New & Old Syllabus Marathon: Goods & Service Tax - (Cs-Executive)

GOODS & SERVICE TAX - ( CS-EXECUTIVE) Page 1
NEW & OLD SYLLABUS

MARATHON
SALEEM QURAISHEE Mo: 9175664444 INSPIRE ACADEMY-8888881719

1. REASONS FOR IMPLEMENTATION OF A NEW INDIRECT TAX REGIME:

a) Plethora of taxes :
b) Plenty of Taxable Events:
c) Double taxation:
d) Multiplicity of compliances:
e) Lack of Cross-utilization facility between goods and services:
f) Non-availability of set off arrangement against other State or Central Government levies:
2. GOODS & SERVICE TAX-

1) GST IS A CONSUMPTION BASED TAX BASED ON VAT PRINCIPLE-
a) It is a destination-based tax on consumption of goods and services.
b) It is proposed to be levied at all stages right from manufacture up to final consumption with credit of
taxes paid at previous stages available as setoff.
c) Only value addition will be taxed, and burden of tax is to be borne by the final consumer.
d) GST is a consumption-based tax, i.e. tax will be payable in the State in which goods and services or
both are finally consumed.
e) Exports are not taxable, because the place of consumption is outside India.
f) Imports are taxable, because the place of consumption is in India.
g) GST is based on VAT system of allowing input tax credit of tax paid on inputs, input services and
capital goods, for payment of tax on output supply.
h) States from which goods are supplied will not get any tax as goods are consumed in another State.
2) TAXABLE EVENT-
I. GST is levied on ‘supply’ of goods or services or both in India.
II. It is a single tax on the supply of goods and services, right from the manufacturer to the
consumer.
III. Under the GST credit of taxes paid at previous stages is available as set-off. That is, only the value
addition will be taxed, and burden of tax is to be borne by the final consumer.

IV. Under GST supply has been divided into two categories:
a) Sale within the state (known as Intrastate Supply)

b) Sale from one State to another State (known as Interstate Supply)
V. Which type of GST will be levied, it depends on type of supply, i.e. whether supply is an intrastate
Supply or interstate supply.
a) In case of intrastate supply, there will be levied two taxes- CGST and SGST- Section 9 of CGST ACT,
2017
b) In case of inter-state supply there will be levied only one tax- IGST Section 5 of IGST Act, 2017
Thus, there are two charging sections- Section 9 of CGST Act, 2017 and Section 5 of IGST Act, 2017.
VI. Section 7, 8 and 9 of IGST Act 2017 specifies the criteria on the basis of which nature of supply
(interstate or intrastate) is determined.
A. INTRASTATE SUPPLY: Where the location of the supplier and the place of supply of goods or
services are in the same State/Union territory, it is treated as intra-State supply of goods or
services respectively.
B. INTER STATE SUPPLY- Where the location of the supplier and the place of supply of goods or
services are in
 two different States or

 two different Union Territories or
 a State and a Union territory,
it is treated as inter-State supply of goods or services respectively.
POINT TO BE NOTED-Equivalent provisions are contained in Respective SGST Act of the State.

3. FRAME WORK OF GOODS AND SERVICE TAX-

1) Dual GST:-
 India has adopted a Dual GST model in view of the federal structure of the country. Centre and
States will simultaneously levy GST on taxable supply of goods or services or both which, takes
place within a State or Union Territory.
 Thus, tax is imposed concurrently by the Centre and States, i.e. Centre and States simultaneously
tax goods and services.
 Now, the Centre also has the power to tax intra-State sales & States are also empowered to tax
services. GST extends to whole of India including the State of Jammu and Kashmir.
2) Legislative Framework -
LAW PASSESD BY PURPOSE

The Central GST Act, 2017 PARLIAMENT  To levy and collect CGST on intra state supplies
and for other matters.
 CGST ACT has 174 Sections, 3 Schedules, and
162 Rules.
The Integrated GST Act, 2017 PARLIAMENT  To levy and collect IGST on inter-state supplies
 IGST Act has 25 Sections.
The Union Territory GST Act,2017 PARLIAMENT  To levy and collect UTGST on intra state
supplies and for other matters.
 UTGST Act has 26 Sections.
The GST (Compensation to States) PARLIAMENT  To compensate states for the loss of revenue
Act, 2017 if any due to introduction of GST
 GST (compensation to States) Act has 14
Sections and 1 Schedule
The SGST Act 2017 STATE LEGISLATURE  To levy and collect SGST on intra state supplies
Point to be noted-
 There is single legislation – CGST Act, 2017 - for levying CGST.
 Union Territories without State legislatures
I. [Andaman and Nicobar Islands,
II. Lakshadweep,
III. Dadra and Nagar Haveli,
IV. Daman and Diu and Chandigarh] are governed by UTGST Act, 2017 for levying UTGST.
 States and Union territories with their own legislatures
I. [Delhi
II. Pondicherry have their own GST legislation for levying SGST.
 Though there are multiple SGST legislations, the basic features of law, such as chargeability,
definition of taxable event and taxable person, classification and valuation of goods and services,
procedure for collection and levy of tax and the like are uniform in all the SGST legislations, as far
as feasible. This is necessary to preserve the essence of dual GST.

3) Classification of goods and services-
A.CLASSIFICATION OF GOODS-
1)HSN (Harmonized System of Nomenclature) code is used for classifying the goods under the GST.
2)It is 8-digit coding system.
3)HSN code for goods.
I. Two-digit code for the taxpayers whose turnover is above Rs 1.5 crores but below Rs. 5 crores.
II. Four-digit code for the taxpayers whose turnover is above 5 crores and above.
III. Taxpayers having turnover less than 1.5 crores are not required to mention HSN code in the
invoices
IV. I/E- HSN of 8 digits is compulsory.
B. SAC for goods

I. SAC for services.
II. 6-digit coding system is used
III. SAC in Invoice is mandatory in all cases.
4) COMMON PORTAL-
 Common GST Electronic Portal – www.gst.gov.in – a website managed by Goods and Services
Network (GSTN) [a company incorporated under the provisions of section 8 of the Companies Act,
2013] has been set by the Government to establish a uniform interface for the tax payer and a
common and shared IT infrastructure between the Centre and States.
 The GST portal is accessible over Internet (by taxpayers and their CAs/Tax Advocates etc.) and
Intranet by Tax Officials etc.
 The portal is one single common portal for all GST related services. A common GST system provides
linkage to all State/ UT Commercial Tax Departments, Central Tax authorities, Taxpayers, Banks
and other stakeholders.
 The eco-system consists of all stakeholders starting from taxpayer to tax professional to tax
officials to GST portal to Banks to accounting authorities.
 GSTN provides three front end services to the taxpayers namely registration, payment and return
through GST Common Portal.
THE FUNCTIONS OF THE GSTN INCLUDE:

I. facilitating registration;
II. forwarding the returns to Central and State authorities;
III. computation and settlement of IGST;
IV. matching of tax payment details with banking network;
V. providing various MIS reports to the Central and the State Governments based on the
taxpayer return information;
VI. Providing analysis of taxpayers' profile; and running the matching engine for matching,
reversal and reclaim of input tax credit.

5) GSPs/ASP-
 GSTN has selected certain IT, ITeS and financial technology companies, to be called GST Suvidha
Providers (GSPs).
 GSPs develop applications to be used by taxpayers for interacting with the GSTN.
 They facilitate the tax payers in uploading invoices as well as filing of returns and act as a single
stop shop for GST related services.
 They customize products that address the needs of different segment of users. GSPs may take the
help of Application Service Providers (ASPs) who act as a link between taxpayers and GSP
6) GST COUNCIL- (ARTICLE 279A)

a) GST Council is the main decision-making body that has been formed to finalize the design of GST.
b) This governing body of GST comprises of
 Union Finance, is the Chairman of the council,
 The Minister of State (Revenue) and
 The State Finance/ Taxation Ministers.
c) The duty of the Council is to make recommendations to the Union and the States.
d) It has been provided in the Constitution (one hundred and first amendments) Act, 2016 that the
GST Council, in its discharge of various functions, shall be guided by the need for a harmonized
structure of GST and for the development of a harmonized national market for goods and services.
In the GST Council, a decision will be taken by a three-fourth majority with the Centre having a one-
third vote and the states the remaining two-third.
FUNCTIONS OF THE GST COUNCIL -
I. Taxes, cesses, and surcharges levied by the Centre, States and local bodies which may be subsumed
in the GST;
II. Goods and services which may be subjected to or exempted from GST;
III. Model GST laws, principles of levy, apportionment of IGST and principles that govern the place of
supply;
IV. Threshold limit of turnover below which goods and services may be exempted from GST;
V. Rates including floor rates with bands of GST;
VI. Special rates to raise additional resources during any natural calamity;
VII. Special provision with respect to Arunachal Pradesh, Jammu and Kashmir, Manipur, Meghalaya,
Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and any other matters
7) GST – A tax on goods and services GST is levied on all goods and services, except
a) Alcoholic liquor for human consumption- Alcoholic liquor for human consumption is outside
GST .The manufacture/production of alcoholic liquor continues to be subjected to State excise
duty and inter-State/intra-State sale of the same is subject to VAT/CST respectively.
b) Petroleum crude, diesel, petrol, ATF and natural gas. Petroleum crude, diesel, petrol, ATF
and natural gas: As regards petroleum crude, diesel, petrol, ATF and natural gas are concerned,
they are not presently leviable to GST. GST will be levied on these products from a date to be
notified on the recommendations of the GST Council. Till such date, central excise duty continues
to be levied on manufacture/production of petroleum crude, diesel, petrol, ATF and natural gas
and inter-State/intra-State sale of the same is subject to VAT/CST respectively.
c) Tobacco: Tobacco is within the purview of GST, i.e. GST is leviable on tobacco. However, Union
Government has also retained the power to levy excise duties on tobacco and tobacco

4. LEVY AND COLLECTION OF GST-

A. LEVY AND COLLECTION - (SEC-9 CHARGING SECTION OF CGST )
1) Levy: A tax called the Central Goods and Services Tax (CGST) shall be levied on all intra-State supplies
of goods or services or both.
 Collection: The tax shall be collected in such manner as may be prescribed and shall be paid by the
taxable person. However, intra-State supply of alcoholic liquor for human consumption is outside the
purview of CGST.
 Value for levy: Transaction value under section 15 of the CGST Act.
 Rates of CGST: Rates for CGST are rates as may be notified by the Government on the
recommendations of the GST Council. Maximum rate of CGST will be 20%.
2) Postponement of GST on Certain Goods: Section 9(2) of CGST Act, 2017 provides that CGST on supply
of the following items has not been levied immediately. It shall be levied with effect from such date as
may be notified by the Government on the recommendations of the Council:
 Petroleum crude
 High speed diesel
 Motor spirit (commonly known as petrol)
 Natural gas and
 Aviation turbine fuel
3) Reverse charge - Tax payable by recipient of supply of goods or services or both -CGST shall be paid
by the recipient of goods or services or both, on reverse charge basis Intra State supply of goods or
services or both, notified by the Government on the recommendations of the GST Council. [Section 9
(3)]
4) Intra State supply of taxable goods or services or both by an unregistered supplier to a registered
person [Section 9 (4)]
5) Tax payable by the electronic commerce operator on notified services- Section 9(5) of CGST Act,
S.NO. SITUATIONS PERSON LIABLE TO PAY TAX
1 If ECO is located in taxable ELECTRONIC COMMERCE OPERATOR (ECO)

territory ( i.e. having physical
presence in India)
2 If ECO does not have physical PERSON REPRESENTING THE ECO

presence in taxable territory (I.e.
India)
3 If the ECO has neither the physical PERSON APPOINTED BY THE ECO FOR THE PURPOSE OF
presence nor any representative PAYING THE TAX
in the taxable territory

Comparison between Section 9 of CGST ACT, 2017 and Section 5 of IGST ACT, 2017
S. No. Section 9 of CGST ACT Section 5 of IGST ACT, Remark

Section 5 contains a provision
which is not mentioned in section
1 Section 9 (1) Section 5 (1) 9(1)
2 Section 9 (2) Section 5 (2) Same

COMPOSITION SCHEME
5. TAXES WHICH HAVE BEEN SUBSUMED UNDER GST

 The GST would replace the following taxes currently levied and collected by the Centre:
a) Central Excise duty
b) Duties of Excise (Medicinal and Toilet Preparations)
c) Additional Duties of Excise (Goods of Special Importance)
d) Additional Duties of Excise (Textiles and Textile Products)
e) Additional Duties of Customs (commonly known as CVD)
f) Special Additional Duty of Customs (SAD)
g) Service Tax
h) Central Surcharges and Cesses so far as they relate to supply of goods and services.
 State taxes that would be subsumed under the GST are:

a) State VAT
b) Central Sales Tax
c) Luxury Tax
d) Entry Tax (all forms)
e) Entertainment and Amusement Tax (except when levied by the local bodies)
f) Taxes on advertisements
g) Purchase Tax
h) Taxes on lotteries, betting and gambling
i) State Surcharges and Cesses so far as they relate to supply of goods and services’

6. SUPPLY-
 Characteristic of Supply
1) Supply means supply of goods or services.
2) Supply of anything other than goods or services doesn’t amount for supply under GST. Goods as
well as services have been defined in the GST Law.
3) Both securities and money is excluded from the definition of goods as well as services, however,
activities relating to the use of money or its conversion by cash or by any other mode, from one
form, currency or denomination, to another form, currency or denomination for which a separate
consideration is charged are included in services.
4) Supply should be a taxable supply
5) Supply should be made by a taxable person
6) Supply should be made within taxable territory
SUPPLY” UNDER GST CAN BE DIVIDED INTO FOLLOWING PARTS;
1) SUPPLY FOR CONSIDERATION IN COURSE OF BUSINESS- SECTION 7(1)(a)

ALL form of supply of G/S or both such as sale, transfer, barter, exchange, license, rental, lease or
disposal made for a consideration by a person in the course or furtherance of business;
2) Import of services for a consideration – Section 7(1)(b)
3) Supply without consideration- Section 7(1)(c ) read with Schedule I
4) Activities or TRANSACTIONS specified in Schedule II (to be treated as supply of goods or supply

of services)- Section 7(1A)
5) Negative List- Section 7(2) ACTIVITIES OR TRANSACTIONS WHICH SHALL BE TREATED NEITHER AS
A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES Read with (Schedule III)
6) SECTION 7(3)-Subject to the provisions of sub-sections 7(1) 7(1A) and 7(2), the Government may,
on the recommendations of the Council, specify, by notification, the transactions that are to be
treated as
a) a supply of goods and not as a supply of services; or
b) a supply of services and not as a supply of goods.
7) Section 8 Composite and Mixed supply.

 SCHEDULES OF SUPPLY
 DEFINITION OF SUPPLY
1) SUPPLY FOR CONSIDERATION IN COURSE OF BUSINESS- SECTION 7(1)(a)

As per Section 7, a supply which is made for consideration in course/furtherance ofbusiness is
considered as a taxable supply. Some inclusions in meaning of supply are:
(a) Sale, (e) License, (i) Import
(b) Transfer, (f) Rental, (j) Schedule 1
(c) Barter, (g) Lease, (k) Schedule II
(d) Exchange, (h) Disposal
2) SUPPLY-IMPORT FOR CONSIDERATION SECTION 7(1)(b)-The term supply includes import of services
for a consideration whether or not in the course of furtherance of business.
I. Applicable only for services not for goods.
II. For a consideration.
III. Service may be in course of furtherance of business or not.
IV. Import of services even for personal consumption would qualify as supply.
CASE-1 Import of free services from Google, without any consideration, are not considered as
supply as the necessary condition “consideration” is missing for such services.
CASE-2 Import (Downloading) of a song for consideration for personal use would be a service, even
though the same are not in the course or furtherance of business.
CASE-3 Ramaiyaa, a proprietor, has received the architect services for his house from an architect
located in New York at an agreed consideration of $ 5,000. The import of services by Ramaiyaa is
supply under section7(1)(b) though it is not in course or furtherance of busi

3) SUPPLY WITHOUT CONSIDERATION- SECTION 7(1)( c )

 Schedule I lists activities that are to be treated as supply even if they are without aconsideration. The
important point to note here is that though the following activities will be considered as supply even if
there is no consideration involved, it is required that the activity is done either in the course or
furtherance of business. The forms of Supply listed in Schedule I are as follows:
a) Permanent transfer or disposal of business assets where input tax credit (ITC) has been availed on
such assets: When ITC is availed on a particular asset and the asset is disposed of or transferred
permanently without a consideration, it will be considered as supply and attract GST.
Analysis
It is clear that permanent sale of business assets is taxable under GST. If it is a temporary transfer, it
will be covered u/s 7(1) as rental. However, only such business assets on which input tax credit is
availed is covered. Hence, a business asset on which input tax credit is not availed remains outside
the scope of Schedule I.
CASE-4 XYZ ltd purchases 10 laptops worth Rs. 500000 + GST Rs. 25000 and further avails ITC of Rs.
25000 on GST paid, and after few years XYZ ltd. gives away these laptops to office staff, it will be
deemed as supply without consideration.
CASE-5 XYZ & Co. donates old laptops to Charitable Schools when new laptops are purchased by
business will qualify as supply provided input tax credit has been availed by XYZ & Co. on such
laptops.
b) Supply of Goods or Service between Related Persons or Distinct Persons- Supply of goods or services
between related parties and between distinct persons (as in section 25) will attract tax. Thus, even if
goods or services are transferred from head office to branch office, GST liability will arise. Although
gifts from an employer to an employee not exceeding Rs. 50,000 will not be considered as supply
POINT TO BE NOTED-
1) RELATED PERSON [SEC.15(5)]
I. Officers or Directors of one another’s businesses,
II. Legally recognised Partners in business,
III. Employer and Employee,
IV. Any person directly or indirectly owns, controls or holds 25% or more of the outstanding
voting stock or shares of both of them,
V. One of them directly or indirectly controls the other,
VI. Both of them are directly or indirectly controlled by a third person,
VII. Together they directly or indirectly control a third person, or they are members of the same
family.
2) Distinct Person [Sec.25(4)]: 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.
3) Establishments of Distinct Person [Sec.25(5)]: 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.

