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CA Sourabh Mutha I CA Inter - IDT (Nov 21)

 Self-introduction
 IDT is 40 marks – scoring
 Start with MCQs 12 marks – very scoring
 10 chapters
 No negatives of GST in the CA exam
 Statements / short-cuts in <<---->> are only for memory purposes

Chapter 1 – Introduction to GST

 Why do we need taxes?
 Introduction
 Difference between DT and IDT
o DT is Progressive vs IDT is regressive
o DT has narrow tax base vs IDT has wider base
o 50% each
o DT is more logical
o Burden is on whom – DT on the person earning, IDT on the consumer
o IDT is inflationary
 Taxes Subsumed by GST laws <<Centre taxes subsumed - <<Sachin Exercised at CST
Station>> <<State taxes subsumed - <<VELLE>>
o Service Tax – Centre
o Excise Duty – Centre
o CST – Centre
o Surcharges on the above - Centre
o VAT + Entertainment Tax + Luxury tax + Lottery Tax + Entry Tax = State Government
 Difficulties pre-GST
o <<Sachin’s Diff Diff Classic Cars Credited & Verified>>
o States were unhappy with lessor taxes
o Different indirect taxes
o Different stages at which tax was to be paid eg: Manufacturing, sales, etc
o Cascading effect – Tax on Tax
o Credits were difficult
o Verification was not easy
o PQ1.1
o PQ1.4
 Composition Scheme - <<Shoe Dealer example>>
o Shoe store selling shoes at 1000. Subject to GST at 28%. Problem – hence
composition scheme was introduced
o Positives – Easy, very low tax and fewer compliances
o Negatives – No ITC, No charging tax to consumers, low turnover limits.
 st
101 Amendment Act, 2016

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 Legislative Framework:
o 1St July 2017
o Different types of Acts - One CGST Act + One IGST Act + One UTGST <<Can DD Also
Levy Likewise>> + Multiple SGSTS – Delhi, Puducherry and J&K too have SGSTs
 India has Dual GST
 GST is consumption based tax or Destination based tax
 HSN Codes and (Service Application Codes) SAC to classify goods and services respectively
 Registration
o Discussed in detail in ‘Registration’ chapter
 GST Returns
o Discussed in detail in ‘Returns’ chapter
 GST Suvidha Providers (GSPs) and Application Support Providers (ASPs) to help taxpayers
 GST Compensation Cess
o On luxury, sin, goods etc
 <<GST is JAIN>> - GST to never be applied on alcohol for human consumption
 Petrol, Diesel, Crude Oil, ATF, Natural Gas if notified by the GST Council + Government
 PQ 1.3
 PQ 1.5
 Exempt Supply <<Exempt has two Ns>>
o Exempted through notification
o Nil
o Non-taxable supply
 Intra-state supply – CGST and SGT
 Inter-state supply - IGST
 GST Portal <<MAARC>>
o Matching + Application + Analysis + Returns + Computation
o PQ 1.2
 Constitutional Amendment
o Article 246 <<2+4+6 = 1 + 2 = 3 lists>> - Union, State and Concurrent List for levying
tax
o Article 246A – For concurrent powers of tax by the centre and states
o Article 269A – For apportionment of IGST
o Article 279A – GST Council
 Finance Minister + State representative
 Centre has 1/3% votes and states have 2/3rd votes
 However, decision to be passed by 75% majority
 Questions

____________________________________________________________________________

Chapter 2 - Value of Supply

 GST is ad-valorem ie % of value and hence Value of Supply is important
 Section 15 of the CGST Act – deals with VOS <<Realise value of things at Age 15>>
 Section 15(1) – Transaction Value (TV)
o The Transaction Value can be considered if the following conditions are satisfied
1) Price paid is the sole consideration (However, deposit is not
consideration)

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 2) Transaction not between ‘Related Persons’
 ‘Related Persons’ <<A Family Can COPE 25%>>
o Agent of the person
o Family members
o Person having control
o Persons having common control
o Officers of the company
o Partners of a business
o Employees
o Person having 25% of more voting rights
 Section 15(2) – Additions to the TV <<Tax These Items In Supply>>
o Add Taxes other than GSTs eg: MTaxes paid on rent and taxes paid on movie tickets
(However, TCS not to be added)
o Add third party costs of actually to be paid by the supplier but borne / paid by the
recipient
o Add Incidental expenses collected or to be collected eg: Packing, delivery, etc
 PQ 2.3
o Add Interest, late fees, penalty only if actually received from the buyer
 PQ 2.5
o Add Subsidy received, except govt subsidy
 PQ 2.4
 PQ 2.6
 PQ 2.7
 Section 15(3) – Deductions in value
o Invoice discount
o Post supply Discount <<TIC discount>>
 Terms are agreed at the time of supply + Invoice-wise discount is given +
Credit is reversed of excess amount
 Eg: Cash payment discount, early payment discount, Staggered Discount are
<<TIC>> discounts
o PQ 2.1
o PQ 2.2
o PQ 2.8
o PQ 2.9
o PQ 2.10
o Jan 21 – Q 5 – 4 marks
o Nov 20 – Q 6(a) – 6 marks
 Value of Supply - Same set of provisions for Goods as well as services
 Questions
_____________________________________________________________________

Chapter 3 - Supply under GST

 Definition of ‘Goods’
o Goods is everything movable except <<IMS>> Immovable property, Money and
Securities (Eg: AC, taking a loan, buying a land, house, shares, etc)
o Includes Actionable claims but only lottery, betting and gambling
o Includes things attached to the land and agreed to be severed before sale eg: timber

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 Services
o Everything except <<GIMS>> ie Goods, Immovable property, Money and Securities
o However, currency exchange service charges and brokerage are services
 Types of supply
o Taxable Supply
o Exempt Supply <<exempt includes 2 Ns>> – includes Nil and Non-Taxable supply
o Zero-rated supply – Export supply and supply to SEZs (since refund is given of GST
paid on inputs)
o Personal supply
 Supplier – includes agent of the supplier
 Recipient – person who pays the consideration, or who receives the goods, including agent
of the recipient
 Supply means sale, transfer, barter, lease, rental, etc
 Deemed distinct persons – Persons having more than one registration in different states as
well as in same state will be considered as DDPs.
 Consideration – Amount to be paid or payable. However, it does not include deposit
o PQ 3.1
o PQ 3.2
o PQ 3.3
 Earlier regime has various taxable events eg: manufacture, sale, etc,, while GST only has one
taxable event – SUPPLY
 Section 7(1)(a) – Supply will be taxable ‘Supply’ only if it is for furtherance of business AND
for a consideration eg: sale of bike by EBC is supply, however sale of second hand bike by
you on OLX is not a supply and hence no GST <<A = B + C>>
o Twin conditions needed (B & C)
o Football player given a car for an advertisement is consideration since quid pro quo
o Even receipt from a third party on behalf of recipient is consideration
o Amount received for not doing a thing is also consideration for supply of service of
not doing the thing : eg: Non-Compete fee
o PQ 3.17
o Donations given to charitable organisations is not supply since no quid-pro-quo
o Artwork sent to galleries by artists is not supply since there is no consideration, yet.
o Supply made by a club, association, etc is also considered in the nature of business
o Business involves anything done for commercial gains, occasional transactions are
also business motives,
 Section 7(1A) – Schedule II – Supply of goods or services or both – based on TITLE Transfer
o Bike sold, bike sold on EMI, Bike sold on hire purchase, food at a restaurant – Supply
of goods
o Bike given on rent, etc - supply of services
o PQ 3.5
o PQ 3.6
 Section 7(1)(b) – Importation of services (doesn’t require to be in the course of business
furtherance) <<b = bahar se services>> <<b doesn’t necessarily require b ie business>>
o Eg: import of services of architect for renovation of showroom is subject to GST
o Eg: import of services of architect for renovation of home also is subject to GST,
since no business furtherance is required
o But consideration should be involved

