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GST
Goods & Services Tax (GST)
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VALUATION, RATE, COMPOSITION & ITC

TAX
GST Rates in India
Rate Goods Service Composition Scheme ADDITIONAL CONDITIONS:-
> Taxable Person opting composition scheme shall not
WITHDRAWAL FROM COMPOSITION SCHEME
1) When aggregate turnover exceeds 1 Cr./75 lacs during the financial year.
Section 15 - Valuation 0% 50% of the consumer price Exemption is given in service tax for some
basket, including foodgrains services
APPLICABILITY AS PER SEC 10
- Applicable to “Registered Person” whose aggregate turnover in preceding
collect tax on outward supplies
> Taxable Person opting composition scheme will not be
2) If he ceases to satisfy any of the conditions required to opt for composition scheme
EFFECTS AFTER WITHDRAWAL
Diamonds, Precious Stones — year is not exceeding 1 Cr. or 75 Lacs (in special category state) eligible to claim input tax credit
1) To file an intimation for withdrawal in prescribed form within 7 days from such event.
0.25% etc. - It is an optional scheme > Would be applicable for all business vertical having
registrations under same PAN of the conditions required to 2) Shall issue a tax invoice for every taxable supply made thereafter
3) Shall be allowed to avail input tax credit in respect of stock held by him as on date.
Sec 15(1) Sec 15(2) Sec 15(3) Silver, Gold, Platinum etc. —
3% RATE
Cases CGST SGST Total
opt for composition scheme
RESTRICTIONS AS PER COMPOSITION RULES
Note : Special category states are : Arunachal Pradesh, Assam, Jammu & Kashmir, Manipur,
Value of = Transation value Inclusion to Transaction Value Deduction of discount Mass consumption items Transport of goods by Rail/Road/ Air/ Ship Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh & Uttarakhand.
Taxable Supply
Price actually
5% like spices and mustard oil Transport of passengers Rail / Road /
Economy air travel, Tour operator, Print
Manufacturer
Trader
1%
0.5%
1%
0.5%
2%
1%
Of State
Turnover
> He is neither a casual taxable person nor a non-resident
taxable person Sec 2(6) - Aggregate Turnover Sec 2(112) Turnover in State” or “Turnover in
a b c d e Media, Ads, News Paper Printing Catering & Restaurant 2.5% 2.5% 5% > Goods held in stock as on appointed date are not Union Territory
paid or payable purchased:- “Aggregate Turnover” ” “turnover in State” or “turnover in Union territory” means the
for Supply Any discount given before Any discount given after supply Processed foods Air travel business class, Non-AC TURNOVER LIMIT IN CURRENT YEAR FOR COMPOSITION - In course of interstate trade or commerce aggregate value of
means the aggregate value of
Duties & Taxes
All taxes levied
3rd party payment
Any payment
Incidental expenses:
Any incidental expenses
Interest, late
fee penalty
Subsidy
Subsidy directly
or at the time of Time of Supply
12% restaurant, Hotel Rooms rent ` 1000-
2500, Construction of building /complex,
Temp transfer of intellectual prop.
Agrregate Turnover does not exceeds 1 Cr. or 75 lacs. - imported from place outside India
- From his agent or principal outside State, where the
Ü all taxable supplies (excluding the value of inward
supplies on which tax is payable by a person on
Ü all taxable supplies (excluding the value of inward
supplies on which tax is payable by a person on
Conditions: under any law included by the charged by supplier & for delay linked to price ELIGIBILITY CONDITIONS (in current year) option is exercised under sub-rule 1 of rule 1 reverse charge basis), reverse charge basis) and
1) Not related party for time being in recipient for which any amount charged for payment of by person other Deductible from value Soaps, Oil, toothpaste, General Rate on all services except 1) Not engaged in supply of services other than catering & restaurant services - From unregistered person under RCM basis, provided he
2) Price is sole consideration force other than
GST Acts if
supplier is liable to
pay
anything done by the
supplier at the time of
consideration than govt. Agreed at the Time or before supply Not Agreed 18% refrigerator, smartphones covered in 5%, 12% and 28% 2) Not engaged in supply of goods which are non taxable under GST Act.