CASE-6 Mohan, a Chartered Accountant, has a registered head office in Delhi. He has also obtained
registration in the State of West Bengal in respect of his newly opened branch office. Mohan shall
be treated as distinct persons in respect of registrations in West Bengal and Delhi.
CASE-7 Raghubir Fabrics transfers 1000 shirts from his factory located in Lucknow to his retail
showroom in Delhi so that the same can be sold from there. The factory and retail showroom of
Raghubir Fabrics are registered in the States where they are located. Although no consideration is
charged, supply of goods from factory to retail showroom constitutes supply.
CASE-8 ABC Goa and ABC Mumbai are both different establishment of same parent having same
PAN. However, if ABC Mumbai completes any assignment for ABC Goa, this would be taxable under
GST as ABC Goa has received services from ABC Mumbai.
c) Principal – Agent Transaction: In the previous indirect tax regime, supply of goods between principal
to his agent or agent to its principle was not taxable but under GST, such a supply will be taxable.
In order to determine whether a particular principal-agent relationship falls within the ambit of
Schedule I as discussed above or not, the deciding factor is whether the invoice for the further
supply of goods on behalf of the principal is being issued by the agent or not?
In other words, the crucial point is whether or not the agent has the authority to pass or receive the
title of the goods on behalf of the principal.
I. Where the invoice for further supply is being issued by the agent in his name then, any provision
of goods from the principal to the agent would fall within the fold of Para 3. above. However, it
may be noted that in cases where the invoice is issued by the agent to the customer in the
name of the principal, such agent shall not fall within the ambit of Para 3. above.
II. Where the goods being procured by the agent on behalf of the principal are invoiced in the name
of the agent then further provision of the said goods by the agent to the principal would be
covered by Para 3. above [Circular No. 57/31/2018 GST dated 04.09.2018].
CASE-9 ABC Manufacturers Ltd. engages Raghav & Sons as an agent to sell goods on its behalf. For
the purpose, ABC Manufacturers Ltd. has supplied the goods to Raghav & Sons located in Haryana.
Supply of goods by ABC Manufacturers Ltd. to Raghav & Sons will qualify as supply even though
Raghav & Sons has not paid any consideration yet.
CASE-10 M/s P Ltd., registered person located in Cochin and having a godown in Cochin transfers the
goods to clearing and forwarding agent (C&F Agent) located in Chennai. Such activity of transfer
shall be considered as supply even if there is no consideration for such transfer and hence, leviable
to GST.
CASE-11 Mr. A appoints Mr. B to procure certain goods from the market. Mr. B identifies various
suppliers who can provide the goods as desired by Mr. A, and asks the supplier (Mr. C) to send the
goods and issue the invoice directly to Mr. A. In this scenario, Mr. B is only acting as the
procurement agent, and has in no way involved himself in the supply or receipt of the goods.
Hence, in accordance with the provisions of this Act, Mr. B is not an agent of Mr. A for supply of
goods in terms of Para 3. of Schedule I.

d) Import of services: Schedule I of CGST Act, 2017, the import of services by a taxable person from a
related person or from a distinct person in the course or furtherance of business shall be treated as
supply even if it is made without any consideration. The summary of the explanations is as under:
Nature of Service Consideration Business Test
a) Import of service Necessarily Required Not required
b) Import of services by a taxable Not required Necessarily Required

person from a related person or from a
distinct person
CASE-12 Import of some services by an Indian branch from their parent company, in the course or
furtherance of business, even if without consideration, will be a supply.
CASE-13 if a head office which is located out of India provides interior designing services to its branch
office in India, the service will be a taxable service under GST
CASE-14 ABC Associates received legal consultancy services from its head office located in Malaysia.
The head office has rendered such services free of cost to its branch office. Since ABC Associates
and the branch office are related persons, services received by ABC Associates will qualify as supply
even though the head office has not charged anything from it.
4) SUPPLY -GOODS VS SERVICE SECTION 7(1A)-Schedule II of the CGST Act, 2017 specifies activities to
be treated as supply of goods or supply of services-
1. Transfer-
a) Any transfer of the title in goods is a supply of goods;
b) Any transfer of right in goods or of undivided share in goods without the transfer of title thereof, is a
supply of services;
c) Any transfer of title in goods under an agreement which stipulates that property in goods shall passat
a future date upon payment of full consideration as agreed, is a supply of goods.

2. LAND AND BUILDING-

a) Any lease, tenancy, easement, license to occupy land is a supply of services;
b) Any lease or letting out of the building including a commercial, industrial or residential complex
for business or commerce, either wholly or partly, is a supply of services.
Analysis - All supplies except sale in respect of land and building is supply of service.
3. TREATMENT OR PROCESS-Any treatment or process which is applied to another person's goods is a

supply of services.
 Any activity carried out on the product whether for bringing change in the product or not will be
considered as processing of the product.
 Job-work performed by a job worker like cleaning and painting.
 Job-work performed by a job worker like converting raw material into finished goods.
4. TRANSFER OF BUSINESS ASSETS-
5. SUPPLY OF SERVICES- The following shall be treated as supply of service, namely:

a) renting of immovable property;
b) Construction of a complex, building, civil structure or a part thereof, including a complex or
building intended for sale to a buyer, wholly or partly, except where the entire consideration
has been received after issuance of completion certificate, where required, by the competent
authority or after its first occupation, whichever is earlier.
c) Temporary transfer or permitting the use or enjoyment of any intellectual property right;
d) Development, design, programming, customization, adaptation, up gradation, enhancement,

implementation of information technology software;
e) Agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do

an act;
f) Transfer of the right to use any goods for any purpose (whether or not for a specified period)
for cash, deferred payment or other valuable consideration.

6. Composite supply deemed to be service-

The following composite supplies shall be treated as a supply of services, namely:
a) Works contract as defined in clause (119) of section 2; and
b) Restaurant & Catering services- Supply, by way of or as part of any service or in any other
manner whatsoever, of goods, being food or any other article for human consumption or any
drink (other than alcoholic liquor for human consumption), where such supply or service is for
cash, deferred payment or other valuable consideration.
7. Supply of Goods- The following shall be treated as supply of goods, namely: Supply of goods by any
unincorporated association or body of persons to a member thereof for cash, deferred payment or
other valuable consideration.
5) SECTION 7(3)-Subject to the provisions of sub-sections 7(1) 7(1A) and 7(2), the Government may, on
the recommendations of the Council, specify, by notification, the transactions that are to be treated
as
a) a supply of goods and not as a supply of services; or
b) a supply of services and not as a supply of goods.

6) SUPPLY NEGATIVE LIST-SECTION 7(2)-
 Activities which are neither supply of goods nor supply of service (SCHDULE III) SECTION 7(2)(a)
S . Provision Analysis with examples

No.
1 Services by an employee to the employer in the course Gift exceeding Rs. 50,000 given by
of or in relation to his employment. employer to employee, not mention in
employment term, shall be taxable as per
Schedule I
2 Services by any court or Tribunal established under any

law for the time being in force.
3 (a) The functions performed by the Members of Example:

Parliament, Members of State Legislature, Judge of Supreme Court of India is a
Members of Panchayats, Members of constitutional post, remuneration received
Municipalities and Members of other local by them shall not subject to GST.
authorities;
(b) the duties performed by any person who holds Example:
any post in pursuance of the provisions of the CBDT is body established by CG.
Constitution in that capacity; or Chairman / Member / Director (who are
not employees) of these body shall be out
(c) the duties performed by any person as a of GST,
Chairperson or a Member or a Director in a
body established by the Central Government
or a State Government or local authority and
who is not deemed as an employee before the
commencement of this clause.
4 Services of funeral, burial, crematorium or mortuary Not liable for tax.

including transportation of the deceased.
5 Sale of land and, subject to clause (b) of paragraph 5 of It is subject to stamp duty.
Schedule II, sale of building.
6 Actionable claims, other than lottery, betting and Lottery, betting and gambling are subject
gambling. to GST.
Actionable claim [Sec. 2(1)]
shall have the same meaning as assigned to it in section
3 of the Transfer of Property Act, 1882.
 Activities/transactions notified by the Government –SEC 7(2)(b)

Such activities/ transactions undertaken by the Central Government, a State Government or any local
authority in which they are engaged as public authorities, as may be notified by the Government on
the recommendations of the Council shall be treated neither as a supply of goods nor a supply of
services.

7) TAX LIABILITY ON COMPOSITE & MIXED SUPPLY- SECTION 8-When two or more goods are sold in a
combination it becomes difficult to identify the rate of tax to be levied. For such goods or services,
CGST Act, 2017 has provided with two terms -- “Composite Supply” and “Mixed Supply”.
CASE-15 Where goods are packed and transported with insurance, the supply of goods, packing
materials, transport and insurance is a composite supply and supply of goods is a principal supply
CASE-16 You are booking an airline ticket which includes meal. It is a bundle of supplies. It is a
composite supply where the products cannot be sold separately. You cannot buy just the airline
meal and not the airline ticket. The transportation of passenger is, therefore, the principal supply.
Rate of tax applicable to the principal supply will be charged to the whole composite bundle.
Therefore, rate of GST applicable to transportation of passengers by air will be charged on the
airline ticket.
CASE-17 On buying a LED Television, along with it, the remote control, the wires and all the
accessories that go with it along with the warranty and the maintenance services are provided. It is
evident here that the LED Television is the principal supply and the others (remote / wires /
warranty are all ancillaries).
Taxability
The composite supply will be charged at the rate which is applicable to the principal supply.
Composite Supply
INR
LED Television supplied with remote, wires and 1 Yr Warranty with
AMC 100000
GST (LED TV) @ 28% 28000
Invoice Value 128000
CASE-18 A Five-star hotel provides four days and three-night package, with breakfast. This is a
composite supply as the package of accommodation facilities and breakfast is a natural
combination in the ordinary course of business for a hotel. In this case, the hotel accommodation is
the principal supply, and breakfast is ancillary to the hotel accommodation. The hotel
accommodation attracts 18% tax and the restaurant service attracts 28% tax. As per the example,
hotel accommodation is the principal supply, and the entire supply will be taxed at 18%.

PROBLEM: 1 Mr. Ravi being a dealer in laptops, sold a laptop bag along with the laptop to a customer, for
` 55,000. CGST and SGST for laptop @18% and for laptop bag @28%. What would be the rate of tax
leviable? Also find the GST liability.
ANSWER:1 If the laptop bag is supplied along with the laptop in the ordinary course of business, the
principal supply is that of the laptop and the bag is an ancillary. Therefore, it is a composite supply
and the rate of tax would that as applicable to the laptop. Hence, applicable rate of GST 18% on `
55,000.CGST is ` 4,950 and SGST is ` 4,950
CASE-19 One buys a consolidated package of beauty products (that is shampoo, comb, conditioner,
nail polish, lipstick and tooth powder).It is evident here that the products can all be independently
supplied and any one of them cannot be singled out as a principal supply and these are deliberately
bundled and sold together.
CASE-20 A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits,
aerated drinks and fruit juices when supplied for a single price is a mixed supply. Each of these
items can be supplied separately and is not dependent on any other. It shall not be a mixed supply
if these items are supplied separately
CASE-21 Many FMCG Companies offer buckets with detergent purchased. This is a mixed supply as it
does not satisfy the 2nd condition, i.e., it can be sold separately. You can buy either just a bucket or
just detergent. The highest rate of GST will then apply. Assuming that plastic buckets have the
higher rate, this rate will apply on the whole mixed bundle.
CASE-22 Diwali gift hamper which consist of different Items like sweets, chocolates, cakes, dry fruits
packed in one pack is Mixed supply as these items can be sold separately and it shall be treated as a
supply of that particular item which attracts the highest rate of tax.
CASE-23 M/s X Ltd. a dealer offer combo packs of shirt, watch, wallet, book and they are bundled as
a kit and this kit is supplied for a single price and the supply of one item does not naturally
necessitate the supply of other elements. Hence the supply is a mixed supply. Tax rate for a shirt,
watch, wallet and book are 12%, 18%, 5% and Nil respectively. In this case, watch attracts the
highest rate of tax in the mixed supply i.e., 18%. Hence, the mixed supply will be taxed at 18%.
PROBLEM: 2 Mr. A booked a Rajdhani train ticket, which includes meal. Is it composite supply or mixed
supply?
ANSWER:2 It is a bundle of supplies. It is a composite supply where the products cannot be sold
separately. The transportation of passenger is, therefore, the principal supply. Rate of tax applicable
to the principal supply will be charged to the whole composite bundle. Therefore, rate of GST
applicable to transportation of passengers by rail will be charged by IRCTC on the booking of Rajdhani
ticket.
PROBLEM: 3 Space Bazar offers a free bucket with detergent purchased. Is it composite supply or mixed
supply? Assume rate of GST for detergent @28% and bucket @18%.
ANSWER:3 This is a mixed supply. These items can be sold separately. Product which has the higher
rate, will apply on the whole mixed bundle.

