Sri Vivekananda Degree College, Chintamani Sri Sai Vishwa Tutorials, Chintamani Goods and Service Tax AS Per NEWACBCS Syllabus for V Semester, B.Com Bangalore University w.e.f 2017-18 Manjunatha $ V .com., B.ed., NET., KSET. PSU ig APs ole RO es 9 BYU Leite m Plt elt tela RU am Mobile No.: 9743082528, 9986658577AC 5.6 GOODS AND SERVICES TAX Unit 1: INTRODUCTION TO GOODS AND SERVICES TAX (GST) 08 Hrs Objectives and basic scheme of GST, Meaning ~ Salient features of GST — Subsuming of taxes Benefits of implementing GST — Constitutional amendments - Structure of GST (Dual Model) — Central GST — State / Union Territory — Integrated GST - GST Council: Structure, Powers and Functions. Provisions for amendments. Unit 2: GST ACTS: CGST Act, SGST Act (Karnataka State), IGST Act 08 Hrs Salient features of CGST Act, SGST Act (Karnataka State), IGST Act - Meaning and Definition: Aggregate turnover, Adjudicating authority, Agent, Business, Capital goods, Casual taxable person, Composite supply. Mixed supply, Exempt supply, Outward supply, Principal supply, Place of supply, Supplier, Goods, Input service distributor, Job work, Manufacture, Input tax, Input tax credit, Person, Place of business, Reverse charge, Works contract, Casual taxable person, Non-resident person, Export of goods / services, Import of goods / services, Intermediary, Location of supplier of service, Location of recipient of service. Unit 3: PROCEDURE AND LEVY UNDER G 24 Hrs Registration under GST: Procedure for registration, Persons liable for registration, Persons not liable for registration, Compulsory registration, Deemed registration, Special provisions for Casual taxable persons and Non-resident taxable persons. Exempted goods and services - Rates of GST. Procedure relating to Levy: (CGST & SGST): Scope of supply, Tax liability on Mixed and Composite supply, Time of supply of goods and services, Value of taxable supply. Computation of taxable value and tax liability. Procedure relating to Levy: (IGST): Inter-state supply, intra-state supply, Zero rates supply, Value of taxable supply ~ Computation of taxable value and tax liability. Input tax Credit: Eligibility, Apportionment, Inputs on capital goods, Distribution of eredit by Input Service Distributor (ISD) ~ Transfer of Input tax credit - Simple Problems on utilization of input tax credit Unit 4: ASSESSMENT AND RETURNS 10 Hrs Furnishing details of outward supplies and inward supplies, First return, Claim of input tax credit, Matching reversal and reclaim of input tax credit, Annual return and Final return. Problems on Assessment of tax and tax liability. Unit 5: GST AND TECHNOLOGY 06 Hrs GST Network: Structure, Vision and Mission, Powers and Functions. Goods and Service Tax Suvidha Providers (GSP): Concept, Framework and Guidelines and architecture to integrate with GST system. GSP Eco system. (Theory only)wrtonicron 06 1. INTRODUCTION TO G Tax: ‘A tax may be defined as a "pecuniary burden laid upon individuals or property owners to support the Government, a payment exacted by legislative authority. A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority". In simple words, tax is nothing but money that people have to pay to the Government, which is used to provide public services. Types of Tax Taxes are broadly classified into direct and indirect taxes Tax on undisclosed foreign income and Tax (GST) assets Goods and Services Direct Taxes: A direct tax is a kind of charge, which is imposed directly on the taxpayer and paid directly to the Géyernment by the persons (juristic or natural) on whom it is imposed. A direct tax is‘one that cannot be shifted by the taxpayer to someone else. A significant direct tax imposethin India is income tax. Indirect Taxes: If the taxpayer is just a conduit and at every stage the tax- incidence is passed on till Wtfinally’yeaches the consumer, who really bears the brunt of it, such tax is indirect fax. Anihdiréct tax is one that can be shifted by the taxpayer to someone else. FEATURES OF INDIRECT TAXES 1. An important source of revenue: Indirect taxes are a major source of tax revenues for Governments worldwide and continue to grow as more countries move to consumption oriented tax regimes. In India, indirect taxes contribute more than 50% of the total tax revenues of Central and State Governments 2. Tax on commodities and services: It is levied on commodities at the time of manufacture or purchase or sale or import/export thereof Hence, it is also known as commodity taxation. It is also levied on provision of services. “Se Sat “Vshwn Fatrns,Chnnment ~ 97450828 998638577 ‘Great things newer come from comfort zones’ e =wrtontenon 06 3. Shifting of burden: There is a clear shifting of tax burden in respect of indirect taxes. For example, GST paid by the supplier of the goods is recovered from the buyer by including the tax in the cost of the commodity. 4. No perception of direct pinch: Since, value of indirect taxes is generally inbuilt in the price of the commodity, most of the time the tax payer pays the same without actually knowing that he is paying tax to the Government. Thus, tax payer does not perceive a direct pinch while paying indirect taxes. 5. Inflationary: Tax imposed on commodities and services causes an all-round price spiral. In other words, indirect taxation directly affects the prices of commodities and services and leads to inflationary trend. It means increase in price and fall in the purchasing value of money. 6. Wider tax base: Unlike direct taxes, the indirect taxes have a wide tax-base. Majority of the products or services are subject to indirect taxes with lowothresholds. 7. Promotes social welfare: High taxes are imposed“on théyConsumption of harmful products (also known as ‘sin goods’) such as alcoholic ptoduéts, tobacco products etc. This not only checks their consumption but also enables the State to collect substantial revenue. 8. Regressive in nature: Generally, the indirect taxés-are regressive in nature. The rich and the poor have to pay the same rate of indirect taxes on certain commodities of mass consumption. This may further increase the income disparities between the rich and the poor. Difference between Direct Taxes and Indirect Taxes — illustrative list: SI Point of — | No.| Difference», Direct Taxes Indirect Taxes [Direct Taxes are the taxes in [Indirect Taxes are such type of which the incidence and impact | taxes where incidence and I Meahitey' falls on the ~~ same| impact fall on two different A __ person/assessee persons Dire Tax i presi in | Indire Taxes are regressive in Prone er tax rect Tax is progressive direct Taxes are regressive a nature. nature, _ : : Purchase / Sale / Manufacture Taxable Income / Taxable | Pt one 3 | Nature of tax of goods and /or rendering of services. Levied & collected from the Levy & | Levied and collected from the | consumer but paid / deposited Collection Assessee. to the Exchequer by the Assessee / Dealer. Wealth of the Assesses. Se Sot “Vshwn Farias, Chnnment — 97450828 998638577 ‘Great things newer come from comfort zones’ e =cane a eet INTRODUCTION To GST 5 | Tax Collection Tax is collected after the income for a year is earned or valuation f assets is determined on the valuation date. At the time of sale or purchases or rendering of services. Tax Burden is directly borne by 6 Spiting.et the Assessee. Hence, the burden Tes Due ule © the cannot be shifted. a Direct taxes are lesser burden | Mdirect taxes are borne by the sia : consumers of commodities and Viability of then indirect taxes to people as : 7 ayment | direct taxes are based income | S*"viees irrespective OPfinancial pay! 7 8 ability as the-MRP includes all earning ability of people. taxes. The administrative cost of Cost tl college indirect are 8 Administrative collecting direct taxes is more ico aie oy ait ; itt iG viability and improper __ administration {™ appa uD in pi may result in tax evasion. ‘of gdods and services and cannot be evaded 9 Imposed on Tneome, wealth and property Goods and services Introduction: GST (Goods,and Serviee Tax) France was the first country to introduce the GST system in 1954 Goods and service tax is a’Bimiprehénsive tax on goods and services levied by both Central and State government bysalloWing the taxes paid on inputs in the earlier stages of production and consumptiofs Itis a tax on final COnsuifiption of goods and services consumed in an economy. The efforts of central government'to implement GST were meticulous. GST extendsto» Whole of India Including Jammu and Kashmir. History of GST (Genesis of GST in Indi February 2006 | May 20077 Finance Minister Mr. P. Chidambaram comments in the Budget Speech that there is a large consensus that the country must move towards a national level GST that must be shared between the Center and States | He proposes | April 2010 as the date for introducing GST. Empowered Committee (EC) of State Finance Ministers in consultation with Central Government, constituted a Joint Working Group (JWG), consisting of officers of Central and State Governments to examine various models and options for GST and to give their assessment of the same to the EC. November 2007 Joint Working Group (JWG) presented its report on the GST to the EC. Sti Sai “Vishwa Fucocials, Chintamani — 9745082528 / 9986658577 ‘Great things newer come from comfort zones? The EC accepied the report on GST submitted by the JWG Gorcanna ee INTRODUCTION To GST April 2008 Empowered Committee finalises the overall strategy for GST introduction in India November ‘First Discussion Paper’ on GST is released by EC 2009 February 2011_| IT strategy (by Mr. Nandan Nilekani) for GST released March 2011 115th Constitution Amendment Bill introduced in Parliament. However, this 115" CAB Constitution Amendment Bill was lapsed (in May 2014) with change of Government at Center. 19 December | The 122nd Constitutional Amendment Bill (hereafter refed a5 CAB) 2014 was introduced in Lok Sabha 6 May 2015 _| The 122nd CAB passed in Lok Sabha 6May 2015 | 122nd CAB introduced in Rajya Sabha. 122nd GABowas referred to Select Committee of Rajya Sabha September “More than half of the State Asseniblies need Yo ratified the 2016 Constitutional Amendment Bill +x Presidential Assent received 2x GST Council formed March 2017 GST Council Recommends the CGS§T, SGST, IGST, UTGST and Compensation Cess Act April 2017 CGST, IGST, UTGST and Compensation Cess Acts passed jay 2017 GST Council recommends allthe rulés }0" June 2017 _| All States except J&K passed theit SGST ACT 1 July 2017 _| GST Launched 8™ July 2017 | SGST Act passed by J&K* extend GST to J&K The Journey to GST iST and IGST Ordinances promulgated to Fat Discussion Pacer i won lesa by the oF =< Empowereg Commence zat Inoauce the Lok athe * © Announcoment of GST for the ts atin te ; time wo made By the then Union Const 6% amendment) The Constitution Finonee Minister durng budget of eco ne nemo ‘Aug20%6 (One Hundred and 2006-97 tot" would” noduced peed Fre amendmen) fom # Apa 2010 ‘etwas orate taey 2017 Apai2o17 wen 2047 sep 2016 ° ue Gst Count cost, Gs, uIGST GST Counet 48GST Counet| An states recommends and" Compenation RECOMMeNOS Ihe CST, Meeting cxcent theres eeaacte persed SOSTIOST, UTOST and sax Companeation Cos het peed — Pro sane el 77 a uy 2017 ars seurnayCominane.., Natbiog and amending res cominant- + Deaing wn ated aves Gs unened 55ST At pe commeneavon with toxooven Sei Sai “Vishwa Furorials, Chinramani — 9745082528 / 9986658577 ‘Great things newer come from comfort zones’ Sorwrtonicron 06 Meani GST-Goods and Service Tax is a destination based consumption tax to be levied on supply of goods and services, taxable event being supply, i.e. a value added tax levied on manufacture, sale and consumption of goods and services The Goods and Services Tax (GST) is a comprehensive value added tax (VAT) on the supply of goods or services Definition: The term ‘GST” is defined in Article 366 (12A) to mean “any tax on supply of Goods or services or both except taxes on supply of the alcoholic liquor for hurfan consumption”. Objectives of GS ae Ensuring that the cascading effect of tax on tax will be elimifiated ye Ensuring the availability of the input credit across the, value chain Ye Reducing the complications in tax administration and compliance. ye Making a unified law involving all the tax bases, laws and’ administration procedures across the country. ye Decrease in the Unhealthy competition among the states due to taxes and revenues. e Reducing the tax slab rates to avoid furthePelarifications issues. Ye To Introduce Principle of ‘consumption-based taxation’. ¥ Improving the competitivencS86f'the original goods and services, thereby improving GDP rate too. Salient Features of GST The salient features of GST are as under: 1. Tax IncidenéeGST.wotild be applicable on supply of goods or services as against the present concept Of tax on the manufacture of goods or on sale of goods or on provision of services. 2. Destination based Tax: - The GST is a destination based tax on consumption of Goods and Services. Hence the credit of SGST shall be transferred to the Destination Staten the form of Integrated GST (IGST). [GST will be imposed on all Inter-State Transactions. 3. GST is a Value Added Tax: Since only the value added at each stage is taxed under GST, It can be termed as value added tax. 4. No Cascading of Taxes: GST is a Value Added Tax, so there is no tax on tax or cascading of taxes under GST. 5. The GST shall have two components: one levied by the Centre (referred to as Central GST or CGST), and the other levied by the States (referred to as State GST or Sti Sai “Vishwa Farorials, Chintamani — 9743082528 / 9986658577 ‘Great things newer come from comfort zones?wrtonteron 06 10. 11. 13, Sti Sai “Vishwa Fucocials, Chintamani — 9745082528 / 9986658577 ‘Great things newer come from comfort zones? '. Utilization “of Levy: Levies from State GST (SGST) & Central GST (C SGST). Rates for Central GST and State GST would be approved appropriately, reflecting revenue considerations and acceptability. Dual GST Model: The CGST and SGST are to be paid to the accounts of the Centre and the States respectively. GST would apply to all goods and services except Alcohol for human consumption. Availability of Tax Credit: In respect of taxes paid on any supply of goods or services or both used or intended to be used in the course business. Assessment: Registered person will be allowed himself to assess thettaxes\ payable under the GST Laws and furnish a return for each Tax Period. Threshold Limit: There shall be a taxable limit. Composition Scheme: The GST Laws will provide a compositiow’Sehigme for small dealers (presently, Aggregate turnover of 275 Lakhs for Special category states and 21.5 Crores for reaming Sates). . GSTIN (GST Identification Number) is PAN based: Every registrants or dealers (including Exporters and Importers) shall be givén a PAN Based TIN number which shall be a common to the both the State GST and Ceritral GST. Compensation to States: The GST Laws provides for Payment of compensation to the States for loss of revenue, if any, arising out 6f implementing of the Goods and Services Tax for a period of 5 years. . The GST Council: The Council\is a\quasi — judicial body of States and the Centre, represented by the Staf@Finance’ Ministers or Taxation Ministers and the Finance Minister of India. The key role of this Council is to make recommendations on various provisions of GST Laws to the State and the Centre. . Anti-Profiteering Measures: Ivis expected the GST Laws will bring down the prices of goods and services onte implemented. To ensure the pass of such benefits to end users or the etistomers,th€ government has put anti-profiteering measures. . Transition: Elaborate ‘Transitions Provisions” for smooth transition of existing tax payers to neWolndiréct Tax Regime provided 'T) shall form patt of State and the Centre respectively and no cross-utilization shall be allowed. . Availability of Tax Credit: In respect of taxes paid on any supply of goods or services or both used or intended to be used in the course business. It is expected that the GST Laws or new indirect tax regime, brings benefits to all the stakeholders’ viz. industry, government and the citizens. Further, lower the cost of goods and services, boost the economy and make our products and services globally competitive.wrtonicron 06 Indirect tax before introduction of GS ‘Tax Levied