0% found this document useful (0 votes)
36 views72 pages

Introduction To GST-1 - 240618 - 053249

The document provides a comprehensive introduction to the Goods and Services Tax (GST) framework in India, covering its definitions, scope, and various components such as levy, collection, and exemptions. It details the dual GST model involving CGST, SGST, and IGST, along with the classification of goods and services, payment mechanisms, and the roles of electronic commerce operators. Additionally, it outlines the taxable supply criteria, GST rates, and the implications for both suppliers and recipients under different scenarios.

Uploaded by

vaibhavgupta1575
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
0% found this document useful (0 votes)
36 views72 pages

Introduction To GST-1 - 240618 - 053249

The document provides a comprehensive introduction to the Goods and Services Tax (GST) framework in India, covering its definitions, scope, and various components such as levy, collection, and exemptions. It details the dual GST model involving CGST, SGST, and IGST, along with the classification of goods and services, payment mechanisms, and the roles of electronic commerce operators. Additionally, it outlines the taxable supply criteria, GST rates, and the implications for both suppliers and recipients under different scenarios.

Uploaded by

vaibhavgupta1575
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 72

INTRODUCTION TO GST

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)

• Real Estate Sector – Outside GST - Sale/Purchase of Immovable property subject


to Stamp Duty

• Tobacco - Central Govt levies excise duty on manufacturing tobacco products.


Therefore, Tobacco = GST + Central Excise Duty.
Central Taxes
Subsumed Not Subsumed
• Central Excise Duty • Customs Duty
• Additional Duty of Excise
• Additional Custom Duty ( CVD )
• Special Additional Duty ( SAD )
• Surcharge & Cess
• CST
• Service Tax
State Taxes
Subsumed Not Subsumed
• VAT • State Excise Duty
• Purchase Tax • Stamp Duty
• Octroi, LBT • Profession Tax
• Entertainment Tax • Electricity Duty
• Luxury Tax • Sales Tax on 5 petroleum
• Betting, Gambling & Lottery Tax products
• Road Tax
Framework for Implementing GST
1. GST Council – Constitution , Members , Quorum, Recommendations,
Levy on Petroleum products.
2. Goods & Service Tax Network – Set – up, Service Providers , Data
Access, Functions.
3. GST Rates – ( IGST Rates) ( SGST/CGST will be 50% of IGST )
Goods – 0%, 0.25%, 3%, 5%, 12%, 18%, 28%.
Services – 5%, 12%, 28%.
Imports – BCD, Cess , IGST, GST Compensation cess
Exports – Nil rate
4. Classification of Goods & Services
5. Compensation Cess
6. E-Way Bill System
7. Anti – Profiteering Mechanism
Definitions
• Business
Any activity incidental/ancillary
Any trade/commerce, to it
manufacture, profession, etc even
if there is no monetary benefit Any activity of same nature even
if no volume/ continuity

Supply/acquisition of goods In connection with


including capital goods and commencement/ closure of
services business

Provision of facilities by
club/association etc To its members for consideration
Admission for consideration To any premises

Services as holder of office Accepted in course/furtherance


of trade, profession

Activities of race club by way of Totalisator or a licence to book


maker in such club

Any activity by Government/ local


As public authorities
authority

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

Payment in money or Monetary value of any act or


otherwise for the supply forbearance for the supply

By recipient or any
Deposit to be other person
considered as
payment

Excluding subsidy
ONLY given by CG/SG

When the supplier


applies such deposit as
consideration for supply
Goods

MEANS

Every kind of movable property EXCLUDES Money & Securities

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

Activities relating to the


Facilitating/ Arranging
use of money or its
Transactions in
conversion for a
Securities
consideration
Recipient
If consideration is payable for Person liable to pay the
supply of goods and/or services consideration

If no consideration is payable for Person to whom goods or their


supply of goods possession/use is
delivered/given/made available

If no consideration is payable for Person to whom the services is


supply of services rendered

Recipient includes an agent acting on behalf of the recipient in relation to the


goods and/or services supplied

Principal Supply – means he supply of goods or services which constitutes the


predominant element of a composite supply and to which any other supply forming part
of that supply is ancillary.

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.

