Definitions, levy

and exemptions –

clause by clause

analysis

CA Dayananda K

Actionable

claim –

Section 2(1)

As defined in Section 3 of the Transfer of Property Act, 1882.

actionable claim" means a claim to any debt, other than a debt secured by mortgage of immovable property or by hypothecation or pledge of movable property, or to any beneficial interest in movable property not in the possession, either actual or constructive, of the claimant, which the civil courts recognise as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional or contingent;

Examples:

Unsecured loans

Unsecured retention amount

Unsecured deposits

Personal unsecured loans

Actionable claim

– Section 2(1)

Impact Points:

Definition of goods under Section 2(52) includes

actionable claim.

Schedule III – actionable claim is neither goods

nor service.

Address of Delivery (AOD) – 2(2) and

Address on Record (AOR) – 2(3)

AOD Means the address of the recipient

of goods or services or both indicated on

the tax invoice issued by the registered

person for delivery.

AOR means the address of the recipient as

available in the records of the supplier.

Recipient of

supply of

goods or

services or

both – 2 (93)

A. Where a consideration is payable – the

person who is liable to pay that

consideration

B. Where no consideration is payable – 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;

or

C. If no consideration is payable for service –

the person to whom the service is rendered

Relevance of the

definition

For the proper determination of the place

of supply

Situation like “bill to” “ship to” case

Where HO wants all the bills to be

addressed centrally but goods to be

delivered throughout branches located in

more than one state, who will be the

recipient of goods?

For determination of export of service

Aggregate Turnover – 2

(6)

Means the aggregate value of all

taxable supplies (excluding inward

supplies on which tax is payable on

RCM basis), exempt supplies, exports

of goods or services or both and

inter-state supplies of persons having

the same PAN to be computed on all

India basis but excluding Central tax,

State tax, Union Territory tax,

integrated tax and cess

Relevance and

issue in

aggregate

turnover

For the purpose of determination of

turnover limit for registration

Composition supplier

Value of supply made by job worker to

principal who do not follow job work

procedure should be added to aggregate

turnover

Requirement for Annual audit- uses the

word turnover and not aggregate turnover

Assessment

2(11)

Meaning – determination of tax liability under

CGST Act and includes:

Self assessment

Re assessment

Provisional assessment

Summary assessment; and

Best judgment assessment

Questions:

- What is the period of assessment? Is it monthly or

yearly ?

- What is the type of determination of tax by the

appellate authority?

Associated

Enterprises 2(12)

List of associated

enterprises as per Section

92A of the IT Act

Applicability:

If supplied to associated

enterprises – apply

valuation rules

Audit 2(13)

Means the examination of records, returns and

other documents maintained or furnished by the

registered person under this Act or the rules made

thereunder or under any other law for time being in

force to verify the correctness of turnover declared,

taxes paid, refund claimed and input tax credit

availed, and to assess his compliance with the

provisions of this Act or the rules made thereunder

Authorised

Representative

2(15)

Means as defined in Section 116:

a) Relative or regular employee

b) Advocate

c) CA, cost accountant and company secretary

d) Retired officer of the commercial tax department

of any state government or union territory or of

the Board and worked not below the rank of

Group B Gazetted officer for not less than 2 years

e) Authorized to practice as GST practitioner

Restriction: If a person is declared as guilty of misconduct by the prescribed

authority, he cannot appear under CGST or SGST or UTGST before any

authority in any State for “life time”.

Business

2(17) –

Includes

Any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity whether or not for a pecuniary benefit;

Any transaction or activity in connection with or incidental or ancillary to above;

One time activity of the nature specified above

Supply or acquisition of goods including capital goods and service 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;

Admission for a consideration of persons to any premises

Services supplied by a person as the holder of any 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 license to book maker in such club; and

Any activity or transaction undertaken by the Central/ State govt, local authority in which they are engaged as public authorities

Business – Issues

Conversion of personal asset into business

asset?

Introduction of capital asset by an

individual to a firm

Amount payable by a person towards

goodwill of a firm.

Business Vertical

2(18)

A distinguishable component

of an enterprise that is

engaged in the supply of

individual goods or services

or a group of related goods

or services which is

subjected to risks and returns

that are different from those

of other business verticals

Basis of

classification

Nature of goods or services – Eg.

consumer goods and industrial goods

Nature of production process

Type of class of customers – wholesale

and retail

Methods used to distribute goods or

supply services – own show room or

distributor channel

Nature of regulatory environment –

Insurance, banking, etc.

