GST – Goods and Service Tax

1
 Definition__
of GST

“Goods and services tax” means any

366(12A) tax on supply of goods, or services or
both except taxes on the supply of the
alcoholic liquor for human
consumption
 FEATURES OF INDIRECT TAXES

• An important source of revenue

• Tax on commodities and services
• Shifting of burden
• No perception of direct pinch
• Inflationary
• Wider tax base
• Promotes social welfare
• Regressive in nature
 Article 246 - Power of Union and State to make laws

• Article 246 of the Indian Constitution, distributes legislative powers including

taxation, between the Parliament of India and the State Legislatures;

• Schedule VII enumerates the subject matters on which the Parliament and
States have the powers to make laws in three lists:
– List I (Union List);
– List II (State List); and
– List III (Concurrent list)

4
 Schedule VII

List – I List – II List – III

(Union List) (State List) (Concurrent List)

• entailing subjects on • entailing subjects on • entailing subjects on

which only the which only the State which both the
Parliament has the Legislatures are Parliament and the
exclusive powers to competent to make State Legislatures are
make laws laws competent to make
laws
 TAXONOMY OF INDIAN TAXATION

TAXATION POWERS OF UNION

• Income Tax (1961) – on income, except agricultural

income
• Excise Duty (1944) – on goods manufactured
• Custom Duty (1962) – on imports
• Service Tax(1994) – on specified services
• Central Sales Tax(1956) – on inter-state sale of goods
• Stamp Duty – on 10 specified instruments
• Specified Cesses - on specified items
EARLIER INDIRECT TAX STRUCTURE IN INDIA
INDIRECT TAXES TO BE SUBSUMED INTO GST

CENTRAL
EXCISE DUTY VAT/ CST

SERVICE TAX CVD

Taxes on
lotteries, Cesses &
bottling, Surcharges
gambling

ADDITIONAL
CENTRAL SURCHARGE STATE
EXCISE DUTIES

Entertainment
Tax (except on Luxury Tax
local bodies)

SAD CESSES

Entry Tax
Excise on M
&TP
 DRAWBACKS OF EARLIER TAXATION SYSTEM

• Confusion / lack of clarity / interpretational issues

• Lack of trust between assessee and revenue – Valuation/ Classification/
Exemption
• Complexity and lack of consistency in provisions
• Hidden tax on exports, no state tax on imports
• Cascading effect
• Narrow assessee base
• High transaction costs
• High compliance costs
• Too much of litigation and disputes
• Lack of harmony and varying inter - state practices : Turnover/Exemption
• Corruption
 CONCEPT OF GST
• GST is a value added tax levied on manufacture, sale and consumption of goods and services.
• GST offers comprehensive and continuous chain of tax credits from the producer's
point/service provider's point upto the retailer's level/consumer’s level thereby taxing only the
value added at each stage of supply chain
• The supplier at each stage is permitted to avail credit of GST paid on the purchase of goods
and/or services and can set off this credit against the GST payable on the supply of goods and
services to be made by him. Thus, only the final consumer bears the GST charged by the last
supplier in the supply chain, with set-off benefits at all the previous stages.
• Since, only the value added at each stage is taxed under GST, there is no tax on tax or
cascading of taxes under GST system. GST does not differentiate between goods and services
and thus, the two are taxed at a single rate.
 FORM OF PROPOSED GST

Multiple One for CGST at Centre

Statutes One in each State for SGST

Intra State  Dual GST: Centre (CGST) and the States (SGST) concurrently levying and
collecting the tax
Supply

 Integrated GST i.e. IGST (CGST+SGST) on supplies in the course of inter-

Inter State
state trade or commerce to be levied and collected by the centre
Supply
 1% additional tax by centre (for originating state for 2 years (extendable))
 Imports deemed to be supply in the course of inter-state trade or commerce
ILLUSTRATION OF GST
INDIRECT TAXES PROPOSED TO BE SUBSUMED IN GST
 TAXES WHICH MAY NOT BE SUBSUMED IN GST

Central Taxes/Levies State Taxes/Levies

Basic Customs Duty Taxes on Liquors

Excise Duty on Tobacco products Toll Tax/ Road Tax

Export Duty Environment Tax

Specific Central Cesses (eg, Oil Cess) Property Tax

Taxes on petroleum products Tax on Consumption or Sale of Electricity - Not certain