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 Section 7(1)(c) – Supply without consideration (but business furtherance is required) <<C
does not require C>>
o Read with Schedule I <<Related Agent Imported BA>>
o Supply to Related Parties w/o consideration – supply between related / ddp entities
without consideration is also supply. Except gifts upto 50,000 by employer to
employee in a financial year <<A Family Can COPE 25%>> (family is self and spouse
always, Parents, G-Parents and siblings only if wholly dependant)
o Supply to Agent w/o consideration – Supply of goods by principal to his agent w/o
consideration (Agent is agent for GST purposes only if he issues his own invoice)
o Import of services w/o consideration – for a business purpose without consideration
(but has to be from a related party)
o Supply / disposal of Business Assets w/o consideration
 Should be a permanent transfer
 not sent for job-work, testing, repairing, etc.
 Donation is also a permanent transfer and hence is a supply subject to GST.
 Eg: Free gifts, AC taken by Vijay Sales owner to his house.
 Credit should have been availed on the business assets
o PQ 3.4
o PQ 3.10
o PQ 3.14
o PQ 3.16
o Nov 20 – Q 8(c) – 5 marks
o Del-Cadre Agent <<Demands Credit Agent>> – Is a normal agent who sells goods
with one extra function – ensures recovery of consideration. When DCA is treated as
an agent, then interest is to be added to the VoS. If DCA issues own invoice, then
interest charges to be added, else not to be added.
 Schedule II – To decide if supply is of goods or of services
o Transfer of Title today or at a future date is transfer of goods
o Transfer of only share or right to use asset is transfer of services
o Building is immovable property but Construction of a complex, building is supply of
services. CC or OC, whichever is earlier
o Undivided share in goods is supply of service
o Refraining from doing something is also supply of services – Non Compete
agreement
o Works contract is supply of services
o Restaurant and outdoor catering is supply of services
o Tenancy rights is supply of services
o PQ 3.11
 Schedule III – Supply that is neither supply of goods nor services, hence no GST on such
supply
o Executive vs Non-executive directors
o Pre-mature termination money is not supply of services
o Non-compete is supply of services
o The following are ‘not taxable’ <<Employee Partner Director Moved Govt
Constitution Court License AC Burial MPS>>
 Services by employee
 Services by partner
 Services by executive director

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  Movement of vehicles, buses, lorries, trucks, trains and aircraft (unless
movement is for sale)
 Government Services as required by the Constitution
 Services by constitutional posts – Chairman, members of constitutional
bodies
 Services by courts
 Alcohol license
 Actionable Claims except lottery, betting and gambling
 Burial, cremation, ambulance services
 Services by MPs, MLAs, Members of Panchayats
o PQ 3.13
o PQ 3.15
 Composite & Mixed Supplies
o Composite Supply <<No Problem>>
 Naturally Bundled
 Principle supply can be identified
 GST rate will be the rate applicable to the principle supply
o Mixed Supply
 Not naturally bundled
 Other than composite supply
 GST rate will be the highest rate applicable on the different products in the
supply
 Rent of two floors for different purposes, leased together
o PQ 3.7
o PQ 3.8
o PQ 3.9
o PQ 3.12
 Questions
____________________________________________________________________

Chapter 4 - Charge of GST

 Intra state supply – CGST + SGST
 Inter state supply – IGST
 Definition of India – Territorial Waters, Continental Shelf, EEZ
 Section 9(1) CGST Act, 2017 – FCM on most supplies eg: EBC
o Maximum rate 20% under CGST and 40% under IGST
o Tax to be collected and paid by the taxable person
o Taxable Person
 Section 9(2) – FCM on the 5 petroleum products, when notified
 Section 9(3) and 9(4) – RCM
o <<R for Reverse and R for Recipient>>
o Recipient to get registration if not already registered
o Similar provisions in Section 5(3) and 5(4) of the IGST Act
 Section 9(4) <<Some Lawyers Lending Cars Met RBI, GG, DIG AT CCD Sponsored Bfast
Reversed BC>>
o Security Services – Provided by small entities (other than company) to business
entities (Taxable under GST)

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 o Legal Services – provided by lawyers to business entities (Taxable under GST)
o PQ 4.16
o Lending of Securities – Provided to SEBI registered entities
o Car renting (with fuel)* - provided by small entities (other than company) to
business entities (taxable under GST) (similar to Security services)
o Music composition services – Provided to music companies (taxable under GST)
o Services by overseeing committee of RBI
o Government services – Renting immovable property provided to Registered entities
o Government Services (except PRAT ie Postal, renting, aircraft leasing, transport of
goods & passengers) – provided to business entities
o Directors services (non-executive) (Services provided by executive directors are
under Schedule III ie non-taxable)
 PQ 4.13
o Insurance agent services – provided to insurance companies
o Goods Transport Agency* - provided to registered entities and Pfirms (regd or not)
 PQ 4.15
o Author services* - provided to publishing companies (taxable under GST)
 Jan 21 – Q8(a) – 5 marks
o Arbitary Tribunal Services – similar to legal services
o Construction Companies – Long term lease services (more than 30 years lease)
o Construction Companies – FSI and TDR services
o Direct Selling Agent Services – services provided to banks, insurance companies, etc.
o Sponsorship services to Company and Firms
 PQ 4.14
o Business Facilitator services – provided to banks
o Recovery agent services to banks – provided to banks, FIs, etc.
o Business Correspondent Services – provided to banks.
o PQ 4.2
o PQ 4.11
o PQ 4.12
o PQ 4.17
o Nov 20 – Q 6(b) – 4 marks
 *Option of paying based on FCM as well
 Section 9(5) – Taxation of E-Commerce transactions <<HTH>>
o Housekeeping services + Taxi Services + Hotel Services
o ECO to pay GST to the government, unless hotel or housekeeping person is
registered, then in that case, they also may pay
 HSN Codes for classification of goods
 SAC Code for services
 GST on housing projects
o RCM on FSIm TDR and long term leases will be exempted on houses sold before
receipt of Completion Certificate
o On unsold houses RCM to be paid at the rate of 1% for affordable houses and 5% for
other than affordable houses
o However, 80% of the supplies to be from registered supplies, else construction
company to pay RCM at 18% on the shortfall upto 80%.
 Section 10(1) – Composition Scheme. Eg: 1000 Rs Shoe Store

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 o Step 1: Check for <<TRM>> ie traders, mfgers and restaurant services
o Step 2: Check aggregate turnover in the earlier year
 Aggregate turnover = All outward supplies including export, exempt
supplies, etc, however, excluding GST on such outward supplies, Interest,
and inward supplies
 Aggregate turnover to be upto 1.5 crores in most states and upto 75 lakhs in
Special Category States <<NE States except Assam and incl Uttarakhand>>
 One PAN – One Scheme – One Turnover
o Step 3: Taxable Person cannot do the following
 If he crosses the above turnover thresholds, then he will come under the
normal scheme
 Person cannot do <<Casually Needing Ice-cream Studying Inter Online>>
 Casual Taxable Person
 Supply non-taxable goods
 Manufacture Ice-cream, aerated drinks, Pan masala, tobacco
(trading is allowed)
 Supplying services
 INTER STATE supplies
 Online supplies
 May 19 – Q8(a) – 5 marks
o Rates under Composition Scheme – 1%, 5%, 1% for TRM respectively
o Intimation for the scheme on any day for new persons and on April 1st for already
registered persons
o Proviso to Section 10(1) - Marginal services allowed under composition scheme
 Marginal services upto 10% of last years turnover or 5 lakhs, whichever is
higher is allowed
 ILLUSTRATION
o Withdrawal from the scheme
 Voluntary withdrawal
 Automatic withdrawal <<Casually Needing Ice-cream Studying Inter
Online>>
 Crossing the turnover of 1.5 crores or 75 lakhs respectively
o PQ 4.5
o No Tax to be collected from consumers
o Bill of Supply instead of a tax invoice
o No ITC can be taken
o Composition scheme to be taken for all the entities under the same PAN
o PQ 4.7
o PQ 4.8
o PQ 4.10
 Nov 19 – Q6(a) – 6 marks
 Section 10(2A) – Small Service Provider Scheme <<Casually Needing Ice-cream Studying Inter
Online>> - This was notified in 2019
o Similar to composition scheme but for ‘small service providers’
o Aggregate turnover in the PY upto 50 lakhs
o Rate under this scheme is 6% (CGST 3% and SGST 3%)
o Ineligibility under this scheme same as above scheme

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 o PQ 4.1
o PQ 4.6
o PQ 4.9
o PQ 4.18
o PQ 4.19
o PQ 4.20
o PQ 4.21
 Nov 19 – Q8(a) – 5 marks
 Section 10(3) – Lapse of the Scheme
o On the lapse of the scheme, the person to intimate the department within 7 days
and give details of the inputs and capital goods in stock
 Section 10(4) – Cannot avail ITC
 Section 10(5) – Penalty for wrongful availment of the scheme
o PQ 4.3
o PQ 4.4
 Questions
________________________________________________________________________