Capital Goods 2(19)

The value of which is capitalized in the

books of account of the person claiming

input credit and which are used or

intended to be used in the course or

furtherance of business

Applicability and Issue:

Any asset can be classified as capital goods

Examine the input credit restrictions given in

Section 17(5) to avail the credit on capital goods

If a capital asset is charged off fully, whether input

credit will be allowed?

Casual

Taxable

Person 2(20)

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

Implications:

Compulsory registrations for casual taxable person.

Persons participate in exhibition cum sale

Conducting events, entertainments, etc.

Issues

Whether registration in particular State is

required when a person of different State

sources and supplies in the same State?

In case of just in supply concepts, where

suppliers keep goods in transporters

warehouse for a short period would

require registration in such state?

Composite supply

2 (30)

A supply made by a taxable person to

a recipient consisting of two or more

taxable supplies of goods or services

or both, or any combinations thereof,

which are naturally bundled and supplied in conjunction with each

other in the ordinary course of

business, one of which is a principal

supply

Examples Supply of goods with additional charge

for transportation, insurance, packing,

loading etc.

Supply and installation of machinery

Medical consultancy and dispensary

(provided both are taxable)

Residential school

Issues

Accounting by the receiver based on line

item

Classification/ accounting code of the

ancillary goods or services may be

different and hence there could be

mismatch

Works contract Vs composite supply

Consideration

2(31) –

Includes

Any payment made or to be made, whether in money or

otherwise, in respect of, in response to, or for the

inducement of, the supply of goods and or services,

whether by the said person or by any other person;

The monetary value of any act or forbearance, whether

or not voluntary, in respect of, in response to, or for the

inducement of, the supply of goods and or services

whether by the said person or by any other person;

Provided that a deposit whether refundable or not, given

in respect of the supply of goods and or services shall

not be considered as payment made unless the supplier

applies the deposit as consideration for the supply.

Exclusion: Subsidy by the Government

Money 2 (75)

The 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 or any other instrument

recognized by the RBI 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

Issues

Whether incentive by the Government to

set up the industry is a consideration?

Whether MEIS/ SEIS and duty drawbacks

are consideration for inducing export and

hence liable for GST?

Whether exchange between two foreign

currency is not money?

Continuous supply of

goods 2(32)- Means

A supply of goods which is provided or agreed to

be provided continuously or on recurrent basis,

under a contract, whether or not by means of wire,

cable, pipeline or other conduit and for which the

supplier invoices the recipient on a regular or

periodic basis and includes supply of such goods as

the Govt may subject to such condition, as it may,

by notifications specify

Example and

Issues

Where contract is for the supply of 1000 bags of cement per month for a period of one year to be supplied 30 bags daily, whether this would fall under CSG?

Whether stock transfer to the C & F location can be billed once a month?

Whether goods to the job worker (without following provisions of Section 143) can be billed periodically?

Whether provisions of Section 31(1) is not applicable (invoice to be prepared either before or at the time of removal)?

Continuous

Supply of

Service -

2(33)

A supply of services which is provided or agreed to be

provided continuously or on recurrent basis, under a contract,

for a period exceeding 3 months with a periodic payment

obligations and includes supply of such services as the Govt.

may subject to such conditions, as it may, by notifications

specify

Examples:

Works contract services

Retainer services

Consultancy services

Renting of commercial

properties

Relevance:

For the purpose of raising

invoice

Follow the provision given in

Section 31(5) to raise invoice

If due date for invoice is not

ascertainable, then invoice should

be raised for the payment

received.

Credit Note

2(37)and

Debit Note

2(38)

A document issued by a registered person

under section 34(1) and 34(3) respectively

Conditions:

Should be issued by the supplier only

Should contain the particulars as notified

Difference in value

Sales return

Deficiency in the service or goods supplied

Difference in rate of tax

Issues

How to remove the goods without invoice from the premises of purchaser in case of purchase return (section 31)?

If credit note to be issued for sales return, who will issue the E way bill if buyer has rejected without recording in his books of account?

Can the advance be returned by way of debit note? (Please refer Section 54(8)(c)

Exception to credit note for purchase return- Proviso to Section 142(1)

Electronic Commerce 2(44) and E commerce operator 2(45)

The supply of goods or services or

both including digital products over

digital or electronic network. S- 2(44)

Means any person who owns, operates

or manages digital or electronic facility

or platform for electronic commerce.

S-2(45)

Relevance

Compulsory registration.