Stamp Duties Stamp Duty - Not certain

Purchase tax on food grains

Taxes on motor spirit & high speed diesel

 Anti-profiteering provisions
• Through section 171 of CGST Act, India plans to introduce an anti-
profiteering measure to ensure that the benefits arising out of the
GST regime is passed on to consumers.
• The CGST Act only empowers the Government to constitute the
Authority but does not prescribe any method to determine the
benefit which the supplier is liable to be pass on. In this regard,
Rule 122 to 137 of CGST Rules deal with Anti-profiteering.
• However, the neither CGST Act and nor CGST Rules do not lay down
method to compute the anti-profiteering benefits. Thus, Anti-
profiteering guidelines could be prescribed in the near future.
16
 Registration

Persons liable for registration: (Sec 22 of CGST)

Every supplier shall be liable to be registered under this Act – (a) in the State or
Union territory, other than special category States, from where he makes a taxable
supply of goods or services or both (b) if his aggregate turnover in a financial
year exceeds Rs. 20 lakh.
However, if such person makes taxable supplies of goods or services or both from
any of the special category States (North-east, & Himachal except the State of
Jammu & Kashmir), he shall be liable to be registered if his aggregate turnover in
a financial year exceeds Rs. 10 lakh.

Why register: (Advantages)

• Legally recognised as a supplier of Goods and / or Services
• Proper accounting of taxes paid on the input goods and / or services
• Utilisation of input taxes for payment of GST due on supply of goods and / or
services or both
• Pass on the credit of the taxes paid on the goods and / or services or both
supplied to purchasers or recipient
State-wise registration:

The supplier liable for registration will have to take a separate registration, even
though such supplier may be supplying goods and / or services or both from
more than one state as a single entity. The application for registration shall be
made within 30 days from the date when he becomes liable for registration.

The aggregate turnover shall include all supplies made by the taxable person
whether on his own account or made on behalf of all his principals. However,
supply of goods after completion of job work by a registered job worker shall be
treated as supply of goods by the principal, and the value of such goods shall not
be included in the aggregate turnover of the registered job worker.
Persons not liable for registration: (Sec 23 of CGST)
The following persons shall not be liable to register:

a) Exclusively dealing in non – taxable / exempted items: 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 or IGST Act

b) Agriculturist: an agriculturist, to the extent of supply of produce out of

cultivation of land
Agriculturist means and individual or a Hindu Undivided Family (HUF) who
undertakes cultivation of land by:
• Own labour, or
• The labour of family, or
• Servants on wages payable in cash or kind or by hired labour under
personal supervision or the personal supervision of any member of the
family.

c) The 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 shall be exempted
from obtaining registration.
Compulsory registration in certain cases (Sec 24 of CGST)

Notwithstanding anything contained in Section 22, the following categories of

persons shall be required to be registered under the Act:

• Persons making any inter-state taxable supply

• Persons who are required to pay tax under reverse charge
• Every electronic commerce operator
• Persons appointed by e-commerce operators
• Persons who supply goods or services or both through such electronic
commerce operator who is required to collect tax at source
• Non-resident taxable persons making taxable supply
• Casual taxable persons making taxable supply
• Persons who make taxable supply of goods or services or both on behalf of
other taxable persons whether as an agent or otherwise
• Input service distributor, whether or not separately registered under this Act
• Every person supplying online information and database access or retrieval
services from a place outside India to a person in India, other than a registered
person
• Such other person or class of persons as may be notified by the Government
on the recommendation of the Council
Supplies from Territorial Waters of India (TWI)

Every person who makes a supply from the territorial waters of India shall obtain
registration in the coastal State or Union territory where the nearest point of the
appropriate baseline is located.
Casual Taxable Person: Section 2(20) of CGST

Means a person who occasionally undertakes transactions:

• Involving supply of goods or service

• In the course or furtherance of business
• Whether as principal, agent or in any other capacity
• In a State or Union Territory where he has no fixed place of business

A person would be regarded as a casual taxable person if he undertakes supply of

goods or services or both:

• Occasionally, and not on a regular basis;

• Either as principal or agent or in any other capacity;
• In a State/ Union Territory where he has no fixed place of business

A trader, businessman, service provider etc. undertaking occasional transactions

like supplies made in trade fairs would be treated as a ‘casual taxable person’ and
will have to obtain registration in that capacity and pay tax.
Casual Taxable Person: Section 2(20) of CGST

Eg: A jeweller carrying on a business in Mumbai, who conducts an exhibition-cum-

sale in Ahmedabad where he has no fixed place of business, would be treated as a
‘casual taxable person’ in Ahmedabad.