8. COMPOSITION SCHEME- SECTION 10, RULE 3 TO 7 OF CGST ACT 2017-

A. OPTIONAL SCHEME-
1) Tax payment under this scheme is an option available to taxable person.
2) A registered person whose aggregate turnover in preceding FY did not exceed `1 Cr will be
eligible to opt for payment of tax under the composition scheme
3) The composition levy is an alternative method of levy of tax designed for small taxpayers.
4) The objective of composition scheme is to bring simplicity and to reduce the compliance cost for
the small taxpayers. Moreover, it is optional and the eligible person opting to pay tax under this
scheme can pay tax at a prescribed percentage of his turnover every quarter, instead of paying tax
at normal rate.
B. RATES OF COMPOSITION LEVY

S.NO ELIGIBLE PERSON CGST SGST
1 Manufacturer 0.5% of T/O in S/UT 0.5% of T/O in S/UT
2 Restaurant service 2.5% 2.5%
3 Other Suppliers .5% of T/O of Taxable .5% of T/O of Taxable
supplies of goods in supplies of goods in
S/UT S/UT
 A reduced limit of `75 lakhs rupees have been kept for special category states (Assam,
Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, Sikkim and Himachal
Pradesh)
C. CONDITION & RESTRICTIONS [SECTION 10(2)]

I. The scheme is not available for services sector, except restaurants and caterers.
II. Supplier of goods which are not taxable under the CGST Act/SGST Act/UTGST Act is not eligible
to register under this scheme.
III. Tax payers making interstate supplies is not eligible for composition scheme
IV. Tax payer making supplies through ecommerce operators who are required to collect tax at
source shall not be eligible for composition scheme
V. Tax Payer who is not a manufacturer of such goods as may be notified by the Government on
the recommendation of the council is also not eligible for composition scheme
VI. Manufacturers of Notified ice creams , pan masala and tobacco products no CS.
D. The scheme lapses on the day his aggregate turnover exceeds the specified aggregate turnover
limit. Section 10(3)
E. Section 10 (4) states that a registered person under composition scheme is not permitted to
collect tax and neither he will be eligible for any input tax credit.
F. All registered persons having same PAN must opt to pay tax under composition scheme.
G. Taxable person who opts for this scheme will not be allowed to charge GST in their invoice. They
will issue a bill of supply instead of Tax invoice. They are also not entitled to take input tax credit.
H. A registered taxable person having same PAN and multiple registrations in different states have
to opt for the composition scheme for all states

I. Aggregate turnover in a Financial Year [Sec. 2(6) of CGST] Act: Aggregate value of all taxable
supplies (excluding the value of inward supplies on which tax is payable by a person o reverse
charge basis), exempt supplies, exports of goods or services or both and inter-state supplies of
person having the same PAN, to be computed on all India basis but excludes Central Tax, State Tax,
Union Territory Tax, integrated tax and Cess.
Aggregate turnover includes Aggregate turnover excludes
The value of exported goods/services Inward supplies on which the recipient is required to
pay tax under Reverse Charge Mechanism (RCM).
Exempted goods/services or both which attracts nil • Central tax (CGST)/SGST/UTGST/IGST
rate of tax or wholly exempt from tax and includes
non- taxable supply
Inter-State supplies between distinct persons having Compensation Cess

same PAN
Supply on own account and on behalf of principal.
Important points:
I. The turnover will be computed PAN Wise.
II. The partner and partnership firm will have different PAN Nos. Thus the turnover of the partner
and partnership firm will not be aggregated.
III. The HUF and individual coparcener of the family have different PAN Nos. Hence, turnover of
Karta of HUF in his individual capacity and turnover of Karta as a Karta of HUF will not be
aggregated.
IV. Supply of goods, after completion of job work, by a registered job worker shall be treated as
the supply of goods by the principal referred to in Sec. 143 of the CGST Act, 2017, and the
value of such goods shall not be included in the aggregate turnover of the registered job
worker. It will be included in the turnover of turnover of principal.
J. "Turnover in State" or "turnover in Union territory" means the aggregate value of all
taxable supplies (excluding the value of inward supplies on which tax is payable by a person
on reverse charge basis) and exempt supplies made within a State or Union territory by a
taxable person, exports of goods or services or both and inter-State supplies of goods or services or
both made from the State or Union territory by the said taxable person but excludes central tax,
State tax, Union territory tax, integrated tax and cess;

K. OTHER PROVISIONS RELATED TO COMPOSITION SCHEME

Eligible for input where any registered person ceases to pay tax under this scheme, he shall be entitled to
tax credit when take credit of input tax in respect of inputs held in stock, inputs contained in semi finished
cease to pay or finished goods held in stock and on capital goods on the day immediately preceding
tax under this the date from which he becomes liable to pay tax under regular scheme.
scheme
[Section 18(l)(c)]
Issue bill of A person under this scheme shall issue bill of supply instead of Tax invoice
supply instead
of tax invoice
[Section 31(3)]
Quarterly Return A registered person paying tax under the provisions of section 10 shall, for each quarter
for Composite or part thereof, furnish, in such form and manner as may be prescribed, a return,
Scheme electronically, of turnover in the State or Union territory, inward supplies of goods or
services or both, tax payable and tax paid within eighteen days after the end of such
[Sec. 39(2)]
quarter.
CASE-24 P, a trader who has a revenue of INR 50,00,000 inclusive of GST @ 5% has purchases
amounting to INR 40,00,000 (GST @ 5% extra). Book-keeping and GST compliance costs are INR
250,000 and other administrative costs are INR 50,000. He now wants to switch to Composition
Levy. You are requested to advise in your capacity as a GST consultant.
Normal Levy Composition Levy

Revenue 50, 00,000 Revenue 50,00,000
Less: GST 2, 38,095 Less: GST NIL
Net Revenue 47, 61,905 Net Revenue 50,00,000
Less: Purchases 40, 00,000 Less : Purchases 42,00,000
Book Keeping 2, 50,000 Book Keeping 1,00,000
Other Costs 50,000 Other Costs 50,000
GST Liability 50,000
Profit 4,61,905 Profit 6,00,000
Payable 2,38,095 GST Liability 50,000
ITC 2,00,000 (1% of Turnover)
GST Liability 38,095
Cash Flow 4,23,810 Cash Flow 6,00,000
Notes:
1. GST liability wouldn’t exist if he opts for composition levy and the trader can now charge the full
amount which he was charging inclusive of GST earlier
2. For normal levy, the GST included in sales is 50,00,000 * 5 / 105
3. The ITC is available in case of normal levy and not composition levy
4. Hence, the taxes (input) are a part of purchase costs and the output is @ 1% of the turnover in case
of Composition Levy Since the book keeping costs are substantially lower in case of composition levy, the
profits and cash flows are higher and hence the trader should be advised to switch to Composition Levy.

9. DIFFERENCE BETWEEN GENERAL AND SPECIFICEXEMPTION-
GENERAL EXEMPTION SECTION 11(1) EXEMPTION BY SPECIAL ORDER SECTION 11(2)
This is granted by a notification This is granted by a special order
This is goods/ services specific. Any supplier This is person specific and purpose specific. The
supplying these notified goods or services can enjoy goods are generally chargeable but exempted in
the exemption special circumstances and hence not available to all
persons generally
It may be absolute or conditional. If absolute, the No such distinction
supplier has to avail it and he can collect tax only at
effective rates.
It may be partial or total It is always total

10. POINT OF TAXATION-

1) Point of taxation means the point in time when goods have been deemed to be supplied
or services have been deemed to be provided.
2) The point of taxation enables us to determine the rate of tax, value, and due dates for
payment of taxes.
11. TIME OF SUPPLY OF GOODS- SECTION 12

 TIME OF SUPPLY OF GOODS- SECTION 12
1) The liability to pay tax on goods shall arise at the time of supply as determined in accordance
with the provisions of this section.
2) Time of supply of goods – Forward charge i.e. Normal supply of goods- Earliest of three
a) date of issue of invoice
b) last date when invoice is required to be issued (sec 31(1))
c) receipt of payment
 ISSUE OF INVOICE-SECTION 31(1)-A registered person supplying taxable goods shall, before
or at the time of,—
a) Removal of goods-for supply to the recipient, where the supply involves movement of
goods; or
b) Delivery of goods or making available thereof to the recipient,- in any other case,
 Issue a tax invoice showing the description, quantity and value of goods, the tax charged
thereon and such other particulars as may be prescribed:
 Provided that the Government may, on the recommendations of the Council, by
notification, specify the categories of goods or supplies in respect of which a tax invoice
shall be issued, within such time and in such manner as may be prescribed.
POINT TO BE NOTED-
I. All taxpayers (except composition suppliers) are exempted from paying GST at the time of
receipt of advance in relation to supply of goods. The entire GST shall be payable only when the
invoice for the supply of such goods is issued or ought to have been issued.
II. A composition supplier has to pay, in lieu of tax payable by him, an amount calculated at the
prescribed rate applied on his ‘turnover in the State/Union Territory’ for a quarter. Therefore,
the composition supplier is not required to pay any tax on advance received as the same does
not form part of taxable supplies and, in turn, also does not form part of the ‘turnover in a
State/Union Territory’ at the end of the quarter (tax period).
 Excess amount received is up to Rs. 1000 in excess to the amount indicated in tax invoice
• (at the option of supplier)-date of issue of invoice (with respect to such excess amount)

3) Reverse Charge Basis (sub section 3)- (Earliest of the three)

a) the date of the receipt of goods
b) the date of payment as entered in the books of account or payment is debited in his bank
account, whichever is earlier
c) the date immediately following thirty days from the date of issue of invoice or any other
document
Note- If time of supply cannot be determined as above- TOS shall be date of entry in books of account of
the recipient of supply.
4) Time of supply in case of supply of vouchers in respect of goods.-

a) the date of issue of voucher, if the supply is identifiable at that point or
b) the date of redemption of voucher, in all other cases
5) TOS in residuary case- Due date of return or date of payment of tax.
6) Special charges like interest, late fee etc. TOS is date of receipt of additional amount.
POINT TO BE NOTED-
A. Continuous supply of goods Time of supply = Time when each statement is issued OR Time
when each payment is received. Whichever is earlier.
B. Goods sent for approval: Time of supply = Time when it becomes known that supply is taken
place OR Six month from the date of removal. Whichever is earlier
PROBLEM: 4 A machine has to be supplied at site. It is done by sourcing various components from
vendors and assembling the machine at site. The details of the various events are:
17th September Purchase order with advance of ` 50,000 is received for goods worth` 12 lakh and
entry duly made in the seller’s books of account
20th October The machine is assembled, tested at site, and accepted by buyer
23rd October Invoice raised
4th November Balance payment of ` 11,50,000 received
Determine the time of supply(ies) in the above scenario.
ANSWER:4 As per Notification No. 66/2017 CT dated 15.11.2017, a registered person (excluding
composition supplier) has to pay GST on the outward supply of goods at the time of supply as
specified in section 12(2)(a) i.e., date of issue of invoice or the last date on which invoice ought to
have been issued in terms of section 31.Therefore, the time of supply of goods for the entire amount
of ` 12,00,000 is 20th October which is the date on which the goods were made available to the
recipient as per section 31(1)(b), and the invoice should have been issued on this date [Section
12(2)(a)].
PROBLEM: 5 Company X receives an advance of ` 50,000 on 30th April, against which it dispatches goods
worth ` 49,200 under invoice dated 5th May.
ANSWER:5 Company X has received ` 800 in excess, which cannot be considered as payment for the
present invoice, in terms of Explanation 1 to section 12(2). Company X will adjust this excess amount
against the next supply. The time of supply for ` 800 can be taken as the date of the next invoice if
the supplier so chooses, though the payment was received earlier.

PROBLEM: 6 Determine the time of supply from the given information.

May 4 Supplier invoices goods taxable on reverse charge basis to Bridge & Co. (30 days from the date of
issuance of invoice elapse on June 3)
May 12 Bridge & Co receives the goods
May 30 Bridge & Co makes the payment
ANSWER:6 Here, May 12 will be the time of supply, being the earliest of the three stipulated dates
namely, receipt of goods, date of payment and date immediately following 30 days of issuance of
invoice [Section 12(3)]. (Here, date of invoice is relevant only for calculating thirty days from that
date.)

May 4 Supplier invoices goods taxable on reverse charge basis to Pillar & Co. (30 days from the
date of issuance of invoice elapse on June 3)
June 12 Pillar & Co receives the goods, which were held up in transit
July 3 Payment made for the goods
ANSWER:7 June 4, 31st day from the date of supplier’s invoice, will be the time of supply, being the
earliest of the three stipulated dates namely, receipt of goods, date of payment and date immediately
following 30 days of issuance of invoice [Section 12(3)].
PROBLEM: 8 Seema is an unregistered trader and supplies the goods to a registered recipient on 1st Feb
2018. The goods were received by Vir at his factory on 28th February, 2018. The invoice was issued on
15th February, 2018 and the payment was made on 5th March, 2018. Advise on the time of supply.
ANSWER:8 As the transaction stated above exhibits “reverse charge mechanism”, supplier i.e. Seema
being unregistered, the time of supply would be the earliest of:
a) Date of receipt of goods: in this case, 28th February, 2018
b) 30 days from date of invoice: in this case, 16th March, 2018
c) Date of payment: in this case 5th March, 2018
Hence the time of supply would be 28th February, 2018.
PROBLEM: 9 ABC Ltd., enters in to an arrangement with “Hush Puppies”, buys the vouchers, these
vouchers were issued on 14th December, 2018. The Company then distributes these vouchers with
denomination INR 4,000/- to all its employees on 24th December, 2018 valid until 31st January, 2019,
so that they can use these vouchers for buying shoes of their choice. The employees make the most
of it and redeem these vouchers on the New Year’s, i.e., on 1st January, 2019.
ANSWER:9 In this case, the supply is identifiable at the point of issue of the voucher and hence the time
of supply would be construed as 14th December, 2018.
PROBLEM: 10 Acme sales Limited sells food coupons to a company, which gives these to its
employees as part of the agreed perquisites. The coupons can be redeemed for purchase of any item
of food /provisions in the outlets that are part of the program.
ANSWER:10 As the supply against which the coupon will be redeemed is not known on the date of the
sale of the coupon, the time of supply of the coupon will be the date on which the employee redeems
it against food / provision items of his choice.

PROBLEM: 11 With each purchase of a large pizza during the Christmas week from Perfect Pizza,
one can buy a voucher for ` 20 which will be redeemable till 5 Jan for a small pizza.
ANSWER:11 As the supply against which the voucher will be redeemed is known on the date of the sale,
the time of supply is the date of issue of the voucher.
PROBLEM: 12 MNO Ltd. Has purchased for its directors 10 vouchers dated 14/01/2018 worth
Rs.5,000 each from PQR Ltd., a footwear manufacturing company. The vouchers were issued by PQR
Ltd. On 25/02/2018. The vouchers can be encashed at retail outlets of PQR Ltd. The directors of MNO
Ltd. Encashed the same on 05-01-2019. Determine time of supply of vouchers.
ANSWER:12 In case of vouchers by a supplier, the time of supply shall be the date of issue of voucher, if
the supply is identifiable at that point. In this case the supply of goods i.e. footwear is identifiable with
the voucher, hence time of supply shall be the date of issue of such vouchers by PQR Ltd. i.e.
25/02/2018.
PROBLEM: 13 Mr. B, a registered supplier supplied certain goods to Mr. C on 3 months credit with
a penalty clause in the agreement levying a penalty of 10% if the invoice value in case of delayed
payment. The invoice was dated 01/06/2018. Mr. C could not make the payment on the due date due
to unavoidable reasons. He however made the payment of the invoice value on 05/09/2018. Mr B
raised a debit note for the penalty amount. There being dispute on third, the matter was in
arbitration which was finally resolved with Mr. C ageing to pay half of the penalty amount. The
amount was paid by Mr. C on 01/12/2018. Determine the time of supply in light of the GST law.
ANSWER:13 With respect to the goods supplied, the time of supply shall be the invoice date on
assumption that there was no movement of goods involved and goods were made available on the
date of invoice i.e., 01/06/2018.however, as per section 12(6), with respect to the amount of penalty,
the time of supply shall be the date of payment by Mr. Y towards the penalty charge i.e. 01/12/2018

12. TIME OF SUPPLY OF SERVICES –SECTION 13

1) The liability to pay tax on services shall arise at the time of supply, as determined in
accordance with the provisions of this section.
2) The time of supply of services shall be the earliest of the following dates, namely:—
a) If Invoice issued within 30/45 days-The date of issue of invoice by the supplier, if the
invoice is issued within the period prescribed under sub-section (2) of section 31 or the
date of receipt of payment, whichever is earlier;
b) If Invoice not Issued within 30/45 days -The date of provision of service, if the invoice is not issued
within the period prescribed under sub-section (2) of section 31 or the date of receipt of payment,
whichever is earlier; or
c) The date on which the recipient shows the receipt of services in his books of account, in a case
where the provisions of clause (a) or clause (b) do not apply:
Provided that where the supplier of taxable service receives an amount up to one thousand rupees in
excess of the amount indicated in the tax invoice, the time of supply to the extent of such excess
amount shall, at the option of the said supplier, be the date of issue of invoice relating to such excess
amount.
Explanation.––For the purposes of clauses (a) and (b)––
(i) The supply shall be deemed to have been made to the extent it is covered by the invoice or, as the
case may be, the payment;
(ii) “The date of receipt of payment” shall be the date on which the payment is entered in the books
of account of the supplier or the date on which the payment is credited to his bank account, whichever is
earlier.
3) In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the
time of supply shall be the earlier of the following dates, namely:––
a) the date of payment as entered in the books of account of the recipient or the date on which
the payment is debited in his bank account, whichever is earlier; or
b) the date immediately following sixty days from the date of issue of invoice or any other
document, by whatever name called, in lieu thereof by the supplier:
Provided that where it is not possible to determine the time of supply under clause (a) or clause (b), the
time of supply shall be the date of entry in the books of account of the recipient of supply:
Provided further that in case of supply by associated enterprises, where the supplier of service is located
outside India, the time of supply shall be the date of entry in the books of account of the recipient of
supply or the date of payment, whichever is earlier.
4) In case of supply of vouchers by a supplier, the time of supply shall be––

a) the date of issue of voucher, if the supply is identifiable at that point; or
b) The date of redemption of voucher, in all other cases.
5) Where it is not possible to determine the time of supply under the provisions of sub- section (2)
or sub-section (3) or sub-section (4), the time of supply shall––
a) in a case where a periodical return has to be filed, be the date on which such return is to be
filed; or
b) In any other case, be the date on which the tax is paid.
6) The time of supply to the extent it relates to an addition in the value of supply by way of interest,
late fee or penalty for delayed payment of any consideration shall be the date on which the
supplier receives such addition in value.