3) Not engaged in making any inter state outward supply of goods
can opt the scheme on payment of tax on RCM basis
Ü exempt supplies, Ü exempt supplies made within a State or Union
territory by a taxable person,
Deduction allowed Deduction Ü exports of goods or services or both and Ü exports of goods or services or both and
charged supply or before delivery White goods, Cars Race club, Gambling, Hotel rent more than 4) Not engaged in supply of goods through an E-Commerce operator . PROCEDURAL REQUIREMENT
separately
i) linked to the invoice
ii) ITC reversed by recipient
not allowed 28% ` 5000/day, Services provided in Five star
Hotels, Cinema/ Multiplexes/ IPL/ Casino,
5) Not a manufacturer of notified goods i.e.
- Ice cream, edible ice
> He shall issue a bill of supply & shall mention the words
“composition taxable person, not eligible to collect tax on
Ü inter-State supplies of persons having the same
Permanent Account Number,
Ü inter-State supplies of goods or services or both
Amusement Parks/Sporting events made from the State or Union territory by the said
- Pan Masala supplies” at the of top of such bill taxable person
to be computed on all India basis
- Tobacco & Tobacco substitutes > On every notice or signboard displayed at prominent place
28%
Plus Cess
Luxury cars, pan masala,
tobacco, aerated drinks
—
6) Neither a casual taxable person nor a non-resident taxable person. of business shall mention words “composition taxable
but excludes central tax, State tax, Union territory tax,
integrated tax and cess
but excludes central tax, State tax, Union territory tax,
integrated tax & cess.
person'
Sec 15(4) Sec 15(5)
If value of supply cannot be determind u/s 15(1) i.e
Notwithstanding anything contained in sec 15(1)/15(4) Value of supply notified by the govt.shall be determined as per Rules INPUT TAX CREDIT
Ü Supply without price
Ü Related party transaction Valuation in special cases [Rule 32]
Sec 2(59) Input : Means any Sec 2(60) Input Service : Sec 2(19) Capital Goods : Means goods, the Sec 2(46) Electronic Credit Ledger: means the Sec 2(47) Inward Supply : in
Ü Supply without consideration or any other considerations then apply 32(2) :Purchase or sale of foreign currency
Note : goods used other than capital Means any service used or value of which is capitalised in the books of account electronic credit ledger as referred in Sec 49(2) i.e. the input tax relation to a person, shall mean receipt
CGST Rules 2017 FC= Foreign currency
credit as self assessed in return of registered person shall be
EV = Exchange Value goods used or intended to be used intended to be used by a supplier of the person claiming the input tax credit and which are of goods or services or both whether by
by supplier in course of furtherance in the course or furtherance of used or intended to be used in the course or furtherance credited to electronic credit ledger in accordance with section 41, purchase acquisition or any other with or
Option 1 Option 2 of business. business of business to be maintained in the manner as may be prescribed. without consideration.
Rule 27 Rule 28 Rule 29
(a) Exchange value up to ` 1,00,000.
When consideration is not Supply between distinct or related person Supply between FC to `
Value = 1% of gross amount exchange value but min
FC to FC
wholly in money (a) Open Market Value (OMV) principle & agent ` 250 Sec 16 : Eligibility & Sec - 17(1), 17(2) & 17(3) Apportionment of Credit Sec - 17(5) Blocked Credit
(b) If (a) is not available convert both (b) Exchange value more than 1 Lac but below 10Lac
(a) Open market value (OMV) (a) Open Market Value (OMV )
value = value of like kind & quality RBI Ref. rate is availabe RBI Ref. not availabe the currencies Value = 1000+0.5% of (E.V. - 1,00,000)
Conditions & Time limit
(b) If (a) is not available (c) If (a) & (b) not determinable then apply OR in Indian ` by T Total input tax (IT) on capital goods (CG) Cases, where ITC not available Exemptions, where ITC allowed
value = consideration in money + Rule 30 or 31 in that order Value = applying RBI rate (c) Exchange Value above 10 L Sec. 16(1) : Eligibility criteria :
FMV of consideration not in money Proviso 1: 90% of price of like kind & Value =1% of Value = 5500+0.1% of (E.V. - 10,00,000) Total IT on I + IS Motor Vehicle and other Conveyance (A) Motor vehicle & other conveyance used for transportation of goods
(c) If (a) & (b) not determinable
If further supply is as such by recipient at option of supplier
Value = 90% of price charged for like kind &
quality by the recipient.
