GOODS AND SERVICES ACT,2017

GST is known as the Goods and Services Tax. It is an indirect tax which has replaced many indirect
taxes in India such as the excise duty, VAT, services tax, etc. The Goods and Service Tax Act was
passed in the Parliament on 29th March 2017 and came into effect on 1st July 2017.

In other words,Goods and Service Tax (GST) is levied on the supply of goods and services. Goods
and Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on
every value addition. GST is a single domestic indirect tax law for the entire country.

Under the GST regime, the tax is levied at every point of sale. In the case of intra-state sales, Central
GST and State GST are charged. All the inter-state sales are chargeable to the Integrated GST.

101 Amendment Act Of constitution:

The establishment of the Goods and Services Tax regime by the One Hundred and First Amendment
to the Constitution.
Legislative Basis Of GST

• The GST Bill was initially introduced in India in the 16th Lok Sabha in 2014. The Lok Sabha
passed the Constitution Amendment Bill in May of 2015. The Bill was finally passed in the
Rajya Sabha in August of 2016, with some revisions. Furthermore, the Bill was ratified by the
required number of states and gained the President’s assent on September 8, 2016, resulting in
the 101st Constitution Amendment Act, 2016. With effect from September 12, 2016, the GST
Council has also been established. The GST Council is directed by a Secretariat.

• Important provisions of the Bill:

1. Central GST will cover excise duty, service tax, and other taxes, while state GST will cover VAT,
luxury tax, and other taxes.
2. GST is integrated to cover interstate trade. The IGST is not a tax in and of itself, but rather a
method for coordinating state and union taxes.

• The Constitution was amended to include Articles 246A, 269A, and 279A. The Amendment
makes revisions to the Constitution’s 7th Schedule.

Key aspects of Article 246 (A)

This Article states that:
In India, both the Union and the States now have ‘concurrent powers’ to enact laws governing goods
and services.
Intra-state trade now falls under the jurisdiction of both the centre and the state, although inter-state
trade and commerce remain ‘exclusively’ under the jurisdiction of the central government.
Key aspects of Article 269 A
According to this Article, in the case of inter-state trade, the tax will be imposed and collected by the
Government of India and allocated between the Union and the States based on the GST Council’s
decision.
The Article further states that the proceeds would not be credited to the consolidated fund of India or
any state, but rather that the relevant part will be allotted to that state or centre. The reason for this is
that under GST, where the centre collects the tax, the state’s portion is assigned to the state, whereas
where the state collects the tax, the centre’s part is assigned to the centre. If that proceeding is
deposited in the Consolidated Fund of India or a state, an appropriation tax will be required every
time. As a result, under GST, tax income will be allocated outside of the Consolidated Funds.
Key aspects of Article 279-A
The Article requires the President to form a GST council within sixty days of the act’s enactment. The
GST council will be comprised of the following individuals:

• The Chairman of the council will be the Union Finance Minister,

• Union Minister of the State in charge of Revenue or Finance,
• Each state has one nominated member in charge of finance or taxation,
• The Council is designed in such a way that the centre will have one-third of the voting power
and the states will have two-thirds,
• Decisions are made with a 3/4th majority.

GST COUNCIL:

GST Council is a constitutional body that has the power to make recommendations to the
State government and Union on issues and other things related to the Goods and Service Tax
of India. Goods and Service Tax was implemented on July 01, 2017. According to Article
279A (1) of the Constitution, the GST Council has to be constituted by the President within
60 days of the commencement of Article 279A.

GST Council is a constitutional body that plays a vital role in decision-making related to the
GST system in India.

Composition of GST Council

The council is a joint forum of the center and states.
The chairperson of the GST Council is Union Finance Minister.
The members of the GST Council include the Union State Minister of Revenue or Finance and
Ministers in charge of Finance or Taxation of all the States.
The Council members from the states have to choose one member amongst themselves who would
become the Vice-Chairperson of the GST Council. They have also the power to decide his term.
GST Council has 33 members, out of which 2 members are from the center and 31 members are from
3 Union territories and 28 states with legislation.
Chairperson of the CBEC (Central Board of Excise and Customs) as a permanent invitee (Non-
Voting) to all the proceedings.

