CHAPTER4

Q1=Mention the persons who are liable and exempted for registration under the GSTAct
Under the Goods and Services Tax (GST) Act in many jurisdictions, including India, certain persons
are required to register for GST, while others may be exempted. Here's a general overview:

Persons Liable for GST Registration:

1. Businesses Crossing Threshold: Typically, businesses with an annual turnover exceeding

a specified threshold are required to register for GST. This threshold varies from country
to country. For example, in India, the threshold is ₹20 lakhs for most states ( ₹10 lakhs for
special category states).
2. Inter-State Suppliers: Suppliers engaged in the supply of goods or services across state
boundaries generally need to register for GST.
3. E-Commerce Operators: Platforms facilitating the supply of goods or services through
electronic means may be required to register, depending on the jurisdiction.
4. Input Service Distributors (ISD): Businesses that have multiple locations and want to
distribute credits for the input services can register as an ISD.
5. Casual Taxable Persons: Individuals or businesses undertaking occasional taxable
transactions need to register for GST.
6. Non-Resident Taxable Persons: Foreign entities providing taxable goods or services in a
country may need to register for GST.
7. Reverse Charge Mechanism: Recipients of goods or services on which tax is payable by
the recipient under the reverse charge mechanism may need to register.

Persons Exempted from GST Registration:

1. Small Businesses Below Threshold: Businesses with an annual turnover below the
specified threshold are exempted from GST registration.
2. Certain Agricultural Activities: Some agricultural activities or products may be
exempted from GST registration, depending on the jurisdiction.
3. Specific Services or Sectors: Certain services or sectors may be exempted or have
relaxed registration requirements under specific circumstances, such as healthcare,
education, and charitable activities.
4. Individuals Making Exempt Supplies: Individuals or businesses exclusively making
exempt supplies may be exempted from GST registration.
Q2=Discuss the procedure for obtaining registration under Gst Act.
The procedure for obtaining registration under the Goods and Services Tax (GST) Act typically
involves several steps. While the specifics may vary depending on the jurisdiction, here's a
general overview of the process:

1. Determine Eligibility:

Before applying for GST registration, ensure that your business meets the eligibility criteria set
forth in the GST Act. This includes factors such as turnover, nature of business activities, and
jurisdiction-specific requirements.

2. Gather Required Documents:

Collect all the necessary documents and information required for the registration process.
Common documents include:

 PAN (Permanent Account Number) of the business entity

 Proof of constitution of business (e.g., partnership deed, certificate of incorporation)
 Address proof of the principal place of business
 Bank account details
 Photographs and identification proof of promoters/partners/directors
 Digital signature (for online registration)

3. Online or Offline Application:

Depending on the jurisdiction, GST registration can be done online through the official GST
portal or offline by visiting the designated GST office. Online registration is generally preferred as
it is more convenient and efficient.

4. Fill Application Form:

Complete the GST registration application form with accurate information. The form typically
includes details such as business name, address, type of business, nature of goods/services
supplied, turnover details, etc.

5. Verification:

After submitting the application, it undergoes a verification process by the GST authorities. This
may involve scrutiny of the documents submitted and validation of the information provided.

6. Clarifications and Corrections:

If there are any discrepancies or additional information required, the applicant may be asked to
provide clarifications or make corrections to the application.

7. Issuance of GSTIN:

Upon successful verification, a Goods and Services Tax Identification Number (GSTIN) is issued to
the applicant. This unique 15-digit number serves as the identification for the registered taxpayer
under GST.

8. Registration Certificate:

A GST registration certificate is issued electronically to the applicant. It contains details such as
the GSTIN, legal name of the business, effective date of registration, and other relevant
information.

9. Compliance Requirements:

Once registered, the taxpayer is required to comply with various GST compliance requirements,
such as filing regular GST returns, maintaining proper records, and adhering to invoicing and
accounting standards.
10. Renewal and Updates:

Ensure timely renewal of GST registration as per the prescribed guidelines. Additionally, update
the registration details in case of any changes in business particulars or other relevant
information.