Where such goods are
Dealers
buying or –RBI
base
selling rate rate
gross amount
of currency exchanged in `
Value = 1%
of lower of but max 60,000
- Person should be registered person
- Goods used/intented to be used in the (a) (b) ‘A’
(B) Motor vehicle & other conveyance used for making taxable supplies of
(i) such motor vehicle & other conveyance
Value = value of like kind & quality above amount
quality by recipient. intended for further supply. course or Furtherance of business. (ii) transportation of passengers
(d) If (a) (b) or (c) not determinable then Proviso 2 :
T1 T2 T3 C1 IT on CG used exclusively IT on CG used exclusively IT on CG not covered (iii) imparting training on driving / flying/ navigation such motor vehicle
(b) If (a) is not available then 32 (3) : Value of the supply of Services in relation to booking of tickets for travel by air for non-business/exempt for taxable supplies under (a) & (b). Useful life
apply Rule 30 or 31 in that order If recipient is eligible Full ITC then OMV = Rule 30 or 31 in order. Sec. 16(2) : Conditions : & other conveyance
(a) Domestic Booking - Value = 5% of basic fare IT on I+IS used IT on I=IS used Blocked credit u/s Remaining ITC supplies including zero rated of CG – 5 years from date
Value declared in invoice for supply of goods or services. a) Tax invoice /Debit note is in possession supply (ZRS) of inovice
(b) International Booking - Value = 10% of basic fare exclusively for exclusively for 75(5) credited to ECrL Food and beverages, Outdoor catering, Where a particular category of such inward supplies is used for making an
Note: Basic fare means airfare on which commission is payable to air travel agent. i.e. It doesn’t includes other charges & taxes. b) Receipt/received of Goods or services non-business exempt supplies = T-(T1 + T2 +T3) Beauty Treatment, Health Services, Cosmetic outward taxable supply of the same category - [Sub-contracting] or as an
32 (4) : Life insurance business both purposes & Plastic Surgery element of a taxable composite or mixed supply.
Not to be credited to Credited to ECrL Credited to ECrL
Exception : Bill to ship to Electronic Credit Ledger
Rule 30 & 31 are applicable in order in following cases If goods are supplied on direction of third (ECrL) Membership of Club, health and fitness —
1) If situation covered in rule 27,28,29 but Valuation can not be done by applying the principles Stated in rules Saving policy Single Annul Risk Policy (i) Exempt supplies include reverse Tc center
Policy person then goods are deemed to be charge supplies, transactions in
2) If situation not covered in a fore said rules. value shall be determined as received by third person when supplied by securities, sale of building when Common credit on CG = TC =Σ (A) Rent a cab, Life insurance and health (A) Services notified by the Government as being obligatory for an
Value =10% of per Sec15(1) supplier to the recipient entire consideration is received
T4 C2 if CG under (a)/(b) subsequently get covered
Investment or saving Investment not intimated to policy holder - single premium charged i.e. gross premium charged insurance employer to provide to its employees under any law
c) The payment of tax to the government has after CC. Tm under ‘A’, = (a)/(b) - 5% of IT for a quarter or
intimated to policy holder (a) 1st year value = 25% of premium charged (B) Where a particular category of such inward supplies is used for making
Rule 30: Value of supply Rule 31: Residual method or Best judgement been made on such supply. (ii) Aggregate value of exempt Credit attributable to I+IS Common credit part thereof
Value = gross (b) 2nd year value = 12.5% of premium charged used exclusively in taxable
an outward taxable supply fo the same category [Sub-contracting] or
supplies and total turnover = C1 – T4
based on Cost by using reasonable means Premium -Investment d) He has file the return. supplies including ZRS Common credit of CG for a tax as part of a taxable composite or mixed supply.
