
Payments ZRSS where supply has

Turnover advances received for Zero
received been completed for
of Zero rated supply of services for
during the which payment had
rated which the supply of services
relevant been received in
supply of has not been completed during
period of advance in any period
services the relevant period
ZRSS prior to relevant period
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 Amount to be claimed as refund in case of Inverted duty Structure :

Refund in case of “Inverted Tax Structure”
Maximum Refund Amount = (Turnover of Inverted rated supply of Goods X Net ITC) – {Tax Payable
Adjusted Total Turnover on such
inverted rated
supply of goods and
services * (Net ITC / ITC availed on Inputs & Input Services)}
Where,
"Refund amount" means the maximum refund that is admissible
"Net ITC" means input tax credit availed on inputs during the relevant period other than ITC availed for
which refund claimed under rule 89(4A)/(4B)
"Adjusted Total turnover" means the turnover in a State or a Union territory, excluding the value of exempt
supplies other than zero-rated supplies, during the relevant period.
“Relevant period” Relevant period means the period for which the claim has been filed.
Explanation–For the purposes of this sub-rule, the value of goods exported out of India shall be taken as –
(i) the Free on Board (FOB) value declared in the Shipping Bill or Bill of Export form, as the case may be,
as per the Shipping Bill and Bill of Export (Forms) Regulations, 2017 or
(ii) the value declared in tax invoice or bill of supply, whichever is less
It is clarified that consequent to incorporation of above Explanation, while calculating "Adjusted Total
Turnover", the value of goods exported out of India to be included will be same as being determined as per
the said Explanation.
 Determination of refundable amount in case of refund of unutilised ITC on account of (i)

exports without payment of tax, (ii) supplies made to SEZ Unit/SEZ Developer without
payment of tax or (iii) accumulation due to inverted tax structure, clarified:
In case of refund of unutilized input tax credit (ITC) on account of

(i) Exports without payment of tax,
(ii) Supplies made to SEZ Unit/SEZ Developer without payment of tax or
(iii) Accumulation due to inverted tax structure,
the common portal calculates the refundable amount as the least of the following amounts:
a) The maximum refund amount as per the formula in rule 89(4) or rule 89(5) of the CGST Rules,
2017 [formula is applied on the consolidated amount of ITC,i.e. CGST+SGST/UTGST+IGST]
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b) The balance in the electronic credit ledger of the applicant at the end of the tax period for
which the refund claim is being filed after the return in Form GSTR-3B for the said period has
been filed and
c) The balance in the electronic credit ledger of the applicant at the time of filing the refund
application.
After calculating the least of the above 3 amounts, as detailed above, the equivalent amount is to
be debited from the electronic credit ledger of the applicant in the following order:
a) Integrated tax, to the extent of balance available
b) Central tax and State tax / Union Territory tax, equally to the extent of balance available
in the event of a shortfall in the balance available in a particular electronic credit ledger
(say, Central tax), the differential amount is to be debited from the other electronic
credit ledger (i.e. State tax/Union Territory tax, in this case).
 Documents for filing refund claim
Declaration by applicant certifying that there is

If claim of refund is less than Rs. 2 lakhs
no unjust enrichment
If claim of refund is more than Rs. 2 lakhs Certificate from CA/ CMA will have to be given
 Documents required as per Rule 89
If refund resulted due to order passed

The reference number of the order a copy of the order
1 by the proper officer or an Appellate
passed by the respective authority under GST laws
Authority or Appellate Tribunal or Court
Statement containing the number and date of shipping

2 In a case where the refund is on bills or bills of export and the number and date of relevant
account of export of goods. export invoices
Statement containing the number and date of invoices
In a case where the refund is on and the relevant Bank Realization Certificates or Foreign
3 account of export of services. Inward Remittance Certificates
A statement containing the number and date of invoices
with the evidence regarding goods admitted in full for
In case of supply of goods made to a authorized operations as endorsed by the specified officer
4 SEZ unit or a SEZ developer. of SEZ
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Statement containing the number and date of invoices,

In case of supply of services to SEZ
along with the evidence regarding receipt of services for
unit or SEZ developer
authorized operations as endorsed by the specified officer
5 of SEZ., and the details of payment
A declaration to the effect that tax has not been collected
In a case where the refund is on from the SEZ unit or the SEZ developer, in a case where
account of supply of goods / services the refund is on account of supply of goods or services or
6 made to a SEZ unit or a SEZ developer. both made to a SEZ unit or a SEZ developer
A statement containing the number and date of invoices
in a case where the refund is on along with such other evidence as may be notified in this
7 account of deemed exports. behalf
ITC unutilised on account of inverted
A statement containing the number and the date of the
duty structure, other than nil-rated or
invoices received and issued during a tax period
8 fully exempt supplies.
In a case where the refund arises on
account of the finalisation of provisional The reference number of the final assessment order and
9 assessment. a copy of the said order
Intra-State supply but which is A statement showing the details of transactions
subsequently held to be inter-State considered as intra-State supply but which is
10 supply subsequently held to be inter-State supply
A statement showing the details of the amount of claim
11 Excess payment of tax on account of excess payment of tax;
A statement containing the details of invoices, in respect
of which refund is being claimed along with copy of such
invoices, proof of making such payment to the supplier, the
copy of agreement or registered agreement or contract,
entered with supplier for supply of service, the letter issued
Refund claimed by unregistered person by supplier for cancellation or termination of agreement or
where the agreement or contract for contract for supply of service, details of payment received
supply of service has been cancelled or from supplier against cancellation or termination of such
terminated agreement
A certificate issued by supplier to effect that he has paid
tax in respect of the invoices on which refund is being
claimed by applicant that he has not adjusted the tax
Refund is claimed by an unregistered amount involved in these invoices against his tax liability
person where the agreement or contract by issuing credit note; and also, that he has not claimed
for supply of service has been cancelled and will not claim refund of the amount of tax involved in
or terminated respect of these invoices
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 Time limit for claiming refund of tax paid on inward supplies of goods or services or both u/s 55
as 2 years from the last day of the quarter in which the said supply was received.
 Order of Refund (Section 54(5),(7) read with Rule 92)

If, on receipt of any such application, the proper officer is satisfied that the whole or part of
the amount claimed as refund is refundable, he may make an order in prescribed form within
60 days from the date of receipt of application complete in all respects. (time limit of 60
days shall be counted from the date of filing claim for refund)
 Refund to be granted both in cash and credit, based on original mode of payment [Rule
92(1A)]
If the PO is satisfied that a refund under section 54(5) of the CGST Act is due and payable to the
applicant:
(i) Amount of refund to be paid, in cash = proportionate to the amount debited in cash against
the total amount paid for discharging tax liability for the relevant period
(ii) for the remaining amount which has been debited from the electronic credit ledger for making
payment of such tax = the proper officer shall issue Form GST PMT-03 re-crediting the said
amount as ITC in electronic credit ledger.
The above shall not apply to the refund of tax paid on zero-rated supplies or deemed export.
Grant of Provisional Refund (Section 54(6) read with rule 91)
The proper officer may, in the case of any claim for refund on account of zero-rated supply of
goods or services or both made by registered persons
 Order refund on a provisional basis, 90% of the total amount so claimed
 Proper officer shall issue a payment advice for the amount so sanctioned and the same shall be
electronically credited to any of the bank accounts of the applicant and thereafter make an
order under section 56(5) for final settlement of the refund claim after due verification of
documents.
Condition for grant of provisional refund:
During any period of 5 years immediately preceding the tax period to which the claim for refund relates,
not been prosecuted for any offence under the Act or under an existing law where the amount of tax
evaded exceeds Rs. 2.5 Crores
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 Principal of Unjust Enrichment [Section 54(8) & (9)]

Theory of unjust enrichment postulates that only the person who has NOT passed the incidence of tax
will be eligible to claim the refund.
If the refund claim of refund (barring specified exceptions) passes the test of unjust enrichment, it is
paid to the applicant.
Cases where provision of unjust enrichment shall not apply:
(a) refund of tax paid on export of goods or services or both or on inputs or input services used in
making such exports;
(b) refund of unutilized ITC in case of zero rated supplies or accumulated ITC on account of inverted
duty structure;
(c) refund of tax paid on a supply which is not provided, either wholly or partially, and for which invoice
has not been issued, or where a refund voucher has been issued;
(d) refund of tax in pursuance of section 77, i.e. tax paid tax on a transaction treated to be an intra-
State supply, but which is subsequently held to be an inter-State supply or vice-versa.;
the refund to be filed before the expiry of a period of 2 years from the date of payment of the tax
on the inter-state supply
(e) the tax and interest, or any other amount paid by the applicant, if he had not passed on the
incidence of such tax and interest to any other person; or
(f) the tax or interest borne by such other class of applicants as may be notified
 Minimum refund claim [Section 54(14)]: No refund shall be paid to an applicant, if the amount
is less than R s . 1,000.
 Refund of integrated tax paid on export of goods or services under bond or Letter of
Undertaking (LUT) [Rule 96A]
Any registered person availing the option to supply goods/services for export without payment of IGST shall
furnish, prior to export, a bond/LUT in prescribed form to the jurisdictional Commissioner, binding
himself to pay the tax due along with the interest specified @ 18% p.a. within a period of:
(a) if the goods are not exported out of 15 days after the expiry of 3 months from the date of
India; or issue of the invoice for export
15 days after the expiry of one year, or such further

(b) if the payment of such services is not
period as may be allowed by the Commissioner, from the
received by the exporter in convertible
date of issue of the invoice for export or in Indian
foreign exchange
rupees, wherever permitted by Reserve Bank of India.
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 Recovery of refund of unutilized input tax credit or integrated tax paid on export of goods
where export proceeds are not realized within stipulated time [New rule 96B]
Where any refund of unutilised

 ITC on account of export of goods or
 IGST paid on export of goods
has been paid to an applicant but the sale proceeds in respect of such export goods have not been
realised, in full or in part, in India within the period allowed under the FEMA, including extension,
 The person to whom the refund has been made shall deposit the amount so refunded, to
the extent of non-realisation of sale proceeds within 30 days of the expiry of the said
period along with interest.
 In case of failure to do so, the amount refunded shall be recovered in accordance

with the provisions of u/s 73 or 74 as is applicable for recovery of erroneous
refund, along with interest u/s 50.
 However if the RBI writes off the requirement of realisation of sale proceeds on
merits, the refund paid to the applicant shall not be recovered.
 Where the sale proceeds are realised by the applicant, in full or part, after the amount of
refund has been recovered from him and the applicant produces evidence about such
realisation within a period of 3 months from the date of realisation of sale proceeds, the
amount so recovered shall be refunded by the proper officer, to the applicant to the
extent of realisation of sale proceeds, provided the sale proceeds have been realised within
such extended period as permitted by RBI.
 Refund to UN Bodies, Embassies Etc [Section 55 read with Section 54(2) of CGST Act]
Refund u/s 55 is allowed to following:

Government may, on the recommendations of the Council, by notification, specify:
(i) any specialised agency of the United Nations Organisation; or
(ii) any Multilateral Financial Institution and Organisation notified under the United
Nations (Privileges and Immunities) Act, 1947; or
(iii) Consulate or Embassy of foreign countries; and
(iv) any other person or class of persons as may be specified in this behalf,
who shall, subject to such conditions and restrictions as may be prescribed, be entitled to
claim a refund of taxes paid on the notified inward supplies of goods or services or both
received by them.
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Time Limit for filing refund claim: Once in every quarter, but before the expiry of 2 years from
the last day of the quarter in which such supply was received.
Note: Specialised agencies ought to get the refund of the IGST paid on imported goods
also.
 Interest on delayed Refund (Section 56 of CGST Act)
Any tax not refunded within 60 Interest is payable on such refund @ 6% p.a.
days from the date of receipt of (from the date immediately after the expiry of 60
application days from the date of receipt of application)
Interest is payable on such refund @ 9% p.a. (Interest
Interest on amount refundable is payable from the date immediately after the expiry of
consequent to order passed in an 60 days from the date of receipt of application till the
appeal or further proceedings date of refund)
 Refund of IGST paid on supply of Goods to tourist leaving India (Section 15 of IGST Act):
The IGST paid by tourist leaving India on any supply of goods taken out of India by him
shall be refunded in such manner and subject to such conditions and safeguards as may be
prescribed.
The term “tourist” means a person not normally resident in India, who enters India for a
stay of not more than 6 months for legitimate non-immigrant purposes.
 Bunching of refund claims across financial years permitted
It has been clarified that while filing the refund claim, an applicant may, at his option, file a
refund claim for a tax period or by clubbing successive tax periods.
 Refund of accumulated ITC on account of reduction in GST rate on goods, not available
The issue which arose for consideration is whether an applicant can seek refund of unutilized
ITC on account of inverted duty structure, under section 54(3)(ii) of the CGST Act, 2017, in
a case where the inversion is due to change in the GST rate on the same goods. refund of
accumulated ITC under said clause would not be applicable in cases where the input and
the output supplies are the same.
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 No restriction on recipient of deemed export supplies in availing ITC of the tax paid on such
supplies
As per third proviso to rule 89(1) of the CGST Rules, in respect of supplies regarded as deemed
exports, either:
 Recipient or Supplier is allowed to file the refund application: However, the supplier can
seek refund only in case where the recipient does not avail ITC on such supplies and
furnishes an undertaking to the effect that the supplier may claim the refund.
Otherwise, recipient of deemed export supplies can claim the refund.
 In view of aforesaid provisions, it has been clarified that:

In a case where recipient of deemed export supplies claims the refund on such supplies,
there is no restriction on such recipient in availing ITC of the tax paid on such supplies.
 Clarification with regard to refund of excess balance in the electronic cash ledger:
No time period for filing refund claim

No certificate/declaration required to establish that there is no unjust enrichment
TDS/TCS deposited in electronic cash ledger can be refunded as excess balance in cash ledger
 Only those goods on which some export duty has to be paid at the time of export to be
covered under the restriction imposed under second proviso to section 54(3)
Issue: Whether second proviso to section 54(3), prohibiting refund of unutilized ITC is applicable
in case of exports of goods which are having Nil rate of export duty?
Clarification: Nil rated Goods or Exempted goods or which are not covered under 2nd Schedule to
the CTA, 1975, cannot be subjected to any export duty under CTA, 1975.
Such goods would not be covered by the restriction imposed under the 2nd proviso to section
54(3) for the purpose of availment of refund of accumulated ITC.
It is clarified that only those goods which are actually subjected to export duty i.e., on which
some export duty has to be paid at the time of export, will be covered under said restriction.
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 Clarification on various issues relating to refund claimed in respect of deemed export
Issue Clarification
Whether ITC availed by the recipient ITC of tax paid on deemed export supplies, allowed to the
of deemed export supply for claiming recipients for claiming refund of such tax paid, is not ITC in
refund of tax paid on supplies regarded terms of the provisions of Chapter V of the CGST Act, 2017
as deemed exports would be subjected Therefore, the ITC so availed by the recipient of deemed export
to provisions of section 17? supplies would not be subjected to provisions of section 17
Whether the ITC availed by the ITC availed by the recipient of deemed export supply for
recipient of deemed export supply for claiming refund of tax paid on supplies regarded as deemed
claiming refund of tax paid on supplies exports is not to be included in the “Net ITC” for computation
regarded as deemed exports is to be of refund of unutilised ITC on account of zero-rated supplies
included in the “Net ITC” for under rule 89(4) or on account of inverted rated structure
computation of refund of unutilised ITC under rule 89(5)
under rule 89(4) & rule 89(5)?
 Refund of accumulated ITC on account of inverted duty structure allowed in cases where rate of
tax on outward supply is less than the rate of tax on inputs (same goods) at the same point of
time.
 Clarification in respect of admissibility of refund where an exporter applies for refund

subsequent to compliance of the provisions of sub- rule (1) of rule 96A
Clarified that exports have been zero rated under the IGST Act and as long as goods have actually been exported
even after a period of 3 months, payment of IGST first and claiming refund at a subsequent date should not
be insisted upon.
In such cases, the jurisdictional Commissioner may consider granting extension of time limit for export as
provided in the said sub -rule on post facto basis keeping in view the facts and circumstances of each case.
The same principle should be followed in case of export of services
It has been emphasized that the substantive benefits of zero rating may not be denied where it has been
established that exports in terms of the relevant provisions have been made. Accordingly, it is clarified that in
such cases, on actual export of the goods or as the case may be, on realization of payment in case of export of
services, the said exporters would be entitled to refund of unutilized ITC in terms of section 54(3), if otherwise
admissible.
It is also clarified that in such cases subsequent to export of the goods or realization of payment in case of
export of services, as the case may be, the said exporters would be entitled to claim refund of the IGST so paid
earlier on account of goods not being exported, or as the case be, the payment not being realized for export of
services, within the time frame prescribed in clause (a) or (b), as the case may be, of rule 96A(1).
It is further being clarified that no refund of the interest paid in compliance of rule 96A(1) shall be admissible.
160
CHAPTER 17 Assessment and Audit
 Different ways to assess the tax liability by a registered Person
A registered person may assess his tax liability in two different ways depending upon
the circumstances warranting such an assessment.
Provisional Assessment Self-Assessment
Where the taxable person is In all other

unable to determine – value; or cases
rate of tax
applicable to the goods or services or

both to be supplied by him
For this –
 Taxable person shall furnish an application along with the documents in

support of his request.
 The proper officer after calling for additional information and documents, if
required, issue an order indicating therein-
o value or the rate or both on the basis of which the assessment is to be
allowed on a provisional basis;
o amount for which the bond is to be executed and security to be furnished

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 Different types of assessments which may be conducted by the department against the
taxable person
There are three different type of assessments, which may be conducted by Tax Authorities
Scrutiny Assessment - To make the assessment on selective basis of taxable person, who have
filed return under section 39.
Best Judgement Assessment - To make the assessment of -
(i) Non-Filers of Return under section 39 (monthly/quarterly) or under section 45(final return)
(ii) Unregistered person liable to pay tax

Summary Assessment - To protect the interest of revenue when:
 the proper officer has evidence that a taxable person has incurred a liability to pay tax
under the Act, and
 the proper officer has sufficient grounds to believe that delay in passing an assessment
order may adversely affect the interest of revenue.
 Assessment
Self-Assessment - Every registered person shall himself assess tax liability and furnish a
return.
Provisional Assessment –
 Person unable to determine value of supply or rate of tax.
 Payment of tax on provisional basis on execution of bond on a request made.
 Order for provisional assessment within 90 days of receipt of application
 Final Assessment : Time: 6 months from date of communication of order
 Extension: 6 months by Joint / Additional Commissioner , 4 years by commissioner
 If Short paid, pay with interest u/s 50 i.e @ 18%(1st day after due date till date of actual
payment)
 If Excess paid, refund with interest u/s 56 i.e @ 6%(after expiry of 60 days from receipt of
application till date of payment)
Scrutiny of Returns:
 In order to verify accuracy of return, the Proper Officer may examine return and seek
explanations.
 If explanation offered is acceptable, no further action.
 If No adequate explanation offered or no corrective actions then proper officer shall take action
u/s 65,66,67,73 or 74 ( conduct audit or direct special audit or undertake procedure of
inspection, search and seizure or proceeding for determination of tax)
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Assessment of Non-filers of Return: If return is not furnished even after service of notice u/s
46, Proper officer shall assess the liability of tax within a period of 5 years from the date
specified u/s 44 for furnishing of annual return.
Withdrawal of Assessment order where RP furnishes valid return within 60 days of the service of
AO But interest @ 18% or payment of late fees Rs. 100 per day subject to maximum of Rs. 5000
shall continue.
If RP fails to furnish a valid return in 60 days he may furnish within further period of 60 days
on additional late fee payment of Rs. 100 for each day beyond 60 days and if he furnishes valid
return in extended period AO shall be deemed to have been withdrawn but
 Liability to pay interest u/s 50(1) i.e 18%
 To Pay late fee under section 47 i.e Rs. 100 per day subject to maximum of Rs.5000 shall
continue
Assessment of Unregistered Persons: Taxable person:
 Who fails to obtain registration
 Registration has been cancelled u/s 29(2)
Proper officer to the best of his judgment, may issue an assessment order, within a period of 5
years from the date specified under section 44 for furnishing of the annual return.
Summary Assessment in Certain Special Cases:
 Proper officer may issue an assessment order imposing tax liability on a person based on
any evidence showing a tax liability.
 If person to whom liability pertains is not ascertainable, the person in charge of goods shall
be assessed.
 If order is erroneous, proper officer may withdraw such order and follow the procedure laid
down in section 73 or section 74.
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 Audit under the Act

Audit by tax Authorities Special Audit
 Commissioner or any officer authorized  At any stage of scrutiny, inquiry or
by him may undertake audit of any investigation.
registered person.  Assistant Commissioner is of the opinion
 Audit may be conducted at the place of that the value has not been correctly
business or in their office. declared or the credit availed is not within
 At least 15 days prior notice be given the normal limits
 Time Period : 3 months from the date of  May nominate a CA or CMA
conduct of audit.Extension : not  Time period : 90 days
exceeding six months.  Extension : further 90 days
 On conclusion, registered person shall be  Audit will be conducted even if accounts have
informed about findings, rights & already been audited.
obligations.  If results in demand of tax, shall be
 If results in demand of tax, shall be recovered under section 73 or 74.
recovered under section 73 or 74.
 Commencement of Audit means later of :
• Records/accounts made
available to audit authority
• Actual Institution of audit at
the POB of taxpayer
Significant Notifications/Circulars:
I. Audit by tax authorities can be conducted for a Financial year or a part of a year
or multiples thereof.
II. Summary of various assessment orders to be uploaded on portal in prescribed form.
III. CBIC has issued the following guidelines to ensure uniformity in the implementation of
the provisions of law in relation to non-filers of returns:
(i) System generated message be sent to all RP 3 days before due date
(ii) After due date, a system generated mail/ message would be sent to all the defaulters to the
effect that the said RP has not furnished his return for tax period, mail/ message is to be sent to
the authorized signatory and the proprietor/partner/ director/karta,etc.
(iii) After 5 days of due date, notice U/S 46 shall be issued electronically to the defaulters to
furnish return within 15 days.
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(iv) If Return not filed within 15 days of notice, the proper officer may proceed to assess tax liability
of defaulter u/s 62, to the best of his judgment taking into account all relevant material which is
available or which he has gathered and would issue assessment order. The PO would upload the
summary of such order.
(v) For the purpose of assessment of tax liability U/s 62, the PO may take into account the following:
 Details of outward supplies available in GSTR-1.
 Details of inward supplies auto-populated in GSTR-2A.
 Information available from E-way bills.
 Any other information available from any another source including inspection
(vi) If defaulter furnishes a valid return within 60 days of the service of assessment order U/S 62,
the said assessment will be deemed to have been withdrawn.
(vii) If the said return remains unfurnished within the statutory period of 30 days from the service of
assessment order under section 62, the proper officer may initiate proceedings U/S 78 and 79.
In some cases, the Commissioner may resort to provisional attachment to protect revenue
U/S 83 of the CGST Act before issuance of assessment order U/S 62.
Further, PO would initiate action under section 29(2) of the CGST Act for cancellation of
registration in cases where the return has not been furnished for the period specified in
section 29.
165
CHAPTER 18 TDS and TCS
1) Rate of TDS
Rate of TDS
Under CGST Under IGST
1 % 2 %
2) Applicability of TDS
Nature of
Situations TDS
Supply
TDS (CGST + SGST) to be
Supplier, place of supply & recipient- same State
deducted
Inter State TDS (IGST) to be deducted

Supplier and place of supply-different States
Supply
Supplier & place of supply - same State & No TDS

recipient located in another State
3) TDS other Points

Person liable to deduct TDS
 Department or Establishment of CG and SG
 Local authority
 Governmental agencies
 Notified Person
o Authority or board or any other body
 Set up by act of parliament or state legislature
 Established by govt with 51% or more participation

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o Society established by CG/SG/LA

o PSU
 Categories of persons not liable to deduct TDS :

o When goods and/or services are supplied from a PSU to another PSU, whether or
not a distinct person.
o When supply of goods and/or services takes place between one person to another
person specified in clause a to d of section 51(1).
 It has been clarified that provisions of section 51 of the CGST Act are applicable only
to such authority or a board or any other body set up by an Act of parliament or a
State legislature or established by any Government in which 51% or more participation
by way of equity or control is with the Government.
Threshold Limit – Total value of supply under a contract is more than Rs. 2.5 lakhs exclusive of
GST as per invoice
Rate of deduction – (1 % CGST + 1 % SGST) OR 2% IGST
Due date of payment of TDS to government – within 10 days from the end of month
4) MANNER OF ACCOUNT OF TDS BY TDS DEDUCTOR

1 Such deductors need to get compulsorily registered under section 24 of the GST Act.
2 They need to remit such TDS collected by the 10th day of the month succeeding the
month in which TDS was collected.
3 The amount deposited as TDS will be reflected in the electronic cash ledger of the
supplier.
4 They need to issue certificate of such TDS to the deductee within 5 days of deducting
TDS failing which fees of Rs.100 per day subject to maximum of Rs. 5,000/- will be
payable by such deductor.
5) Manner Of Account Of TDS By Supplier

 Any amount shown as TDS will be reflected in the electronic cash ledger of the concerned
supplier.
 He can utilize this amount towards discharging his liability towards tax, interest fees and
any other amount.