TDS compliance

Books of account – special requirements

Persons not having place of business in particular state – appoint agents

Read provisions of Section 9(5) of CGST Act and Section 5(5) of the

IGST Act

Exempt supply 2(47)

Supply of any goods or services or both which attracts NIL rate of tax or which may be wholly exempt from tax under Section 11 or under Section 6 of the IGST Act and includes non taxable supply – CGST Act

Supply of any goods or services or both which attracts NIL rate of tax or which may be wholly exempt from tax under Section 8 or under Section 6 of the IGST Act and includes non taxable supply – UTGST Act

No definition under IGST Act

Non taxable

supply 2(78)

A supply of goods or services or both which is not

leviable to tax under this Act or under the IGST Act.

Relevance and Issue:

Composite dealer should not deal in goods not leviable to tax under

this Act

Aggregate turnover as well as turnover in State includes non taxable

supply

Should petroleum and liquor be added to the turnover and reported

in monthly report?

Existing law

2(48)

Any law, notification, order, rule or regulation relating to levy and collection of duty or tax on goods or services or both passed or made before the commencement of this Act by Parliament or any Authority or person having power to make such law, notification, order, rule or regulation

Relevance:

Determination of quantum of transition credit

Point of taxation of advances received in the current

regime

Transition issues such as sales return, purchase return,

refunds, litigation, demand etc.

Read Section 143

Issue

When service tax on advance is already paid

under existing law and VAT was not paid, how to

pay VAT portion alone under GST?

Fixed Establishment 2(50)

A place (other than the registered place

of business) which is characterised by a

sufficient degree of permanence and

suitable structure in terms of human and

technical resources to supply services, or

to receive and use services for it’s own

needs

Relevance

To determine the place of supply.

Requires to decide the registration

in the particular State

Site office for a period say 9

months/ one year would be held as

fixed establishment.

Working in third party premises for

a long period- will it be a fixed

establishment?

Goods 2(52)

Every kind of movable property other

other than money and securities but

includes actionable claim, growing

grass and things attached to or

forming part of the land which are to

be severed before supply or under a

contract of supply

Service 2(102)

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

Relevance

To determine the point of taxation

Classification and Rate of tax

To determine the correct place of supply

of goods / service

To fulfill other compliances such as

maintenance of books, invoices etc.

Read the list of goods and services

notified in Schedule II and neither goods

nor service in Schedule III

Issue

Whether sale of land is service?

Whether sale of office building with

interiors and furniture would need a split?

India 2(56)

The territory of India as referred to in

article 1 of the Constitution, its territorial

waters, seabed and sub soil underlying

such waters, continental shelf, exclusive

economic zone or any other maritime

zone as referred to in the Territorial

Waters, Continental Shelf, Exclusive

Economic Zone and other Maritime

Zones, Act and the air space above its

territory and territorial waters

Relevance

To determine the export and import of

goods or services or both.

Supply of goods to and from territorial

waters.

Cloud services

Input- 2(59)

and Input

service 2(60)

Any goods other than the capital goods used or

intended to be used by a supplier in the course or

furtherance of business – 2(59)

Any service used or intended to be used by a

supplier in the course or furtherance of business -

2(60)

Supplier

2(105)

In relation to any goods or services or both, shall

mean the person supplying the said goods or

services or both and shall include an agent acting as

such on behalf of such supplier in relation to the

goods or services or both supplied

Relevance:

For transition purposes- refer section 139 to 142

Refer Section 16, 17, 18 and 19

Input service

distributor -

2(61) means

An office of the supplier of goods or

services or both which receives tax invoices

issued under Section 31 towards the receipt

of input services and issues a prescribed

document for the purposes of distributing

the credit of central tax, state tax, integrated

tax or union territory tax paid on the said

services to a supplier of taxable goods or

services or both having the same PAN as

that of the said office

Relevance

Whether for the same address, ISD and supplier registration can be taken?

When supplier is registered in multiple states, whether the credit should be transferred to multiple States?

Instead of ISD, can the full credit be taken by one supplier and raise invoice on other distinct persons?

Whether payment criteria (within 180 days) is applicable either to the ISD or to the recipient?

Who has to report the payment details in GSTR-2?