The following aspects need to be noted:

• The threshold limit for registration would not apply; and he would be required
to obtain registration irrespective of his turnover;
• He is required to apply for registration at least 5 days prior to commencement of
business;
• The registration would be valid for 90 days or such period as specified in the
application, whichever is shorter;
• An advance deposit of the estimated tax liability is required to be made along
with the application for registration.
Non-Resident Taxable Person: Section 2(77) of CGST

Means any person who occasionally undertakes transactions:

• Involving supply of goods or services or both,
• Whether as principal or agent or in any other capacity
• But who has no fixed place of business or residence in India
Analysis:
• The meaning of the term ‘non-resident taxable person’ covers all persons who
undertake transactions involving supply of goods or services or both, whether
or not such supplies are taxable, so long as such person neither has a fixed
place of business nor residence in India.
• Every such person who intends to affect any taxable supplies under the GST
law, should compulsorily obtain registration under the GST law before
commencing business, irrespective of the turnover during the year, the
application for registration shall be made atleast 5 days prior to the
commencement of business.
• However, a person who does not undertake transactions involving any
supplies ‘occasionally’, he would not be treated as a non-resident taxable
person. The law does not define the frequency implied by the expression
‘occasionally. Therefore, where there is a reasonable frequency of occurrence
of supplies in India, it must be construed as transactions occurring
occasionally.
Procedure for registration (Sec 25 of CGST)

Application within 30 days:

Every person who is liable to be registered under section 22 or section 24
(discussed above) shall apply for registration in every such State or Union
Territory in which he is so liable within 30 days from date on which he becomes
liable to registration.
A casual taxable person or a non-resident taxable person shall apply for
registration at least 5 days prior to commencement of business.

Single registration in each state – Multiple verticals registration in same state:

A person seeking registration under this Act shall be granted single registration in
a State or Union Territory. However, a person having multiple business verticals
in a State or Union territory may be granted a separate registration for each
business vertical, subject to such conditions as may be prescribed.

Voluntary registration:
A person, though not liable to be registered u/s 22 or Sec 24 may get himself
registered voluntarily, and all provisions of this Act, as are applicable to a
registered person, shall apply to such person.
Procedure for registration (Sec 25 of CGST)

Separate registration is a separate person:

A person who has obtained or is required to obtain more than one registration,
whether in one State or Union territory or more than one State or Union territory
shall, in respect of each such registration, be treated as distinct persons for the
purposes of this Act.

Premises in separate states treated as separate person:

Where a person who has obtained or is required to obtain registration in a State or
Union territory in respect of an establishment, has an establishment in another
State or Union territory, then such establishments shall be treated as
establishments of distinct persons for the purposes of this Act.

PAN or TAN mandatory

Every person shall have a Permanent Account Number (PAN) issued under the
Income Tax Act, 1961 in order to be eligible for grant of registration.
However, a person required to deduct tax u/s 51 may have, in lieu of PAN, Tax
Deduction and Collection Account Number (TAN) issued under the said Act in
order to be eligible for grant of registration.
However, a non-resident taxable person may be granted registration without PAN
on the basis of such other documents as may be prescribed.
Procedure for registration (Sec 25 of CGST)

Mandatory registration on failure to seek registration (suo moto grant of

registration by proper officer)
Where a person who is eligible to be registered under this Act fails to obtain
registration, the proper officer may, without prejudice to any action which may be
may be taken under this Act or any other law for the time being in force, proceed
to register such person in such manner as may be prescribed.

Unique Identifier
Notwithstanding anything contained in sub-section (1)
• Any specialised agency of the United Nations Organisation or any Multilateral
Financial Institution and Organisation notified under the United Nations
(Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign
countries; and
• Any other person or class of persons, as may be notified by the Commissioner,
shall be granted a Unique Identity Number in such manner and for such
purpose, including refund of taxes on the notified supplies of goods or services
or both received by them, as may be prescribed.
Procedure for registration (Sec 25 of CGST)

Verification and deemed grant, if no deficiency

The registration or the Unique Identity Number (UIN) shall be granted or rejected
after due verification in such manner and within such period as may be
prescribed. A registration or a Unique Identity Number is deemed to have been
granted after expiry of the period prescribed, if no deficiency has been
communicated to the applicant within that period.

Certificate
A certificate of registration shall be issued in such form and with effect from such
date as may be prescribed.