on i Collected by State VAT Sake oF purchases effected within the Respective state governments Central sales tax | Sales or purchases effected in inter- | State government from where (CST) state trade or commerce sales are done. State excise | Manufacture of alcoholic brewages in State government where “ the state. _ manufacture happens, Central excise | Manufacture of excisable Union government \ Providing of taxable service in taxable territory (India excluding J&K) | t __Customs duty | On goods imported into India Union government Principles subsumed the taxes under GST (a) Taxes to be subsumed should be primarily on indirect taXes,,either on the supply of goods or on the supply of services. (b) Taxes to be subsumed should be part of the transaction ¢hain,which commences with import/ manufacture/ production af goods or provision of services at one end and the consumption of goods and services at the otlier, (c) The Subsumation should result in free flow of tax Gredit in intra and inter-State levels. (d)The taxes, levies and fees that are not Specifically related to supply of goods and services should not be subsumed under GST. (c) Revenue fairness for both thebinion’and)the States individually would need to be Service tax Union government attempted. Subsuming of taxes underGST: Central Levies state Levies => VAT/ Sales tax Cement mate, | oo excise duty (cu oS ey Entertainment tax (unless levied pee ererey by the lacal bodies) (ie. CVD and ACD. Faxes on lottery, betting and gambling Geases and surcharges: Purchase tax to be levied byUnion|e education | ‘subsumed cessete, Not Subsumed (likely tobe out) a Municipal levies: State GST ‘Stampduty Basic custom duty Export duty ‘Toll, Road and Passenger Tax central GST Se Sot “Vshwn Fatrns,Chnnmant — 97450828 998638577 ‘Great things newer come from comfort zones’ ewrtonicron 06 CENTRAL TAXES TO BE SUBSUMED IN GST On application of the above principles and various papers which have been released in this regard, it is deduced that the following Central Taxes should be, to begin with, subsumed under the Goods and Services Tax: > Central Excise Duty (CENVAT) » Additional Excise Duties » The Excise Duty levied under the Medicinal and Toiletries Preparations (Excise Duties) Act 1955 Service Tax Additional Customs Duty, commonly known as Countervailing’Duty (CVD) Special Additional Duty of Customs — 4% (SAD) Surcharges and Cesses levied by Centre are also likely to be subsumed wherever they are in the nature of taxes on goods or services. This may include cess on rubber, tea, coffee, national calamity contingent dutty. ete. > Central Sales Tax to be phased out. ‘TATE TAXES TO BE SUBSUMED IN GST. Following State taxes and levies would be, to begim with, subsumed under GST: VAT / Sales tax Entertainment tax (unless it is leyied by the:local bodies) Luxury tax Taxes on lottery, betting and’'gambling State Cesses and Surchargés in $0 far as they relate to supply of goods and services Octroi and Entry Tax Purchase Tax TAXES WHICH ARE NOT'TO BE SUBSUMED GST may not subsumesthe:following taxes within its ambit: > Basic Custonis, Duty: These are protective duties levied at the time of Import of goods int6"India, > Exports Duty: This duty is imposed at the time of export of certain goods which are not available in India in abundance. » Road & Passenger Tax: These are in the nature of fees and not in the nature of taxes on goods and services. » Toll Tax: These are in the nature of user fees and not in the nature of taxes on goods and services. Property Tax > Stamp Duty Electricity Duty vvvy vvyvyvyyyY v v Se Sat “Vshwn Furs, Chioument — 97450828 998638577 ‘Great things newer come from comfort zones’ e =ersooucoon os BENEFITS OF GST:- The benefits of GST can be summarized as under: I. For Business And Industry: 1. Better compliance: - a robust and comprehensive IT system would be the foundation of GST regime in India. Therefore, GST ensures better compliance of laws relating to registrations, returns, payments, ete. would be available to taxpayers online, which would make compliance easy and transparent. 2. One Point Single Tax (Uniformity of Tax Rates and Structures); One of the features that GST will hold is it will be ‘One Point Single Taxation’. This also, gives a lot of comforts and confidence to business community thatythey would focus on business rather than worrying about their taxation that may crop'atlater stages. This will help the business community to decide their supply chain, pricing- modalities and in the long run helps the consumers being goods competifive.as price will no longer be the function of tax components but function of,sheerybusiness intelligence and innovation. 3. GST will end cascading of Taxes (Mitigation of, ill effects of cascading): -This will be the major contribution of GST for the business and commerce. At present, there are different state level and centre level indirect tax levies that are compulsory one after another on the supply chain till thetime of its final consumption which was becoming tax on tax; by GST it can be avoided, 4. Improved competitiveness? ®¥eduction in transaction costs of doing business would eventually lead to an improved competitiveness for the trade and industry. . Gain to manufacturers and ‘exporters: - the subsuming major central and state taxes in GST, complete and comprehensive set-off of input goods and services and phasing out of central silles tax (CST) would reduce the cost of locally manufactured goods and-ServieesThis will increase the competitiveness of Indian goods and services in the international market and give boost to Indian exports. The uniformity in tax rates‘and procedures across the country will also go a long way in reducing the complianéé cost. 6, Creation of unified national market: GST aims to make India a common market ‘Withcommon tax rates and procedures and remove the economic barriers thus paving the.way for an integrated economy at the national level Il. For Central And State Governments: 1. Simple and easy to administer: - multiple indirect taxes at the central and state levels are being replaced by GST. Backed with a robust end-to-end IT system, GST would be simpler and easier to administer than all other indirect taxes of centre and state levied so far. wn Sti Sai “Vishwa Fucocials, Chintamani — 9745082528 / 9986658577 ‘Great things newer come from comfort zones?wrtonieron 06 2. Better controls on leakage: - GST will result in better tax compliance due to a robust IT infrastructure. Due to the seamless transfer of input tax credit from one stage to another in the chain of value addition, there is an inbuilt mechanism in the design of GST that would incentivize tax compliance by traders. 3. Higher revenue efficiency: - GST is expected to decrease the cost of collection of tax revenues of the government, and will therefore, lead to higher revenue efficiency 4. Boost to ‘Make in India’ initiative: GST will give a major boost to the ‘Make in India’ initiative of the Government of India by making goods and services produced in India competitive in the national as well as international market, III, For The Consumer: 1. Single and transparent tax proportionate to the value of gd6dS and servic due to multiple indirect taxes being levied by the centre and state, with incorporate or no input tax credits available at progressive stages of value‘addition, the cost of most goods and services in the country today are laden with any hidden taxes. Under GST, there would be only one tax from the mariufactufer to}the consumer, leading to transparency of taxes paid to the final consumer. 2. Relief in overall tax burden; - becaiise Of efficiéncy gains and prevention of leakages, the overall tax burden on most commodities will come down, which will benefit consumers. NEED FOR GST IN INDIA The following deficiencies in the-existing Indirect Tax Laws cause need to bring GST in India as a cure for ills of existing Indirect Tax regime. GST is a Cure for ills of existing Indirect Tax: The given statement is true. Cascading affect of tax is one of the vital cause-to-cause ill of existing Indirect Taxwltameans’a tax that is levied on a good at each stage of the production process up to, the point of being sold to the final consumer. It is also known as tax on tax. One of the fundamental features of GST is the seamless flow of input credit across the chain (from the manufacture of goods till it is consumed) and across the country. Let us understand itn the following cases: 1) Nen-integration of VAT and Service Tax causes double taxation: In the present regiine, restaurant services provider is liable to pay VAT on sale of food and service tax on supply of services. There is no set-off. It means VAT is not allowed as input tax credit against service tax and vice versa. 2) No CENVAT Credit after manufacturing stage to a dealer: In the present regime, a manufacturer of dutiable goods charge excise duty and value added tax on intra-state sale of goods or CST on inter-state sale of goods. VAT or CST is levied inclusive of excise duty. Sti Gai “Vishwa Farorials, Chintamani — 9743082528 / 9986658577 Ea ‘Great things newer come from comfort zones? SoFwrooicron 06 3) Cascading of taxes on account of levy of CST Inter-state purchases: 4) The cxisting Indirect Tax frame works in India suffer from various duties and taxes at Central as well as at State level: CONSTITUTIONAL AMENDMENT: Constitution (122nd Amendment) Bill, 2014 received the assent of the President of India on 8th September, 2016 and became Constitution (101st Amendment) ‘Act, 2016, which paved the way for introduction of GST in India. Constitution (101st Amendment) Act, 2016 was enacted on 8th September, 2006, with following significant amendments (a)Concurrent powers on Parliament and State Legislatures to make laws governing goods and services. It means there will be dual control of State’and Central authorities for all assesses. (b)As per Article 246A, the power to levy GST has beén givetrto the Parliament as well as to Legislature of every State. i. CGST — enacted by Central Government of India, i. IGST — enacted by Central Government of India. .. SGST— enacted by respective State,Governments UTGST — enacted by Central Governmentof India (Q)IGST will be apportioned between Centre and the States in the manner provided by Parliament by Law as per th€Feeommendation of the GST Council. (d)GST will be levied on all supply-of goods and services except alcoholic liquor for human consumption, (e) The explanation to Article 269A of Constitution of India provides that the import of goods or services\will be deemed as supply of goods or services or both in the course of inter=State trade or commerce. In case of import of goods IGST will be levied along withthe Basic Customs duty. It means IGST is levied in replacement of CVD + SpecialCVD. In case of import of services only IGST will be levied. (f) Principles for determining the place of supply and when a supply takes place in the course Of intet-state trade or commerce shall be decided by the Parliament. (g) The*power to levy Central Excise duty on goods manufactured or produced in India is available in respect of the following products: i. Petroleum crude; . High speed diesel; .. Motor spirit (commonly known as petrol); iv. Natural gas; v. Aviation turbine fuel; and vi. Tobacco and tobacco products. Sti Sai “Vishwa Farorials, Chintamani — 9743082528 / 9986658577 ‘Great things newer come from comfort zones?wrtooueron 06 However, once GST is imposed there will be no duty on manufacture of these goods. (h) The power to impose tax on sale of the following products is still provided to the State Governments: i. Petroleum crude; ii, High speed diesel: i. Motor spirit (commonly known as petrol); . Natural gas: y. Aviation turbine fuel; and vi. Alcoholic liquor for human consumption. However, once GST Council is recommend the date from which GST is imposed on these products (except alcoholic liquor for human consumption), and noeSales, tax will be imposed on these products As per definition given in article 366(12A), GST covers all the»goods except alcoholic liquor for human consumption. It means no GST can-Be, levied on Alcoholic liquor for human consumption. Present system of State Excise duty anéisalés tax on Alcoholic liquor for human consumption will continue. As a result, the following bills became an Act on 12th April/2017: ¥ Central Goods and Services Tax Bill, 2017 % Integrated Goods and Services Tax Bill, 200%, ¥% Union Territory Goods and Services, Tax Bill, 2017 + Goods and Services Tax (Coffipeisation 6’States) Bill, 2017 The Central Government notified. st July, 2017 as the date from which the much awaited indirect tax reform in India; te, Goods and Services Tax (GST) will be implemented. Accordingly, GoodSvand'Seryices Tax (GST) has been implemented in India wef. Ist July, 2017. Structure of GST (DUAL GST MODEL): India adopted @ dual GST where tax imposed concurrently by the Central and States. GST Tntra State Transaction Inter State Transaction (In same state) (In different states) CGST + SGST Integrated GST Sti Sai “Vishwa Fucocials, Chintamani — 9745082528 / 9986658577 ‘Great things newer come from comfort zones?wctonteron 06 Central Goods and Services Tax Act, 2017 (CGST): CGST levied and collected by Central Government. It is a revenue source to the Central Government of India, on intra- state supplies of taxable goods or services or both. State Goods and Services Tax Act, 2017 (SGST): SGST levied and collected by State Governments/Union Territories with State Legislatures (namely Delhi and Pondicherry) on intra-state supplies of taxable goods or services or both. It is a revenue sottive of the respective State Government. Union Territory Goods and Services Tax (UTGST): UTGST leyied-and collected by Union Territories without State Legislatures, on intra-state supplies 6PtRable goods or services or both. Note: India is a Union of States. The territory of India compti8es.of the territories of the States and the Union Territories. Currently, there are 29°States and 7 Union Territories; of which, two (Delhi and Pondicherry) are having Legislature, GST - in Union Territories without Legislatures, Suppliés within such Union territory, Central GST will apply to whole of Indiaand hence, it would be applicable to all Union Territories, with or without Legislature. To replicate the law similar to State GST to Union Territories without Legislature, the Parliament has the powers unde ‘Afticle»246(4) to make such laws. Alternatively, the President of India may use his general'powers to formulate such laws. Hence, law same as similaf to State\GST can be formulated for Union Territory without Legislature, by the Parliament. The following are Union Terfitories without Legislature: 1. Chandigarh 2. Lakshadweep 3. Daman and Diu 4. Dadra and NagarHaveli 5. Andaman and Nicobar Islands Integrated Goods and Services Tax Act, 2017 (IGST): IGST is a mechanism to monitor the inter-stite trade of goods and services and ensure that the SGST component accrues to the COnsumer'State. It would maintain the integrity of ITC chain in inter-state supplies. The IGST rate would broadly be equal to CGST rate plus SGST rate. IGST would be levied and collected by the Central Government on all inter-State transactions of taxable goods or services. The revenue of inter-state sales will not accrue to the exporting state and the exporting state will be required to transfer to the Centre the credit of SGST/UTGST used in payment of IGST. Sti Sai “Vishwa Fucocials, Chintamani — 9745082528 / 9986658577 ‘Great things newer come from comfort zones?wrtonicron 06 Comparison between SGST, CGST, IGST [___ Basis CGsT sGsT IGST itis levied by contra ® Fevied by state [Tt isa. combined vovattnent te wentace eovernment to replace |fiom of CGST and Meaning | & place the existing tax like|SGST levied and the existing tax like 4 sales tax, luxury tax, | collected by central service tax, excise, ete. ~ entry tax, ete, government, Technically this is country wide but it | would be against the When trading within the |(When there is an Applicability : , state as it relates to | same state ifiterstate supply buying in and out of that state. The credit of CGST, is| The credit of SGSTVis | The credit of IGST Input tax , ", 7 Pf a vedit — *ailable only against available“only” against | is available against CGST and IGST SGS and IGST CGST Wh Hects o