Non Taxable Supply


• NTS means supply of G or S or both which is not leviable to tax under this Act
or under IGST Act. Eg. – Alcoholic Liquor for Human consumption / Petroleum
products.
Person
• An individual, An HUF, Company, Firm, LLP, AOP or BOI, CG or SG, Local Authority
Trust, Artificial Juridical person, Co-operative society

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

For any transaction to qualify as a taxable supply :-


1.) It should be a supply of goods and/or services.
2.) The supply should be leviable to GST
Concept of Supply (Section 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, license, 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
• (c) the activities specified in schedule I, made or agreed to
be made without a consideration
Schedule I: Activities to be treated as supply even if made
without consideration
• Permanent transfer & disposal of business assets where ITC has been
availed on such assets
• Supply of goods or services or both between related person or between
distinct persons as specified in section 25, when made in the course or
furtherance of business.
• Provided gift not exceeding Rs. 50000/- in value in a FY by an employer
to employee shall not be treated as supply of goods or services or both
• Supply of goods by principal to agent or by agent to principal
• Import of services by a taxable person from a related person or from any
of his establishment outside India, in the course or furtherance of
business.

• Comments – While related persons have different PAN’s, Distinct persons


are registered under the same PAN.
Import of Service

With Consideration Without


Consideration

Not in course Related


In course or person/Disti
or
furtherance nct person +
furtherance Other Cases
of business in course or
of business
furtherance
of business

Non-Taxable
Taxable
Whether Supply of Goods or Services

1.) Transfer - a.) Any transfer of title in goods ( GOODS )


b.) Any transfer of right in goods or of undivided in goods without
the transfer of the title thereof. ( SERVICES )
c.) Transfer of title under a forward contract ( GOODS )

2.) Land & Building – a.) Any lease, tenancy, licence to occupy land. ( SERVICE )
b.) Any lease or letting out of building ( SERVICE )

3.) Treatment of process – a.) Job work ( 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 )

6.) Composite Supply – a.) Works Contract ( SERVICE )


b.) Restaurant service for cash/deferred payment/other consideration
( SERVICE )

7.) Supply of Goods – By any unincorporated association or body of persons to a member


thereof for cash, deferred payment or other consideration ( GOODS )
Supply of neither GOODS nor SERVICES

• Services by an employee to the employer


• Court Services
• Services by MP, MLA
• Constitutional Posts
• Chairman/Director/Member of Govt Bodies
• Services of funeral
• Sale of land
• Actionable claims other than lottery, betting & gambling
• Out & Out transaction ( NTT to NTT ) ( Dubai to Thailand )
• Supply of warehoused goods to any person before clearance for home
consumption.
• High Seas Sales
Concept of Composite & Mixed Supply
• Composite Supply means 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 combination 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.

“ Principal supply means the supply of G or S which constitutes the


predominant element of a composite supply and to which any other supply
forming part of that composite supply is ancillary.”

• Mixed Supply means 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.

• Composite Supply - Tax Rate Applicable to the Principal Supply


Mixed Supply – Highest Tax Rate Applicable
Levy & Collection Of Tax
1.) Taxable Event under GST is supply of G/S in India
CGST - Intra-state supply
SGST - Intra state supply within a State
UTGST - An Intra state supply within an Union Territory
IGST – An inter-state supply or import

2.) Basis of Charge


a) CGST
• Central Goods & Services Tax
• Intra-State supplies, where location of the supplier and the place of
supply are in the same State or Same Union Territory
• Not levied on Alcoholic Liquor for human consumption
• CGST shall be levied at such notified rates, not exceeding 20%.
b.) IGST

• Integrated Goods & Services Tax


• Inter State supplies, where location of the supplier and the place of supply
are in two different states, two different Union territories or a state and a
union territory.
• Imports
• IGST shall be levied at notified rates, not exceeding 40%.

Taxable Supply

1.) CGST + SGST/UTGST = Intra State Supplies


2.) CGST – covers whole India including J&K.
3.) SGST – All States including UT’s having State legislature ( D, J&K P)
4.) UTGST covers all UT’s ( except the above )
5.) IGST = Inter-State supplies
6.) CGST/IGST = not levied on alcoholic liquor for human consumption.
7.) CGST/IGST = shall be levied on petroleum products with effect from a date
as notified by Govt on recommendation of the Council.
Tax Payable
• The nature of tax would depend upon the nature of supply.
• Inter State supplies + Imports = IGST
• Intra-State supplies = CGST + SGST/UTGST
• SGST is levied in case of intra-state supplies within a particular State.
• UTGST is levied in case of intra-state supplies within a particular Union Territory.