Chapter 5 - Registration
 Benefits of Registration – Charge GST to customers and take ITC on inputs, etc.
 Negative of Registration – Goods and services become expensive for final customers,
compliance formalities, etc.
 Section 22 – Persons liable to register
o Every supplier needs to register if aggregate supply exceeds the specified limits.
 Category 1: Check for <<PIGS>> ie a) Cannot supply prohibited goods, b)
Cannot supply inter state c) Only supplies goods, d) Not in special states of
<<NTMM>> or <<PUTSAM ie Puducherry, Uttarakhand, Telangana, Sikkim,
Arunachal Pradesh, Meghalaya>> = 40 lakhs limit,
 Category 2: check for <<NTMM>> ie States of Nagaland, Tripura, Manipur &
Mizoram ie 10 lakhs,
 Category 3: 20 lakhs for everyone else not forming part of above
o Aggregate Turnover is same as composition scheme – ie all outward supplies, no
inward supplies, no GST and no Interest income
o One PAN = One Turnover
o Aggregate turnover shall include all supplies made by the taxable person, whether
on his own account or made on behalf of all his principals.
o If a person with places of business in different States across India has one branch in
a Special Category State eg: One entity is in NTMM, then the threshold limit for GST
registration will be reduced to Rs. 10 lakh.
o Multiple registrations in the same state is not needed but can be done voluntarily
o ‘Aggregate turnover’ Vs. ‘Turnover in a State’: The aggregate turnover is different
from turnover in a State. The former is used for determining the threshold limit for
registration and eligibility for composition scheme as well as for option to pay tax at
concessional rate for small services providers. However, once a person is eligible for
composition levy, the amount payable under composition levy would be calculated
on the basis of ‘turnover in the State/UT’.
 PQ 5.6

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  PQ 5.11
 Nov 19 – Q7(a) – 5 marks
o Registration required only for a place of business from where taxable supply takes
place
 May 19 – Q7(c) – 4 marks
 Section 22(3)
o When business carried on by taxable person is transferred on account of succession
OR OTHERWISE, new registration is required from date of transfer (since PAN
number changes)
 Section 22(4)
o When there is an amalgamation or demerger of companies, new registration is
required from incorporation date (since new company hence new PAN and hence
new registration)
 Section 24 – Compulsory registration for the following person, irrespective of turnover:
<<Ensure Compulsory Registration Is Needed – TONAI>>
o E-commerce Operator + Casual Taxable Person (CTP) + RCM (Persons liable to pay
tax under RCM) + Inter state supply** + Non Resident Taxable Person (NRTP) + TDS /
TCS persons + OIDAR + Notified persons + Agent of a taxable person + Input Service
Distributor (ISD)
 PQ 5.8
 Section 23 – No Registration needed for the following
o <<HEARS>>
o *Handicraft Goods – Intra state upto 40 lakhs, inter-state upto 20 lakhs or 10 lakhs
in NTMM, even if is done by a CTP
o Exempt supply exclusively
 Nov 20 – Q 7(a) – 4 marks
o Agriculturist (ind or HUF) from cultivation of land
o Persons making supplies all of which are subject to RCM
o *Inter-state supply of taxable services upto 20 lakh (or 10 lakhs in NTMM)
 PQ 5.3
 Section 25 – Registration Procedure
o To apply within 30 days of becoming liable u/s 22 or u/s 24
o State-wise registration
o CTP and NRTP to apply 5 days in advance
o SEZ to have separate registration
o 25(3) – Voluntary registration
 PQ 5.13
o 25(4) and 25(5) – DDP
o 25(6) – PAN is mandatory except NRTP
o 25(8) – Suo-moto registration by proper officer
o 25(9) – UIN
o 25(6A to 6D) – Aadhaar from 1.4.2020
o GST REG-01 for everyone except <<NOT>> ie NRTP, OIDAR, TDS/TCS persons
o Bank details may be uploaded within 45 days
 PQ 5.4

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 o For registration <<dial 377>> ie Officer to intimate within 3 days, reply to be filed
within 7 days and officer to decide within 7 days (Deemed registered if officer
doesn’t action out)
o 60 days limit in case aadhaar is not verified
o Physical verification is discretionary
o Effective date depends on whether application is made within 30 days from date
liable to register
 PQ 5.1
 PQ 5.9
 PQ 5.10
 PQ 5.12
o GST Number is a 15 digit code
o Suo-moto registration can be converted into full time registration by the taxable
person
o UIN is for refunds
o Registered person to declare his PPoB and APoB
 PQ 5.15
 Section 26 – Deemed registrations <<Hum Saath Saath Hai>>
o If registered under one Act, then registered under all Acts
 Section 27 – CTP and NRTP
o Who is CTP and NRTP?
 CTP does business in a state in which it is not registered
 NRTP does business in a country in which it has no permanent establishment
o Mandatory registration 5 days before business starts
o Validity of RC and extension is for 90 days max which can be further extended by
another 90 days max
o Advance payment of tax is needed on presumptive basis
o NRTP is the only person who does not require PAN to get registered
 PQ 5.2
 PQ 5.7
 PQ 5.14
 May 19 – Q8(c) – 5 marks
 Section 28 – Amendment to registration
o Registration Certificate and UIN both can be amended for changes
o Application for amendment within 15 days of the change
o Core fields <<CAN>> be changed but need approval, core fields <<CAN>> –
Constitution change, Address change and Name change
o Non-core fields are changed on self-verification
o Change in PAN cannot be amended, fresh RC needs to be obtained
o 15-15-7 is the code for this ie application for change within 15 days, reply within 15
days and further reply within 7 days
 Section 29 – Cancellation or suspension of Registration
o Cancellation can be on his own motion or on an application made by the person or
the legal heir on account of death of the person
o During the pendency of cancellation, the RC will be suspended
o Manner of suspension:

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  Voluntary cancellation – from the date of submission of cancellation
application or date when cancellation is sought, whichever is LATER (no
supply during period of suspension and no returns to be filed as well)
 Cancellation by dept – date to be decided by the dept
o Officer may cancel registration in te foll cases: <<Can Immediately Commence 36
Frauds>>
 Contravention of the Act
 Issuing invoices without supplying goods or services
 Not commenced business for 6 months
 Composition Scheme Dealer (CSD) has not furnished returns for 3
consecutive periods
 Other persons have not furnished returns for 6 months
 Fraud
o Cancellation under one Act leads to cancellation under other Acts
o Procedure for cancellation:
 Apply within 30 days
 Furnish details of inputs
 Order of cancellation within 30 days
 On cancellation the credit and cash ledger will need to be debited by the
amount of ITC on the inputs or the output tax payable, whichever is HIGHER
o Taxpayer would not be allowed to file return for the period after date of cancellation
mentioned in the cancellation order. However, he can submit returns of the earlier
period
o Jan 21 – Q 8(b) – 5 marks
 Section 30 – Revocation of cancellation
o Only in case of cancellation by officer
o Apply for revocation within 30 days from receipt of order
o Period can be extended by another 30 days and then further 30 days
o Order to be passed within 30 days
o Before rejecting application SCN to be issued
o If registration was cancelled for return filing, then returns need to be filed before
applying. Post cancellation returns need to be filed within 30 days from order of
revocation
 Questions
______________________________________________________________________

Chapter 6 - Time of Supply

 Time of Supply (ToS) determines when govt gets the GST amount (Earlier the better for the
govt)
 Separate provisions and section for ToS of goods and services
 Sections 12 and 13 deal with TOS fo goods and services respectively
 Section 12(1) and 13(1) are guiding sections (not useful)
 Section 12(4) and 13(4) are for ToS in the case of vouchers – If identifiable, then Date of
purchase will be ToS, else, date of redemption will be ToS
o PQ 6.11
 Section 12(6) and 13(6) are for ToS in the case of interest, late fee, penalty – ToS is the date
of RECEIPT of such amounts

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 Section 12(3) – ToS in the case of goods chargeable under RCM - <<Receipient Pays In31
Entirely>>
o Earliest of the following:
 Date of RECEIPT of goods
 Date of PAYMENT
 31st Day from the date of INVOICE
 If, none of the above are known, then date of ENTRY in books of accounts
o All things from recipient’s perspective in the case of 12(3)
o PQ 6.2
 Section 13(3) – ToS in the case of services chargeable under RCM - << Pays In61 Entirely>>
o Earliest of the following:
 Date of PAYMENT
 61st Day from the date of INVOICE
 If none of the above are known, then date of ENTRY in books of accounts
o All things from recipient’s perspective in the case of 13 (3)
o PQ 6.5
o PQ 6.7
o PQ 6.12
 Nov 19 – Q6(b) – 4 marks
 Section 12(5) and 13(5) are residuary sections – ToS is earlier of date on which return is filed
or taxed is paid
o PQ 6.14
 Section 12(2) is ToS in the case of goods chargeable under FCM - <<I Demand Payment>>
o Earlier of - Date of INVOICE, *Due Date of Invoice, Date of PAYMENT from supplier’s
perspective (his accounts or bank, whichever is earlier)
o Notification 66/2017 – Advance payment is not to be considered to determine ToS
u/s 12(2)
o *Due Date in case of Goods is as per Section 31(1)/(4)/(7) - <<147>>
 Section 31(1) – Generally - Invoice Before or at the time of removal or
delivery
 Section 31(4) – In case of Continuous Supply - Invoice before successive
statements / payments
 Section 31(7) – In case of sale on approval basis - Invoice before or at earlier
of date of approval or 6 months from date of removal
o PQ 6.1
o PQ 6.9
o PQ 6.10
o PQ 6.18
o PQ 6.19
 Section 13(2) – ToS in the case of services chargeable under FCM <<IP or PP>>
o <<IP>> ie earlier of Date of INVOICE or Date of PAYMENT when invoice is issued in
time,
o <<PP>> ie earlier of Date of PROVISION of services or Date of PAYMENT if invoice is
issued beyond due date
o Due date of invoice in the case of supply of services as per Section 31(2)/(5)/(6) -
<<256>>