Input Tax

2(62)

In relation to a registered person means the central tax,

state tax, integrated tax or union territory tax charged on

any supply of goods or services or both made to him and

includes-

The integrated GST charged on import of goods

Tax payable under the provisions of Section 9(3) and 9(4)

of CGST

The tax payable under the provisions of Section 5(3) and

5(4) of the IGST Act

The tax payable under the provisions of Section 9(3) and

9(4) of the respective State GST

Tax payable under Section 7(3) and 7(4) of the UTGST

Exclusion: Tax paid under composition

Input tax

continued -

2(g) of GST

(Compensatio

n to States)

Bill

Cess charged on any supply of goods or

services or both made to him;

Cess charged on import of goods and

includes cess payable on reverse charge basis

Inward Supply

2(67)

In relation to a person

shall mean receipt of

goods or services or both

whether by purchase,

acquisition or any other

means with or without

consideration

Outward

Supply 2(83)

In relation to a taxable person means supply of

goods or services or both , whether by sale, transfer,

barter, exchange, license, rental, lease or disposal or

any other mode, made or agreed to be made by

such person in the course or furtherance of business

Issues

The meaning of inward supply is much wider than outward supply

Whether goods received for repair or testing should be reported as inward supply under Section 38?

Outward supply is restricted to taxable person and for inward supply, it is person

Contentious issue: Movement of goods between URDs for job work and other purposes and job worker to registered person without complying with the job work procedure

Whether relinquishment of asset is outward supply?

Any other mode is not included in Section 7 (meaning and scope of supply)

Job Work

2(68)

Any treatment or process undertaken by a person on

goods belonging to another registered person and the

expression “job worker” shall be construed accordingly

Interpretation:

If a registered person undertakes job work to un

registered person, is it not job work?

Whether repair, testing etc., will fall within the meaning

of job work?

Whether an unregistered job worker can provide job

work to a registered person located in another State

who complies with the procedure under Section 143?

Whether job worker can add his own material?

Location of

the recipient

of services

2(70)

Where a supply is received at a place of business for which the registration has been obtained, the location of such place of business;

Where a supply is received at a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such establishment

Where a supply is received in more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the receipt of the supply; and

In the absence of such places, the location of the usual place of residence of the recipient

Relevance and

Issue

Decides the type of taxes (IGST or

CSGST/SGST) to be charged

Read Section 7(3) and 12 of the IGST Act

Same definition given in Section 2(14) of

the IGST Act

If a person opens a branch but not

included in the certificate within the

stipulated time, the input credit may not be

available for the supply made up to the

date of amendment under Section 28

Issues

Whether fixed establishment means the

establishment of recipient or may also

include third party?

Location of

the supplier

of service

2(71)

Where a supply is made from a place of business for which the registration has been obtained, the location of such place of business;

Where a supply is made from a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment

Where supply is made from more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the provisions of the supply; and

In the absence of such places, the location of the usual place of residence of the supplier

Issues

When Section 25(2) states that a single

registration will be granted per State for a

person, whether it will really matters if

supply is made from a place not added as

additional place under Section 28?

Manufacture 2(72)

Processing of raw material or

inputs in any manner that results

in emergence of a new product

having a distinct name, character

and use and the term

“manufacturer” shall be

construed accordingly

Relevance

Job work Vs Manufacture

If the activity undertaken does not

amount to manufacture, whether the

department will demand a complete

reconciliation of inputs and outputs?

May end up classification and rate of

tax dispute

Composition levy Vs Manufacture

Market value

2(73)

Shall mean the full amount which a recipient of a

supply is required to pay in order to obtain the goods

or services or both of like kind and quality at or

about the same time and at the same commercial

level where the recipient and the supplier are not

related.

Relevance and Issues:

The same is applicable only when consideration cannot be ascertainable or

transaction between related parties or distinct persons

Valuation rules uses the word “open market value”

In case of high sea sale, whether the GST officers can dispute the value?

Whether the market value includes the GST taxes payable on like goods?

Mixed Supply 2(74)

Two or more individual

supplies of goods or services

or any combination thereof,

made in conjunction with

each other by a taxable

person for a single price

where such supply does not

constitute a composite

supply

Examples:

Various marketing schemes – bundled unrelated products

Sale of school bag, water bottle and stationery for one

price

Relevance

Definition is applicable only for taxable

person.

It relates to rate of tax and not valuation-

Read Section 8(b)

If different price is shown for each

product but bundled, revenue may demand

highest rate of tax for all the products

Non resident

Taxable

Person 2(77)

Any person who occasionally undertakes transactions involving supply of goods or services or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India.

Legal requirement: Compulsory registration under Section 24

Examples:

Providers of online data base and retrieval services

Companies undertaking turnkey projects in India but executing through

agents

Arranging supply within India but without having place of business

Supply of manpower through other agencies in India for a project in

India

Non resident participating in exhibition cum sale

Non taxable

supply 2(78)

A supply of goods or services or both which is not

leviable to tax under this Act or under the IGST Act.