Location of Supplier and the Place of Supply

In same state In different states

Intra-State Transaction Inter-State Transaction

CGST + SGST IGST


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
GST Rates on Goods

Rates IGST CGST SGST/UTGST


Schedule I 5% 2.5% 2.5%
Schedule II 12% 6% 6%
Schedule III 18% 9% 9%
Schedule IV 28% 14% 14%
Schedule V 3% 1.5% 1.5%
Schedule VI 0.25% 0.125% 0.125%

GST Rates on Services

Rates IGST CGST SGST/UTGST


Schedule - I 5% 2.5% 2.5%
Schedule II 12% 6% 6%
Schedule III 18% 9% 9%
Schedule IV 28% 14% 14%
GST On Reverse Charge on Notified Goods

Description Supplier Recipient


Cashew nuts Agriculturist Any registered person
Bidi wrapper leaves Agriculturist Any registered person
Tobacco leaves Agriculturist Any registered person
Silk Yarn / Raw Cotton Agriculturist Any registered person
Supply of Lottery State Govt, UT or any local Lottery distributor or
authority selling agent
Used vehicles Central Govt, State Govt, Any registered person
UT or a local authority
GST on Reverse Charge on Notified Services
Category of Service Supplier Recipient
Transportation of Goods GTA Any taxable person
by Road located in taxable territory
who is liable to pay the
freight
Legal Services An individual advocate Any business entity
including a senior located in taxable territory
advocate or firm of
advocates
Arbitral services An Arbitral tribunal Any business entity
Sponsorship Any person Any body corporate or
partnership firm
Renting of Immovable CG, SG, UT, LA Any registered person
property
Director services Director of a company or a The company or a body
body corporate corporate
Category of Service Supplier Recipient

Services supplied by Govt CG, SG, UT or LA Any business entity

Insurance service An insurance agent Any person carrying on


insurance business
Recovery service A recovery agent A banking company or
NBFC
Transfer or permitting the Music composer, Music company, producer,
use of enjoyment of a photographer, artist, publisher
copyright relating to author
original work
Business services Business facilitator A banking company

Agency An agent of business A business correspondent


correspondent
Security Services Any person other than a A registered person
body corporate
Notified Services Under Only IGST

Category of Supply Supplier Recipient


Any service Any person located in non- Any person located in
taxable territory taxable territory other than
non-taxable online
recipient
Transportation of goods by A person located in non- Importer located in taxable
a vessel from a place taxable territory territory
outside India up to customs
station of clearance e in
India

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

House Keeping Unregistered person Any person ECO


Service supplying services
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:-

1.) Exemption should be necessary in public interest


2.) Exemption should be on recommendation of the Council
3.) Exemption should be by way of issue of notification
4.) Exemption may be absolute or conditional
5.) Exemption may be for any goods and/or services of any specified description.
6.) Exemption will be effective from the date specified in the notification

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

• Forward Charge • Forward Charge


• Reverse Charge • Reverse Charge
• Vouchers • Vouchers
• Residual Cases • Residual Cases
Time of Supply of Goods ( FCM ) =
Date of Invoice / Date of Payment, whichever is earlier
Actual Date / DUE DATE

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 of Goods under Reverse Charge

Time of Supply is earliest of the following:-


1.) Date of receipt of Goods
2.) Date of payment
3.) Date immediately following 30 days from the date of issuance of invoice by the
supplier.
Residual Cases

Time of Supply is as follows:-


1. Due date of filing the periodical return
2. In any other case, date on which GST is paid.

TOS for Interest/Late Fee

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

Normal Continuous Supply of services ceases


Supply Supply before contract

At the time when supply


Banks/NBFC Other Cases ceases to the extent of
= 45 Days = 30 days supply made before such
cessation

• Due date is ascertainable = On or before the due date of payment


• Due date is not ascertainable = the supplier receives the payment
• Payment is linked with completion = On or Before the date of completion of event
Time of Supply of Service ( FCM )
If the invoice is issued in time Earlier of
• Date of invoice
• Date of receipt of payment
If the invoice is not issued in time Earlier of
• Date of provision of service
• Date of receipt of payment
In any other case Date on which receipt shows the receipt
of service in his books of account

• 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 of receipt of payment is the earliest of :-

Date on which payment is recorded in the books of accounts of the supplier or Date of
credit to the suppliers bank account.