conecls Central Government —_ State Government Central Government the tax? Features of the proposed dual model % GST shall have two component"On@levied by the Centre (referred to as Central GST), and the other levied by'the States (referred to as State GST) % Central GST and the SfatGST Would be applicable to all transactions of goods and services % Central GST and State GST are to be paid to the accounts of the Centre and the States individually + Central GST and’State GST are to be treated individually, therefore taxes paid against the Central GSTshail be allowed to be taken as input tax credit (ITC) “ Crossuutilization of ITC between the Central GST and the State GST would not be permitted except in the case of inter-State supply of goods and services (IGST). “% Creditaccumulation on account of refund of GST should be avoided by both the Cente and the States except in the cases such as exports, purchase of capital goods, input tax at higher rate than output tax ete. % Uniform procedure for collection of both Central GST and State GST would be prescribed in the respective legislation for Central GST and State GST. SH Sol "Vion Foss, Chisoman = 7A5ORGD 198665877 Ea ‘Great things newer come from comfort zones’ e = awctnteron ros * Composition / Compounding Scheme for the purpose of GST should have an upper ceiling on gross annual turnover and a floor tax rate with respect to gross annual tumover. vx The taxpayer would need to submit periodical returns, in common format as far as possible, to both the Central GST authority and to the concerned State GST authorities. *« Each taxpayer would be allotted a PAN-linked taxpayer identification, number with a total of 14/15 digits GST Council GST council is a governing body to regulate and direct each afi@"@Vety step for the implementation of goods and service tax in the nation with decisions over tax rates and further implementation measures. GST council assimilates suggestions and regulatién, into\Gne form and improyises the changes formally through notifications and circulars with its departments and finance ministry. Cabinet Ministry has given approval for the establishment of GST Council while the notification regarding the establishment.of Councibwas issued on Saturday the 10th day September 2016 and the provisions came into force on Monday the 12th day of September 2016. Also, the Article 279A having prOvisions regarding establishment of GST Council was inserted after Article 279 of the constitution (101 Amendment) ACT, 2016. + The Union Finance Minister Mr. Arun Jaitley who is the head of GST Council while the First Meeting of the council was held on 22nd and 23rd September 2016 in New Dethi. GST Council Constitution According to the’articley GST Council will be a joint forum for the Centre and the States. Followingare the designated personnel, who will form the GST Council together:~ CHAIRMAN, : The Union Finance Minister MEMBERS, : The Union Minister of State in charge of Revenue or Finance VICE CHAIRMAN — =: Anyone of the member who will be mutually elected by them Note: EX-Officio Secretary The Secretary of Revenue Department permanent invitee The Chairperson of Central Board of Excise and Customs will be the permanent invitee in all the proceedings of the GST Council who will not have the voting rights. Sti Sai “Vishwa Fucocials, Chintamani — 9745082528 / 9986658577 ‘Great things newer come from comfort zones?wrtonicron 06 Quorum and Decision-Making %* For a valid meeting of the members of GST Council, at least 50 percent of the total number of the member should be present at the meeting +x Every Decision made during the meeting should be supported by at least 75 percent majority of the weighted votes of the members who are present and voting at the meeting, In “article 279A” a principle is there which divides the total weighted vote cast between Central Government and State Government:- » The vote of Central Government shall have the weighted of one-third of the total votes » The votes of State Government shall have the weighted of two third of the total votes, cast in the meeting yx Any act, decision or proceedings shall not be declared as invalid onthe basis of any remaining deficiency at the time of establishment of GST Council i.e. > Ifthere is any vacancy remained in the Council > If there is any defect in the constitution of Council > If there is any defect in the appointment of person as ainember of the Council > If there is any procedural non-complianée, Powers and Functions of the GST Council / Role of GST Council The GST council will be supposed to make the recommendation to the Union and State on the following matters:~ 1. On subsuming of various faxes, cess, and surcharge in GST. 2. Details of services and Goods that will be subjected to GST or which will be exempted from GST. 3. On Threshold limit below, which, services and goods will be exempted from GST. 4. On GST ratéstineluding"floor rate with bands of GST and any special rate for time being to arrange resources to face any natural calamity. 5. Making special provisions for the Special Category states: As per Explanation (3) of Section 22 of CGST act 2017, “special category States” shall mean the States as specifiedyin sub-clause (g) of clause (4) of article 279A of the Constitution. List of whichis as follows: — Ty, Arunachal Pradesh 2. Assam 3. Jammu & Kashmir 4. Manipur 5. Meghalaya 6. Mizoram 7. Nagaland 8. Sikkim 9. Tripura 10.Himachal Pradesh 11.Uttarakhand 6. Any other matter relating to the GST, as the Council may decide. Sti Sai “Vishwa Fucocials, Chintamani — 9745082528 / 9986658577 ‘Great things newer come from comfort zones? GSwrtonicron 06 Features of GST Council that you must kno 1. GST Council office is set up in New Dethi 2. Revenue Secretary is appointed as the Ex-officio Secretary to the GST Council 3. Central Board of Indirect Taxes and Customs (CBIC) is included as the chairperson as 8 permanent invitee (non-voting) to all proceedings of the GST Couneil 4. Create a post for Additional Secretary to the GST Couneil 5. Create four posts of commissioner in the GST Council Secretariat (This is @t,the level of Joint Secretary) 6. GST Council Secretariat will have officers taken on deputation from both te€entral and State Governments Sti Sai “Vishwa Fucocials, Chintamani — 9745082528 / 9986658577 ‘Great things newer come from comfort zones?wrtonicron 06 Section— A What is GTS? The term GST is defined in article 366 (12A) to mean “any tax on supply of goods or services or both except taxes on supply of the aleoholic liquor for human consumption. In other words, GST is a destination based tax and levied at a single point at the time of consumption of goods or services by the ultimate consumer. 2. What is taxable event under GST? Supply of taxable goods and services by a registered person is called as taxable event. 3. How does GST work? GST is a single tax on the supply of goods and services, rightfiom the manufacturer to the consumer. Credits of input taxes paid at eaclfstage\vill be available in the subsequent stage of value addition, which makes‘GST e&sentially a tax only on value addition at each stage. The final consumer wilf thus bear only the GST charged by the last dealer in the supply chain, with set-off Benefits at all'the previous stages. 4. Give the meaning of goods. Goods means every kind of moveable pfoperty other than money and securities but includes actionable clime, grasS"afidethings attached or forming part of the land which are agreed to be served before supply or under a contract of supply. 5. Which taxes at the centre are being subsumed into GST? At the centre levels, the following taxes are being subsumed: Central Excise duty, Additional Ex¢isesDuty, Service Tax, Additional customs Duty commonly known as countervailing Diity and Special additional Duty of customs. 6. Which taxe¥ at the state level are being subsumed into GST? At the state level, the following taxes are being subsumed: subsuming of state value Add@d Tax/Sales Tax, entertainment Tax (other than the tax levied by the local bodies), Central Sales Tax (levied by the centre and collected by the states), Octroi and Entry Tax, Purchase Tax, Luxury tax and Taxes on lottery, betting and gambling. x . What is IGST? Under the GST regime, an integrated GST (IGST) would be levied and collected by the centre on inter-state supply of goods and services SH Sol "Vion Foss, Chisoman = 7A5ORGD 198665877 sas | ‘Great things newer come from comfort zones’ e =wrtonicron 06 8. What is GST council? Goods & Services Tax Councilis a constitutional body for making recommendations to the Union and State Government on issues related to Goods and Service Tax. The GST Council is chaired by the Union Finance Minister and other members are the Union State Minister of Revenue or Finance and Ministers in-charge of Finance or Taxation of all the States. 9. Mention the composition of GST council? The union finance minister will be the chairperson of the GST conneil. Union minister of state for revenue or finance, minister of finance or any other mifiistPnominated by each state will be the members. Vice chairperson of GST council beelected by GST council from amongst its members. The GST council is maitily'a.recommendatory body on various issues relating to GST. 10.State any four objectives of GST. oe Ensuring that the cascading effect of tax‘on tax will Be eliminated sx Ensuring the availability of the input credit actoss the value chain ae Reducing the complications in fax adnitnistration and compliance. xx To Introduce Principle of ‘consumption-based taxation’. 11.What is dual GST model? Dual GST Model is istiplementéd int India, Under this the taxes are levied by both Centre and State on goods afid services supplied. SGST- GST Collected by the State Government. CGST- GST Collected bythe Central Government. Section-B& C 1) Define GSTY What are its objectives of GST? Explain salient features of GST. 2),Writé\a Hote on Subsumation of taxes and its principles 3) Whatare the advantages of GST and need for implementing GST in India? 4) Write.a note on 122 constitutional amendment bill. 5) Write a note on Indian GST model (Dual Model). Discuss its features. 6) What is GST council? What are its structure, responsibilities and functions? Sti Sai “Vishwa Fucocials, Chintamani — 9745082528 / 9986658577 ‘Great things newer come from comfort zones?esr acs 2. GST Acts Definition of GST: The term ‘GST? is defined in Article 366 (12A) to mean “Any tax on supply of goods or services or both except taxes on supply of the alcoholic liquor for human consumption”. Structure of GST: India adopted a dual GST where tax imposed concurrently by the Central ari@'States, ods and Service Tax Intra State Transa¢ Inter State Transaction (Indifferent states) Integrated GST (In same state) CGST + SGST Central Goods and Services Tax Act, 2017 (CGST): CGST levied and collected"bysCentral (Government. It is a revenue source to the Central Government of India, on intrastate supplies of taxable goods or services or both, Features of Central Goods and Service Tax (CGST) Act 2017: 1) This Act may be éalled the Central Goods and Services Tax Act, 2017 2) Ibis levied byeentral\government to replace the existing tax like Service tax, Excise, ete. 3) It is appliGaible onlywithin the state. 4) The@redit of CGST is available only against CGST and IGST. 8) There shall be a Threshold Limit. 6) ‘Taxpayers making inter-State supplies or paying tax on reverse eharge basis shall not be eligible for threshold exemption. 7)_Itmakes provision for self-assessment of the tax payable by registered person; 8) Small taxpayers with an aggregate turnover in a financial year up to 275 Lakhs for Special category states and @1.5 Crores for reaming Sates shall be eligible for composition levy. Sri Sai “Vishwa Fatorials, Chintamani — 9743082528 / 9986658577 ‘Sometimes later becomes never. Do it now.”Cee Seema GST ACTS tate Goods and Services Tax Act, 2017 (SGST): SGST levied and collected by State Governments/Union Territories with State Legislatures (namely Delhi and Pondicherry) on intra-state supplies of taxable goods or services or both. It is a revenue source of the respective State Government. Features of State Goods and Service Tax (SGST) Act 2017 [KARNATAKA State] 1) This Act may be ealled the Karnataka Goods and Services Tax Act, 2017 2) It extends to the whole of Karnataka, 3) Levy and collection: There shall be levied a tax called the Karnataka Goods and Services Tax on all intra-State supplies of goods or services of both, except on the supply of alcoholic liquor for human consumption, on the vall® detetmined under section 15 and at such rates, not exceeding twenty per ceni., as may berfiotified by the Government on the recommendations of the Council 4) The State tax on the supply of petroleum crudes high speed diesel, motor spirit (commonly known as petrol), natural gas and ayiation turbine fuel, shall be levied with effect from such date as may be notified by,the Government on the recommendations of the Council. 5) The State tax in respect of the supply. of taxable goods or services or both by a supplier, who is not registered, to.a registeréit:person shall be paid by such person on reverse charge basis as the recipient Financial and administrative poWersiof State President: The State President shall exercise such financial and administrative powers over the State Bench and Area Benches of the Appellate Tribunal in a State, Subject to the condition that such Member or officer shall while.exercising such delegated powers, continue to act under the direction, control and supervision of the State President. 7) Migration of @xisting, faxpayers: On and from the appointed day, every person registered.under “any of the existing laws and having a valid Permanent Account Number shall’beissued a certificate of registration on provisional basis, subject to such conditions and in such form and manner as may be prescribed, which unless replaced by a finalcertificate of registration. 6) Integrated Goods and Services Tax Act, 2017 (IGST): IGST is a mechanism to monitor the inter-state trade of goods and services and ensure that the SGST component accrues to the Consumer State. It would maintain the integrity of ITC chain in inter-state supplies. The IGST rate would broadly be equal to CGST rate plus SGST rate. IGST would be levied and collected by the Central Government on all inter- State transactions of taxable goods or services. The revenue of inter-state sales will not Sri Sai “Vishwa Tutorials, Chintamani — 9743082528 / 9986658577 | 22 | ‘Sometimes later becomes never. Do it now.’ GS =Geek eee me GST ACTS accrue to the exporting state and the exporting state will be required to transfer to the Centre the credit of SGST/UTGST used in payment of IGST. Features of Integrated Goods and Service Tax (IGST) Act 2017 1) This Act may be called the Integrated Goods and Services Tax Act, 2017. 2) It shall extend to the whole of India including the State of Jammu and Kashmir. 3) Central Government would administer and levy taxes on GST. 4) The Board may appoint such central tax officers as it thinks fit for‘xercising the powers under this Act. Levy and collection: There shall be levied a tax called the integrated goods and services tax on all inter-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption. 6) Inter-state seller shall use his input CGST and input SGST forpayment of IGST 7) Inter-state buyer shall avail input tax credit on the basis of 14x invoice for payment of his own IGST, CGST, or SGST. 8) Both the seller and buyer shall report these wansactions in their respective e-retums. 9) Exporting state will transfer the GST porting. to central government and central government will transfer the SGST to importing state. 10) Stock transfer / to branch / depot will attract IGST. 11) Inter-state dealer will pay IGST after adjusting available, input IGST, CGST and SGST on purchases 5 RELEVANT DEFINITIONS Adjudicating authority. [Section 2(4) of the CGST Act]: Means any auth6rity@ppaintéd or authorized to pass any order or decision under CGST Act, but doesnot include se The Central Board of Excise and Customs, xx TheRevisional Authority, weThe Authosily for Advance Ruling, ve The’Appellate Authority for Advance Ruling, se The Appellate Authority and the Appellate Tribunal Sri Sai “Vishwa Tutorials, Chintamani — 9743082528 / 9986658577 ‘Sometimes later becomes never. Do it now.’ GS =Cee eA eee am as GST ACTS Aggregate turnover [Section 2(6) of CGST Act|: means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account be computed on all India basis but exchides central tax, State tax, Union ferritory tax, integrated tax and cess. Aggregate turnover aS Value of all _outward|--CGST supplies ~-SGST —Taxable supplies —-UIGST Exempt supplies --IGST. ~Exports Compensation cess ~Inter-State supplies ~-Value of inward supplies on of persons having the same|which tax is payable under PAN be computed on. ali|reverse charge India basis Person: includes [Section 2(84),of CGSTAct]- a. An individual; b. A Hindu undivided family; c. A company; A firm; A limited liability"parinerShip; An association of,persons or a body of individuals, whether incorporated or not, in India or outsidedndia; g. Any Corporation established by or under any central act, state act or provincial act or a government Company as defined in clause (45) of section 2 of the companies act, 2013; h. Anybody corporate incorporated by or under the laws of a country outside India; i, A cd-operative society registered under any law relating to co-operative societies; j. A local authority; k. Central government or a state government; 1. Society as defined under the societies registration act, 1860; m, Trust; and n. Every artificial juridical person, not falling within any of the above; mee Sri Sai “Vishwa Fatorials, Chintamani — 9743082528 / 9986658577 ‘Sometimes later becomes never. Do it now.’ GS =GST ACTS: = e An individual = okie @ An association of : persons or a body of ZA Limited individuals, whether Atm we fae incorporated or notin [Partnership | India or outside India 8 ay comoration| established by/under| i Any body corporate S Trust any Central, State or| incorporated by or! froveeal"" Ae’ er| | Under te iw of a oe county. outside es company 2s defined| | india society. jepistered ‘Companies Act, 2013, under any law ‘Gat relating to ten cooperative OF Stes cope A local * pony © occy op detnen © Wen ariificial juridical wnder the Societies penny, ik Gina Registration Act, 1860 o above A company Casual Taxable Person [Section 2(20)|2,means a person who occasionally undertakes transactions involving supply of ‘goods or services or both in the course or furtherance of business, whether as principal, agentor if any other capacity, in a State/UT where he has no fixed place of business», Non-Resident Vaxable Person [Section 2(77)|: means any person who occasionally undertakes transactions involving supply of goods or services or both, whether as principal or agent or in Aity,otheF capacity, but who has no fixed place of business or residence in India. © mm, FERRER ENeeecctaas Sri Sai “Vishwa Fatorials, Chintamani — 9743082528 / 9986658577 ‘Sometimes later becomes never. Do it now.”GST ACTS: Busines: (a)Any trade, commerce, manufacture, profession, vocation, adventure, wager or any. other similar activity, whether or not it is for a pecuniary benefit; (b) Any activity or transaction in connection with or incidental or ancillary to (a) above; (c) Any activity or transaction in the nature of (a) above, whether or not there is volume, frequency, continuity or regularity of such transaction; (d) Supply or acquisition of goods including capital assets and services in conneetion with commencement or closure of business, (€) Provision by a club, association, society, or any such body (for a subscriptio# or any other consideration) of the facilities or benefits to its members, asthe case may be: (f) Admission, for a consideration, of persons to any premises; and (g) Services supplied by a person as the holder of an office eo has him in the course or furtherance of his trade, professig or includes — accepted by (h)Services provided by a race club by way of totali ee to book maker in such club (i) Any activity or transaction undertaken woe centrab government, a state government or any local authority in which they are en; Put ic authorities profession etc. even if there is no Dec Any trade/commerce, manufacture, j Any activity incidental ancillary to it ry Beaten Supplyfacquisition of goods including fin connection with commencement / closure eres etwas esi see oy eer cae re Pecans rong: Services as holder of office totalisator oa licence to book maker in Sen ea ial pers Any activity by Government /local aut! Sri Sai “Vishwa Furorials, Chintamani — 9743082528 / 9986658577 Ea « , ‘Sometimes later becomes never. Do it now.’ GS S =Manjunati GST ACTS: ee era Place of business [Section 2(85) of CGST Act.| includes For the purposes of this Act, where a person has,— i. An establishment in India and any other establishment outside India; ii, An establishment in a State or Union territory and any other establishment outside that State or Union territory; or iii, An establishment in a State or Union territory and any other establishment being a business vertical registered within that State or Union territory, then such establishments shall be treated as establishments of distinct persons. Agent [Section 2(5)]: means a person, including a factor, brokef, commission agent, arhatia, del-credere agent, an auctioneer or any other mercantile agent by Whatever name called, who carties on the business of supply or receipt of goods or setvi¢es or both on behalf of another ca Goods means every kiftd 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 aresagréed to be severed before supply or under a contract of supply [Section 2(52)]. [Actionable claim, Growing Crops, Grass & Things forming part of agreed to be severed before supply or under a contract of supply Sri Sai “Vishwa Furorials, Chintamani — 9743082528 / 9986658577 ‘Sometimes later becomes never. Do it now.” GS ; =GST ACTS ital goods [Section 2(19)| means goods, the value of which is capitalized in the books of account of the person claiming the ITC and which are used or intended to be used in the course or furtherance of business. ee aes Services [Section 2(102)] 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. Activities felating to use ) Revo ee we ee SUPPLY Supply includes all forms of supflotigdods’or services or both such as sale, transfer, barter, exchange, licence, rentals lease or disposal made or agreed to be made for a consideration by a person ifithe coitrse br furtherance of business. It also includes import of services for consideration whether or not in the course or furtherance of business. COMPOSITE AND MIXED SUPPLIES [SECTION 8] Composite supply.meatis a supply made by a taxable person to a recipient and: sx Comprises two or more taxable supplies of goods or services or both, or any combination thereof. 3x Are nattirally bundled and supplied in conjunction with each other, in the ordinary course of business 3& One of which is a principal supply [section 2(30) of the CGST act). ‘This means that in a composite supply, goods or services or both are bundled owing to natural necessities. The elements in a composite supply are dependent on the ‘principal supply” Sri Sai “Vishwa Furorials, Chintamani — 9743082528 / 9986658577 Ea ‘Sometimes later becomes never. Do it now.’ GS =ee aes Mixed supply means: GST ACTS: 3 Two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person st Fora single price where such supply does not constitute 2 composite supply [section 2(74) of the CGST act] > The individual supplies are independent of each other and are not naturally bundled. Composite Supply Consist of two or more ‘supplics +Naturally bundled +In_conjunction with each ‘other +One of which is principal +Tax liability shall be rate of principal } Mixed Supply +Consist of two or more supply +Not naturally bundled Though can independently, together be supplied still supplied “Tax liebilty, shall be the rate to the supply that | of and! highest rate of tax +Example: A gift pack comprising choclates. candies, sweets Principal supply [Section 2(90)'ef CGST Act]: means the supply of goods or services which constitutes the predominant clement of a composite supply and to which any other supply forming part of that"vomposite supply is ancillary. Exempt supply [Séétion 2(47) of CGST Act]: means supply of any goods or services or both which attracts nitrate of tax or which may be wholly exempt from tax under section 11, or under sectiém,6 of the Integrated Goods and Services Tax Act, and includes non- —_ taxable Stipply. Supply sttracting NIL rate of SSR EOE — Sri Sai “Vishwa Fatorials, Chintamani — 9743082528 / 9986658577 ‘Sometimes later becomes never. Do it now.”Cee Seema GST ACTS ‘Zero rated supply: Zero-rated supply shall have the meaning assigned to it in section 16 [Section 2(23) of the IGST Act]. As per section 16(1) of IGST Act, “zero rated supply” means any of the following supplies of goods or services or both, namely: — (a) Export of goods or services or both; or (b)Supply of goods or services or both to a Special Eeonomie Zone developer or a Special Economic Zone unit. Pam e)ag Non-taxable supply: means a supply of goods or services Ox both which is not leviable to tax under CGST Act or under IGST Act. [Section.2(78) of CGST Act] Difference between Nil Rated, Exempt, Zero Rated and Non-GST supplies Supply Name | Description Exports Zero Rated | snplies made to'SBAor SE? Developers. att Nit Rateg _ SuPDlies that have a declared rate of 0% GST, Example: Salt, grains, jaggery etc. Supplies are taxable but do not attract GST and for which ITC cannot be Exempt claimed. Example: Presh milk, Fresh fruits, Curd, Bread ete ‘These supplies do not come under the purview of GST law. "Example: Alcohol for human consumption, Petrol etc Non-GST Outward supply [Section 2(83)]; in relation to a taxable person, means supply of goods or seryives\ or both, whether by sale, transfer, barter, exchange, licence, rental, lease or disposalor any other mode, made or agreed to be made by such person in the course or furtherance of business. Inward supply [Section 2(67)]: in relation to a person, shall mean receipt of goods or services or both whether by purchase, acquisition or any other means with or without consideration. Sri Sai “Vishwa Furorials, Chintamani — 9743082528 / 9986658577 Ea ‘Sometimes later becomes never. Do it now.” GS =Cee Seema GST ACTS (Canyther means] Supplier [Section 2(105)]: in relation to any goods or services or bothy-shall mean the person supplying the said goods or services or both and shall inelude an agent acting as such on behalf of such supplier in relation to the goods of services or both supplied. Input service [Section 2(60)|: means any service used or intended to be used by a supplier in the course or furtherance of business, Input service distributor [Section 2(61)]:, means. an office of the supplier of goods or services or both which receives tax invoices issued under section 31 towards the receipt of input services and issues a prescribed’@octiment for the purposes of distributing the credit of central tax, State tax, integrated tax‘or Union territory tax paid on the said services to a supplier of taxable goods of services\or both haying the same Permanent Account Number as that of the said office. Input tax [Section’2(62)]:, in relation to a registered person, means the central tax, State tax, integrated tax of Union territory tax charged on any supply of goods or services or both made to himand includes— (a) The,integtated goods and services tax charged on import of goods; (b) The tax, paYable under the provisions of sub-seetions (3) and (4) of section 9; (¢) Tlie tax payable under the provisions of sub-section (3) and (4) of section 5 of the IGST act; (d)The tax payable under the provisions of sub-section (3) and sub-section (4) of section 9 of the respective state goods and services tax act; or (e)The tax payable under the provisions of sub-section (3) and sub-section (4) of section 7 of the union territory goods and services tax act, But does not include the tax paid under the composition levy. Sri Sai “Vishwa Fatorials, Chintamani — 9743082528 / 9986658577 ‘Sometimes later becomes never. Do it now.”Input Tax Credit [Section 2(63)] means the credit of input ta Job work [Section 2(68)] means any treatment orprocéss undertaken by @ person on goods belonging to another registered person and*the expression “job worker” shall be construed accordingly. Job worker Person carrying a job work activity iSuermed as/a Job worker. E.g.: Painting, packing, fitting, ete Manufacture [Section 2(72) of CGST)Aet]: means processing of raw material or inputs in any manner that resulfSin effergeuce of a new product having a distinct name, character and use and the term “manufacturer” shall be construed accordingly. EXPORT OF GOODS / SERVICES [SECTION 2(5) AND 2(6) OF THE IGST ACT] Section Definitions 2(5) | Expottof goods with its grammatical variations and cognate expressions, means taking goods out of India to a place outside India 2().| Export of services means the supply of any service when, - i. The supplier of service is located in India; |. The recipient of service is located outside India, iii, The place of supply of service is outside India; iv. The payment for such service has been received by the supplier of service in convertible foreign exchange: and v. The supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with explanation 1 in section 8. Sri Sai “Vishwa Fatorials, Chintamani — 9743082528 / 9986658577 ‘Sometimes later becomes never. Do it now.”Cee Seema GST ACTS IMPORT OF GOODS / SERVICES [SECTION 2(10) AND 2(11) OF THE IGST ACT] Seetion 2 Definitions Sub-seetion Particulars (10) | Import of goods with its grammatical variations and cognate expressions, means bringing goods into India from a place outside India (11) __| Import of services means the supply of any service, where— i. The supplier of service is located outside India; ii, The recipient of service is located in India, and iii, The place of supply of service is in India Tntermediary: has the same meaning as assigned to it in sub-section (13) of section 2 of the Integrated Goods and Services Tax Act, 2017. Intermediary Means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two Ohmofe persons, but does not include a person who supplies such goods or services,or both Or, securities on his own account [Section 2(13) of the IGST Act, 2017]. Works contract means a contract for buildificonstruction, fabrication, completion, erection, installation, fitting out, imiprovement, modification, repair, maintenance, renovation, alteration or commigsiouliig OPany immovable property wherein transfer of property in goods (whether as godds oF in some other form) is involved in the execution of such contract [Section 2(119)}, Location of the suppliér of sérvices: Section 2(71) of Ceritral\Goods and Services Tax (CGST) Act, 2017 “location of the supplier of seryices” theans, a, Where a supplyeis made from a place of business for which the registration has been obtaified, the location of such place of business; ba\Where aYsupply is made from a place other than the place of business for which registfation has been obtained (a fixed establishment elsewhere), the location of such fixedéstablishment; ¢. Where a supply is made from more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the provisions of the supply; and d, In absence of such places, the location of the usual place of residence of the supplier: Sri Sai “Vishwa Fatorials, Chintamani — 9743082528 / 9986658577 ‘Sometimes later becomes never. Do it now.”Manjunati GST ACTS Location of the recipient of service: Section 2(70) of Central Goods and Services Tax (CGST) Act, 2017 “location of the recipient of services” means, a. Where a supply is received at a place of business for which the registration has been obtained, the location of such place of business; b. Where a supply is received at a placé%ether than the place of business for which registration has been obtained (a-fixed establishment elsewhere), the location of such fixed establishment; ¢. Where a supply is received at more than one establishment, whether the place of business or fixed establishmént, the location of the establishment most directly concerned with the reeeipPof the Supply; and in absence of such places, the location of the usual place oftesidéhce of the recipient. Sri Sai “Vishwa Fatorials, Chintamani — 9743082528 / 9986658577 a ‘Sometimes later becomes never. Do it now.” GS =| Mania $V son cer s0c | GST ACTS: CONSIDERATION One of the essential conditions for the