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6) Consequences of Not Complying with TDS Provisions
Sr
Event Consequence
No
Interest to be paid along with the TDS
1 TDS not deducted amount; else the amount shall be
determined and recovered as per the law
TDS certificate not issued or delayed beyond Late fee of Rs. 100/- per day subject to
2
the prescribed period of five days a maximum amount of Rs. 5000/-
TDS deducted but not paid to the Government Interest to be paid along with the TDS
3 or paid later than 10th of the succeeding amount; else the amount shall be
month determined and recovered as per the law
Late fee of Rs. 100/- for every day during

4 Late filing of TDS Returns which such failure continues, subject to a
maximum amount of Rs. 5,000.
7) TCS Rate
Rate of TCS
Under CGST Under IGST
0.5 % 1 %
8) Other Points in TCS

Person liable to Collect TCS – ECO
Threshold Limit – Nil
Rate of Collection of TCS – 1 % (CGST + SGST / IGST )
Value for Collection of Tax at source – Net value of taxable supply
Due date of payment of TCS to government within 10 days from the end of month

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9) Net Value Of Taxable Supplies
other than notified services U/S 9(5)

Aggregate value of by all registered persons
taxable supplies of
goods and/or
services
Net value of
Taxable Supplies
taxable supplies
returned to
supplier
10) Filing of Statement

Statement to be filed
Monthly – by 10th of Succeeding Month
Annual – by 31st December of Succeeding FY
11) Key Points relating to TCS

(a) Every e-commerce operator is required to collect tax on behalf of actual supplier, where
consideration with respect to the supply is being collected by the e-commerce operator.
(b) The e-commerce operator should make the collection during the month in which supply was
made.

169
CHAPTER 19 Demand and Recovery
 Applicability: Provisions relating to demand shall apply only when the amount of duty/tax is
not less than Rs. 100
 Summary of Provisions of Section 73 and Section 74 – Table A
Amount of penalty payable

Sr
Action by tax payer Normal Cases – Fraud Cases – Remarks
No
Section 73 Section 74
Tax amount, along 15% of the tax

No penalty and no
with the interest, amount payable as
1 notice shall be
paid before issuance penalty and no notice
issued
of notice shall be not be issued
Tax amount, along

25% of the tax amount
with the interest, No penalty. All The penalty shall
payable as
2 paid within 30 days proceedings deemed also be not
penalty. All proceedings
of issuance of to be concluded chargeable in cases
deemed to be concluded.
notice where the self-
assessed tax or
Tax amount, along any amount
10% of the tax 50% of the tax amount
with the interest, collected as tax
amount or Rs. payable as
3 paid within 30 days paid within 30
10000 whichever is penalty. All proceedings
of communication of days from the due
higher deemed to be concluded.
order Date of payment
Tax amount, along

10% of the tax
with the interest,
amount or Rs.
4 paid after 30 days 100 % of the tax amount
10000 whichever is
of communication of
higher
order

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 Summary of Provisions of Section 73 and Section 74 – Table B
Nature of
Sr No Time for issuance of notice Time for issuance of order
case
Within 2 years and 9 months from Within 3 years from the due date
the due date of filing Annual Return of filing of Annual Return for the
1 Normal Cases for the Financial Year to which the Financial Year to which the
demand pertains or from the date of demand pertains or from the date
erroneous refund of erroneous refund
Within 4 years and 6 months from Within 5 years from the due date
the due date of filing of Annual of filing of Annual Return for the
2 Fraud Cases Return for the Financial Year to Financial Year to which the
which the demand pertains or from demand pertains or from the date
the date of erroneous refund. of erroneous refund
Any amount
Within 1 year from the date of
collected as
3 No time limit issue of notice [to be discussed
tax but not
subsequently in this chapter]
paid
Non- payment Recovery proceedings can be
4 of self- No need to issue a SCN started directly [to be discussed
assessed tax subsequently in this chapter]
Voluntary Payment SCN will not be served, except for short payment. The time limit for
of tax before issue search SCN is form the date of receipt of such information of payment.
of SCN a. SCN u/s 73(1)/74(1) shall not be served on such person, is respect
of duty so paid
b. SCN will be issued for short payment, if any. (relevant date for
SCN= date of receipt of intimation of such payment)
c. Facility of voluntary payment before issue of SCN has been extended
even to fraudulent cases but, penalty will be levied
Requirements of 1. No demand without SCN
SCN 2. Ground should be mentioned
3. Nature of contravention and provision contravened should be
specifically started
4. Penalty, if any, just be mentioned.
5. It must be served on the person.

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6. If statement is served, and grounds are same then detailed SCN is

not required. SCN can be issued to person other than defaulter, in
case of transferable script authorisation, etc.
Deposit of Excess Case A: Persons liable to pay tax has collected GST in excess of Tax
Tax Collected assessed / determined and paid
Case B: Other person: has collected Excess GST / or collected tax on NIL
rated / Exempt goods service
The proper officer shall issue an order within 1 year from the date of issue
of the notice
Initiation of recovery Any amount payable by a taxable person in order passed under this act shall
proceeding be paid within a period of three months from the date of service of such
(sec 78) order failing which recovery proceeding shall be initiated.
Modes of Recovery Proper officer may recover the dues u/s 78 in following manner:-
(Sec 79) 1) Reduction of dues from the amount by the tax authorities to such
person. (deduction from the refund payable)
2) Recovery by way of detaining/selling any goods belonging to such
person
3) Recovery from third person from whom money is due or may become
due to such person or recovery from person who holds or may
subsequently hold money (banks) for such person
4) Detain/seize any movable/immovable property belonging to such
person until amount is paid & if the dues are not paid within 30
days then the said property is to be sold and the amount payable
including cost of sell will be recover from sell proceeds and balance &
is refundable
5) Officer will prepare the certificate of dues and send it to the
collector of district in which such person owns any
property/decides/carries the business and the collector will recover
such amount as arrears of land revenue
6) By way of making application to appropriate magistrate who in turm
shall proceed to recover the amount as if it was a fine imposed by
him
7) By enforcing bond/instrument executed under this act/ rules/
registration

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Payment of tax and A person can avail this benefit of payment in instalments, by making an
other amount in application to the commissioner by specifying reason for such request.
instalments (Sec
80) On receipt of application, the commissioner may allow the payment of
amount in instalments, subject to maximum 24 monthly instalments and on
payment of applicable interest.
However, where is the default in payment of anyone instalment on its due

date, the whole outstanding balance payable on such date shall become due
and payable forthwith and shall, without any further notice being served on
the person be liable for recovery
Facility of payment in Instalments not allowed in certain cases:
a. The taxable person has already defaulted on the payment of any
amount for which recovery process is on
b. The taxable person has not been allowed to make payment in
instalments in the preceding financial year
c. The amount for which instalment facility is sought is less than rs
25000
Transfer of property Where a person, after any amount has come due form him,
to void in certain  Create a charge on the property belongs to him or his positions
cases (Sec 81)  By way of sale, mortgage exchange, or any other mode of transfer
whatsoever;
 Of any office properties in favour of any other person
With the intention of defrauding the government revenue, such charge of

transfer shall be void.
Proviso:- Such charge a transfer shall not be void if it made for adequate
consideration, in good faith and without notice of the pendency of such
proceeding under this act or without notice of such tax or other some
payable by the said person, or with the previous permission of the proper
officer
Tax to be first Notwithstanding anything to the contrary contained in any law for the time
charge on property being in force, save as otherwise provided in the Insolvency and Bankruptcy
(Sec 82) Code, 2016, any amount payable by a taxable person or any other person on
account of tax, interest or penalty which he is liable to pay to the
Government shall be a first charge on the property of such taxable person or
such person.

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Provisional Where, after the initiation of any proceeding under Chapter XII, Chapter
Attachment XIV or Chapter XV, the Commissioner is of the opinion that for the purpose
of protecting the interest of the Government revenue, it is necessary so to
do, he may, by order to that effect mentioning therein, the details of property
which is attached in writing attach provisionally any property, including
bank account, belonging to the taxable person or any person in section
122(1A).
The encumbrance on the said movable/immovable property shall be removed

only
(i) on the written instructions from the Commissioner to that effect
or
(ii) on expiry of a period of 1 year from the date of issuance of order of
provisional attachment of property,
whichever is earlier.
Where the property attached is of perishable or hazardous nature, and if the

person whose property has been attached pays:
(i) an amount equivalent to the market price of such property, or
(ii) the amount that is or may become payable by such person whichever
is lower
then such property shall be released forthwith, by an order in prescribed form,
on proof of payment.
However, where such person fails to pay the amount referred above in respect
of the said property of perishable/hazardous nature, the Commissioner may
dispose of such property and the amount realized thereby shall be adjusted
against the tax, interest, penalty, fee or any other amount payable by such
person.
Any person whose property is attached may file an objection to the effect
that the property attached was or is not liable to attachment, and the
Commissioner may, after affording an opportunity of being heard to the person
filing the objection, release the said property by an order.
The Commissioner may, upon being satisfied that the property was, or is no
longer liable for attachment, release such property by issuing an order.
Continuation and Where any notice of demand in respect of "Government dues",
validation of certain a. Enhancement of Dues in appeal/revision: - The Commissioner shall
recovery proceedings serve upon the taxable person or any other person another notice of
(Sec 84) demand and

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Continuation & validation of proceeding: - Any recovery proceedings in

relation to such Government dues as are covered by the notice of
demand served upon him before the disposal of such appeal, revision or
other proceedings may, without the service of any fresh notice of
demand, be continued from the stage at which such proceedings stood
immediately before such disposal
b. Government dues are reduced: -

(i) it shall not be necessary for the Commissioner to serve upon the taxable
person a fresh notice of demand;
(ii) the Commissioner shall give intimation of such reduction to him and to
the appropriate authority with whom recovery proceedings is pending;
(iii) any recovery proceedings initiated on the basis of the demand served upon
him prior to the disposal of such appeal, revision or other proceedings may
be continued in relation to the amount so reduced from the stage at
which such proceedings stood immediately before such disposal.
Clarification in Refund claim under the said sections can be claimed by the taxpayer in both
respect of refund of the Inter-state and Intra state situations, provided the taxpayer pays the
tax specified in required amount of tax in the correct head
Section 77 of the
CGST Act and
Section 19 of IGST
Act
Clarification on Any person who has retained the benefit of transactions specified under section
various issues 122(1A), and at whose instance such transactions are conducted, shall also be
relating to liable for penal action under section 122(1A).
applicability of It may also be noted that in such cases of wrongful/ fraudulent availment or
demand and penalty utilization of ITC, or in cases of issuance of invoices without supply of goods
provisions under or services or both, leading to wrongful availment or utilization of ITC or refund
CGST Act in respect of tax, provisions of section 132 may also be invokable, subject to conditions
of transactions specified therein, based on facts and circumstances of each case
involving fake
invoices
Clarification on the Recovery of taxes not paid or short paid, can be made under the provisions of
legal position of section 79 only after following due legal process of issuance of notice and
voluntary payment subsequent confirmation of demand by issuance of adjudication order.
of taxes during the Therefore, there may not arise any situation where “recovery” of the tax dues
course of inspection, has to be made by the tax officer from the taxpayer during the course of
search, inspection or investigation, on account of any issue detected during

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search or such proceedings. However, the law does not bar the taxpayer from voluntarily
investigation making payment of any tax liability ascertained by him or the tax officer in
respect of such issues, either before or during the course of such proceedings
or subsequently. The tax officer should however, inform the taxpayers regarding
the provisions of voluntary tax payments.

176
CHAPTER 20 Liability to Pay in Certain Cases
Issues Liability in case of Person Liable

Transfer The taxable person & the person whom the business is
of business transferred shall jointly and severally, be liable wholly or to the
extent of transfer
if the order is to take effect from a date earlier to the date of
Amalgamation or Merger the order and the amalgamated/ merged companies have
of Companies supplied or received any goods/services, such transactions shall
be included in the turnover of supply or receipt of the respective
companies and they shall be liable to pay tax
Company in liquidation Liquidator of the company (Receiver of any assets of a
company)
Company in liquidation If tax dues cannot be recovered, then every person who was a
(Pvt Co) director of such company at any time during the period for
which the tax was due shall, jointly and severally, be liable for
Liability to pay tax the payment of such dues.
Dues in certain Directors of Private If tax dues cannot be recovered, then every person who was
cases Company director of the Private Company during such period shall jointly
and severally, be liable for payment of such dues
Partners of firm to pay The firm and each of the partners of the firm shall, jointly and
tax severally, be liable for such payments
Agency Business Agent and his principal shall, jointly and severally, be liable to
pay the tax
Guardians, Trustee etc Tax dues shall be recoverable from guardian, trustee or agent in
like manner and the same extent as it would be determined
and recoverable from any such minor or other incapacitated
person
Court of Wards, etc Tax dues shall be levied upon and be recoverable from-
a) Court of Wards
b) The Administrator of General
c) The official Trustee or receiver or manager

177
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On death of a person
liable to pay tax, interest
or penalty
(a) Business Carried on
by Deceased person Legal representative or other person who continues the business
is continued
(b) Business carried on
Legal representative shall be liable to pay out of the estate of
by deceased person is
the deceased, to extent to which the estate is capable of
discontinued
meeting the charge, tax dues
(whether before or
after his death)
On partition of HUF or Property of the HUF and AOP is partitioned amongst the
AOP various members or groups of members, Then, each member
/ group of members shall, jointly and severally, be liable to
pay the tax, interest or penalty due from the taxable person
under said Act Up to the time of the partition
On dissolution of a firm Every person who was a partner shall, jointly and severally,
be liable to pay the tax, interest or penalty due from the firm
under said Act up to the time of dissolution
On termination of Ward or the beneficiary shall be liable to pay the tax, interest
guardianship or trust or penalty due from the taxable person
Up to the time of the termination of the guardianship or trust
 Discontinuation of
business by a Every person who, at the time of such discontinuance, was a
firm/AOP/HUF partner of such firm, or a member of such association or

family, shall, notwithstanding such discontinuance, jointly and
 Dissolution of
severally, be liable
firm/AOP or partition
of HUF
Change in the Partners of the firm or members of association, as it existed
constitution of the firm before and as it exists after the reconstitution, shall, without
or AOP prejudice to the provision of section 90, jointly and severally,

be liable
Tax dues = Any Tax + interest + Penalty payable under GST
Significant Circulars: Transferee/successor be liable to pay any tax, interest or any penalty
due from the transferor in cases of transfer of business due to death of sole proprietor.

178
CHAPTER 21 Inspection
Power of summon any person whose attendance is

Proper officer not below the rank of JC necessary to give evidence or to produce documents
in any enquiry
Will record in writing the reasons to believe that
Taxable person has Taxable person Taxable person Any person has Evasion of tax by the Goods documents
suppressed any has claimed ITC has kept goods or person engaged in the or things etc are
transaction relating in excess of contravened books of accounts business of transporting secreted & useful
to goods service or entitlement any provision of cause evasions of goods, warehouse or to any proceedings
both act or rules payment of tax godown operator/owner
Inspection of places of taxable as well as any person (Sec.67)
Search, Seize & confiscate goods,

documents, books or things (Sec.67)
Business premises of Goods in movement Not practicable

practicable
registered person (sec71)
(Sec 68)
Carrying out any audit scrutiny, Person in charge must Relied up on for Service an order on the
Not relied
verification & checks to safe carry documents of issue of notice owner or the custodian of
upon
guard interest of revenue conveyance with him the goods by the proper
officer
On making demand On intercepted by Retained by such officer Returned within 30 Not remove or deal with the
authorised by proper the proper officer for any inquiry or days of the issue of goods except with the
officer proceedings under this act notice previous permission of officer
Within 15 working days Manner to release
of demand or any confiscated goods
further period allowed documents etc

Perishable or
Liability to produce Actual discharge hazardous goods
when no notice constraint of storage Disposed
the document by Provisional Basis
issued (Sec67(7)) space etc (SEC67(8) by proper
person in charge (Sec 67(6)
officer
Execution of bond & Payment of applicable Within 6 months of Prepare inventory of such
Furnishing security tax interest & penalty seizure of goods goods (Sec67(9))

179
CHAPTER 22 Offences and Penalties
3
Offences and penalties
Assist or abets offences
1
2 mentioned in note-1
Offences related to
Tax not paid or erroneously refunded or ITC Acquire possession/concerns in
invoices transportation,
has been wrongly availed or utilized dealing goods which he knows
payment of tax deduction
or reason to believe are liable
or collection, furnishing
to confiscation such as
of false records or
transport, remove, keeps
information, etc (for Fraud Other
conceals, supply or purchase
details refer note 1 ) Higher of ₹
Higher of
₹10,000 or 10% 10,000 or 100% Receives/deals with supply of
of tax due of tax due services which he knows or

₹ 10,000 reasons to believe are liable to
contravention of Act/Rules
or
Fails to appear when summon
an amount equivalent to
is issued to give evidence/
tax evaded / tax not
produce a document
deducted/ collected / not
paid to the government / Fails to issue invoice or
ITC availed, passed or account for in accordance with
distributed / fraudulent provisions
claimed refund, whichever
is higher Upto ₹ 25000
NOTE 1:
Offence Related to Invoice :

 (i)Supplies of goods/ services made without invoice/ issue incorrect or false invoice,
 (ii)Invoices or bills issued without any supply of goods/services or in violation of provisions
 Issues invoices using registration number of another person.
Offence Related to tax evasion/relation to TCS / TDS :

 Collects any amount as tax,but fails to pay to government within 3 months from due date of
payment
 Collects any tax in contravention of provisions of act, but fails to pay to government within 3
months from due date of payment

180
Summary Book
 Fails to deduct any tax or collect tax/ deduct or collect lesser amount of tax failed to pay same to
government
 (vii)Takes or utilizes ITC without actual receipt of goods
 (ix)Takes or Distributes ITC in contravention of the Act
 Suppresses his turnover leading to evasion of tax
Offence related to Refund: Obtain refund fraudulently
Offence related to records, documents, books of accounts:

 Falsifies or substitutes financial records/ produced fake accounts/ furnished false information with
an intention to evade tax/ suppresses the turnover in order to evade tax.
 Fails to keep maintain or retain books of accounts.
 Fails to furnished information or documents/ furnished false information during any proceedings
Offence related to registration:

 Fails to obtain registration furnishes false particular with regard to registration
Offence related to transportation and storage:
 Supplies transports or storage goods which person has a reason to believe are liable for section.
 Transporting any taxable goods without cover of documents.
Other Offences
 Obstructs to prevents officer in discharge of his duties

 Tamper with or destroys any material evidence or document.
 Disposes off or tampers any goods that have been detained seized or attached.
 Section 122(1A)
Any person who retains the benefit of a transaction covered under clauses (i), (ii), (vii) or clause (ix)
of sub-section (1) and at whose instance such transaction is conducted, shall be liable to a penalty of
an amount equivalent to the tax evaded or input tax credit availed of or passed on.
 Penalty under section 122(1B)
E-commerce operator (ECO) liable to penalty if it
 permits the supply through it by an unregistered person (other than notified persons, making
supply through ECO, exempted from registration),
 allows inter-State supply through it by a person not so eligible or

181
Summary Book
 fails to furnish the correct details in Form GSTR-8 with respect to any outward supply of goods
through it by a person exempted from registration under CGST Act.
CGST/SGST/UTGST law
(i) Rs. 10,000/-; or
(ii) Amount equivalent to, amount of tax involved had such supply been made by a registered person other
than composition supplier
whichever is higher.
 Fail to furnish information statistics:
Fail to furnish
information
statistics
Fine for failure to furnish

Failure to furnish information return
statistics or furnish fake
[Section 123]
information [Section 124]
Penalty
Penalty
Rs 10000
Rs 100 for each day till failure
continues, maximum of Rs 5000 In case of continuing offence - Rs100
per day maximum Rs 25000

182
Summary Book
 General penalty or power to waive penalty:
General penalty or
power to waive
penality
General disciplines Power to waive

General Penalty
related to penalty penalty or fee or
[Section 125]
[Section 126] both [Section 128]
Penalty
Penalty Maximum
of Rs 25000 1. Penalty shall not be imposed for minor Penalty
breaches or mistakes made without fraudulent
intention or gross negligence A breach shall be The government
considered a minor breach if the amount of tax may by notification
involved is less than Rs 5000. waive in part or
full any penalty
2. Penalty imposed shall depend on the facts referred to in
and circumstances of each case and shall section 122 or 123
commensurate with the degree and severity of or 125 or any late
breach. fees referred to in
No penality shall be imposed without giving him section 47
an opportunity of being heard.
Note : Penalty Mentioned is with reference to CGST Act, An Equal Amount of penalty will
be leviable under SGST Act as well.

