GST Important definitions

Goods And Services

Tax

Important definitions
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 GST Important definitions

Goods and services tax –Article 366(12A)-

Means any tax on supply of goods, or services or both except taxes on

the supply of the alcoholic liquor for human consumption.

Goods [Sec. 2(52) of CGST Act]:

 Means every kind of movable property

 other than money and securities
 but includes
 actionable claim,
 Growing crops, grass and things attached to or forming part of
the land which are agreed to be severed before supply or under a
contract of supply.

Actionable claim: (Section 2(1) of CGST Act)

 Means a claim to any debt, other than a debt secured by mortgage
of immovable property or by hypothecation or pledge of movable
property, (Transfer of Property Act, 1882)
 or to any beneficial interest in movable property not in the
possession, either actual or constructive, of the claimant

GST for actionable claims is only applicable to goods not for services.

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 GST Important definitions

Services: (Section 2(102) of CGST Act)

 Means anything other than goods, money and securities

 But includes activities relating to the use of money or its
conversion by cash or by any other mode, from one form,
currency or denomination, to another form, currency or
denomination for which a separate consideration is charged.
 Services include facilitating or arranging transactions in
securities.

“Person” includes—(Section 2(84) of CGST Act)

(a) an individual;
(b) a Hindu Undivided Family;
(c) a company;
(d) a firm;
(e) a Limited Liability Partnership;
(f) an association of persons or a body of individuals, whether
incorporated or not, in India or outside India;
(g) any corporation established by or under any Central Act, State Act
or Provincial Act or a Government company as defined in clause (45)
of section 2 of the Companies Act, 2013;
(h) any body corporate incorporated by or under the laws of a country
outside India;
(i) a co-operative society registered under any law relating to co-
operative societies;

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(j) A local authority;

(k) Central Government or a State Government;
(l) Society as defined under the Societies Registration Act, 1860;
(m) Trust; and
(n) Every artificial juridical person, not falling within any of the above;

Money: [Section 2(75) of CGST Act]

 Indian legal tender or any foreign currency,
 cheque, promissory note,
 bill of exchange, letter of credit
 Draft
 Pay order
 Traveller cheque
 Money order
 Postal or electronic remittance
 Commercial paper and certificate of deposit
 Any other instrument recognized by the Reserve Bank of India
when used as a consideration to settle an obligation or exchange
with Indian legal tender of another denomination

but shall not include any currency that is held for its numismatic
value.

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Business- (Sec 2(17) of CGST Act) includes

 Any trade, commerce, manufacture, profession, vocation, adventure,

wager or any other similar activity, whether or not it is for a pecuniary
benefit;
 Any activity or transaction in connection with or incidental or ancillary
to (a) above
 Any activity or transaction in the nature of(a) above, whether or not
there is volume, frequency, continuity or regularity of such transaction;
 Supply or acquisition of goods including capital assets and services in
connection with commencement or closure of business;
 Provision by a club, association, society, or any such body (for a
subscription or any other consideration) of the facilities or benefits to
its members, as the case may be;
 Admission, for a consideration, of persons to any premises; and
 Services supplied by a person as the holder of an office which has been
accepted by him in the course or furtherance of his trade, profession or
vocation;
 Services provided by a race club by way of totalisator or a licence to
bookmaker in such club;
 Any activity or transaction undertaken by the Central Government, a
State Government or any local authority in which they are engaged as
public authorities;

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 GST Important definitions

Supplier :(Section 2(105) of CGST Act)

 Person supplying goods or services
 Agent acting such on behalf of supplier

Recipient : Sec 2(93) of CGST Act

 Where a consideration is payable for the supply of goods or services or
both, the person who is liable to pay that consideration
 Where no consideration is payable for the supply of goods, the person
to whom the goods are delivered or made available, or to whom
possession or use of the goods is given or made available, and
 Where no consideration is payable for the supply of a service, the
person to whom the service is rendered
 Agent acting such on behalf of recipient.

Agent- Section 2(5) of CGST Act

Means a person, including a factor, broker, commission agent, arhatia,
del credere agent, an Auctioner or any other mercantile agent.

Aggregate turnover – Section 2(6) of CGST Act

o means the aggregate value of

o all taxable supplies,
o exempt supplies (Nil rated, exempted and non-GST supply)
o exports of goods or services or both and (Zero rated Suply)
o inter-State supplies of persons having the same Permanent
Account Number, to be computed on all India basis

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o but excludes central tax, State tax, Union territory tax, integrated
tax and cess.
o excluding the value of inward supplies on which tax is payable
by a person on reverse charge basis

Formula for calculation of Aggregate Turnover:

Value of all (taxable supplies + exempted supplies + Nil Rated supplies +
Zero rated supplies + Non GST supplies) – (Taxes & Compensation Cess
under GST Act + inwards supplies + supplies under reverse charge) of a
person having the same PAN (Permanent Account Number) across all his
business entities in India.

Question

Mr. A living in Delhi is a trader of goods. On the same PAN, he has a branch
in Kerala. The detail of his sale (excluding GST) for the financial year 2020-
21 is as follows:-
 Sale of Taxable Goods from Delhi is Rs. 10 Lakhs
 Sale of Goods from Delhi to Kerala Branch is Rs. 5 Lakhs
 Sale of Exempted Goods from Kerala is Rs. 25 Lakhs
 Export of Goods from Delhi is Rs. 4 Lakhs
 Sale of Non GST Goods from Kerala is Rs. 1 Lakh
 Total GST on above sale is Rs. 2 Lakhs
 Inward supplies liable to reverse charge is Rs. 1.5 Lakhs

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Answer
In this Aggregate Turnover is Rs. 45 Lakhs (10+5+25+4+1)

Family: means, — (Section 2(49) of CGST Act)

 the spouse and children of the person, and

 the parents, grand-parents, brothers and sisters of the person if they are

wholly or mainly dependent on the said person.

State - Section 2(103) of CGST Act

 State include a Union territory with Legislature

Related Person – (explanation to sec 15) Persons including legal person are

deemed as related if

 Officers or directors of one another’s business

 Legally recognized partners

 Employer and employee

 Any person directly or indirectly owns, controls or holds 25% or

more of the outstanding voting stock/ shares of both of them.

 One of them directly or indirectly controls the other.

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 Both of them are directly or indirectly control or control by a third

person.

 Members of the same family.

 One of them is the sole agent/sole distributor/sole concessionaire of

the other.

Distinct persons- [Section 25(4) of the CGST Act]

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

Where a person having one registered establishment in a State/UT

has another establishment in a different State/UT [not necessarily
registered], these establishments are considered as establishments
of distinct persons. (Sec 25 (5) of the CGST Act)

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.

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India - Section 2(56) of CGST Act

Means the territory of India as referred to in article 1 of the

constitution, its territorial waters, seabed and subsoil underlying such

waters, continental shelf, exclusive economic zone or any other

maritime zone and the air space above its territory and territorial

waters.

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