Introduction To GST-1 - 240618 - 053249
Introduction To GST-1 - 240618 - 053249
TYBCOM/TYBAF
SEMESTER VI/V
INDIRECT TAXES
Index
• Introduction
• Definitions
• Scope of Supply
• Levy & Collection of Tax
• Composition Levy
• Exemption From Tax
• Time of Supply
• Place of Supply
• Value of Supply
• Input Tax Credit
• Registration Under GST
• Payment of Tax
• Computation of Liability & Tax
Introduction
• Tax – Direct & Indirect Tax
• Features of Indirect Tax
• Advantages of Indirect Taxes
• Disadvantages of Indirect Taxes
• Need for GST
• Features, Scope & Benefit of GST
• GST Laws :- 1.) CGST Act
2.) SGST Act
3.) IGST Act
4.) UTGST Act
5.) GST ( Compensation to States ) Act
Dual GST Model
CGST + SGST/UTGST IGST
• Centre & State/ UT • Centre
• Intra State Supply of G & S • Inter State Supply of G & S
• CGST – Central GST, SGST – State • IGST – Integrated GST
GST • Imports subject to Basic Custom
• CGST – levied when both S & R Duty + IGST
located within same country • Exports – Nil Rated (0 % )
• SGST – levied when both S & R • IGST Rate = CGST Rate + SGST
located within same state. ( All Rate
States including J&K, Delhi & • Since GST is a destination based
Pondicherry ) tax, the SGST portion will be
• UTGST - levied when both S & R transferred by the exporting
located within same UT. state to CG & then it CG will
transfer it to the importing state.
Scope of GST
• All Goods & Services
• Alcoholic Liquor for Human Consumption - Outside GST ( State Excise Duty on
Manufacture and CST/Vat on Sale )
• Petroleum products - Petroleum crude, diesel, petrol, ATF & Natural Gas –
currently not leviable to GST (Currently subject to Central Excise duty on
manufacture and VAT/CST on sale)
Provision of facilities by
club/association etc To its members for consideration
Admission for consideration To any premises
Note – 1.) Monetary Benefit is not relevant in deciding whether an activity can be called
business or not. Similarly, profit motive is not relevant in deciding whether an
activity can be called business or not.
2.) Trade means B & S of goods but Commerce means trade and related services like
marketing, distribution,etc.
Consideration
By recipient or any
Deposit to be other person
considered as
payment
Excluding subsidy
ONLY given by CG/SG
MEANS
INCLUDES
• Actionable Claim
•Growing Crops
•Grass and things forming part of land agreed to be
severed before supply under a contract of supply
Services
MEANS
Goods
Anything EXCLUDING Money
Securities
INCLUDES
Taxable Supply – means a supply of goods or services or both which is leviable to tax
under this Act.
Electronic Commerce Operator
• ECO means any person who owns, operates or manages digital or
electronic facility or platform for electronic commerce
• Aggregators like OLA, UBER, ZOMATO, SWIGGY, URBAN CLAP
• They are neither supplier nor recipient but basically connects the two of
them.
• Compulsory registration for a ECO ( Threshold limit not applicable )
India
• It includes territories of India ( States + UT ) + territorial waters.
Payment Mechanism
Reverse
Forward Charge Charge ECO
Nether S nor R,
The Supplier has to The recipient has to but the
pay tax to the pay tax to the Aggregator or ECO
Government Government has to pay tax to
the Government
Scope of Supply
“Taxable event”- happening of which, the charge is fixed. It is
that taxable event which creates or attracts the liability of
tax. The taxable event under GST is
a) the taxable supply b) made by taxable person c) in
taxable territory
Non-Taxable
Taxable
Whether Supply of Goods or Services
2.) Land & Building – a.) Any lease, tenancy, licence to occupy land. ( SERVICE )
b.) Any lease or letting out of building ( SERVICE )
4.) Transfer of Business Assets – a.) Transfer or disposal of goods forming part of
the assets of business ( GOODS )
b.) Business goods put to non-business use ( SERVICE )
c.) Treatment of business goods when a person ceases to
be a taxable person ( GOODS )
5.) Supply of Services – a.) Renting of immovable property ( SERVICE )
b.) Construction of a complex ( SERVICE )
c.) Temporary transfer or permitting the use or enjoyment of any
intellectual property ( SERVICE )
d.) Development design, programming, customisation, up gradation
enhancement, implementation of IT software ( SERVICE )
e.) Agreeing to the obligation to refrain from an act, or to tolerate
an act or a situation, or to do an act ( SERVICE )
f.) Transfer of the right to use any goods for any person for cash,
deferred payment or other consideration ( SERVICE )
Taxable Supply
Reverse
Forward Charge Charge ECO
Nether S nor R,
The Supplier has to The recipient has to but the
pay tax to the pay tax to the Aggregator or ECO
Government Government has to pay tax to
the Government
GST Rates on Goods
Non taxable online recipient means any Government, local authority, an individual or
Any other person not registered receiving OIDAR services ( online information, database
Access and retrieval) services in relation to a non-business purpose.
Electronic Commerce Operator Services
Nature of Supply Supplier Recipient Person Liable to pay
GST
Transportation of Driver Any person ECO
passengers
Accommodation Unregistered person Any person ECO
service supplying service
through ECO
If the ECO is located in taxable territory Person liable to pay tax is the ECO
If the ECO does not have physical Person liable to pay tax is the person
presence in the taxable territory representing the ECO
If the ECO has neither the physical Person liable to pay tax is the person
presence nor representative in the taxable appointed by the ECO for the purpose of
territory paying the tax
Inter State Supply
Imports Exports
Bringing goods into India from a • Taking goods out of India to place
place outside India outside India
BCD + IGST • Export of G or S or both + supply of
Imports are taxed when the goods G or S or both to an SEZ unit or SEZ
crosses the customs frontiers developer will be ZERO RATED
Importer liable to pay IGST SUPPLY.