Q3=Discuss the provisions under GST Act for amendment of registration and cancellation
of registration.
Under the Goods and Services Tax (GST) Act, provisions are made for amending and cancelling
registrations based on various circumstances. Here's a discussion on both:

Amendment of Registration:

1. Change in Particulars: If there are any changes in the particulars furnished at the time of
registration, such as business address, contact details, business structure (e.g., partnership
to private limited), or addition/deletion of business premises, the registered person needs
to apply for an amendment of registration.
2. Changes in Business Activities: If there are changes in the nature of business activities,
such as adding new goods or services to the business, the registered person must apply
for an amendment of registration to reflect these changes.
3. Change in Bank Details: In case of any changes in bank account details provided during
registration, the registered person needs to update the information through the
amendment process.
4. Voluntary Amendment: A registered person may also voluntarily apply for an
amendment of registration to rectify any errors or discrepancies in the registration
details.

Process for Amendment of Registration:

 The registered person needs to log in to the GST portal and submit an application for
amendment of registration.
 Relevant details or changes need to be filled in the amendment application form along
with supporting documents, if required.
 Once the application is submitted, it undergoes a verification process by the GST
authorities.
 Upon successful verification, the registration details are updated, and an amended
registration certificate is issued.

Cancellation of Registration:

1. Cessation of Business: If a registered person ceases to carry out business activities or no

longer liable to be registered under GST (e.g., turnover falls below the threshold), they
can apply for cancellation of registration.
2. Transfer of Business: In case of transfer of business ownership, merger, amalgamation,
or demerger, the registered person can apply for cancellation of registration.
3. Non-Compliance: GST authorities may cancel the registration of a taxpayer for non-
compliance with GST laws, such as non-filing of returns or non-payment of tax dues.
 4. Voluntary Cancellation: A registered person may voluntarily apply for cancellation of
registration if they intend to close down the business or cease taxable activities.

Process for Cancellation of Registration:

 The registered person needs to log in to the GST portal and submit an application for
cancellation of registration.
 Reasons for cancellation need to be specified, along with supporting documents, if
required.
 GST authorities may conduct an inquiry before approving the cancellation request.
 Once approved, a cancellation order is issued, and the registration is deemed to be
cancelled from the effective date specified in the order.
 Final returns need to be filed, and any pending tax liabilities need to be cleared before
the cancellation takes effect.
Q4=What are the advantages of taking registration under GST Act?
Registering under the Goods and Services Tax (GST) Act offers several advantages to businesses,
which contribute to simplifying tax compliance, fostering transparency, and promoting ease of
doing business. Here are some of the key advantages:

1. Legally Recognized Business:

 GST registration provides legal recognition to businesses as registered taxpayers under

the GST regime, enhancing their credibility and legitimacy in the market.

2. Input Tax Credit (ITC):

 Registered businesses can claim input tax credit on GST paid on purchases of goods and
services used for furtherance of business activities. This helps in reducing the overall tax
burden and improving cash flow.

3. Inter-State Transactions:

 GST registration enables businesses to engage in inter-state transactions without

restrictions, as GST is a unified tax system applicable throughout the country. This
facilitates seamless trade across state boundaries.

4. Compliance Benefits:

 Registered taxpayers need to file periodic GST returns, which encourages better record-
keeping and compliance with tax laws. It also simplifies the tax reporting process through
online filing and reduces the burden of multiple tax filings.

5. Competitive Advantage:

 GST registration may confer a competitive advantage to businesses, especially in B2B

transactions, as many buyers prefer to deal with registered suppliers to avail input tax
credit.

6. Access to Input Tax Credit for Capital Goods:

  Registered businesses can claim input tax credit on capital goods, including machinery,
equipment, and infrastructure, which helps in reducing the cost of capital investments.

7. Threshold Exemption:

 Small businesses with turnover below the threshold limit may voluntarily register for GST
to avail benefits such as input tax credit and participate in the formal economy.

8. E-Commerce Opportunities:

 GST registration is mandatory for e-commerce operators and facilitates their compliance
with tax laws. It also enhances trust and transparency in online transactions.

9. Expansion Opportunities:

 GST registration simplifies the process of expanding business operations across multiple
states or regions, as it provides a unified tax framework applicable throughout the
country.

10. Government Tenders and Contracts:

 Many government tenders and contracts require GST registration as a prerequisite,

thereby expanding business opportunities for registered taxpayers.

11. Export Benefits:

 Registered exporters can claim refunds of GST paid on inputs used for manufacturing
goods exported out of the country, making their products more competitive in the
international market.
Q5=What is Input Tax Credit? What are the documents required for claiming Input Tax
Credit?
Input Tax Credit (ITC) is a mechanism under the Goods and Services Tax (GST) system that allows
registered businesses to offset the tax they have paid on inputs (i.e., goods and services used in
the course of business) against the tax they are liable to pay on their output supplies. In simpler
terms, it allows businesses to claim credit for the GST paid on their purchases, thereby reducing
their overall tax liability.

Here's how it works:

 When a registered business purchases goods or services, it pays GST on those purchases,
known as Input Tax.
 The business can then claim credit for the GST paid on those purchases, which is known
as Input Tax Credit.
 This credit can be utilized to offset the GST liability on the supplies made by the business.

Documents Required for Claiming Input Tax Credit:

 1. Tax Invoice: A valid tax invoice issued by the supplier containing specific details as per
GST rules is required. The tax invoice must include:
 Name, address, and GSTIN of the supplier.
 Invoice number and date.
 Description of goods or services.
 Quantity and value of goods or services.
 GST charged and total amount.
 HSN (Harmonized System of Nomenclature) or SAC (Services Accounting Code)
code for goods or services.
2. Goods Receipt Note (GRN): For goods, a Goods Receipt Note (GRN) is essential to verify
the receipt of goods mentioned in the tax invoice.
3. Bill of Entry: In the case of imported goods, the Bill of Entry containing details of
customs duty paid is required to claim input tax credit.
4. Debit Note: If there is an increase in the value of supply or tax charged in the tax invoice
after issuance, a debit note issued by the supplier is necessary to claim ITC.
5. Supplier's GST Return: The supplier's GST return, reflecting the details of the supplies
made and the tax paid, serves as supporting documentation for claiming input tax credit.
6. Payment Evidence: Evidence of payment for the goods or services, such as bank
statements, payment receipts, or challans, may also be required to validate the claim for
input tax credit.
Q6=What is the eligibility for claiming Input Tax Credit? Explain the conditions for
claiming Input Tax Credit.
To claim Input Tax Credit (ITC) under the Goods and Services Tax (GST) regime, certain eligibility
criteria and conditions must be met. These conditions are outlined in the GST law and regulations
to ensure that the credit is availed correctly and in compliance with tax rules. Here's an
explanation of the eligibility criteria and conditions for claiming Input Tax Credit:

Eligibility Criteria:

1. Registered Person: Only registered persons under GST are eligible to claim Input Tax
Credit. Unregistered persons or those engaged in exempt supplies are not entitled to
claim ITC.
2. Taxable Supply: ITC can be claimed only on goods or services used or intended to be
used for making taxable supplies. Input tax credit cannot be claimed on goods or services
used for making exempt supplies or for personal use.
3. Receipt of Goods or Services: Input Tax Credit can be claimed when the registered
person has received the goods or services along with a valid tax invoice or other
prescribed documents.

Conditions for Claiming Input Tax Credit:

1. Possession of Tax Invoice: The registered person must possess a valid tax invoice or
other prescribed documents, such as debit notes or bill of entry, issued by the supplier
for claiming Input Tax Credit.
2. Timely Filing of Returns: The recipient must ensure that the supplier has filed the
requisite GST returns and paid the tax due to the government. Input Tax Credit cannot be
claimed if the supplier has not complied with the return filing requirements.
 3. Payment for Supplies: The registered person must have made the payment for the
supplies to the supplier within the stipulated time period. Input Tax Credit cannot be
claimed if payment for the supplies has not been made within the specified time frame.
4. Use for Business Purposes: Input Tax Credit can be claimed only for goods or services
used or intended to be used in the course or furtherance of business. Personal or non-
business use of goods or services is not eligible for Input Tax Credit.
5. Compliance with GST Rules: The recipient must comply with the provisions of the GST
law and rules, including maintaining proper records of invoices, goods, and services
received, to claim Input Tax Credit.
6. Matching of Invoices: The details of invoices furnished by the supplier must match with
the details as declared by the recipient in their GST returns. Any discrepancies may lead
to denial of Input Tax Credit.
7. Reversal of Credit: Input Tax Credit needs to be reversed in case of goods or services
used partly for business and partly for non-business purposes, as well as for goods or
services used for making exempt supplies.
Q7=What is tax invoice and bill of supply? What are their contents?
A tax invoice and a bill of supply are both important documents under the Goods and Services
Tax (GST) regime, issued by registered persons for different types of transactions. Here's a
breakdown of each:

Tax Invoice:

 Purpose: A tax invoice is issued when a taxable supply of goods or services is made by a
registered person to another registered person. It serves as evidence for the supply of
goods or services and is used for claiming Input Tax Credit (ITC) by the recipient.
 Contents of a Tax Invoice:
1. Name and Address: Name, address, and GSTIN (Goods and Services Tax
Identification Number) of the supplier.
2. Invoice Number and Date: A unique serial number and date of issuance of the
invoice.
3. Recipient's Details: Name, address, and GSTIN (if the recipient is registered).
4. Description of Goods or Services: Description, quantity, and value of goods or
services supplied.
5. HSN (Harmonized System of Nomenclature) or SAC (Services Accounting
Code) Code: Classification code for goods or services as per GST rules.
6. Taxable Value and Tax Rates: Taxable value of goods or services supplied, along
with the applicable CGST (Central Goods and Services Tax) and SGST/UTGST
(State Goods and Services Tax/Union Territory Goods and Services Tax) rates or
IGST (Integrated Goods and Services Tax) rate in case of inter-state transactions.
7. Total Amount: Total amount payable, including taxes.
8. Signature: Signature or digital signature of the supplier or authorized person.

Bill of Supply:

 Purpose: A bill of supply is issued when a registered person supplies exempted goods or
services, or when they are registered under the Composition Scheme, which doesn't allow
for charging tax on supplies. It does not entitle the recipient to claim Input Tax Credit.
 Contents of a Bill of Supply:
 1. Name and Address: Name, address, and GSTIN (if applicable) of the supplier.
2. Bill of Supply Number and Date: A unique serial number and date of issuance
of the bill of supply.
3. Recipient's Details: Name, address, and GSTIN (if provided by the recipient).
4. Description of Goods or Services: Description and quantity of goods or services
supplied.
5. Total Value: Total value of goods or services supplied.
6. Signature: Signature or digital signature of the supplier or authorized person.

Key Differences:

 Tax Invoice is issued for taxable supplies, while Bill of Supply is issued for exempt supplies
or under the Composition Scheme.
 Tax Invoice allows the recipient to claim Input Tax Credit, whereas Bill of Supply does not.
 Tax Invoice includes details of taxes charged (CGST, SGST/UTGST, or IGST), while Bill of
Supply does not include any tax details.
Q8=When should a tax invoice be issued for supply of goods? Mention the provisions of
the GST Act relating to availability of credit in special circumstances.
Under the Goods and Services Tax (GST) Act, a tax invoice should be issued for the supply of
goods in certain prescribed circumstances. Here are the provisions regarding the issuance of tax
invoice for the supply of goods and the availability of credit in special circumstances:

Issuance of Tax Invoice for Supply of Goods:

1. Normal Supply of Goods: A tax invoice should be issued when there is a normal supply
of goods from one registered person to another registered person. This includes supplies
made in the course of business activities for consideration.
2. Inter-State Supply: In the case of inter-state supplies of goods, where the supplier and
recipient are located in different states, a tax invoice must be issued.
3. Taxable Supply: Tax invoice is required for all taxable supplies of goods, regardless of
whether the supply is intra-state or inter-state.
4. Export of Goods: For the export of goods out of the territory of India, a tax invoice is
required to be issued. Export of goods is considered as a zero-rated supply under GST.

Availability of Credit in Special Circumstances:

Under the GST Act, there are provisions for the availability of credit in special circumstances,
allowing registered persons to claim Input Tax Credit (ITC) in certain situations. These include:

1. Receipt of Goods in Installments: If the goods are received by the recipient in

installments, the ITC can be claimed based on the tax invoice pertaining to each
installment.
2. Supplies Made on Approval Basis: When goods are supplied on approval basis, the ITC
can be claimed by the recipient when the goods are finally accepted and the tax invoice is
issued.
3. Recipient Pays Tax on Behalf of Supplier: In cases where the recipient pays the tax on
behalf of the supplier under the reverse charge mechanism, the recipient is eligible to
claim ITC based on the tax invoice received from the supplier.
 4. Tax Paid on Advance Payments: If tax is paid on advance payments for the supply of
goods, the recipient can claim ITC based on the tax invoice received when the actual
supply takes place.
5. Goods Sent on Job Work: When goods are sent by the supplier to a job worker for
processing, the recipient can claim ITC based on the tax invoice issued by the job worker
upon return of the processed goods.
Q9=What is e-way bill? When should an e-way bill be generates? Mention the cases when
generation of e-way bill is not required?
An e-way bill is an electronic document required for the movement of goods under the Goods
and Services Tax (GST) regime in India. It contains details such as the type of goods, quantity,
value, and the GSTIN of the parties involved in the transportation of goods. The e-way bill system
is aimed at ensuring seamless movement of goods across state borders and reducing tax evasion.