• Continuous supply means a supply which is provided or agreed to be provided continuously


or on recurrent basis, under a contract, for a period exceeding 3 months.
Time of Supply for Provision of Service ( RCM )

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 is as follows:-


1. Due date of filing the periodical return
2. In any other case, date on which GST is paid.

TOS for Interest/Late Fee

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

Date of Supply Date of Invoice Date of GST Rate TOS


Payment Applicable
Before After After New Rate DOI / DOP ( E )

Before Before After Old Rate DOI

Before After Before Old Rate DOP

After Before Before Old Rate DOI / DOP ( E )

After Before After New Rate DOP

After After Before New Rate DOI

Before – Before the change in GST rate


After – After the change in GST Rate

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

Export/ Within Outside


Domestic India India
Import
POS Of Goods ( Domestic Supply )
Nature of Supply Place of Supply
• Supply involves movement of goods • Location of goods where movement
terminates for delivery
• Goods are supplied by transfer of • Principal place of business of third
document during movement of person on whose direction goods
goods ( Bill to Ship to Model ) were supplied to another person
• Supply does not involve movement • Location of goods at the time of
of goods delivery
• Goods are assembled or installed at • Place of such installation or delivery
site
• Goods are supplied on board a • Location at which such goods are
conveyance taken on board
• Place of supply cannot be • POS shall be determined as per Rules
determined
POS Of Goods ( Export Import )
Nature of Supply Place of Supply
• Goods Exported from India • Location outside India
• Goods Imported into India • Location of the Importer

Y ( Third Person) Delhi

X
( Supplier )

Mumbai Z ( Customer ) Chennai

POS 1 = Chennai ( Z ) ( Location where the movement terminates for delivery )


POS 2 = Delhi ( Y ) ( Principal place of business of third person on whose direction goods
were supplied to third person )
Place of Supply for Services Within India

Nature of Service Place of Supply


Service in relation to IMP including agents, Place where the IMP is located
experts, lodging hotels, inn, accommodation
for functions and ancillary services If IMP is located outside India - LOR
Restaurant catering, personal grooming,
Place where service is actually performed
fitness, beauty treatment, health services
Place where event actually held or park is
Admission to events or amusement park
located
Service on board a conveyance including Location of 1st scheduled point of
Vessel and Aircraft departure of that journey
Telecom Service – Fixed Lease or cable line Location of installation
Telecom service – Post-paid service
Billing address

Telecom service – Prepaid mobile Address of agent who did the recharge

Telecom service – through internet Billing address


Place of Supply
Nature of Supply
Supply to Unregistered
Supply to Registered Person
Person
LOR of service in records of Location of such registered
Insurance Services
Insurance Co. person
Place where the person
Passenger Transportation Location of such registered
embarks on the conveyance
Service person
for the journey
Passenger Transportation Address in record – LOR Location of such registered
Service – Right to passage Address not in record - LOS person
Transportation of goods Place where goods are handed Location of such registered
including mail or courier over for their transportation person
Organisation of events Place where event is actually
Location of such registered
including ancillary services, held
person
sponsorship If held outside India - LOR
Training & Performance Location of such registered
Place of performance
appraisal person
Default rule for remaining Address in record – LOR Location of such registered
services Address not in record - LOS person
Place of Supply for services when Supplier/Recipient of Services Outside
India
Nature of Supply Place of Supply

Performance Based Services

a) In respect of goods required to be made


physically available
1.) Services in respect of goods provided by Location where services are actually
Recipient Performed

2.) Services provided electronically in Actual location of goods


respect of goods

b.) Services requiring presence of recipient Location where the services are actually
performed

Services in relation to immovable property

1.) Supply of accommodation by hotel, club


2.) Grant of rights to use immovable property Location of the Immovable Property
3.) Construction work ( Architect + ID )
4.) Experts/Real estate Agents
Nature of Supply Place of Supply

Admission to and/or organization of events or Where the event is actually held


celebrations and ancillary services
Where the above services are supplied at more POS shall be location in the taxable
than one location, including a location in taxable territory
territory
Where the above services are performed in POS shall be each state & UT
more than one State
Banking, financial services, intermediary Location of service provider
services and hiring of means of transport
Transportation of goods The place of destination of goods

Passenger transportation Place where the passenger embarks on


conveyance for a continuous journey
Services on board a conveyance The first scheduled point of departure of
that conveyance for the journey
OIDAR services Location of recipient of services

Any other services Location of the Recipient of Service


If LOR not available, LOS of service
Value of Supply
• GST is payable on ad-valorem basis. GST rate is a % of value. The value
on which this % s charged is the “value of taxable supply.”
• This chapter contains provisions for determining the value for goods and
services.
Value of Supply