Functions of GST Council

The function of the GST Council is to make recommendations to the States and Unions on the
following matter:

The cesses, taxes, and surcharges levied by the States and Union and the local bodies which are under
the Goods and Services Tax
Any special rates for a certain period to raise additional resources during any natural disaster or
calamity.
Model GST laws, Principles of the levy, apportionment of Goods and Services Tax levied on supplies
in the course of commerce or Inter-state trade under article 269A, and the principles that control the
place of supply.
The goods and services that may be exempted or subjected to the Goods and Services tax.
The threshold limit of turnover below which the services and goods may be exempted from GST.
The rates include the floor rates with the bands of Goods and Service Tax,
Special provision with respect to the states– Arunachal Pradesh, Mizoram, Nagaland, Tripura, Assam
Sikkim, Manipur, Meghalaya, Himachal Pradesh, and Uttarakhand.
Additionally, the GST Council has the power to recommend the date on which the GST may be levied
on petrol, high-speed diesel, petroleum crude, aviation turbine fuel, and natural gas.
Furthermore, the GST Council has to recommend compensation to the states for the loss of revenue
due to the introduction of GST for a period of 5 years. According to the recommendation, the
parliament decided on the compensation

GST Council recommendations

According to the provisions laid down under Article 279A (4), the GST Council has the duty to make
recommendations about GST to the Union Government as well as the State Governments. The council
would decide which goods and services would be charged to GST and which would be exempted from
it. Thereafter, the GST Council has the duty of creating laws and principles about the place of supply,
threshold limits, special rates of GST for certain States of India, the applicable GST rates on various
goods and services and special rates of GST during a natural calamity or a disaster so that additional
resources can be raised for meeting the financial losses suffered, etc.

SUPPLY:
Sec 7-Scope of supply
7.(1) For the purposes of this Act, the expression “supply” includes–

(a) All forms of supply of goods or services or both such as sale, transfer, barter, Exchange,
licence, rental, lease or disposal made or agreed to be made for a Consideration by a person in
the course or furtherance of business;
(b) Import of services for a consideration whether or not in the course or Furtherance of business;
© the activities specified in Schedule I, made or agreed to be made without a
Consideration; and

(c) The activities to be treated as supply of goods or supply of services as Referred to in

Schedule II.

(2) Notwithstanding anything contained in sub-section (1),––

(a) activities or Transactions specified in Schedule III; or
(b) such activities or 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.

(3) Subject to the provisions of sub-sections (1) and (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

Sec 8- Tax liability on composite and mixed supplies

8.The tax liability on a composite or a mixed supply shall be determined in the Following manner,
namely:—

(a) A composite supply comprising two or more supplies, one of which is a Principal supply, shall be
treated as a supply of such principal supply; and

(b) A mixed supply comprising two or more supplies shall be treated as a supply Of that particular
supply which attracts the highest rate of tax.

What are the three components of supply under GST?

A supply under GST has three attributes that are used to calculate the tax owed for that transaction:
place, value, and time.
Place of Supply – This component determines whether a transaction is an intra-state supply, an inter-
state supply, or an external trade, which determines the type of GST that will be associated with it.
Value of Supply – This component decides the taxable value of supply made, and thus the amount of
tax that needs to be paid for it.
Time of Supply – This component determines when the associated taxes and GST returns are due

PLACE OF SUPPLY:
Place of supply plays a crucial role under GST to determine the nature of supply whether it is Intra
State Supply or Inter State Supply and the tax is to be paid in accordance with nature of supply, If the
supply is Intra state then CGST and SGST shall be applicable and If the supply is Interstate then only
IGST shall be paid.

There are mainly two major factors to determine the nature of supply as follows-

• Location of Supplier
• Location of the Place of Supply

Location of Supplier is determined as per the registered address of the supplier and Place of supply is
determined as per sections 10,11,12 and 13 of the IGST Act, 2017

How to determine the Place of Supply?

• Place of Supply of Goods other than supply of goods imported into or exported from India is
determined as per Section 10 of IGST Act, 2017.

• Place of Supply of goods imported into, or exported from India is determined as per Section
11 of IGST Act, 2017.

• Place of supply of services where location of supplier and recipient is in India is determined
as per Section 12 of IGST Act, 2017

• Place of supply of services where location of supplier or location of recipient is outside India
is determined by Section 13 of IGST Act, 2017.
A detailed discussion on the Place of Supply of Goods is given below:-

Section 10 of IGST Act, 2017

• Section 10-(a) Where movement of goods is involved

Place of Supply of goods, when there is movement of goods involved shall be the location where the
movement of goods terminated for delivery to the recipient.