Cost of production Note : If this option is exercised it can’t withdrawn in the same financial year exclude the CED, SED & VAT Tr
– Consistent with the principles & general provision of Sec 15 period during their useful life
Value = 110% of Cost of acquisition – Provision of this chapter (i.e. earlier rules) Tm = Tc/60 Travel benefits extended to employees on —
32 (5) : Buying & Selling of 2nd hand goods. Other : Common credit at the beginning of a tax vacation such as leave or home travel
Cost of provision of service Note: In case of supply of services supplier may option for rule 31 instead of rule 30
1) If, goods received in lots - then, ITC is period for all CG having useful life in that tax
D1 D2 C3 period
concession
on ‘Receipt of last lot/install.
Tr = Tm of such CG Works contract service for construction of (A) Works Contract services for Plant & (A) Construction includes re-
If ITC is not taken on purchase of such goods 2) Payment to Supply within 180 days - Credit attributable to exempt Credit attributable to non- Remaining
Rule 33 : Deduction of expenses incurred as a pure agent If ITC is taken on purchase of such goods supplies - business purpose if Common credit immovable property Machinery construction/ renovation/
Definition of pure agent : Means a person Service recipient pay 180 days. [Value+tax] addition/ alterations/ repairs
This rule is applicable for all supply of services not with standing to E xC common I + IS used partly = C2 - (D1 + D2) (B) Where Works contract service for to the extent of capitalisation
- Value = selling price - purchase price Value = Transaction value U/S 15(1) or outward supply of such goods But if not 180 days then, D1 = — Te
anything contained in the provision on this chapter F 2
for business + non-business immovable property is input service for to said immovable property.
Value shall exclude the expenditure & cost incurred by the supplier as (a) entering into contractual agreement with the E= Value of ES during tax period purposes further supply of works contract services (B) Plant & Machinery means
In case of reposed goods from defaulting borrowers. Common credit towards exempted supplies
recipient to incurred the expenditure as pure Amt. = ITC added in outward lia F = Total turnover during tax period D2 = 5% x C2 Eligible ITC [Sub-contracting] apparatus, equipment &
a pure agent subject to following conditions.
1) Supplier act as pure agent of the recipient while making payment
agent
(b) Neither holding any title on supplies procured
Purchase = Purchase price of
price defaulting borrower
–
5% of each qtr or part there of between date
of purchase of defaulting borrower & date of disposal by person
(+) Interest @ 18% if no turnover during the tax
period/values not available, values
attributable to
business &
E
Te = — x Tr
F
E – Aggregate value of exempt supplies Inward supplies received by taxable person (A) Construction of Plant & Machinery
machinery fixed to earth by
foundation or structural
to 3rd party supports but excludes land
as a pure agent Regain when payment is made. for last period may be used. taxable supplies for construction of immovable property on his (B) Construction of immovable property for
during the tax period; F — Tutal turnover building/ other civil
2) Amount separately shown in invoice (c) Doesn’t use such supplies for his own interest 32 (6) : Value of token, voucher, coupon. including ZRS during the tax period. own account including when such supplies others structures, tele-
Exception : 1) Tax payable under RCM Ineligible credits Added to output tax liability along
3) Supplies of goods / services procured by the supplier as a pure (d) Received only the actual amount incurred to Value = money value of goods / services / both redeemable against such coupon, token, voucher, stamp If no turnover during the tax period/values not are used in the course or furtherance of communication towers and
2) Deemed supplies without consideration with interest pipelines laid outside the
agent are in addition to services he supplies on his own A/c. procure supplies under pure agent. 32 (7) : Value of supply of service to distinct person. In case of notified supply of services by govt. the value of supply available, values for last tax period may be business
[Sch.I] used. factory premises.
made to distinct person where ITC is available shall be Nil To be added to output tax liability
Inward supplies received by NRTP Goods imported by him
Sec. 16 (B) - claimed & depreciation on tax Ü C3 will be computed separately for ITC of CGST, SGST/ UTGST and IGST.