supply of goods and/or services to fall within the ambit of GST is that a supply is made for a consideration. However, consideration does not always mean money. It covers anything which might be possibly done, given or made in exchange for something else, Further, a consideration need not always flow from the recipient of the supply. It can also be made by a third person. Recipient of supply of goods or services or both, means— (a) Where a consideration is payable for the supply of goods or services or both, the person who is liable to pay that consideration; (b) Where no consideration is payable for the supply of goods, the petson)to whom the goods are delivered or made available, or to whom possession or use-of the goods is given or made available; and (c) Where no consideration is payable for the supply of 'service, the person to whom the service is rendered, and P (d) Any reference to a person to whom a supply:ds madeshall be construed as a reference to the recipient of the supply and shall include an.agent acting as such on behalf of the recipient in relation to the goods or services or bothi/supplied [Section 2(93)]. aaa) ee ee Place of supply Two important factors are essential for determining types of taxes based on place of supply. a) Location of supplier: - It is the registered place of business of the supplier. b) Place of supply: - It is the registered place of business of the recipient. Sri Sai “Vishwa Fatorials, Chintamani — 9743082528 / 9986658577 ae ‘Sometimes later becomes never. Do it now.” GS =Cee Seema GST ACTS Reverse charge: means the liability to pay tax by the recipient of supply of goods or services or both instead of the supplier of such goods or services or both under section 9(39/9(4), or under section 5(3)/5(4) of the IGST Act [Section 2(98) of CGST Act]. Normally the supplier pays the tax on supply. In certain cases, the receiver becomes liable to pay tax ie. the chargeability gets reversed; hence it is called reverse charge. Under GST, reverse charge is applicable for both goods and services. The purpose of this charge is to increase tax compliance and tax revenues. Earlier the goverment Was unable to collect service tax from various unorganized sectors like goodstransport. So, compliances and tax collections will be increased through reverse charge. Reverse charge on services under GST a) Insurance agent b) Services of a director to a company ©) Manpower supply d) Goods transport agencies e) Non-resident service providers f) Any service involving aggregators Situations where Reverse charge is applica a) Unregistered dealer selling to a registered dealer Registered dealer has to pay GSTom the supply (receiver). b) Services through an e-commerce operator E-commerce operator Supplic8 services, then reverse charge will be applied on e- commerce operator. E-cotmerce operator is liable to pay GST. If the E-commerce operator does fiat have presence in India, then the operator will appoint a representativ@Whoawill be liable to pay GST. Example: Ola Cabs Ghlist drivers to ply their cars. Drivers are providing driving services to Olm Ola is the service receiver and pays driver a share of the fare collected from passengers. Ola pays GST on reverse charge basis. c) CBIC has issued a list of services on which reverse charge is applicable Sri Sai “Vishwa Fatorials, Chintamani — 9743082528 / 9986658577 ‘Sometimes later becomes never. Do it now.”Cee Seema GST ACTS Section - A 1. State any four features of IGST ACT. # This Act may be called the Integrated Goods and Services Tax Act, 2017. It shall extend to the whole of India including the State of Jammu and Kashmir, 4 Central Government would administer and levy taxes on GST. ‘4 The Board may appoint such central tax officers as it thinks fit for exeréising the powers under this Act. 2. Define Goods as per CGST Act. According to Section 2(52) of CGST Act, Goods means every kind of movable property other than money and securities but includes actionable claini’growing crops, grass and things attached to or forming part of the land which fiteagreed to be severed before supply or under a contract of supply. 3. What is aggregate turn over? Aggregate tumover mean the aggregate value Of.all taxable supplies (excluding the value of inward supplies on which tax itpayable by’a person on reverse change basis), exempt supplies, export of goods or services or both, interstate state supplies of persons having permanent account number bubexcludes CGST,SGST,/ UTGST , IGST. 4. Give the meaning of the term supply as defined in CGST Act, 2017. Supply includes all forms'of supply of goods or services or both such as sale, transfer, barter, exchange, licené®, refital; lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. It also includes import of sefviees TOF €onsideration whether or not in the course or furtherance of business. 5. What is.composite supply? ‘Composit@)supply means supply consisting of 2 or more taxable supplies or both, which aréqatirtally bundled and supplies in conjunction with each other in the ordinary course of business and one of which is a principle supply. Example: if goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance will be a composite supply, wherein supply of goods will be a principal supply Sri Sai “Vishwa Fatorials, Chintamani — 9743082528 / 9986658577 ‘Sometimes later becomes never. Do it now.”Cee Seema GST ACTS 6. What is mixed supply Mixed supply means 2 or more individual supplies of goods or services or both made in conjunction with each other by a taxable person for a single price. Example: A supply of a package consisting of sweets, dry fruits, cakes for a single price is a mixed supply. Further, it shall not be a mixed supply, if these are items are supplies separately. 7. How to determine the tax liability for mixed supply? The tax liability in case of a mixed supply shall be ascertained with referenc® to that particular supply, which attracts highest rate of tax. 8. Give the meaning of exempted supply. Exempted supply includes supplies that have a NIL rate of taX’supplies that are wholly exempted from UTGST, CGST OR IGST, supplies that are‘not taxable under the act like aleoholic liquor for human consumption. 9. What is Principal Supply? According to Section 2(90) of CGST Act Principal supply means the supply of goods or services which constitutes the predominant clement of a composite supply and to which any other supply forming part of that composite supply is ancillary 10.Give meaning of continuous supply of goods or services. Continuous supply of godds/services means a supply of goods/ services on recurrent basis, under a contract. 11.Give meaning Gf iiward Supply. Inward supply in‘elation to a person means receipt of goods or services or both whether by puf@hase, acquisition or any other means with or without consideration. 12.Giye thedhing of outward supply Outward supply means supply or goods or services or both, weather by sale, transfer, bartety exchange, licence, rental, lease or disposal or any other mode, by such person in the course of furtherance of business. 13.Give the meaning of input services. Input services means any services used or intended to be used by a supplier in the course or furtherance of business. Sri Sai “Vishwa Tutorials, Chintamani — 9743082528 / 9986658577 ‘Sometimes later becomes never. Do it now.’ GS =Cee Seema GST ACTS 14.Give the meaning of job work. Job work means any treatment or process undertaken by a person on goods belonging to another registered person. 15.Give the meaning of manufacture. Manufacture means processing of raw material or inputs in any manner that,result in the emergence of a new product having distinet name, character and uses 16.What do you mean by location of the recipient of services? Location of the receipt of services means, a) Where a supply is received at a place of business for.which registration has been obtained, the location of such place of business. b) Where a supply received at a place other than‘the plage of business for which registration has been obtained, (a fixed establishmentelsewhere), the location of such fixed establishment, ¢) Where a supply is received at more than one. establishment, weather the place of business or fixed establishment, the location of the most directly concerned with the receipt of the supply, d) In the absence of such places, the location of usual place of residence of the recipient. 17. What do you mean by lécation of suppliers of services? Location of the supplieof sétviees means a) Where a supply ts made: from place of business for which the registration has been obtained the 16eatiomof such place of business b) Whereya supply is made from a place other than the place of business for registration ‘hasbeen obtained, (affixed establishment elsewhere), the location of such fixed establishment, ¢),Whieréia supply is made from more than one establishment, weather the place of business or fixed establishment, the location of the establishment most directly concerned with the receipt of the supply, d) In the absence of such places, the location of usual place of residence of the recipient. Sri Sai “Vishwa Fatorials, Chintamani — 9743082528 / 9986658577 ‘Sometimes later becomes never. Do it now.”Cee Seema GST ACTS 18.State weather stock transfers to another branch and taxable. Stock transfer to a branch located outside the state would qualify as supply and will be liable to tax. Further, stock transfers to a branch located within the same state having separate registration would also be liable to tax since both such units would qualify as distinet persons, 19.Whether fringe benefits given by the employer to the employee willbe taxable under GST regime? Fringe benefits like transport facility, meals, telephone facility étc.. provided by the employer to the employee will be treated as supply and will be liabfé fo tax further any gifls to the employees for a value not exceeding RS. Fifly,thousand wWill’not quality as supply and will not liable to tax 20.What are the taxes that are levied on an intra State supply? Inira-state supplies are liable to CGST and SGST intra-state supplies are made by a taxable person located in union territory he will be liable to CGST & UTGST. 21.How to ascertain the taxable value for levy of CGST&SGST/UTGST? Taxable value levy of CGST & SGST/UTGST will be based on the transaction value ice, the price actually paid or payable-for the said supply of goods or services or both where the supplier and the revipieiit of the supply are not related and price is the sole consideration for the supply. Further, incidental expenses, commission interest, penalty ete., will form part of the valle, 22. What do you méan’by:reverse charge? The receipt receiving supply from unregistered persons are liable to pay tax under reverse charge"once tax is paid, its input tax eredit is available if such supply of goods or services ot both are eligible for input tax credit. 23.Whether CGST&SGST/UTGST application on import of goods or services or both? CGST&SGST/UTGST is applicable on import of goods or services or both, because imports are treated as a supply in the course of inter- state trade or commerce. Sri Sai “Vishwa Tutorials, Chintamani — 9743082528 / 9986658577 EI ‘Sometimes later becomes never. Do it now.’ GS =Cee eA eee am as GST ACTS 24,Can every taxable person opt to pay tax under composition scheme The registered taxable person, whose aggregate turnover in the preceding financial year does not exceed 50 lakhs may opt to pay tax under composition scheme and such persons are not cligible for input tax credit in case of Uttarakhand the turnover of limit composition scheme will be 75 lakhs. Further, supplier of services is not eligible to opt for the composition scheme except restaurant sectors. 25.What is the tax rate applicable on a composition dealer? A registered tax payer, who is registered under the composite scheme, will pay tax at a rate not more than 1% for manufacturer, 2.5% for restaurant sectof“and 0,5% for other suppliers of turnover. 26.Can a composition dealer issue tax invoice? Since a composition dealer is not allowed to avail inpurtax, credit, such a dealer cannot issue a tax invoice as well. A buyer from comiposition.dealer will not be able to claim input tax on such goods. 27.1s liability to pay taxes under reverse Charge mechanism covered under the composition scheme? Any tax payable under reyetse efiafge.mechanism will not be covered under the scheme, These taxes will be liable to.be paid as a normal tax player. 28.Can a dealer involved in interstate supplies opt for composition scheme? No, composition sclieme isavailable only for intra-state supplies. If a dealer is involved in intra-state sUppliesythent he cannot opt for the scheme. 29.How exports are treated under GST? Exports will be treated as zero rated supplies. No tax will be payable on exports of go0d8"or services, however credit of input tax credit will be available and same will be available as refined to the exporters. 30.Give the meaning of input tax. Input tax in relation to a registered person means the central tax, state tax, integrate tax or union territory tax charged on any supply of goods or services or both made to him but does not include the tax paid under the composition levy. Sri Sai “Vishwa Fatorials, Chintamani — 9743082528 / 9986658577 ‘Sometimes later becomes never. Do it now.’ GS =Cee Seema GST ACTS 31.What is input tax credit? Input tax credit means the credit of CGST, SGST/UTGST and IGST available to a registered on the inward supply of goods or services or both, made to him, excluding the tax paid on supplies liable to composite tax. 32.Mention the products on which ITC cannot be claimed. Petroleum products, liquor, petrol, diesel, motor spirit. 33.What are the conditions to be fulfilled for entitlement of ITC? To claim input tax credit, the following condition shall be fulfilled: He is in possession of tax invoice, % He has received the goods or services or both, % The tax charged on such supply is paid to the govélmment) % He has furnished a valid return. 34.Can a person without GST registration claim ELC and collect tax? A person without GST registration camsneither collect GST from his customers nor claim any input tax credit of GST paid by hints 35.Give the meaning output tax? Output tax in relation toa taXable*person means the tax chargeable under this act on taxable supply of goods ofservicés or both made by him or by is agent but excludes tax payable by him on,reveise clituge basis. 36.Who is a taxable casual taxable person? Casual taxable petson is a person who occasionally under takes transaction involving supply of goodsor services or both in the course or furtherance of business, either as principal or agent in a state or union territory, where he has no fixed place of business. 37.Who is non resident taxable person? Non ‘yesident taxable person is a person who occasionally under takes transaction involving supply of goods or services or both in the course or furtherance of business, either as principal or agent in any other capacity but as no fixed place of business or residence in India. Sri Sai “Vishwa Fatorials, Chintamani — 9743082528 / 9986658577 ‘Sometimes later becomes never. Do it now.”Cee Seema GST ACTS 38.What is the validity period for the registration certificate issued to the casual taxable person /non resident person? The certificate of registration issued to the casual taxable person will be valid for a period specified in the application for registration or 90 days from the date of registration whichever is earlier. 39.What do you mean by place of business? Place business includes, a)a place where the business is carried on, b)a’place Where a taxable person maintain is books of account, c)a place where a taxable pétson is engaged in business through an agent. 40. What will be the time of supply of goods, generally? The time of supply of goods shall be the earliest of the followitig: Date of issue of invoice or due date of invoice or datejon Which supplier receives the payment or date on which payment is entered in“the books of accounts of supplier or date on which payment is credit to the accounts, 41,What will be the time of supply, where multiple invoices are issued for a single consignment involving supply of good? If multiple invoices are issued for a'single consignment, the time of supply shall be earlier of date of issuance of inivoice"Ordue date for issuance of invoice. 