For example-Mr. A of Mumbai, Maharashtra sells 10 TV sets to Mr. B of Nagpur, Maharashtra.

The place of supply is Nagpur in Maharashtra. Since it is the same state CGST & SGST will be
charged.

• Section 10-(b) In case of Bill to Ship to model

Where the goods are delivered by the supplier to a recipient or any other person on the direction of a
third person, whether acting as an agent or otherwise, before or during movement of goods, either by
way of transfer of documents of title to the goods or otherwise, it shall be deemed that the said third
person has received the goods and the place of supply of such goods shall be the principal place of
business of such person.

For example- Mr. A in Lucknow buys goods from Mr. B in Mumbai (Maharashtra). The buyer
requests the seller to send the goods to Nagpur (Maharashtra).
In this case, it will be assumed that the buyer in Lucknow has received the goods & IGST will be
charged, In this case the place of supply is Lucknow (UP)

• Section 10-© Supply not involving movement of goods

Place of supply shall be the location of such goods at the time of the delivery to the recipient.

For example- X Ltd. (Chennai) opens a new showroom in Bangalore. It purchases a building for a
showroom from XYZ (Bangalore) along with pre-installed workstations, In this case the place of
supply: Bangalore and accordingly CGST & SGST applicable.
There is no movement of goods (work stations), so the place of supply will be the location of such
goods at the time of delivery (handing over) to the receiver.

• Section 10-(d) Goods installed or assembled

Where the goods are assembled or installed at site, the place of supply shall be the place of such
installation or assembly.
For Example- A Ltd. (Jharkhand) asks M/s XYZ Constructions (West Bengal) to build a blast furnace
in their Jharkhand steel plant. The Place of supply: Jharkhand and accordingly CGST & SGST will
apply.
Although M/s XYZ is in West Bengal, the goods (blast furnace) is being installed at a site in
Jharkhand which will be the place of supply.

• Section 10-€ Goods supplied on Board

Where the goods are supplied on board a conveyance, including a vessel, an aircraft, a train or a motor
vehicle, the place of supply shall be the location at which such goods are taken on board.

Example- Mr. A is travelling from Mumbai to Delhi by air. He purchases coffee and snacks while on
the plane. The airline is registered in both Mumbai and Delhi.
Place of supply: Mumbai & accordingly CGST & SGST shall apply.
The food items were loaded into the plane at Mumbai. So, the place of supply becomes Mumbai.

Section 11 of the IGST Act – Place of supply of goods imported into, or exported from India.
The place of supply of goods,—

• Imported into India shall be the location of the importer.

• Exported from India shall be the location outside India.

Section 12 - Place of supply of service within India

• This explains the case where the location of the supplier of service and the recipient of service
is in India. The place of supply of services differs in the supply of services based on the
nature of service availed and the location of supply of such service.
• The place of supply of services made to an unregistered person is the location of the person
receiving the services.
• If supplied to unregistered persons, the place of supply would be the location of such
unregistered person if his address is available or the location of the supplier of services if the
address is not available.

Section 13 - Place of supply of services outside India

In the case of export of services, the place of supply of such services is the location of the recipient of
services. However, if the location of the recipient is not available, the place of supply is the location
of the supplier of services.
TIME AND VALUE OF SUPPLY:
Section 12 Time of supply of Goods S.12(1): Enabling Section:- The liability to pay tax on goods
shall arise the time of supply, as determined in accordance with the provisions of this section
S.13 TIME OF SUPPLY OF SERVICES
S.13(1) Enabling Section:- The liability to pay tax on services shall arise at the time of supply, as
determined in accordance with the provisions of this section.
 S 14 Change in rate of tax in respect of supply of goods or services.
The time of supply, where there is a change in the rate of tax in respect of goods or services or both,
shall be :-

VALUE OF SUPPLY:
Registration Under CGST:
Document required for registration of GST:
A person has to submit the following documents at the time of registration of GST which are as
follows:

• PAN of the Applicant: An applicant has to submit the details of the Permanent Account
Number (PAN) at the time of registration.

• Aadhar card: At the time of registration of GST, an applicant has to submit a copy of Aadhar
card.

• Address proof of the place of the business: A person needs to submit the address proof of the
place of business where he is planning to set up from where he wants to commence business.

• Bank Account Statement: An applicant has to submit the bank account statement, cancelled
cheque at the time of registration of GST.

• Digital Signature: The digital signature of the applicant is necessary at the time of registration
of GST.