13
 o Section 31(2) – Normal Services - Within 30 days from date of provision of services
(45 days in case of banks, financial services)
o Section 31(5) – In case of continuous supply of services (minimum 3 months) –
before <<DRC>> Due Date, or receipt of payment or completion event in that order
o Section 31(6) – In case of cessation of services, before or at the time of cessation of
services
o In case of associated enterprise abroad, invoice date is to be ignored
o PQ 6.3
o PQ 6.4
o PQ 6.6
o PQ 6.8
o PQ 6.13
o PQ 6.16
o PQ 6.17
 Once ToS is established, tax will be paid to the government alongwith a monthly return by
the 20th of the next month
 In case of excess payment upto 1000 INR in the case of 12(2) and 13(2) – ToS can be
considered as the next invoice date or the receipt date, at the option of the supplier
 Questions
 May 19 – Q7(a) – 4 marks


Chapter 7 - Input Tax Credit

 Explain the difference between inputs, input services and capital goods – eg: Engines,
Batteries and Tyres are inputs, CA Services are input services and tempos are capital goods
 GST to be paid on Inputs, input services and capital goods but ITC can be availed while
paying the output liability
 Section 16(1) – two conditions for availing ITC
o Person should be REGISTERED
o Input or input services or capital goods should be USED or INTENDED TO BE USED for
the purpose of business
 Section 16(2) – has four conditions to avail ITC
o <<DR GR>>
o DOCUMENT – Invoice, or Self generated invoice, or Bill of Entry or ISD invoice is
needed
 Supplier needs to upload invoice details (GSTR1) which is auto-populated in
GSTR-2A of the respective recipients
 In case invoice detail is not uploaded, recipient cannot take ITC
 To give partial relief Rule 36(4) was introduced, which allows 10% of Eligible
ITC of uploaded invoices for the invoices not uploaded. (This was 20% earlier
and has recently been further reduced to 5%)
 PQ 7.1
o RECEIPT of goods
 Deemed receipt in the case of ‘Bill to ship to’ model
 Receipt only on receiving the last lot / instalment under one invoice
o GOVERNMENT should get the tax amount

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  Rule 37 to give relief to the supplier – Recipient to make payment to
supplier within 180 from date of invoice. If not paid, then the credit availed
and interest on the credit at 18% (from the date of availing credit till the
date of payment of this amount) will be credited to the output tax liability
ledger
 However, when amount is finally paid after 180 days, re-credit of the
amount will be again allowed
 This rule doesn’t apply if no consideration is to be paid or GST to be paid on
RCM basis
 PQ 7.3
o RETURN to be filed by the person taking the ITC (Section 39 discussed in ‘Returns’
chapter)
 Section 16(3) – ITC in the case of capital goods
o If Capitalised with GST, then no ITC
o If capitalised without GST, then ITC available
 Section 16(4) – ITC has an expiry period and should be taken to the credit ledger before it
expires
o Earlier of September return due date ie 20 Oct or Annual Return filing date (last date
for Annual Return filing is 31 December after the end of the FY)
o Once taken to the credit ledger it can be used whenever required
o Expiry of debit note is the same as expiry of invoice linked with it
 PQ 7.2
 PQ 7.4
 PQ 7.5
 Section 17(5) – Blocked Credit
o Certain ITC even though normally eligible has been blocked by the Act
 Section 17(5)(a)/(aa)/(ab) – GST on <<VAM>>
o ITC is allowed on <<VAM>> ie Vessels, Aircrafts and Motor-vehicles only if <<GST-
Please>> ie for the following purposes:
 Transportation of GOODs, SUPPLY of the VAMs further, TRAINING on VAMs,
PASSENGER transportation*, else no ITC
 *ITC for motor vehicles other than VAM GST – ie for passengers is only when
13+ seater vehicles
o ITC on leasing, renting, Insurance, repair, maintenance of eligible VAMs, while not
allowed if VAM is ineligible
 PQ 7.6
 Section 17(5)(b) GST on <<B for beauty, beverages>>
o ITC on F&B, beauty, cosmetic treatments, health and life insurance, outdoor
catering, etc is not allowed
o ITC on Clubhouse memberships is blocked
o ITC on travel related expenses of employees is blocked
o Unless, the above are statutorily required
 Section 17(5)(c) GST on construction services <<C for construction>>
o ITC on construction of immovable property (Immovable property includes telecom
towers and pipelines outside factory) is blocked except for the following:
 Construction of P&M (including foundation of P&M)
 Construction expenses not capitalised ie debited to P&L account

15
  If construction if the line of business
 Section 17(5)(d) GST on Self-construction <<D for development>>
o ITC on self-construction of immovable property (telecom towers and pipeline also is
immovable) is blocked except the following:
 Self Construction of P&M (including foundation of P&M)
 Self Construction expenses not capitalised
 If construction if the line of business
 PQ 7.7
 Section 17(5)(e) – GST on composition scheme <<E for easy scheme ie CS>>
o ITC on Composition Scheme dealer supplies is blocked
 Section 17(5)(f) –GST paid by NRTP <<F for foreigners>>
o ITC in the case of NRTP is blocked
o Except ITC of the IGST paid on imports
 Section 17(5)(g) GST on personal supply <<G for Ghar ie personal>>
o ITC is blocked for personal consumption
 Section 17(5)(h) – GST on destroyed goods and samples <<H for happy and unhappy>>
o ITC on goods given as samples/gifts is blocked
o ITC on goods destroyed, lost, stolen, etc is blocked
 Section 17(5)(i) – GST on frauds
o ITC of GST paid on account of an order of the officer due to fraud, etc is blocked
 PQ 7.8
 PQ 7.9
 PQ 7.10
 PQ 7.11
 Section 17(1) and 17(2)
o Taxable supply vs Zero rated supply vs exempt supply vs personal supply
o ITC available only for taxable and zero rated supply
o Apportionment of ITC in the case of inputs, input services and CGs used for business
and other than business use
 Rule 42 – Method of apportionment of ITC on inputs and input services <<Gift on 42nd
birthday>>
o Take entire gift ie take entire ITC (T)
o Remove <<PEBbles>> ie remove ITC on inputs and input services used exclusively for
Personal, Exempt and blocked purporses (T1,T2, T3)
o From the gift ie C1, remove <<Mobile Phone T4 >> ie remove the ITC on input and
input services used exclusively for taxable supply (which includes zero rated supply)
(T4)
o From C2 ie common credit, <<chocolates>> ie Common ITC need to be apportioned,
some to be given away ie liability and some to be kept as under:
 D1 to be calculated based on exempt supply and total supply and D2 is 5% of
C2 in case inputs are also used for personal purposes
 D1 + D2 in not available as credit and hence to be taken to the output
liability and T4 + C3 is available as credit and hence to be taken to the credit
ledger
 PQ 7.12
 Rule 43 – Method of apportionment of ITC in case of capital goods
o No ITC for CGs used exclusively for exempt and personal purposes