Supply made to Supply Supply where Supply is a


unrelated person made to price is not the notified supply
where price is the related sole
sole person consideration
consideration
Assessable Value =
Transaction Value +
• Taxes other than GST
• Third party payments Value to be determined as per Rules
• Incidental expenses
• Subsidies
• Post supply discount/incentive
• Interest/late fee/penalty
Supplies to Unrelated Persons where price is the Sole Consideration
• The value of supply of goods and/or services shall be the transactional value which is the
the price actually payable or paid as the sole consideration for such supply where the
supplier and the recipient of the supply are not related.
• In most of the cases of regular normal trade, Invoice value will be the transactional value
• Even if the price is not actually paid, the price “payable” as per the agreement will be the
transactional value.
• This rule is not applicable when the supplier and recipient are “related person.”

A & B are deemed to be related persons if


A and B are officers/directors of one another's business
A and B are legally recognised partners
A and B are employee and employer
A controls B or vice versa (directly/indirectly)
C, a third person controls both A & B
A and B are members of the same family
A and B together control C, a third person (directly/indirectly).
Inclusions in Transaction Value ( + )
a) Taxes other than GST, if charged separately by the supplier
• Any taxes, duties, cesses, fees and charges levied under any law for the time being in
force will be included in the transaction value.
• Transaction value will not include CGST, SGST, UTGST, IGST, Compensation cess
• If the amount charged is inclusive of GST, the net value is the transaction value.

b) Payments to third parties by the recipient on behalf of the supplier


• The value of supply shall include any amount that the supplier is liable to pay in
relation to such supply but which has been incurred by the recipient of the supply
and not included in the price actually paid or payable for the supply.
• GST will be charged on the value inclusive of such amounts incurred by the recipient
on behalf of the supplier.

c) Incidental Expenses and Additional Charges


• The value of supply shall include incidental expenses, commission and packing
charged by the supplier to the recipient of supply and any amount charged for
anything done by the supplier in respect of the supply of G/S or both at the time of,
or before the delivery of goods or supply of services.
• GST will be charged on the value inclusive of such charges and expenses.
d) Interest, late Fee and Penalty for Delayed Payment
• The value of supply shall include interest or late fee or penalty for delayed payment of any
consideration for any supply. GST will be charged on the value inclusive of such interest.
e) Subsidies
• The value of supply shall include subsidies directly linked to the price excluding subsidies by
Central & State Government.

EXCLUSION OF DISCOUNTS FROM TRANSACTION VALUE

• 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.

• Volume Discounts – Shall be excluded to determine the value of 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 )

 Rule 30 – Value of supply of goods or services or both based on cost


Value of Supply = Cost of Production * 110%

 Rule 32 – Determination of value in respect of certain supplies


a) Supply of services for purchase or sale of foreign currency
b) Value of Supply of services provided by an Air Travel Agent
c) Value of service of Life Insurance Company
Supply of services for purchase or sale of foreign currency

Rule 32(2)(b) Slab System Rule 32(2) (a) Exchange Rates


Composite Gross GST (₹) • Case 1 ( There is RBI RR )
Rate Amount Actual ER – RBI RR = Diff * FC

1% <1,00,000 Min 250


Max 1,000
• Case 2 ( There is no RBI RR )
Actual ER * FC = Value
0.5% 1,00,000 to 1000 + Max Taxable value = value * 1%
10,00000 5,500
• Case 3 ( Cross Currency )
0.1% > 10,00,000 5,500 + Max FC1 * ER = Value in INR1
60,000 FC2 * ER = Value in INR2
Value = V1/V2 ( Whichever is lower )
Taxable value = value * 1%
Value of Supply
 Air Travel Agent
Domestic Bookings = 5% of the basic fare
International Bookings = 10% of the basic fare