Sec 2(61) “Input Service Distributor”
component under income tax act = ITC Ü Σ(D1 + D2) will be computed for the whole financial year, by taking exempted
Sec 20 – Distribution of credit Goods or services or both on which tax —
Sec 19- Goods sent by principal for Job Work not allowed turnover and aggregate turnover for the whole financial year. Ü Te will be computed separately for ITC of CGST, SGST/UTGST and has been paid under Sec 10
Means an office of the supplier of goods or services or both If this amount is more than the amount already added to output tax liability every
by Input Service Distributor which receives tax invoices issued under section 31 month, the differential amount will be added to the output tax liability in any of the
IGST.
Goods or services or both received by non- —
The principal shall be allowed input tax credit on inputs sent to a Sec. 16(4) - Time limit for availing ITC Ü Exempt suppliies include reverse charge supplies, transactions in
towards the receipt of input services Earlier of following month till September of succeeding year along with interest @ 18% from 1st April securities, sale of land and sale of building when entire consideration resident taxable person except on goods
job-worker for job-work. The Input Service Distributor shall distribute the credit of and of succeeding year till the date of payment. imported by him
1) Due date of sep. of + FY is received after completion certificate.
1
issues a prescribed document for the purposes of Ü If this amount is less than the amount added to output tax liability every month, the Ü Aggregate value of exempt supplies and total turnover excludes the
Ü central tax as central tax or 2 integrated tax distributing the credit of Limit [i.e. 20th Oct of next F.Y] additional amount paid has to be claimed back as credit in GSTR 3 or any month Goods or services or both used for personal —
central excise duty, State excise duty & VAT.
and Ü Central tax, till September of the succeeding year. consumption
Ü State tax, OR
Ü integrated tax as 1
integrated tax or 2central tax, ÜIntegrated tax or
Sec 17(4) : Special option of ITC to banking and F.I. Goods lost, stolen, destroyed, written off or —
Inputs sent for Capital Goods sent for Ü Union territory tax paid on the said services
2) Date of filling Annual Return Avail of every month, an amount equal to 50% of the eligible input tax credit on inputs, capital gooda nd input services in that month and the rest shall lapse disposed of by way of gift or free samples
Note : 100% ITC is available if inward supply from another registered branch under same PAN (except block credit)
Job work Job work Ü State tax as 1
State tax or 2 integrated tax to a supplier of taxable goods or
services or both having the same Permanent Account
by way of issue of a document containing the amount of input tax credit being
distributed in such manner as may be prescribed.
Number as that of the said office. Sec 18 : Reversal of Credit
Where inputs sent for job work – Where capital goods sent for job work Sec 18(1) Availment of Credit Sec 18 (3) Transfer of ITC Reversal of Credit
> Are not received back by the principal after – The Input Service Distributor may distribute the credit of central tax, integrated tax, and state tax subject to the
completion of job-work or otherwise or > are not received back by principal following conditions namely:-
> Are not supplied from the place of business Within a period of 3 years of being a) The credit can be distributed to the recipients of credit against a document containing such details as may
be prescribed (c) (d) In case of Sec 18(4) Reversal of credit
of the job worker as per sec 143 sent, it shall be treated as deemed (a) (b)
Registered person switching from Registered person is exempt
In case of Sec 18 (6) : Reversal of credit on supply
Person applied or Person obtaining - Sale, Amalgamation, Demerger in Special Cases of Capital Goods/ Plant & Machinery on
Within 1 year of being sent, it shall be treated supply by principal to job worker b) the amount of the credit distributed shall not exceed the amount of credit available for distribution registration within voluntary composition levy to normal tax payment supplies becoming a taxable supply Lease, Transfer of business
which ITC has been taken
as deemed supply and ITC if availed shall be c) the credit of tax paid on input services attributable to a recipient of credit, shall be distributed only to that 30 days & becoming Registration
reversed liable for registration Person entitled for ITC on Registered person 1) If capital goods or plant & machinery on
recipient The Registered apportion his ITC in ratio of
- Input as such held in stock Registered person switching from Taxable supply Cancellation which ITC has been taken are supplied