PROBLEM: 14 Determine the time of supply in each of the following independent cases in
accordance with provisions of CGST Act, 2017:
Case Date of actual provision of Time (date) of invoice, bill or Date on receipt of payment
service challan as the case may be
1. 10/11/2018 30/11/2018 15/12/2018
2. 10/11/2018 30/11/2018 15/01/2018
3. 10/11/2018 30/11/2018 15/11/2018 (PART) and

10/12/2018 (Remaining)
4. 10/11/2018 30/11/2018 06/11/2018 (part) and

09/11/2018 (remaining)
5. 10/11/2018 30/11/2018 06/11/2018 (Part) and

6. 10/11/2018 12/12/2018 30/04/2019

7. 10/11/2018 12/12/2018 05/11/2018 (part) and
8. 10/11/2018 22/12/2018 12/12/2018
ANSWER:14
PROBLEM: 15 Determine the time of supply from the following particulars:

6th May Booking of convention hall, sum agreed ` 15000, advance of` 3000 received
15th September Function held in convention hall
27th October Invoice issued for ` 15000, indicating balance of `12000payable
3rd November Balance payment of ` 12000 received
ANSWER:15 As per section 31 read with rule 47 of CGST Rules, the tax invoice is to be issued within 30
days of supply of service. In the given case, the invoice is not issued within the prescribed time limit.
As per section 13(2)(b), in a case where the invoice is not issued within the prescribed time, the time
of supply of service is the date of provision of service or receipt of payment, whichever is earlier.
Therefore, the time of supply of service to the extent of ` 3,000 is 6th May as the date of payment of `
3000 is earlier than the date of provision of service. The time of supply of service to the extent of the
balance ` 12,000 is 15th September which is the date of provision of service
PROBLEM: 16 Determine the time of supply from the following particulars:

15th October-The marriage hall was fixed and the advance of INR 25000 was paid (amount agreed
was INR 100,000)
30th November-The marriage ceremony took place in the hall
14th December-The invoice was issued for balance INR 75000 indicating & adjusting the advance
paid earlier
31st December The balance payment was received
In the above case, the invoice was issued within the prescribed time (that is within 30 days of the event)
ANSWER:16 The date of invoice: which is 14th December and The date of receipt of payment: which is
31st December Therefore, for the amount of INR 75000, the time of supply would be 14th December.
For the advance of INR 25000, the date of payment precedes the invoice and hence the time of supply
for that amount would be 15th October

PROBLEM: 17 DEF Ltd., an unregistered supplier, renders professional services to GHI Ltd. and
issues the invoice on 7thAugust, 2018. There is a dispute on the quality of services and the payment
gets delayed and is finally released on 14th November, 2018 by cheque and an entry is made in the
books of account of the recipient.
ANSWER:17 In this case, the time of supply would be the earlier of:
a) 60 days from date of invoice: 7th October, 2018
b) Date of payment: 14th November, 2018
Hence the time of supply would be 7th October, 2018.
PROBLEM: 18 Determine the time of supply from the given information. (Assuming that service
being supplied is taxable under reverse charge)
May 4-The supplier of service issues invoice for service provided. There is a dispute about amount
payable, and payment is delayed.
August 21 Payment made to the supplier of service
ANSWER:18 Here, July 4 will be the time of supply, being the earliest of the two stipulated dates namely,
date of payment and date immediately following 60 days since issue of invoice

May 4 A German company issues email informing its associated company ABC Ltd. of the cost of
technical services provided to it.
July 2 ABC Ltd transfers the amount to the account of the German company
ANSWER:19 As there is no prior entry of the amount in the books of account of ABC Ltd., July 2 will be the time of
supply, being the date of payment in terms of second proviso to section 13(3).
PROBLEM: 20 Best Hospitality Services enters into agreement with Drive Marketing Ltd by which
Drive Marketing Ltd. markets Best Hospitality Services’ hotel rooms and sells coupons / vouchers
redeemable for a discount against stay in the hotel.
ANSWER:20 As the supply against which the voucher will be redeemed is identifiable, the time of supply
of the voucher will be its date of issue.
PROBLEM: 21 K &K Ltd. Is located in India and holding 69 %of shares of Prince Ltd., a Hungarian
based company. Prince Ltd. Provides business Auxillary services to K and K Ltd From the following
details, determine the time of supply and K and K Lts.:
Agreed consideration Us $ 1,00,000
Date on which services are provided by Prince Ltd. 16/12/2018
Date on which invoice is sent by Price Ltd. 19/12/2018
Date of debit in the books of account of K and K Ltd. 30/12/2018
Date on which payment is made by K and K Ltd. 23/03/2019
ANSWER:21

13. TIME OF SUPPLY IN CASE OF CHANGE IN RATE OF TAX
A. In case the goods or services or both have been supplied before the change in rate of tax, the
time of supply can be determined as follows:
CONDITION TIME OF SUPPLY APPLICABLE

RATE
Earlier of New rate
where the invoice for the same has been
 Date of receipt of
issued and the payment is also received after
payment
the change in rate of tax  Date of Issue of
invoice
 Date of Issue Old rate

Where the invoice has been issued prior to
of Invoice
the change in rate of tax but payment is
received after the change in rate of tax.
 Date of receipt Old rate
where the payment has been received before
of payment
the change in rate of tax, but the invoice for
the same is issued after the change in rate of
tax
B. In case the goods or services or both have been supplied after the change in rate of tax, the time
of supply can be determined as follows:
CONDITION TIME OF SUPPLY APPLICABLE

RATE
 Date of receipt of New rate
where the payment is received after the
payment
change in rate of tax but the invoice has been
issued prior to the change in rate of tax
Earlier of Old rate
where the invoice has been issued and
 Date of Issue of
payment is received before the change in
Invoice or
rate of tax,  Date of receipt of
payment
 Date of issue New rate
where the invoice has been issued after the
of invoice
change in rate of tax but the payment is
received before the change in rate of tax,
C. Date of receipt of payment- Date of receipt of payment shall be

1) The date on which the payment is entered in books of accounts of supplier
2) The date on which payment is credited in his bank account
Whichever is earlier
Provided that the date of receipt of payment shall be the date of credit in the bank account if such credit in
the bank account is after four working days from the date of change in the rate of tax.

PROBLEM: 22 Supply was made on 10th May, 2018. From the following particulars, find out the
rate of GST applicable.
Event Date of event Rate applicable

Change of rate 31st May, 2018 Rate changed from 18% to 12%
Issue of Invoice 5th June, 2018 12%
Payment received 6th July, 2018 12%
ANSWER:22 Applicable rate is 12%. i.e. which is applicable on earlier of the two events, date of invoice
and date of payment which in this case would be 5th June, 2018.
PROBLEM: 23 Supply was made on 10th May, 2018. From the following particulars, find out the
rate of GST applicable.
Event Date of event Rate applicable

Change of rate 30th June, 2018 Rate changed from 18% to 12%
Issue of Invoice 5th June, 2018 18%
Payment received 6th July, 2018 12%
ANSWER:23 Applicable rate is 18%. i.e. date of invoice i.e. 5th June, 2018 because it is earlier than the
date of payment.
PROBLEM: 24 Determine the time of supply in each of following cases. The rate of GST has been
increased to 18% from 12 % w.e.f. 01/10/2018.
Cases Date of supply of Date of Invoice Date of Value of
service Payment Service(Rs)
1 25/09/2018 05/10/2018 08/10/2018 10,00,000
2 25/09/2018 25/09/2018 08/10/2018 7,00,000
3 25/09/2018 08/10/2018 30/09/2018 10,00,000
4 04/10/2018 28/09/2018 30/09/2018 10,00,000
5 04/10/2018 04/10/2018 30/09/2018 07,00,000
6 04/10/2018 30/09/2018 08/10/2018 10,00,000
ANSWER:24
PROBLEM: 25 Mr. X is supplied goods to Mr. Y on 28th July 2018. The GST rate on goods is changed
from 12% to 5% w.e.f. 1st January 2019. Mr. X issued invoice on 28th August 2018 and payment is
credited in his bank account on 30th December 2018.What is the time of supply in this case? Effective
rate of GST?
ANSWER:25 Time of supply = 28th August 2018Effective rate of GST = 12%

14. VALUE OF TAXABLE SUPPLY- SECTION 15

1) Transaction value to be taken as assessable value [Section 15(1)]-The value of a supply of goods or
services or both shall be the transaction value,
I. Which is the price actually paid or payable for the said supply of goods or services or both
II. Where the supplier and the recipient of the supply are not related and
III. The price is the sole consideration for the supply.
2) Amounts to be added in transaction value [Section 15(2)]The value of supply shall include –
a) Any taxes-
I. duties,
II. cesses,
III. fees and charges levied under any law for the time being in force
other than
I. this Act,
II. the State Goods and Services Tax Act,
III. the Union Territory Goods and Services Tax Act and
IV. the Goods and Services Tax (Compensation to States) Act, if charged separately by the
supplier;
b) Any amount that the supplier is liable to pay in relation to such supply but which has been incurred
by the recipient of the supply and not included in the price actually paid or payable for the goods
or services or both;
c) Incidental expenses, including commission and packing, charged by the supplier to the recipient of
a supply and any amount charged for anything done by the supplier in respect of the supply of
goods or services or both at the time of, or before delivery of goods or supply of services;
d) Interest or late fee or penalty for delayed payment of any consideration for any supply; and
e) Subsidies directly linked to the price excluding subsidies provided by the Central Government and
State Governments.
Explanation––For the purposes of this sub-section, the amount of subsidy shall be included in the
value of supply of the supplier who receives the subsidy.
3) Exclusions from value of supply [Section 15(3)]-The value of the supply shall not include any discount
which is given––
a) Before or at the time of the supply if such discount has been duly recorded in the invoice issued
in respect of such supply; and
b) After the supply has been effected, if—
I. such discount is established in terms of an agreement entered into at or before the time of
such supply and specifically linked to relevant invoices; and
II. input tax credit as is attributable to the discount on the basis of document issued by the
supplier has been reversed by the recipient of the supply.

CASE-25 A purchases an Air conditioner from B for ` 20,000. B gives cash discount of ` 2,000 to A on
the sale invoice itself. Transaction value will be ` 18,000, being price of the goods after reducing the
discount offered at the time of sale.
CASE-26 A purchases an Air conditioner from B for `20,000 on July 1, 2018. On August 1, 2018, A
gives discount of `5,000 to B and B makes a payment of `15,000 to A.
 If discount is not known before or at time of supply, transaction value will be ` 20,000 being net
price of the goods plus discount allowed after the supply has been affected.
 If discount is known before or at the time of supply, transaction value will be ` 15,000 being net
price of the goods.
4) Value to be determined as per valuation rules [Section 15(4)]Where the value of the supply of goods
or services or both cannot be determined as per Section 15(1), the same shall be determined in such
manner as may be prescribed.
5) Value of notified supplies to be determined in prescribed manner [Section 15(5)]Notwithstanding

anything contained in Section 15(1) or Section 15(4), the value of such supplies as may be notified by
the Government on the recommendations of the Council shall be determined in such manner as may
be prescribed
PROBLEM: 26 Best Cars Ltd. sells a car worth ` 5,00,000 to Sundar Automobiles. Best Cars Ltd.
incurred packing charges of `6,000 on the car. Best Cars Ltd provided a discount of 1% on the car
price, as part of Diwali scheme. Best Cars Ltd agreed to provide a further discount of 0.5% if Sundar
Automobiles makes payment by 31st of the month via net banking. Sundar Automobiles makes the
payment by 31st of the month using net banking. Find the Net GST liability in the hands of Best Cars
Ltd. Applicable rate of GST 18%.
ANSWER:26
Particulars Value in `
Value of the product 5,00,000
Add: packing charges 6,000
Sub-total 5,06,000
Less: Discount 1% on Rs 5 lakh (5,000)
Transaction value 5,01,000
Add: CGST 9% 45,090
Add: SGST 9% 45,090
Invoice price 5,91,180
Note: Since, the discount was known at the time of supply, and can be linked to this specific invoice, the
discount amount can be reduced from the transaction value.
For this, Best Cars Ltd will issue a credit note to Sundar Automobiles for ` 2,500 (0.5% of ` 5,00,000 = `
2,500+ GST@ 18% on ` 2,500 = ` 450), and the same must be linked to the relevant tax invoice.
Discount given after supply but agreed upon before or at the time of supply and can be specifically linked
to relevant invoices, can be deducted from the transaction value.

PROBLEM: 27 RG Pvt.Ltd. provides the following particulars relating to goods sold by it to GK

Pvt.Ltd
Particulars Amount
List price of the good ( exclusive of taxes and discounts ) 5,00,000
Tax levied by Municipal Authority on the sale of such goods 50,000
CGST and SGST chargeable on the goods 1,00,000
Packing charges ( not included in price above ) 10,000
RG Pvt. Ltd received Rs. 20,000 as a subsidy from a NGO on sale of such goods. The price of Rs. 5,00,000 of
the goods is after considering such subsidy. RG Ltd. Offers 2% discount on the list price of the goods which
is recorded in the invoice for the goods. Determine the taxable supply made by RG Pvt. Ltd.
ANSWER:27
PROBLEM: 28 From the following information determine the value of taxable supply as per
provisions of section 15 of the CGST Act, 2017?
Particulars Rs
Contracted value of supply of goods (Including GST @ 18%) 11,00,000
1) Primary packing 25000
2) Protective packing at recipient’s request for safe 15,000
transportation
3) Designing charges 85000
Other information:
1. Commission paid by recipient as per supplier’s request 5000
2. Freight and insurance charges borne by recipient on behalf of supplier 75,000
ANSWER:28
PROBLEM: 29 From the following information determine the value of taxable supply as per
provisions of section 15 of CGST Act, 2017?
Particulars Rs
Value of machine (inclusive GST @12%) 15,00,000
The invoice value including the following
1) Taxes (other than GST) charged separately by the supplier 15,000
2) Loading charges 25,000
3) Consultancy Charges for installation 10000
4) Testing Charges 2,000
5) Inspection Charges 4,500
Other information:
1) Subsidy received from central government for setting up 51,000
factory in backward region
2) Subsidy received from third party to recipient 50,000
3) Trade discount actually allowed shown separately in invoice 24,000
ANSWER:29

PROBLEM: 30 Determine the value of taxable supply as per section 15 of the CGST Act, 2017
Particulars Rs
Contracted sale price of goods (including CGST and SGST @5%) 10,56,000
The contracted sale price includes the following elements of cost:

(i) Drawings and design 5,000
(ii) Primary packing 2,000
(iii) Packing at buyer’s request 4,000
(iv) Fright and insurance from place of removal to buyers premises 43,000
A discount of Rs 6,000 of given by the supplier before the time of supply of goods. CGST and SGST is levied
@ 5%
ANSWER:30
PROBLEM: 31 Black and White Pvt. Ltd. has provided the following particulars relating to goods
sold by it to Colorful Pvt. Ltd.
Particulars `
List price of the goods (exclusive of taxes and discounts) 50,000
Tax levied by Municipal Authority on the sale of such goods 5,000
CGST and SGST chargeable on the goods 10,440
Packing charges (not included in price above) 1,000
Black and White Pvt. Ltd. received ` 2000 as a subsidy from a NGO on sale of such goods. The price of `
50,000 of the goods is after considering such subsidy. Black and White Ltd. offers 2% discount on the list
price of the goods which is recorded in the invoice for the goods. Determine the value of taxable supply
made by Black and White Pvt. Ltd
ANSWER:31
15.INPUT TAX CREDIT-

Input Tax Credit (ITC) is considered as a cornerstone of GST. In the previous tax regime, there was a non-
availability of credit at various points of supply chain, which led to a cascading effect of tax and increased
the cost of goods and services. This flaw has been removed under GST and a seamless flow of credit
throughout the value chain will be provided which will help in reducing the cascading effect of tax.
1) To avail the benefit of ITC it is required that the person availing such benefit is registered under
GST.
2) An unregistered person is not eligible to take the benefit of ITC.
3) Section 155, of the CGST Act, 2017 states that where any person claims that he is eligible for input
tax credit under this Act, the burden of proving such claim shall lie on such person.
4) EXEMPT SUPPLY N TAXABLE SUPPLY

Supply
Taxable Supply Exempt Supply
Normal Composition NIL Rate Wholly exempt Non-taxable

Tax Rates Tax Rates of Tax from Tax Supply
0%
5% 2%
12% 5%
18% 1%
28%
INPUT TAX CREDIT INPUT TAX CREDIT NOT ALLOWED