183
Summary Book
 Penalty for releasing the goods and / or conveyance after detention or seizure (Sec 129).
Where owner of the goods comes

forward for payment of
applicable tax and penalty
In case of Exempted goods:

In case of normal goods:
a. An amount equal to 2% of the
a. on payment of penalty equal to
value of goods or 25000 whichever
200% of the tax payable on such
is less
goods
b. upon furnishing a security
b. upon furnishing a security
equivalent to the amount payable
equivalent to the amount payble
under a above in such form and
under above as may be prescribed
manner as maybe prescribed
Where owner of the goods does

not comes forward for
payment of applicable tax and
penalty
In case of Exempted goods

In case of normal goods
a. An amount equal to 5% of the value of
a. on payment of penalty equal to 50% goods or 25000 whichever is less
of the value of goods or 200% of the tax
b. Upon furnishing a security equivalent to
payable w.e.h
the amount payable under (a) above in such
b. Upon furnishing a security equivalent to form and manner as may be prescribed
the amount payable under (a) above
 Service of order of detention or seizure – Mandatory

 The proper officer shall issue a notice specifying the amount of tax penalty payable
after giving the concerned person opportunity of being heard
 On payment of the amount stated in the notice the proceedings shall be deemed to be
concluded

184
Summary Book
 If the owner or transporter fails to pay the tax and penalty within 14 days – further
proceedings shall be initiated
 Confiscation of goods or conveyance and levy of penalty (section 130):
A. Specified contraventions, if any person-

i. Supplies or receives any goods in contravention of the act, or
ii. Does not account for any goods on which he is liable to pay tax
iii. Supplies any goods without obtaining registration
iv. Contravenes the provisions with an intention to evade tax
v. Uses any conveyance as a means of transport in contravention of the provisions
without the knowledge of the owner himself
Then all such goods or conveyances shall be liable confiscation and penalty
B. Redemption fine- Whenever confiscation of any goods or conveyance is authorised by

the act. Redemption fine: Maximum amount should not exceed the market value of the
goods reduced by any amount of tax paid the aggregate of such fine and penalty leviable
shall not be less than the penalty equal to 100% of the tax payable on such goods.
Further, where any such conveyance is used for the carriage of the goods or passengers
for hire, the owner of the conveyance shall be given an option to pay in lieu of the
confiscation of the conveyance a fine equal to the tax payable on the goods being
transported thereon.
C. The concerned person will be given an opportunity of being heard before passing the
order.
D. Curve conveyance used for carriage of such goods -fine 100 % tax
 Cases where prosecution can be initiated and punishment thereof - Sec 132:
(a) supply without issue of any invoice with the intention to evade tax
(b) issues any invoice or bill without supply leading to wrongful availment or utilisation of ITC or refund
of tax
(c) avails ITC using such invoice or bill referred to in clause (b)
(d) collects any amount as tax but fails to pay the same to the Government beyond a period of 3
months from the date on which such payment becomes due;
(e) evades tax, fraudulently avails ITC or fraudulently obtains refund and where such offence is not
covered under clauses (a) to (d)
(f) falsifies or substitutes financial records or produces fake accounts or documents or furnishes any
false information with an intention to evade payment of tax
(h) dealing with, any goods which he knows or has reasons to believe are liable to confiscation
(i) Dealing in services services which he knows or has reasons to believe are in contravention

185
Summary Book
(l) attempts to commit, or abets the commission of any of the offences mentioned above shall be
punishable with the previous sanction of Commissioner,
Punishment (Imprisonment minimum 6 months in the

absence of special and adequate reasons to the
Offences Involving Amount Involved
contrary to be recorded in the judgment of the Court
and extending to --)
Tax evaded or input tax credit wrongly > 5 crores 5 Years and with fine
availed or utilised or refund wrongly Exceeds 2 crores
3 Years and with fine
taken but ≤ 5 crores
Issuance of invoice without supply in
violation of GST law leading to Exceeds 1 crores
1 Years and with fine
wrongful availment / utilisation of ITC but ≤ 2 crores
/ refund of tax
Falsification of information or records
etc. with an intention to evade tax or
6 months or with fine or with both
abetting the commission of said
offence
For second and every subsequent

No limit 5 Years and with fine
offence under section 132
 Section 137: Offences By Companies
Offence has been committed by a taxable person being a company - every person who, at the time the
offence was committed was in charge of, shall be deemed to be guilty of the offence
However, for an offence that has been committed –
• with the consent or connivance of, or
• is attributable to any negligence on the part of, any director, manager, secretary or other officer
such director, manager, secretary or other officer shall also be deemed to be guilty of that offence
and shall be liable to be proceeded against and punished accordingly
Offence has been committed by a taxable person being a partnership firm or a LLP or a HUF or a trust,
the partner or karta or managing trustee shall deemed to be guilty of offence
• with the consent or connivance of, or
• is attributable to any negligence on the part of, any partner/member/trustee, manager, secretary or
other officer of the partnership firm or a LLP or a HUF or a trust,
such partner/member/trustee, manager, secretary or other officer shall also be deemed to be guilty of
that offence and shall be liable to be proceeded against and punished accordingly.

186
Summary Book
Section 138 : Compounding of Offence read with rule 162:
Any offence, other than the following, may be compounded by the Commissioner, either before or
after the institution of prosecution, upon payment of such compounding amount :
(i) Offence specified in clauses (a) to (f),)(h),(i) and (l) of section 132(1), if the person had
been allowed to compound offence earlier in respect of any of the said offences
(ii) a person who has been accused of committing an offence under clause (b) of section 132(1)
(iii) a person who has been convicted for an offence under this Act by a court
(iv) any other class of persons or offences as may be prescribed
Compounding shall be allowed only after making payment of tax, interest and penalty involved in
such offences.
Further, any compounding allowed shall not affect the proceedings, if any, instituted under any other
law.[Proviso to Section 138(1)]
The amount for compounding of offences under this section shall be such as may be prescribed, subject
to –
• The minimum limit for compounding amount is to be the higher of the following amounts:-
25% of tax involved
• The upper limit for compounding amount is to be higher of the following amounts: -
100% of tax involved or
On payment of such compounding amount, no further proceedings shall be initiated under this Act
against the accused person in respect of the same offence and any criminal proceedings, if already
initiated in respect of the said offence, shall stand abated. [Sub-Section (3) of Section 138]
Amount for compounding of offences shall be such as may be prescribed, subject to the minimum
amount not being less than 25% of the tax involved and the maximum amount not being more
than 100% of the tax involved. The compounding amount shall be determined in the following
manner:
S. Offence Compounding amount if offence is Compounding amount if offence is

No. punishable under section 132(1)(i) punishable under section 132(1)(ii)
1. Offence specified in (i) Up to 75% of the amount of tax (i) Up to 60% of the amount of tax
section 132(1)(a) evaded or ITC wrongly availed/utilised evaded or ITC wrongly availed /
2. Offence specified in or refund wrongly taken utilised or refund wrongly taken
section 132(1)(c) OR OR
3. Offence specified in (ii) 50% of such amount of tax evaded (ii) 40% of such amount of tax
section 132(1)(d) or ITC wrongly availed/utilised or refund evaded or ITC wrongly availed /
4. Offence specified in wrongly taken utilised or refund wrongly taken
section 132(1)(e) whichever is higher.
whichever is higher.
5. Offence specified in Amount equivalent to 25% of tax Amount equivalent to 25% of tax
section 132(1)(f) evaded. evaded.
6. section 132(1)(h)

187
Summary Book
7. Offence specified in
clause (i) of
section 132(1)
8. Attempt to commit Amount equivalent to 25% of such Amount equivalent to 25% of such
the offences or amount of tax evaded or ITC wrongly amount of tax evaded or ITC
abets the availed / utilised or refund wrongly wrongly availed / utilised or refund
commission of taken. wrongly taken.
offences mentioned
in clause (a), (c)
to (f)and clauses
(h) and (i) of
subsection (1) of
section 132

188
Chapter 23 Appeals and Revisions
Appeals and Revision Chapter

Adjudication by Proper officer [Sec. 73/74/76]
Order by Order by officer below

proper officer To satisfy himself If effects revenue rank of revisional
About legality or Of Government Authority
GST APL – 01 propriety Of order
appeal by aggrieved
Revisional Authority  Erroneous
person within 3 Commissioner
- On his own motion  Illegal or improper
months from date  On his own motion
 Not considering
- On information received
of communication of  On request of commissioner material facts
order condo nation - On request of SGST/UTGST
From SGST or UTGST
by 1 month Commissioner
Review
APL - 03 6 month + Revision by Revisional
1 month Authority enhancing
/modifying annulling
Appellate Authority
Commissioner (Appeals) – if order

Additional Commissioner or JC
Appeal against order of
Joint Commissioner (Appeal) – if Appellate Authority of
Order DC/ Assistant Commissioner Revisional Authority
Mandatory Pre-deposit= Tax/ interest/
Penalty/ Fine Full Amount as agreed + Mandatory Pre-deposit = full amount of tax
APL - 05 3 months
10% of dispute amount[Max 25 crores /interest/Penalty /Fine as agreed
+ 3 months
CGST] Appellate Tribunal
+
Pre-deposit = 25% of the penalty appeal to 20% of dispute amount [Max 50 crores CGST]
be filed against order passed u/s 129(3).
If order of Appellate Authority/ Revisional In all other cases

Authority where disputed point is Place of Supply
State Bench
Principal Bench
Appeal against order directly

Within Appeal to high court
to Supreme Court
180 days of Question of Law
APL - 08 is involved
Supreme Court High Court

189
Summary Book
Composition of the Appellate Tribunal :
Goods And Services Tax Appellate Tribunal
Principal Bench State Bench
Technical Technical Technical Technical

Judicial 2 Judicial
President member member member member
Member Members
(Centre) (State) (Centre) (State)
Type of Dispute Bench

Place of Supply Principal Bench
Other than Place of Supply Principal Bench and State Bench
Single member bench:
 Tax or
 ITC involved or
 Amount of fine, fee or penalty determined in any order appealed against,
does not exceed Rs.50,00,000 and which does not involve any question of law may, with the
approval of the President, be heard by a single Member, and in all other cases, shall be heard
together by one Judicial Member and one Technical Member.
 Form for appeal to AA:
An appeal to the Appellate Authority may be filed manually in GST APL- 01 or in GST APL-
03, along with the relevant documents, only if-
(i) the Commissioner has so notified, or
(ii) the same cannot be filed electronically due to non-availability of the decision or order
to be appealed against on the common portal,
and in such case, a provisional acknowledgement shall be issued to the appellant immediately.

190
Summary Book
DATE OF FILING APPEAL
Aggrevied Person / Department
File Appeal To Appellate Authority
Provisional Acknowledgement Issued To

Appellant
Decision / Order Appealed Against Is
Uploaded on Common Portal Not Uploaded on Common Portal
Final ACK. Appellate Submits Self

Certified Copy Of Self Certified Copy Of The
Decision Or Order Decision Order Is Not
Submitted In 7 Days From Date
Indicating
Of FIling Form GST APL-01
Appeal No.
Within A Period Of 7 Days
From Date of Filing Appeal
Issued By AA Or
any Officer
Date Of Submission Of
Final ACK. Indicating Appeal
Such Copy Shall Be
No. Shall be Issued By
In Form GST Considered As Date Of
Appellate Authority Or An
APL-02 Filing appeal
Offer Authorised - In Form
GST APL-02
Date Of Issue
Of Provisional Date Of Issue Of
ACK. Shall Be Provisional
Considered Acknowledgement
Considered As Date Of
Filing Of Appeal
Date Of Filing
Appeal
Note:- Appeal shall be treated as filed only when final Acknowledgment is issued.

191
Summary Book
Rule 109C relating to withdrawal of appeal provides as follows:
The appellant may, at any time

 before issuance of show cause notice under section 107(11) or
 before issuance of the order under the said sub-section,
whichever is earlier,
in respect of any appeal filed in Form GST APL-01 or Form GST APL-03, file an application for
withdrawal of the said appeal.
Where final acknowledgment in Form GST APL-02 has been issued, the withdrawal of said appeal
would be subject to the approval of the Appellate Authority and such application for withdrawal
of the appeal shall be decided by Appellate Authority within 7 days of filing of such application.
Further, any fresh appeal filed by the appellant pursuant to such withdrawal shall be filed within
the time limit specified of section 107 (1) or (2).
Non Appealable Decisions And Orders
Section 121 lays down that no appeals whatsoever can be filed against the following orders:-
(i) an order of the Commissioner or other authority empowered to direct transfer of proceedings from
one officer to another officer;
(ii) an order pertaining to the seizure or retention of books of account, register and other documents
or
(iii) an order sanctioning prosecution under the Act; or
(iv) an order passed under section 80 (payment of tax in instalments).

192
CHAPTER 24 Exemptions under GST
1) Power to grant Exemption from Tax (Section 11 of CGST / Section 6 of IGST Act)
Exemption by Notification Exemption by Special Order

Section 11(1) of CGST Act, 2017 Section 11(2) of CGST Act, 2017
 Where the Government is satisfied that it is
necessary in the public interest so to do,  Where the Government is satisfied that it is
 it may, on the recommendations of the Council, necessary in the public interest so to do,
by notification,  it may, on the recommendations of the
 exempt generally, either absolutely or subject Council,
to such conditions as may be specified therein,  by special order in each case,
 goods or services or both of any specified  under circumstances of an exceptional nature
description from the whole or any part of the to be stated in such order, exempt from
tax leviable thereon with effect from such date payment of tax any goods or services or both
as may be specified in such notification on which tax is leviable.
2) Legal services:
Following services under this category are exempt from the levy of GST
 Legal services by Arbitral Tribunal to following recipient are exempt from GST
Legal services By Arbitral

Tribunal
Other than Business CG, SG, UT, Local

Business Entity
Entity Authority Etc.
Aggregate TO of Aggregate TO of It is Exempt

It is Exempt
Business Entity is Business Entity is
upto specified limit above speciifed limit
It is taxable under
It is Exempt
RCM basis
CA YachanaMuthaBhurat 09669357770 gst.yachana@gmail.com

193
Summary Book
 Legal services by a partnership firm of advocates or an individual as an advocate other

than a senior advocate to following recipient are exempt from GST.
Legal services by a partnership firm of

advocate, an individual advocate other
than a senior Advocate
An advocate or Other than Business CG, SG, UT, Local
partnership firm business Entity Authority Etc.
of advocates Entity
Aggregate TO of Aggregate TO of It is
providing legal
It is Business Entity Business Entity Exempt
services;
Exempt is upto specified is above
It is limit specified limit
Exempt
It is It is Taxable
Exempt under RCM
basis
 Legal services by Senior Advocate to following recipient are exempt from GST
Legal service by Senior

Advocates
An advocate or Other than Business Entity CG, SG, UT,

partnership firm of business Local Authority
advocates providing Entity Etc.
Aggregate TO
legal services; It is Aggregate TO It is
of Business
Exempt of Business Exempt
It is Taxable. Entity is
Entity is upto
However firm can above
specified limit
calim exemption as specified limit
Business Entity
having TO upto Rs. It is It is Taxable under
20 Lakhs Exempt RCM basis
**Amendment in turnover limit: up to such specified amount in the preceding FY as makes

it eligible for exemption from registration under

194
Summary Book
3) Passengers Transportation services (Entry No 15, 16 & 17)
Air transport
Air, embarking from or terminating in an airport

located in the State of Arunachal Pradesh, Assam,
Any other case
Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, or
Tripura or at Bagdogra located in West Bengal
It is Exempt It is Taxable
Description Status of Taxability
Non-AC Contract Carriage for Tourism Taxable

Non-AC Contract Carriage other than tourism Exempt
AC Contract Carriage Taxable
Non-AC Stage Carriage Exempt
AC Stage Carriage Taxable
Old / Uber Cab (Radio Taxi) Taxable
Non-AC Stage Carriage and Non-AC Contract Carriage other than tourism if
Taxable
transport service are supplied through ECO and notified u/s 9(5)
 Analysis of entry no. 17
Status of
Description
Taxability
Railway Ticket in AC coach / First class Taxable
Railway Ticket in Sleeper Coach Exempt
Ticket of travelling from Janakpuri to Rajiv Chowk in Delhi Metro Exempt
Ticket in Inland Waterway from Haldia port to Allahabad Exempt
Ticket of vessel from one spot to other Spot in Goa (Other than tourism) Exempt
Ticket of Angriya Cruise from Mumbai to Goa Taxable

Fare paid for Metered cab in Mumbai Exempt
Fare Paid for Auto-Rickshaw / E Rickshaw Exempt

195
Summary Book
Fare Paid for Auto-Rickshaw / E Rickshaw if transportation services are supplied

Taxable
through an electronic commerce operator, and notitied u/s 9(5)
52A Tour operator service, which is performed partly in India and partly outside India, supplied by a
tour operator to a foreign tourist, to the extent of the value of the tour operator service which is
performed outside India.
However, value of the tour operator service performed outside India shall be such proportion of the
total consideration charged for the entire tour which is equal to the proportion which the number
of days for which the tour is performed outside India has to the
 Total number of days comprising the tour, or
 50% of the total consideration charged for the entire tour,
Whichever is less.
Note : Any duration of time equal to or exceeding 12 hours = one full day and
any duration of time less than 12 hours = half a day
4) Goods Transport Agency Services (Entry no. 18, 21, 21A, 22 & 22B)
 Analysis of entry no. 18
Transportation of Goods
By Road By Inland waterway
By GTA / by Courier It is
BY others
agency exempt
It is It is
taxable exempt

196
Summary Book
 Analysis of GTA services
GST on GTA
service
If the recipient is Dept.

If the recipient is other If the recipient is one of the 7
of CG/SG/UT/LA/GA
than 7 specified categories specified categories of the person
who taken for
of person (e.g unregistered
registration for tax
individual end consumer)
deduction
GST is
Chargable
GST is exempt GST is exempt
GTA service
supplier has the
choice
Take registration
under GST and opt Otherwise
to pay GST under
FCM
Receipent will
Applicable rate be the liable to
of GST pay GST under
RCM
5% (without 12% (with ITC

any ITC on IN, on IN,CG& INS Applicable rate
CG & INS used used by GTA) of GST 5%
by GTA)

197
Summary Book
 Exemptions granted to transport of specified goods through rail or a vessel or a by

GTA in goods carriage are presented in the following table:
Transportation of the following goods by rail / vessel / GTA in goods carriage is exempt
(a) agricultural produce
(b) milk, salt and food grain including flours, pulses and rice
(c) organic manure
(d) newspaper or magazines registered with the Registrar of Newspapers
(e) relief materials meant for victims of natural or man-made disasters, calamities, accidents or
mishap
(f) defence or military equipments
5) Charitable and religious activity related services

 Analysis of Entry No. 1
For Exemption of Services by Charitable / Religious trust 2

Conditions are necessary
The entity carries out one or

The entity is registered under section
more of the specified charitable
12AA of the Income tax Act, 1961,
activities.
 Charitable Activities Includes
Public Health Services
Advancement of Religion, Spirituality or Yoga
Advancement of Educational Programmes / Skill Development
Preservation of Environment including watershed, Forests & Wildlife

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Summary Book
 Analysis of Entry No. 13
Services by a person
Conduct of Religious
Renting of "precincts" of a religious place by
Ceremony
Entity registered u/s 12 AA of IT Act. (Note 1)
It is Exempt It is Exempt
(Note 2)
Note 1 : The word 'precincts' is not to be interpreted in a restricted manner and all
immovable property of the religious place located within the outer boundary walls of the
complex (of buildings and facilities) in which the religious place is located, is to be
considered as being located in the precincts of the religious place.
Note 2: Renting of precincts of religious place is exempt from GST. However the exemption
shall be subject to per day / per month rental limit as specified in respective entry.
Exemption shall apply to-
(i) renting of rooms where charges are Rs. 1,000 or more per day;
(ii) renting of premises, community halls, kalyanmandapam or open area, and the like where
charges are Rs. 10,000 or more per day;
(iii) renting of shops or other spaces for business or commerce where charges are Rs. 10,000
or more per month.

199
Summary Book
6) Health care services:
Entry No. 46: Services by a veterinary clinic in relation to health care of animals or birds.
Entry No. 74 : Services by way of-

(a) health care services by a clinical establishment, an authorised medical practitioner or para-medics;
However, nothing in this entry shall apply to the services provided by a clinical establishment by way of
providing room [other than ICU / CCU / ICCU / NICU] having room charges exceeding ` 5000 per day to a
person receiving health care services
(b) services provided by way of transportation of a patient in an ambulance, other than those specified in
(a) above.
Entry No. 74A : Services provided by rehabilitation professionals recognised under the Rehabilitation
Council of India Act, 1992 by way of rehabilitation, therapy or counselling and such other activity as
covered by the said Act at medical establishments, educational institutions, rehabilitation centres established
by CG/SG/UT or an entity registered under section 12AA of the Income Tax Act, 1961.
Health Care Services
Means any service by way of Includes by way of But shall not include
diagnosis or treatment or care trasnportation of the hair transplant or
for illness, injury, deformity, patient to and from a
cosmetic or plastic surgery, except
abnormality or pregnancy in clinical establishment
when undertaken to restore or to
any recognized system of
reconstruct anatomy or functions of
medicine in India
body affected due to congenital
defects, developmental abnormalities,
injury or trauma.
 Only recognized system of medicines in India are exempt under this entry such as:
Allopathy Ayurveda Unani
Siddha Yoga Naturopathy
Any other system of medicine that may

Homeopathy
be recognized by Central Government

200
Summary Book
 Food supplied to the patients: Taxability of Food supplied in hospital premises can be
understood with the help of below mentioned chart
Food Supplied by Hospital Canteen to
Others - Such as Doctors,

Patient
Staff, Visitors Etc.
Patient Admitted - Food supplied to

Patient Not
the in-patients as advised by the It is Taxable
Admitted
doctor/nutritionists
It is a part of composite supply of

healthcare and not separately It is Taxable
taxable
7) Educational services:
Entry No Description of Services

Services Provided -
(a) by an educational institution to its students, faculty and staff
(aa) by way of conduct of entrance examination against consideration in the form of
entrance fee are exempt from GST.
(b) To an educational institution, by way of, -
(i) transportation of students, faculty and staff
(ii)catering, including any mid-day meals scheme sponsored by the central government,
state government or union territory
(iii) Security or cleaning or house-keeping services performed in such educational institution:
66
(iv) Services relating to admission to, or conduct of examination by, such institution:
(v) Supply of online educational journals or periodicals
However, nothing contained in sub-items (i), (ii) and (iii) of item (b) shall apply to an
educational institution other than an institution providing services by way of pre-school
education and education up to higher secondary school or equivalent.
Further, nothing contained in sub-item (v) of item (b) shall apply to an institution
providing services by way of,-
(i) pre-school education and education up to higher secondary school or equivalent; or
(ii) Education as a part of an approved vocational education course.

201
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Educational institution means an institution providing services by way of-

(i) pre-school education and education up to higher secondary school
or equivalent;
(ii) education as a part of a curriculum for obtaining a qualification recognised by any law for
the time being in force;
(iii) education as a part of an approved vocational education course.
Covered in
Education services provided sub-clause Reasons
(ii)
Conduct of degree courses by colleges, These courses lead to grant of qualifications
Yes
universities or institutions recognized by law
Training given by private coaching Such training does not lead to grant of a
No
institutes recognized qualification.
Education as a part of a prescribed Education as a part of a prescribed
curriculum for obtaining a qualification No curriculum for obtaining a qualification
recognized by a law of a foreign country recognized by a law of a foreign country
IIMs are now covered under the definition of ‘educational institution’ whose services are
exempt under entry No. 66 of the said notification
 Composite and mixed supply in so far as education is concerned

 Boarding schools provide service of education coupled with other services like providing dwelling
units for residence and food. This may be a case of composite supply if the charges for education
and lodging and boarding are inseparable. Their taxability will be determined in terms of the
principles laid down in section 2(30) read with section 8 of the CGST Act, 2017(i.e. Composite
Supply)
 Such services in the case of boarding schools are naturally bundled and supplied in the ordinary
course of business. Therefore, the bundle of services will be treated as consisting entirely of the
principal supply, which means the service which forms the predominant element of such a bundle.
 In this case since the predominant nature is determined by the service of education, the other
service of providing residential dwelling will not be considered for the purpose of determining the tax
liability and in this case the entire consideration for the supply will be exempt.
Note: It has been clarified that Maritime Training Institutes are educational institutions
under GST Law and the courses conducted by them are exempt from levy of GST subject to
fulfilment of other conditions specified under entry 66 of the exemption notification.

202
Summary Book
80 Services by way of training or coaching in-

(a) recreational activities relating to arts or culture, by an individual, or
(b) sports by charitable entities registered under section 12AA or 12AB of Income-tax Act
8) Agricultural Related Activities :
Services relating to cultivation of plants and rearing of all life forms of animals, except the
rearing of horses, for food, fibre, fuel, raw material or other similar products or agricultural
produce by way of—
(a) agricultural operations directly related to production of any agricultural produce
including cultivation, harvesting, threshing, plant protection or testing;
(b) supply of farm labour;
(c) processes carried out at an agricultural farm including tending, pruning, cutting,
harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling
or bulk packaging and such like operations which do not alter the essential characteristics of
agricultural produce but make it only marketable for the primary market;
(d) renting or leasing of agro machinery or vacant land with or without a structure
incidental to its use;
(e) loading, unloading, packing, storage or warehousing of agricultural produce;
(f) agricultural extension services;
(g) services by any Agricultural Produce Marketing Committee or Board or services provided
by a commission agent for sale or purchase of agricultural produce.
 Examples:
Agricultural Produce Non Agricultural Produce

Potato Potato Chips
Tomato Tomato Ketchup
Vegetables & Fruits Vegetable & Fruit Juice
Wheat Wheat Flour
Paddy Rice
Green Tea Leaves Green Tea
Entry No
24: Services by way of loading, unloading, packing, storage or warehousing of rice.
24 A: Services by way of warehousing of minor forest produce.
24 B: Services by way of storage/ warehousing of cereals, pulses, fruits and vegetables,
55 A: Services by way of artificial insemination of livestock (other than horses).

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57: Services by way of pre-conditioning, pre- cooling, ripening, waxing, retail packing, labelling of
fruits and vegetables which don’t change or alter the essential characteristics of the said fruits or
vegetables.
9) Services by an unincorporated body or a non- profit entity
Entry
Description of Services
No
Service by an unincorporated body or a non- profit entity registered under any law for the time
being in force, to its own members by way of reimbursement of charges or share of
contribution –
(a) as a trade union
77
(b) for the provision of carrying out any activity which is exempt from the levy of GST; or
(c) up to an amount of Rs. 7,500 per month per member for sourcing of goods or services
from a third person for the common use of its members in a housing society or a residential
complex.
Services provided by an unincorporated body or a non-profit entity registered under any law for
the time being in force, engaged in,-
(i) activities relating to the welfare of industrial or agricultural labour or farmers; or
77 A (ii) promotion of trade, commerce, industry, agriculture, art, science, literature, culture, sports,
education, social welfare, charitable activities and protection of environment,
to its own members against consideration in the form of membership fee up to an amount of
Rs. 1000/- per member per year.
9 Accommodation services
Entry No Description of Services

Services by way of renting of residential dwelling for use as residence except where
the residential dwelling is rented to a registered person.
Explanation — For the purpose of exemption under this entry, this entry shall cover
services by way of renting of residential dwelling to a registered person where –
12
(i) the registered person is proprietor of a proprietorship concern and rents the
residential dwelling in his personal capacity for use as his own residence; and
(ii) such renting is on his own account and not that of the proprietorship concern.

204
Summary Book
10) Sports Related Activities
Entry
No
Services provided to a recognised sports body by-
(a) an individual as a player, referee, umpire, coach or team managerfor participation in
a sporting event organised by a recognized sportsbody;
68 (b) Another recognised sportsbody.
However, services by individuals such as selectors, commentators, curators, technical experts
are taxable. The service of a player to a franchisee which is not a recognized sports body is
also taxable. The term ‘recognised sports body’ has been defined earlier in this chapter.
Services by way of sponsorship of sporting events
(a) by a national sports federation, or its affiliated federations, where the participating
teams or individuals represent any district, State, zone or Country;
(b) by Association of Indian Universities, Inter-University Sports Board, School Games

53 Federation of India, All India Sports Council for the Deaf, Paralympic Committee of
India or Special Olympics Bharat;
(c) by the Central Civil Services Cultural and Sports Board;
(d) as part of national games, by the Indian Olympic Association; or
(e) Under the Panchayat Yuva Kreeda Aur Khel Abhiyaan Scheme.
11) Art Related Activities
Entry
No
Services by an artist by way of a performance in folk or classical art forms of-
Music or dance or theatre
If the consideration charged for such performance is not more than Rs. 1,50,000 are exempt
from GST.
78
Further, all other activities by an artist in other art forms e.g. western music or dance,
modern theatres, performance of actors in films or television serials would be taxable.
Similarly activities of artists in still art forms e.g. painting, sculpture making etc. are
taxable. However, the exemption shall not apply to service provided by such artist as
brand ambassador.

205
Summary Book
12) Construction Services
Entry no. Description of Services

Services provided by way of pure labour contracts of construction, erection, commissioning,
installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil
10 structure or any other original works pertaining to the beneficiary-led individual house
construction or enhancement under the Housing for All (Urban) Mission or Pradhan Mantri
Awas Yojana.
Services supplied by Electricity Distribution Utilities by way of construction, erection,

10A commissioning, or installation of infrastructure for extending electricity distribution network
up to the tube well of the farmer or agriculturalist for agricultural use.
Services by way of pure labour contracts of construction, erection, commissioning, or

11 installation of original works pertaining to a single residential unit otherwise than as a part
of a residential complex.
13) Services Provided by Specified Bodies
Entry No. Description of Services

Services by the Employees’ State Insurance Corporation to persons governed under the
30
Employees’ State Insurance Act, 1948.
Services provided by the Employees Provident Fund Organisation to the persons governed under
31
the Employees Provident Funds and the Miscellaneous Provisions Act, 1952.
Services by Coal Mines Provident Fund Organisation to persons governed by the Coal Mines
31A
Provident Fund and Miscellaneous Provisions Act, 1948.
Services by National Pension System (NPS) Trust to its members against consideration in the
31B
form of administrative fee.
14) Leasing Services
Entry
No.
Upfront amount(called as premium, salami, cost, price, development charges or by any other name)
payable in respect of service by way of granting of long term lease of 30 years, or more) of
industrial plots or plots for development of infrastructure for financial business, provided by
41 the State Government Industrial Development Corporations or Undertakings or by any other entity
having 20% or more ownership of Central Government, State Government, Union territory to the
industrial units or the developers in any industrial or financial business area.
Explanation - For the purpose of this exemption, the Central Government, State Government or

206
Summary Book
Union territory shall have 20 % or more ownership in the entity directly or through an entity which
is wholly owned by the Central Government, State Government or Union territory.
Provided that the leased plots shall be used for the purpose for which they are allotted, that is,
for industrial or financial activity in an industrial or financial business area.
Provided also that the State Government concerned shall monitor and enforce the above
condition, as per the order issued by the State Government in this regard:
Provided further that in case of any violation or subsequent change of land use, due to any reason
whatsoever, the original lessor, original lessee as well as any subsequent lessee or buyer or owner
shall be jointly and severally liable to pay such amount of integrated tax, as would have been
payable on the upfront amount charged for the long term lease of the plots but for the exemption
contained herein, along with the applicable interest and penalty:
Provided also that the lease agreement entered into by the original lessor with the original lessee or
subsequent lessee, or sub- lessee, as well as any subsequent lease or sale agreements, for lease or
sale of such plots to subsequent lessees or buyers or owners shall incorporate in the terms and
conditions, the fact that the integrated tax was exempted on the long term lease of the plots
by the original lessor to the original lessee subject to above condition and that the parties to the
said agreements undertake to comply with the same
Clarification :
Upfront amount which is determined upfront but is paid or payable in instalments for long term
(30 years, or more) lease of industrial plots or plots for development of financial infrastructure, it
has been clarified that GST exemption on the upfront amount is admissible irrespective of
whether such upfront amount is payable or paid in one or more instalments, provided the
amount is determined up front.
Supply of TDR, FSI, long term lease (premium) of land by a landowner to a developer have
been exempted subject to the condition that the constructed flats are sold before issuance of
41A completion certificate and tax is paid onthem.
and Exemption of TDR, FSI, long term lease (premium) shall be withdrawn in case of flats sold
41B after issue of completion certificate, but such withdrawal shall be limited to 1% of value in case
of affordable houses and 5% of value in case of other than affordable houses. This will achieve
a fair degree of taxation parity between under construction and ready to move property

207
Summary Book
15) Services Provided by Government
Entry
no. Description of Services
Services by governmental authority by way of any activity in relation to any function entrusted to a
4
municipality under article 243 W of the Constitution are exempt.
Services by a governmental authority by way of any activity in relation to any function entrusted
5
to a Panchayat under article 243G of the Constitution.
Services by the Central Government, State Government, Union territory or local authority excluding
the following services—
(a) services by the Department of Posts and the Ministry of Railways (Indian Railways);
(b) services in relation to an aircraft or vessel, inside or outside the precincts of port or an
6
airport;
(c) transport of goods or passengers; or
(d) any service, other than services covered under entries (a) to (c) above, provided to business
entities.
Services provided by the Central Government, State Government, Union territory or local authority to
a business entity with an such amount in the preceding FY as makes it eligible for exemption
from registration under the CGST Act, 2017.
7 Explanation - For the purposes of this entry, it is hereby clarified that the provisions of this entry
shall not be applicable to following services:-
(i) item (a), (b) and (c) of Entry 6 above.
(ii) services by way of renting of immovable property.
Services provided by the Central Government, State Government, Union territory or local authority to
another Central Government, State Government, Union territory or local authority.
8
However, nothing contained in this entry shall apply to services referred in item (a), (b) and (c) of
Entry 6 above.
Services provided by Central Government, State Government, Union territory or a local authority where
the consideration for such services does not exceed Rs. 5,000.
However, nothing contained in this entry shall apply to services referred in item (a), (b) and
9 (c) of Entry 6 above
Further, in case where continuous supply of service* is provided by the Central Government, State
Government, Union territory or a local authority, the exemption shall apply only where the
consideration charged for such service does not exceed ` 5,000 in a FY.
Supply of service by a Government Entity to Central Government, State Government, Union territory,
local authority or any person specified by Central Government, State Government, Union territory or
9C
local authority against consideration received from Central Government, State Government, Union
territory or local authority, in the form of grants.

208
Summary Book
Services by:
an old age home run by:
 Central Government, State Government or
9D  an entity registered under section 12AA of the Income-tax Act, 1961
to its residents (aged 60 years or more) against consideration up to Rs. 25,000 per month
per member, provided that the consideration charged is inclusive of charges for boarding, lodging
and maintenance.
Services supplied by Central Government, State Government, Union territory to their undertakings or
34A Public Sector Undertakings (PSUs) by way of guaranteeing the loans taken by such undertakings
or PSUs from the banking companies and financial institutions. (The words ‘banking
companies’ have been inserted in the entry)
Services provided by the Central Government, State Government, Union territory or local authority by
way of-
(a) registration required under any law for the time being in force;
47
(b) testing, calibration, safety check or certification relating to protection or safety of workers,
consumers or public at large, including fire license, required under any law for the time being in
force.
61
way of issuance of passport, visa, driving license, birth certificate or death certificate.
way of tolerating non-performance of a contract for which consideration in the form of fines or
62
liquidated damages is payable to the Central Government, State Government, Union territory or local
authority under such contract.
way of assignment of right to use natural resources to an individual farmer for cultivation of
63
plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel,
raw material or other similar products.
Services by the Department of Posts by way of post card, inland letter, book post and ordinary post
24C
(envelopes weighing less than 10 grams).

209
Summary Book
16) Banking and financial service
Entry No. 27
Interest discount income inter se sale or purchase

of foreign currency
Interest earned through Interest/discount earned Exempt
credit card by bank by way of

extending deposit loans
or advance
Taxable Exempt
17) Right to admission to various events
Entry No. 79 / 79A
Services by way of admission to a Services by way of admission

museum, national park, wildlife to a protected monument
sanctuary, tiger reserve or zoo. E.g Taj Mahal.
corbett national park
It is exempt

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Summary Book
Entry No. 81
Service by way of admission to … ()
If consideration less If consideration

than Rs 500 more than Rs 500
It is Exempt It is taxable
 Clarification regarding applicability of GST on delayed payment charges in case of late

payment of Equated Monthly Instalments (EMI)
Issue: Whether GST is applicable on additional / penal interest on the overdue loan? Whether such
penal interest would be exempt under Entry 27 of exemption notification or it would be taxable
treating it as consideration for liquidated damages ?
Clarification: As per section 15(2)(d) of the CGST Act, the value of supply shall include
interest or late fee or penalty for delayed payment of any consideration for any supply.
Entry 27 of exemption notification, inter alia, exempts the “services by way of extending
deposits, loans or advances in so far as the consideration is represented by way of interest or
discount (other than interest involved in credit card services)”.
Taxability of additional
penal interest on late
payment of EMI
Purchase of goods/service on EMI Purchase of goods in cash By

basis and delaying EMI payment taking loan and delaying such EMI
Added in value of supply as per Would not be subject to GST

see 15(2) (d) since covered under sl.no, 27

211
Summary Book
 Clarification on issues related to GST on monthly subscription/ contribution charged by a

Residential Welfare Association from its members
Issue Clarification
Are the maintenance charges paid by Supply of service by RWA to its own members by way of
residents to the Resident Welfare reimbursement of charges or share of contribution up to an
Association (RWA) in a housing society amount of Rs. 7,500/- per month per member for providing
exempt from GST and if yes, is there an services and goods for the common use of its members in a
upper limit on the amount of such housing society or a residential complex are exempt from GST.
charges for the exemption to be available?
No. If aggregate turnover of an RWA does not exceed Rs.20
Lakh in a FY, it shall not be required to take registration and
pay GST even if the amount of maintenance charges exceeds
Rs. 7,500/- per month per member.
RWA shall be required to pay GST on monthly subscription/
contribution charged from its members, only if such
A RWA has aggregate turnover of Rs. 20
subscription is more than Rs. 7,500/- per month per member
lakh or less in a FY. Is it required to
and the annual aggregate turnover of RWA by way of
take registration and pay GST on
supplying of services and goods is also Rs. 20 lakh or more.
maintenance charges if the amount of
such charges is more than Rs. 7500/- per Annual turnover of Monthly Whether
month per member? RWA maintenance charge exempt?
More than Rs. 20 lakhs More than Rs. 7,500/- No
Rs. 7,500/- or less Yes
Rs. 20 lakhs or less More than Rs. Yes

7,500/-
Rs. 7,500/- or less Yes
Is the RWA entitled to take ITC of GST

paid on input and services used by it for RWAs are entitled to take ITC of GST paid by them on
making supplies to its members and use capital goods (generators, water pumps, lawn furniture etc.),
such ITC for discharge of GST liability on goods (taps, pipes, other sanitary/hardware fillings etc.) and
such supplies where the amount charged
input services such as repair and maintenance services.
for such supplies is more than Rs.
7,500/- per month per member?

212
Summary Book
As per general business sense, a person who owns 2 or more

residential apartments in a housing society/residential complex
shall normally be a member of the RWA for each residential
Where a person owns 2 or more flats in apartment owned by him separately. The ceiling of Rs. 7,500/-
the housing society/residential complex, per month per member shall be applied separately for each
whether the ceiling of Rs. 7,500/- per residential apartment owned by him. For example, if a person
month per member on the maintenance owns 2 residential apartments in a residential complex and
for the exemption to be available shall be pays Rs. 15,000/- per month as maintenance charges towards
applied per residential apartment or per maintenance of each apartment to the RWA (Rs. 7,500/- per
person? month in respect of each residential apartment), the
exemption from GST shall be available to each apartment.
18) Other Exempt Services:
Services provided to a Governmental Authority by way of —

(a) water supply;
(b) public health;
3B
(c) sanitation conservancy;
(d) solid waste management; and
(e) slum improvement and upgradation
Services by way of transportation of goods by an aircraft from customs station of clearance
19A
in India to a place outside India.
Services by way of transportation of goods by a vessel from customs station of clearance in
19B
India to a place outside India.
Satellite launch services supplied by Indian Space Research Organisation, Antrix Corporation Limited
19C
or New Space India Limited.
Services of public libraries by way of lending of books, publications or any other knowledge-
50
enhancing content or material.
52 Services by an organiser to any person in respect of a business exhibition held outside India.
Services by way of pre-conditioning, pre- cooling, ripening, waxing, retail packing, labelling of
57 fruits and vegetables which do not change or alter the essential characteristics of the said
fruits or vegetables.
59 Services by a foreign diplomatic mission located in India.
65A Services by way of providing information under the RTI Act
72 Services provided to the CG, SG, UT administration under any training programme for which 75% or
more of the total expenditure is borne by the CG, SG, UT administration
76 Services by way of public conveniences such as provision of facilities of bathroom,

213
Summary Book
washrooms, lavatories, urinal or toilets.
 Clarification regarding applicability of GST on supply of food in anganwadis and schools
Aganwadi is covered by the definition of educational institution (as pre school). It is clarified
that services provided to an educational institution by way of serving of food (catering
including mid- day meals) is exempt from levy of GST irrespective of its funding from
government grants or corporate donations.
Hence, serving of food to anganwadi shall be covered by said exemption, whether sponsored by
government or through donation from corporates.
 Clarification regarding GST on Supply of various services by Central and State Boards
It has been clarified that:
(i) GST is exempt on services provided by Central or State Boards (including the
boards such as NBE) by way of conduct of examination for the students,
including conduct of entrance examination for admission to educational
institution under Entry 66(aa). Therefore, GST shall not apply to any fee or any
amount charged by such Boards for conduct of such examinations including
entrance examinations.
(ii) GST is also exempt on input services relating to admission to, or conduct of
examination, such as online testing service, result publication, printing of
notification for examination, admit card and questions papers etc, when provided
to such Boards under Entry 66(b)(iv).
(iii) GST is applicable to other services provided by such Boards, namely of providing
accreditation to an institution or to a professional (accreditation fee or
registration fee such as fee for FMGE screening test) so as to authorise them
to provide their respective services.
 Clarification regarding applicability of GST on milling of wheat into flour or paddy into rice
for distribution by State Governments under PDS
Issue: Whether composite supply of service by way of milling of wheat into wheat flour, along
with fortification by any person to a state government for distribution of such wheat flour
under Public Distribution system is eligible for exemption under Entry 3A

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Summary Book
Public Distribution specifically figures at entry 28 of the 11th Schedule to the Constitution,
which lists the activities that may be entrusted to a Panchayat under Article 243G of the
Constitution.
Hence, said Entry 3A would apply to composite supply of milling of wheat and fortification
thereof by miller, or of paddy into rice, provided that value of goods supplied in such composite
supply (goods used for fortification, packing material etc) does not exceed 25% of the value of
composite supply.
It is a matter of fact as to whether the value of goods in such composite supply is up to 25%
and requires ascertainment on case-to-case basis.
 Clarification regarding applicability of GST on service supplied by State Government to

their undertakings or PSUs by way of guaranteeing loans taken by them
Clarification: Entry 34A exempts services supplied by CG, SG, UT to their undertakings or
PSUs by way of guaranteeing the loans taken by such undertakings or PSUs from the banking
companies and financial institutions.
Accordingly, it is reiterated that guaranteeing of loans by CG or SG for their undertaking or

PSU is specifically exempt under said entry 34A
 Clarification regarding coaching services supplied by coaching institutions and NGOs under
the central sector scheme of ‘Scholarships for students with Disabilities
Free coaching services provided by coaching institutions and NGOs under the central scheme of
“Scholarships for students with Disabilities” where total expenditure is borne by the
Government to coaching institutions by way of grant in aid is covered under entry 72 and
hence is exempt from GST
 Clarification regarding GST on overloading charges at toll plaza
Entry 23 exempts services by way of access to road or a bridge on payment of toll charges
It has been clarified that overloading charges are given same treatment as that of toll charges.
Additional fees is collected from road users not having valid functional fastag. Normally such
additional amount is in the form of toll and may be given same treatment as that of toll.
 Clarification regarding renting of vehicles to State Transport Undertakings and Local

Authorities

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Summary Book
Entry 22 exempts services by way of giving on hire (a) to a state transport undertaking, a
motor vehicle meant to carry more than 12 passengers; or (aa) to a local authority, an
Electrically Operated vehicle meant to carry more than 12 passengers. It is clarified that the
expression “giving on hire” here includes renting of vehicles.
Accordingly, where the said vehicles are rented or given on hire to State Transport Undertakings
or Local Authorities, said services are eligible for above exemption irrespective of whether such
vehicles are run on routes, timings as decided by the State Transport Undertakings or Local
Authorities and under effective control of State Transport Undertakings or Local Authorities
which determines the rules of operation or plying of vehicles.
 Clarification regarding applicability of GST on application fee charged for entrance or the
fee charged for issuance of eligibility certificate for admission or for issuance of migration
certificate by educational institutions
In this regard, it is stated that educational services supplied by educational institutions to its
students are exempt from GST vide Entry 66, relevant portion of which reads as under Services
provided – (a) by an educational institution to its students, faculty and staff; (aa) by an
educational institution by way of conduct of entrance examination against consideration in the
form of entrance fee.
Therefore, it can be seen that all services supplied by an ‘educational institution’ to its
students are exempt from GST. Consideration charged by the educational institutes by way of
entrance fee for conduct of entrance examination is also exempt. The exemption is wide enough
to cover the amount or fee charged for admission or entrance, or amount charged for
application fee for entrance, or the fee charged from prospective students for issuance of
eligibility certificate to them in the process of their entrance/admission to the educational
institution. Services supplied by an educational institution by way of issuance of migration
certificate to the leaving or ex-students are also covered by the exemption. Accordingly, such
activities of educational institutions are also exempt.
 Exemption available to educational institutions and Central and State educational boards
for conduct of entrance examination extended to any authority/ board/ body set up by the
Central/State Government including National Testing Agency for conduct of entrance
examination for admission to educational institutions
Clause (iva) has been inserted in the Explanation to Notification no. 12/2017 CT(R) dated
28.06.2017.