42.What will be the time ofjsupply of goods, if tax is payable under reverse charge mechanism? Time of supply shall, be the earliest of the following: date of receipt of goods by the receipt or daté 6 Which, the payment is entered in the books of accounts of the receipt or date on.which*payment is debited in the bank accounts of the recipient or date immediately flowing 30 days from the date of issue of invoice by the supplier or date of entry,in the books of accounts of the receipts. 43, Whatwill be the time of supply in case of supply of voucher? Time of supply of vouchers shall be the earliest of the following: date of issue of voucher, if supply is identifiable at that point or date of redemption of voucher, in all other cases. Sri Sai “Vishwa Fatorials, Chintamani — 9743082528 / 9986658577 ‘Sometimes later becomes never. Do it now.”Cee Seema GST ACTS 44.What will be the time of supply in case of composite supply? The time of supply of goods shall be the earliest of the following: date of issue of voices or date on which supplier receives the payment or date on which payment is entered in the books of accounts of the supplier or date on which payment is eredited to the bank account 45, How to ascertain the time of supply of services? The time of supplies of services shall be the earliest of the following: date of issue of invoice or due date of issue of invoice or date payment entry in relation to supply of services is recorded in the books of account or date on which the payment is credited to supplier's bank account. 46.What will be the time of supply of services, if tax is payable under reverse charge mechanism? Time of supply shall be the earliest of the following: date of payment recorded in the books of accounts or date of debit in bank acedunt oF 60 days from the date of issue of invoice or date of entry in the books of accott Of.the re€ipient. 47.Define the term person? person includes: an individual, a HUE, a Company, a firm, an association of person or body of individuals whether inéBfporatéd of not, a local authority and artificial juridical person. 48.Give the meaning of principal Principal means a’person \, on whose behalf an agent carties on the business of supply or receipt of goods.or Serviees or both 49.Give the méaning of supplier. Supplier in télation to any goods or services or both, shall mean the person supplying the said goods-or services or both and shall include an agent acting as such on behalf of suéhesuppligr 50.Give the meaning of intermediary. AG HORRORS! Ys. @ [PGed WHS ANSNRES or BEIT a proviso OE service between two persons. Thus, an intermediary is involved with two supplies at any one time: (i) the supply between the principal and the third party and (ii)the supply of his own service (agency service) to his principal, for which a fee or commission usually charged. Sti Sai “Vishwa Futorials, Chintamani — 9743082528 / 9986658577 ‘Sometimes later becomes never. Do it now.’ GS =Cee Seema GST ACTS 51.Give the meaning of works principal. Works contract means a for construction, completion, modification, renovation ete of any immovable property, wherein transfer of property in goods is involved in the execution of such contract. 52.Give the meaning of taxable event. Tax can be imposed only on taxable event. Therefore, one should know-the meaning of taxable event. taxable Means any event or occurrence that result in a,tax liabilify. Section—B & C 1) Define GST. Explain the salient features of CGST, SGST, IGST_Act, 2017. Or Write on CGST, SGST/UTGST and IGST. 2) Important definitions. Sri Sai “Vishwa Fatorials, Chintamani — 9743082528 / 9986658577 ‘Sometimes later becomes never. Do it now.”rae PROCEDURE AND LEVY Ei beraa Rae? REGISTRATION Under any taxation system, registration is the most fundamental requirement for identification of tax payers ensuring tax compliance in the economy. Under indirect tax regime, without registration, a person can neither collect tax from his customers nor claim any credit of tax paid by him. Under GST, registrations need to be taken State-wise, i.e. there are“no,centralized registrations under GST. A business entity having its branches in multiple States Will have to take separate State wise registration for the branches in different States. Further, within a State, an entity with different branches would have single registration Wherein it can declare one place as Principal Place of Business (PPoB) and other branches as Additional Place of Business (APoB). However, a business entity having separate business verticals in a State may obtain separate registration for each of its btisiness Verticals otherwise a given PAN based legal entity would have one registration numben.— Goods and Services Tax Identification Number (GSTIN) per State. Registration under GST is not tax specific, which means that there is single registration for all the taxes i.e. CGST, SGST/UTGST, IGST and cesses. Nature of registration 1. ‘The registration in GST is PAN Basedrand State specific. 2. One registration per State/UT. 3. However, a businesséntity having ‘separate business verticals in a State may obtain separate registration foreachtof its business verticals 4. 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. 5. Registration Under GST is not tax specific, ie. single registration for all the taxes ice. CGST, SGST/UTGST, IGST and cesses. WHY. REGISTRATION [NEED / ADVANTAGE] ¥ He isegally recognized as supplier of goods or services He is legally authorized to collect tax from his customers and pass on the credit of the taxes paid on the goods or services supplied to the purchasers/ recipients He can claim input tax credit of taxes paid on his purchases / procurements and can utilize the same for payment of taxes due on supply of goods or services Seamless flow of Input tax credit from suppliers to recipients at the national level Se Sat “Vshwn Farias, Choument — 97450828 998638577 ‘No Tax Shall Be Levied Or Collected Except By Authority Of Law’ GS = aEee PROCEDURE AND LEVY UNDER GST PERSONS LIABLE FOR REGISTRATION [SECTION 22] 1. Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate urnover in a financial year exceeds the thresholds limit. Applicable of Threshold Limit MOOG Moa eT anot ocean mance nt] * Manipur, Mizoram, Nagaland ‘and Tripura States with threshold limit of @ 20 lakh. of : Supe en Aggregate turnover for both goods and Uttarakhand, Pondicherry, services Kerala and Telangana + All other States including Jammu and Kashmir, Assam, Himachal Pradesh RO eRe ete ene UC ae Meek Cotettshy ith threshold li Tn O Sutitioa els) eee be computed on All 2. Every person who,on theday immediately preceding the appointed day, is registered or holds a licence.under an existing law, shall be liable to be registered under this Act with effect from the appointed day Where a business ‘earried on by a taxable person registered under this Aet is transferred) svhether on account of succession or otherwise, to another person as a going cOncerny the transferee or the successor, as the case may be, shall be liable to be registered with effect from the date of such transfer or succession. 4. Notwithstanding anything contained in sub-sections (1) and (3), in a case of transfer pursnant to sanction of a scheme ot an arrangement for amalgamation or, as the case may be, demerger of two or more companies pursuant to an order of a High Court, Tribunal or otherwise, the transferee shall be liable to be registered, with effect from the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High Court or Tribunal * Se Sat “Vshwn Farias, Choument — 97450828 998638577 ‘No Tax Shall Be Levied Or Collected Except By Authority Of Law’ GS = aMG parabens Coa PROCEDURE AND LEVY UNDER GST COMPULSORY REGISTRATION IN CERTAIN CASES [SECTION 24] Following category of persons are mandatorily required to obtain the registration under GST irrespective of their tumover: (Persons making any inter-State taxable supply. However, threshold limit is available in case of inter-State supply of taxable services and of notified handicraft goods. (ii) Casual taxable persons (CTP) making taxable supply. However, threshold limit is available in case of CTP who is making inter-State taxable supplies of ‘notified handicraft goods and availing the benefit of exemption from registfation as mentioned in point (i) above. (ii) Persons who are required to pay tax under reverse chargéM"However, persons engaged exclusively in making supplies, tax on which is liable to be,paid on reverse charge basis are exempt from registration. (iv) Persons who are required to pay tax under reversé charge under section 9(5) (vy) Non-resident taxable persons (NRTP) making taxable supply. (vi) Electronic Commerce Operator: Every ECO persons who supply goods and / or services, other than supplies specified urider Section 9(5), through such ECO who is required to collect tax at source under.section 52 Persons who are required to deduct tax Whder section 51, whether or not separately registered under this Act. Persons who make taxable supply:of goods or services or both on behalf of other taxable persons whether as.an agent or otherwise (ix) Input Service Distributor, whetler or not separately registered under this Act. (x) Every person supplying Online Information and Data Base Access or Retrieval (OIDAR) services from a place outside India to a person in India, other than a registered personzand (xi) Such other peison or class of persons as may be notified by the Government on the recommendations of the Council. PERSONS NOT LIABLE FOR REGISTRATION [Section 23] 1. Personiengaged exclusively in the business of supplying goods and /or services not liable,to tax/wholly exempt from tax: As section 23, any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under CGST Act/ IGST Act shall not be liable to registration. 2. An agriculturist, to the extent of supply of produce out of cultivation of land: An agriculturist to the extent of supply of produce out of cultivation of land is also not liable to registration. SH Sol "Vion Tosca, Chiou = 7A5ORR 1986651877 Ea ‘No Tax Shall Be Levied Or Collected Except By Authority Of Law’ GS =cereale PROCEDURE AND LEVY UNDER GST 3. Specified category of persons notified by the Government exempted from obtaining registration: Following category of persons have been notified as being exempted from obtaining registration under GST law: (a)Persons making only reverse charge supplies: Persons who are only engaged in making supplies of taxable goods or services or both, the total tax on which is liable to be paid on reverse charge basis by the recipient of such goods or services or both under section 9(3) have been exempted from obtaining registration [Notification No. 5/2017 CT dated 19.06.2017]. (b)Persons making inter-State supplies of taxable services up to € 20 Takh: The persons making inter-State supplies of taxable services and*having an aggregate tumover, to be computed on all India basis, not exceeding an aniollnit of 20 lakh in a financial year have been exempted from obtaining compulsory registration. However, the aggregate value of such supplies, to be cofputed on all India basis, should not exceed an amount of % 10 lakh in case of Special Category States of Mizoram, Tripura, Manipur and Nagaland {Notifieation No. 10/2017 IT dated 13.10.2017]. (c) Persons making inter-State taxable supplies of notified handicraft goods up to %20,00,000: As we have seen earlier that as petsection 24 read with Notification No. 10/2017 IT, a person making inifState supplies of goods is liable to be registered compulsorily under GST irreSpective of the threshold limit. However, in the following C@@spperyons making inter-State supplies of goods have been exempted from obtaintug registration: me ¥ Persons making ihter-Stateaxable supplies of notified handicraft goods! ¥ Persons making inter-State taxable supplies of notified products’, when made by craftsmen predominantly by hand even though some machinery may also be used in the processe Notes: © Handiéraft goods are defined under suid notification as goods predominantly made\by hand even though some tools or machinery may also have been used in Wesproeess; such goods are graced with visual appeal in the nature of ornamentation or in-lay work or some similar work of a substantial nature; possess distinctive features, which can be aesthetic, artistic, ethnic or culturally attached and are amply different from mechanically produced goods of similar wility. © Some of the notified products are leather articles, carved wood products, wood jurning and lacquer ware, bamboo products, textiles hand printing, theatre costumes, musical instruments, dolls and toys, etc. These examples are only for the purpose of knowledge and are not relevant for examination purpose. Sri Sai “Vishwa Turocials, Chinramani ~ 9745082528 / 9986658577 Ea ‘No Tax Shall Be Levied Or Collected Except By Authority Of Law’ Gorcn eo rae PROCEDURE AND LEVY UNDER GST PROCEDURE FOR REGISTRATION [SECTIONS 25] (a)Every applicant who is seeking new registration as regular taxable person or has interest to take voluntary registration, shall provide the details of PAN (as per status of entity), Legal name of business, State or Union territory, mobile number and e-mail address (of authorized signature), state or union territory in Part — A of Form GST REG —01 on common website portal www gst gov.in. (b)Upon filling the details, mobile number, and e-mail address are verified with a one-time password (OTP). Also, the applicant shall receive the application reference nlimiber on mobile and through email. In Part — B of Form GST REG -01, theapplication reference number has to be specified. Following important documents would’al86'be required for this purpose: v Permanent Account Number (PAN) ¥ Aadhaar card of directors / partners / proprietors, ete. ¥ Incorporation certificate of business ¥ Identification documents and addresses‘proof oftdirectors / partners / promoters, etc., of the business with photographs ¥ Address proof of the place of buisiness: prinéfpal place and additional place of business. v If the premises are own: Any document in support of the ownership of premises like latest property tax réceipt OF Municipal khata copy or copy of electricity bill. ¥ If the premises is rentedor leased: Copy of rent/ lease agreement along with owner’s (landlord) documents like latest property tax receipt or municipal khata copy or copyof eléetricity bill v Bank account details of business v Digital signature certificate y Letteof authorization / board resolution for authorized signature. (c) Upon receipt of documents in Part ~B of Form GST REG-— 01, acknowledgement shall ‘heassued electronically to the applicants in FORM GST REG 02. (a)If thé” application submitted is found as deficient by the tax authorities, or any documents submitted is not proper or any clarification is required, then proper officer shall issue a notice to the applicant electronically in the Form GST REG — 03 within 3 working days from date of submission of application. Applicant shall furnish information, clarifications and any documents in Form GST REG ~ 04 within a period of 7 working days. SH So "Vicon Tosca, Chiara = 7A5OR RO 198665877 Ea ‘No Tax Shall Be Levied Or Collected Except By Authority Of Law’ GS =Ei borane? rae PROCEDURE AND LEVY UNDER GST (&) Where no reply is received or officer is not satisfied with the clarification, information received then the officer shall reject such application in Form GST REG ~ 05 (0 If the officer fails to take action within 3 working days from receipt of application or within a period of 7 working days from the date of the receipt of the clarification, information or documents, then application for grant of registration shall beGeemed to have been approved. (g)If the application for registration has been approved, a cettificate “of registration in Form GST REG ~ 06 showing the principal place of business and"ailditional place or places of business shall be made available to the applicant on the common portal and a GSTIN with appropriate characters shall be granted. GSTIN format State Code PAN No. Entity Code Check sum character Al Ul x| P| v2] 7) 7/5] J x Sti Sai “Vishwa Farorials, Chintamani — 9745082528 / 9986658577 Ea ‘No Tax Shall Be Levied Or Collected Except By Authority Of Law’ Sorfollows: Mt shall electronically submit application in within 3 working days from the date of submission of application Proper officer will grant registration certificate in Proper officer will reject the application for reasons to be Proper Officer issues notice electronically, within 3 working ing days from the ‘date of receipt of information/ clarification/ documents ‘pplication date LA Crores anpreval of Apetiontion It the proper officer fais to take any action - documents furnished by the applicant. + within 3 working days from the date of submission of application, or + Within 7 working days from the date of receipt of clarification, information or {the application for grant of registration shall be deemed to have been approved. Sri Gai “Vishwa Farocials, Chintamani — 9743082528 / 9986658577 ‘No Tax Shall Be Levied Or Collected Except By Authority Of Law’ Ea GostMG parabens Cos PROCEDURE AND LEVY UNDER GST Deemed registration [SECTION 26] Provision under section 26 of central goods and services tax (Ct “Deemed Registration”, are as under: 1) If the proper officer fails to take action in 3working days from the date of submission, the registration is deemed to have been approved. 2) The proper officer is satisfied with the classification: he may approve the grant of registration to the application within 7 working days on receipt of such clarification. 3) Registration under GST is not tax specific, which means that there i8 single registration for all the taxes i.e. CGST, SGST/UTGST, IGST and cesses. 4) Grant of registration/UIN under any SGST Acti UTGST Att is deemed to be registratiovUIN granted under CGST Act provided "pplication for registration has not been rejected under CGST Act 5) Further, rejection of application for registration/UIN underSGST Act/UTGST Act is deemed to be rejection of application for registration‘tnder GGST Act. ) Act, 2017 relating to Special provisions for grant of registration in¢ease 6f Non-Resident Taxable Person (NRTP) and Casual Taxable Person (CTP)"[Settions 25 & 27 read with rules 13 & 15] & Casual Taxable Person: means a perso who occasionally undertakes transactions involving supply of goods or services or Both in the course or furtherance of business, whether as principal, agent of ii"anyoOthef capacity, in a State/UT where he has no fixed place of business [Section 2(20)]. He cannot exercise the option to pay tax under composition levy. ye Non-Resident Taxable Pérson: means any person who occasionally undertakes transactions involving supply of goods or services or both, whether as principal or agent or in anYvother.capaeity, but who has no fixed place of business or residence in India [Section 2(77)]. He cannot exercise the option to pay tax under composition levy. The special registration provisions pertaining to CTP and NRTP are as follows: (A) Both CTP and NRTP have to compulsorily get registered under GST irrespective of the threshold limit, at least 5 days prior to commencement of business. (B) As per section 25(6), every person must have a PAN to be eligible for registration. Since NRTP will generally not have a PAN of India, he may be granted registration on the basis of other prescribed documents. He has to submit a self-attested copy of his valid passport along with the application signed by his authorized signatory who is an Indian Resident having valid PAN, However, in case of a business entity incorporated or established outside India, Sti Gai Vishwa Furorials, Chinramani — 9743082528 / 9986658577 ‘No Tax Shall Be Levied Or Collected Except By Authority Of Law’ GS =MG parabens PROCEDURE AND LEVY UNDER GST the application for registration shall be submitted along with its tax identification number or unique number on the basis of which the entity is identified by the Government of that country or it’s PAN, if available. Application will be submitted by NRTP in a different prescribed form whereas CTP will submit the application for registration in the normal form for application for registration i.e. Form GST REG 01 and his registration of CTP will be a PAN based registration. (C) Period of validity of registration certificate granted to CTP/NRTP Registration Certificate granted to CTP / NRTP will be valid for: (i) Period specified in the registration application, ‘or | whichever ii) 90 days from the effective date of registration is earlier [can be extended further by a period not exceeding \0,days by making an application before the end of dhe validity” of registration granted to him] (D) Advance deposit of tax At the time of submitting the registration application, CTP/NRTP are required to make an advance deposit of tax** in an amount equivalent to the estimated tax liability of such person for the period for whieh the tegistfation is sought. Such person will get a TRN_for miking\an advance deposit of tax which shall be credited to his electronic cash ledger. An acknowledgement of receipt of application for registration is issued.only after Said deposit. Summary: ¥ Compulsory registration irrespective of their tumover Should apply-for Fegistration at least 5 days prior to the commencement of their business: Cannot dpt fo®Composition Scheme. Has to obtain a Temporary Registration ‘Should iiake an advance payment of tax Required to file returns of the tax paid by him/her Not be required to file annual returns Eligible for refunds of the excess advance tax paid eecteee SH Sol "Vion Tosca, Chiou = 7A5ORR 1986651877 El ‘No Tax Shall Be Levied Or Collected Except By Authority Of Law’ GS =PROCEDURE AND LEVY UNDER GST AMENDMENT OF REGISTRATION [SECTION 28] The provisions relating to amendment of registration are contained in section 28 read with rule 19 of CGST Rules, 2017. The significant aspects of the same are discussed hereunder: ve Where there is any change in the particulars furnished in registration application/UIN application, registered person shall submit an application in prescribed manner, within 15 days of such change, along with documents relating to such change at the Common Portal. \ “ In case of amendment of core fields of information, the proper offieér, may, on the basis of information furnished or as ascertained by him, approve or reject ents in the registration particulars in the prescribed manner. Such jent shall take effect from the date of occurrence of event warranting such amen ve However, where change relates to non-core fields of information, registration certificate shall stand amended upon submission of the applitation for amendment on the Common Portal. } Where a change in the constitution of any business réyultsin change of PAN of a registered person, the said person shall et registration. The reason for the a same is that GSTIN is PAN based. Any change in” PAN would warrant a new registration. ’ Yy oe Any particular of the application for reeRaigy shall not siand amended with effect from a date earlier than date of subiissiog of application for amendment on common portal except with order of for reasons to be recorded in writing and subject to conditions spee’ffedby Commissioner in the said order Regu aie eth Cur eee ae ety Sea ees eeu mart ane ith fein Peres teeta) cea For other changes like the name of day to-day functionaries, €-mall IDs mobile numbers etc. no approval of the Officer is required, and the De ei eo et ee an ett "Gri Sai “Vishwa Tutorials, Chintamani — 9743082528 / 9986658577 ‘No Tax Shall Be Levied Or Collected Except By Authority Of Law’ x GorTFManjunatha $V me. Cos PROCEDURE AND LEVY UNDER GST PROCEDURE RELATING TO LEVY: (CGST & SGST): Meaning and Scope of Supply [Section 7] Section 7 Meaning and Scope of Supply Sub Clause Particulars section a) ‘Supply includes - (a) _ | All forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course @mfurtherance of business; (b) | Import of services for a consideration whether or not in the course or furtherance of business: (c) | The activities specified in Schedule I, made or agreed to be made without a consideration; (d) | The activities to be treated as supplyof goods Or-supply of services as referred to in Schedule I. (2) Notwithstanding anything contained int sub-séction (/),— (a) | Activities or transactions speCified inSchedule III; or (b) | Such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as"may be notified by the Government on the recommendations of thé Couitil, shall be treated neither as a supply of goods nor a supply.of services. (3) Subject to.the provisions of sub-sections (/) and (2), the Government may, on the fecommendations of the Council, specify, by notification, the transactions that are to be treated as— (a) | A supply of goods and not as a supply of services: or (b) | Avsupply.of services and not as a supply of goods. SCHEDULE-I (Deemed Supply [See. 7(1)(¢)]) ACTIVITIES™£O BE TREATED AS SUPPLY EVEN IF MADE WITHOUT CONSIDERATION 1) Petanenttransfer or disposal of business assets where input tax credit has been ‘availed 6n such assets. 2) Supply of goods or services or both between related persons or between distinet persons as specified in section 25, when made in the course or furtherance of business Provided that gifts not exceeding fifty thousand rupees in value in a financial year by an employer to an employee shall not be treated as supply of goods or services or both Sti Sai “Vishwa Fucocials, Chintamani — 9745082528 / 9986658577 ‘No Tax Shall Be Levied Or Collected Except By Authority Of Law’Manjunatha $V me. 3) Supply of goods— (a.) By a principal to his agent where the agent undertakes to supply such goods on behalf of the principal; or (b.) By an agent to his principal where the agent undertakes to receive such goods on behalf of the principal. 4) 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. rae PROCEDURE AND LEVY UNDER GST SCHEDULE-II ACTIVITIES TO BE TREATED AS SUPPLY OF GOODSOR SUPPLY OF SERVICES [7(1) (@)] 1. Transfer (a.) Any transfer of the title in goods is a supply of goods: (b.) Any transfer of right in goods or of undivided shafe,in goods without the transfer of title thereof, is a supply of services; (c.) Any transfer of title in goods under an agreement which stipulates that property in goods shall pass at a future date upon payrient of fill consideration as agreed, is a supply of goods, 2. Land and building (a.) Any lease, tenancy, easement, licence to occupy land is a supply of services; (b.) Any lease or letting out“6hesbuilding including a commercial, industrial or residential complex for’ business or commerce, either wholly or partly, is a supply of services. 3. Treatment or process) Any treatment of proces8which is applied to another person's goods is a supply of services. (‘Jobe Work pérformed by a job worker like dyeing of fabric in various colours.) 4. Transfer of business assets (a.) Where g6ods forming part of the assets of a business are transferred or disposed of by oRundet the directions of the person carrying on the business so as no longer to form part of those assets, whether or not for a consideration, such transfer or disposal is a supply of goods by the person; (b.) Where, by or under the direction of a person carrying on a business, goods held or used for the purposes of the business are put to any private use or are used, or made available to any person for use, for any purpose other than a purpose of the business, whether or not for a consideration, the usage or making available of such goods is a supply of services; SH Sol "Vion Tosca, Chiou = 7A5ORR 1986651877 Ea ‘No Tax Shall Be Levied Or Collected Except By Authority Of Law’ GS = aFHOCEDURE AND LEVY UNDER GST (c.) Where any person ceases to be a taxable person, any goods forming part of the assets of any business carried on by him 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, unless— i. The business is transferred as a going concern to another person; or ii, The business is carried on by a personal representative who is deemed to be a taxable person. 5. Supply of services The following shall be treated as supply of service, namely:— (a) Renting of immovable property: (b.) Consiruction of a complex, building, civil structure or a paffth€reof, including a complex or building intended for sale to a buyer, wholly or partly except where the entire consideration has been received after “issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier. Explanation - for the purposes of this clituse— (1) The expression "competent alithotity" méans the government or any authority authorised to issue completion certificate under any law for the time being in force and in case Ofinon-requirement of such certificate from such authority, from any’of thé following, namely:— i. An architect registéredewith the council of architecture constituted under the architects act, 1972; or ii, A charteted, engineer fegistered with the institution of engineers (India); or iii, A livensed'surveyor of the respective local body of the city or town or ‘Village or development or planning authority; (2,) The expression "construction" includes additions, alterations, replacements OFremodélling of any existing civil structure; (@)Temporary transfer or permitting the use or enjoyment of any intellectual (property right; (@Development, design, programming, customisation, adaptation, upgradation, enhancement, implementation of information technology software; (c.) Agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act; and (£) Transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration. 6. Composite supply The following composite supplies shall be treated as a supply of services, namely:— Sti Sai “Vishwa Farorials, Chintamani — 9743082528 / 9986658577 Ea ‘No Tax Shall Be Levied Or Collected Except By Authority Of Law’ GorManjunatha $V me. Cos PROCEDURE AND LEVY UNDER GST (a.) Works contract as defined in clause (119) of section 2; and (b.) Supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration. . Supply of Goods The following shall be treated as supply of goods, namely:— Supply of goods by any unincorporated association or body of personsito a member thereof for cash, deferred payment or other valuable consideration. x SCHEDULE-III (Negative list under GST [See. 7(2)] ACTIVITIES OR TRANSACTIONS WHICH SHALL BE TREATED.NEITHER AS. A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES 1. Services by an employee to the employer in thé 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. 3. (a.) The functions performed by the\M@mbers of Parliament, Members of State Legislature, Members of Panchayats, Members of Municipalities and Members of other local authorities; (b.) The duties performed'by any person who holds any post in pursuance of the provisions of the‘Censtitution in that capacity: or (c.) The duties performed'by any person as a Chairperson or a Member or a Director ina body éstablishéd 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: 4. Services Sffunerdl, burial, crematorium or mortuary including transportation of the deceased! 5, Sale Of larid and, subject to clause (b) of paragraph 5 of Schedule II, sale of Biiilding. 6. Actionable claims, other than lottery, betting and gambling. Explanation - For the purposes of paragraph 2, the term "Court" includes District Court, High Court and Supreme Court. Principal supply means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary, [Section 2(90) of CGST Act] Ss Sok “Vishwa Torna, Chotment- 97450828 6986650577 Ea ‘No Tax Shall Be Levied Or Collected Except By Authority Of Law’ GS =MG earauaeaees Coa PROCEDURE AND LEVY UNDER GST COMPOSITE AND MIXED SUPPLIES [SECTION 8] Composite supply means a supply made by a taxable person to a recipient and (a)Comprises two or more taxable supplies of goods or services or both, or any combination thereof. (b)Are naturally bundled and supplied in conjunction with each other, in the ordinary course of business (c) One of which is a principal supply [section 2(30) of the CGST act]. (d)This means that in a composite supply, goods or services or both are bundled Owing to natural necessities. The elements in a composite supply are dependent on the “principal supply’ Examples: *% You are booking a Rajdhani train ticket which includes meal: Vis a bundle of supplies. It is a composite supply where the products cantiéttbe sold separately. You will not buy just the train meal and not the train tickety,The transportation of passenger is, therefore, the principal supply. Rate of tax applicable to the principal supplyAvill bé charged to the whole composite bundle. Therefore, rate of GST applicable 6 a ttansporlation of passengers by rail will be changed by IRCTC on the booking of Rajdhani ticket. Where goods are packed, and transportedywith insurance, the supply of goods, packing materials, transport and insuraice: It is a composite supply and supply of goods is the principal supply““Thiseimplie¥ that the supply will be taxed wholly as supply of goods Ifa contract is entered for, (i) supply of certain goods and erection and installation of the same thereto or (ii)supply. of certain goods along with installation and warranty thereto, it is impottant to\note that these are naturally bundled and therefore would qualify as ‘composite supply’. Accordingly, it would qualify as supply of the goods therein, which is\essentially the principal supply in the contract. Thus, the value attributable to"erection and installation or installation and warranty thereto will also be taxable.as ifthey are supply of the goods therein. + A gift-wrappetl box of chocolates: Here, the chocolates are the principal supply, while the "Box, gift wrapper, message card and gift wrapping service offered by the saleSperson are supporting elements that cannot be supplied individually without the chocolates. This is a composite supply, and its GST rate will be same as the rate for the chocolates. A dealer sells a brand-new vehicle along with registration, insurance, a tool kit and ‘first aid kit, and 4 free maintenance services: This is 2 composite supply, because vehicle insurance, registration and free maintenance services cannot be supplied without the vehicle (which is the principal supply). Sti Sai “Vishwa Farorials, Chintamani — 9743082528 / 9986658577 Ea ‘No Tax Shall Be Levied Or Collected Except By Authority Of Law’ Gor adMG earauaees Coa PROCEDURE AND LEVY UNDER GST “ Air transport and food on board: this is a composite supply as food is merely incidental supply which is naturally bundled to enjoy the services of air transportation Without the air transportation, the food does not have any substances in itself. Thus, GST at 5% would be applicable for all. Five-star hotels providing free laundry services on staying at the hotel: this would be a composite supply if considered as naturally bundled and GST rate stay would be applicable which 28% is if single price is charged. If laundry services are’ Separately identifiable and independent of accommodation service, then laundry services, can be subjected to 12% GST. + Repair service with parts: Composite supply with service being ptincipal supply as the customer would be interested in service and supply of parts is*ifiidental to repair service. Entire value would be subject to 18%. Healthcare service with medicines: healthcare services, beini'the principal supply with supply of medicines naturally bundled, would be treated as/€omposite supply. Entire value would be exempt from GST. > Mixed supply means: (a)Two or more individual supplies of goods or setyices, or any combination thereof, made in conjunction with each other by a:taxable person (b)For a single price where such supply. doe§ not constitute a composite supply [section 2(74) of the CGST act]. (c) The individual supplies are independent of each other and are not naturally bundled. Examples: > A supply of a package vonsisting of canned foods, sweets, chocolates, cake, dry fruits, aerated drink and fruit juices when supplied for a single price is a mixed supply. All can be sold séparatelys, ASsuming aerated drinks have the highest GST rates, aerated drinks will be treated as prineipal supply * Many shops offer a free bucket with detergent purchased. This is a mixed supply as it does'nt satisfy the 2™! condition, i.e., it can be sold separately. You can buy either just a buckefor just detergent. The highest rate of GST will then apply. Assuming that plastie-buckets have the higher rate, this rate will apply on the whole mixed bundle. GST ate of 28% is applicable on entire value. “A housing developer sells a residential house and supplies furniture as a complimentary gift. This is a mixed supply consisting of two components ie. construction of a residential house and a supply of a furniture. The supply of a furniture is not integral to the supply of the house but a separate supply by itself because both components are available separately and not interdependent on each other. SH Sol "Vion Tosca, Chiou = 7A5ORR 1986651877 Ea ‘No Tax Shall Be Levied Or Collected Except By Authority Of Law’ GS = aMG parabens Coa PROCEDURE AND LEVY UNDER GST A hamper (different goods packed together) consisting of wheat flour, canned foods, sweets, branded chocolates, crackers, cakes, non-alcoholic drink and fruit juices is on sale at a single price of 2300/-. This is mixed supply wheat flour and other components. The components can be made available separately and are not interdependent on each other. The components are capable of being separate supplies in themselves. A laptop seller sold laptop to customers along with laptop bag, now 1“ test’is satisfied (laptop bag is natural requisite to carry the laptop) that there are two products and sold together, but 2” test is failed because bag and laptop are not naturally bundiéd’means bag and laptop can be sold separately also. Therefore it is NOT composite supply, will be treated as mixed supply. * A plant nursery sells cut flowers, ornamental plants, and gardening services together as a bundle. When they’re sold separately, the plants and flowers incur GST at a rate of 5%, and the gardening services incur GST at a raf@of 18%. When they’re offered together as a bundle, the whole bundle will incur GST at the 18% rate. Note: Whenever a shopkeeper ships the contents 6f a mixed supply, the tax rate associated with the shipping charge will be equivalent to the tax rate applied on the bundle. If a tooth paste (say for instance it is liabl@t0,GST at 12%) is bundled along with a tooth brush (say for instance it is liable to GST at 18%) and is sold as a single unit ‘for a single price, it would betekoned a8 a mixed supply. This would therefore be liable to GST at 18% (higher of 12% or 18% applicable to each of the goods therein). Five-star hotel in Hydérabad providing services on staying at the hotel and one day visit to Ramoji Film City: The inclusion of visit to Ramoji Film City in this package is not a natural requisite to aéeommodation in the hotel. Hence, This is a mixed supply + Problem No.1: Compute the GS"Puates’applicable on the following after ascertaining if it is mixed supply or composite suipply.applicable GST rates provided within brackets for all instances. i A warapped’box of chocolates and fruits (chocolate attracts 18%, dry fruits attracts 28%) ii. Brand-new vehicle sold along with registration, insurance, a tool kit and first aid kit, and free maintenance services (vehicle attracts 28%, insurance attracts 18%) iii. Air transport and food on boarding (travel attracts 5% and food attracts 18%) iv. Five-star hotels providing free laundry services on staying at the hotel (accommodation attracts 28%, laundry services attracts 12%) vy. Goods are packed and transported with insurance (goods attracts 5%, insurance attracts 18%) Sti Sai “Vishwa Farorials, Chintamani — 9743082528 / 9986658577 ‘No Tax Shall Be Levied Or Collected Except By Authority Of Law’ GorMG eeraaees Coa PROCEDURE AND LEVY UNDER GST vi. Supply of repair service which includes replacement of parts (parts attract 28%, service attracts 18%) vii. On buying detergent, plastic bucket issue free (detergent attracts 28%, bucket attracts 18%) viii. Supply of healthcare services with medicines (healthcare exempted, medicines attracts 12%) Solution: i. A wrapped box of chocolates and fruits: - this is mixed supply a§,they\are not naturally bundled and there is no principal supply. Thus, GST would bé*charged based on highest rate of GST. Thus, entire lot attracts GST at 28% if single price is charge for entire box. ii. Brand-new vehicle sold along with registration, insurance, a tool kit and first aid kit, and free maintenance servi This is a\COmposite supply, because vehicle insurance, registration and free maintenahtce setyices cannot be supplied without the vehicle. These are naturally bundiéd with'supply of vehicle. Supply of vehicle is the principal supply. Thus, GST of 28% Would be applicable. iii, Air transport and food on boarding: - this is,a composite supply as food is merely incidental supply which is naturally bundiéd’ to enjoy the services of air transportation. Without the air transportation, the food does not have any substance in itself. Thus, GST at 5% would be application for all iy. Five-star hotels providing “fee*laundry services on staying at the hotel: - this would be a composite supply ifconsidered as naturally bundled and GST rate stay would be applicable Which is 28% if single price is charged. If laundry services are separately identifiable and. independent of accommodation service, then laundry services can be subjected,to 12% GST Goods are“packed*and transported with insurance: - composite supply as the supply of goods would be principal supply with transportation, insurance being incidental “GST rate of 5% is applicable on entire value. vi. Supply of repair service which includes replacement of parts: - composite supply with, seryic® being principal supply as the customer would be interested in service afidssupply of parts is incidental to repair service. Entire value would be subject to 18%. vii. On buying detergent, plastic bucket issue free: - this could be considered as mixed supply as detergent and bucket cannot be considered to be naturally bundled. GST tate of 28% is applicable on entire value. viii. Supply of healthcare services with medicines: - healthcare services, being the principal supply with supply of medicines naturally bundled, would be treated as composite supply. Entire value would be exempt from GST. Sti Sai “Vishwa Farorials, Chintamani — 9743082528 / 9986658577 Ea ‘No Tax Shall Be Levied Or Collected Except By Authority Of Law’ Gor <Loans eae PROCEDURE AND LEVY UNDER GST TIME OF SUPPLY OF GOODS [SECTION 12] and TIME OF SUPPLY OF SERVICES [SECTION 13] TIME OF SUPPLY OF GOODS Time Of Supply Of Goods [Section 12(2)] Under Forward Charge Time Of Supply Of Goods [Section 12)] Under Reverse Charge Earliest of the following: (a) Date of issue of invoice by the supplier or the last date on which he is required, to issue the invoice under section 31(1) with respect to the supply (b)Date on which the supplier receives the payment (entering the payment in books of account or crediting of payment in bank account, whichever is earlier) with respect to the supply ‘Time of supply of services [Section 13(2)] Under forward charge Ea of the following. (a) Date of receipt of goods, or (b)Date of payment as entefed in'the books of account of the recipient or the date on which the payment is debited to his bank account, whichevemis'@étlier, or (c)31st day from the date of issue of invoice LUNCH ae Time of supply of services [Section 13(3)] Under reverse charge ‘(a)Invoice issued within the prescribed time period Earliest of the following: teDate of issue of Tax invoice by the supplier 3c Date of receipt of payment (entering the payment in books \of “account or crediting of paynient in}bank account, whichever is eatliér) (b) Invoice not.issued within the prescribed time period ie8t of the following 3 Date of provision of service se Date of receipt of payment (entering the payment in books of account or crediting of payment in bank account, whichever is earlier) (c)When the above events. are unascertainable: Date on which the recipient shows the receipt of services in his books of account a (a)Date of payment as entered in the books of account of the recipient or the date on which the payment is debited to his bank aecount, whichever is earlier, or (b)6Ist 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 Sti Sai “Vishwa Fucocials, Chintamani - 9745082528 / 9986658577 ‘No Tax Shall Be Levied Or Collected Except By Authority Of Law’Eee PROCEDURE AND LEVY UNDER GST IE LIMIT FOR RAISING Supply of goods [Section 31(1)] Supply of services [Section 31(2)] Before or at the time of - Before or after the provision of service (a)removal of goods for supply to the | but within 30 days [45 days in case of recipient, where the supply involves | insurance cos./anking and __ financial movement of goods, or institutions including NBFCs] from the date (b)delivery of goods or making available | of supply of services thereof to the recipient, in any other case \ 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 wx Date of redemption of the voucher 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 toibe filed > Due date of filing such return (b)Other cases ae Date of payment of tax is paid TIME OF SUPPLY FOR ADDITION IN VALUE BY WAY OF INTEREST/ LATE FEE/PENALTY FOR DELAYED PAYMENT OF CONSIDERATION ‘Addition in value by way ofinterest; late fee/penalty for delayed payment of consideration Time of Supply — Date’on whith the supplier receives such addition in value ROMP PRANK RO Ge RULE Me AGL ROR RID EY In case the supplier of service is located outside India, the time of supply would be earlier of the following. (a) The date of entry in the books of account of the recipient (b)Ghe date'of payment There cotild be change in GST rates at the time of making supply or issue of invoice or payment towards the supply. This could leads to confusion as to rate of tax application, ic., whether to consider the old rate of the new changed rate. This has been addressed in section 14 of CGST Act 2017. Sti Gai “Vishwa Farocials, Chintamani — 9743082528 / 9986658577 ‘No Tax shall Be Levied Or Collected Except By Authority Of Law’ GitUi cements oases PROCEDURE AND LEVY UNDER GST When goods or services were supplied before the change in the tax rate, the time of supply would be as following: (a) Invoice has been issued and the payment is also received after the change in rate of tax, the time of supply shall be the date of receipt of payment or the date of issue of invoice, whichever is earlier; or (b)Invoice has been issued prior to the change in rate of tax but payment is received after the change in rate of tax, the time of supply shall be the date of invoice; or (c) The payment has been received before the change in rate of tax, but the invoice for the same is issued after the change in rate of tax, the time supply shall be thedate of receipt of payment: . _| Issueof | Payment | Goods or - ‘Applicable Scenario | invoice | _receipt _| service supply | _TiM€ °F SUPPIY. | “tay rate After After New Tax 1 | Chane | Change | Before Change | Date of payménr we 2 le After | Before Change fg EaigvoFdate of | oid Tax Rate Change | Change iyoice or payment Before After Date oF issue of | New Tax 2 Change _| Before Gefinge' invoice Rate ‘When goods or services were supplied after the change in the tax rate, the time of supply would be as following: (a)If the payment is received after the change'in.rate of tax but the invoice has been issued prior to the change in rate of taxX)the time of supply shall be the date of receipt of payment; or (b)If the invoice has been issuéd and payment is received before the change in rate of tax, the time of supply shall/be that date of receipt of payment or date of issue of invoice, whichever is earlier, or (c) In case the invoice ha8, beéh.issted after the change in rate of tax but the payment is received before the.change in rate of tax, the time of supply shall be the date of issue of invoice. : | Issueof | Payment | Goods or ‘ | Applicable Scenario | ye : : Time of supply ‘invoice | receipt _| service supply 2 tax rate 1 | ee Gas After Change | Date of payment a 2 | “Before Before | A her Change | batlier ofdate of | Old Tax (A Change Change 8 | invoice or payment Rate 3 After Before | ser Change | Date ofissue of | New Tax | Change Change is invoice Rate Date of receipt of payment in case of change in rate of tax: In case of change in rate of tax, the date of receipt of payment is the date of credit in the bank account if such credit is after four working days from the date of change in rate of tax. (Normally the date of receipt of payment is the date of credit in the bank account of the recipient of payment or date on which the payment is entered into his books of account, whichever is earlier. SS “Viaon Tessas, Cowan 7 A5ORRD 19677 Ea ‘No Tax Shall Be Levied Or Collected Except By Authority Of Law’ GS =