ALLOWED
16. CONDITION AND ELIGIBILITY TO OBTAIN ITC-SECTION 16

1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and, in
the manner, specified in section 49, be entitled to take credit of input tax charged on any supply of
goods or services or both to him which are used or intended to be used in the course or furtherance
of his business and the said amount shall be credited to the electronic credit ledger of such person.
2) Conditions for taking ITC [Section 16(2)]-The registered person will be entitled to ITC on a supply only
if ALL the following four conditions are fulfilled:
a) Possession of tax paying document [Section 16(2)(a) read with rule 36 of the CGST Rules]- ITC can
be availed on the basis of any of the following documents:
I. Invoice issued by a supplier of goods and/or services

II. Invoice issued by recipient (receiving goods and/or services from unregistered supplier)
along with proof of payment of tax (in case of reverse charge)
III. A debit note issued by supplier
IV. Bill of entry or similar document prescribed under Customs Act
V. Revised invoice
VI. Document issued by Input Service Distributor
The documents basis which ITC is being taken should contain at leastthe following details:
 Amount of tax charged
 Description of goods or services
 Total value of supply of goods and/or services
 GSTIN of the supplier and recipient
 Place of supply in case of inter-State supply

The documents basis which ITC is being taken should have all the relevant particulars as
prescribed in rule 46 of the CGST Rules.
No ITC of tax paid towards demands involving fraud [Rule 36(3)]: Tax paid in pursuance of any
order where any demand has been confirmed on account of any fraud, willful misstatement or
suppression of facts cannot be availed as ITC.
b) Receipt of the goods and / or services [Section 16(2)(b)]-The registered person taking the ITC must
have received the goods and / or services.
 “Bill to Ship to” Model also included: Under this model, the goods are delivered to a third party
on the direction of the customer (registered person) who purchases the goods from the vendor
(supplier) i.e., the customer (registered person) who purchases such goods does not receive the
said goods.
 However, in such a scenario, section 16(2)(b) deems that the registered person (customer) has
received the goods. In other words, delivery of goods to another person on the direction of the
registered person by way of transfer of documents of title to goods or otherwise either before or
during the movement of goods, is deemed to be the receipt of goods by the registered person.
So, ITC will be available to the registered person on whose order the goods are delivered to a
third person.
c) Tax leviable on supply actually paid to Government [Section 16(2)(c)]-Tax should actually have been
paid, by cash or through utilization of ITC, on the goods and / or services for which ITC is being
taken.
d) Filing of return [Section 16(2)(d)]-The registered person taking the ITC must have filed his return
under section 39.
 [First proviso to section 16(2)]Goods received in lots: ITC available only on receipt of last lot In
case the goods covered under an invoice are not received in a single consignment but are received
in lots / instalments, the ITC can be taken only upon receipt of the last lot / instalment.
 Second proviso to section 16(2) Payment for the invoice to be made within 180 days [read with
rule 37 of CGST Rules]
I. The registered person must pay the supplier, the value of the goods and/or services along with
the tax within 180 days from the date of issue of invoice.
II. In the event of failure to do so, the corresponding credits availed by the registered person
would be added to his output tax liability, with interest.
III. Interest will be paid @ 18% from the date of availing credit till the date when the amount added
to the output tax liability is paid.
IV. However, once the recipient makes the payment of value of goods and/or services along with
tax, he will be entitled to avail the credit again without any time limit
V. In case part-payment has been made, proportionate credit would be allowed.

 Exceptions-This condition of payment of value of supply plus tax within 180 days does not apply in
the following situations:
a) Supplies on which tax is payable under reverse charge
b) Deemed supplies without consideration
c) Additions made to the value of supplies on account of supplier’s liability, in relation to such
supplies, being incurred by the recipient of the supply Under situations given in points (b) & (c),
the value of supply is deemed to have been paid.
3) IF DEPRECIATION CLAIMED ON TAX COMPONENT, ITC NOT ALLOWED [SECTION 16(3)]

 If the person taking the ITC on capital goods and plant and machinery has claimed depreciation on
the tax component of the cost of the said items under the Income-tax Act 1961, the ITC on the said
tax component shall not be allowed.
 Thus, in respect of the tax paid on such items, dual benefit cannot be claimed under Income-tax
Act, 1961 and GST laws simultaneously.
 In other words, either depreciation on the tax component can be claimed under Income Tax Act or
ITC of such tax paid can be availed under GST laws.
4) Time limit for availing ITC: Due date of filing of return for the month of September of succeeding
financial year or date of filing of annual return, whichever is earlier [Section 16(4)]
 ITC on invoices pertaining to a financial year or debit notes relating to invoices pertaining to a
financial year can be availed any time till the due date of filing of the return for the month of
September of the succeeding financial year or the date of filing of the relevant annual return,
whichever is earlier.
 It may be noted that the return for the month of September is to be filed by 20th October and
annual return of a financial year is to be filed by 31st December of the succeeding financial year.
 So, the upper time limit for taking ITC is 20th October of the next financial year or the date of filing
of annual return, whichever is earlier.
 The underlying reasoning for this restriction is that no change in return is permitted after
September of next financial year.
 If annual return is filed before the month of September, then no change can be made after filing of
annual return.
Exception
The time limit u/s 16(4) does not apply to claim for re-availing of credit that had been reversed
earlier.

PROBLEM: 32 From the following information determine the amount of input tax credit
admissible to RD Ltd. In respects of various inputs purchased during the month of September, 2018
Particulars CGST & SGST
Goods purchased but without invoice 25,000
Goods purchased from JKL Ltd. (Tax has not been paid by JKL Ltd. to Government.) 120,000
Purchases of goods for personal purpose 18,000
Purchases of goods from CC Ltd. (Invoice of CC Ltd. is received in month of September, 2018, 24,000
but goods were received in month of October , 2018)
Goods purchased against valid invoice from DD Ltd. Tax has been deposited by DD Ltd. RD 36,000
Ltd. has made payment to DFD Ltd. for such purchases in the month of October , 2018
ANSWER:32
PROBLEM: 33 R agrees to supply to G (a Trader) certain goods worth Rs. 10,00,000 in the
following lots:
Date Lot Value of Goods
18.09.2018 First lot Rs. 2,00,000
18.10.2018 Second lot Rs. 3,00,000
18.11.2018 Third lot Rs. 5,00,000
When and for what amount will G be able to take input credit? Assume the rate of GST is 18%.
ANSWER:33
17. APPORTIONMENT OF CREDIT AND BLOCKED CREDITS

1) GOODS OR SERVICES PARTLY USED FOR BUSINESS PURPOSE :
a) The Act specifically states that input tax credit can only be taken for the amount of input tax paid
on goods or services or both used for the purpose of business.
b) Thus, if goods or services or both are used partly for purpose of business and partly for other
purpose, only that amount of input tax which is attributable to the purpose of business will be
allowed as credit.
2) ZERO RATED & EXEMPT SUPPLY- Where the goods or services or both are used by the registered
person
I. partly for effecting taxable supplies including zero-rated supplies under this Act or under the
Integrated Goods and Services Tax Act and
II. partly for effecting exempt supplies under the said Acts,
 the amount of credit shall be restricted to so much of the input tax as is attributable to the said
taxable supplies including zero-rated supplies.
 ZERO-RATED SUPPLY means any of the following supplies of goods or services or both, namely:––
a) Export of goods or services or bot
b) Supply or goods or services to both SEZ developer and SEZ Unit.
3) The value of exempt supply under sub-section (2) shall be such as may be prescribed, and shall
include
 supplies on which the recipient is liable to pay tax on reverse charge basis,
 transactions in securities,
 sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building.

4) ITC availment in case of Banking Co. or a Financial Institution including NBFC’s [Sec.17(4)]
1) A Banking Company or a Financial Institution including a Non-Banking Financial Company, engaged in
supplying services by way of accepting deposits, extending loans or advances shall have the following
options –
Option 1: To comply with the provision’s u/s 17 (2), or
Option 2: To avail of, every month, an amount equal to 50% of the eligible input tax credit on Inputs,
Capital Goods and Input Services in that month and the balance 50% shall lapse.
2) Conditions on choosing Option 2: [Rule 38]:

a) The said Company or Institution shall not avail the credit of-
I. tax paid on Inputs and Input Services that are used for non-business purposes, and
II. the credit attributable (blocked Credits) to supplies specified u/s 17(5), in FORM GSTR-2,
b) 50% of the of input tax shall be the input tax credit admissible to the company or the institution and
shall be furnished in FORM GSTR-2,
3) When an option is once exercised, it shall not be withdrawn during the remaining part of the
financial year.
4) The restriction of 50% shall not apply to the tax paid on supplies made by one Registered Person to
another Registered Person having the same Permanent Account Number. (Transfer between
branches)
5) GOODS ON WHICH ITC IS NOT ALLOWABLE – BLOCKED CREDITS [SEC.17(5)-Input tax credit shall
not be available in respect of the following, namely—
a) Motor vehicles and other conveyances except when they are used––
I. for making the following taxable supplies, namely: —

 further supply of such vehicles or conveyances; or
 transportation of passengers; or
 imparting training on driving, flying, navigating such vehicles or conveyances;
II. for transportation of goods;
PROBLEM: 34 M/s Praveen Travels transporting passengers from Chennai-Mumbai-Chennai. For

this purpose M/s Praveen Travels purchased Volvo Bus (air-conditioned) for ` 55 lakhs plus GST 28%.
M/s Praveen Travels is eligible for ITC on Volvo Bus in the following two cases:
• M/s Praveen Travels paying GST 12% on supply of output supplies.
• M/s Praveen Travels paying GST 5% on supply of output supplies.
ANSWER:34
Case (1). Yes. M/s Praveen Travels is eligible to avail the ITC on purchase of Volvo Bus.
Case (2). No. M/s Praveen Travels is not eligible to avail the ITC on capital goods and input goods
(except input services).
Note: AC contract/stage carriage other than motor cab GST @ 5% – with ITC of input services only
from similar line of business (vide Notification No. 31/2017-Central Tax (Rate) Dt.13th October 2017)

PROBLEM: 35 Sukhee Bhava Hospital is a clinical establishment purchased four ambulances for ` 32
lakhs plus GST 28%. Find the input tax credit available to Sukhee Bhava Hospital.
ANSWER:35 Input tax credit = nil Note: Since, supply of services of Sukhee Bhava is exempted from GST
under health care services.
PROBLEM: 36 Ferrari Company for conducting Formulae One car races purchased 20 Racing Cars
for ` 80 lakhs plus GST 28%.Ferrari company is eligible for availing ITC on purchase of Racing Cars.
ANSWER:36 No. Ferrari Company can not avail the ITC on purchase of Racing Cars which are not treated
as passenger vehicles.
PROBLEM: 37 Mr. Ram a school van driver and also registered person under GST law. He
purchased Omni vehicle for ` 8 lacs plus GST 28%. Mr. Ram is eligible for ITC on this vehicle. Explain.
ANSWER:37 Since, Mr. Ram is a registered person supplying taxable services in the nature of
transportation of passengers, he is eligible to avail the ITC on motor vehicle.
PROBLEM: 38 M/s Maruti Driving School Pvt. Ltd. supplied taxable services in the month of
October 2018 for ` 15 lacs (plus GST 18%) to provide training on driving. Company purchased two
vehicles for this purpose namely passenger vehicle for ` 20 lacs plus GST 28% and goods vehicle for `
33 lacs plus GST 28%. Find the net GST liability of M/sMaruti Driving School Pvt. Ltd.
ANSWER:38
GST on output supply = ` 2,70,000
Less: ITC
On passenger vehicle = ` -5,60,000
On goods vehicle = ` -9,24,000
Net Excess ITC c/f = `12,14,000
PROBLEM: 39 Course completion certificate/training offered M/s Sky Ltd. (Flying Training Institute)
purchased aircraft for ` 22 crores plus GST 28%. Whether the flying institute is eligible for input tax
credit on purchase of air craft.
ANSWER:39 Yes. M/s Sky Ltd. (Flying Training Institute) is eligible to avail ITC.
b) ITC not available for the following supply of Goods or Services or both:—
I. Food and Beverages,
II. Outdoor catering,
III. Beauty treatment,
IV. Health services,
V. Life Insurance
VI. Health Insurance
VII. Cosmetic and plastic surgery,
VIII. Leasing, renting or hiring of motor vehicles, vessels or aircraft referred above
IX. Membership of a Club, Health and Fitness centre, and
X. Travel benefits extended to employees on vacation such as Leave or Home travel
concession. ITC shall be available, if it is obligatory for an employer to provide to its
employees under any law
However, ITC for the above services shall be available, where an inward supply of goods
or services or both is used by a registered person for making an outward taxable supply of
the same category of goods or services or both or as an element of a taxable Composite
or Mixed supply,

PROBLEM: 40 Guidelines Academy organizes parents meeting and provides meal during meeting to
students and their parents. The supplier of food charged ` 72,500 plus GST 18%, under the category
of outdoor catering. Explain Guidelines Academy being provider of taxable supply of services namely
commercial training and coaching services is eligible to avail the credit of GST paid on outdoor
catering service.
ANSWER:40 GST paid on outdoor catering is not allowed as ITC even though such services are used for
business purpose. Since, it is specifically mentioned under Section 17(5)(b)(i) of the CGST Act, 2017
where credit is not allowed.
PROBLEM: 41 Annapurna caterings supply outdoor catering services to its customers by sub-
contracting the same. Sub-contractor supplied food items like ice creams, North Indian Meals, South
Indian Meals and so on to Annapoorna caterings. Sub-contractor raised invoice on Annapoorna
caterings for supply of outdoor catering services ` 2,00,000 plus GST 18%. Annapoorna caterings
supplied outdoor catering to its customers for ` 2,10,000 plus GST18%. Find the Net GST liability of
Annapoorna caterings.
ANSWER:41 Statement showing net GST liability of Annapoorna caterings:
GST on outward supply 37,800
Less: ITC from similar line of business (36,000)
Net GST liability 1,800
PROBLEM: 42 Hotel King Pvt Ltd. provider of short-term accommodation services and also provides
picking up guest from airport. Accordingly, Hotel King Pvt. Ltd availed rent-a-cab services from M/s X
&Co. Rent-a-cab services provided by M/s X & Co to Hotel King Pvt Ltd. during Nov 2018 for `
2,00,000 plus GST 18%.Hotel King Pvt Ltd. provided short-term accommodation services to its
customers (i.e. guests) during Nov 2018 for ` 15,75,250 plus GST 18%.Find the Net GST liability of
Hotel King Pvt Ltd. during the month of November 2018
ANSWER:42 Statement showing Net GST liability of Hotel King Pvt. Ltd for the month of Nov 2018
GST on outward supplies 2,83,545
Less: ITC on rent-a-cab service (36,000)
Net GST liability 2,47,545
Note: In the given case Hotel King Pvt. Ltd. providing a composite supply of rent-a-cab and accommodation
service. The principal supply of service is accommodation service. Hence, GST paid on rent-a-cab will be
available as a credit to Hotel King Pvt. Ltd.
c) Works Contract Services when supplied for Construction of an Immovable property (other than
plant and machinery) except where it is an input service for further supply of works contract
service.

d) Goods or services or both received by a taxable person for construction of an immovable

property (other than plant or machinery) on his own account including when such goods or
services or both are used in the course or furtherance of business.
Explanation. ––For the purposes of clauses (c) and (d), the expression “construction” includes re-
construction, renovation, additions or alterations or repairs, to the extent of capitalization, to
the said immovable property;
Explanation. ––For the purposes of this Chapter and Chapter VI, the expression “plant and
machinery” means apparatus, equipment, and machinery fixed to earth by foundation or
structural support that are used for making outward supply of goods or services or both and
includes such foundation and structural supports but excludes—
I. land, building or any other civil structures;
II. Telecommunication towers; and
III. Pipelines laid outside the factory premises.
e) goods or services or both on which tax has been paid under section 10;
f) goods or services or both received by a non-resident taxable person except on goods imported by
him;
g) goods or services or both used for personal consumption;
CASE-27 M/s X Ltd purchased shoes for their employee’s personal consumption by paying GST
thereon. ITC not allowed on such goods.
CASE-28 M/s Y Ltd. for safety reasons purchased hand gloves and shoes for workers as mandatory.
Hence, ITC on such goods cannot be considered as used for personal purpose. Therefore, ITC allowed.
PROBLEM: 43 M/s Info Ltd. providing various facilities to their employees like club, sports facilities
etc. to ensure that the employees stay comfortably in the colony. It increases the efficiency of
employee. Examine the credit applicability in this case.
ANSWER:43 Expenses incurred in colony are in the course or furtherance of business. Hence, credit of
GST paid on such services will also be available to the taxable person.
h) goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples; and
i) Any tax paid in accordance with the provisions of sections 74, 129 and 130.
PROBLEM: 44 M/s X Ltd. sold goods to M/s Y Ltd. for ` 2,00,000 plus GST `36,000. M/s X Ltd.
remitted the GST on or before the due date. During the audit of M/s X Ltd. books by the Central Tax
Department quantified the GST liability ` 72,000 and demanded to pay differential duty of ` 36,000
u/s 74 of the CGST Act, 2017. Finally, M/s X Ltd. paid the differential GST of ` 36,000.M/s Y Ltd.
wants to avail the input tax credit of differential amount of GST?
ANSWER:44 Since, the differential GST paid by M/s X Ltd. against show cause notice u/s 74 of the CGST
Act, 2017, will not be available as credit to M/s Y Ltd. in view of clause (i) of section 17(5) of the CGST
Act, 2017.