Importance:

It means there will be common list of goods for IGST and

CGST

If goods are exempt under CGST or IGST, will it be

exempt under IGST or CGST respectively?

Exempt supplies include non taxable supply

Eg: Petroleum products, liquor, transaction in immovable

property

Non Taxable

Territory

2(79) and

Taxable

Territory

2(109)

Means the territory which is outside the taxable

territory 2(79)

Means the territory to which provisions of this Act

apply 2(109)

Issues:

What tax should be charged when invoice raised on J

& K?

Is high sea sale to a buyer in J & K liable for IGST

(Section 7(2)?

Notification

2(80)

A notification published in the Official

Gazette and the expression “notify” and

“notified” shall be construed accordingly

Issue: Refer Section 11- Exemptions-

discussed separately

Output tax

2(82)

In relation to a taxable person means the tax

chargeable under this Act on taxable supply of

goods or services or both made by him or by his

agent but excludes tax payable by him on reverse

charge basis.

Same definition under UTGST- 2(7)

Similar definition under IGST

Points to Note:

An output tax paid by a supplier will not be an automatic input tax to

buyer.

Tax will be output tax when it is payable by a registered taxable person

as well as liable to be registered person

Inclusive tax concept is not available.

Person 2(84)

Includes an individual,

HUF,

a company,

a firm,

a LLP,

an AOP or a BOI, whether incorporated or not, in India or outside India,

any corporation established by or under any Central Act or Provincial Act or a Government Company as defined in Section 2(45) of the Companies Act,

any body corporate incorporated by or under the laws of a country outside India,

a co-operative society registered under the law relating to co-operative societies,

local authority,

Central or a State Govt, society, trust and every artificial judicial person not falling within any of the above

Relevance

An inclusive definition.

Receiver may be liable to pay GST when

supply received from some of the persons

Please refer Section 7 as well as Schedule

III

Issue

Whether firm and partner would be held

as two different persons to tax the salary

received as well as share of profit?

Place of

business 2(85)

includes

A place from where the business is ordinarily

carried on, and includes a warehouse, a

godown or any other place where a taxable

person stores his goods, supplies or receives

goods or services or both; or

A place where a taxable person maintains his

books of account; or

A place where a taxable person is engaged in

business through an agent, by whatever name

called

Issues

Whether the BPO office would be held as

place of business?

Whether work site is a place of business?

Whether a transporter godown would be

held as place of business?

Whether customs bonded warehouse

could be held as place of business?

Place of

supply 2(86)

As per Chapter V of the IGST Act

Principal

Supply 2(90)

The supply of goods or services which

constitutes the predominant element of a

composite supply and to which any other

supply forming part of that composite

supply is ancillary

Issue:

Whether principal supply provision will help

industry in overcoming the issues under job work

or repair?

Registered

person 2(94)

Means a person who is registered under

Section 25 but does not include a person

having a Unique Identity Number

Regulations –

2(95)

The regulations made by the Board under

this Act on the recommendations of the

Council

Removal

2(96)

In relation to goods-

Dispatch of the goods for delivery by the

supplier thereof or by any other person

acting on behalf of such supplier; or

Collection of goods by the recipient thereof

or by any other person acting on behalf of

such supplier.

Relevance: Time of supply, place of supply,

invoicing etc.

Reverse

charge 2(98)

The liability to pay tax by the recipient

of supply of goods or services or both

under sub section (3) or sub section (4)

of section 9, or under sub section (3)

or sub section (4) of section 5 of the

IGST Act.

Issues

When a person cannot undertake inter-state supply without registration, how such transaction should be taxed under RCM?

Is it necessary to pay the supplier within 180 days to get the credit?

In case of purchase return, whether tax to be reversed?

IGST payable on import falls outside the meaning of RCM and hence Time of supply is not applicable for advance payment to import

Revisional

authority

2(99)

An authority appointed or authorised

for revision of decision or orders as

referred to in section 108

State 2(103) –

includes

“a Union territory with Legislature”.