• Letter of Authorization: At the time of registration, a person needs to submit a letter of

authorization or board resolution for the authorized signatory.

• Incorporation Certificate: An incorporation certificate is a legal document or license which is

related to the formation of a company, so a person needs to submit the incorporation
certificate at the time of registration of GST

• Identity and Address proof of the Directors: At the time of registration, a person has to submit
the identity and address proof of the directors.

Person liable for Registration (Sec 22)

• Section 22 of the CGST Act talks about the person liable for registration. If a taxable supply
of goods and services of a person exceeds forty lakh rupees in a financial year then he shall be
liable for registration. However, for some special category state (Jammu & Kashmir, Ladakh,
Assam, Puducherry, Meghalaya, Mizoram, Tripura, Manipur, Sikkim, Nagaland, Arunachal
Pradesh, and Uttrakhand) the threshold limit of taxable supply of goods and services is twenty
Lakh in a financial year which means that such special category state shall be liable for
registration if his aggregate turnover in a financial year exceeds ten Lakh rupees.
 • Every person who, on the day immediately preceding the appointed day, is registered or holds
a license under existing law, shall be liable to be registered under this Act with effect from the
appointed day.
• If in the case of transfer of business by the registered person then the transferee shall be liable
to be registered with effect from the date of such transfer or succession.
• In the case of transfer according to the sanction of a scheme, amalgamation or in the case of
the demerger of two companies by the order of High Court, Tribunals then the transferee of
business shall be liable to be registered.

Aggregate turnover
• Section 2(6) of CGST defines the Aggregate turnover. Aggregate turnover means the
aggregate value of all taxable supplies, exempt supplies, exports of goods and services, the
inter-state supply of persons having the same Permanent Account Number (PAN) to be
computed on an all India basis.

• However, the Aggregate turnover excludes taxes, if any charge under CGST Act,
UTGST/SGST Act, and ITGST Act. The value of inward supplies on which tax is payable by
the person on a reverse charge basis and the value of inward supplies are also excluded in
Aggregate turnover.

Person not liable for Registration (Section 23)

Section 23 of CGST states that there is the following person who is not liable to registration.

• Any person who is doing the business of Goods and services and if they are not liable to pay
tax or wholly exempted from tax under this Act or the Integrated Goods and Services Tax Act,
then such person is not liable for registration.
• Agriculture income is exempted under Income Tax Act, 1961. So, an Agriculturist who is
engaged in the supply or produce of crops is not liable for registration.
• On the recommendation of the GST Council, the Government may from time to time issue the
notification about the person who is not liable or may be exempted from obtaining
registration under this Act.

SIGN IN
r account
your username

your password

Forgot your password?

Compulsory Registration (Section 24)
Section 24 of CGST talks about compulsory registration. Notwithstanding
anything containing 22(1) of CGST, the following categories of persons shall
be required to register under this act.

Inter-State taxable supply

When there is the supply of goods and services from one state to another
state then this is termed as the Inter-State supply. Like, the goods and
services from Bihar are transferred to Jharkhand then this will be termed as
the Inter-State supply. So, if a person is making any inter-State supply then
such shall have to register compulsorily.

Casual taxable person

Section 2(21) of GST defines the casual taxable person. When any person
commences their business occasionally in another state or union territory
where he has no fixed place of business then these will be called a casual
taxable person.

Illustration: Let’s suppose that an auto company that is registered in

Maharashtra and wants to conduct the auto race in Noida for a shorter period
then they will have to register themselves in Noida for a shorter period.

However, the validity period of the GST certificate of registration for a casual
taxable person shall be valid for ninety days from the date of registration.

So Casual taxable person making taxable supplies shall have to register

compulsorily.

A person who required to pay tax under reverse charge mechanism

Reverse charge mechanism means that when the liability to pay the taxes is
upon the recipient instead of the supplier. So, if a person is paying the tax
under the Reverse charge mechanism then he shall have to register
compulsorily.

Electronic commerce operator

Section 9(5) of CGST states that the government may, on the

recommendation of the council, by notification, specify categories of services
the tax on Intra – State supplies of which shall be paid by the electronic
commerce operator if such services are supplied through it, and all the
provisions of this Act shall apply to such electronic commerce operator as if
he is supplier liable for paying the tax about the supply of such services.

Non Resident taxable person

A Non-Resident taxable person means any non-resident person who

occasionally supplies the goods and services in India and who has no fixed
place of business or residence in India then such person will be termed as
the Non-Resident taxable person.