18. AVAILABILITY OF CREDIT IN SPECIAL CIRCUMSTANCES

1) Treatment for Inputs held in stock / contained in Semi-finished / Finished goods (SFG / FG) in case
of Newly Registered Persons-
SECTION 18 Situation Input Tax Credit is available on -
a) A Person who has applied for registration Inputs held in stock, and Inputs contained in semi-
under this Act within 30 days from the date finished or finished goods held in stock on the day
on which he becomes liable to registration immediately preceding the date from which he
and has been granted such registration. becomes liable to pay tax.
b) A person who takes registration u/s 25(3) Inputs held in stock and inputs contained in semi-
finished or finished goods held in stock on the day
immediately preceding the date of grant of registration.
c) Any Registered Person who ceases to pay tax Inputs held in stock, Inputs contained in Semi-finished
u/ 10 (Composition Scheme) or Finished Goods held in Stock and on Capital Goods
on the day immediately preceding the date from which
he becomes liable to pay tax u/s 9 (Normal rate). [Note:
Credit on Capital goods shall be reduced by such
percentage points as may be prescribed].
d) An Exempt Supply of goods or services or Inputs held in stock and inputs contained in semi-
both by a Registered Person becomes a finished or finished goods held in stock relatable to
taxable supply such exempt supply and on capital goods exclusively
used for such exempt supply on the day immediately
preceding the date from which such supply becomes
taxable.
A Person who obtains Voluntary Registration Inputs in stock, Inputs in semi- finished goods and
finished goods in stock, held on the day immediately
preceding the date of registration.
2) A Registered Person shall not be entitled to take input tax credit in respect of any supply of goods or
services or both to him after the expiry of 1 year from the date of issue of tax invoice relating to
such supply. [Sec. 18(2)]
3) ITC in case there is a change in constitution of registered person [Sec.18(3)]When there is a change
in the constitution of a registered person on account of sale, merger, demerger, amalgamation,
lease or transfer of the business with the specific provisions for transfer of liabilities, the said
registered person shall be allowed to transfer the input tax credit which remains unutilised in his
electronic credit ledger to such sold, merged, demerged, amalgamated, leased or transferred
business in the prescribed manner.

4) TAX IMPLICATIONS IN CASE A CHANGE IN STATUS OF REGISTERED PERSON [SEC.18(4)]

I. Where any Registered Person who has availed of Input Tax Credit opts to pay tax under
Composition Scheme u/s 10 or, where the goods or services or both supplied by him become
wholly exempt.
II. He shall pay an amount, by way of debit in the electronic credit ledger or electronic 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 and on Capital Goods, reduced by such percentage points
as may be prescribed.
III. On the day immediately preceding the date of exercising of such option or, the date of such
exemption.
IV. After payment of such amount, the balance of input tax credit, if any, lying in his electronic credit
ledger shall lapse.
5) ITC IN CASE OF SUPPLY OF CAPITAL GOODS OR PLANT AND MACHINERY [SEC.18(6)]

I. In case of supply of Capital Goods or Plant and Machinery, on which Input Tax Credit has been
taken, the registered person shall pay an amount equal to the input tax credit taken on the said
capital goods or plant and machinery reduced by such percentage points as may be prescribed or
the tax on the transaction value of such capital goods or plant and machinery determined u/s 15,
whichever is higher.
II. If refractory bricks, moulds and dies, jigs and fixtures are supplied as scrap, the taxable person may
pay tax on the transaction value of such goods determined u/s 15.
Note:
a) Capital Goods means goods, the value of which is capitalised in the books of account of the person
claiming the input tax credit and which are used or intended to be used in the course or
furtherance of business,
b) “Plant and Machinery” means apparatus, equipment, and machinery fixed to earth by foundation
or structural support that are used for making outward supply of goods or services or both and
includes such foundation and structural supports but excludes-
I. land, building or any other civil structures,
II. telecommunication towers, and
III. pipelines laid outside the factory premises.
CASE-29 Mr. Z becomes liable to pay tax on 1st August and has obtained registration on 15 th
August. Mr. Z is eligible for ITC on inputs held in stock and as part of semi-finished goods or finished
goods held in stock as on 31st July. Mr. Z cannot take ITC on capital goods.
CASE-30 Mr. A applies for voluntary registration on 5th June and obtains registration on 22 th June.
Mr. A is eligible for ITC on inputs held in stock and as part of semi-finished goods or finished goods
held in stock as on 21st June. Mr. A cannot take ITC on capital goods.
CASE-31 Mr. B, a registered taxable person, was paying tax at composition rate up to 30th July.
However, w.e.f. 31st July, Mr. B becomes liable to pay tax under regular scheme. Mr. B will be eligible
for ITC on inputs held in stock and inputs contained in semi-finished or finished goods held in stock
and on capital goods as on 30 th July. ITC on capital goods will be reduced by 5% per quarter from the
date of the invoice.

CASE-32 Mr. C acquired a Capital Asset on 1st April, 2016 and used it for production of exempt supplies only.
Now, in November 2017, his supplies become taxable. The cost of the asset was INR 250,000 and GST 18%
was charged on it. Hence the ITC applicable is INR 250,000*18%, which is INR 45,000.Now, number of quarters
of usage that have elapsed between April 2016 to November 2017 are: seven. Hence, there would be a
reduction of 5% per quarter for 7 quarters, that is 35%.Therefore, ITC available would be as under.
Total ITC 45000
Less: Reduction for 7 quarters 15750
Net ITC available 29250

Note that this ITC would be available from the date immediately preceding the date from which the supply becomes
taxable.
Rule 40(2) of CGST RULES, 2017, states that the amount of credit shall be calculated by reducing the input tax @ 5%
for every quarter or part thereof. It shall be calculated from the date of issue of invoice for the capital goods.
CASE-33 X Ltd. purchased a machine for Rs. 100,000 and brought it on 1-8- 2017 and paid 12% IGST. He
availed input tax credit and used the capital goods in his business. On 5-11-2018 he resold it as second-hand
machine for 65,000. Find out the amount of tax payable/ ITC reversible in the above case.
Input Tax 12000
Less: 5% per quarter of usage 3600
Net ITC available 8400
Transaction Value 65000
Tax on Transaction Value 7800
POINT TO BE NOTED-6 quarters have elapsed and therefore 6*5%, that is 30% would be the reduction for
usage
I. Tax on Transaction Value @ GST would be computed and compared to the Net ITC available
II. The higher of the two would be payable for disposal of Capital Goods
III. If the supply is intrastate, it should be payable in two equal parts (4200) to Centre and the concerned
State (that is CGST + SGST).
IV. If it is an interstate supply, Rs. 8,400 is payable as IGST.
V. An invoice has to be issued to the recipient with the details of tax amount.
CASE-34 Mr. B becomes liable to pay tax on 1st August and has obtained registration on 17th August.
He will hence be entitled to take ITC effective 31st July on inputs (Raw Materials/Finished Goods &
Capital Work in Process); except on Capital Goods. It must be noted that if the application is not made
within 30 days, then he will be able to claim ITC effective the date of grant of such registration.
CASE-35 Mr. Z applies for voluntary registration on 1st September and is granted such registration on
9th September. He will hence be entitled to take ITC effective 8th September on inputs (Raw
Material/Work in Process/Finished Goods); except on Capital Goods.

PROBLEM: 45 Fun Pharma Private Limited, a registered supplier is engaged in the manufacture of
Taxable goods. The company provides the following information of GST paid on the purchases
made/input services availed by it during the month of September 2017:
Particulars GST Paid ( ` )
I. Purchase of cabs used for the transportation of its employees 3,30,000
II. Inputs consisting of three lots, out of which first lot was received during the 1,25,000
month
III. Capital Goods (Out of three items, invoice for one item was missing and GST 2,50,000
paid on that item was ` 25,000)
IV. Outdoor catering service availed on Women's day 72,000
Determine the amount of Input Tax Credit available with M/s Fun Pharma Private Limited for the month of
September 2017 by giving necessary explanations for treatment of various items. All the conditions
necessary for availing the Input Tax Credit have been fulfilled.
ANSWER:45
PROBLEM: 46 From the following information provided to you determine how would you utilized
ITC on account of IGST available in the electronic credit ledger.
Particular Amount
(a) Amount of ITC on account of IGST available in the electronic Credit ledger 2,00,000
for the month of January,2018
(b) IGST payable for the month of January,2018 1,46,000
(c) CGST payable for the month of January,2018 36,000
(d) SGST payable for the month of January,2018 70,000
ANSWER:46
PROBLEM: 47 Ankush paints Ltd. Is engaged in the manufacture of paints and varnishes. It
procured the following items during the month of August,2018
S.NO Items GST paid (Rs.)
1 Machine to be used for manufacturing paints 10,00,000
2 Tempo used for the transport of raw material 4,00,000
3 Raw material 12,00,000
4 Snacks purchased for consumption of employees working in the factory 40,000
Determine the amount of ITC available with Ankush paints Ltd, for the month of august by giving necessary
explanation for treatment of various items assuming all the condition necessary for availing the ITC have
been fulfilled.
ANSWER:47

PROBLEM: 48 Ahuja Continental Pvt.Ltd is engaged in manufacture of taxable goods. Compute

the ITC available with Ahuja Continental Pvt.Ltd for the month of November,2018 from the
following particulars:
S.No Inward supplies GST(Rs.) Remark
1 Inputs ‘X’ 4,00,000 Two invoices on which GST payable was Rs.40,000, are
missing
2 Inputs’Y’ 5,00,000 Inputs are to be received in two lots. Only first lat has been
received in November,2018.
3 Plant and 1,80,000 Ahuja Continental pvt. ltd has capitalized the plant and
machinery machinery at full invoice value inclusive of GST as it will
avail depreciation on the full invoice value.
4 Input services 3,00,000 One invoice dated 20.12.2017 on which GST payable was
Rs.1,00,000 has been received in November,2018.
Note : The annual return for the financial year 2017-18 was filed on 15th October,2018.
ANSWER:48
PROBLEM: 49 :SG Ltd. A registered manufacturer engaged in taxable supply of goods procured
the following goods during the month of December,2017. The same has been capitalized in the
books of accounts of SG Ltd. Determine the amount of input tax credit available by giving necessary
explanation for treatment of various items.
Items Input tax
Electrical transformers used in the factory 216000
Moulds and dies used in the factory 26,000
Pollution control equipment used in the factory 234,000
Capital goods purchased on which depreciation has been taken on full value including tax 135,000
thereon.
Capital goods used as parts purchased from supplier who paid tax of Rs. 10000 under
composition scheme and the composite tax has not been collected from SG Ltd.
ANSWER:49
PROBLEM: 50 Determine the amount of input tax credit available to Bosco Ltd. In respect of the
following items procured by them in the month of March, 2018:
Sl. No. Item Input tax paid
1 Input used for the manufacture of the final product 72,000
2 Food and Beverages procured from Beet Caterers for being used in dealers meet 48,000
3 Goods used for providing services during warranty period 12,000
4 Goods used for setting up Machinery being immovable property 90,000
5 Inputs stolen from the Store 13200
ANSWER:50

19. INPUT SERVICE DISTRIBUTOR

A. INPUT SERVICE DISTRIBUTOR- ISD is an office of a business which receives tax invoices for input
services and distributes available ITC to other branch offices of the same business
B. ROLE OF AN INPUT SERVICE DISTRIBUTOR (ISD)

 Companies may have their Head Office at one place and units at other places which may be registered
separately. The Head Office would be procuring certain services which would be for common utilization
of all units across the country. The bills for such expenses would be raised on the Head Office but the
Head Office itself would not be providing any output supply so as to utilize the credit which gets
accumulated on account of such input services.
 Since the common expenditure is meant for the business of all units, it is but natural that the credit of
input services in respect of such common invoices should be apportioned between all the consuming
units. ISD mechanism enables proportionate distribution of credit of input services amongst all the
consuming units. The concept of ISD under GST is a legacy carried over from the service tax regime
 Thus, the concept of ISD is a facility made available to business having a large share of common
expenditure and where billing/payment is done from a centralized location. The mechanism is meant
to simplify the credit taking process for entities and the facility is meant to strengthen the seamless
flow of credit under GST.
C. SEPARATE REGISTRATION FOR AN ISD
 An ISD is compulsorily required to obtain a separate registration as an ISD even though it may be
separately registered. There is no threshold limit for registration for an ISD.
 The other locations may be registered separately.
 Since the services relate to other locations the corresponding credit should be transferred to such
locations (having separate registrations) as the output services are being provided there.
PROBLEM: 51 XYZ Ltd, having its head Office at Mumbai, is registered as ISD. It has three units in
different cities situated in different States namely ‘Mumbai’, ‘Jabalpur’ and ‘Delhi’ which are
operational in the current year/s XYZ Ltd furnishes the following information for the month of July
20XX:
 CGST paid on services used only for Mumbai Unit: ` 3,00,000/-
 IGST, CGST & SGST paid on services used for all units: ` 12,00,000/-
 Total turnover of the units for the previous financial year are as follows: -
Unit Turnover (`)
Total Turnover of three units ` 10,00,00,000
Turnover of Mumbai unit ` 5,00,00,000
Turnover of Jabalpur unit ` 3,00,00,000
Determine the credit to be distributed by XYZ Ltd. to each of its three units.
ANSWER:51

20. PERSONS LIABLE FOR REGISTRATION- SECTION 22

Section 22 of the CGST Act, 2017 specifies the list of persons liable for registration and section 24 of the
CGST Act, 2017 lists categories of persons who are required specifically to take registration even if they are
not covered under section 22 of the Act. Following is a summarized list:
1) Supplier: Supplier of taxable goods or services or both exceeding the specified threshold limit of Rs.
10 lakhs (for special category States) and Rs. 20 lakhs for other states and Union territories
2) Licensee: Every person who is a registered licensee or holds a license under an existing law, on the
day immediately preceding the appointed day i.e 1st July
3) Transferee: Where a business, which is carried by a taxable person is transferred as a going concern
shall be liable to be registered with effect from the date of such transfer or succession
4) Transferee under a scheme: Transfer pursuant to sanction of a scheme or an arrangement for

amalgamation or, as the case may be, demerger of two or more companies pursuant to an order of a High
Court, Tribunal or otherwise, the transferee shall be liable to be registered, with effect from the date on
which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the
High Court or Tribunal
CASE-36 On the basis of the following information, advice Mr. A, whether he is liable for registration
under the GST: (Rs in lacs)
Place of business Taxable Exempted Total Liable for Registration

Turnover Turnover Turnover
Yes/ No
Sikkim (Sikkim comes 8 2 10 No, since his aggregate turnover do
under the ‘Special not cross the threshold limit of Rs 10
Category State) lacs
Gujarat 18 2 20 No, since his aggregate turnover do
not cross the threshold limit of Rs 20
lacs
Delhi 18 3 21 Yes, he is liable for registration since
the turnover limit crosses Rs 20 lacs
Rajasthan 11 2 13 Yes, he is liable for registration in
terms of Section 22(2) of CGST since
(he was previously
he was previously registered under
registered under the
the Service Tax. Irrespective of the
Service Tax)
threshold limit of Rs 20 lacs but can
apply for cancellation of registration
in terms of Rule 24(4).
Punjab (he is 9 3 12 Yes, because the total turnover in
additionally having a all registrations taken under his PAN
GST registration in exceeds Rs. 20 lacs.
Haryana and commands
taxable turnover of Rs.
12 Lakhs).

21. PERSONS NOT LIABLE FOR REGISTRATION – SECTION 23

1) The following persons shall not be liable to registration, namely: ––
a) 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 this Act or under the Integrated Goods and
Services Tax Act;
b) An agriculturist, to the extent of supply of produce out of cultivation of land.
2) The Government may, on the recommendations of the Council, by notification, specify the
category of persons who may be exempted from obtaining registration under this Act.
I. Persons making only reverse charge supplies Persons who are only engaged in making supplies
of taxable goods or services or both, the total tax on which is liable to be paid on reverse charge
basis by the recipient of such goods or services or both under section 9(3) have been exempted
from obtaining registration.
II. Persons making inter-State supplies of taxable services up to ` 20,00,000-The persons making
inter-State supplies of taxable services and having an aggregate turnover, to be computed on all
India basis, not exceeding an amount of ` 20 lakh in a financial year have been exempted from
obtaining compulsory registration. However, the aggregate value of such supplies, to be
computed on all India basis, should not exceed an amount of ` 10 lakh in case of Special Category
States other than Jammu and Kashmir .
III. ` 20 lakhs
CTP interstate supplier of handicraft goods & craftsman products having T/O up to`
IV. Job workers engaged in making interstate supply of services exempt from obtaining
`20 lakhs
registration if T/O upto`
V.
22. COMPULSORY REGISTRATION IN CERTAIN CASES- SECTION 24

Notwithstanding anything contained in sub section (1) of section 22, the following categories of persons
shall be required to be registered under this Act
1) Interstate supplier: An interstate supplier is compulsorily required to get registered under GST
2) Casual Taxable person: A person who occasionally undertakes transactions involving supply of
goods or services or both in the course or furtherance of business, whether as principal, agent or
in any other capacity, in a State or a Union territory where he has no fixed place of business is
termed as a casual taxable person. Such persons if making taxable supply of goods or services or
both comes under the ambit of taxable person
3) Payer of Reverse charge: Persons who are required to pay tax under reverse charge shall get
registered under GST
4) Person who are required to pay tax under Section 9(5) of CGST Act, 2017ie E-Commerce operator
who is required to pay tax on specified services.
5) Non-resident: A non-resident taxable person making taxable supply

6) Deductors of tax at source: Persons who are required to deduct tax under section 51, whether or
not separately registered under this Act
7) Supplier on behalf of another person: Persons who make taxable supply of goods or services or
both on behalf of other taxable persons whether as an agent or otherwise
8) Input Service Distributor: Whether or not separately registered under this Act
9) Supplier through Electronic Commerce Operator: Persons who supply goods or services or both
(other than supplies specified under sub-section (5) of section 9), through such electronic
commerce operator who is required to collect tax at source under section 52
10) Electronic Commerce Operator: Every Electronic Commerce Operator
11) Supplier of online information: 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
12) Any other person: Any other person or class of persons as notified by the Government on
recommendations of the Council
23. PROCEDURE FOR REGISTRATION- SECTION 25

1) Every person who is liable to be registered under section 22 or section 24 shall apply for
registration in every such State or Union territory in which he is so liable within thirty
days from the date on which he becomes liable to registration, in such manner and
subject to such conditions as may be prescribed:
 Provided that a casual taxable person or a non-resident taxable person shall apply for
registration at least five days prior to the commencement of business.
 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.
CASE-37 Sugam Services Ltd. is engaged in taxable supply of services in Madhya

Pradesh. The turnover of Sugam Services Ltd. exceeded ` 20 lakh on 1st November. It is
liable to get registered by 1st December in the State of Madhya Pradesh.
CASE-38 A dealer ‘X’ has two offices – one in Delhi and another in Haryana. In order to
determine whether ‘X’ is liable for registration, turnover of both the offices would be
taken into account and only if the same exceeds ` 20 lakh, X is liable for registration.
CASE-39 Rohan Oils, Punjab, is engaged in supplying machine oil as well as petrol. Supply of petrol is
not leviable to GST, but supply of machine oil is taxable. In order to determine whether Rohan Oils is
liable for registration, turnover of both the supplies – non -taxable as well as taxable - would be taken
into account and if the same exceeds ` 20 lakh, Rohan Oils is liable for registration.
CASE-40 Mohini Enterprises has appointed M/s Best fords& Associates as its agent. All the supplies of
goods made by M/s Best fords& Associates as agent of Mohini Enterprises will also be included in the
aggregate turnover of M/s Best fords& Associates.

2) A person seeking registration under this Act shall be granted a single registration in a
State or Union territory:
 Provided that 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.
3) A person, though not liable to be registered under section 22 or section 24 may get
himself registered voluntarily, and all provisions of this Act, as are applicable to a
registered person, shall apply to such person.
4) 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.
5) 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.
CASE-41 Mohan, a Chartered Accountant, has a registered head office in Delhi. He has also obtained
registration in the State of West Bengal in respect of his newly opened branch office. Mohan shall be
treated as distinct persons in respect of registrations in West Bengal and Delhi.
6) Every person shall have a Permanent Account Number issued under the Income-tax Act, 1961 in
order to be eligible for grant of registration: Provided that a person required to deduct tax under
section 51 may have, in lieu of a Permanent Account Number, a Tax Deduction and Collection
Account Number issued under the said Act in order to be eligible for grant of registration.
7) Notwithstanding anything contained in sub-section (6), a non-resident taxable person may be

granted registration under sub-section (1) on the basis of such other documents as may be
prescribed.
8) Where a person who is liable to be registered under this Act fails to obtain registration, the proper
officer may, without prejudice to any action which may be taken under this Act or under any other
law for the time being in force, proceed to register such person in such manner as may be
prescribed.
9) Notwithstanding anything contained in sub-section (1),––

a) any specialized agency of the United Nations Organization or any Multilateral Financial
Institution and Organization notified under the United Nations (Privileges and Immunities) Act,
1947, Consulate or Embassy of foreign countries; and
b) any other person or class of persons, as may be notified by the Commissioner all be granted a
Unique Identity Number in such manner and for such purposes, including refund of taxes on the
notified supplies of goods or services or both received by them, as may be prescribed.
10) The registration or the Unique Identity Number shall be granted or rejected after due verification in
such manner and within such period as may be prescribed.
11) A certificate of registration shall be issued in such form and with effect from such date as may be
prescribed.

12) A registration or a Unique Identity Number shall be deemed to have been granted after the expiry
of the period prescribed under sub-section (10), if no deficiency has been communicated to the
applicant within that period.
Point to be noted-
a) There are basically four types of Registration,
I. Turnover basis,
II. compulsory registration,
III. voluntary registration and
IV. Suo moto registration.
b) For obtaining registration, PAN is mandatory. PAN based GST identification number is issued to
every registrant.
c) However, in case a person is required to deduct tax under section 51, registration can be obtained
on the basis of TAN, in that case TAN based GST identification number is issued to the registrant.
d) Any specialized agency of the United Nations Organization or any Multilateral Financial Institution
and Organization notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate
or Embassy of foreign countries shall be granted Unique Identity Number(UIN)
24. DEEMED REGISTRATION-SECTION 26

1) The grant of registration or the Unique Identity Number under the State Goods and Services Tax Act
or the Union Territory Goods and Services Tax Act shall be deemed to be a grant of registration or the
Unique Identity Number under this Act subject to the condition that the application for registration or
the Unique Identity Number has not been rejected under this Act within the time specified in sub-
section (10) of section 25.
2) Notwithstanding anything contained in sub-section (10) of section 25, any rejection of application for
registration or the Unique Identity Number under the State Goods and Services Tax Act or the Union
Territory Goods and Services Tax Act shall be deemed to be a rejection of application for registration
under this Act.

25. SPECIAL PROVISIONS RELATING TO CASUAL TAXABLE PERSON AND

NON-RESIDENT TAXABLE PERSON- SECTION 27
1) 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 supplies only after the
issuance of the certificate of registration:
Provided that the proper officer may, on sufficient cause being shown by the said taxable person,
extend the said period of ninety days by a further period not exceeding ninety days.
2) A casual taxable person or a non-resident taxable person shall, at the time of submission of
application for registration under sub-section (1) of section 25, 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:
Provided that where any extension of time is sought under sub-section (1), 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.
3) The amount deposited under sub-section (2) shall be credited to the electronic cash ledger of such
person and shall be utilized in the manner provided under section 49.
4) The validity of the Registration certificate granted to the casual taxable person and non- resident
taxable person shall be for a period specified in application or ninety days from the effective date of
registration which may be extended, at the request of the said taxable person to the proper officer,
for further period not exceeding ninety days at a time.
5) However in case of other registered persons, Registration certificate once granted is permanent
unless surrendered, cancelled, suspended or revoke

26. DIFEERENCE BETWEEN CTP &NRTP
Casual Taxable Person u/s 2(20) Non-resident Taxable Person u/s 2(77)
Definition A person who occasionally undertakes A taxable person who occasionally
transactions involving supply of goods or undertakes transactions involving supply
services or both in the course or furtherance of goods and/or services whether as
of business, whether as principal, agent or in principal or agent or in any other
any other capacity, in a State or a Union capacity but who has no fixed place of
territory where he has no fixed place of business in India.
business.
Meaning Occasionally undertakes transactions Occasionally undertakes transactions

involving supply of goods or services in a involving supply of goods or services but
State or UT where he has no fixed place of has no fixed place of business residence
business. in India.
PAN Has a PAN Do not have a PAN. A non-resident
person, if having PAN may take
registration as a casual taxable person.
Application Same application form for registration as for Separate application form for registration
for normal taxable persons viz GST REG-01 by non-resident taxable person viz GST
Registration REG-10
Business Has to undertake transactions in the course Business test absent in the definition
or furtherance of business
Forms Has to file normal GSTR-1, GSTR-2 and GSTR- Has to file a separate simplified return in
3 returns the format GSTR-5
ITC Can claim ITC of all inward supplies Can get ITC only in respect of import of
goods and /or services.

27. AMENDMENT OF REGISTRATION- SECTION 28

1) Every registered person and a person to whom a Unique Identity Number has been assigned shall
inform the proper officer of any changes in the information furnished at the time of registration or
subsequent thereto, in such form and manner and within such period as may be prescribed.
2) The proper officer may, on the basis of information furnished under sub-section (1) or as ascertained
by him, approve or reject amendments in the registration particulars in such manner and within such
period as may be prescribed:
 Provided that approval of the proper officer shall not be required in respect of amendment of such
particulars as may be prescribed:
 Provided further that the proper officer shall not reject the application for amendment in the
registration particulars without giving the person an opportunity of being heard.
3) Any rejection or approval of amendments under the State Goods and Services Tax Act or the Union
Territory Goods and Services Tax Act, as the case may be, shall be deemed to be a rejection or
approval under this Act.
POINT TO BE NOTED-
a) It may be noted that permission of the proper officer for making amendments will be required for
only certain core fields of information, whereas for the other fields, the registrant can himself carry
out the amendments.
b) Where the change in constitution of business results in change of PAN, fresh registration is to be
obtained.
28. CANCELLATION OF REGISTRATION- SECTION 29

1) 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,––
a) 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
b) there is any change in the constitution of the business; or
c) The taxable person, other than the person registered under sub-section (3) of section 25, is no
longer liable to be registered under section 22 or section 24.
2) 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 tax under section 10 has not furnished returns for three consecutive tax periods; or
c) any registered person, other than a person specified in clause (b), has not furnished returns for a
continuous period of six months; or
d) any person who has taken voluntary registration under sub-section (3) of section 25 has not
commenced business within six months from the date of registration; or

e) registration has been obtained by means of fraud, willful misstatement or suppression of facts:
 Provided that the proper officer shall not cancel the registration without giving the person an
opportunity of being heard.
3) 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 there
under 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.
4) The cancellation of registration under the State Goods and Services Tax Act or the Union Territory
Goods and Services Tax Act, as the case may be, shall be deemed to be a cancellation of registration
under this Act.
5) Every registered person whose registration is cancelled shall pay an amount, by way of debit in the
electronic credit ledger or electronic 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. Provided that in case of capital goods or plant and machinery, the taxable person shall pay
an amount equal to the input tax credit taken on the said capital goods or plant and machinery,
reduced by such percentage points as may be prescribed or the tax on the transaction value of such
capital goods or plant and machinery under section 15, whichever is higher.
6) The amount payable under sub-section (5) shall be calculated in such manner as may be prescribed.
29. REVOCATION OF CANCELLATION OF REGISTRATION-SECTION 30

1) 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 thirty days from the date of service of
the cancellation order.
2) 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:
 Provided that the application for revocation of cancellation of registration shall not be rejected
unless the applicant has been given an opportunity of being heard.
3) The revocation of cancellation of registration under the State Goods and Services Tax Act or the Union
Territory Goods and Services Tax Act, as the case may be, shall be deemed to be a revocation of
cancellation of registration under this Act.
TION SCHEM

30. PLACE OF SUPPLY

A. Place of Supply of Goods in GST:-While determining the levy of taxes based on Place of Supply, two
things are considered namely:
Location of Supplier: It is the registered place of business of the supplier.
Place of Supply: It is the registered place of business of the recipient
B. Where the location of the supplier and the place of supply of goods or services are in-
I. two different States or
II. two different Union Territories or
III. a State and a Union territory,
It is treated as inter-State supply of goods or services respectively.
C. Where the location of the supplier and the place of supply of goods or services are in the same
State/Union territory, it is treated as intra-State supply of goods or services respectively.
CASE-42 X Ltd., is a supplier of craft products, having the registered office in Chennai, Tamil Nadu. It
supplies goods to schools in Madurai, Tamil Nadu. Here since the supplier as well as the recipient is
located in the same State i.e Tamil Nadu, it will be counted as ‘Intra-State Supply of Goods’ and hence
SGST & CGST will be levied.
CASE-43 X Ltd., located in Mumbai, Maharashtra receives order from M/s Y Ltd. located in
Ahmedabad, Gujarat for supply of one machine. Find the place of supply and applicable GST?
Location of Supplier: Mumbai (Maharashtra).
Place of Supply: Ahmedabad (Gujarat) Since, the movement of goods terminate at Ahmedabad.
Applicable GST = IGST
31. INTER-STATE SUPPLY –SECTION 7

1) Subject to the provisions of section 10, supply of goods, where the location of the supplier and the
place of supply are in:
a) two different States;
b) two different Union territories; or
c) a State and a Union territory,
shall be treated as a supply of goods in the course of inter-State trade or commerce.
Cases Location of supplier Place of supply Tax to be levied
Case 1 Goa Madhya Pradesh IGST
Case 2 Diu & Daman Delhi IGST
Case 3 Punjab Chandigarh IGST
2) Supply of goods imported into the territory of India, till they cross the customs frontiers of India, shall
be treated to be a supply of goods in the course of inter-State trade or commerce.

CASE-44 Mr. A is importing machine from the USA for his business. While the machine was in transit,
Mr. A decides not to continue his business and sells off the machinery to Mr. B. In such case, Mr. A
will have to charge IGST to Mr. B
3) Subject to the provisions of section 12, supply of services, where the location of the supplier and the
place of supply
a) two different States;
b) two different Union territories; or
c) a State and a Union territory,
Shall be treated as a supply of services in the course of inter-State trade or commerce.
4) Supply of services imported into the territory of India shall be treated to be a supply of services in the
course inter-State trade or commerce.
5) Supply of goods or services or both,

a) when the supplier is located in India and the place of supply is outside India;
b) to or by a Special Economic Zone developer or a Special Economic Zone unit; or
c) In the taxable territory, not being an intra-State supply and not covered elsewhere in this section,
shall be treated to be a supply of goods or services or both in the course of inter-State trade or
commerce.
Location of supplier Place of supply Tax to be levied

Mumbai Canada IGST
SEZ Developer SEZ Unit IGST
32. INTRA - STATE SUPPLY [SECTION 8]

1) Subject to the provisions of section 10, supply of goods where the location of the supplier and the place
of supply of goods are in the same State or same Union territory shall be treated as intra-State supply:
Provided that the following supply of goods shall not be treated as intra-State supply, namely:
I. supply of goods to or by a Special Economic Zone developer or a Special Economic Zone unit;
II. goods imported into the territory of India till they cross the customs frontiers of India; or
III. Supplies made to a tourist referred to in section 15.
Cases Location of supplier Place of supply Tax to be levied

Case 1. Maharashtra Maharashtra CGST + SGST of Maharashtra
Case 2. Delhi Delhi CGST + SGST of Delhi
Case 3. Chandigarh Chandigarh CGST + UTGST of Chandigarh
2) Subject to the provisions of section 12, supply of services where the location of the supplier and the
place of supply of services are in the same State or same Union territory shall be treated as intra-State
supply:
Provided that the intra-State supply of services shall not include supply of services to or by a Special
Economic Zone developer or a Special Economic Zone unit.

Explanation- 1. For the purposes of this Act, where a person has,

I. an establishment in India and any other establishment outside India;
II. an establishment in a State or Union territory and any other establishment outside that State;
or
III. An establishment in a State or Union territory and any other establishment being a business
vertical registered within that State or Union territory, and then such establishments shall be
treated as establishments of distinct persons.
Explanation- 2. A person carrying on a business through a branch or an agency or a representational

office in any territory shall be treated as having an establishment in that territory.
33. SUPPLIES IN TERRITORIAL WATERS- SECTION 9

Notwithstanding anything contained in this Act,
1) where the location of the supplier is in the territorial waters, the location of such supplier; or
2) where the place of supply is in the territorial waters, the place of supply,
Shall, for the purposes of this Act, be deemed to be in the coastal State or Union territory where the
nearest point of the appropriate baseline is located.
CASE-45
Location of supply of Place of supply of Nature of Supply Relevant Section of IGST
Goods or Services Goods or Services
Rajasthan Gujarat Inter-State Supply Section 7(1)(a) & 7(3)(a)
New Delhi Chandigarh Inter-State Supply Section 7(1)(b) & 7(3)(b)
Maharashtra New Delhi Inter-State Supply Section 7(1)(c) & 7(3)(c)
China Chennai Inter-State Supply Section 7(2) & 7(4)
India UK Inter-State Supply Section 7(5)(a)
SEZD /SEZ SEZD /SEZ Inter-State Supply Section 7(5)(b)
Rajasthan Rajasthan Intra-State Supply Section 8(1)
New Delhi New Delhi Intra-State Supply Section 8(1)

34. PLACE OF SUPPLY OF GOODS OTHER THAN SUPPLY OF GOODS

IMPORTED INTO, OR EXPORTED FROM INDIA-SECTION 10
Section 10 prescribes the provisions for determining the place of supply of goods in domestic
transactions i.e., within India.
Sub-section (1) of section 10 sets out five rules to provide the place of supply of goods in the
following specific situations:
 Supply involving movement of goods- Sec 10(1) (a)


 Goods delivered on bill to ship to model Sec 10(1) (b)


 Supply not involving movement of goods Sec 10(1) ( c )


 Goods assembled/installed at site Sec 10(1) (d)


 Goods supplied on board a conveyance Sec 10(1) (e )



a) Supply involves movement of goods [Section 10(1)(a) of the IGST Act, 2017]:
Nature of supply Place of supply of goods
Supply involves movement of goods whether by Location of the goods at the time at which the movement
supplier or recipient or by any other person. of goods terminates for delivery to the recipient.
b) GOODS DELIVERED ON BILL TO SHIP TO MODEL - In simple words, where goods are
delivered by the supplier to the recipient at the instruction of a third person, the place of supply is
the principal place of business of such third person and not of the actual recipient.
c) SUPPLY DOES NOT INVOLVE MOVEMENT OF GOODS [SECTION 10(1)(C) OF THE IGST ACT, 2017]:
Where the supply does not involve movement of Location of such goods at the time of the delivery to
goods, whether by the supplier or the recipient. the recipient
(This place of supply is irrespective of the location of
the buyer and seller)
d) Goods are assembled or installed at Site [Sec 10(1)(d) of IGST, 2017]

Where the goods are assembled or installed at site. Place of such installation or assembly
e) Goods are supplied on board a conveyance [Section 10(1)(e) of IGST Act, 2017]:
Where the goods are supplied on board a conveyance Location at which such goods are taken on board.
including a vessel, an aircraft, a train or a motor vehicle.
 SECTION 10 (2) Where the place of supply of goods cannot be determined, the place
of supply shall be determined in such manner as may be prescribed-

35. PLACE OF SUPPLY OF GOODS IMPORTED INTO, OR EXPORTED FROM

INDIA-SECTION 11
 Export of goods [Section 11(a)]- The place of supply in case of export of goods is the place
where they have been exported i.e., the destination outside India
POINT TO BE NOTED- Section 2(5) defines export of goods to mean taking goods out of India to a
place outside India. Under the GST Law, export of goods has been treated as:
a. inter-State supply
b. ‘zero rated supply’ i.e., the goods or services exported shall be relieved of GST levied upon
them either at the input stage or at the final product stage.
CASE-46 Ms. Rajendra (New Delhi) exports spices from New Delhi to London, UK. The place of supply
is London
 Import of goods [Section 11(b)]- if the goods have been imported in India the place of
supply of goods is the place where the importer is located.
POINT TO BE NOTED - The import of goods has been defined in section 2(10) of the IGST Act as
bringing goods into India from a place outside India. All imports are deemed as inter-State supplies and
accordingly IGST is levied in addition to the applicable custom duties.
CASE-47 -Ms. M imports electric kettles from China for her Kitchen Store in Noida, Uttar Pradesh.
Ms. M is registered in Uttar Pradesh. The place of supply is Noida

36. PLACE OF SUPPLY OF SERVICES WHERE LOCATION OF SUPPLIER AND

RECIPIENT IS IN INDIA- SECTION 12
1) The provisions of this section shall apply to determine the place of supply of services where the
location of supplier of services and the location of the recipient of services is in India.
2) GENERAL RULE- The rule is applicable only if the supply of service does not fall in any of the specific
cases provided under section 12. The place of supply of services, except the services specified in sub-
sections (3) to (14),—
STATUS PLACE OF SUPPLY
a) RECIPIENT IS Registered person Location of recipient
b) RECIPIENT IS Unregistered Address on record exists Otherwise
person
Location of recipient Location of supplier
CASE-48 A (a Chartered Accountant registered in New Delhi) makes a supply of service to his client
Mr. B of Noida, Uttar Pradesh (registered in Uttar Pradesh). In this cases, since the supply is made to a
registered person, the place of supply is the location of the registered recipient i.e., Noida.
CASE-49 Mr. A, a barber in Gurugram, Haryana, (registered in Haryana) provides hair cutting services
to his client Mr. C who is a resident of New Delhi but is not registered under GST. If the address of Mr.
C is available in the records of Mr. A, location of Mr. C i.e., New Delhi will be the place of supply, else
the location of Mr. A, which is Gurugram, will be the place of supply
3) Services in relation to an immovable property/boat/vessel [Section 12(3)]

 Place of supply of services directly in relation to an immovable property [Sec. 12(3)(a) of IGST Act, 2017]:
S. No. Nature of service Place of supply of service
1 Architects Any  Immovable property
2 Interior decorator services located or intended to be
ancillary located India:
3 Surveyors
4 Engineers and other related exports or estate agents to these • Location of Immovable
services
property
5 Any service provided by way of grant of rights to use immovable Sec.
 Outside
property 12(3)(d) India:
6 for carrying out or co-ordination of construction work • Location of the recipient.
 Place of supply of services by way of lodging accommodation by a [Sec. 12(3)(b) of IGST Act, 2017]:
1 Hotel any Property located or intended to
2 Inn services be located in India:
3 Guest house ancillary • Location of Immovable
to these property or boat or vessel.

4 Home stay services
Outside India:
5 Club or campsite by whatever name called and including Sec.
a house boat or any other vessel 12(3)(d) • Location of the recipient.

Place of supply of services by way of accommodation in any immovable property for organizing [Sec. 12(3)(c) of IGST Act,
201
1 Any marriage or reception or matters any services  Property located or intended to be
related thereto, ancillary located in India:
2 Official, social, cultural, religious or business to these • Location of immovable property.
services
function including services provided in Sec.  Outside India:
relation to such function at such property 12(3)(d)
• Location of the recipient.
Situations Place of supply Location of property Place of supply Location of property

- In India - Outside India
a) Construction Location of such construction Location of recipient
b) Lodging & boarding Location of hotel Location of recipient
c) Accommodation for function Location of immovable property Location of recipient
4) Restaurant service, personal grooming/fitness/ beauty and health services [Section

12(4)]
S. NO. NATURE OF SERVICE PLACE OF SUPPLY OF SERVICE
1 Restaurant Location where the services are actually
2 Catering services Performed.
3 Personal grooming
4 Fitness services
5 Beauty treatment services
6 Health services including cosmetic and plastic surgery
5) Training and performance appraisal services [Section 12(5)

1 Services in relation to training and  Provided to a registered person:
Performance appraisal.
Location of recipient of Service
 Provided to a un-registered person:
Location where the services are actually performed.
6) Services by way of admission to events/amusement park/other places [Section 12(6)]

1 Cultural Services Where the event is
2 Artistic ancillary actually held or
thereto
3 Sporting where the park or such
4 Scientific other place is located.
5 Educational
6 Entertainment event or Amusement part or any other place.

7) Organization of events [Section 12(7)]

1 Cultural Services ancil  Provided to a registered person:
Location of recipient of Service
2 Artistic lary thereto or
assigning of  Provided to an un-registered
3 Sporting person:
sponsorship
4 Scientific to Location where the event is
such events.
actually held and
5 Educational
 if the event is held outside India,
6 Entertainment event including supply of services
the place of supply shall be the
in relation to a conference, fair, exhibition,
location of the recipient.
celebration or similar events
6) Transportation of goods including mails [Section 12(8)] The place of supply of services by
way of transportation of goods, including by mail or courier to,-
a) a registered person, shall be the location of such person;
b) a person other than a registered person, shall be the location at which such goods are handed over
for their transportation.
7) Passenger transportation service [Section 12(9)] The place of supply of passenger

transportation service to,-
a) a registered person, shall be the location of such person;
b) a person other than a registered person, shall be the place where the passenger embarks on the
conveyance for a continuous journey:
Provided that where the right to passage is given for future use and the point of embarkation is not
known at the time of issue of right to passage, the place of supply of such service shall be
determined in accordance with the provisions of sub-section (2).
Explanation: For the purposes of this sub-section, the return journey shall be treated as a separate
journey, even if the right to passage for onward and return journey is issued at the same time.
8) Service supplied on board a conveyance [Section 12(10)]

The place of supply of services on board a conveyance, including a vessel, an aircraft, a train or a
motor vehicle, shall be the location of the first scheduled point of departure of that conveyance for
the journey.
9) Telecommunication service [Section 12(11)]
POS for
Telecommunication Services
Fixed Line Post Paid Pre Paid Pre paid sold

through internet
Location where the Billing Address Location where the

line is prepaid voucher is
installed sold Billing Address

10) Financial and stock broking services [Section 12(12)] The place of supply of banking and
other financial services, including stock broking services to any person shall be the location of the
recipient of services on the records of the supplier of services:
Provided that if the location of recipient of services is not on the records of the supplier, the place of
supply shall be the location of the supplier of services
There can be a scenario where there would be multiple addresses of one person. In such case, in the
opinion of the authors, either the latest address available or address as per KYC should be taken as
address on record.
11) Insurance services [Section 12(13)] The place of supply of insurance services shall,
a) To a registered person, be the location of such person;
b) To a person other than a registered person, be the location of the recipient of services on the
records of the supplier of services.
12) Advertisement service to the Government [Section 12(14)] Advertisement service to the
Central Government/State Government/ Statutory body/ Local authority meant for the State/Union
Territory identified in contract or agreement - PLACE OF SUPPLY -Each of such States/ Union
territories wherethe advertisement is broadcasted/run /played/dissemination.
The value of such supplies is in proportion to the services provided by way of dissemination in the
respective States/Union territories determined in terms of the contract or agreement entered into in
this regard. However, in the absence of a contract or agreement between the supplier and recipient
of services, the proportionate value of advertisement services attributable to different States/Union
territories will be computed in accordance with rule 3 of IGST Rules, 2017. The provisions of the said
rule are tabulated below:

37. PLACE OF SUPPLY OF SERVICES WHERE LOCATION OF SUPPLIER OR

LOCATION OF RECIPIENT IS OUTSIDE INDIA- SECTION 13
1) Section 13 of IGST Act, 2017 deals with place of supply of service the parties is outside
India
2) Section 13(2) General: Location of recipient or supplier, if location of supplier is not available
3) Section 13(3) Specific cases: location of actual performance
4) Section 13(4) Immovable Property: location of such property
5) Section 13(5) Admission to/organization of events etc: location of event
6) Section 13(6) Multi location: location in Taxable territory
7) Section 13(7) Multi location & more than one state/UT: proportional to value in each
state/UT
8) Section 13(8) Banking, intermediary and hiring of means of transport: location of supplier
9) Section 13(9) Goods transport other than mail/courier: destination of goods
10) Section 13(10) Passenger transport: location of embarkment
11) Section 13(11) services on board a conveyance: first scheduled point of departure
12) Section 13 (12) on line info, database etc: location of recipient

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GOODS & SERVICE TAX - ( CS-EXECUTIVE) Page 1

NEW & OLD SYLLABUS

SALEEM QURAISHEE Mo: 9175664444 INSPIRE ACADEMY-8888881719

1. REASONS FOR IMPLEMENTATION OF A NEW INDIRECT TAX REGIME:

2. GOODS & SERVICE TAX-

SALEEM QURAISHEE Mo: 9175664444 INSPIRE ACADEMY-8888881719

a) Sale within the state (known as Intrastate Supply)

 two different States or

SALEEM QURAISHEE Mo: 9175664444 INSPIRE ACADEMY-8888881719

3. FRAME WORK OF GOODS AND SERVICE TAX-

LAW PASSESD BY PURPOSE

SALEEM QURAISHEE Mo: 9175664444 INSPIRE ACADEMY-8888881719

3) Classification of goods and services-

B. SAC for goods

THE FUNCTIONS OF THE GSTN INCLUDE:

SALEEM QURAISHEE Mo: 9175664444 INSPIRE ACADEMY-8888881719

6) GST COUNCIL- (ARTICLE 279A)

SALEEM QURAISHEE Mo: 9175664444 INSPIRE ACADEMY-8888881719

4. LEVY AND COLLECTION OF GST-

S.NO. SITUATIONS PERSON LIABLE TO PAY TAX

1 If ECO is located in taxable ELECTRONIC COMMERCE OPERATOR (ECO)

2 If ECO does not have physical PERSON REPRESENTING THE ECO

SALEEM QURAISHEE Mo: 9175664444 INSPIRE ACADEMY-8888881719

S. No. Section 9 of CGST ACT Section 5 of IGST ACT, Remark

2 Section 9 (2) Section 5 (2) Same

5. TAXES WHICH HAVE BEEN SUBSUMED UNDER GST

 State taxes that would be subsumed under the GST are:

SALEEM QURAISHEE Mo: 9175664444 INSPIRE ACADEMY-8888881719

SUPPLY” UNDER GST CAN BE DIVIDED INTO FOLLOWING PARTS;

1) SUPPLY FOR CONSIDERATION IN COURSE OF BUSINESS- SECTION 7(1)(a)

2) Import of services for a consideration – Section 7(1)(b)

3) Supply without consideration- Section 7(1)(c ) read with Schedule I

4) Activities or TRANSACTIONS specified in Schedule II (to be treated as supply of goods or supply

7) Section 8 Composite and Mixed supply.

SALEEM QURAISHEE Mo: 9175664444 INSPIRE ACADEMY-8888881719

1) SUPPLY FOR CONSIDERATION IN COURSE OF BUSINESS- SECTION 7(1)(a)

SALEEM QURAISHEE Mo: 9175664444 INSPIRE ACADEMY-8888881719

3) SUPPLY WITHOUT CONSIDERATION- SECTION 7(1)( c )

SALEEM QURAISHEE Mo: 9175664444 INSPIRE ACADEMY-8888881719

SALEEM QURAISHEE Mo: 9175664444 INSPIRE ACADEMY-8888881719

Nature of Service Consideration Business Test

a) Import of service Necessarily Required Not required

b) Import of services by a taxable Not required Necessarily Required

SALEEM QURAISHEE Mo: 9175664444 INSPIRE ACADEMY-8888881719

2. LAND AND BUILDING-

3. TREATMENT OR PROCESS-Any treatment or process which is applied to another person's goods is a

4. TRANSFER OF BUSINESS ASSETS-

5. SUPPLY OF SERVICES- The following shall be treated as supply of service, namely:

d) Development, design, programming, customization, adaptation, up gradation, enhancement,

e) Agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do

SALEEM QURAISHEE Mo: 9175664444 INSPIRE ACADEMY-8888881719

6. Composite supply deemed to be service-

SALEEM QURAISHEE Mo: 9175664444 INSPIRE ACADEMY-8888881719

6) SUPPLY NEGATIVE LIST-SECTION 7(2)-

S . Provision Analysis with examples

2 Services by any court or Tribunal established under any

3 (a) The functions performed by the Members of Example:

4 Services of funeral, burial, crematorium or mortuary Not liable for tax.

 Activities/transactions notified by the Government –SEC 7(2)(b)

SALEEM QURAISHEE Mo: 9175664444 INSPIRE ACADEMY-8888881719

SALEEM QURAISHEE Mo: 9175664444 INSPIRE ACADEMY-8888881719

SALEEM QURAISHEE Mo: 9175664444 INSPIRE ACADEMY-8888881719