Telecommuni

cation service

2(110)

Service of any description (including

electronic mail, voice mail, data services,

audio text services, video text services, radio

paging and cellular mobile telephone

services) which is made available to users by

means of any transmission or reception of

signs, signals, writing, images and sounds or

intelligence of any nature, by wire, radio,

visual or other electromagnetic means

Turnover in a

State or UT

2(112)

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 UT 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 UT by the said

taxable person but excludes Central tax, State

tax, UT tax, integrated tax and cess

Usual place

of residence

2(113)

In case of an individual, the place

where he ordinarily resides;

In other cases, the place where the

person is incorporated or otherwise

legally constituted

Voucher

2(118)

An instrument where there is an obligation

to accept it as consideration or part

consideration for a supply of goods or

services or both and where the goods or

services or both to be supplied or the

identities of their potential suppliers are

either indicated on the instrument itself or in

related documentation, including the terms

and conditions of use of such instrument

Issues

Stock transfer of voucher to HO-

identifiable goods?

Misplacement of above vouchers during

transportation?

Whether the purchase of voucher from

individuals would be held as URD

purchase?

Whether stock to be maintained for the

vouchers?

Works

contract

2(119)

A contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alternation or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract

Also read: Declared service- entry number 6(a) in Schedule II

Issues

Works contract Vs Construction service

Whether pure labour contract for the works contract is a works contract?

Whether electrical contract of a building- Works contract?

Construction contract with detailed break up for material and labour would be held as composite supply or mixed supply or works contract?

Supply and installation of air conditioning would be classified as composite supply or works contract?

Relevance

There is no classification rule between

composite supply Vs works contract and

hence may lead to litigation

When the works contractor ends up with

refund due to rate difference (majority of

input GST @ 28% and output GST @

18%), whether the department will classify

the whole activity as composite supply and

deny refund and claim additional tax?

Levy –

Section 9 of

CGST

All intra state supplies of goods or services

or both

Exception – alcoholic liquor for human

consumption

On the value as determined under Section 15

of the CGST

At such rate not exceeding 20%

Power of notification of rate of tax has been

given to Govt on the recommendation of

Council

Temporary

break

Petroleum crude

High speed diesel

Motor spirit

Natural gas

Aviation turbine fuel

Note: IGST Act also has excluded the

above products from the levy

Issues

Whether entry tax and excise duties will

continue on the excluded products?

What type of tax to be charged on inter-

state sale of excluded goods?

Reverse levy-

specified goods

or services

Government may notify the list of goods or services or both based on the recommendation of Council – 9(3)

On such recommended supplies- recipient shall pay

All the provisions of the Act in respect of levy, collection, invoicing etc., shall apply to the recipient

Similar provisions under IGST Act- Section 5(3)

Reverse Charge-

Supply of goods and services or

both by an un registered to a

registered supplier – shall be paid by

the registered supplier on RCM-

Section 9(4).

Similar provisions under Section 5(4)

of IGST Act

Issues

Whether Section 9(3) is applicable

for URD’s also?

The invoice of URD in the

prescribed manner has to be

prepared by the recipient.

Classification issue.

Whether additional input credit will

be denied if department disputes the

classification?

Levy-supply of

service through e

com

The Govt may notify on the recommendation of the Council, the list of services supplied intra state through e commerce operator- E commerce operator will be liable to pay GST.

If the e commerce operator does not have any presence in the state, then the person representing such e commerce operator for any purpose in the taxable territory shall be liable to pay tax.

Similar provisions under Section 5(5) of the IGST Act and 7(5) of UTGST

Relevance

Applicable for certain services only.

Who operates within the state without physical presence

As per the second proviso to Section 9(5), if they do not have physical presence, they have to appoint the agent in “taxable territory”.

Issue

A courier person acting for the e

commerce for supply of goods can

be held responsible for supply of

services

Whether an e commerce operator

belong to a foreign country should

appoint agents in each State if they

want to operate within that state?

Exemptions-

Section 11

The Central Govt can grant the exemption on the recommendation of the Council by way of notification

Exemption may be absolute or subject to certain conditions

Specified description of goods or services or both

Exemption may be wholly or partly from the levy of CGST

Notification will specify the effective date of exemption

Exemption-

section 11

Exemption can also be granted

on special situation by way of

order

Special situation must be an

exceptional nature

The order should specify such

exceptional nature

Effect of

exemption

notification

To explain the scope of exemption either

issued generally or under exceptional

circumstances- an explanation can be

inserted within a period of one year by

way of notification.

Effect of such explanation- retrospective

If any exemption from the CGST is given

absolutely, the supplier shall not collect tax

in excess of effective rate.

Similar provision exists under Section 6 of

the IGST Act

Issues

Whether goods exempt under

CGST Act also exempt under

IGST Act?

When it is not exempt under

IGST Act, whether the input

credits can be availed?