16
 o Take ITC on CGs used exclusively for business purpose and credit it to the credit
ledger
o Create common pool:
 Include ITC on CGs used for common purposes
 Add proportionately reducing 5% for every quarter: ITC on CGs earlier
exclusively for exempt / personal purporses, now for common purposes
 Add proportionately reducing 5% for every quarter: ITC on CGs earlier
exclusively for taxable purposes, now for common purposes
o Divide the common pool by number of months to get monthly ITC (Tm)
o Calculate ITC not allowed by considering exempt supply over total supply (E/F)
 Section 17(4) – ITC in the case of banks, FIs and NBFCs
o Option to apportion ITC or take eligible ITC as 50% of total eligible ITC
o Step1: Calculate total ITC
o Step 2: Remove ITC in the case of supplies between the same PAN but different
registrations
o Step 3: Remove ineligible / blocked credit
o Step 4: Take 50% of the above amount as eligible ITC
 PQ 7.16
 Section 18 – Credit in special circumstances
<<Register Voluntarily or Credit Expires>>
o Section 18(1)(a) – In the case of fresh registration – the ITC on the inputs and input
services only the day prior to becoming liable for registration will be credited to
credit ledger
o Section 18(1)(b) - In case of voluntary registration – the ITC on inputs and input
services only prior to the date of registration will be credited to the credit ledger
o Section 18(1)(c) - From composition scheme into the normal scheme – ITC on inputs,
input services in stock as well as capital goods prior to the day it becomes liable to
enter the normal scheme. For CG, reduction in ITC of 5% per quarter or part
o Section 18(1)(d) - Switching from exemption to taxable - ITC on inputs, input services
in stock as well as capital goods prior to the day it becomes taxable. For CG,
reduction in ITC of 5% per quarter or part
o Section 18(2) - In all the above scenarios no ITC beyond 1 year from the date of the
invoice
 PQ 7.13
 PQ 7.14
o Form GST ITC 01 to be filled in within 30 days of the above scenarios
o CA certificate required if ITC is more than 2 lakhs
 Section 18(3) – Transfer of ITC in case of sale, amalgamation, merger, etc
o There has to be a specific provision of transfer of liabilities, only then ITC will be
transferred
o Rule 41 Transferor to fill in GST ITC 02
o In case of demerger transfer to be in proportion to the transfer of assets
o CA certificate required
o Transferee needs to accept the transfer and account for the same
o Rule 41A – Similar transfer even in the case of separate registration in the same
state but will be proportionate to the value of assets
 Section 18(4) and 18(5)– Reversal in the case of CE (Entering composition scheme / supply
becoming exempt <<4go>>

17
 o The ITC lying in the credit of the credit ledger alongwith cash will be used to pay the
output liability and the balance if any, will lapse.
o Section 18(5) and Rule 44 <<Four for fourgo>> prescribe the method of reversal of
credit as under:
 Input and input services credit based on invoices
 For Capital Goods, balance after considering use will be reversed considering
useful life of 60 months
o Form GST ITC 03 – in case of such reversal or GSTR – 10 in case of cancellation of
registration Section 29
o CA certificate also required
 Section 18(6) – ITC reversal on supply of Capital Goods on which ITC has been taken
o Higher of the following:
 After use of 5% per quarter from the date of invoice, excess ITC availed to be
reversed
 GST payable on the transaction value of such capital goods
o In case of mould, dies, etc, no credit reversal Is required, only GST is payable on the
transaction value if to be considered and put in the output liability ledger
 Utilization of Credit
o Credit ledger can be used to pay only tax (only GST under FCM)
o Cash ledger can be used to pay <<TIFPO>>
 Section 49A, 49B read with new Rule 88A: Order of utilization when there is IGST
o Step 1: Calculate output tax liability for the month/year, separately for each type of
GST
o Step 2: Identify the opening ITC, separately for each type of GST
o Step 3: Determine and add the ITC on eligible inputs, input services and CGs
o Add Step 2 and 3
o Use and exhaust IGST first to pay IGST liability fully
o Compare the SGST and CGST liability with the available credit to determine, which is
more needy.
o Use balance IGST to help the needy first
o No cross utilization of SGST and CGST allowed
 Section 49A, 49B read with new Rule 88A: Order of utilization when there is no IGST
o First CGST will help CGST and SGST will help SGST, balance from CGST and SGST, if
any will be used to pay IGST
 Rule 86A – Restrictions on utilization of ITC in case it is fraudulently availed in the following
circumstances:
o <<Government BTRS>> 1) No payment to Government 2) No Business 3) No Tax
Invoice, 4) 2) No Receipt of goods , 5) No Supplier
o Restrictions for a maximum period of one year and can be withdrawn by the
Commissioner
 PQ 7.17
 PQ 7.18
 PQ 7.19
 Jan 21 Q5 – 8 marks
 Nov 20 – Q5 – 8 marks
 Nov 19 – Q5 – 8 marks
 May 19 – Q5 – 8 marks

18
  Questions

_______________________________________________________________________________

Chapter 8 - Returns
 Every registered person (incl composition scheme dealer) needs to file returns either
monthly, quarterly and / or annually
 Under GST, the tax needs to be self-assessed and return needs to be filed
 Also, return filed by one person has an impact on the other person as well eg: supplier-
recipient
 Returns to be filed online or through GSPs or GSTN
 Section 37 – Return for outward supplies
o To be filed by everyone except <<Is NOT Compulsory>> ie ISD, NRTP and
Composition Scheme Dealer
o Return to be filed in GSTR-1 by the 10th of the following month (this date has been
extended to 11th)
o GSTR-1 to be filed only after the month ends except two cases:
 Casual Taxable person
 Cancellation of registration
o Small taxpayers with aggregate annual t/o upto 1.5 crs in the PY have been given
relief of filing GSTR-1 quarterly by the 13th of the month after the quarter end
o NIL GSTR-1 - Even if no outward supply, NIL GSTR-1 needs to be filed, SMS facility
available.
o PQ 8.1
o PQ 8.8
o PQ 8.9
o PQ 8.14
o GSTR-1 is a return u/s 37
o GSTR-1 to have details of the supplier as well as details of outward supplies,
including debit and credit notes, revised invoices etc as under:
 B2B supplies where recipient will avail ITC – Invoice-wise details always –
Table No 4
 B2C supplies where recipient will not avail ITC – Consolidated for intra state
always and invoice wise for inter-state if value of supply is more than 2.5
lakhs, else state-wise consolidated
o Nov 20 – Q 7(c) – 3 marks
o PQ 8.3
o HSN codes for supply of goods
 Where annual turnover in the PY is upto 5 crores then HSN upto 4 digits in
B2B, while HSN is optional for B2C
 Where annual t/o in the PY is more than 5 crores then 6 digit HSN code
o Details of GSTR-1 is auto-populated in GSTR-2A (NS) and GSTR-4A (CS) – has to be
verified and validated
o GSTR-1 can be amended as and when errors or ommissions come to the notice of
the supplier but no amendment after the deadline (same as Section 16(4) ie Sept
return due date (20 Oct) or Annual Return Filing Date (whichever is early)
 GSTR-2 contains details of inward supplies and has to be filed by 15th of the next month

19
 GSTR-3B – Return to be filed by every registered person except <<Is NOT Compulsory>>
o This is a summarized return of the outward supply, inward supply ie inputs, etc
o GSTR-3B is a temporary replacement of GSTR-3 which is yet not notified
o GSTR-3B is a return under Section 39
o GSTR-3B to be filed by 20th of the next month alongwith the applicable tax
o Relief for taxable persons with annual t/o of upto 5 crores in the PY, this return can
be filed by 22nd or 24th depending on state / UT
o Taxable persons
o NIL GSTR-3B also to be filed, SMS facility available
o Return is valid even if tax is not paid on the same
o PQ 8.6
o PQ 8.12
 Nov 19 – 8(c) – 2 marks
 GSTR-4 – Return in the case of CSD
o Annual return GSTR-4 to be filed by 30th April after the year ends
o Besides the above, a quarterly return in GST-CMT-08 to be filed by 18th of the month
after the quarter ends
o Auto-population of inward supplies in GSTR-4A
o Since CSD supplies are not taxed, hence no invoice details required
o However, invoice wise details of inward supplies, since someday CSD could get into
NS and require ITC then
o CSD to discharge their liability only through the cash ledger, since they don’t get ITC
o In case CS taken from 1st April, returns upto 16(4) due date need to be filed under NS
as well
o Further, is CS ends and normal scheme starts during the middle of the year, GST-
CMP-08 to be filed for the quarter in which the CS ends and also, annual return in
GSTR-4 needs to be filed as well
o GST-CMP-08 is not a return but just a form to pay tax every quarter, while GSTR-4 is
the return to be filed annually.
o PQ 8.10
o PQ 8.16
 GSTR-5 – Return for NRTP
o Needs to be filed by 20th of the next month or within 7 days from end of registration,
whichever is earlier
 For all returns, tax to be paid when return is filed, else the return would not be considered
as a valid return
o PQ 8.5
 Return of one month can be filed only if return of the previous month has been filed
o PQ 8.11
 Section 39(9) – Rectification of errors/ returns
o Under GST law a return once filed cannot be revised
o Instead of retifying existing returns, there is a provision of adding the changes to the
return of the month in which the error is noticed
o Errors in the returns can be rectified within the 16(4) due date
o Any tax payable has to be paid alongwith interest at 18%
o However, no rectification if error is discovered during any inspection, etc
o PQ 8.2