Registration under SGST etc. valid – deemed registration (Sec 26)

The grant of registration or UIN under SGST / UTGST Act shall be deemed to be
a grant of registration or the UIN under this Act subject to the condition that the
application for registration or the UIN has not been rejected under this Act within
the prescribed time for verification under Section 25.
Any rejection of application for registration or the UIN under the SGST / UTGST
Act shall be deemed to be rejection of application for registration under this Act.
Procedure for registration (Sec 25 of CGST)

Registration valid upto period specified or 90 days (Sec 27)

The certificate of registration issued to a casual taxable person or a non-resident
taxable person shall be valid for the period specified in the application for
registration or ninety days from the effective date of registration, whichever is
earlier and such person shall make taxable supply only after the issuance of the
certificate of registration. However, proper officer may, on sufficient cause being
shown by the said taxable person, extend the said period of 90 days by a further
period not exceeding 90 days.

Advance deposit of estimated tax prior to registration (Sec 27)

A CTP or a NTP shall at the time of submission of application for registration,
make an advance deposit of tax in an amount equivalent to the estimated tax
liability of such person for the period for which the registration is sought.
However, if any extension of time is sought, such taxable person shall deposit an
additional amount of tax equivalent to the estimated tax liability of such person
for the period for which the extension is sought.
Amendment of registration (Sec 28)
• Intimation of changes
• Approving or rejecting amendments
• Rejection under SGST / UTGST applies here also

Cancellation of Registration – Sec 29

Circumstances leading to cancellation

The proper officer may, either on his own motion or on an application filed by the
registered person or by his legal heirs, in case of death of such person, cancel the
registration, in such manner and within such period as may be prescribed, having
regard to the circumstances where:
• The business has been discontinued, transferred fully for any reason including
death of the proprietor, amalgamated with other legal entity, demerged or
otherwise disposed of; or
• There is any change in the constitution of the business; or
• The taxable person (other than the person voluntarily registered), is no longer
liable to be registered under Section 22 or 24.
Cancellation of Registration – Sec 29

Registration may be cancelled from retrospective date in some cases

The proper officer may cancel the registration of a person from such date,
including any retrospective date, as he may deem fit, where:
a) A registered person has contravened such provisions of the Act or the rules
made thereunder as may be prescribed; or
b) A person paying composite tax under section 10 has not furnished returns for
3 consecutive tax periods; or
c) Any registered person, other than a person specified in clause b, has not
furnished returns for a continues period of 6 months; or
d) Any person who has taken voluntary registration has not commenced
business within 6 months from the date of registration; or
e) Registration has been obtained by means of fraud, wilful misstatement or
suppression of facts.
However, the proper officer shall not cancel the registration without giving the
person an opportunity of being heard.
Cancellation of Registration – Sec 29

Liability not affected

The cancellation of registration under this section shall not affect the liability of
the person to pay tax and other dues under this Act or to discharge any obligation
under this Act or the rules made thereunder for any period prior to the date of
cancellation whether or not such tax and other dues are determined before or after
the date of cancellation.

Cancellation under SGST applies here also

The cancellation of registration under the State Goods and Services Tax Act or the
Union Territory Goods and Services Act, as the case may be, shall be deemed to
be a cancellation of registration under this Act.
Cancellation of Registration – Sec 29

On cancellation, pay = credit reversal or output tax (higher)

Every registered person whose registration is cancelled shall pay an amount, by
way of debit in the electronic credit ledger or electric cash ledger, equivalent to
the credit of input tax in respect of inputs held in stock and inputs contained in
semi-finished or finished goods held in stock or capital goods or plant and
machinery on the day immediately preceding the date of such cancellation or the
output tax payable on such goods, whichever is higher, calculated in such manner
as may be prescribed.
However, in case of capital goods or plant and machinery, the taxable person shall
pay an amount equal to:
• Input tax credit taken on said capital goods or plant and machinery, reduced by
such percentage points as may be prescribed or
• Tax on the transaction value of such capital goods or plant and machinery
under Section 15
whichever is higher.
Amount so payable shall be calculated in such manner as prescribed.
Revocation of Cancellation of Registration – Sec 30

Application for restoration of registration

Subject to such conditions as may be prescribed, any registered person, whose
registration is cancelled by the proper officer on his own motion, may apply to
such officer for revocation of cancellation of the registration in the prescribed
manner within 30 days from the date of service of the cancellation order.