For example, a person from Australia comes to Patna to participate in a

footwear exhibition, then in such circumstances, a person would need to
register as a non – resident taxable person at Patna and he will be granted
registration for a maximum period of Ninety days.

A non-Resident taxable person shall have to register compulsorily.

A person who is required to deduct tax under Sec 51

A person who is required to deduct tax under Section 51 of CGST, whether or

not separately registered under this act.

Taxable supply of Goods & Services behalf of another person

If a person makes a taxable supply of goods and services or both on behalf

of other taxable people whether as an agent or otherwise, then in such
circumstances a person shall have to register compulsorily.

Input Service Distributor

When a business receives the invoices of services used by its branches it is

termed as the Input Service Distributor (ISD). After that Head office
distributes the tax by issuing ISD Invoices to all the branches.

Let’s understand with an example:

Chhabra is a company whose head office is located in Patna and their

branches are located in Kolkata, Jharkhand, and Maharashtra. After that, the
Head office spent the money on maintenance of all the computers on behalf
of all its branches and received the invoice. Since the money spent on the
maintenance of the computer is done for every branch that’s why the Input
Tax Credit of the entire service cannot be claimed at Patna. Input Tax Credit
will be distributed to all three branches and Patna which is head office will be
termed as the Input Service Distributor.

Required to collect tax at source under Sec 52

When the supplier supplies the goods and services through its portal then the
payment of that supply is collected by the Electronic Commerce Operator.
Every electronic commerce operator who is required to collect tax at source
under Section 52 of CGST shall have to register compulsorily.

Supplying online information outside India

If a person is supplying the online information and database access or

retrieval services outside India and if they are not registered, then they shall
have to register compulsorily.

Notification by government

On the recommendation of the GST council, the Government may from time
to time notify the person liable for compulsory registration.

What is the Procedure for Registration

(Section 25)
• After checking the criteria for registration under Section 22 or 24 of
the CGST Act, if a person fulfils the criteria for registration then such
person shall apply for registration in every state or Union territory
within the thirty days from the date on which he becomes liable to
registration.
• After the submission of the application, a proper officer has to take
action within the three days of submission of the application or
within the seven days of receiving the clarification so solicited, the
applicant for the grant of registration is deemed to be approved.
• In the case of a casual taxable person or non-resident taxable
person, a person shall apply for registration at least five days before
the commencement of business.
• If a person is making the supply of Goods and services from
territorial waters of India then in such a situation a person shall
obtain the registration in the coastal State or Union Territory where
the nearest point of the appropriate baseline is located.
• Only one registration has to be done for a single business in a State
or Union Territory. However, if a person is engaged in multiple
 businesses in a State or Union Territory then in such a condition a
person shall have to apply for separate registration.
• If a person is not liable to register under Section 22 or 24 of the
CGST Act, then such person may get himself registered voluntarily
and all the acts which apply to the registered person shall apply to
such person.
• If a person has registered himself in more than one state or union
territory, then in such a situation the person will be treated as a
distinct person.
• Establishment of the same person in different states or Union
territory to be treated as the establishment of a distinct person.
• A person shall have a Permanent Account Number issued under the
Income Tax Act, 1961 to be eligible for grant of registration.
• Authority shall verify the registration details and after the
verification, he shall issue the Unique Identity Number. However, if
the authority finds any error then he has the authority to eject after
the verification.
• A certificate of registration shall be issued in such form and with
effect from such date as may be prescribed

Amendment of GST Registration

After the allotment of the Unique Identification Number, if a registered
person wants to change the information given at the time of registration then
in such a situation a registered person shall have to inform the proper office
within fifteen days of receiving the unique identification number.

After the submission of changes required, it depends upon the discretion of

the proper officer that they approve it or reject it. However, the proper
officer shall not reject the application for registration without giving the
person an opportunity of being heard

Cancellation of Registration (Section 29)

Section 29 of CGST talks about the cancellation of Registration. After the
death of the registered person, the Proper officer himself or an application
filed by the registered person, or his legal heirs cancel the registration.
Cancelation of registration depends upon the discretion of the proper officer
whether he wants to cancel it from a prospective or retrospective date. A
registered person whose registration is cancelled will have to debit the
electronic cash ledger or electronic credit ledger, by an amount equal to
Input Tax Credit (ITC) so availed or the output tax liability, whichever is
higher.