20
 o PQ 8.4
o PQ 8.6
 Nov 19 – Q8(b) – 5 marks
 Section 40 – First Return
o This is a normal return ie GSTR-3B but is called a first return since it is filed after
registration
o It includes details of ‘revised invoices’ issued during the pendency period
o First return is for the period from the date on which he became liable for
registration till the date of grant of registration
 Section 44 – Annual Return GSTR-9
o All registered persons are required to file annual return except <<Is NOT Casual>> ie
ISD, NRTP and CTP
o Due date is 31st December (but practically this due date keeps getting extended)
o For NS GSTR-9 for CS GSTR-9A, for ECOM GSTR 9B and for audit GSTR9C
o Relief for persons with turnover upto 2 crores – no filing annual return for FY 17-18
and FY 18-19
o It may be noted that filing of GSTR-9 has been made voluntary in respect of financial
years 2017-18 and 2018-19 for the registered persons whose turnover is less than 2
crores.
 Final Return – Section 45
o GSTR-10 to be filed within 3 months of date of cancellation or order of cancellation,
whichever is later
o PQ 8.15
 UIN to be filed under GSTR 11
 In case return is not filed a notice is issued u/s 46
 Section 47 – Late fees
o In case of returns u/s 37,39, 45, etc late fees of 100 INR per day or max 5,000
o In case of return u/s 44 ie annual return late fees of 100 INR per day or 0.25% of the
turnover
o Further, similar late fee will also be charged under SGST acts
o Q 7(c) – Jan 21 – 3 marks
 Section 48 – GST-Practitioners
o Indian Citizen, not insolvent, not of unsound mind and having required qualification
in commerce, banking, finance, CA, CMA etc degree can be a GSTP
o Also, a retired officer in commercial tax dept with exp of 2 years or more
o Or a Sales tax Practitioner with exp of 5 years or more can also be a GSTP
o GSTP shall help the registered person, but ultimate responsibility will be of the
registered person
o GSTP gets a separate login and then Registered person can change GSTP
o GSTP can perform only authorized tasks
o PQ 8.13

________________________________________________________________________

Chapter 9 - Payments
 Section 49(1) - Electronic Cash Ledger
o Once a person is registered, cash and credit ledger open automatically.

21
 o Cash can be paid through netbanking, debit, credit cards, as well as OTC (cash,
cheque, dd limit of 10,000 per challan, per tax period)
 More than 10,000 cash can be deposited in exceptional cases being:
 Notified persons
 Officers on sale of seized assets
 Officers on search, investigation etc
 Generate challan also called CPIN – GST-PMT-06 (only one challan for all
payments TIFPO). CPIN is 14 digit number identifying the challan, valid for 15
days
 Pay the amount in the challan – CIN. CIN is a 17 digit number when payment
is actually made using the CPIN
 Receipt will be issued containing a BRN – Bank code
 E-FPB will issue the receipt – Is the branch of bank which is authorised to
collect GST – one branch is nominated. For For NEFT / RTGS – RBI is the e-
FPB
 For complaints etc – GST – PMT – 07 / 04
 TDS and TCS shall reflect in the cash ledger
 Transfer between heads possible by filing GST – PMT – 09 from 21st April
2020
o May 19 – Q7(b) – 2 marks
o PQ 9.5
o PQ 9.7
 Four major heads – IGST, CGST, SGST/UTGST and GSTCC
 Five minor heads under each major head – <<TIFPO>>
 No Manual challans
 GST-PMT-05
 Can be used to pay TIFPO
o PQ 9.8
o PQ 9.10
o PQ 9.13
 Section 49(2) – Electronic Credit Ledger
o GST PMT 01
o Can only be used to pay tax (only FCM GST)
o PQ 9.14
o Exhaust IGST First, then CGST and SGST as the case may be
o CGST and SGST cannot be cross utilised
o ITC cannot be used to pay tax under reverse charge or for composition scheme
liabilities
o Rule 86A – In case officer believes that ITC has been availed fraudulently, then use
can be prohibited, maximum for one year, can be reduced by Commissioner
 The Commissioner or an officer (not below the rank of an Assistant
Commissioner) authorised by him has been empowered to impose
restrictions on utilization of ITC available in the electronic credit ledger if 1)
ITC has been availed on the basis of tax invoices/valid documents issued by a
non-existent supplier or 2) without receipt of goods and/or services; or 3)
the tax in relation to which has not been paid to the Government or 4)
Registered person availing ITC has been found non-existent or not to be
conducting any business from the registered place of business; or 5)

22
 Registered person availing ITC is not in possession of tax invoice/valid
document.
o Nov 20 – Q 8(a) – 5 marks
o PQ 9.9
o As per Section 49(2) - The input tax credit as self-assessed in the return of a
registered person shall be credited to his electronic credit ledger
o PQ 9.11
o PQ 9.12
 Section 49(7) – Electronic Liability ledger
o Section 49(8) states that liability should be discharged as under:
 TIFPO of the previous periods first
 Then TIFPO of the current period
 Then last TIFPO as determined by the officer u/s 73 and 74
o PQ 9.15
o This online payment scheme is beneficial to all
o Section 49(10) - Transfer between heads possible by filing GST – PMT – 09 from 21st
April 2020. ILLUSTRATION
o Nov 19 – Q8(c) – 3 marks
o PQ 9.3
o PQ 9.4
 Section 50 – Interest on delayed payment
o Interest is mostly calculated at 18% from the day after the due date till the actual
payment of tax
o However, u/s 50(3) – any interest payable due to undue or excess claim of ITC or
undue or excess reduction of liability shall be liable to pay interest at 24%
o Interest payment to be made even if not demanded through any notice, etc
o Interest on net basis <<net amount if no return if filed>> if return is not filed and
credit is available
o Interest on gross basis if return is filed and credit is used
o (Interest @ 24% on undue or excess claim of ITC or on such undue or excess
reduction in output tax liability)
o PQ 9.1
o PQ 9.2
o PQ 9.16
 Section 53 – Transfer of ITC
o This section is not for the assessee but for the government
o If IGST credit is used for
 CGST then no transfer needed
 SGST then centre needs to pay state
 UTGST then centre needs to pay UT
o If CGST credit is used for IGST then no transfer needed
o If SGST credit is used for IGST then state needs to pay centre
 Section 49(9) – When payment of tax is made, it is assumed that the incidence of tax has
been passed on ahead. Thus no refund will be then made to the middle person ie payer
since it will lead to UNJUST ENRICHMENT
o PQ 9.6
 Questions

23
________________________________________________________________________________

Chapter 10 - Tax Invoice, Debit Notes & Credit Notes & E-way bills
 Tax invoice is an important document in GST
 For ITC invoice matching needs to be done on the portal
 No need to upload physical invoices in the returns, only details are needed
 Section 31(1) / 31(4) and 31(7) – Due date of issue of invoice in case of goods done in ToS
chapter
o PQ 10.4
o PQ 10.17
 Section 31(2) / 31(5) and 31(6) - Due date of issue of invoice in case of services done in ToS
chapter
o PQ 10.5
o PQ 10.18
 Section 31(3) – Various Issues around invoices
o 31(3)(a) – Revised Invoices (‘RI’) <<a for add to the invoices>>
 RI to be issued within 30 days from the date of Reg Cert
 Consolidated revised invoice may be issued for supplies made to unregd
customers except when inter-state supply of more than 2.5 lakhs
 PQ 10.2
 PQ 10.6
 PQ 10.9
o 31(3)(b) – Small invoice value <<b for bahut saare or busy>>
 If B2C customer, then no individual invoices for value <= 200, consolidated
invoice at the end of every day
 If B2B customer, then invoice needed
 This option not available for movie theatres
 PQ 10.3
o 31(3)(c) – Bill of Supply and Invoice / Bill of Supply <<c for composition scheme>>
 In case of exempt or composite supply, since tax cannot be levied
 PQ 10.7
 PQ 10.14
o 31(3)(d) – Receipt Voucher <<d for advance demanded>>
 In case of advance payments
 Tax rate will be assumed 18% and supply will be assumed inter-state, if both
are not known
o 31(3)(e) - Refund Voucher
 PQ 10.19
o 31(3)(f) & (g) – RCM self created invoice and payment voucher on payment to the
supplier
 PQ 10.20
 In case of supplying taxable and exempted goods supplier can issue a invoice cum bill of
supply
o PQ 10.15
 The below entities may issue a tax invoice, however, they may also issue any other
document in place of the tax invoice, that document shall be considered as a tax invoice.