person shall transfer his Value of asset transfered to normal scheme of payment of tax becoming exempt of
d) the credit of tax paid on input services attributable to more than one recipient, shall be distributed on pro Person entitled for ITC on - Inputs contained in semi finished goods unutilized ITC in Ecr ledger
[Removed as such by way of sale
> Nothing contained in this section shall apply to moulds, dies, jigs & fixtures or tools sent out for job work rata basis of No benefit demerged unit to composition Levy Supply Registration transfer barter etc.] then registered
- Input as such held in stock - Inputs contained in finished goods held instock or transferee
- Inputs contained in semi-finished goods on Capital - Capital goods person shall pay higher of the following
- the turnover in state / union territory of such recipient during the relevant period to the aggregate of the 1) Amt to be reversed is equivalent to ITC on
Note:- For inputs – The period of 1 year shall be counted from the date of receipt of inputs by the job worker - Inputs contained in finished goods held in stcok goods [ITC = Input tax - 5% per qtr. or part these of from the date of invoice.] - Input as such held in stock a) Payment = ITC - 5% per at or part
For Capital goods – The period of 3 years shall be counted from the date of receipt of capital goods by the job worker turnover of all such recipients to whom such input service is attributable & which are operational in the Conditions - Inputs contained in semi finished goods
thereof
current year, during the said relevant period If person liable for registration Voluntary Registration Composition to normal : on the date immediately Exempt to taxable : on the date immediately 1) There is a specific provision for transfer of liabilities - Inputs contained in finished goods held in stock
2) Conditions of Rule 41 OR
As per sec 2(68) “job work” means any treatment or process undertaken by a person on goods belonging to another registered person and the e) The credit of tax paid on input services attributable to all recipients of credit shall be distributed amongst On the date immediately preceding on the date immediately preceding the date from which person become liable preceding the date from which such supply - Capital goods [reversal on prorata basis pertaining to remaining useful life in a month (taking
to pay tax under normal scheme become taxable. (a) declaration of details in the form GST ITC 02 for transfer of useful life as 5 yrs.
expression “job worker” shall be construed accordingly; such recipient on pro rata on the basis of the date from which he becomes preceding the date of credit . b) GST on transaction value
liable to pay tax registration After reversal balance if any in Ecr. ledger shall lapse
- - the turnover in state / union territory of such recipient during the relevant period to the aggregate of the 1) As per Sec 18(2) person is not entitled to take ITC if supply of input or capital goods is after expiry of 1 year from the (b) Certification of transfer of liabilities from CA/CMA
date of issue of tax invoice. (c) Acceptance of transferred credit by transferee on common Rule 44 : Procedure & conditions 2) In case of refectories bricks, modules &
As per sec 2(88)“principal” means a person on whose behalf an agent carries on the business of supply or receipt of goods or services or both turnover of all such recipients to whom such input service is attributable & which are operational in the current Important Comment : 2) Imp provisions of rule 40 : 1) Reversal of inputs shall be determined with corresponding invoices. If invoice is not available die, jugs & fixtures supplied as a scrap
portal
year, during the said relevant period If person failed to apply for reg. within 30 days then he is not a) Declaration in form GST ITC of within 30 days
(d) inputs & capital goods so transferred are duly accounted by then reversal is based on prevailing market price of inputs. then person may pay tax on transaction
b) If the aggregate claim amt is more than ` 2,00,000 it should be duly certified by practicing CA or CMA 2) Reversal of ITC shall be calculated separately for CGST, SGST & IGST. value instead of above 2 options.
For detailed discussion of this section refer chapter notes of Input tax credit eligible to take such ITC. c) ITC claimed under clause (c) & (d) of Sec 18(1) shall be crossverified by with details furnished by supplier in form transferee in his books of A/c GS
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3) Reversal amt. will be added in output tax liability & details to be furnished in GST ITC 03
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GSTR-1 & GSTR-4 on Common portal.

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