Acceptance/Rejection of application
The proper officer may, in such manner and within such period as may be
prescribed, by order, either revoke cancellation of the registration or reject the
application. However, the application for revocation of cancellation of registration
shall not be rejected unless the applicant has been given an opportunity of being
heard.

Treatment under SGST to apply here

The revocation of cancellation of registration under the State GST Act or Union
Territory GST Act, as the case may be, shall be deemed to be a renovation of
cancellation of registration under this Act.
 Overview of GST
State
Service
Excise
Tax Goods & Duty
Service Tax
Excise (GST) Entertai
Duty nment
Tax

VAT
CST
Luxury Octroi
Tax Duty

Features of GST. GST Council

1. One Nation & One Tax & One Market
2. Events are based on Concept of Supply.
3. Streamlining & Cross Utilization of Input
Tax Credits.
4. Revolutionary Invoice Matching Concept.
GST Governing Body with power to take
decision on rates, exemption, threshold
exemptions, etc with 33.33% voting power
of Union Government & 66.66% power lies
with the State Government.
 Concept of Supply
All the Earlier Laws, Taxes were based on Events like 
Manufacturing, Provision of Service, Sales, Contract entered, Agreement made, etc.

Under GST, the Concept of

Supply has tremendously
increased the Scope of
Taxable events.
 Concept of Supply……….. Continued
• What is “NOT” a Supply?
• Any Exemption provided vide Notification
of the Council.
• Proportion of Abatement as notified by
the Council.
• Employer – Employee Services.
• Services By Courts & Tribunal
• Services of Government
(State/Central/Local Authority).
• Statutory Duty to be performed by
Government.
• Supply without Consideration.
• Disposal of Assets of Business where
Input Tax Credit has been availed.
• Supply undertaken between Related
Person.
• Import of Services from a Related
Person.
• Supply of Goods – Agent Principal
Relationship.
• Business Assets utilized for personal
used.
• Inter-state Stock Transfer shall be
treated as supply of Goods.
 Schedule I – Supply without Consideration

• Transfer of business assets, where ITC has been availed

• Business Assets transferred w/o consideration to third party – taxable only if ITC availed

• Gift upto Rs. 50,000 in a year to employee – not a supply

• Services by an employee to an employer in the course of employment – in the negative list (Sch. III)
• All perquisites which are part of employment contract are not supplies e.g. bonus, LTC, rent free
accommodation or car, medical reimbursement, etc.
• Gift of any goods or services beyond contractual terms – is covered under this entry e.g. Diwali gifts
or vouchers
• Litigation prone as activities like free lunch or free car or parties or foreign trips
 Registrations

Registration not required upto

turnover upto 20 Lacs & 10 Lacs for
Special Category States(Current • Single Registration for
Limit Proposed in Law.) IGST/SGST/CGST/UGST
per state.
No threshold Exemption • Registration required in
applicable to following Items, each state from where
• Inter-State Taxable Supply supplies made – No
• Casual Taxable Person Centralized
• Liability to Pay Under RCM. Registration.
• ECOs
• Multiple Business
• NRIs
Verticals in a State –
• GST TDS Deductors.
• ISD May opt for separate
• Online Information & Data registration for each
Retrieval Services. Business Vertical.
• Others, as maybe notified.
 Registrations

• PROOF OF CONSTITUTION OF BUSINESS

• DETAILS OF ALL BANK ACCOUNTS
• PROOF OF PRINCIPAL AND ADDITIONAL PLACE OF BUSINESS
Documents Required • DETAILS OF PARTNERS/ PARTNERS/ DIRECTORS
for Registration • DETAILS OF GOODS OR SERVICES TO BE SUPPLIED
• HSN CODE OF GOODS AND SERVICES
• PHOTOGRAPHS OF PARTNERS/ DIRECTORS/ PROPRIETOR
• ANY OTHER DOCUMENTS AS MAY BE PRESCRIBED.

Format of Prov. GST •

Reg.
 Time Of Supply (TOS)
Time of Supply shall decide the liability to Pay Goods & Service Tax (GST).

Inputs/services
received or Non- TAXABLE PERSON OUTPUT SALES /
Registered Person. SERVICES PROVIDED.