When Should an E-Way Bill be Generated?

An e-way bill should be generated in the following circumstances:

1. Inter-State Movement of Goods: When there is a movement of goods from one state
to another and the value of the consignment exceeds ₹50,000 (in most cases).
2. Intra-State Movement of Goods: In some states, e-way bills are required for the
movement of goods within the state if the value of the consignment exceeds the
specified threshold.
3. Transportation by Registered Person: The e-way bill should be generated by the
registered person who is causing the movement of goods or by the transporter assigned
by the registered person.
4. Transportation for Reasons Other than Supply: E-way bills are also required for the
movement of goods for reasons other than supply, such as for job work, inward supply
from an unregistered person, etc.

Cases When Generation of E-Way Bill is Not Required:

There are certain cases when the generation of an e-way bill is not required:

1. Goods Below Specified Value: E-way bill is not required if the value of the consignment
(aggregate value of all goods in a conveyance) is less than ₹50,000 ( ₹50,000 limit is
applicable in most states).
2. Specified Goods: Some specific goods, such as fruits, vegetables, meat, milk, etc., are
exempted from the requirement of e-way bill, irrespective of the value of the
consignment.
3. Transportation by Non-Motorized Conveyance: If the goods are transported by a non-
motorized conveyance, such as bullock carts, the generation of e-way bill is not required.
4. Transportation by Specified Entities: Certain categories of persons, such as the Central
Government, State Governments, local authorities, and specified defense establishments,
are exempt from generating e-way bills.
5. Transportation Within Specified Distance: For transportation of goods within a radius
of 20 kilometers from the place of business of the consignor to the place of business of
the transporter for further transportation, e-way bill is not required.
Q10=Write a brief note on Time, place and value of supply.
Time, place, and value of supply are essential concepts under the Goods and Services Tax (GST)
framework, governing when and where a supply of goods or services is deemed to occur, as well
as determining the value on which GST is levied. Here's a brief overview of each:

1. Time of Supply:

Definition: The time of supply refers to the point in time when a transaction is considered to
have occurred for GST purposes.

Key Points:

 GST Liability: The time of supply determines when the liability to pay GST arises for the
supplier and when the recipient can claim Input Tax Credit (ITC).
 Types of Time of Supply:
 Goods: Generally, the time of supply for goods is earlier of the following:
 Date of issuance of invoice or last date of issue of invoice (if invoice is not
issued within prescribed time), or
 Date of receipt of payment or last date of receipt of payment (if payment
is not received within prescribed time), or
 Date of delivery of goods or making goods available to the recipient, or
 Date of entry in the books of accounts of the supplier.
 Services: For services, the time of supply is generally the earlier of:
 Date of issuance of invoice or last date of issue of invoice (if invoice is not
issued within prescribed time), or
 Date of receipt of payment or last date of receipt of payment (if payment
is not received within prescribed time), or
 Date of completion of service or date of making the service available to
the recipient, or
 Date of entry in the books of accounts of the supplier.
 Adjustments: In certain cases, adjustments may be required to the time of supply, such
as in case of continuous supply of goods/services or change in the rate of tax.

2. Place of Supply:

Definition: The place of supply determines the jurisdiction (state/country) where a supply of
goods or services is deemed to have occurred for the purpose of levying the correct type of GST.

Key Points:

 GST Jurisdiction: Place of supply is crucial in determining whether a supply is an intra-

state supply (within the same state) or an inter-state supply (between different states).
 Types of Place of Supply:
 Goods: The place of supply for goods is generally determined based on the
location of the goods at the time of delivery to the recipient.
 Services: For services, the place of supply is determined based on various factors,
such as the location of the recipient, location of the supplier, nature of service,
etc.
  Special Cases: There are specific rules for determining the place of supply for various
types of services, including transportation, telecommunication, banking and financial
services, etc.

3. Value of Supply:

Definition: The value of supply represents the monetary worth of goods or services supplied, on
which GST is levied.

Key Points:

 Taxable Value: The value of supply includes all costs, expenses, and charges incurred in
relation to the supply, excluding GST.
 Inclusions and Exclusions: The value of supply includes the consideration for the supply,
any taxes, duties, cesses, fees, and charges levied under any law other than GST,
subsidies, grants, etc. Discounts and subsidies directly linked to the price are deducted
from the value of supply.
 Methods for Determining Value: There are specific methods prescribed under GST law
for determining the value of supply in various situations, such as transaction value, open
market value, value of like kind and quality, etc.
Q11=Explain in detail various returns to be filled under GST Act. Also mention due dates of
various returns.
Under the Goods and Services Tax (GST) Act in India, various returns need to be filed by
registered taxpayers to report their business activities, tax liabilities, and claim Input Tax Credit
(ITC). Here's an explanation of the main returns under GST along with their due dates:

1. GSTR-1 (Outward Supplies Return):

Purpose: GSTR-1 is used to report details of outward supplies (sales) made by the taxpayer
during the reporting period.

Contents:

 Details of invoices issued to registered taxpayers (B2B).

 Details of invoices issued to unregistered taxpayers (B2C).
 Debit notes, credit notes, and amendments to invoices.
 Details of exports and deemed exports.
 Details of supplies made to consumers through e-commerce operators.
 Consolidated details of advances received against future supplies.

Due Date: Monthly or Quarterly, based on the turnover of the taxpayer.

 Monthly: Due on the 11th of the following month.

 Quarterly: Due on the 13th of the month following the end of the quarter.

2. GSTR-3B (Summary Return):

Purpose: GSTR-3B is a summary return where taxpayers provide summarized details of outward
supplies, input tax credit claimed, and tax payable for the reporting period.

Contents:

 Details of outward supplies (both taxable and exempted).

 Input tax credit availed and reversed.
 Tax payable and payment details.

Due Date: Monthly basis.

 Due on the 20th of the following month.

3. GSTR-2A (Auto-drafted Inward Supplies Return):

Purpose: GSTR-2A is an auto-generated return that contains details of inward supplies

(purchases) as uploaded by the suppliers in their GSTR-1.

Contents:

 Details of invoices and debit/credit notes received from suppliers.

 Auto-populated details based on suppliers' GSTR-1 filings.

Due Date: Not applicable. It is available for viewing and reconciliation purposes.

4. GSTR-9 (Annual Return):

Purpose: GSTR-9 is an annual return that summarizes the details of outward supplies, inward
supplies, taxes paid, and Input Tax Credit (ITC) availed for the entire financial year.

Contents:

 Consolidated details of outward supplies.

 Summary of input tax credit availed and utilized.
 Details of tax paid and payable.

Due Date: Annually.

 Due on or before December 31st of the subsequent financial year.

5. GSTR-9C (Reconciliation Statement):

Purpose: GSTR-9C is a reconciliation statement that needs to be filed along with GSTR-9 by
taxpayers whose aggregate turnover exceeds a specified limit.

Contents:
  Reconciliation of turnover declared in audited financial statements with turnover declared
in annual return (GSTR-9).
 Reconciliation of tax paid as per the financial statements with tax paid as per GST returns.

Due Date: Annually.

 Due on or before December 31st of the subsequent financial year.

Note:

 The due dates mentioned above are subject to periodic changes by the government, so
it's essential to check for any updates from the tax authorities.
 Additionally, there are other returns such as GSTR-4 (Composition Scheme Return), GSTR-
5 (Non-Resident Foreign Taxpayer Return), GSTR-6 (Input Service Distributor Return), etc.,
applicable to specific categories of taxpayers. The due dates for these returns also vary
based on the taxpayer's profile and circumstances.
Q12=What do you mean by valuation of Taxable Services? Provide the format of
computation of taxable value and GST on goods
Valuation of taxable services refers to the process of determining the value on which Goods and
Services Tax (GST) is levied for services provided by a taxpayer. It involves calculating the taxable
value of services based on prescribed rules and guidelines under the GST law. The taxable value is
the amount on which GST is levied, and it forms the basis for calculating the GST payable on
services rendered.