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It clarifies that any authority, board or body set up by the Central Government or State
Government including National Testing Agency for conduct of entrance examination for
admission to educational institutions shall be treated as educational institution for the limited
purpose of providing services by way of conduct of entrance examination for admission to
educational.
 Clarification regarding applicability of GST on transportation of empty containers returning

from Nepal and Bhutan after delivery of transit cargo, to India
In this regard, it is clarified that exemption under Entry 9B covers services associated with
transit cargo both to and from Nepal and Bhutan. It is also clarified that movement of empty
containers from Nepal and Bhutan, after delivery of goods there, is a service associated with
the transit cargo to Nepal and Bhutan and is therefore covered by the exemption.
 Clarification regarding applicability of GST on transport of minerals from mining pit head
to railway siding, beneficiation plant etc., by vehicles deployed with driver for a specific
duration of time
It is clarified that such renting of trucks and other freight vehicles with driver for a period of
time is a service of renting of transport vehicles with operator and not service of transportation
of goods by road. Consequently, it is not eligible for exemption under Entry 18.
 Location charges or preferential location charges (PLC) collected in addition to the lease
premium for long term lease of land constitute part of the lease premium or of upfront
amount charged for long term lease of land and thus exempted
It is clarified that location charges or preferential location charges (PLC) paid upfront in
addition to the lease premium for long term lease of land constitute part of upfront amount
charged for long term lease of land and are eligible for the same tax treatment, and thus
eligible for exemption under Entry 41.
 Clarification regarding GST on payment of honorarium to the Guest Anchors the circular
clarifies the applicability of GST on honorarium paid to Guest Anchors.
Sansad TV and other TV channels invite guest anchors to participate in their shows and pay
remuneration to them in the form of honorarium. It is clarified that supply of all goods &
services are taxable unless exempt or declared as ‘neither a supply of goods nor a supply of

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Summary Book
service’. Services provided by the guest anchors in lieu of honorarium attract GST liability.
However, guest anchors whose aggregate turnover in a financial year does not exceed ` 20 lakh
(`10 lakh in case of specified Special Category States) shall not be liable to take registration
and pay GST).
 Clarification regarding applicability of GST on services in form of ART/ IVF
Health care services provided by a clinical establishment, an authorized medical practitioner or

para-medics are exempt vide Entry 74. As per the definition of health care services, it means
any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality
or pregnancy in any recognised system of medicines in India and includes services by way of
transportation of the patient to and from a clinical establishment, but does not include hair
transplant or cosmetic or plastic surgery, except when undertaken to restore or to reconstruct
anatomy or functions of body affected due to congenital defects, developmental abnormalities,
injury or trauma. Since, the abnormality/disease/ailment of infertility is treated using ART
procedure such as IVF, it is clarified that services by way of IVF are also covered under the
definition of health care services.
 Clarification regarding applicability of GST on sale of land after levelling, laying down of
drainage lines etc.
As per Para 5 of Schedule III of the CGST Act, 2017, ‘sale of land’ is neither a supply of goods
nor a supply of services and therefore does not attract GST.
Land may be sold either as it is or after some development such as levelling, laying down of
drainage lines, water lines, electricity lines, etc. It is clarified that sale of such developed land
is also sale of land and is covered by Para 5 of Schedule III and accordingly, does not attract
GST. However, it may be noted that any service provided for development of land, like levelling,
laying of drainage lines (as may be received by developers) shall attract GST at applicable rate
for such services.
 Clarification regarding hiring of vehicles by firms for transportation of their employees to

and from work.
Entry 15(b) exempts transport of passengers, with or without accompanied belongings, by non-
air-conditioned contract carriage, other than radio taxi, for transport of passengers, excluding
tourism, conducted tour, charter or hire. The said exemption would apply to passenger

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Summary Book
transportation services by non-air-conditioned contract carriages where transportation takes

place over pre-determined route on a pre-determined schedule. The exemption shall not be
applicable where contract carriage is hired for a period of time, during which the contract
carriage is at the disposal of the service recipient and the recipient is thus free to decide the
manner of usage (route and schedule) subject to conditions of agreement entered into with
the service provider.
 Clarification regarding applicability of GST on tickets of private ferry used for passenger
transportation.
The circular clarifies the applicability of GST on private ferry tickets. For instance, private
ferries are used as means of transport from one island to another in Andaman and Nicobar
Islands. As per Entry 17(d), transportation of passengers by public transport, other than
predominantly for tourism purpose, in a vessel between places located in India is exempted. It
is clarified that this exemption would apply to tickets purchased for transportation from one
point to another irrespective of whether the ferry is owned or operated by a private sector
enterprise or by a PSU-government.
It is further clarified that, the expression ‘public transport’ used in the exemption notification
only means that the transport should be open to public. It can be privately or publicly owned.
Only exclusion is on transportation which is predominantly for tourism, such as services which
may combine with transportation, sightseeing, food and beverages, music, accommodation such
as in shikara, cruise etc.
 Clarification on applicability of GST on accommodation services supplied by Air Force Mess

and other similar messes to its personnel.
All services supplied by CG, SG, UT or LA to any person other than business entities (barring a
few specified services such as services of postal department, transportation of goods and
passengers etc.) are exempt from GST.
It is clarified that accommodation services provided by Air Force Mess and other similar
messes, such as, Army mess, Navy mess, Paramilitary and Police forces mess to their personnel
or any person other than a business entity are covered by Entry 6 provided the services
supplied by such messes qualify to be considered as services supplied by CG, SG, UT or LA.

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CHAPTER - 25 Advance Ruling
Section 97 : Question for which ruling can be sought
Advance ruling can be obtained on a proposed transaction as well as a transaction already undertaken by the
appellant. Advance Ruling can be sought for the following questions:-
(a) classification of any goods or services

(b) applicability of a notification issued under CGST Act
(c) determination of time and value of supply of goods or services
(d) admissibility of ITC of tax paid or deemed to have been paid
(e) determination of the liability to pay tax on any goods or services
(f) whether applicant is required to be registered
(g) whether any particular thing done by the applicant with respect to any goods or services or both amounts
to or results in a supply of goods or services
1. Section 98 of CGST Act, 2017 : Procedure for Obtaining Advance Ruling
Applicant should make application to AAR

AAR shall send copy of application to officer in whose jurisdiction applicant falls and call for all relevant
records.
AAR may examine application along with records and may also hear applicant. Thereafter he will pass an
order either admitting or rejecting the application.
Application for advance ruling will not be admitted in cases where the question raised in the application is
already pending or decided in any proceedings in case of an applicant under this Act.
If application is rejected, it should be by way of a speaking order giving reasons for rejection.
If application is admitted, AAR shall pronounce its ruling within 90 days of receipt of application. Before
giving its ruling, it shall examine the application and any further material furnished by applicant or by the
concerned departmental officer.
Before giving ruling, AAR must hear applicant or his authorized representative and the jurisdictional officers.
If there is a difference of opinion between the two members of AAR, they shall refer the point or points on
which they differ to the AAAR for hearing the issue. If the members of AAAR are also unable to come to a
common conclusion in regard to the point(s) referred to them by AAR, then it shall be deemed that no
advance ruling can be given in respect of the question on which difference persists at the level of AAAR.
A copy of the advance ruling duly signed by members and certified in prescribed manner shall be sent to
the applicant, the concerned officer and the jurisdictional officer.
Application for advance ruling shall be made on common portal and shall be accompanied by fees of Rs. 5000.

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Advance Ruling
2. Section 100 and 101 of CGST Act, 2017: Appeals Against Order Of AAR To The Appellate Authority
Section 100 : Appeal to Appellate Authority

An appeal against AR shall be made by applicant on common portal and along with fees of Rs. 10000.
If applicant is aggrieved with the finding of AAR, he can file an appeal with AAAR. Similarly, if the concerned or
jurisdictional officer of CGST/SGST does not agree with finding of AAR, he can also file an appeal with AAAR.
Any appeal must be filed within 30 days from the receipt of the advance ruling. Appellate Authority may allow for
an additional 30 days for filing an appeal, if it is satisfied that there was a sufficient cause for delay in presenting
the appeal.
Section 101 of CGST Act, 2017 : Orders of Appellate Authority
Appellate Authority must pass an order after hearing the parties to the appeal within a period of 90 days
of the filing of an appeal.
If members of AAAR differ on any point referred to in appeal , it shall be deemed that no advance ruling is
issued in respect of the question under appeal.
Authority can either confirm or modify the ruling appealed against.

Copy of the advance ruling pronounced by the Appellate Authority should be signed by members, certified
in the prescribed manner, and communicated to the applicant, the concerned officer, the jurisdictional
officers and to the Authority.
3. Section 102 of CGST Act, 2017 : Rectification of Mistakes
Law gives power to AAR and AAAR to amend their order to rectify any mistake apparent from the record
within a period of 6 months from the date of order .
Mistake may be noticed by the authority on its own accord or may be brought to its notice by the applicant
or concerned or jurisdictional officer.
If rectification has the effect of enhancing the tax liability or reducing the quantum of input tax credit ,
applicant must be heard before the order is passed.
4. Section 103 of CGST Act, 2017 : Applicability of Advance Ruling
An advance ruling pronounced by AAR or AAAR shall be binding

 Only on the applicant who had sought it ,
 In respect of any matter referred to in section 97(2) for advance ruling and
 On the concerned officer or the jurisdictional officer in respect of the applicant.
This clearly means that an advance ruling is not applicable to similarly placed other taxable persons in the
State. It is only limited to the person who has applied for an advance ruling.
The law does not provide for a fixed time period for which the ruling shall apply.
Instead, it has been provided that advance ruling shall be binding till the period when the law, facts or
circumstances supporting the original advance ruling have not changed.

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Advance Ruling
5. Section 104 of CGST Act, 2017: Advance ruling to be void in certain circumstances.
If AAR and Appellate Authority find that the advance ruling pronounced has been obtained by
applicant/appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order,
declare such ruling to be void ab-initio.
Consequently, all the provisions of the CGST Act shall apply to the applicant as if such advance ruling had
never been made (but excluding the period when advance ruling was given and up to the period when the
order declaring it to be void is issued).
No such order shall be passed unless Reasonable opportunity of being heard is being given to applicant
A copy of the order so made shall be sent to the applicant, the concerned officers and the jurisdictional
officer.
6. Section 105 and 106 of CGST Act, 2017 : Powers and Procedure of Advance Ruling
Both the AAR and AAAR are vested with the powers of a civil court under Code of Civil Procedure, 1908,
 For discovery and inspection,
 Enforcing the attendance of a person and examining him on oath, and
 Issuing commissions and compelling production of books of account and other records.
Both the authorities are deemed to be a civil court for the purposes of section 195 of the Code of
Criminal Procedure, 1973.
Any proceeding before the authority shall be deemed to be judicial proceeding under section 193 and 228
and for the purpose of section 196, of the IPC, 1860. The AAR and AAAR also have the power to regulate
their own procedure.

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CHAPTER 26 Ethical Aspects under GST
Ethical Aspects under GST
Chartered Accountants (CAs) uphold a Code of Ethics set by the ICAI, focusing on honesty, fairness, and
professionalism. Their fundamental principles, including integrity, objectivity, and confidentiality, guide their
conduct. Disciplinary actions for misconduct are outlined in the Chartered Accountants Act, 1949.
CAs play a crucial role in ensuring:

 GST compliance,
 assisting with registration,
 transaction structuring,
 tax optimization, and
 other related tasks.
 Serve as tax advisors, maintaining accurate GST records and deepening their understanding of
clients' business goals to ensure ethical conduct and compliance in the complex realm of GST.
 CAs, holding a certificate of practice, can represent clients before GST authorities and provide
certifications affirming compliance with GST laws. These certifications, mandated in specific
situations, aim to prevent revenue leakage. The ethical responsibility of CAs during this process
involves exercising utmost care and diligence, adhering to the ICAI Code of Ethics and relevant
Quality Control standards. This ensures integrity and quality in their professional conduct,
contributing to a robust and compliant GST environment.

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Summary Book
The certifications / reports required to be furnished by a Chartered Accountant under GST law have been
explained in detail hereunder :
1. Certifications/ Reports to be furnished by a Chartered Accountant required under GST law:
 Certification of the amount of ITC claimed at the time of registration/voluntary registration

or switching to regular tax paying status or coming into tax-paying status [Section 18(1)
read with rule 40].
Section No. Persons eligible to take credit Goods entitled to ITC

Inputs held in stock/ as on
capital goods
(1) (2) (3) (4)
Section 18(1)(a) Person who has applied for Inputs held in stock and The day immediately
registration within 30 days from the inputs contained in preceding the date from
date on which he becomes liable to semifinished or which he becomes
registration and has been granted finished goods held in liable to pay tax
such registration stock
Section 18(1)(b) Person who is not required to Inputs held in stock and The day immediately
register, but obtains voluntary inputs contained in preceding the date of
registration semifinished or registration
finished goods held in
stock
Section 18(1)(c) Registered person who ceases to pay Inputs held in stock and The day immediately
composition tax and switches to inputs contained in semi- preceding the date from
regular scheme finished or which he becomes
finished goods held in liable to pay tax under
stock and regular scheme
capital goods
Section 18(1)(d) Registered person whose exempt Inputs held in stock and The day immediately
supplies become taxable supplies inputs contained in semi- preceding the date from
finished or which such supply
finished goods held in becomes taxable
stock relatable to such
exempt supply and
capital goods exclusively
used for such exempt
supply

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Summary Book
In all above RP has to make an electronic declaration in Form ITC-01 on the common portal,specifying the
details relating to :
 inputs held in stock,
 inputs contained in semifinished or
 finished goods held in stock and capital goods
on the days mentioned in column (4) of table above. The declaration is to be filed within 30 days
(extendable by Commissioner/Commissioner of State GST/Commissioner of UTGST) from the date when
the registered person becomes eligible to avail ITC. If the claim of ITC pertaining to CGST, SGST/UTGST,
IGST put together exceeds 2,00,000, the declaration needs to be certified by a practicing Chartered
Accountant or Cost Accountant.
A Chartered Accountant is required to examine the books of accounts and other relevant documents /
records of the taxpayer and to provide a reasonable assurance that the amounts declared in the Form GST
ITC-01 have been accurately drawn from the books of accounts and other relevant documents / records of
the taxpayer and is claimed as ITC.
 Certification that the sale, merger, demerger, amalgamation, lease or transfer of business done with
a specific provision for the transfer of liabilities [Section 18(3) read with rule 41]
In case of :
 Sale,
 Merger,
 Demerger,
 Amalgamation,
 Transfer or change in ownership of business etc.,
the ITC that remains unutilized in the electronic credit ledger of the registered person can be transferred
to the new entity, provided there is a specific provision for transfer of liabilities in such change of
constitution.
RP should furnish the details of change in constitution in Form ITC - 02 on the common portal. Further,
he needs to submit a certificate from practicing Chartered Accountant or Cost Accountant certifying
that the change in constitution has been done with a specific provision for transfer of liabilities.
A Chartered Accountant is required to examine the books of accounts and other relevant documents /
records of the taxpayer and to provide a reasonable assurance that the sale, merger, demerger,
amalgamation, lease or transfer or business has been done with a specific provision for the transfer of
liabilities.

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Summary Book
 Certification that in case of refund claim exceeding 2 lakh by the applicant, there is no unjust
enrichment [Section 54 read with rule 89(2)(m)]
A certificate in Annexure 2 of Form GST RFD-01 is to be issued by a Chartered accountant or Cost

Accountant to the effect that
the incidence of tax, interest or any other amount claimed as refund has not been passed on to any other
person (i.e., there is no unjust enrichment in the case of the applicant) in a case where the amount of
refund claimed exceeds ` 2 lakh.
The certification by the Chartered Accountant should be based on meticulous examination of the books of
accounts and other relevant documents / records supporting the refund claim thereby providing a reasonable
assurance that the incidence of tax, interest or any other amount claimed as refund, has not been passed
on to any other person.
 Certification of the amount of ITC to be reversed on cancellation of registration or on switching to

composition levy/ exit from taxpaying status, in respect of inputs for which tax invoices are not
available [Section 29(5)/ section 18(4) read with rule 44(5)]
Section 29(5) requires reversal of ITC on cancellation of registration of a RP.

Similarly, section 18(4) requires reversal of ITC when a RP who has availed ITC switches to composition
levy or when his supplies get wholly exempted from tax.
ITC on inputs should be reversed proportionately on the basis of corresponding invoices on which credit had
been availed on such inputs.
If invoices are not available, ITC can be reversed on the basis of the prevailing market price of such goods
on the date of switch over/exemption/cancellation of registration.
Role of CA or Cost Accountant : The details so furnished on the basis of prevailing market value need to
be duly certified by a practicing Chartered Accountant or Cost Accountant.
The certification by the Chartered Accountant should be based on meticulous examination of the books of
accounts and other relevant documents / records of the taxpayer thereby providing a reasonable assurance
as regards the correctness of the quantum of the amount of ITC to be reversed in case where the tax
invoices related to the inputs held in stock are not available.

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Summary Book
 Audit report under section 66
Section 66 : Special Audit

 Special audit can be ordered at any stage of scrutiny, inquiry or investigation
 Assistant Commissioner is of the opinion that the value has not been correctly declared or the
credit availed is not within the normal limits
 The commissioner may nominate a CA or CMA
 Time period : 90 days
 Extension : further 90 days
 On application by RP or CA or CMA
 Any material and sufficient reason
 Expenses of the examination and audit of records shall be determined and paid by
commissioner and such determination shall be final.
 Audit will be conducted even if accounts have already been audited
On conclusion of Audit :
RP shall be informed of the findings of special audit.
RP is communicated the proposed tax, interest and other liabilities, if any, along with the audit findings
and the RP is called upon to discharge the liabilities.
RP discharges the liabilities as proposed, no further action is taken.
Otherwise, the authorities may initiate the proceedings against the registered person u/s 73 or 74 for
determination of the tax liability of the person audited.
Approach of CA :
A Chartered Accountant must approach the Special Audit with an unbiased and impartial mindset, free from
any external influences or conflicts of interest.This ensures that the audit findings are based on factual
evidence and professional judgment, rather than personal biases.
He should first go through the terms of reference provided by the GST authorities to understand the scope
and objectives of the special audit. This document outlines the specific areas and tax periods to be audited.
He should conduct a comprehensive review of all relevant documents, including financial statements, invoices,
transaction records, and any other documentation provided by the taxpayer.
This ensures that the audit findings are based on accurate and reliable information. He should take steps
to identify and mitigate any potential conflicts of interest that may arise during the special audit. This
includes refraining from engaging in any activities or relationships that could compromise their objectivity
or independence. If a conflict of interest does arise, it should be promptly disclosed to the relevant parties.

227
Chapter 27 – Miscellaneous Provisions
1) Section 144: Presumption as to documents in Certain cases
Documents
Seized from the Received from place

Produced by any Person custody or control of outside India or the
under the CGST Act any person under the course of any
CGST Act Proceedings
Tendered by the prosecution in evidence against such person or any other

person who is tried jointly with such person.
2) Section 151 & 152: Power To Collect Statistics & Bar On Disclosure Of Information
Section 151
The Commissioner or an officer authorised by him may, by an order, direct any person to furnish
information relating to any matter dealt with in connection with this Act, within such time, in such
form, and in such manner, as may be specified therein.
Bar on disclosure of information [Section 152]
No information with respect to any matter given for the purposes of section 150 or section 151
shall, without the previous consent in writing of the concerned person or his authorised
representative, be published in such manner so as to enable such particulars to be identified
as referring to a particular person and no such information shall be used for the purpose of any
proceedings under this Act without giving an opportunity of being heard to the person concerned.
Nothing in this section shall apply to the publication of any information relating to a class of
taxable persons or class of transactions, if in the opinion of the Commissioner, it is desirable in
the public interest to publish such information.
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Miscellaneous Provisions
3) Section 160: Assessment Proceedings, Etc not to be Invalid on Certain Grounds

Sometimes, proceedings are challenged for their validity merely for reasons of mistakes etc. This
provision aims at saving the proceedings from such challenges.
The following proceedings done, accepted, made, issued, initiated, or purported

to have been done, accepted, made, issued, initiated in pursuance of any
provisions of the Act are covered:
• Assessment
• Re-assessment
Which
• Adjudication
proceedings are
• Review
covered under
• Revision
this provision?
• Appeal
• Rectification
• Notice
• Summons
• Other proceedings
Such proceedings shall not be held invalid for mere reason of :
On which • Mistake
grounds, will • Defect
such proceedings • Omission
be not held as if such proceedings are in substance and effect in conformity with or
invalid? according to the intents, purposes and requirements of the Act or any earlier
law.
The service of any
• Notice
When will the • Order
service of any • Communication
notice, order, or shall not be called in question if:
communication • the notice, order or communication has already been acted upon by the
be not called in person to whom it is issued or
question? • where such service has not been called in question at or in the earliest
proceedings commenced, continued or finalised pursuant to such notice,
communication or order.

229
4) Section 171: Anti-Profiteering Measure
Application by the customer
Standing committee
State screening committee
confirm prima facie evidence
confirm prima facie evidence of
of profiteering
profiteering
Director general of Anti – Profiteering for

investigating profiteering
Competition Commission of India

For determining profiteering and passing appropriate
order to ensure consumer benefit form reduced prices
Consent based sharing of information [Rule 163 inserted]
Section 158A provides for consent-based sharing of information with notified systems furnished by taxable
person. The said provision is implemented by rule 163 which provides that where a registered person opts
to share the information furnished in —
(a) application for registration in Form GST REG-01 as amended from time to time
(b) return in Form GSTR-3B for certain tax periods
(c) Form GSTR-1 for certain tax periods, pertaining to invoices, debit notes and credit notes issued
by him, as amended from time to time
with a system referred to in section 158A (1) (hereinafter referred to as "requesting system"), the
requesting system shall obtain the consent of the said registered person for sharing of such information
and shall communicate the consent along with the details of the tax periods, where applicable, to the
common portal.

230
The registered person shall give his consent for sharing of information furnished in Form GSTR-1 above
only after he has obtained the consent of all the recipients, to whom he has issued the invoice, credit
notes and debit notes during the said tax periods, for sharing such information with the requesting system
and where he provides his consent, the consent of such recipients shall be deemed to have been obtained.
The common portal shall communicate the information referred in this rule with the requesting system on
receipt from the said system -
(a) the consent of the said registered person, and
(b) the details of the tax periods or the recipients, as the case may be, in respect of which the information
is required.
Central Government has notified “Account Aggregator” as the systems with which information may be
shared by the common portal based on consent under section 158A.
“Account Aggregator” means an NBFC which undertakes the business of an Account Aggregator in
accordance with the policy directions issued by the RBI and defined as such in the NBFC-Account
Aggregator (Reserve Bank) Directions, 2016.

231
CHAPTER 1 Introduction and levy of Custom Duty
 Stages for Imposition of taxes and duties
Assessment is the The final stage is

Levy is stage
procedure of where the tax or
where declaration
quantifying the duty is actually
of liability is made
amount of liability collected
 What is India as per Customs Act, 1962
India includes the territorial waters of India.

The definition of India is an inclusive definition and includes not only the land mass of India but
also the territorial waters of India.
The territorial waters extend to 12 nautical miles into the sea from the appropriate base line.
 Charging Section 12
Analysis: The following are the conditions for levy of custom duty
• Duties of customs shall be levied on goods
• The goods shall be such as are imported or exported to or from India;
• The duty shall be charged at such rates as may be specified under the Customs Tariff Act,
1975.
• Government goods shall be treated at par with non-Governmental goods for the purposes of
levy of customs duty.