24
 o Banks, insurance cos, FIs and NBFCs, Passenger Transport, Goods transport, Movie
Theatres (Their ticket is their tax invoice)
o They can issue consolidated invoice at the end of every period
o PQ 10.16
 No format prescribed for the above documents, only certain information which is required
on them important being:
o Serial number 16 digit
o Details of recipient if B2C only if value is above 50,000 then compulsory else
voluntary
o Details of recipient if B2B, compulsory
o Quick Response Code in cases of e-invoice (e-invoice compulsory for business with
T/o of more than 500 crores)
o HSN code- NIL, 2 and 4 depending on turnover of less than 1.5 crores, upto 5 crores
and more than 5 crores respectively
o Triplicate for goods and duplicate for services
o PQ 10.11
 E-Invoicing <<Amazon>>
o Compulsory for most business with T/o above 500 crores in any year since
introduction of GST ie FY 2017-18
o E-invoicing is not generation of invoice by a Government portal. Taxpayers will
continue to create their GST invoices on their own Accounting/Billing/ERP Systems
as per e-invoice schema. These invoices will then be reported to ‘Invoice
Registration Portal (IRP)’. On such reporting, IRP will generate a unique ‘Invoice
Reference Number (IRN)’, digitally sign it and return the e-invoice to the supplier. A
GST e-invoice will be valid only with a valid IRN.
o Generate normal GST invoice, upload details on IRP (invoice registration portal) and
generate IRN (invoice registration number) which will then be used as the e-invoice
o E-invoicing also not applicable on imports
o Advantages of E-invoicing
o E-invoicing at present is only for B2B transactions (Business 2 Business)
 Auto-reporting of invoices into GST return
 Auto-generation of e-way bill (wherever required).
 Substantial reduction in transcription errors
 Buyer can do reconciliation with his Purchase Order.
 E-invoicing will eliminate the fake invoices.
o The following shall be exempt from e-invoicing transactions:
 SEZ units
 Movie theatres
 GTA
 PTS
 Insurance, banking, NBFC
o PQ 10.1
o E-invoices, on generation of IRNs will be auto-populated into GSTR1 and GSTR2A
o Where needed, the seller can cancel IRN for an e-invoice already reported by
reporting it on IRP within specified time. Amendment of e-invoice already uploaded
on IRP will be done only on GST portal. Amendment of invoices is not possible
through the IRP.
o Q 7(a) – Jan 21 – 4 marks

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 Quick Response Code
o Upon successful registration of invoice on IRP, it will return a signed e-invoice to the
supplier with IRN and QR Code. IRN is embedded in the QR Code which shall be
extracted and printed on the invoice. The QR code enables quick view, validation
and access of the invoices from the GST system from hand-held devices. The digitally
signed QR code will have a unique IRN which can be verified on the central portal as
well as by an offline app by the officer. This will be helpful for tax officers checking
the invoice offline on the roadside where internet may not be available all the time.
o All B2C invoices issued by a registered person whose aggregate turnover in any
preceding financial year from 2017-18 onwards exceeds ` 500 crores are proposed to
have a dynamic QR code (which has the amount imbedded in the code) from
December 1, 2020.
 Delivery Challan <<bikes sent for job work>>
o When goods are sent for job work, etc which are not supply then delivery challan
can be issued in place of invoice
o Delivery challan also in triplicate
o In case of CKD / SKD goods, invoice first and then delivery challans later
o PQ 10.21
 Section 34(1) Credit notes – reduces amount and reduces liability <<C for Cut>>
o When erroneously QUANTITY is more, or TAX rate is higher, or VALUE is more (QTV)
or goods are not to the satisfaction then credit note is issued to cut the amount and
the tax
o Credit note cannot be issued for other than TIC discounts
o Particulars are similar to a tax invoice
o Consolidated credit note
o PQ 10.12
o PQ 10.13
 Section 34(2) Debit Notes – Increases amount and increases liability and increases <<D for
dangerous since it increases tax>>
o When erroneously Quantity is less, or tax rate is low, or value is less (QTV) then
debit note is issued to increase the amount and the tax
o Particulars are similar to a tax invoice
o Details of debit notes and credit notes have to be given in the GST returns
o PQ 10.10
 May 19 – Q8(b) – 5 marks
 Section 32 – Prohibition of unauthorized collection of tax
o Unregistered persons cannot collect tax
o Registered persons cannot collect excess tax
 Section 68 – E-way bill
o Rules 138 of the CGST Rules
o It is an electronic document created online to evidence movement of goods
o Mandatory if consignment value being transported is more than 50,000
 No 50,000 limit when inter-state movement is to a job-worker
 No 50,000 limit in case of movement of handicraft goods by a person
exempted from registration
 Voluntary generation of EWB even if consignment value if less than 50,000
o Movement can be due:

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  to supply,
 other than supply eg: job work or
 inward supply from unregistered persons
o Saves time, fuel and is seamless
o E-way bill is to be generated by regd consignor or consignee, and if they don’t then
transporter needs to generate (If aggregate of all the consignment exceeds Rs.
50,000 but individually the consignment does not exceed Rs. 50,000)
o GST EWB 01
 Part A to be filled by the consignor or consignee – Contains details of
supplier, receiver and goods
 Part B contains details of transporter, vehicle number, etc. Details of
conveyance not needed if intra-state movement upto 50 kms from
consignor to transporter or transporter to receiver
o Nov 20 – Q 7(b) – 3 marks
o Nov 19 – Q7(b) – 5 marks
o Goods transported by rail will be ultimately delivered only on production of e-way
bill
o Restriction on generation of EWB if returns are not filed
o Movement of goods is caused by registered supplier or if recipient arranges
transport then by him
o Movement of goods in case of URD supplier to regd recipient then it is caused by the
recipient
o Consolidated EWB (GST EWB 02) in case multiple consignments in a single
conveyance, it is like a trip sheet
o It is not possible to modify Part A of Form GST EWB-01 without cancelling or
withdrawing the same, however EWB can be cancelled within 24 hours
o Validity of EWB:
 1 day for every 100 kms or part thereof
 1 day for every 20 kms or part thereof in case of Over Dimensional Ccargo
(ODC) or transport by ship atleast one leg
o Q 7(b) – Jan 21 – 3 marks
o Acceptance or rejection of EWB
 Deemed acceptance if not rejected within 72 hours
o If an invoice is split into multiple vehicles, then multiple EWBs need to be generated
o PQ 10.11
o No EWB in the following cases:
 <<Postman Used LPG / Kerosene cycle rickshaw for pearls, jewellery, currency,
coral>> <<Nepal / Bhutan Customs Easily Defended Notified Alcohol and 5
products>> <<Carried empty containers cylinders weighing III Govt Rail >>
o Conveyance should carry the invoice / delivery challan / BOS as well as the EWB
o Proper officer can intercept vehicle and verify the EWB
o Physical verification possible but with Commissioner’s approval, in this case
summary report within 24 hours and final report within 3 days
o Where vehicle has been stopped for more than 30 minutes, transporter may upload
details
o Part A of EWB will not allowed to be filled in if:
 CSD not filed returns for 2 periods
 Normal scheme person not filed return for 2 months

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  Non filing of GSTR-1 for 2 months
o Questions
o PQ 10.8
_______________________________________________________________________

Chapter 11 - Exemptions
 Section 11 of the CGST Act
 Notification 12/2017 on 28th June 2017
 11(1), 11(2) and 11(3) of the CGST Act
 Charitable Associations
o <<HEER>>
o Yoga camps
o Hospitals run by charities
o Hotel accommodation
o Renting of room less than 1000/day, hall less than 10,000/day and shops less than
10,000/month exempted in the precincts of a religious place meant for general
public – services provided by 12AA, 10(23C) or 10(23BBA) institutions
o Recreational Sports training – only by 12AA registered entities
o Old Age homes run by govt or 12AA associations for 60 years or more residents –
Consideration upto 25k per month is exempt
o Recreational training in Arts and Culture – services provided by any person
o Conduct of religious activities – services provided by any person
o Religious Pilgrimage sponsored by govt under an agreement – services provided by
spec organisations eg: KMVN or Haj Committee
o Services provided to charities are not exempted unless there is a specific provision
provision
o However, payment made for the services received from a service provider located
outside India, for the purposes of providing ‘charitable activities’ is exempt
o PQ 11.1
o PQ 11.2
o PQ 11.3
o PQ 11.4
o PQ 11.5
 Agriculture Services
o Primary and secondary operations relating to cultivation of food grains, fruits and
vegetables (also rearing of all animals except horses)
o Renting of farm land
o Supply of farm labour
o Supply of agri machinery on rent
o Loading, unloading, storage, etc of agri produce
o Warehousing of food grains
o Fumigation of warehouses
o Agri extension services
o APMC – agri marketing services
o Artificial isemination of livestock except horses
o No exemption for services that alter the basic form of agri produce or which makes
it ready for RETAIL market (primary market is exempted)

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 o Although tea, coffee, jaggery, rice, pulses, etc is not exempted since secondary
produce, their loading, unloading, warehousing, etc has been exempted
o PQ 11.6
o PQ 11.7
o PQ 11.8
o PQ 11.9
o PQ 11.10
o Jan 21 – Q 2(a) – 6 marks
 Education Services
o Education institute means pre-school, school and colleges and approved vocational
courses
o Services provided by any Edu Inst to SFS is exempt
o Services by any edu Inst to any person in relation to entrance exams is exempt
o VEC exempt
o ITIs exempt
o NSDC is exempt
o International Schools / IB exempt
o Govt skill development courses – exempt
o Approved maritime courses are exempt
o Courses recognised by law eg: B.Com, etc exempt
o Boarding is composite supply hence exempt
o Rest everything taxable eg foreign courses, private classes
o Placement services taxable
o Services provided TO Edu Inst in relation to conduct of exams is exempt
o Services provided TO (Pre-school and upto 12th std) Edu Inst in the nature of TCS is
exempt
o Services provided to Higher edu inst (exempt Pre-school, upto 12th and VEC) in the
nature of online journals etc is exempt
o PQ 11.18
o PQ 11.19
o PQ 11.20
o PQ 11.21
o PQ 11.22
o PQ 11.23
o PQ 11.24
 Healthcare Services
o Healthcare services provided by <<CAP>> are exempt in areas of <<HUNASAY>>
o Ambulance services is exempt
o Rehab services provided to Govt, establishments are exempt
o Healthcare services provided to animals by VETs are exempt
o Preservation of stem cells by cord blood banks are exempt
o Food and stay in hospital provided to in-patients are exempt
o Cosmetic, hair transplant, plastic surgery is exempt if not needed to due to
condition/accident
o Food to outpatient, renting shops is taxable
o Input services in the nature of services by doctors to hospitals and bio medical waste
treatment if exempt
o PQ 11.11

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 o PQ 11.12
o PQ 11.13
 Services Provided by Govt
o Services provided by Municipality and Panchayat u/s 243W and 243G of the
constitution
o Services provided by the government are EXEMPT except: <<PRAT>>
 Postal is taxable except basic postal services, money order, saving account
with post office, pension payment services
 Renting is taxable under RCM for registered entities
 Aircraft and vessel leasing
 Transportation of goods and passengers is taxavle
o Services provided by govt to each other is exempt
o Services of old age home provided by government are exempt if amount charged is
upto 25k
o Services provided to incubates
o Penalties charged by the govt are exempt
o PQ 11.14
o PRAT Services are always taxable
o Services other than PRAT are taxable if the recipient is liable to be registered under
GST and amount of services is more than 5,000
o PQ 11.17
o PQ 11.30
o PQ 11.31
 Construction Services
o Supply of Pure labour contracts under PM Awas Yojana is exempt
o Supply of Pure labour contracts for independent house and not residential complex
is exempt
o Services supplied by Electricity Distribution Utilities by way of construction of
infrastructure for extending electricity upto the tube well of the farmer or
agriculturalist for agricultural use is exempt
o Supply of TDR, FSI, long term lease is subject to RCM, however, the same would be
exempt if flats are sold before issuance of CC. If not taxable under RCM at 1%
(affordable houses) or 5% (others)
 Passenger Transport Services
o Aircraft is taxable. Exception: to / from NE states and Bagdogra in WB and RCS
airports for 3 years
o Inland Waterways is exempt. Exception: Primarily for tourism purposes then taxable
and going outside India then taxable
o Rail is exempt. Exception: AC or first class then taxable
o Mono, Metro and Tram, always exempt
o Metered taxi/rick exempt. Exception Radio taxi
o Contract Carriage – if AC or tourism then taxable
o Stage Carriage is AC then taxable
o PQ 11.15
o PQ 11.16
 Goods Transport
o Inland waterways is always exempt
o Railway Transport if exempt if <<Rail Dr.NAMM>>

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 o Road transport if exempt. Exceptions:
 Courier
 Express Cargo
o GTA (road + consignment note)
 Exempt if provided in the the case of <<LL Dr.NAMM>>
 Exempt if provided to Govt, LA
 Exempt if provided to unregistered persons
o PQ 11.25
o PQ 11.26
o PQ 11.27
o PQ 11.28
o PQ 11.29
o PQ 11.33
 Banking & Financial Services
o Provided by RBI then exempt
o Services of sale and purchase of forex between banks, etc is exempt
o Interest/invoice discounting is exempt (except interest on credit cards)
o BSBDA services are exempt
o Upto 2000 transaction single transaction on DC, CC, exempt
o IFSC entity provided financial services abroad is exempt
o BC and BF services to banks and insurance companies for rural areas accounts is
exempt
o Processing fees, service charges, min balance charges are taxable
 May 19 – Q6(a) – 6 marks
 Life Insurance Services
o Provided under Govt schemes is exempt
o Micro life insurance (amt max 2 lakhs) is exempt
 Services by specified bodies
o State Insurance, PF, Coal PF, NPS, IRDAI, SEBI are exempt
<<PPC IRDAI, SEBI Insured>>
 General Insurance Business
o Hut, Animals, Tribals, Women, etc
 Services provided TO government
o Pure services provided to SG, CG, LA, municipality and panchayat
o Composite supply where value of supply of goods is not more than 25%
o Services provided by FPS
o Services provided by GSTN
 Leasing Services
o Long leases for industrial and financial use only of 30 years or more by the govt or
entity having 20% or more holding by govt. If usage is changed then GST to be paid
by the entity
o Lease by IRFC to Indian railways
 Legal Services
o Provided to unregistered persons, govt, to other lawyers is exempt
o Provided to business entities is taxable
 Sponsorship of events

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 o Events organised by IOA, national sports federation, Universities, Panchayats is
exempt
 Performance by an artist
o In the areas of classical dance, music, art, upto 1.5 lakhs per event is exempt
o Western dance, music, art is taxable
o As a brand ambassador is taxable
o PQ 11.36
 May 19 – Q6(b) – 4 marks
 Admission to various events
o <<NM Tiger Zoo>>
o <<TDC Present Planet Sports>>
o Theatre Dance Circus, award, pageant, etc, recognised sporting event, planetarium
upto 500 Rs is exempt
 Services by unincorporated body or non-profit body (co-op societies)
o Services by trade union is exempt
o Co-op housing societies is exempt per member upto 7.5k
o Societies for welfare of agriculture, industries, etc upto 1k per year
o Services in the nature of pure agent eg: collecting money for house electricity is
exempt
o Jan 21 Q 2(b) – 4 marks
 Others - <<Going FIFA RSB Nepal Bhutan>> <<Resident / Hotel / 3 Carriages on rent>>
<<Electric News Information Satellitets exhibit toll animals food>> <<Incubated Cold Toilets,
Libraries Foreign Regions>>
o Transfer of Going Concern is exempt
o FIFA U-17 Women’s World Cup
o Services provided by players, coaches, umpires, referees, team-managers to RSB and
RSBs to each other is exempt
o Cargo to Nepal & Bhutan
o Renting of residential premises
o Hotels, etc upto 1,000 per day
o Satellite Launch Servcies
o Services of giving on rent passenger carriages of + 12 passengers to STU only.
o Services of giving on rent electric cars of +12 passengers to LA.
o Services of giving on rent goods carriages to a GTA.
o Distribution / Transmission of electricity (however, other services eg: meter change,
etc is taxable)
o Collecting and providing news and views
o RTI services
o Launch of satellites by ISRO, etc
o Exhibitions outside India
o Toll charges
o Slaughtering animals
o Testing food samples
o Services provided by Incubatee (providing tech services) upto 50 lakhs and within 3
years of being recognised as such
o Cold Chain knowledge
o Public toilets
o Public libraries

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o Foreign diplomatic mission services
o PQ 11.32
o PQ 11.34
o PQ 11.35
o PQ 11.37
o PQ 11.38
o PQ 11.39
o PQ 11.40
o PQ 11.41
o PQ 11.42
o PQ 11.43
o PQ 11.44
o PQ 11.45
o PQ 11.46
o PQ 11.47
o PQ 11.48
o PQ 11.49

33