 Life Insurance Company


• Premium covers only risk = Value is equal to premium amount paid
• Premium covers risk + savings
Intimated to PH = Gross Premium – Savings = Net Premium
Not intimated to PH =
a) If premium paid every year – 25% * 1st year premium & 12.5% * succeeding
years
b) If premium paid only once ( annuity ) = 10% of the premium amount
Rule 33 – Value of Supply in case of Pure Agent
• Value = Agency Income + Non – reimbursable expenses
• Expenses such as taxes and duties are incurred by pure agent on
behalf of the recipient which are reimbursable
• Other expenses such as travelling, stay expenses, etc are
incurred by pure agent on his account.
Documentation
 Tax Invoice is an essential document not only to document the supply
of goods or services but also to help the recipient avail ITC.
 Different types of Invoices:-
a) Tax Invoice
b) Payment Voucher
c) Debit Note
d) Credit Note
e) Refund Voucher
f) Bill of Supply
g) Supplementary Invoice
h) Receipt Voucher
Person liable & Not Liable for Registration
Compulsory Registration
Registration by Casual/Non-Taxable Resident Person
Special Provisions relating to Casual / Non-Resident Taxable Person
Procedure for Registration
Deemed Registration
Amendment to Registration
Cancellation or Suspension of Registration
Revocation of Cancellation of Registration
Person Liable for Registration
(Section 22)

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)

• Liable to be regd from


Business date on which ROC
transferred
issues Incorporation
due to
amalgamation Certificate on the
or merger basis of order of HC or
Tribunal
Important Points
• Aggregate Turnover ( PAN India ) = Taxable Supplies + Exempt Supplies + Exports +
Inter State Supplies
• Every supplier making a taxable supply is liable to be registered when his
turnover exceeds the specified limit.
• Separate Registration for Each State.
• Single Registration for all taxes.
• Aggregate Turnover does not include CGST/SGST/UTGST/IGST
• Supply of goods, after completion of job-work, by a registered job worker shall be
treated as the supply of goods by the principal.
• Include total of all branches with same PAN for Aggregate Turnover.
• Includes Branch Transfers ( Distinct Person having Same Pan )
• Amendment – Any person, who is engaged in exclusive supply of goods and
whose aggregate turnover in the financial year does not exceed ₹ 40 lakhs is
exempt from obtaining registration under the said Act, except
1.) person required to take compulsory registration ( Section 24 )
2.) person engaged in making supplies of goods of the description ( Refer TB )
3.) persons engaged in making intra-state supplies in the States of SCS.
Person Not Liable for Registration (Section 23)
1) The following persons shall not be liable to registration, namely: –

• (a) any person engaged exclusively in the business of supplying
goods or services or both that are not liable to tax or wholly
exempt from tax under this Act or under the Integrated Goods and
Services Tax Act;
• (b) an agriculturist, to the extent of supply of produce out of
cultivation of land.
• (c) Person engaged exclusively in supplying gods/services or both
wholly exempt from tax

(2) The Government may, on the recommendations of the Council,


by notification, specify the category of persons who may be
exempted from obtaining registration under this Act.
Threshold Limit for Registration for Suppliers of Ice Cream, Pan Masala, Tobacco Products

10 Lakhs 20 Lakhs
Manipur
Mizoram Remaining States and Union
Nagaland Territories
Tripura

Threshold Limit for Registration for Exclusive Suppliers of Other Goods

10 Lakhs 20 Lakhs 40 Lakhs


Manipur Arunachal Pradesh
Mizoram Meghalaya
Nagaland Pondicherry Remaining States and
Union Territories
Tripura Sikkim
Telangana
Uttarakhand
Threshold Limit for Registration for Suppliers of Services/Goods and Services

10 Lakhs 20 Lakhs
Manipur
Mizoram Remaining States & Union
Nagaland Territories
Tripura

Limits for Registration ( State Wise )


States with threshold limit States with threshold limit States with threshold limit
of ₹ 10 lakhs for both goods of ₹ 20 lakhs for both goods of ₹ 20 lakhs for services and
and services and services ₹ 40 lakhs for goods
Manipur Arunachal Pradesh
Mizoram Meghalaya
Nagaland Sikkim Remaining States and Union
Tripura Uttarakhand Territories
Pondicherry
Telengana
Compulsory registration ( Section 24 )
• Persons Making any Inter-State Taxable Supply
a) Inter-State Taxable Supply of Goods
b) Inter-State Taxable Supply of Services – GST Council has decided to exempt
those service providers whose annual aggregate turnover is less than
₹ 20 lakhs ( ₹ 10 lakhs in SCS ) from obtaining registration even if they are
making inter-State taxable supplies of services.
• Casual Taxable Persons making Taxable Supply
• Persons Required to Pay Tax under Reverse Charge
• A Person Required to Pay Tax u/s 9(5) ( ECO )
• Non-Resident Taxable Persons making Taxable supply.
• Agents
• Input Service Distributor
• Suppliers through ECO
• OIDAR suppliers
• Notified Persons by Government

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy