Additions to versions IDT Handwritten Book

of
Supply Under Gst
Perquisites provided in terms of contractual agreement
to employee Not liable to Gse Isch II
Eg Rent free accommodation company car medicalfacility etc

Clarification regarding liquidated damages compensation

and
penalty arising out of breach of contract
or

other provisions law

of

in Sch I
Treated
as supply
service
of
t t t
Eg Non compete Eg Shopkeeper Industry agrees
to install zero there
agreements allowing Hawker

I
permission builder no
legal contract
monthly payment
Society tolerating requirement t in
express implied

against loudspeakers against a sum

compensation from tr compensation gg
neighbours

Tax some transactions in this

ability of regard
Al Compensation payable to
Liquidity Damages aggrieved
breach
party for of contract
 Where amount is to for injury
paid only compensate
loss or damage suffered by aggrieved party there is
no and hence not taxable
agreement by aggrieved
Examples of such cases are:

(1) damages resulting from damage to property, negligence, piracy, unauthorized use of trade name, copyright

(2) penalty stipulated in a contract for delayed construction of houses

(3) forfeiture of earnest money by a seller in case of breach of ‘an agreement to sell’ an immovable property by the buyer or by Government or local

authority in the event of a successful bidder failing to act after winning the bid, for allotment of natural resources.

following are supply Chareagble

On the contrary, consider the following examples:
Principal supply Rate
(1) A contract may provide that payment by the recipient of goods or services shall be made before a certain date and failure to make payment by the

due date shall attract late fee or penalty.

(2) A contract for transport of passengers may stipulate that the ticket amount shall be partly or wholly forfeited if the passenger does not show up.

(3) A contract for package tour may stipulate forfeiture of security deposit in the event of cancellation of tour by the customer.

(4) A contract for lease of movable or immovable property may stipulate that the lessee shall not terminate the lease before a certain period and if he

does so he will have to pay certain amount as early termination fee or penalty.

(5) Some banks similarly charge pre- payment penalty if the borrower wishes to repay the loan before the maturity of the loan period.

B Cheque Dishonor fine Penalty

Not taxable no contract Supplier wants to
receive payment there is no
implied express willingness

of supplier

k Penalty imposed for violation laws Not taxable

of
Eg Traffic Pollution violation

D Forfeiture or bond amount

of salary payment of
in the event
of employee leaving employment
before minimum agreed period
 Not taxable C imposed to discourage non serious
employees also the employee does not get anything
in return such amount
against payment of
El Late Payment surcharge fees charged the
by
Taxable same rate as Principal
supplier of
supply Eg Late payment fees for water bill

F Fixed Charges for power

Minimum amount even if O units
payable electricity
consumed Not taxable as is exempt
electricity
from Gst
9 Cancellation Charges
Amount forfeited in the case of non-refundable ticket for air travel or security deposit or earnest money forfeited in case of

the customer failing to avail the travel, tour operator or hotel accommodation service or such other intended supplies

Chareagble to Gse same rate

of Principal supply

Forfeiture of earnest money by a seller in case of breach of ‘an agreement to sell’ an immovable property by the buyer or

such forfeiture by Government or local authority in the event of a successful bidder failing to act after winning the bid for

allotment of natural resources, is a mere flow of money Not

Chareagble
to 95

Charge of Gst
Issue Service provided BY Non
Body Corporate
To

Body Corporate for passenger transport service is

chargeable under RCM

cartyrpassengers
There is Renting of motor vehicle designed to
a
distinction
between service
of transportation of passengers RCM X
Eg Ren shall be levid when a hires a bus
company
on rent for transportation of employees NOT
when the buys ticket in a bus
company

Exemptions
Serving of food to Anganwadi pre school covered by
a

exemption whether sponsored by Gout or through

entry
donation from corporates

Access to road bridge on

payment tou
of annuity
is exempt not the construction Road services
of
Hence 957 not exempt on
def red payment or
Roads
annuity paid for
construction
of
Applicability Gse on wheat into flour or
of milling of
paddy into rice for Distribution state Govt under
by
Public Dist system PDS
PDS is covered under Article 2436 constitution and
of
hence exemption would depend on case to case basis
whether the in composite milling
goods supply of
fortification exceed 251 of value or not

Additional amount collected at Toll Plaza for not

having
Fastag is also exempt

Fees charged
for entrance or the fees charged for
issuance
of eligibility certificate for admission for
or

educational
issuance
of migration certificate by
institutions Exempt
 Gst exempt for services associated with transit cargo
both Edm Nepal and Bhutan
Also movement containers from Nepal Bhutan
of empty
after delivery is associated with transit
of goods
cargo and i
exempt

Gse on sanitation conservancy service supplied to

and other central state Govt Depts
Army
1
If not related to 243W 2439 Not
exempt

Transport from Minerals

pit head to
of mining railway
siding benefication plant etc by vehicles deployed
with Driver for a specific duration of time
1
These are not transportation services It is
renting
services vehicle with hence
of operator
NOT exempt

Location charges Preferential Location Charges

or
collected in addition to Lease premium
for long
term lease shall have same treatment as the

upfront amount charged for lease

Payment honorarium to Guest Anchors Taxable

of
Clarification regarding applicability of GST on sale of land after levelling, laying down of drainage lines etc.

Land may be sold either as it is or after some development such as levelling, laying down of drainage lines, water lines,

electricity lines, etc, it is covered by Para 5 of Schedule III and accordingly, does not attract GST.
However, it may be noted that any service provided for development of land, like levelling, laying of drainage lines (as may be

received by developers) shall attract GST at applicable rate for such services.

Clarification regarding hiring of vehicles by firms for transportation of their employees to and from work

exemption would apply to passenger transportation services by non-air conditioned contract carriages where transportation

takes place over pre-determined route on a pre-determined schedule. The exemption shall not be applicable where contract

carriage is hired for a period of time, during which the contract carriage is at the disposal of the service recipient and the

recipient is thus free to decide the manner of usage (route and schedule) subject to conditions of agreement entered into with

the service provider.

Applicability of GST on tickets of private ferry used for passenger transportation

Ferry may be gout ferry or privately owned does not

make a difference if used for public transportation
other than tourism It is
exempt

Demand Recovery

Clarification relating to demand Penalties in

case
of fake invoices
invoice
fake
makes further supply
issues fake invoice without 1 22
Of without supply A penaltyul
of 91s 3g two
offences
for
No supply
to 3,8 fake smh
invoice

Tyga
without

hence no notice
giggles
under Sec 73 74
1
Ts
Penalty u s 122 shall Demand
y
f
be levid order
U s Fy
Sec 122
 Refund under Gse
Clarification relating to Deemed Export
7
To claim defund it is requirement of portal
to debit the ITC in e credit ledger once

However this 17C in relation to deemed

not be subject to provisions
export shall
Sec 17
of

Ed

109
Pg
00
pg

c
Pg 651
Pg
If
o

Pg 1294
 142
Pg
Pg 129

167
pg

All the Best Keep Rocking

Riddhi Baghmal