Format of Computation of Taxable Value and GST on Goods:

The computation of taxable value and GST on goods involves the following steps:

1. Calculation of Taxable Value:

Taxable Value of Goods (TVG) = Transaction Value + Freight or Transport Charges +

Insurance Charges + Packing Charges + Discount (if not already deducted) - Taxes and
Duties (other than GST)

 Transaction Value: The actual value of goods agreed upon by the buyer and seller for
the transaction. It is typically the price paid or payable for the supply of goods.
 Freight or Transport Charges: Charges incurred for transporting goods from the place
of supply to the recipient's location, if not already included in the transaction value.
 Insurance Charges: Charges for insuring the goods during transit, if applicable and not
already included in the transaction value.
 Packing Charges: Charges for packing the goods for transportation, if applicable and not
already included in the transaction value.
 Discount: Deduction for any discounts given by the supplier to the buyer, provided it is
allowed and mentioned in the invoice.
 Taxes and Duties (other than GST): Any taxes, duties, or cesses levied on the goods
other than GST, such as excise duty, customs duty, etc.

2. Calculation of GST:
GST = TVG x GST Rate

 GST Rate: The applicable GST rate based on the classification of goods and any
notifications issued by the government.

Example:

Let's consider an example to illustrate the computation of taxable value and GST on goods:

 Transaction Value of Goods: ₹10,000

 Freight Charges: ₹500
 Insurance Charges: ₹200
 Packing Charges: ₹100
 Discount: ₹500
 Excise Duty (already paid): ₹800

Taxable Value of Goods (TVG) = ₹10,000 + ₹500 + ₹200 + ₹100 - ₹500 - ₹800 = ₹10,500

Assuming GST rate of 18%,

GST = ₹10,500 x 18% = ₹1,890

So, the taxable value of goods is ₹10,500 and the GST payable is ₹1,890.

This format provides a structured approach for determining the taxable value of goods and
calculating the GST payable, ensuring compliance with GST regulations and accurate reporting of
tax liabilities.
Q13=Write a brief note of debit note and credit note.
Debit Note and Credit Note are important documents used in business transactions to adjust or
rectify errors in invoices or to record changes in transactional values. Here's a brief overview of
each:

Debit Note:

Purpose: A debit note is issued by a seller to a buyer to inform them of an increase in the
amount payable. It is typically issued in the following situations:

 Correction of undercharged amounts.

 Additional charges or costs incurred by the buyer, such as freight charges, taxes, etc.
 Returns or replacements of goods leading to an increase in the invoice value.

Contents of Debit Note:

1. Details of Issuer: Name, address, and GSTIN of the seller issuing the debit note.
2. Recipient's Details: Name, address, and GSTIN of the buyer receiving the debit note.
3. Debit Note Number and Date: A unique serial number and date of issuance of the debit
note.
 4. Reason for Issuance: Explanation of the reason for issuing the debit note, such as
undercharged amounts, additional charges, etc.
5. Details of Goods or Services: Description, quantity, and value of goods or services to
which the debit note pertains.
6. Revised Amount: Revised total amount payable by the buyer after considering the
adjustments mentioned in the debit note.
7. Tax Details: Applicable tax rates and amounts, including CGST, SGST/UTGST, or IGST, if
applicable.
8. Authorized Signatory: Signature or digital signature of the authorized person issuing
the debit note.

Credit Note:

Purpose: A credit note is issued by a seller to a buyer to inform them of a decrease in the
amount payable. It is typically issued in the following situations:

 Correction of overcharged amounts.

 Discounts or rebates provided to the buyer.
 Returns or adjustments for goods or services that are damaged, defective, or not as per
the agreed terms.

Contents of Credit Note:

1. Details of Issuer: Name, address, and GSTIN of the seller issuing the credit note.
2. Recipient's Details: Name, address, and GSTIN of the buyer receiving the credit note.
3. Credit Note Number and Date: A unique serial number and date of issuance of the
credit note.
4. Reason for Issuance: Explanation of the reason for issuing the credit note, such as
overcharged amounts, discounts, returns, etc.
5. Details of Goods or Services: Description, quantity, and value of goods or services to
which the credit note pertains.
6. Revised Amount: Revised total amount payable by the buyer after considering the
adjustments mentioned in the credit note.
7. Tax Details: Applicable tax rates and amounts, including CGST, SGST/UTGST, or IGST, if
applicable.
8. Authorized Signatory: Signature or digital signature of the authorized person issuing
the credit note.