Point of taxing imports is the • ITC may be availed
crossing of customs frontiers of India
Exemption From Tax
The Government is empowered to grant exemptions from tax, subject to following
conditions:-
On the same lines, exemption can also be granted by issuing a special order which
should state the circumstances of exceptional nature requiring such order.
Chapter Covers :-
• Exempt Goods
• Exempt Services from CGST
• Exempt Services from IGST
• Other notifies Exempt Services.
Important Points
• Exemption from CGST automatically operates as exemption from SGST
• Exemption from IGST on domestic supply does not automatically operate
as exemption from CGST
• Exemption from IGST on domestic inter-state supplies automatically
operates as exemption from IGST on imports
• Exemption issued will make specific reference to HSN code along with
description of the goods to be exempted.
• In case of violation of the conditions of exemption, exemption will stand
withdrawn.
• If the taxpayer omits to claim exemption, GST would have been charged,
collected and deposited along with the claim of ITC.
• Exemption is different from exclusion from GST.
• Exempt supplies means Nil rated supply or Wholly exempt and includes
Non-taxable supplies.
• Exempt goods are not the same as non-taxable goods
• Petroleum products are non—taxable goods.
Time of Supply
• Liability to pay tax on goods or services shall arise at the TOS
as determined by rules.
• In order to calculate and pay the GST liability, it is important to know
when the tax liability arises, i.e. date on which the charging event has
occurred , this is called TOS.
• TOS determines the rate of tax and the due date of payment of tax.
Time of Supply
Goods Services
Date of Invoice
Goods sent on
Normal Supply Continuous Supply
Approval Basis
Involving Before or
Other Before or Earlier of :-
movement of at the
cases at the tie
goods time of
issuance of receipt • Before or at the
of of such time of supply
Before or at Before or
statement successive • 6 months from
the time of at the time
of payments the date of
removal of of delivery
accounts removal
goods of goods
or making
available
Date of Payment = Date of entry in the bank account / date of entry in the books ,
whichever is earlier.
Time of supply related to an addition in the value of supply by way of interest, late
Fee or penalty shall be the date on which supplier receives such interest or late fee.
Time of Supply for Services
Due Date
Date of Issuance of Invoice
• For Advance up to ₹ 1,000 , the supplier of service can take the date of issue of invoice
in respect of such supply as time of supply.
Date on which payment is recorded in the books of accounts of the supplier or Date of
credit to the suppliers bank account.
1. Date of Payment
2. Date immediately following 60 days since the issue of invoice by the supplier
whichever is earlier.
Residual Cases
Time of supply related to an addition in the value of supply by way of interest, late
Fee or penalty shall be the date on which supplier receives such interest or late fee.
Change in Rate of Tax
The Time of Supply will always be between DOI or DOP, but DOS is needed to decide
which GST rate to be applied and accordingly to help in finding the TOS.
Place of Supply
• GST is a destination based tax. POS have been framed for goods and
services keeping in mind the destination/consumption principle.
• POS is determined for both goods as well as services.
• Since goods are tangible in nature, generally their place of delivery
becomes the POS.
• Services being intangible in nature, the rules related to POS are different
depending on the category of supply.
Place of Supply
Goods Services
X
( Supplier )
Telecom service – Prepaid mobile Address of agent who did the recharge
b.) Services requiring presence of recipient Location where the services are actually
performed
• Discount given at or before Supply – Shall not be included in the value if such discount has
duly recorded in the invoice issued in respect of such supply.
• Discount given after Supply - Shall not be included in the value of supply if
a) 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
b) 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.
• Secondary Discounts – These are the discounts which are not known at the time of supply or
are offered after the supply is already over. Such discounts shall be included while
determining the value of supply as such discounts are not known at the time of supply and the
conditions of Section 15 are not satisfied.
Valuation as per RULES
Rule 27 – Value of Goods or services where consideration is not wholly in
money
a) Open Market rate
b) If Open Market rate is not available, sum total of consideration in money
and any such further amount in money as is equivalent to the consideration
not in money. ( Exchange offer, Ek pe Ek free, relative admission to class )
Supplier
making taxable
supplies from • Aggregate T/O
a State / Union Exceeds Rupees
Territory shall Twenty Lakhs
be liable to be • Normal States & UT
registered in a
such State / UT
Person Liable for Registration
(Section 22)
Supplier making
taxable supplies • Aggregate T/O Exceeds
from a Special Rupees Ten Lakhs
Category States • Special Category States of
shall be liable to Manipur, Mizoram,
be registered in Nagaland, Tripura
a such State
Person Liable for Registration
(Section 22)
Every person
regd under
• Liable to be regd from
existing law
appointed day
on day
(Migration of Existing
before
Dealers)
appointed
day
Person Liable for Registration
(Section 22)
Business
transferred
due to • Liable to be regd from
succession or
otherwise to
date of such
any person as succession
a going
concern
Person Liable for Registration
(Section 22)
10 Lakhs 20 Lakhs
Manipur
Mizoram Remaining States and Union
Nagaland Territories
Tripura
10 Lakhs 20 Lakhs
Manipur
Mizoram Remaining States & Union
Nagaland Territories
Tripura