Inward Supply of Goods/ Outward Supply of

Services Earlier of ,
- Date of Receipts of Goods.
- Date of Payment of Goods /
Services
- Date immediately following
30 days (Goods) & 60 days
(Services) from date of
Issuance of Invoice.
- For Service, if neither
applicable then date of
receipt of service in Books.
Goods/Services
Earlier of ,
- Date of Issue of Invoice, or
- Last Date of Issuance of
Invoice in case of Goods
- Provision of Service if Invoice
Not issued within prescribed
time
- Date on which the payment is
received.
- For Service, if neither
applicable then date of
receipt of service in Books.
 Levy of GST on purchases from URD- Unregistered Dealer
Sec 9(4)

• On purchase of taxable goods and services from URD, buyer liable to GST on Reverse Charge
basis

• No definition of taxable goods and services.

• Illustrations: (Areas could possibly be covered)
• Purchases from suppliers falling below threshold limit
• Trader purchasing office supplies like stationery, tea, cleaning services from URD
• A company purchasing cold drinks, cigarettes or sweets from nearby shops
 Tax Invoices
• Single Goods / Services / Commodity shall
have Rates Prescribed in CGST / SGST &
IGST.
• If the Receiver is Located within the State
CGST & SGST both shall be made
applicable.
• If the Receiver is Located in other State,
IGST shall be made applicable.

Proposed Format of the Tax Invoices

 Composition Levy for Turnover < 50 Lacs
(May Increase upto 1.5 Cr)

CONDITION FOR RATE OF TAX

WHO CAN OPT WHO CANNOT OPT
•A registered taxable •Supplier of Services ELIGIBILITY •1% of turnover in a
(State/UT) in Case of a
person whose •Supplier of Exempted • The person shall not Manufacturer
turnover in preceding Goods collect tax from the
financial year did not •2.5% of turnover in a
•Who makes inter-state recipient on supplies
exceed fifty lakh (State/UT) in case of a
supply of goods (IGST) made by him nor he
rupees supply of food & non-
•Supplies goods shall be eligible for
alcoholic liquor for
•If the turnover in the through ECO. any input tax credit.
human consumption.
current financial year • Unless all units
exceeds fifty lakh • 0.5% of the turnover
registered for Same (State/UT) in case of a
rupees, the permission PAN
shall stand withdrawn others suppliers.
 Input Tax Credits (ITC)……… continued
What are the Credits available?
• All Input tax Charged on supply of Goods / Services on the Goods & Services intended to be used in course of
furtherance of Business or Commerce including GST paid on RCM basis.
• Credits available for WCS (Works Contracts Service) in relation to Plants and Machinery other than Land, Buildings
& other Civil Structures, Telecommunication Towers, Pipelines outside the factory premises.

What are the conditions for availing Input Credits in General?

• Registered person should be in possession of tax invoices or debit notes.
• Should have received the goods and services or both.
• Tax charged in respect of such supply has been actually paid to the government, subject to provisional availment of
credit by supplier, and,
• Supplier has furnished the Monthly Return.
• If the recipient fails to pay the supplier within 180 days, then amount of such credit availed needs to be added back to
their output liability alongwith Interest. Credits shall be allowed subsequently on the payment made the supplier.
• No credits shall be allowed after due date of Monthly Return to be filed for September following the F.Y. for which such
Invoice pertains to, or , Furnishing of Annual Returns. i.e. For F.Y. 2017-18 uptill 20th Oct’18 or Date of Annual Return
filed (Due date is 31st Dec’ 2018)
 Input Tax Credits (ITC)
What/Whose Credits are disallowed?
• Non Registered Taxable person
• No Credit on Depreciated components of the Capital Goods.
• Apportionment of the ITC, if claimed partly for Business (including zero rated suppliers) and Partly of
Personal Use or use of Exempted Supply (incl t/o of RCM, securities, sale of land, sale of building excl
construction services).
• Option to Banking company, FI, NBFC to avail 50% of the eligible credit of the month without complying Taxable /
Exempted apportionment
• No Credit of Motor Vehicles & other Conveyances, in general except when used similar conveyances, transportation of
passengers or imparting training & Transportation of Goods.
• Supply of foods, beverages, catering, etc except when used to similar outward supply.
• Membership of club, health & fitness centre.
• Rent-a-Cab, Life & Health Insurance, except Government Notified obligatory duty or similar outward supply.
• Travel benefits extended to employees.
• Works Contract Services for construction of immovable property (other than P&M) except when used for
similar outward supplies
• Goods & Services received for construction of immovable property (other than P&M) on his own account or
even for furtherance of Business. (Consider Section 2(119) & Sch II 5(b) for Definition of Construction)
• Person paying Tax in Composition Scheme.