1
Summary Book
Note: Sec. 2 (22) Goods include

1) Vessel, Vehicle & aircraft
2) Stores
3) Baggage
4) Currency and negotiable instruments
5) Any kind of movable Property.
Import : Import with its grammatical variation and cognate expressions, means bringing into India
from a place outside India
Important case laws related to Import of Goods

Garden Silk Mills v. UOI
The SC observed that :
• Import of goods will commence: when they cross the territorial waters,but continues and is
completed when they become part of the mass of goods within the country;
• The taxable event: being reached at the time when the goods reach the customs barriers and
bill of entry for home consumption is filed.
Kiran Spinning Mills v. Collector of Customs
In case of warehoused goods, the custom barriers would be crossed when they are sought to be taken
out of customs and brought to the mass of goods in the country.
Export : Export with its grammatical variation and cognate Expressions is defined to mean taking
out of India to a place outside India

2
Summary Book
Important Case laws for Export of Goods
Rajendra Dyeing & & Printing Mill ltd:
Facts of cases: Rajendra Dying & Printing Mill Ltd were manufacturers of readymade
garments. They exported certain goods and filed shipping bill. The goods were examined by the
customs authorities and loaded onto the ship. While it was within the territorial water, the ship
sank. The cargo of assesse was destroyed.
Issue: The assesse filed their claim for duty drawback in relation to the goods which were
destroyed. Whether the claim is valid
Court Decision: Their claim was rejected on the grounds that the goods had not crossed the
territorial water and hence no export has taken place

3
Summary Book
 Remission / Abatement of duty
If any imported goods are pilfered after the unloading thereof and before
the proper officer has made an order for clearance for home consumption
Duty on Pilfered
or deposit in a warehouse, the importer shall not be liable to pay the duty
goods (Section 13)
leviable on such goods. However, where such goods are restored to the
importer after pilferage, the importer becomes liable to duty.
Where it is shown to the satisfaction of the AC / DC of Customs -
(a) that any imported goods had been damaged or had deteriorated at
any time before or during the unloading of the goods in India; or
(b) at any time after the unloading thereof in India but before their
examination u/s 17
(c) that any warehoused goods had been damaged at any time before
Abatement Of Duty
clearance for home consumption on account of any accident not due to
On Damaged Or
any wilful act, negligence or default of the owner, his employee or agent,
Deteriorated Goods
Duty in such cases shall be calculated in following manner:
(Section 22)
Duty leviable on such damaged or deteriorated goods =
Duty chargeable on the goods before

the damage or deterioration Value of the damaged
goods
Value of goods before damage
Without prejudice to the provisions of section 13, where it is shown to the

Remission Of Duty On
satisfaction of the AC or DC of Customs that any imported goods have
Goods Lost, Destroyed
been lost (otherwise than as a result of pilferage) or destroyed, at any
Or Abandoned
time before clearance for home consumption, the AC or DC shall remit
[Section 23]
the duty on such goods. [Sub-section (1)].
Provides that an importer can request Central Government to make rules

for permitting to denature/mutilate the imported goods, which are
ordinarily used for more than one purpose, so as to render them unfit for
one or more of such purpose.
Denaturing Or
If any imported goods can be used for more than one purpose and duty is
Mutilation Of Goods
leviable on the basis of its purpose of utilisation, than denaturing or
[Section 24]
mutilation of such goods is useful. By denaturing, goods are made unfit
for other purposes. After denaturing process, goods can be used only for
one purpose and accordingly duty can be levied.
Denaturing of Spirit Rules, 1972 specify procedure for denaturing spirit.

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 Goods derelict, wreck etc. [Section 21]

All goods, derelict, jetsam, flotsam and wreck brought or coming into India, shall be dealt
with as if they were imported into India, unless it be shown to the satisfaction of the
proper officer that they are entitled to be admitted duty-free under this Act.
 Exemption from Custom Duty [Section 25]
CG has Power to grant Exemption
General Special
Exemption Exemption
it may, by special order in each case,

exempt generally either exempt from payment of duty, any goods
absolutely or subject to on which duty is leviable only under
such conditions as may be circumstances of an exceptional nature
specified in the notification to be stated in such order

5
CHAPTER 2 Types of duty Classification of Goods in Tariff
SEC 2 BCD levied are specified in the (1) and (II) schedules
SEC 3
Additional customs duty
Determination of Rate for ACD 3(1) Determination of Rate for ACD 3(5)
If, like good not actually

It like article
produced or If rate is
is produced or
If imported manufactured in India notified by If not rate is
manufactured
article is but if likewise produced Central Govt. notified by
in India on
alcohol or manufactured then which does not Central Govt.
which excise
excise duty would have exceed 4%
duty is leviable
been leviable in India
CVD is CVD is CVD is payable @ ACD 3(1) is

applicable to goods of payable at the ACD 3(5) is
payable at the payable as
same class or rate as notified payable at
rate as mentioned in
dercription to which by CG by central 4%
notified by CG CETA 1985
imported article belong Govt.
SEC 4 PREFERENTIAL RATE

1. C.G. has power to notify preferential area
2.Duty is payable at preferential rate of imported goods being produce or manufacture in
preferential area
3.C.G. notify the rules for determination of goods produce or manufacture in preferential area
4. In the interest of trade C.G. may reduce or increased or discontinue preferential rate
5. If preferential rate increased then it should not exceeds normal Rate

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SEC 5 LOWER RATE OD DUTY UNDER TRADE AGREEMENT

1) C.G. may notify lower agreement between Govt. of India & Foreign Country
2) C.G. notify rules for determination of goods produce or manufacture in foreign country.
Anti-Dumpting Duty:
DETERMINATION OF MARGIN OF DUMPING
It is difference between
Normal value Export Price
If available If not available
If like goods are In case no or low If imported articles If imported articles

ordinarily Sold in the sales in domestic are resold to an are not resold to
country of market of exporting independent buyer an independent
exportation country buyer
“Normal value”, Comparable The cost of Export price”, The export The export price
in relation to representative production of in relation to price may be may be
an article, price of the the said article an article, constructed on constructed on
means the like article in the country means the the basis of such reasonable
comparable when exported of origin along price of the the price at basis as may be
price, in the from the with reasonable article exported which the determined in
ordinary course exporting addition for from the imported accordance with
of trade, for country or administrative, exporting articles are the rules made
the like article territory to an selling and country or first resold to
when sold in appropriate general costs, territory an independent
the exporting third country. and for profits, buyer
country or
territory

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Duty Protective Duty Safeguard Duty CVD on Anti Dumping Duty

(SGD) (any Subsidised Article
County)
Section 6 8B 9 9A
Authority to levy It is levied by C.G. It is levied by It is levied by C.G. It is levied by C.G.
on recommendation C.G.
of tariff commission
Condition/ purpose Tariff Commission To avoid import Import from any Where an article
of Levy Recommendation to of increased country / territory, exported from any
protect the interest quantities and in which pays any country or territory,
of any industry conditions to subsidy on to India at less
established in India. cause serious manufacture, than its Normal
injury to domestic production, Value.
industry. exportation or
transportation of
article.
Rate of Duty On the basis of SGD = Injury CVD = subsidy on Anti Dumping Duty
recommendation by margin (market imported goods = Margin of
Tariff Commission price in India - Dumping or injury
landed cost) margin w.e.lower
Landed cost =
FOB + BCD
Provisional Levy Not Relevant Valid for 200 Provisional levy is Provisional levy is
days from date of possible. Time possible. Time limit
imposition. limit not specified. not specified.
Maximum duration Not Relevant 4 years, 5 years, 5 years, extendable
of Levy extendable upto extendable another another 5 years
10 years. 5 years from date from date of such
of such extension extension
Retrospective Levy Not Possible Not Possible Upto 90 days Upto 90 days before
before the date of the date of
notification. notification.
Exemption to be No specified No SGD u/s 8B f No specified No ADD u/s 9A for
EOU / SEZ or 100 % EOU 100% EOU & unit
& unit in FTZ / in FTZ / SEZ
SEZ
Effects of Levy Such duties shall be in addition to any other duty imposed under this Act or under
any other law for the time being in force.

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ACD 3(7) to countervail levy of GST

(7) Any article which is imported into India shall, in addition,
• be liable to integrated tax
• at such rate, not exceeding forty per cent.
• as is leviable under section 5 of the Integrated Goods and Services Tax Act, 2017 on a
like article on its supply in India,
• on the value of the imported article as determined under sub-section (8). or Sub Section
(8A), as the case may be
(8) Valuation for ACD 3(7)
For the purposes of calculating the integrated tax under sub-section (7) on any imported
article where such tax is leviable at any percentage of its value,
the value of the imported article shall, notwithstanding anything contained in section 14 of
the Customs Act, 1962,
be the aggregate of—
(a) the value of the imported article determined under sub-section (1) of section 14 of the
Customs Act, 1962 or the tariff value of such article fixed under sub-section (2) of that
section, as the case may be;
and
(b) any duty of customs chargeable on that article under section 12 of the Customs Act,
1962 (BCD),
and
any sum chargeable on that article under any law for the time being in force as an addition
to, and in the same manner as, a duty of customs,
but does not include
• the tax referred to in sub-section (7) or
• the cess referred to in sub-section (9).
(8A) ACD on Warehouse Sale before clearance

Where the goods deposited in a
warehouse are sold to any person before clearance for home
consumption or export the value of such goods under subsection (7) shall be,—
(a) where the whole of the goods are sold-,
the value determined under sub-section (8) or
the transaction value of such goods, whichever is higher;
OR
(b) where any part of the goods is sold,
the proportionate value of such goods as determined under sub-section (8) or
the transaction value of such goods, whichever is higher:

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Provided that where the whole of the warehoused goods or any part thereof are sold more
than once before such clearance for home consumption or export, the transaction value of the
last such transaction shall be the transaction value for the purposes of clause (a) or clause
(b):
Provided further that in respect of warehoused goods which remain unsold, the value or the
proportionate value, as the case may be, of such goods shall be determined in accordance
with the provisions of sub-section (8).
Explanation.— For the purposes of this sub-section, the expression “transaction value”, in
relation to warehoused goods, means the amount paid or payable as consideration for the
sale of such goods.
ACD 3(7) = IGST
1) ACD 3(7) = IGST

2) It is leviable to counter balance that effects of GST payable on supply of like goods in
India. It is payable as IGST as per section 5 of IGST Act.
3) It is leviable on all goods except the goods as mentioned in ACD3(1)
4) Determination of duty IGST is payable @0%, 5%, 12%, 18%, 23%or any other rate
notified by CG on recommendation by council which should not exceeds 40%
5) Transaction value
Assessable value u/s 14(1) XX

(+)BCD XX
(+)Social welfare surcharge @10% XX
(+)NCCD XX
(+)protective duty/safeguard duty/ CVD on subside Article/anti dumping duty XX
Value for IGST (i.eACD3(7)) XXX
ACD 3(9) to countervail levy of GST Compensation Cess

(9) Any article which is imported into India shall, in addition,
• be liable to the goods and services tax compensation cess
• at such rate, as is leviable under section 8 of the Goods and Services Tax (Compensation to
States) Cess Act, 2017
• on a like article on its supply in India,
• on the value of the imported article as determined under sub-section (10) or sub-section
(10A), as the case may be

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(10) Valuation for ACD 3(7)

For the purposes of calculating the goods and services tax compensation cess under subsection
(9) on any imported article where such cess is leviable at any percentage of its value,
the value of the imported article shall, notwithstanding anything contained in section 14 of
the Customs Act, 1962,
be the aggregate of
(a) the value of the imported article determined under sub-section (1) of section 14 of the
Customs Act, 1962 or
the tariff value of such article fixed under sub-section (2) of that section, as the case may be;
and
(b) any duty of customs chargeable on that article under section 12 of the Customs Act,
1962,(BCD) and
any sum chargeable on that article under any law for the time being in force as an addition to,
and in the same manner as, a duty of customs,
but does not include
• The tax referred to in sub-section (7) or
• The cess referred to in sub-section (9).
(10A) ACD on Warehouse Sale before clearance
Where the goods deposited in a warehouse under the provisions of the Customs Act, 1962 are sold
to any person before clearance for home consumption or export under the said Act, the value of
such goods for the purpose of calculating the goods and services tax compensation cess under
sub-section (9) shall be,—
(a) where the whole of the goods are sold,
the value determined under sub-section (10) or
the transaction value of such goods, whichever is higher;
OR
(b) where any part of the goods is sold,
the proportionate value of such goods as determined under sub-section (10) or
the transaction value of such goods, whichever is higher:
Provided that where the whole of the warehoused goods or any part thereof are sold more than
once before such clearance for home consumption or export, the transaction value of the last of
such transaction shall be the transaction value for the purposes of clause (a) or clause (b):
Provided further that in respect of warehoused goods which remain unsold, the value or the
proportionate value, as the case may be, of such goods shall be determined in accordance with
the provisions of sub-section (10).
Explanation.—For the purposes of this sub-section, the expression “transaction value”, in
relation to warehoused goods, means the amount paid or payable as consideration for the
sale of such goods.

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14. SOCIAL WELFARE SURCHARGE ON IMPORTED GOODS
Social welfare surcharge(SWS) @ 10% is levied in lieu of education cesses for providing and
financing education, health and social security.
SWS is leviable on the aggregate of duties, taxes and cesses leviable on such goods under
section 12 of the Customs Act, 1962 and any sum chargeable on that article under any law for
the time being in force as an addition to, and in the same manner as, a duty of customs.
However, following duties shall be excluded for computing this cess:

(a) Safeguard duty
(b) Countervailing duty
(c) Anti-dumping duty
(d) Social welfare surcharge itself on imported goods
The SWS on imported goods are in addition to any other duties of customs or tax or cess
chargeable on such goods, under the Customs Act, 1962 or any other law for the time being
in force.
Social welfare surcharge leviable on integrated tax and goods and services tax compensation
cess has been exempted vide Notification No. 13/2018-Cus dated 02.02.2018.
15. Amendments in countervailing duty :
Section 9(1B) Absorption of countervailing duty:
Where the Central Government, on such inquiry as it considers necessary, is of the opinion that
✓ Absorption of countervailing duty has taken place

✓ whereby the countervailing duty so imposed is rendered ineffective,
it may modify such duty to counter the effect of such absorption, from such date, not
earlier than the date of initiation of the inquiry, as may be specified by the Central
Government by way of notification in the Official Gazette.
Absorption of countervailing duty is said to have taken place,—
(a) If there is a decrease in the export price of an article without any commensurate change
in the resale price in India of such article imported from the exporting country or territory; or
(b) Under such other circumstances as may be provided by rules.

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Sec 9(2A) : Non-applicability of countervailing duty:
Countervailing duty shall not apply to article imported by a 100% EOU or a unit in SEZ ,
unless,-
(i) it is specifically made applicable in such notification or to such undertaking or unit; or
(ii) such article is either cleared as such into the domestic tariff area or used in the
manufacture of any goods that are cleared into the domestic tariff area, in which case,
countervailing duty shall be imposed on that portion of the article so cleared or used, as was
applicable when it was imported into India.
2nd Proviso to section 9(6) : Revocation of CVD before specified period :
However, if the said duty is revoked temporarily, the period of such revocation shall not exceed
one year at a time.
16. Amendments in Anti-dumping duty :
Sec 9A(1B) Absorption of Anti-dumping duty:
Where the Central Government, on such inquiry as it considers necessary, is of the opinion that
✓ Absorption of anti-dumping duty has taken place

✓ Whereby the anti-dumping duty so imposed is rendered ineffective
it may modify such duty to counter the effect of such absorption, from such date, not earlier
than the date of initiation of the inquiry, as may be specified by the Central Government by
way of notification in the Official Gazette.
Absorption of anti-dumping duty is said to have taken place,—
(a) if there is a decrease in the export price of an article without any commensurate change in
the cost of production of such article or export price of such article to countries other than
India or resale price in India of such article imported from the exporting country or territory; or
(b) under such other circumstances as may be provided by rules.
Sec 9A(2A) Non-applicability of anti-dumping duty:
Anti-dumping duty shall not apply to articles imported by a 100% EOU or a unit in SEZ ,
unless,-
(i) It is specifically made applicable in such notification or to such undertaking or unit; or

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(ii) Such article is either cleared as such into the DTA or used in the manufacture of any
goods that are cleared into the DTA, in which case, anti-dumping duty shall be imposed on
that portion of the article so cleared or used, as was applicable when it was imported into
India.
2nd Provisio to Sec 9A(6) Revocation of Anti dumping duty before specified period :
However, if the said duty is revoked temporarily, the period of such revocation shall not
exceed one year at a time.
For the purposes of this sub-section, the expression
“100% EOU” shall have the same meaning as assigned to it in clause (i) of Explanation 2 to
subsection (1) of section 3 of the Central Excise Act, 1944.
“special economic zone” shall have the same meaning as assigned to it in clause (za) of
section 2 of the Special Economic Zones Act, 2005
17. AGRICULTURE INFRASTRUCTURE AND DEVELOPMENT CESS ON IMPORT OF CERTAIN

ITEMS:
✓ An Agriculture Infrastructure and Development Cess (AIDC) has been levied on import
of specified goods at the notified rate.
✓ This cess is used to finance the improvement of agriculture infrastructure and other
development expenditure.
✓ It shall be charged on value of goods as determined u/s 14 of the customs act.
✓ AIDC is in addition to any other duties of customs chargeable on such goods
✓ The provisions of the Customs Act, 1962 and the rules and regulations made
thereunder, including those relating to assessment, non-levy, short levy, refund,
exemptions, interest, appeals, offences and penalties shall apply in relation to the levy
and collection of the AIDC on ids as they apply in relation to the levy and collection of
duties of customs on such goods under the said Act, or the rules or regulations, as the
case may be.

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Classification of Goods
✓ Tariff Based on Harmonised system of Nomenclature (HSN)
Schedule to CTA, 1975
Schedule I Schedule II
Exported Good
Imported Goods
✓ HSN Code (8 Digit) : System of names and numbers for classifying product (WCO)
21 sections
(Schedule 1)
98 chapters Heading Sub- Headings Tariff items
HSN 1. Meaning: internationally accepted product coding system for categorisation

Harmonized and Classification of commodities and was conceived and devised by the
system of world Customs Organisation (WCD)
Nomenclature 2. Features: 8digit code suitable for multi-purpose nomenclature.
3. Reliance: HSN can be relied for classification under the Tariff Schedule, if
there is no conflict between Indian Tariff Schedule and HSN
4. Relevance of Notes: Section notes and chapter notes have legal status.

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✓ Rules of interpretation and explanatory notes
Determination of heading &

Subheading in CTA 1975
General Rule of
Explanatory
interpretation
Notes
(GRI)
6 Rules 3 Notes
 Important Points
Classification Determination of headings or sub headings of the CTA, 1975 under which the said goods
of Goods are covered
Features of
Tariff Columns in Customs Tariff Act, 1985 (CTA)
1 Tariff item Eight Digit Description
2 Description of Goods Names and Classifications
3 Units Kilograms, Metres, Units, Litres Etc.
4 Rate of Duty 30%, 10%, 4%, Nil Etc
5 Preferential rate of duty 20%, Nil etc
Eights Digit System [17011310]

First 2 digit indicates 17 Chapter No.
Next 2 digits indicates 01 Heading No.
Next 2 digits indicates 13 Subheading No.
Next 2 digits indicates 10 Tariff items
it is a unit and used to facilitate the collection,
Std. Unit of quantity comparison and analysis of trade statistics. Example
:CC,Cm,Mt

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Elaborate explanation regarding to scope of respective

section or chapter. It is part of the status & legally used
Section notes & Chapter
for classification
Notes
At the beginning of the sections, sections notes are given
At the beginning of the chapters, chapter notes are given
✓ General Explanatory Notes
There are three general explanatory notes included in the First Schedule. They are-
a) Dash System –
Dash System
- Single dash Indicates sub classification of article-covered in heading
Indicates sub classification of article preceded by 'Single

-- double dash
dash'
Triple & Indicates sub-sub classification of article preceded by

--- & ----
Quadruplicate 'Single or double dash'
b) Abbreviation –
Abbreviation % It Indicates that duty is on the basis of value of goods
c) Standard rate of duty applicable if no preferential rate specified : In any entry, if no

preferential rate of duty has been notified, the standard rate of duty shall be applicable
✓ General rules of interpretation
Purpose 1. To help in appropriate classification of goods

2. To give clear direction as to how the nomenclature in Schedule is to be interpreted and
3. To give statutory force to the interpretation Rules and the general explanatory notes.
Rule 1 Titles of sections or chapters are for ease of reference and do not decide classification
Terms of heading, section notes or Chapter Notes are relevant.

Rule 2 a) Incomplete Goods/ Unfinished / Disassembled/ Unassembled Goods = Complete Goods
(Provided that as presented the incomplete or unfinished article has the essential character)
Eg. Car without seats would still be classifiable as car

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Railway coaches removed without seats would still be railway coaches

b) Any reference to a material/ substance – includes mixture or combination of that
articles with others
Eg. Coffee will include coffee mixed with chicory
Natural rubber will cover mixture of natural and synthetic rubber
Classification of goods consisting of more than one material or substance shall be
according to the principles of rule 3
Rule 3 If goods are prima facie classifiable under 2 or more heading due to Rule 2(b) or any other
reason, apply Rule 3(a) to Rule 3(c)
Specific Rule Product Available Headings Classification
(a) Prefer specific Name plate a) Accessories of Accessories
heading to General motor vehicle motor vehicle
Heading b) Article of
plastic
VIP bag a) Plastic Article Suitcase
b) Suitcase
However mixed or composite goods or items in set, each heading shall be regarded as equally
specific.
Characteristic Rule Product Available Headings Classification

(b) If mixture consist of Book with 1) Book Classification as
different material classify in CD 2) CD book
that material which gives
them their essential character
Pen stand 1) Pen Stand Classification as
with clock 2) Clock pen stand
Later the better Product Available Headings Classification

(c) If both are Meter Vehicle a) Motor vehicle design It shall be classified as
equally specific use for for transport of Motor vehicle design for
prefer the latter transportation passenger (87 03) transport of goods
tariff head to of passenger b) Motor vehicle design (Mahindra & Mahindra
earlier tariff head and goods both for transport of goods 1999)
(87 04)
Rule 4 Akin Rule: Goods which cannot be classified in accordance with the above rules shall be
classified under the headings appropriate to the goods to which they are most akin
Rule 5 Classification of cases/containers used for Packaging of goods : Shall be classified with
specific article or set of articles. Eg. Camera cases, gun cases, necklace case

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Classification of Packing:
General Packing : Shall be covered under the heading of main article Eg. Leather cases
Special Packing : Shall be covered under the heading of main article
Exception:
✓ Double container capable of repetitive use should be classified separately.
(Example: Gas cylinders cannot be classified along with gas)
✓ When Packing material itself gives the essential character as a whole

Rule 6 Classification of goods in the subheadings of a heading shall be determined according to
the terms of those subheading notes and mutatis mutandis to the above rule
(Subheading at the same level are comparable. This implies that a subheading can be
compared only with another subheading within the same heading)
Trade Parlance If notes and headings does not cover any goods then trade understanding of
Theory goods is considered

19
CHAPTER 3 Importation and Exportation Procedures
 Procedure for Import of Goods

Section 29: Arrival Of Vessels And Aircrafts In India
Vessels or aircrafts entering India from outside India can only call or land at a customs port or a customs
airport. If CBIC can permit calling / landing of conveyance at any other place other than customs
station is permitted.
Exception: in relation to any vessel or aircraft, which is compelled by accident, stress of weather or other
unavoidable cause to call or land at a place other than a customs port or customs airport.
Section 30 : Delivery Of Arrival Manifest Or Import Manifest Or Import Report
After ensuring that the vessels are landed only in approved customs port or airports, further duty is cast
upon the person in charge of the vessel to deliver the arrival manifest or import manifest.
Import Manifest in case of Vessel or Aircraft and import report in case of vehicle
Particulars Import Document Time limit for Mode of

presentation of IM/IR Presentation
Where the imported Arrival manifest or Any time prior to the Electronic filing*
goods are brought in a import manifest arrival of the vessel
vessel
Where the imported Arrival manifest or Any time prior to the Electronic filing*
goods are brought in an import manifest arrival of the aircraft
aircraft
Where the imported Import Report Within twelve hours Manual filing
goods are brought in a after its arrival in the
vehicle customs station
Penalty : if Above section contravenes then the person-in- charge would be liable to a penalty up to
Rs. 50,000.
Belated filing of IGM: Arrival manifest or import manifest/Report filed belatedly may also be accepted by
the proper officer on valid justified grounds.
Amendment to IGM: If the proper officer is satisfied that the arrival manifest or import manifest or
import report is in any way incorrect or incomplete and there is no fraudulent intention, he may permit it
to be amended or supplemented

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Section 30A: Passenger and Crew Arrival Manifest and Passenger Name Record Information.
The person in-charge of conveyance that enters India, shall deliver to the Proper Officer.
(i) the passenger and crew arrival manifest before arrival in the case of an aircraft or a vessel and upon
arrival in the case of a vehicle; and
(ii) the passenger name record information* of arriving passengers, in such form, containing such
particulars, in such manner and within such time, as may be prescribed.
 Other Provisions relating to conveyance carrying imported goods
Sections Particulars
Imported Goods Not To Be Unloaded Unless Mentioned In Arrival Manifest Or Import
Section 32
Manifest Or Import Report
Section 33 Loading And Unloading Of Goods At Approved Places Only
Section 34 Goods Not To Be Loaded Or Unloaded Except Under The Supervision Of Customs Officer
Section 36 Restrictions On Unloading And Loading Of Goods On Holidays Etc.
Section 37 The Proper Officer Has Power To Board Conveyance
Section 38 The Proper Officer Has Power To Require Production Of Documents And Ask Questions
 Section 45: Restrictions On Custody And Removal Of Imported Goods

 Once the imported goods have entered the Customs area, there arises the question of who is
responsible for the safe custody of goods.
 Responsibility of Custodian of goods:
(i) Maintain a proper record of goods received from the carriers and send a copy of the record to the
proper officer.
(ii) Not to permit such goods to be removed from the customs area or allow them to be dealt with
otherwise except under the specific permission in writing of the proper officer or in accordance
with a general procedure that may be prescribed that avoid subjectivity of the officer as to the
manner of removal of such goods.
 Section 46: Filing of Import bill of entry

Bill of Entry is a document of assessment and when assessed becomes an assessment order. With
this extent of automation, Customs expects that filing of bill of entry and payment of duty is on the
automated system of customs department or CAS.
The importer who presents a bill of entry shall ensure the following, namely:—
(a) the accuracy and completeness of the information given therein;

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(b) the authenticity and validity of any document supporting it; and
(c) compliance with the restriction or prohibition, if any, relating to the goods under this Act or under
any other law for the time being in force.
Bill of Lading: The Bill of Lading given by the carrier of the goods is the importer’s document of title to
the goods. The Bill of Lading covers all the goods imported with full description.
Time limit for filing: Before the end of following the day on which aircraft / vessel arrives but in any
case bill of entry may be presented at any time not exceeding thirty days prior to the expected arrival
of the aircraft/vessel.
 Section 47: Clearance of Goods

Time limit for payment of import duty: The importer shall pay the import duty—
(a) on the date of presentation of the bill of entry in the case of self- assessment; or
(b) within one day (excluding holidays) from the date on which the bill of entry is returned to
him by the proper officer for payment of duty in the case of assessment, reassessment or provisional
assessment; or
(c) in the case of deferred payment, from such due date as may be specified by rules made in this
behalf, and if he fails to pay the duty either in full or in part within the time so specified, he shall pay
interest on the duty not paid or short-paid till the date of its payment.
The rate of interest shall be not below 10% and not exceeding 36% per annum and shall be
fixed by the central government. However, the interest may be waived by the CBIC in public
interest.

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 Deferred Payment of Import Duty Rules
Information about intent to avail benefit of Notification: An eligible importer intending to avail the
benefit of deferred payment shall intimate to the Principal Commissioner/Commissioner of Customs, having
jurisdiction over the port of clearance, his intention to avail the said benefit who on being satisfied with
the eligibility of the importer allow him to pay the duty by due dates.
Due dates for deferred payment of import duty—
Due date of payment of duty, inclusive of
Goods corresponding to Bill of Entry
Sr No. the period (excluding holidays) as mentioned
returned for payment from
in section 47(2)
1 1st day to 15th day of any month 16th day of that month
16th day till the last day of any month

2 1st day of the following month
other than March
3 16th day till the 31st day of March, 31st March
CG considers it necessary and expedient, it may under Exceptional circumstances and for reasons
to be recorded in writing allow payment to be made on a different due date.
Deferred payment not to apply in certain cases:
If there is default in payment of duty by due date more than once in three consecutive months, this
facility of deferred payment will not be allowed unless the duty with interest has been paid in full.
The benefit of deferred payment of duty will not be available in respect of the goods which have not
been assessed or not declared by the importer in the entry.
The eligible importer shall be permitted to make the deferred payment if he has—
(i) paid the duty for a bill of entry within due date and
(ii) paid the differential duty for the same bill of entry along with the interest on account of
reassessment within one day (excluding holidays).
Electronic payment of duty: The eligible importer shall pay the duty electronically: However, the
Assistant/Deputy Commissioner of Customs may for reasons to be recorded in writing, allow payment of
duty by any mode other than electronic payment.
Mandatory Electronic Payment Of Duty: The Central Government has notified the following classes
of importers who have to pay customs duty electronically, namely:-
(i) Importers registered under Accredited Clients Programme
(ii) Importers paying customs duty of Rs. 10000 or more per bill of entry
The importer desirous to make use of the e-payment facility first needs to have an internet
account with a designated bank.

23
Summary Book
 Section 49: Storage Of Imported Goods In Warehouse Pending Clearance Or Removal
Where the Assistant Commissioner/Deputy Commissioner of Customs is satisfied on the application

of the importer that––
(a) the goods cannot be cleared within a reasonable time in the case of imported goods, whether
dutiable or not, entered for home consumption.
(b) the goods cannot be removed for deposit in a warehouse within a reasonable time in the case of
any imported dutiable goods, entered for warehousing.
then in such cases, goods can be stored in a public warehouse for a period not exceeding 30 days.
Such goods deposited under public warehouse will not be covered under Chapter IX of the Act. However,
the Principal Commissioner / Commissioner of Customs may extend such period of storage for
further 30 days at a time.
 Procedure for Export of Goods
The first and foremost duty cast on the master of the vessel u/s 40 is that export goods are not to be
loaded unless duly passed by Proper Officer.
The person-in-charge of a conveyance shall not permit the loading at a customs station
(a) of export goods, other than baggage and mail bags, unless a shipping bill or bill of export or a
bill of transshipment, as the case may be, duly passed by the proper officer, has been handed over to
him by the exporter;
(b) of baggage and mail bags, unless their export has been duly permitted by the proper officer.
This is the most important responsibility cast on the person-in-charge of the conveyance has to
give to the Customs Authorities a complete list of the cargo exported from India and taken by the
conveyance under his charge.
Penalty : If the above mentioned clause is contravened by Person in charge then he shall be liable for
fine of Rs. 50000/-
 Section 41A: Passenger And Crew Departure Manifest And Passenger Name Record Information
The person-in-charge of a conveyance that departs from India to a place outside India or any other
person as may be specified by the Central Government, shall deliver to the proper officer—
(i) the passenger and crew departure manifest; and
(ii) the passenger name record information of departing passengers, in such form, containing such
particulars, in such manner and within such time, as may be prescribed.

24
Summary Book
 Flow of Export
(i) The exporter files an application for export of goods known as Shipping Bill.
(ii) After the appraising department, assesses the export duty on the shipping bill, export cess etc. are
collected.
(iii) Thereafter the Shipping Bill along with the export cargo is presented to the Customs officers in
charge of supervision of the loading of the Cargo. (These officers are generally called Preventive Officers
in the major Custom Houses.) The Preventive Officer after satisfying himself that all the customs
checks including Export Trade Control license and export duty payment have been completed, will
endorse the shipping bill with a “Let Ship” order.
(iv) On receipt of the cargo on board the ship, the master/mate/agent of the ship issues a receipt of
the quantity and particulars of the cargo loaded on the ship.
(v) If the ship is not berthed alongside the quay and the goods have to be taken to the ship by
boats/lighters the boat note procedure would be followed.
(vi) When the Shipping Bill is presented to the master/agent/mate of the vessel, the export cargo will
be permitted to be loaded.
(vii) The Customs Officer endorses on the Shipping Bill the quantity of the goods-loaded into the ship
under the Shipping Bill.
 Difference between Transit and Transhipment
Transit Transhipment
(i) Section 53 of the Customs Act, 1962 (i) Section 54 of the Customs Act, 1962 provides
provides for transit of goods. for transhipment of goods.
(ii) In case of transshipment of goods, the

(ii) In case of transit of goods, goods are
conveyance changes i.e., the goods are unloaded from
allowed to remain on the same conveyance.
one conveyance and loaded in another conveyance.
(iii) In transshipment of goods, continuity in the

(iii) In case of transit of goods, there is
records is not maintained as the goods are transferred
continuity of records.
to another conveyance.

25
Summary Book
Phased implementation of Electronic Cash Ledger (ECL) in Customs [Section 51A]
The Electronic Cash Ledger (ECL) functionality is covered in Section 51A of the Customs Act,
1962. It provides enabling provision whereby the importer, exporter or any person liable to pay
duty, fees etc., under the Customs Act, has to make a non-interest- bearing deposit with the
Government for the purpose of payment.
Section 51A(4) provides that CBIC may by notification exempt certain deposits to which
provisions of Electronic Cash Ledger will not be applicable. Accordingly, CBIC has exempted
following deposits from the provisions of section 51A of the Customs Act till 30.11.2023-
(i) with respect to goods imported or exported in customs stations where customs
automated system is not in place
(ii) with respect to goods imported or exported at international courier terminals
(iii) with respect to accompanied baggage
(iv) other than those used for making electronic payment of:
a. any duty of customs, including cesses and surcharges levied as duties of
customs
b. IGST;
c. GST Compensation Cess;
d. interest, penalty, fees or any other amount payable under the Act, or Customs
Tariff Act, 1975
The phased introduction of ECL is aimed at leveraging technology and reforming the payment
process, inter-alia related to clearance of goods as the deposit may be held in ECL by the
trade for making subsequent transaction-wise payments of various types. This has potential to
easing compliance in numerous ways.

26
CHAPTER 4 Valuation under Customs
 Valuation of customs Duty
Section 14(1) – Transaction Value of Imported or Exported Goods
- Price actually paid / payable for goods when sold for export to/from India
- for delivery at time & place of importation/ exportation
- buyer & seller not related
- price sole consideration for sale
- subject to conditions prescribed by rules.

Section 14 (2) – Tariff Value
CBEC may notify Tariff values for any class of imported/ export goods
Authors Note :
1) For Import = Assessable Value is CIF
2) For Exports = Assessable value is FOB
 Relevant date for rate of duty and Tariff valuation of Imported Goods
Scenario Relevant Date

Import Goods
Entered for home Later of (i) date of filing B/E for home consumption or (ii) date of
consumption entry inwards to vessel/arrival of vehicle/aircraft
Cleared from Warehouse date on which Bill of Entry for home consumption is presented
Any other goods date of payment of duty

Export Goods
Entered for export date of the ‘let export’ order
Any other goods date of payment of duty
 Relevant date for Rate of Exchange

Imported Goods – Date of filing of Bill of entry
Warehoused Goods – Date of presentation of into bond bill of entry
Export Goods – Date of filing shipping Bill / bill of export

27
Summary Book
 Format for valuation of Goods For Imported Goods
Format for the purpose of Determination of Assessable Value and calculation of custom duty
Particulars Amount
Ex-Factory Cost XXX
Add: Transport Charges at Exporter's Country XXX
Add: Handling Charges and Loading Charges XXX
FOB (Free on Board) XXX
Add : Adjustment for 10(1) expenses i.e. Commission, Engineering, design work,royalties
XXX
and license fees and any other payment made as a condition of sale
Adjusted FOB XXX
Add : Adjustment for 10(2) Expenses i.e. Freight Cost XXX
Add : Adjustment for 10(2) Expenses i.e. Insurance cost XXX
CIF being Assessable Value - (A) XXX
BCD @ Applicable % on (A) - (B) XXX
Add: Social Welfare Surcharge (SWS) @ 10% on (A) - (C) XXX
Total value for the purpose of levy of IGST u/s 3 (7) of Customs Tariff Act (A+B+C) XXX
IGST @ Applicable Rate (D)

Total Custom Duty Payable (B+C+D) XXX
 Value of Imported Goods

Value of Imported goods – to be applied sequencially
Customs Valuation (Determination of value of Imported Goods) Rules, 2007
• TV of imported goods [Rule 3]
• TV of identical goods [Rule 4]
• TV of similar goods [Rule 5]
• Deductive Value based on identical/similar imported goods [Rule 7]
• Computed Value [Rule 8]
• Residual method (Rule9)

28
Summary Book
 Adjustment for Rule 10 (1) Expenses

(a) Commission, brokerage and Packing charges
If incurred by the buyer but are not included in the price actually paid or payable :
(i) commissions and brokerage, except buying commissions;
(ii) the cost of containers which are treated as being one for customs purposes with the goods in
question;
(iii) the cost of packing whether for labour or materials.
Note: “buying commissions” means fees paid by an importer to his agent for the service of
representing him abroad in the purchase of the goods being valued.
(b) Free assistance by Buyer
Apportioned value of goods or services: where supplied directly or indirectly by the buyer free of
charge or at reduced cost for use in connection with the production and sale for export of imported
goods to the extent that such value has not been included in the price actually paid or payable,
namely:-
(i) materials, components, parts and similar items incorporated in the imported goods;
(ii) tools, dies, moulds and similar items used in the production of the Imported goods;
(iii) materials consumed in the production of the imported goods;
(iv) engineering, development, art work, design work, and plans and sketches undertaken elsewhere
than in India and necessary for the production of the imported goods.
(c) Royalty and License Fees (If Includes patent, copy rights, )
(d) The value of any part of the proceeds of any subsequent resale, disposal or use of the
imported goods that accrues, directly or indirectly, to the seller;
(e) all other payments actually made or to be made
• as a condition of sale of the imported goods,
• by the buyer to the seller, or by the buyer to a third party to satisfy an obligation of the seller
• to the extent that such payments are not included in the price actually paid or payable.

29
Summary Book
 Adjustment for Rule 10 (2) Expenses i.e. Cost of Transportation & Insurance
Cost of Insurance
If Cost Not Ascertainable If Cost Ascertainable
If FOB value is If FOB Value not ascertainable Actual cost to be

and Cost of Transport, loading,
ascertainable included for Valuation
unloading and handling
charges is ascertainable
1.125 % of
FOB
1.125 % of
Such sum
Cost of Transport, loading,

unloading and Handling Charges
By Air By Sea
Ascertainable Not Ascertainable Ascertainable
Actual cost but If FOB Value FOB value is not ascertainable Actual
restricted to 20% of is but the sum of FOB value Expenses to
Ascertainable and the cost of insurance is be added
FOB
ascertainable,
20 % of
FOB
20 % of Such Sum
 Valuation Rules
Rule 3
• No restriction on buyer for disposal of goods
• Sale not subject to conditions for which value cannot be determined
• No further consideration to accrue to seller unless adjustable as per rule 10

30
Summary Book
• Buyer & seller are unrelated; if related TV is accepted when examination of circumstances of
sale indicate that relationship didn’t influence price & importer proves that price is close to
TV of identical/ similar goods, in sales to unrelated buyers; deductive/ computed value of
identical/similar goods
Rule 4
Value = TV of Identical Goods
• imported at/ about same time
• at same commercial level & in substantially same qty (or value is accordingly adjusted)
• as goods being valued
Rule 5
Value = TV of Similar Goods
• imported at/ about same time
• at same commercial level & in substantially same qty (or value accordingly adjusted)
• as goods being valued
Rule 7
Value = Deductive Value
• If goods being valued/ identical/ similar goods are sold in India, in the same condition as
imported, at/ about same time:
• AV = S.P – [Commission, sales expenses, profit, transport & insurance, customs duties & other
taxes payable], IN INDIA.
• S.P. is unit price at which imported/ identical/ similar imported goods sold in greatest aggregate
qty to unrelated persons in India
Rule 8
Value = Computed Value
• Computed Value = Sum of Cost of material, processing employed in producing imported goods,
profit & general Expenses reflected in sale of same class goods made in country of exportation
for export to India & expenses/ cost under rule 10(2).

31
Summary Book
 Difference Between Identical Goods and Similar goods
“Identical Goods”
Same Physical Same Same producer

Imported Goods features, quality Country of (if not then
Etc. others allowed)
production
“Similar Goods”
Like feature and

component Same producer
material Same
(if not then
Imported Goods commercially Country of
interchangeably others
production
with imported allowed)
goods

32
Summary Book
 Valuation of Exported Goods

Rule 3 : Determination of Method of Valuation
• Subject to rule 8, the value of export goods shall be the transaction value.
• The transaction value shall be accepted even where the buyer and seller are related, provided that
the relationship has not influenced the price.
• If the value cannot be determined under the provisions of sub-rule (1) and sub-rule (2), the value
shall be determined by proceeding sequentially through rules 4 to 6.
Rule 4 : Determination Of Export Value By Comparison
The value of the export goods shall be based on the Transaction value of the goods of the like kind
and quality, exported at or about the same time, to other buyers in the same destination country of
importation or in its absence another destination country of importation adjusted in accordance with
Rule 4(2).
Rule 5 : Computed Value Method
If the value cannot be determined under rule 4, it shall be based on a computed value, which shall
include the following:-
(a) cost of production, manufacture or processing of export goods;
(b) charges, if any, for the design or brand;
(c) an amount towards profit.
Rule 6 : Residual Method
Subject to the provisions of rule 3, where the value of the export goods cannot be determined under
the provisions of rules 4 and 5, the value shall be determined using reasonable means consistent with
the principles and general provisions of these rules provided that local market price of the export goods
may not be the only basis for determining the value of export goods.

33
CHAPTER 5 Stores, Baggage
 Section 2(38) - Stores
Stores
Includes, fuels, spares parts and other

Means goods for used in Vessel or Aircraft articles of equipment whether or not for
immediate fittings
 Foreign going vessel
foreign-going vessel or aircraft” means any vessel or aircraft for the time being engaged in the
carriage of goods or passengers between any port or airport in India and any port or airport outside
India, whether touching any intermediate port or airport in India or not, and includes—
• any naval vessel of a foreign Government taking part in any naval exercises;
• any vessel engaged in fishing or any other operations outside the territorial waters of India;
• any vessel or aircraft proceeding to a place outside India for any purpose whatsoever;
 Provision of Stores
Section 85: Stores allowed to deposited in warehouse without warehousing provisions of warehousing
Section 86: Transit and transhipment of stores allowed without duty
Section 87: Imported stores may be consumed on board a foreign-going vessel or aircraft
Section 88: 1) Duty paid imported stores eligible for drawback as follows:
Aircraft Fuel and lubricant oil 100 % drawback
Other stores i.e. (e.g. food, 98 % drawback
drink etc.)
Vessels Fuel, Lubricant oil and other 98 % drawback
stores
Section 89: Goods manufactured in India and required as a stores on Foreign going vessel / Foreign
aircraft
Section 90: Imported Stores may be consumed on board a ship of the Indian Navy.

34
Summary Book
 Baggage
Baggage
Include - but doesnot

Unaccompanied include Motor
baggage vehicle
 Rate of Duty on baggage is 38.5% ( including social welfare surcharge of 10% )

 Provision of Baggage
Section 77: For clearing the baggage, the owner shall make a declaration of its content to proper
officer
Section 78: Relevant date for custom duty : date on which declaration is made in respect of such
baggage.
Section 79: Bonafide Baggage is exempted from duty to the extent specified in rules.
Rule 3: Passengers arriving from countries other than Nepal, Bhutan or Myanmar
Situations Free Allowance
Class of passengers : Indian resident or Foreigner residing in India or Tourist of Indian origin
(i) Used personal effects and travel souvenirs; and Free
(ii) Articles other than mentioned in Annexure – I Rs. 50,000
Class of passengers : Tourist of foreign origin
(ii) Articles other than mentioned in Annexure – I Rs. 15,000
Class of passengers : Infant
(ii) Articles other than mentioned in Annexure – I No Benefit

35
Summary Book
Rule 4 : Passengers arriving from Nepal, Bhutan or Myanmar

Situations Free Allowance
Class of Passengers : Indian resident or Foreigner residing in India or Tourist, excluding an
infant
(ii) Articles other than mentioned in Annexure – I
(a) Passenger is arriving by Land Route No Benefit
(b) Passenger is arriving by other Route Rs. 15,000
Class of Passengers : Tourist of Foreign origin
(ii) Articles other than mentioned in Annexure – I
(a) Passenger is arriving by Land Route No Benefit
(b) Passenger is arriving by other Route Rs. 15,000
Class of Passengers : Infant
(ii) Articles other than mentioned in Annexure – I No Benefit
Annexure - I (See Rule 3, 4 and 6)
1. Fire arms.
2. Cartridges of fire arms exceeding 50.
3. Cigarettes exceeding 100 sticks or cigars exceeding 25 or tobacco exceeding 125 gms.
4. Alcoholic liquor or wines in excess of two litres.
5. Gold or silver in any form other than ornaments.
6. Flat Panel (Liquid Crystal Display/Light-Emitting Diode/Plasma) television.
Rule 5 : Jewellery
Class of Passengers : Passenger residing abroad for more than one year
Origin country from which the passenger is coming
Gentleman Passenger Jewellery up to a weight of 20 gms with a value cap of Rs. 50,000
Lady Passenger Jewellery up to a weight of 40 gms with a value cap of Rs. 1,00,000
Rule 6 : Transfer of Residence (Refer Main book for complete provision)
Rule 8 : Provision Regarding Unaccompanied Baggage
Unaccompanied baggage refers to Baggage that is not accompanied with passenger.
Unaccompanied baggage may arrive within a period of 1 month after passengers arrival or before
2 months arrival (condonation of earlier arrival by AC/DC)
These rules shall apply to unaccompanied baggage except where they have been specifically
excluded.

36
Summary Book
Rule 9 : Crew Baggage

These baggage rules are also applicable to the members of the crew engaged in foreign going
conveyance for importation of their baggage, when they are finally paid off on termination of
their engagement. However, other crew members of a vessel and aircraft will be allowed to
bring items like chocolates, cheese, cosmetics and other petty gift items for their personal
or family use for a value not exceeding 1500. Family, under these rules, includes all persons who
are residing in the same house and form part of the same domestic establishment.

37
CHAPTER 6 Refunds
Procedure to Claim the Refund

PARTICULARS CUSTOMS PARTICULARS CUSTOMS
Presentation of claim by the Any person claiming refund of any duty and interest paid on such duty
applicant a) Paid by him in pursuance of an order of assessment, or
b) Borne by him
shall present a claim in proper (Form-R), along with
 All the relevant document supporting his claim and also
 The copies of documents/ records supporting his declaration
that he has not passed on the duty incidence.
Time Limit for claiming the 1 year from relevant date
refund Note: No time limit if duty paid under protest
Order for refund The AC/DC may make the refund order:
 The amount so determined shall be credited to Consumer
Welfare Fund.
 But appellant is entitled to refund only if he had not passed
on the incidence of duty.
RELEVANT DATE FOR REFUND
Normally, the relevant date is date of

payment of customs duty & interest if
any, but if
Duty is provisionally
If duty is paid by buyer
assessed.
Relevant date is date of final Relevant date is date of

assessment purchase of goods

38
Summary Book
Circumstances under which refund will be paid to the assessee or in which

Unjust Enrichment is not applicable.
1. The duty and interest, if any, paid on such duty paid by the importer, or the
exporter, as the case may be if he had not passed on the incidence of such
duty and interest to any other person.
2. The duty and interest, if any, paid on such duty on imports made by an
individual for his personal use.
3. The duty and interest, if any, paid on such duty borne by the buyer, if he
had not passed on the incidence of such duty and interest to any other
person.
4. The export duty as specified in Section 26 [see below]
5. Drawback of duty payable under Sections 74 and 75
6. The duty and interest, if any, paid on such duty borne by any other such
class of applicants as the Central Government may, by notification in the
Official Gazette, specify.
REFUND OF EXPORT DUTY [SEC 26 ]
Where on the exportation of any goods any duty has been paid, such duty shall be
refunded to the person by whom or on whose behalf it was paid, if -
a) The goods are returned to such person otherwise than by way of re-sale;
b) The goods are re-imported within one year from the date of exportation; and
c) An application for refund of such duty is made before the expiry of six
months from the date on which the proper officer makes an order for the
clearance of the goods.
BELATED DISBURSEMENT OF REFUND BY C.G. [CUSTOMS-SEC 27A]

a) If any duty ordered to be refunded to an applicant is not refunded within
three months from the date of receipt of application, there shall be paid to
that applicant interest.
b) Rate of interest : 6% p.a. by the C.G.
c) Duration of interest : Interest is payable from the date of expiry of 3 months
from the date of receipt of application till the date of refund of duty.
d)Interest shall be paid even where refund is granted by an Appellate Authority.

39
CHAPTER 7 Audit
CUSTOMS AUDIT [SECTION 99A]

In supersession of On-site Post Clearance Audit at Premises of Importer and Exporter
Regulations, 2011, Government has notified Customs Audit Regulations, 2018. For this reason, a
separate section 99A is introduced authorizing the proper officer to audit of assessment
that has already been conducted at the time of customs clearance. Such audit is permitted
to the carried out swiftly either at the premises of the auditee or at the office of the
proper officer.
It may be noted that ‘auditee’ is defined in this section to include not only the principal
(importer or exporter) but also persons concerning themselves with dealing with goods
attracting section 12 of Customs Act.
Pursuant to these regulations, ‘auditee’ is defined in 2(c) to mean “a person who is subject to
an audit under section 99A of the Act and includes an importer or exporter or custodian
approved under section 45 or licensee of a warehouse and any other person concerned directly
or indirectly in clearing, forwarding, stocking, carrying, selling or purchasing of imported goods
or export goods or dutiable goods”
Salient feature of this audit procedure are as follows:

(i)Auditee is to preserve records for conduct of this audit for a period of five years
(ii)Risk based assessment will identify persons to be audited
(iii)Audit will be conducted at the premises of the auditee by the authorized officers
who will intimate fifteen days in advance of their schedule visit
(iv)Based on the findings, auditee may accept the liabilities and voluntarily discharge
the duty, interest and penalty, as applicable
(v)Assistance of experts can be availed for conducting this audit such as CA, CWA or
IT professionals with permission of Principal Commissioner/ Commissioner of
Customs
(vi)Contravention of these Regulations attracts penalty of ` 50,000

40
Chapter 8 Warehousing
–
The imported goods after landing may be allowed to be removed to a warehouse without payment
of customs duty. Duty is paid at the time of clearance from the warehouse.
The consideration the importer is required to pay for this facility is that:-
(i) he should bind himself to pay to the Government a sum equal to thrice the
amount of total duty determined, with such surety or security as may be
required and
(ii) he should agree to pay duty on the goods cleared from such warehouse at the
rate of duty and valuation prevalent on the date on which a bill of entry in
respect of such goods is presented.
An importer who intends to get his goods warehoused files an into-bond bill of Entry [Bill of
entry for Warehousing], which is assessed to customs duty at the port of import. The importer
is also required to execute a bond to cover the risk to customs duty, interest, penalty etc.
Once the bond is executed by the importer, the assessing officer at the port of import permits
the goods to be deposited without payment of duty in a warehouse.
When the importer wishes to clear the goods from warehouse, ex-bond bill of entry needs to
be filed and applicable duty be paid by importer. Thereafter, the proper officer will pass the order
for clearance of goods from warehouse.

41
Warehousing
1. Types Of Warehouses [Section 57, 58 And 58a]
Public Warehouses Private Warehouses Special Warehouses

Section 57 Section 58 Section 58A
A site or building A site or building A site or building

licensed by licensed by licensed by
Principal Principal Principal
CCus./CCus. CCus./CCus. CCus./CCus.
wherein dutiable wherein dutiable

wherein dutiable
goods imported by goods notified by
goods may be
licensee are CBIC may be
deposited
deposited deposited
They are under It remains under

record-based physical record of
controls & not PO [under customs
under customs lock lock]
2. Cancellation Of License [Section 58B]
License can be cancelled if the licensee contravenes any of the provisions of the customs law or
breaches any of the conditions of the licence.
licensee shall be given a reasonable opportunity of being heard.
During the pendency, operations of the warehouse may be suspended. During suspension no goods
shall be deposited in such warehouse.
Where the licence is cancelled, the goods warehoused shall:

(i) be removed from such warehouse to another warehouse or
(ii) be cleared for home consumption/export.
The goods shall be removed within 7 days

42
Warehousing
3. Warehousing Bond [Section 59]
Warehousing Bond +
Prescribed security
Importer has to furnish Warehousing

Bond + Security for warehousing goods
/ or for transferring goods from one
warehouse to another warehouse,
without paying customs duties
Consignment Bond General Bond
Thrice the amount of duty AC / DC may permit importer to execute

assessed General Bond in respect of goods
warehoused within a specified period
4. Period For Which Goods May Remain In A Warehouse [Section 61]
Time period for which different class of goods may be warehoused is tabulated as under:
S. No. Class of goods Time for which the goods may remain
warehoused
1. Goods for use in any 100% EOU/ EHTP/ STP/
warehouse where manufacture or other
operations are permitted u/s 65
(i) Capital goods Till the clearance of such goods from
warehouse
(ii) Other goods Till the consumption or clearance of such
goods from warehouse
2. Goods other than 1 above Till the expiry of 1 year from the date of
order permitting deposit of goods in
warehouse

43
Warehousing
B. Interest on warehoused goods
S. No. Class of goods Provisions relating to interest payable

1. Capital goods and other goods for use in No interest is chargeable for the period that
any 100% EOU/ EHTP/ STP/ warehouse the goods remain warehoused.
where manufacture or other operations
are permitted under section 65
2. Goods other than 1 above Interest will be payable if goods remain in the
warehouse beyond 90 days from the date on which
the order permitting deposit of goods in a
warehouse under section 60 is made.
Rate of interest 15% p.a.
Amount on which Duty payable at the
interest is payable time of clearance of
the goods
Period for which From the expiry of
interest is payable the 90 days till the
date of payment of
duty on the
warehoused goods.
Waiver of interest : The Board may waive the interest (whole or partial) in individual cases by
ad-hoc order or by notification in respect of any class of goods.
Further, the Board may also notify the class of goods in respect of which the interest will be
chargeable from the date of order permitting deposit of goods in a warehouse U/s 60.
5. Manufacture And Other Operations In Relation To Goods In A Warehouse [Sections 65 &66]
The owner of any warehoused goods may carry on any manufacturing process or other operations
in relation to warehoused goods. After manufacture, the produced goods :
 May either be exported out of India or

 Cleared for home consumption.
The duties are fully remitted if the goods resulting from such operations are exported.
Import duty, interest, fine and penalties, if any, are payable only if the resulting goods or imported
goods are cleared in the domestic market (ex-bonding).

44
Warehousing
Further, the clearance of such goods for domestic consumption squarely qualifies as supply under
GST law and would be leviable to tax under section 9 of the CGST Act or section 5 of the IGST
Act depending upon whether the supply from warehouse is an intra-State supply or inter-State
supply.
6. Removal of Goods From The Warehouse [Sections 67, 68 & 69]
The warehoused goods can be removed from the warehouse for any of the following three reasons:
 Transfer from one warehouse to another [Section 67]; or

 Clearance for home consumption [Section 68]; or
 Clearance for export [Section 69].
7. Allowance In Respect of Volatile Goods [Section 70]
In some cases, warehoused goods are subject to normal loss owing to volatility of such goods and
manner of their storage. Neither the importer nor the warehouse keeper can be asked to bear
the duty burden of this loss.
When any warehoused goods notified under this section, are at the time of delivery from a warehouse
found to be deficient in quantity on account of natural loss, the AC/DC of Customs may remit the
duty on such deficiency.
8. Improper Removal of Goods From Warehouse [Sections 71 & 72]
Warehoused goods can be removed from warehouse only in situations stipulated under sections
67, 68 and 69. As a corollary, it follows that warehoused goods cannot be removed otherwise.
Sections 71 and 72 provide for such a prohibition and the penal action thereon.
Section 71 prohibits the removal of the warehoused goods out of a warehouse except on clearance
for home consumption, or export, or for removal to another warehouse, or as otherwise provided
by the Customs Act.
Section 72 enumerates the cases where the proper officer may demand, the full amount of duty
chargeable on account of warehoused goods together with interest, fine and penalties payable in
respect of such goods. The owner of the warehoused goods is required to forthwith pay the same.

45
Warehousing
Cases enumerated in section 72 are as follows:

 Where any warehoused goods are removed from a warehouse in contravention of section
71
 Where any warehoused goods have not been removed from a warehouse at the expiration
of the period during which such goods are permitted under section 61 to remain in a
warehouse
 Where any goods in respect of which a bond has been executed under section 59 and
which have not been cleared for home consumption or export are not duly accounted for
to the satisfaction of the proper officer.
In case the owner fails to pay duty chargeable on account of warehoused goods together with
interest, fine and penalties payable in respect of goods warehoused by it, the proper officer may
cause such goods to be detained and sold, such sufficient portion of his goods, if any, in the
warehouse, as the said officer may deem fit. However, the proper officer has to first give a notice
to the owner (any transfer of the goods notwithstanding) for the same.

46
Chapter 9 FTP
–
1. Administration : Authority: DGFT, Other Authorities: Customs, CBIC, RBI and State GST
Departments
2. Contents of foreign Trade Policy :

a. FTP 2023: having 11 Chapters giving basic policy. Notified by CG on 01.04.2023.
b. Handbook of Procedures 2023: containing 11 chapters
c. ITC (HS) classification of exports and import items:
ITC (HS)
Schedule I Schedule II SCOMET
Import Policy Export Policy

Regime Regime
3. Status Category :
Status of Export performance FOB/FOR value (Threshold in USD millions)

(CY+ Preceding 2 licensing years)
1 Star Export House 3
Privilege to Status holder :

(a) Clearance on self- declaration basis,
(b) Fixation of input-output norms within 60 days
(c) Exemption from furnishing of bank Guarantee
(d) Status holders shall be entitled to export freely exportable items (excluding Gems and
Jewellery, Articles of Gold and precious metals) on free of cost basis for export promotion,
subject to a specified annual limit.

47
Summary book
4. Export Promotion Schmes :

a. Duty Exemption Scheme
i. AA-Advance Authorisation Scheme
ii. DFIA - Duty free import Authorisation
b. Duty remission schemes
i. Duty Drawback scheme
c. Scheme for Remission of duties and taxes on exported products (RoDTEP)
A) Duty Exemption Scheme :

1) AA-Advance Authorisation Scheme 2) DFIA – Duty free import Authorisation
Advance Authorisation Duty Free Import Authorisation

These Authorizations shall be issued only for
products for which Standard Input and Output
Norms (SION) have been notified.
(a) DFIA is issued to allow duty free import of
Inputs which are used in the export product can be inputs. In addition, import of oil and
imported without payment of duty. catalyst which is consumed / utilised in
the process of production of export
product, may also be allowed.
(b) Import of tyre under DFIA Scheme is not
allowed
Exemption : The goods imported are exempt ONLY
from basic customs duty.
Exemption : BCD, ACD, Education Cess, Anti- Drawback shall be available for duty paid inputs
Dumping Duty, Countervailing duty, Safeguard Duty, used in export product.
GST Compensation cess, IGST DFIA shall be exempted only from payment of
Basic Customs Duty (BCD).
IGST will be payable on imports.
Advance Authorisation shall be valid for 12 months
from the date of issue of such Authorisation. DFIA shall be issued on post export basis for
Advance Authorisation for Deemed Export shall be products for which SION have been notified.
co-terminus with contracted duration of project Separate DFIA shall be issued for each SION
execution or 12 months from the date of issue of and each port.
Authorisation, whichever is later.
Advance Authorization and / or materials imported

RA Shall issue transferable DFIA ,
thereunder will be with actual user condition. It will

48
Summary book
not be transferable even after completion of The applicant shall file an online application to RA
export obligation. However, Authorization holder concerned before starting exports under DFIA.
will have an option to dispose off product Export shall be completed within 12 months
manufactured out of duty free inputs in DTA once from the date of online filing of application and
export obligation is completed. generation of file number.
DFIA is valid for 12 months from the date of
issue.
Separate DFIA shall be issued for each SION
Minimum Value addition of 15% to be achieved.
In case of specified product value addition could be Minimum Value addition of 20% to be achieved
less than 15%
B) Duty remission schemes : Duty Drawback

Duty drawback under section 75 of the Customs Act, 1962 is granted when imported
materials are used in the manufacture of goods which are then exported, while duty
drawback under section 74 is applicable when imported goods are re-exported as it is, and
article is easily identifiable
Duty drawback is only of customs duty. There is no duty drawback in respect of GST.
C) Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP)
Objective of the Scheme : The objective of the scheme is to refund, currently unrefunded :
(i) Duties / taxes / levies, at the Central, State & local level, borne on the exported product,
including prior stage cumulative indirect taxes on goods & services used in production of the
exported product, and
(ii) Such indirect duties /taxes /levies in respect of distribution of exported products
Salient features of the scheme:
✓ The refund in the form duty credits would be credited in the electronic credit ledger in the
customs automated account of the exporter.
✓ Such duty credit shall be used only to pay basic customs duty on imported goods.
✓ The duty credit scrips are freely transferable, i.e. credits can be transferred to other importers.
✓ The rebate under the scheme shall not be available in respect of duties and taxes already exempted
or remitted or credited.

49
Summary book
Eligibility for the scheme: All exporters of eligible RoDTEP export items are eligible for the scheme.
Reward under the scheme:

Rebate would be granted to eligible exporters at a notified rate as a % of FOB value with a value
cap per unit of the eligible exported product, wherever required, on export of items. However, for
certain export items, a fixed quantum of rebate amount per unit may also be notified.
Rebate would not be dependent on the realization of export proceeds at the time of issue of rebate.
However, rebate will be deemed never to have been allowed in case of non-receipt of sale proceeds
within time allowed under the FEMA, 1999.
5. EPCG Scheme:
EPCG scheme allows import of capital goods for pre-production, production and post-
production at zero customs duty.
a) Validity of authorisation - 24 months from date of Issue
b) Actual User Condition - Yes, till EO is completed and EODC is granted
c) IGST and GST Compensation cess: Capital goods imported under EPCG Authorisation for
physical exports are also exempt from IGST and Compensation Cess
In case integrated tax and compensation cess are paid in cash on imports under EPCG,
incidence of the said integrated tax and compensation cess would not be taken for
computation of net duty saved provided input tax credit is not availed.
d) Export Obligation (EO) - 6 times of duties, taxes and cess saved from C.G. & fulfilment
within 6 years (it also includes turnover under duty exemption scheme drawback scheme
deemed export etc.
Specific export obligation (Specific EO) under EPCG scheme is equivalent to 6 times of
duty saved on capital goods imported under EPCG scheme, to be fulfilled in 6 years
reckoned from Authorization issue-date. Specific EO is over and above the Average EO.
Average export obligation (Average EO) under EPCG scheme is the average level of
exports made by the applicant in the preceding 3 licensing years for the same and similar
products. It has to be achieved within the overall EO period (including extended period
unless otherwise specified).

50
Summary book
e) Eligible Exporter - Manufacturer, Exporter including supporting manufacturer, Merchant

Exporter, Service Provider
f) Eligible capital goods include :
Capital Goods including capital goods in CKD/SKD condition
Computer systems and software which are a part of the Capital Goods being imported
Spares, moulds, dies, jigs, fixtures, tools & refractories
Catalysts for initial charge plus one subsequent charge
g) In case of Indigenous sourcing of capital goods - Specific EO shall be 25% less than the
EO mentioned above, i.e. EO will be 4.5 times (75% of 6 times) of duty saved on such
goods procured.
h) Incentives for early fulfilment of export obligation : In cases where Authorization

holder has fulfilled 75% or more of specific export obligation and 100% of Average
Export Obligation till date, if any, in half or less than half the original export obligation
period specified, remaining export obligation shall be condoned and the Authorization
redeemed.
6. EOUs / EHTPs /STPs / BTP
a) Eligibility : Units undertaking to export their entire production of goods and services,
may be set up under the EOU Scheme, EHTP Scheme, STP Scheme or BTP Scheme for
manufacture of goods, including repair, remaking, reconditioning, re-engineering and
rendering of services.
Trading units are not covered under these schemes.
b) Imports :
I. Duty Free Imports : The unit may import and / or procure, from DTA or
bonded warehouses in DTA/ international exhibition held in India, without
payment of BCD,ACD,IGST and compensation cess. However, procurement of
goods covered under GST from DTA would be on payment of GST and
compensation cess.
II. Capital Goods : Units shall also be permitted to import goods including capital
goods required for approved activity, free of cost. Import of capital goods will be
on a self certification basis with actual user condition and shall be utilized for
export production.

51
Summary book
c) Investment Criteria : Projects having minimum investment of 1 crore in plant &

machinery shall be considered for establishment as EOUs. This shall not apply to units in
EHTP/ STP/ BTP, EOUs in Handicrafts/ Agriculture/ Floriculture/ Aquaculture/ Animal
Husbandry/ Information Technology Services, Brass Hardware and Handmade jewellery sectors.
Board of Approvals (BoA) may also allow establishment of EOUs with a lower investment
criteria.
d) Net Foreign Exchange Earnings

EOU/ EHTP/ STP/ BTP unit must be a positive net foreign exchange earner. However, a higher
value addition is specified for some sectors.
7. Deemed Exports :
Deemed exports broadly cover three areas:
1. Supplies to domestic entities who can import their requirements duty free at reduced
rates of duty.
2. Supplies to projects / purposes that involve international competitive bidding.
3. Supplies to infrastructure projects of national importance.
Benefits for deemed exports :
1. Advance Authorisation / Advance Authorisation for Annual requirement/ DFIA
2. Deemed Export Drawback
Refund of drawback on the inputs used in manufacture and supply under the deemed exports
category can be claimed on 'All Industry Rate' provided no CENVAT credit has been availed by
supplier on excisable inputs or on ‘Brand rate basis’ upon submission of documents evidencing
actual payment of basic custom duties.
3. Refund of terminal excise duty for specified excisable goods
Supply of goods will be eligible for refund of terminal excise duty provided recipient of goods
does not avail CENVAT credit / rebate on such goods and supply is eligible under that category
of deemed exports.

52

Summary Book - IDT - May 2024 - by CA Yachana Mutha - Compressed

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By Yachana Mutha Bhurat

GOODS AND SERVICES TAX

1. SUPPLY UNDER GST 1 – 14

2. LEVY AND COLLECTION OF TAX 15 – 17

3. REVERSE CHARGE MECHANISM 18 – 31

7. INPUT TAX CREDIT 52 – 66

10. PLACE OF SUPPLY 92 – 107

11. IMPORT, EXPORT AND ZERO RATED SUPPLY 108 – 115

12. ACCOUNTS AND RECORDS AND E-WAY BILL 116 – 122

14. PAYMENT OF TAX 130 – 137

15. RETURNS UNDER GST 138 – 148

16. REFUND UNDER GST 149 – 160

17. ASSESSMENT AND AUDIT 161 – 165

18. TDS AND TCS 166 – 169

19. DEMAND AND RECOVERY 170 – 176

21. INSPECTION 179

22. OFFENCES AND PENALTIES 180 – 188

23. APPEALS AND REVISIONS 189 – 192

24. EXEMPTIONS UNDER GST 193 – 219

25. ADVANCE RULING 220 – 222

26. ETHICAL ASPECTS UNDER GST 223 – 227

27. MISCELLANEOUS PROVISIONS 228 - 231

1. INTRODUCTION AND LEVY OF CUSTOM DUTY 1–5

2. TYPES OF DUTY CLASSIFICATION OF GOODS IN TARIFF 6 – 19

3. IMPORTATION AND EXPORTATION PROCEDURES 20 – 26

4. VALUATION UNDER CUSTOMS 27 – 33

1) Introduction to supply Under GST

Supply should be made in Supply should be

 The discussion with respect to supply is broadly categorised into following:

7(1)(c) : Activites not

CA Yachana Mutha Bhurat 09669357770 gst.yachana@gmail.com

Author’s Analysis on Goods & Services

Service charges or service fees or For provision of service and

CA Yachana Mutha Bhurat 09669357770 gst.yachana@gmail.com

 Supply for consideration in course or furtherance of business [Section 7(1)(a)]

 Importation of services for consideration whether or not in course or furtherance of

In course or Not in the course From Related Person /

Taxable Not Taxable

CA Yachana Mutha Bhurat 09669357770 gst.yachana@gmail.com

o Permanent Transfer/Disposal of Business Assets

Business Input Tax Credit availed

o Supply between related persons or distinct persons

Related Person 1 Related Person 2

In course or furtherance of business

CA Yachana Mutha Bhurat 09669357770 gst.yachana@gmail.com

o Supply between principal and agent:

supplies goods on behalf

 By an agent to his principal where the agent undertakes to receive such

Third Person Agent

supplies goods to Supply

o Importation of services: Import of services by a taxable person from a related

Effect of above amendment: This amendment is to ensure that import of services by

CA Yachana Mutha Bhurat 09669357770 gst.yachana@gmail.com

 Activities or transactions to be treated as Supply of goods or Supply of services [Section

Right/undivided share in goods without transfer of title in them Services

Lease, tenancy, easement, licence to occupy land

Transfer of by/under directions of person carrying on the business